What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 319 added, 155 removed, 1095 unchanged (30% of the section changed)

8 unchanged sentences

Mortgage loans held for sale, at fair value 26,116 20,077

Available for sale debt securities, at fair value (amortized cost of $ 1,137,057 , net of allowance for credit losses on securities of $ 0 at March 31, 2024;

Available for sale debt securities, at fair value (amortized cost of $ 1,117,819 , net of allowance for credit losses on securities of $ 0 at June 30, 2024;

and amortized cost of $ 1,152,629 ;

24 unchanged sentences

authorized 60,000,000 shares;

17,363,457 shares issued and 17,033,174 shares outstanding at March 31, 2024 and 17,363,457 shares issued and 17,030,987 shares outstanding at December 31, 2023

17,363,457 shares issued and 17,058,411 shares outstanding at June 30, 2024 and 17,363,457 shares issued and 17,030,987 shares outstanding at December 31, 2023

Paid-in capital 125,898 126,150

2 unchanged sentences

Treasury stock, at cost;

330,283 shares at March 31, 2024 and 332,470 shares at December 31, 2023

305,046 shares at June 30, 2024 and 332,470 shares at December 31, 2023

( 14,050 ) ( 15,313 )

6 unchanged sentences

(Dollars and shares in thousands, except per share amounts)

Three months ended March 31, 2024 2023

Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023

Interest income:

29 unchanged sentences

FDIC deposit insurance costs

1,404 1,371 2,845 2,243

Advertising and promotion 661 427 1,209 835

16 unchanged sentences

(Dollars in thousands)

Three months ended March 31, 2024 2023

Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023

Net income $ 10,815 $ 11,256 $ 21,751 $ 24,068

3 unchanged sentences

Net change in defined benefit plan obligations 23 45 46 90

Total other comprehensive (loss) income, net of tax ( 7,760 ) 16,040

Total other comprehensive income (loss), net of tax 2,587 ( 7,067 ) ( 5,173 ) 8,973

Total comprehensive income $ 13,402 $ 4,189 $ 16,578 $ 33,041

4 unchanged sentences

(Dollars and shares in thousands, except per share amounts)

For the three months ended March 31, 2024 Common

For the three months ended June 30, 2024 Common

Shares Outstanding Common

4 unchanged sentences

Loss Treasury Stock Total

Balance at March 31, 2024 17,033 $ 1,085 $ 126,785 $ 503,175 ($ 148,913 ) ($ 15,212 ) $ 466,920

— — — 10,815 — — 10,815

Total other comprehensive income, net of tax — — — — 2,587 — 2,587

Cash dividends declared ($ 0.56 per share)

— — — ( 9,640 ) — — ( 9,640 )

Share-based compensation — — 524 — — — 524

Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered

25 — ( 1,411 ) — — 1,162 ( 249 )

Balance at June 30, 2024 17,058 $ 1,085 $ 125,898 $ 504,350 ($ 146,326 ) ($ 14,050 ) $ 470,957

For the six months ended June 30, 2024 Common

Shares Outstanding Common

Stock Paid-in

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury Stock Total

Balance at December 31, 2023 17,031 $ 1,085 $ 126,150 $ 501,917 ($ 141,153 ) ($ 15,313 ) $ 472,686

6 unchanged sentences

27 — ( 1,530 ) — — 1,263 ( 267 )

Balance at June 30, 2024 17,058 $ 1,085 $ 125,898 $ 504,350 ($ 146,326 ) ($ 14,050 ) $ 470,957

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Washington Trust Bancorp, Inc.

and Subsidiaries

Consolidated Statements of Changes in Shareholders' Equity (unaudited)

(Dollars and shares in thousands, except per share amounts)

For the three months ended June 30, 2023 Common

Shares Outstanding Common

Stock Paid-in

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury Stock Total

Balance at March 31, 2023 16,986 $ 1,085 $ 127,734 $ 495,231 ($ 141,760 ) ($ 17,307 ) $ 464,983

For the three months ended March 31, 2023 Common

— — — 11,256 — — 11,256

Total other comprehensive loss, net of tax — — — — ( 7,067 ) — ( 7,067 )

Cash dividends declared ($ 0.56 per share)

— — — ( 9,491 ) — — ( 9,491 )

Share-based compensation — — 87 — — — 87

Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered

33 — ( 2,136 ) — — 1,529 ( 607 )

Balance at June 30, 2023 17,019 $ 1,085 $ 125,685 $ 496,996 ($ 148,827 ) ($ 15,778 ) $ 459,161

For the six months ended June 30, 2023 Common

Shares Outstanding Common

14 unchanged sentences

( 200 ) — — — — ( 8,741 ) ( 8,741 )

Balance at March 31, 2023 16,986 $ 1,085 $ 127,734 $ 495,231 ($ 141,760 ) ($ 17,307 ) $ 464,983

Balance at June 30, 2023 17,019 $ 1,085 $ 125,685 $ 496,996 ($ 148,827 ) ($ 15,778 ) $ 459,161

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3 unchanged sentences

(Dollars in thousands)

Three months ended March 31, 2024 2023

Six months ended June 30, 2024 2023

Cash flows from operating activities:

2 unchanged sentences

Provision for credit losses

Net gain on sale of bank-owned property ( 988 ) —

Depreciation of premises and equipment

10 unchanged sentences

( 181,608 ) ( 97,701 )

Decrease in operating lease right-of-use assets 148 986

Decrease in operating lease liabilities ( 190 ) ( 936 )

Decrease (increase) in operating lease right-of-use assets 977 ( 1,477 )

(Decrease) increase in operating lease liabilities ( 1,015 ) 1,744

Increase in other assets ( 746 ) ( 23,820 )

Increase (decrease) in other liabilities 752 ( 176 )

Net cash provided by operating activities 1,948 11,094

Decrease in other liabilities ( 3,673 ) ( 1,113 )

Net cash provided by (used in) operating activities 13,129 ( 9,902 )

Cash flows from investing activities:

8 unchanged sentences

Available for sale debt securities:

Net (purchases) redemptions of Federal Home Loan Bank stock ( 3,619 ) 962

Net increase in loans ( 36,251 ) ( 116,609 )

Other 500 250

Net purchases of Federal Home Loan Bank stock ( 14,273 ) ( 2,405 )

Net decrease (increase) in loans 20,162 ( 267,157 )

Purchases of loans

2 unchanged sentences

( 2,246 ) ( 3,020 )

Net proceeds from the sale of bank-owned property 1,669 —

Proceeds from bank-owned life insurance — 1,566

1 unchanged sentence

Purchases of other equity investments ( 250 ) ( 188 )

Net cash used in investing activities

( 26,711 ) ( 167,367 )

Net cash provided by (used in) investing activities 35,797 ( 306,829 )

Cash flows from financing activities:

8 unchanged sentences

( 19,278 ) ( 19,512 )

Net cash provided by financing activities

40,167 176,131

Net cash (used in) provided by financing activities ( 31,579 ) 326,625

Net increase in cash and cash equivalents 17,347 9,894

50 unchanged sentences

(Dollars in thousands)

March 31, 2024 Amortized Cost Unrealized Gains Unrealized Losses ACL

June 30, 2024 Amortized Cost Unrealized Gains Unrealized Losses ACL

Available for Sale Debt Securities:

26 unchanged sentences

Total available for sale debt securities $ 1,152,629 $ 261 ($ 152,510 ) $ — $ 1,000,380

Available for sale debt securities balances exclude accrued interest receivable of $ 3.0 million and $ 3.7 million, respectively, as of March 31, 2024 and December 31, 2023.

At March 31, 2024 and December 31, 2023, securities with a fair value of $ 292.9 million and $ 311.9 million, respectively, were pledged as collateral for FHLB borrowings, potential borrowings with the FRBB, certain public deposits, and for other purposes.

Available for sale debt securities balances exclude accrued interest receivable of $ 3.6 million and $ 3.7 million, respectively, as of June 30, 2024 and December 31, 2023.

At June 30, 2024 and December 31, 2023, securities with a fair value of $ 298.9 million and $ 311.9 million, respectively, were pledged as collateral for FHLB borrowings, potential borrowings with the FRBB, certain public deposits, and for other purposes.

See Note 9 for additional disclosure on FHLB borrowings.

4 unchanged sentences

(Dollars in thousands)

March 31, 2024 Amortized Cost Fair Value

June 30, 2024 Amortized Cost Fair Value

Due in one year or less $ 84,131 $ 70,242

8 unchanged sentences

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Included in the above table are debt securities with an amortized cost balance of $ 253.0 million and a fair value of $ 225.5 million at March 31, 2024 that are callable at the discretion of the issuers.

Final maturities of the callable securities range from 3 months to 13 years, with call features ranging from 1 month to 4 months.

Included in the above table are debt securities with an amortized cost balance of $ 252.9 million and a fair value of $ 226.7 million at June 30, 2024 that are callable at the discretion of the issuers.

Final maturities of the callable securities range from 1 year to 13 years, with call features ranging from 1 month to 5 months.

Assessment of Available for Sale Debt Securities for Impairment

4 unchanged sentences

(Dollars in thousands) Less than 12 Months 12 Months or Longer Total

March 31, 2024 # Fair

June 30, 2024 # Fair

Value Unrealized

31 unchanged sentences

9 $ 63,711 ($ 438 ) 181 $ 914,700 ($ 152,072 ) 190 $ 978,411 ($ 152,510 )

There were no debt securities on nonaccrual status at March 31, 2024 and 2023 and, therefore there was no accrued interest related to debt securities reversed against interest income for the three months ended March 31, 2024 and 2023.

As of March 31, 2024, the Corporation does not intend to sell the debt securities in an unrealized loss position and has determined that it is more-likely-than-not that the Corporation will not be required to sell each security before the recovery of its amortized cost basis.

There were no debt securities on nonaccrual status at June 30, 2024 and 2023 and, therefore there was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024, the Corporation does not intend to sell the debt securities in an unrealized loss position and has determined that it is more-likely-than-not that the Corporation will not be required to sell each security before the recovery of its amortized cost basis.

In addition, management does not believe that any of the securities are impaired due to reasons of credit quality.

As further described below, management believes the unrealized losses on these debt securities are primarily attributable to changes in the investment spreads and interest rates.

Therefore, no ACL was recorded at both March 31, 2024 and December 31, 2023.

Therefore, no ACL was recorded at both June 30, 2024 and December 31, 2023.

Obligations of U.S.

5 unchanged sentences

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

continue to make timely principal and interest payments, and none of these securities were past due at March 31, 2024.

continue to make timely principal and interest payments, and none of these securities were past due at June 30, 2024.

Additionally, the Corporation utilizes a zero credit loss estimate for these securities.

Individual Name Issuer Trust Preferred Debt Securities

These securities in an unrealized loss position at March 31, 2024 included three trust preferred securities issued by three individual companies in the banking sector.

These securities in an unrealized loss position at June 30, 2024 included three trust preferred securities issued by three individual companies in the banking sector.

Management reviewed the collectability 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.

As of March 31, 2024, there was one individual name issuer trust preferred debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 192 thousand that was rated below investment grade by S&P.

We noted no downgrades to below investment grade between March 31, 2024 and the filing date of this report.

As of June 30, 2024, there was one individual name issuer trust preferred debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 176 thousand that was rated below investment grade by S&P.

We noted no downgrades to below investment grade between June 30, 2024 and the filing date of this report.

Based on the information available through the filing date of this report, all individual name issuer trust preferred debt securities continue to accrue interest and make payments as expected with no payment deferrals or defaults on the part of the issuers.

Corporate Bonds

These securities in an unrealized loss position at March 31, 2024 included four corporate bond holdings issued by three individual companies in the financial services industry.

These securities in an unrealized loss position at June 30, 2024 included four corporate bond holdings issued by three individual companies in the financial services industry.

As of March 31, 2024, there was one corporate bond debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 46 thousand that was rated below investment grade by S&P.

We noted no downgrades to below investment grade between March 31, 2024 and the filing date of this report.

As of June 30, 2024, there was one corporate bond debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 35 thousand that was rated below investment grade by S&P.

We noted no downgrades to below investment grade between June 30, 2024 and the filing date of this report.

Based on the information available through the filing date of this report, all corporate bond debt securities continue to accrue interest and make payments as expected with no payment deferrals or defaults on the part of the issuers.

1 unchanged sentence

The following table presents a summary of loans:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2024 December 31, 2023

12 unchanged sentences

$ 5,629,102 $ 5,647,706

(1) CRE consists of commercial mortgages primarily secured by income-producing property, as well as construction and development loans.

(1) CRE consists of commercial mortgages primarily secured by non-owner occupied income-producing property, as well as construction and development loans.

Construction and development loans are made to businesses for land development or the on-site construction of industrial, commercial, or residential buildings.

(2) C&I consists of loans to businesses and individuals, a portion of which are fully or partially collateralized by real estate.

(2) C&I consists of loans to businesses and individuals, a portion of which are fully or partially collateralized by owner occupied real estate.

(3) Residential real estate consists of mortgage and homeowner construction loans secured by one- to four-family residential properties.

(4) Other consists of loans to individuals secured by general aviation aircraft and other personal installment loans.

(5) Includes net unamortized loan origination costs of $ 13.1 million and $ 13.0 million, respectively, at March 31, 2024 and December 31, 2023 and net unamortized premiums on loans purchased from and serviced by other financial institutions of $ 273 thousand and $ 286 thousand, respectively, at March 31, 2024 and December 31, 2023.

Loan balances exclude accrued interest receivable of $ 23.8 million and $ 22.9 million, respectively, as of March 31, 2024 and December 31, 2023.

(5) Includes net unamortized loan origination costs of $ 13.3 million and $ 13.0 million, respectively, at June 30, 2024 and December 31, 2023 and net unamortized premiums on loans purchased from and serviced by other financial institutions of $ 262 thousand and $ 286 thousand, respectively, at June 30, 2024 and December 31, 2023.

Loan balances exclude accrued interest receivable of $ 23.5 million and $ 22.9 million, respectively, as of June 30, 2024 and December 31, 2023.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

As of both March 31, 2024 and December 31, 2023, loans amounting to $ 3.4 billion, were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRBB for the discount window.

As of June 30, 2024 and December 31, 2023, loans amounting to $ 3.6 billion and $ 3.4 billion, respectively, were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRBB for the discount window.

See Note 9 for additional disclosure regarding borrowings.

7 unchanged sentences

(Dollars in thousands) Days Past Due

March 31, 2024 Current 30-59 60-89 90 or More Total Past Due Total Loans

June 30, 2024 Current 30-59 60-89 90 or More Total Past Due Total Loans

Commercial real estate

24 unchanged sentences

Total loans $ 5,636,361 $ 6,748 $ 1,853 $ 2,744 $ 11,345 $ 5,647,706

Included in past due loans as of March 31, 2024 and December 31, 2023, were nonaccrual loans of $ 5.1 million and $ 6.9 million, respectively.

In addition, all loans 90 days or more past due at March 31, 2024 and December 31, 2023 were classified as nonaccrual.

Included in past due loans as of June 30, 2024 and December 31, 2023, were nonaccrual loans of $ 8.4 million and $ 6.9 million, respectively.

In addition, all loans 90 days or more past due at June 30, 2024 and December 31, 2023 were classified as nonaccrual.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

7 unchanged sentences

The following table is a summary of nonaccrual loans, segregated by class of loans:

(Dollars in thousands) March 31, 2024 December 31, 2023

(Dollars in thousands) June 30, 2024 December 31, 2023

Nonaccrual Loans Nonaccrual Loans

12 unchanged sentences

Accruing loans 90 days or more past due $ — $ —

Nonaccrual loans of $ 25.6 million and $ 37.7 million, respectively, at March 31, 2024 and December 31, 2023 were current as to the payment of principal and interest.

As of March 31, 2024 and December 31, 2023, nonaccrual loans secured by one- to four-family residential property amounting to $ 3.2 million and $ 960 thousand, respectively, were in process of foreclosure.

There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at March 31, 2024.

Nonaccrual loans of $ 22.1 million and $ 37.7 million, respectively, at June 30, 2024 and December 31, 2023 were current as to the payment of principal and interest.

As of June 30, 2024 and December 31, 2023, nonaccrual loans secured by one- to four-family residential property amounting to $ 3.7 million and $ 960 thousand, respectively, were in process of foreclosure.

There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at June 30, 2024.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents interest income recognized on nonaccrual loans:

(Dollars in thousands)

Three months ended March 31, 2024 2023

(Dollars in thousands) Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023

Commercial real estate

$ — $ — $ — $ —

Commercial & industrial

2 unchanged sentences

Residential real estate

71 89 186 182

Total consumer 32 21 69 44

9 unchanged sentences

If the TLM performs in accordance with the modified contractual terms for that period of time, it would be removed from this classification.

The following table presents the carrying value at March 31, 2024, of TLMs made during the period indicated, segregated by class of loans and type of concession granted:

The following tables present the carrying value at June 30, 2024, of TLMs made during the periods indicated, segregated by class of loans and type of concession granted:

(Dollars in thousands)

Three months ended March 31, 2024

Maturity Extension Total % of Loan Class (1)

Commercial real estate $ — $ — — %

Commercial & industrial 668 668 —

Total commercial 668 668 —

Three months ended June 30, 2024

Other-than-Insignificant Payment Delay Total % of Loan Class (1)

Residential Real Estate:

Residential real estate $ 267 $ 267 —

Total $ 267 $ 267 — %

(1) Percentage of TLMs to the total loans outstanding within the respective loan class.

During the three months ended March 31, 2023, there were no TLMs.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents the financial effect of TLMs made during the period indicated, segregated by class of loans:

Three months ended March 31, 2024

Weighted Average Maturity Extension

(Dollars in thousands)

Six months ended June 30, 2024

Maturity Extension Other-than-Insignificant Payment Delay Total % of Loan Class (1)

Commercial real estate $ — $ — $ — — %

1 unchanged sentence

Total commercial 642 — 642 —

Residential Real Estate:

Residential real estate — 267 267 —

Total $ 642 $ 267 $ 909 — %

(1) Percentage of TLMs to the total loans outstanding within the respective loan class.

During the three and six months ended June 30, 2023, there were no TLMs.

The following tables describe the financial effect of TLMs made during the periods indicated, segregated by class of loans:

Three months ended June 30, 2024

Financial Effect

Other-than-Insignificant Payment Delay:

Residential real estate Provided payment delay for a weighted average period of 6 months

Six months ended June 30, 2024

Financial Effect

Maturity Extension:

Commercial & industrial Extended maturity by a weighted average of 120 months

Other-than-Insignificant Payment Delay:

Residential real estate Provided payment delay for a weighted average period of 6 months

Management closely monitors the performance of TLMs to understand the effectiveness of the modifications.

The following tables present an aging analysis, as of the date indicated, of TLMs that have been modified in the past 12 months:

The following table presents an aging analysis, as of the date indicated, of TLMs that have been modified in the past 12 months:

(Dollars in thousands) Days Past Due

March 31, 2024 Current 30-59 60-89 90 or More Total Past Due Total Loans

June 30, 2024 Current 30-59 60-89 90 or More Total Past Due Total Loans

Commercial real estate

3 unchanged sentences

Total commercial 8,522 — — — — 8,522

Total loans $ 22,360 $ — $ — $ — $ — $ 22,360

(Dollars in thousands) Days Past Due

December 31, 2023 Current 30-59 60-89 90 or More Total Past Due Total Loans

Commercial real estate

Residential Real Estate:

Residential real estate

267 — — — — 267

Commercial & industrial

Total commercial 21,830 — — — — 21,830

Total loans $ 8,789 $ — $ — $ — $ — $ 8,789

There were no TLMs made in the previous 12 months for which there was a subsequent payment default.

There were no significant commitments to lend additional funds to borrowers experiencing financial difficulty whose loans were TLMs at March 31, 2024.

There were no significant commitments to lend additional funds to borrowers experiencing financial difficulty whose loans were TLMs at June 30, 2024.

Individually Analyzed Loans

Individually analyzed loans are individually assessed for credit impairment and include nonaccrual commercial loans, TLMs, as well as certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans.

As of March 31, 2024 and December 31, 2023, individually analyzed loans amounted to $ 34.2 million and $ 34.6 million, respectively, all of which were considered collateral dependent.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

analyze such loans.

As of June 30, 2024 and December 31, 2023, individually analyzed loans amounted to $ 20.4 million and $ 34.6 million, respectively, all of which 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.

See Note 7 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents the carrying value of collateral dependent individually analyzed loans:

(Dollars in thousands) March 31, 2024 December 31, 2023

(Dollars in thousands) June 30, 2024 December 31, 2023

Carrying Value Related Allowance Carrying Value Related Allowance

30 unchanged sentences

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.

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.

A “doubtful” loan is

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

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.

A loan in the “loss” category is considered generally uncollectible or the timing or amount of payments cannot be determined.

1 unchanged sentence

The Corporation’s procedures call for loan risk ratings and classifications to be revised whenever information becomes available that indicates a change is warranted.

On a quarterly basis, management reviews a watched asset list, which generally consists of commercial loans that are risk-rated 6 or worse, highly leveraged transaction loans, high-volatility

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

commercial real estate, and other selected loans.

On a quarterly basis, management reviews a 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, the appropriateness of risk ratings and strategies to improve the credit.

8 unchanged sentences

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table includes information on credit quality indicators and gross charge-offs for the Corporation’s loan portfolio, segregated by class of loans as of March 31, 2024:

The following table includes information on credit quality indicators and gross charge-offs for the Corporation’s loan portfolio, segregated by class of loans as of June 30, 2024:

(Dollars in thousands) Term Loans Amortized Cost by Origination Year

64 unchanged sentences

Total gross charge-offs $ 196 $ — $ 8 $ — $ — $ 373 $ — $ — $ 577

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Washington Trust may renew commercial loans at or immediately prior to their maturity.

1 unchanged sentence

In addition, loans with extensions of maturity dates of more than three months are reported as originations in the period extended.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Note 5 - Allowance for Credit Losses on Loans

1 unchanged sentence

The level of the ACL on loans is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

The following table presents the activity in the ACL on loans for the three months ended March 31, 2024:

The following table presents the activity in the ACL on loans for the three months ended June 30, 2024:

(Dollars in thousands) Commercial Consumer

5 unchanged sentences

Ending Balance $ 25,766 $ 7,097 $ 32,863 $ 8,102 $ 1,080 $ 333 $ 1,413 $ 42,378

The following table presents the activity in the ACL on loans for the three months ended March 31, 2023:

The following table presents the activity in the ACL on loans for the six months ended June 30, 2024:

(Dollars in thousands) Commercial Consumer

CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total

Beginning Balance $ 24,144 $ 8,088 $ 32,232 $ 7,403 $ 1,048 $ 374 $ 1,422 $ 41,057

Charge-offs — ( 20 ) ( 20 ) — — ( 103 ) ( 103 ) ( 123 )

Recoveries — 17 17 — 7 20 27 44

Provision 1,622 ( 988 ) 634 699 25 42 67 1,400

Ending Balance $ 25,766 $ 7,097 $ 32,863 $ 8,102 $ 1,080 $ 333 $ 1,413 $ 42,378

The following table presents the activity in the ACL on loans for the three months ended June 30, 2023:

(Dollars in thousands) Commercial Consumer

Total Commercial Residential Real Estate Home Equity Other Total Consumer Total

4 unchanged sentences

Ending Balance $ 22,026 $ 9,428 $ 31,454 $ 6,442 $ 1,039 $ 408 $ 1,447 $ 39,343

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents the activity in the ACL on loans for the six months ended June 30, 2023:

(Dollars in thousands) Commercial Consumer

CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total

Beginning Balance $ 18,435 $ 10,356 $ 28,791 $ 7,740 $ 1,115 $ 381 $ 1,496 $ 38,027

Charge-offs — ( 20 ) ( 20 ) — — ( 93 ) ( 93 ) ( 113 )

Recoveries — 9 9 — 3 17 20 29

Provision 3,591 ( 917 ) 2,674 ( 1,298 ) ( 79 ) 103 24 1,400

Ending Balance $ 22,026 $ 9,428 $ 31,454 $ 6,442 $ 1,039 $ 408 $ 1,447 $ 39,343

Note 6 - Derivative Financial Instruments

6 unchanged sentences

Interest Rate Risk Management Agreements

Interest rate risk management agreements, such as caps, swaps, and floors, are used from time to time as part of the Corporation’s interest rate risk management strategy.

Interest rate risk management agreements, such as swaps, caps, floors, and collars, are used from time to time as part of the Corporation’s interest rate risk management strategy.

Interest rate swaps are agreements in which the Corporation and another party agree to exchange interest payments (e.g., fixed-rate for variable-rate payments) computed on a notional principal amount.

Interest rate caps and floors represent options purchased by the Corporation to manage the interest rate paid throughout the term of the option contract.

An interest rate collar is a derivative instrument that represents simultaneously buying an interest rate cap and selling an interest rate floor.

The credit risk associated with these transactions is the risk of default by the counterparty.

2 unchanged sentences

Cash Flow Hedging Instruments

As of March 31, 2024 and December 31, 2023, the Corporation had interest rate swap contracts that were designated as cash flow hedges to hedge the interest rate risk associated with short-term borrowings.

As of June 30, 2024 and December 31, 2023, the Corporation had interest rate swap contracts that were designated as cash flow hedges.

In addition, at June 30, 2024, the Corporation had an interest rate collar that was designated as a cash flow hedge.

These cash flow hedges were executed to hedge the interest rate risk associated with short-term borrowings.

See Note 9 for additional disclosure on borrowings.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Additionally, the Corporation had an interest rate swap contract that was designated as a cash flow hedge to hedge the interest rate risk associated with a pool of variable rate commercial loans.

The Corporation also had an interest rate swap contract that was designated as a cash flow hedge to hedge the interest rate risk associated with a pool of variable rate commercial loans.

On March 31, 2023, the Corporation terminated this interest rate swap contract, and the derivative liability was derecognized.

1 unchanged sentence

This loss is being amortized into earnings as a reduction of interest income on a straight-line basis over the remaining life of the original interest rate swap term, or through May 1, 2026.

At March 31, 2024, the remaining unamortized balance of the loss included in the AOCL component of shareholders’ equity was $ 17.9 million, or $ 13.3 million after tax.

At June 30, 2024, the remaining unamortized balance of the loss included in the AOCL component of shareholders’ equity was $ 15.8 million, or $ 11.7 million after tax.

The changes in fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) and subsequently reclassified to earnings when gains or losses are realized.

4 unchanged sentences

When the Corporation enters into an interest rate derivative contract with a commercial loan borrower, it simultaneously enters into a “mirror” interest rate contract with a third party.

For interest rate swaps, the third party exchanges the client’s fixed-rate loan payments for variable-rate loan payments.

For interest rate swaps, the third party

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

exchanges the client’s fixed-rate loan payments for variable-rate loan payments.

The Corporation’s credit policies with respect to interest rate contracts with commercial borrowers are similar to those used for loans.

15 unchanged sentences

The following table presents the notional amounts and fair values of derivative instruments in the Unaudited Consolidated Balance Sheets:

(Dollars in thousands) March 31, 2024 December 31, 2023

(Dollars in thousands) June 30, 2024 December 31, 2023

Fair Value Fair Value

4 unchanged sentences

$ 120,000 $ 2,176 $ — $ 120,000 $ 802 $ 1,119

Interest rate collar 50,000 — 41 — — —

Derivatives not Designated as Hedging Instruments:

16 unchanged sentences

Net amounts $ 63,372 $ 61,240 $ 51,966 $ 52,814

(1) The fair value of derivative assets includes accrued interest receivable of $ 233 thousand and $ 239 thousand, respectively, at March 31, 2024 and December 31, 2023.

There was no accrued interest payable included in the fair value of derivative liabilities at March 31, 2024 or at December 31, 2023.

(1) The fair value of derivative assets includes accrued interest receivable of $ 232 thousand and $ 239 thousand, respectively, at June 30, 2024 and December 31, 2023.

There was no accrued interest payable included in the fair value of derivative liabilities at June 30, 2024 or at December 31, 2023.

(2) Interest rate risk management contracts and loan related derivative contracts with counterparties are subject to master netting arrangements.

2 unchanged sentences

The following table presents the effect of derivative instruments in the Unaudited Consolidated Statements of Changes in Shareholders’ Equity:

(Dollars in thousands) Gain Recognized in

(Dollars in thousands) Amounts Recognized in

Other Comprehensive Income (Loss), Net of Tax

Three months ended March 31, 2024 2023

Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023

Derivatives Designated as Cash Flow Hedging Instruments:

2 unchanged sentences

$ 1,846 $ 2,715 $ 5,051 $ 5,512

Interest rate collar ( 31 ) — ( 31 ) —

Total $ 1,815 $ 2,715 $ 5,020 $ 5,512

4 unchanged sentences

Recognized in Noninterest Income

Three months ended March 31, Statement of Income Location 2024 2023

Three Months Six Months

Periods ended June 30, Statement of Income Location 2024 2023 2024 2023

Derivatives not Designated as Hedging Instruments:

28 unchanged sentences

The following table presents a summary of mortgage loans held for sale accounted for under the fair value option:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2024 December 31,

4 unchanged sentences

Changes in fair value of mortgage loans held for sale accounted for under the fair value option election are included in mortgage banking revenues in the Unaudited Consolidated Statements of Income.

Changes in fair value amounted to a decrease in mortgage banking revenues of $ 69 thousand for the three months ended March 31, 2024, compared to an increase in mortgage banking revenues of $ 24 thousand for the same period in 2023.

Changes in fair value amounted to decreases in mortgage banking revenues of $ 22 thousand and $ 91 thousand, respectively, for the three and six months ended June 30, 2024.

This compared to a decrease in mortgage banking revenues of $ 6 thousand for the three months ended

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

There were no mortgage loans held for sale 90 days or more past due as of March 31, 2024 and December 31, 2023.

June 30, 2023 and an increase of $ 18 thousand for the six months ended June 30, 2023.

There were no mortgage loans held for sale 90 days or more past due as of June 30, 2024 and December 31, 2023.

Valuation Techniques

3 unchanged sentences

such items are classified as Level 1.

There were no Level 1 debt securities held at March 31, 2024 and December 31, 2023.

There were no Level 1 debt securities held at June 30, 2024 and December 31, 2023.

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.

There were no Level 3 debt securities held at March 31, 2024 and December 31, 2023.

There were no Level 3 debt securities held at June 30, 2024 and December 31, 2023.

Mortgage Loans Held for Sale

16 unchanged sentences

However, the credit valuation adjustments utilize Level 3 inputs.

As of March 31, 2024 and December 31, 2023, 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 are not significant to the overall valuation.

As of June 30, 2024 and December 31, 2023, 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 are not significant to the overall valuation.

As a result, the Corporation has classified its derivative valuations in their entirety as Level 2.

10 unchanged sentences

(Level 2) Significant Unobservable Inputs

March 31, 2024

June 30, 2024

Available for sale debt securities:

37 unchanged sentences

Items Recorded at Fair Value on a Nonrecurring Basis

There were no assets written down to fair value during the three months ended March 31, 2024.

There were no assets written down to fair value during the six months ended June 30, 2024.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

18 unchanged sentences

(Dollars in thousands)

March 31, 2024 Carrying Amount Total

June 30, 2024 Carrying Amount Total

Fair Value Quoted Prices in Active Markets for Identical Assets

33 unchanged sentences

The following table presents a summary of deposits:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2024 December 31,

10 unchanged sentences

Total deposits $ 4,976,126 $ 5,348,160

(1) Includes wholesale brokered time deposit balances of $ 673.7 million and $ 654.1 million, respectively, as of March 31, 2024 and December 31, 2023.

(1) Includes wholesale brokered time deposit balances of $ 339.2 million and $ 654.1 million, respectively, as of June 30, 2024 and December 31, 2023.

The following table presents scheduled maturities of time certificates of deposit:

(Dollars in thousands) Scheduled Maturity Weighted Average Rate

April 1, 2024 to December 31, 2024 $ 1,518,477 4.74 %

July 1, 2024 to December 31, 2024 $ 963,519 4.61 %

2025 427,213 4.10

3 unchanged sentences

2029 and thereafter 3,067 2.34

Balance at March 31, 2024 $ 1,830,236 4.49 %

Time certificates of deposit in denominations of $250 thousand or more totaled $ 297.5 million and $ 271.2 million, respectively, at March 31, 2024 and December 31, 2023.

Balance at June 30, 2024 $ 1,504,056 4.35 %

Time certificates of deposit in denominations of $250 thousand or more totaled $ 273.3 million and $ 271.2 million, respectively, at June 30, 2024 and December 31, 2023.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Note 9 - Borrowings

Advances payable to the FHLB amounted to $ 1.2 billion at both March 31, 2024 and December 31, 2023.

At March 31, 2024, the Corporation has interest rate swaps with a notional amount of $ 120.0 million that were designated as cash flow hedges to hedge the interest rate risk associated with short-term FHLB advances.

Advances payable to the FHLB amounted to $ 1.6 billion and $ 1.2 billion, respectively, at June 30, 2024 and December 31, 2023.

At June 30, 2024, the Corporation has interest rate swaps with a notional amount of $ 120.0 million, as well as an interest rate collar with a notional amount of $ 50.0 million, that were designated as cash flow hedges to hedge the interest rate risk associated with short-term FHLB advances.

See Note 6 for additional disclosure on derivatives.

As of March 31, 2024 and December 31, 2023, the Bank had access to a $ 40.0 million unused line of credit with the FHLB.

Additionally, the Bank had standby letters of credit with the FHLB of $ 66.0 million and $ 65.0 million, respectively, at March 31, 2024 and December 31, 2023.

As of June 30, 2024 and December 31, 2023, the Bank had access to a $ 40.0 million unused line of credit with the FHLB.

Additionally, the Bank had standby letters of credit with the FHLB of $ 66.0 million and $ 65.0 million, respectively, at June 30, 2024 and December 31, 2023.

The standby letters of credit collateralize institutional deposits.

The Bank had remaining available borrowing capacity of $ 999.4 million and $ 1.1 billion, respectively, with the FHLB at March 31, 2024 and December 31, 2023.

The Bank had remaining available borrowing capacity of $ 801.5 million and $ 1.1 billion, respectively, with the FHLB at June 30, 2024 and December 31, 2023.

The Bank pledges certain qualified investment securities and loans as collateral to the FHLB.

The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of March 31, 2024:

The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of June 30, 2024:

(Dollars in thousands) Scheduled

Maturity Weighted

April 1, 2024 to December 31, 2024 $ 600,000 5.37 %

July 1, 2024 to December 31, 2024 $ 700,000 5.43 %

2025 475,000 5.06

3 unchanged sentences

2029 and thereafter 80,000 3.82

Balance at March 31, 2024 $ 1,240,000 4.99 %

Balance at June 30, 2024 $ 1,550,000 5.05 %

Note 10 - Shareholders' Equity

4 unchanged sentences

The 2024 Repurchase Program commenced on January 1, 2024 and expires on December 31, 2024, and may be modified, suspended, or discontinued at any time.

As of March 31, 2024, no shares have been repurchased under the 2024 Repurchase Program.

As of June 30, 2024, no shares have been repurchased under the 2024 Repurchase Program.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Regulatory Capital Requirements

Capital levels at March 31, 2024 exceeded the regulatory minimum levels to be considered “well capitalized.”

Capital levels at June 30, 2024 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:

1 unchanged sentence

Amount Ratio Amount Ratio Amount Ratio

March 31, 2024

June 30, 2024

Total Capital (to Risk-Weighted Assets):

26 unchanged sentences

The Corporation and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends and discretionary bonuses.

The Corporation’s and the Bank’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at March 31, 2024 and December 31, 2023.

The Corporation’s and the Bank’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at June 30, 2024 and December 31, 2023.

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.

At both March 31, 2024 and December 31, 2023, $ 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 capital adequacy guidelines of the Federal Reserve.

At both June 30, 2024 and December 31, 2023, $ 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 capital adequacy guidelines of the Federal Reserve.

In accordance with regulatory capital rules, the Corporation elected the option to delay the estimated impact of ASC 326 on its regulatory capital over a two-year deferral and subsequent three-year transition period ending December 31, 2024.

3 unchanged sentences

Note 11 - Revenue from Contracts with Customers

The following table summarizes total revenues as presented in the Unaudited Consolidated Statements of Income and the related amounts that are from contracts with customers within the scope of ASC 606.

The following tables summarize total revenues as presented in the Unaudited Consolidated Statements of Income and the related amounts that are from contracts with customers within the scope of ASC 606.

As shown below, a substantial portion of our revenues are specifically excluded from the scope of ASC 606.

For the three months ended March 31, 2024 2023

For the three months ended June 30, 2024 2023

(Dollars in thousands) Revenue (1)

11 unchanged sentences

Loan related derivative income

284 — ( 51 ) —

Income from bank-owned life insurance

1,375 286 463 344

2,466 2,370 352 276

Total noninterest income 16,660 12,008 14,325 11,327

2 unchanged sentences

(2) Revenue from contracts with customers in scope of ASC 606.

For the six months ended June 30, 2024 2023

(Dollars in thousands) Revenue (1) ASC 606 Revenue (2)

Revenue (1) ASC 606 Revenue (2)

Net interest income $ 63,250 $ — $ 70,693 $ —

Noninterest income:

Wealth management revenues 19,016 19,016 17,711 17,711

Mortgage banking revenues 5,267 — 2,998 —

Card interchange fees 2,420 2,420 2,400 2,400

Service charges on deposit accounts 1,454 1,454 1,444 1,444

Loan related derivative income 333 — 196 —

Income from bank-owned life insurance 1,492 — 2,044 —

Other income 3,841 556 815 620

Total noninterest income 33,823 23,446 27,608 22,175

Total revenues $ 97,073 $ 23,446 $ 98,301 $ 22,175

(1) As reported in the Unaudited Consolidated Statements of Income.

(2) Revenue from contracts with customers in scope of ASC 606.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents revenue from contracts with customers based on the timing of revenue recognition:

(Dollars in thousands)

Three months ended March 31, 2024 2023

(Dollars in thousands) Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023

Revenue recognized at a point in time:

4 unchanged sentences

Wealth management revenues

9,678 9,048 19,016 17,711

Service charges on deposit accounts

279 242 539 461

59 63 118 123

Total revenues from contracts with customers in scope of ASC 606

1 unchanged sentence

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.

Receivables amounted to $ 5.7 million and $ 5.5 million, respectively, at March 31, 2024 and December 31, 2023 and were included in other assets in the Unaudited Consolidated Balance Sheets.

Receivables amounted to $ 5.9 million and $ 5.5 million, respectively, at June 30, 2024 and December 31, 2023 and were included in other assets in the Unaudited Consolidated Balance Sheets.

Deferred revenues, which are considered contract liabilities under ASC 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.

The balances of contract liabilities were insignificant at both March 31, 2024 and December 31, 2023 and were included in other liabilities in the Unaudited Consolidated Balance Sheets.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The balances of contract liabilities were insignificant at both June 30, 2024 and December 31, 2023 and were included in other liabilities in the Unaudited Consolidated Balance Sheets.

For commissions and incentives that are in scope of ASC 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.

The carrying value of contract cost assets amounted to $ 2.0 million at both March 31, 2024 and December 31, 2023 and were included in other assets in the Unaudited Consolidated Balance Sheets.

The carrying value of contract cost assets amounted to $ 1.9 million and $ 2.0 million, respectively at June 30, 2024 and December 31, 2023 and were included in other assets in the Unaudited Consolidated Balance Sheets.

The amortization of contract cost assets is recorded within salaries and employee benefits expense in the Unaudited Consolidated Statements of Income.

4 unchanged sentences

In the fourth quarter of 2023, the Corporation’s Board of Directors approved a resolution to terminate the qualified pension plan, and participants were notified of the termination.

Work on the qualified pension plan termination process has commenced and the qualified pension plan’s assets are expected to be distributed in 2025, pending completion of applicable regulatory approvals, including receipt of a determination letter from the Internal Revenue Service.

The qualified pension plan liability is expected to be settled in 2025 through a combination of lump sum payments to participants and purchase of a group annuity contract from a highly-rated insurance company.

1 unchanged sentence

The actual amount of the settlement charge will depend on various factors, including interest rates, plan asset returns, the lump sum election rate and annuity pricing.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss), on a pre-tax basis:

(Dollars in thousands) Qualified

Pension Plan Non-Qualified Retirement Plans

Three months ended March 31, 2024 2023 2024 2023

(Dollars in thousands) Qualified Pension Plan Non-Qualified Retirement Plans

Three Months Six Months Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023 2024 2023 2024 2023

Net Periodic Benefit Cost:

6 unchanged sentences

Recognized net actuarial loss (2)

— — — — 30 60 61 119

Net periodic benefit cost ($ 70 ) $ 89 ($ 140 ) $ 177 $ 193 $ 276 $ 386 $ 550

(1) Included in salaries and employee benefits expense in the Unaudited Consolidated Statements of Income.

Service cost for 2024 represents administrative expenses related to the termination of the qualified pension plan.

(2) Included in other expenses in the Unaudited Consolidated Statements of Income.

1 unchanged sentence

Qualified Pension Plan Non-Qualified Retirement Plans

For the three months ended March 31, 2024 2023 2024 2023

For the six months ended June 30, 2024 2023 2024 2023

Measurement date Dec 31, 2023 Dec 31, 2022 Dec 31, 2023 Dec 31, 2022

23 unchanged sentences

and institutional trust services, including custody and fiduciary services.

The following table presents the statement of operations and total assets for Washington Trust’s reportable segments:

The following tables present the statement of operations and total assets for Washington Trust’s reportable segments:

(Dollars in thousands) Commercial Banking Wealth Management Services Consolidated Total

Three months ended March 31, 2024 2023 2024 2023 2024 2023

Three months ended June 30, 2024 2023 2024 2023 2024 2023

Net interest income $ 31,585 $ 33,486 $ — $ 14 $ 31,585 $ 33,500

12 unchanged sentences

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

(Dollars in thousands) Commercial Banking Wealth Management Services Consolidated Total

Six months ended June 30, 2024 2023 2024 2023 2024 2023

Net interest income $ 63,250 $ 70,666 $ — $ 27 $ 63,250 $ 70,693

Provision for credit losses 1,200 1,500 — — 1,200 1,500

Net interest income after provision for credit losses 62,050 69,166 — 27 62,050 69,193

Noninterest income 12,223 9,573 21,600 18,035 33,823 27,608

Noninterest expenses:

Depreciation and amortization expense 1,786 1,690 628 713 2,414 2,403

Other noninterest expenses 52,166 49,082 13,693 15,095 65,859 64,177

Total noninterest expenses 53,952 50,772 14,321 15,808 68,273 66,580

Income before income taxes 20,321 27,967 7,279 2,254 27,600 30,221

Income tax expense 4,248 5,605 1,601 548 5,849 6,153

Net income $ 16,073 $ 22,362 $ 5,678 $ 1,706 $ 21,751 $ 24,068

Total assets at period end $ 7,125,943 $ 6,938,357 $ 58,417 $ 73,403 $ 7,184,360 $ 7,011,760

Expenditures for long-lived assets 2,156 2,995 90 25 2,246 3,020

Note 14 - Other Comprehensive Income (Loss)

The following table presents the activity in other comprehensive income (loss):

Three months ended March 31, 2024 2023

(Dollars in thousands) Pre-tax Amounts Income Tax Benefit (Expense) Net of Tax Pre-tax Amounts Income Tax Expense Net of Tax

The following tables present the activity in other comprehensive income (loss):

Three months ended June 30, 2024 2023

(Dollars in thousands) Pre-tax Amounts Income Tax Expense Net of Tax Pre-tax Amounts Income Tax Benefit (Expense) Net of Tax

Available for Sale Debt Securities:

8 unchanged sentences

30 ( 7 ) 23 60 ( 15 ) 45

Total other comprehensive income (loss) $ 3,483 ($ 896 ) $ 2,587 ($ 9,298 ) $ 2,231 ($ 7,067 )

(1) The pre-tax amounts reclassified into earnings in the Unaudited Consolidated Statements of Income included reductions of $ 2.1 million included in interest and fees on loans for both the three months ended June 30, 2024 and 2023, as well as reductions of $ 495 thousand and $ 264 thousand, respectively, included in FHLB interest expense.

(2) The pre-tax amounts are included in other expenses in the Unaudited Consolidated Statements of Income.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Six months ended June 30, 2024 2023

(Dollars in thousands) Pre-tax Amounts Income Tax Benefit (Expense) Net of Tax Pre-tax Amounts Income Tax Expense Net of Tax

Securities available for sale:

Change in fair value of available for sale debt securities ($ 13,742 ) $ 3,503 ($ 10,239 ) $ 4,436 ($ 1,065 ) $ 3,371

Cash flow hedges:

Change in fair value of cash flow hedges

3,458 ( 890 ) 2,568 2,742 ( 658 ) 2,084

Net cash flow hedge losses reclassified into earnings (1)

3,291 ( 839 ) 2,452 4,510 ( 1,082 ) 3,428

Net change in fair value of cash flow hedges 6,749 ( 1,729 ) 5,020 7,252 ( 1,740 ) 5,512

Defined benefit plan obligations:

Amortization of net actuarial losses (2)

61 ( 15 ) 46 119 ( 29 ) 90

Total other comprehensive (loss) income ($ 6,932 ) $ 1,759 ($ 5,173 ) $ 11,807 ($ 2,834 ) $ 8,973

(1) For the three months ended March 31, 2024 and 2023, the pre-tax amounts reclassified into earnings in the Unaudited Consolidated Statements of Income included reductions of $ 2.1 million and $ 2.8 million, respectively, in interest and fees on loans, as well as reductions of $ 493 thousand and $ 127 thousand, respectively, in FHLB interest expense.

(1) For the six months ended June 30, 2024 and 2023, the pre-tax amounts reclassified into earnings in the Unaudited Consolidated Statements of Income included reductions of $ 4.3 million and $ 4.9 million, respectively, included in interest and fees on loans, as well as reductions of $ 988 thousand and $ 391 thousand, respectively, included in FHLB interest expense.

(2) The pre-tax amounts are included in other expenses in the Unaudited Consolidated Statements of Income.

1 unchanged sentence

(Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total

For the three months ended March 31, 2024

For the three months ended June 30, 2024

Balance at March 31, 2024 ($ 127,579 ) ($ 12,414 ) ($ 8,920 ) ($ 148,913 )

Other comprehensive income before reclassifications 749 589 — 1,338

Amounts reclassified from AOCL

— 1,226 23 1,249

Net other comprehensive income 749 1,815 23 2,587

Balance at June 30, 2024 ($ 126,830 ) ($ 10,599 ) ($ 8,897 ) ($ 146,326 )

(Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total

For the six months ended June 30, 2024

Balance at December 31, 2023 ($ 116,591 ) ($ 15,619 ) ($ 8,943 ) ($ 141,153 )

3 unchanged sentences

Net other comprehensive (loss) income ( 10,239 ) 5,020 46 ( 5,173 )

Balance at June 30, 2024 ($ 126,830 ) ($ 10,599 ) ($ 8,897 ) ($ 146,326 )

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

(Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total

For the three months ended June 30, 2023

Balance at March 31, 2023 ($ 117,835 ) ($ 19,848 ) ($ 4,077 ) ($ 141,760 )

Other comprehensive (loss) income before reclassifications ( 9,827 ) 1,289 — ( 8,538 )

Amounts reclassified from AOCL

— 1,426 45 1,471

Net other comprehensive (loss) income ( 9,827 ) 2,715 45 ( 7,067 )

Balance at June 30, 2023 ($ 127,662 ) ($ 17,133 ) ($ 4,032 ) ($ 148,827 )

(Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total

For the three months ended March 31, 2023

For the six months ended June 30, 2023

Balance at December 31, 2022 ($ 131,033 ) ($ 22,645 ) ($ 4,122 ) ($ 157,800 )

3 unchanged sentences

Net other comprehensive income 3,371 5,512 90 8,973

Balance at March 31, 2023 ($ 117,835 ) ($ 19,848 ) ($ 4,077 ) ($ 141,760 )

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

Balance at June 30, 2023 ($ 127,662 ) ($ 17,133 ) ($ 4,032 ) ($ 148,827 )

Note 15 - Earnings per Common Share

1 unchanged sentence

(Dollars and shares in thousands, except per share amounts)

Three months ended March 31, 2024 2023

Three Months Six Months

Periods ended June 30, 2024 2023 2024 2023

Earnings for basic and diluted earnings per common share:

10 unchanged sentences

$ 0.63 $ 0.66 $ 1.27 $ 1.41

Weighted average common stock equivalents, not included in common stock equivalents above because they were anti-dilutive, totaled 464,011 for the three months ended March 31, 2024, compared to 303,982 for the same period in 2023.

Weighted average common stock equivalents, not included in common stock equivalents above because they were anti-dilutive, totaled 458,539 and 459,100 , respectively, for the three and six months ended June 30, 2024, compared to 478,490 and 377,989 , respectively, for the same periods in 2023.

Note 16 - Commitments and Contingencies

1 unchanged sentence

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to manage the Corporation’s exposure to fluctuations in interest rates.

These financial instruments include commitments to extend credit and standby letters of credit, as well as derivative financial instruments, such as mortgage loan commitments, loan related derivative contracts and interest rate risk management contracts.

These financial

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

instruments include commitments to extend credit and standby letters of credit, as well as derivative financial instruments, such as mortgage loan commitments, loan related derivative contracts and interest rate risk management contracts.

These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Unaudited Consolidated Balance Sheets.

14 unchanged sentences

Most standby letters of credit extend for one year.

At March 31, 2024 and December 31, 2023, there were no liabilities to beneficiaries resulting from standby letters of credit.

At June 30, 2024 and December 31, 2023, there were no liabilities to beneficiaries resulting from standby letters of credit.

Should the Corporation be required to make payments to the beneficiary, repayment from the customer to the Corporation is required.

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The following table presents the contractual and notional amounts of financial instruments with off-balance sheet risk:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2024 December 31,

4 unchanged sentences

The ACL on unfunded commitments is management’s estimate of expected lifetime credit losses over the expected contractual term 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.

The activity in the ACL on unfunded commitments for the three months ended March 31, 2024 is presented below:

The activity in the ACL on unfunded commitments for the three months ended June 30, 2024 is presented below:

(Dollars in thousands) Commercial Consumer

3 unchanged sentences

Ending Balance $ 906 $ 799 $ 1,705 $ 24 $ — $ 11 $ 11 $ 1,740

The activity in the ACL on unfunded commitments for the three months ended March 31, 2023 is presented below:

The activity in the ACL on unfunded commitments for the six months ended June 30, 2024 is presented below:

(Dollars in thousands) Commercial Consumer

CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total

Beginning Balance $ 1,091 $ 822 $ 1,913 $ 15 $ — $ 12 $ 12 $ 1,940

Provision ( 185 ) ( 23 ) ( 208 ) 9 — ( 1 ) ( 1 ) ( 200 )

Ending Balance $ 906 $ 799 $ 1,705 $ 24 $ — $ 11 $ 11 $ 1,740

Condensed Notes to Unaudited Consolidated Financial Statements – (continued)

The activity in the ACL on unfunded commitments for the three months ended June 30, 2023 is presented below:

(Dollars in thousands) Commercial Consumer

Total Commercial Residential Real Estate Home Equity Other Total Consumer Total

2 unchanged sentences

Ending Balance $ 1,483 $ 877 $ 2,360 $ 15 $ — $ 15 $ 15 $ 2,390

The activity in the ACL on unfunded commitments for the six months ended June 30, 2023 is presented below:

(Dollars in thousands) Commercial Consumer

CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total

Beginning Balance $ 1,236 $ 988 $ 2,224 $ 50 $ — $ 16 $ 16 $ 2,290

Provision 247 ( 111 ) 136 ( 35 ) — ( 1 ) ( 1 ) 100

Ending Balance $ 1,483 $ 877 $ 2,360 $ 15 $ — $ 15 $ 15 $ 2,390

Other Contingencies

3 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.

What changed 10-Q

Item 1. Financial Statements