What changed in this filing

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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 89 added, 85 removed, 298 unchanged (37% of the section changed)

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RISKS RELATED TO OUR BUSINESS AND INDUSTRY

Inflationary pressures and increases in market interest rates may affect our results of operations and financial condition.

Inflation continued at elevated levels in 2024 and may remain elevated in 2025.

In response to a pronounced rise in inflation, the Federal Reserve raised the federal funds rate several times in 2023.

While the Federal Reserve cut the federal funds rate in 2024, we cannot predict whether or when the Federal Reserve may increase or decrease the federal funds rate in the future.

Moreover, while the inflation rate has decreased, prices remain high.

Small to medium-sized businesses may be impacted by higher costs as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.

Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly.

Sustained higher interest rates by the Federal Reserve, changes to fiscal policy, including expansion of U.S.

federal deficit spending and resultant debt issuance, could also affect market interest rates, push down asset prices and weaken economic activity.

A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, any of which, could adversely affect our business, our financial condition and results of operations.

Further, continued high market interest rates may reduce our loan origination volume, particularly refinance volume, and/or reduce our interest rate spread, which could have an adverse effect on our profitability and results of operations.

Fluctuations in interest rates may impair the Bank’s business.

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uncertainties regarding fiscal and monetary policies;

the timing and impact of changing governmental policies, including changes in guidance and interpretation by regulatory authorities;

the timing and

impact of changing governmental policies, including changes in guidance and interpretation by regulatory authorities;

changes in trade policies by the U.S.

or other countries, such as tariffs or retaliatory tariffs as those proposed by the incoming U.S.

Administration;

or other countries;

supply chain disruptions;

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• the value of loans and other assets or collateral securing loans may decrease.

Inflation can have an adverse impact on our business and on our customers.

The future rate of inflation and other economic factors remain uncertain, and the Federal Reserve may decrease or increase interest rates slower or faster than anticipated.

If inflation increases and interest rates rise, the value of our investment securities, particularly those with longer maturities, will decrease, although this effect is less pronounced for floating rate instruments.

Prolonged periods of inflation also may impact our profitability by negatively impacting our costs and expenses, including elevated funding costs and expenses related to talent acquisition and retention, and negatively impacting the demand for our products and services.

Moreover, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans.

Changes in U.S.

trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely affect our business, financial condition, and results of operations.

There have been significant changes to U.S.

trade policies, including tariffs affecting many countries, and there continues to be significant discussion regarding other potential changes to U.S.

trade policies, treaties, and tariffs, including the potential for additional tariffs.

In addition, retaliatory tariffs have been imposed and additional retaliatory tariffs are likely.

Tariffs, retaliatory tariffs or other trade restrictions on products and materials that our customers import or export could cause the prices of our customers’ products to increase, which could reduce demand for such products.

Any of these effects could adversely affect the ability of our customers to pay their loans or result in changes to our customers’ borrowing patterns that could have a negative effect on our business and results of operations.

Changes in the business and economic conditions in southern New England could adversely affect our financial condition and results of operations.

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To manage liquidity, we draw upon a number of funding sources in addition to in-market deposit growth and repayments and maturities of loans and investments.

Any inability to access the capital markets, illiquidity or volatility in the capital markets, the decrease in value of eligible collateral or increased collateral requirements (including as a result of credit concerns for short-term borrowing), changes to our relationships with our funding providers based on real or perceived changes in our risk profile, prolonged federal government shutdowns, or changes in regulations or regulatory guidance, or other events could negatively affect our access to or cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences.

Any inability to access the capital markets, illiquidity or volatility in the capital markets, a decrease in value of eligible collateral or an increase in collateral requirements (including as a result of credit concerns for short-term borrowing), changes to our relationships with our funding providers based on real or perceived changes in our risk profile, prolonged federal government shutdowns, or changes in regulations or regulatory guidance, or other events could negatively affect our access to or cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences.

Additionally, our liquidity or cost of funds may be negatively impacted by the unwillingness or inability of the Federal Reserve to act as lender of last resort, unexpected simultaneous draws on lines of credit or deposits, the withdrawal of or failure to attract customer deposits, or increased regulatory liquidity, capital and margin requirements.

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If the cost effectiveness or the availability of supply in these markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means.

These alternatives may include generating client deposits, extending the maturity of wholesale borrowings, borrowing under certain

secured borrowing arrangements, using relationships developed with a variety of fixed income investors, selling or securitizing loans, and further managing loan growth and investment opportunities.

These alternatives may include generating customer deposits, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships developed with a variety of fixed income investors, selling or securitizing loans, and further managing loan growth and investment opportunities.

These alternative means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs.

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Any deterioration in the FHLB’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLB stock to be impaired.

If we are not able to access funding through the FHLB, we may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition.

If we are not able to access funding through the FHLB, we

may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition.

Similarly, if we deem all or part of our investment in FHLB stock impaired, such action could have an adverse effect on our financial condition or results of operations.

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Higher rates of default could have an adverse effect on our financial condition and results of operations.

A portion of our commercial loan portfolio consists of loan participations, which may have a higher risk of loss than loans we originate because we are not the lead lender and we have limited control over credit monitoring.

We occasionally purchase commercial loan participations.

Although these loan participations are individually underwritten by us using standards similar to those employed for our self-originated loans, loan participations may have a higher risk of loss than loans we originate because we are limited in our ability to monitor the performance of the loan and rely significantly on the lead lender.

Moreover, our decisions regarding the classification of a loan participation and provisions for credit losses associated with a loan participation are made in part based upon information provided by the lead lender.

A lead lender also may not monitor a participation loan in the same manner as we would for loans that we originate.

At December 31, 2025, our participation in commercial loan originated by other banks amounted to $613.5 million.

We may experience losses and expenses if security interests granted for loans are not enforceable.

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If there is a loan default, we may seek to foreclose upon collateral and enforce the security interests to obtain repayment and eliminate or mitigate our loss.

Drafting errors, recording errors, other defects or imperfections in the security interests granted to us and/or changes in law may render liens granted to the us unenforceable.

Drafting errors, recording errors, other defects or imperfections in the security interests granted to us and/or changes in law may render liens granted to us unenforceable.

We may incur losses or expenses if security interests granted to us are not enforceable.

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These events could have an adverse effect on our financial condition and results of operations.

We may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could adversely affect our results of operations and financial condition.

When mortgage loans are sold, we are required to make customary representations and warranties to purchasers, guarantors and insurers, including government-sponsored entities, about the mortgage loans and the manner in which they were

We are subject to a variety of risks in connection with any sale of loans we may conduct, which could adversely affect our results of operations and financial condition.

We routinely sell newly originated residential mortgage loans and may also sell other loans or loan portfolios.

Whole loan sale agreements require us to repurchase or substitute mortgage loans, or indemnify buyers against losses, in the event we breach these representations or warranties.

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If repurchase and indemnity demands increase and such demands are valid claims and are in excess of our provision for potential losses, our results of operations and financial condition may be adversely affected.

Our ACL on loans may not be adequate to cover actual loan losses, and an increase in the ACL on loans will adversely affect our earnings.

We maintain an ACL on loans that is based on relevant internal and external information related to past events, current economic conditions and reasonable supportable forecasts.

Historical credit loss experience provides the basis for the estimation of expected credit losses.

We make various assumptions and judgments about the quality and collectability of the loan portfolio, the creditworthiness of borrowers, the value of the underlying collateral, the enforceability of the loan documents, current economic conditions and reasonable and supportable forecasts.

If the assumptions underlying the determination of the ACL prove to be incorrect, the ACL may not be sufficient to cover actual loan losses and an increase to the ACL may be necessary to allow for different assumptions or adverse developments.

In addition, a problem with one or more loans could require a significant increase to the ACL.

Federal and state regulators, in reviewing our loan portfolio as part of a regulatory examination, may request that we increase our ACL.

Any increases in our ACL will result in a decrease in our net income and, possibly, our capital, and could have an adverse effect on our financial condition and results of operations.

If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings may decrease.

We periodically make a determination of an ACL based on available information, including, but not limited to, the quality of the loan portfolio as indicated by trends in loan risk ratings, payment performance, economic conditions, the value of the underlying collateral, and the level of nonperforming and criticized loans.

Management relies on its loan officers and credit quality reviews, its experience, and its evaluation of economic conditions, among other factors, in determining the amount of provision required for the ACL.

Provisions to this allowance result in an expense for the period.

If, as a result of general economic conditions, previously incorrect assumptions, or an increase in defaulted loans, we determine that additional increases in the ACL are necessary, additional expenses may be incurred.

Determining the ACL inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and trends, all of which may undergo material changes.

We cannot be sure that we will be able to identify deteriorating credits before they become nonperforming assets or that we will be able to limit losses on those loans that are identified.

We have in the past been, and in the future may be, required to increase our ACL for any of several reasons.

Changes in economic conditions, forecasts or individual business or personal circumstances affecting borrowers, new information regarding existing loans, the value of underlying collateral, identification of additional problem loans, and other factors, both within and outside of our control, may require an increase in the ACL.

In addition, our regulators, as an integral part of their examination process, periodically review the ACL and may require us to increase the ACL by recognizing additional provisions for loan losses charged to earnings, or to charge-off loans, which, net of any recoveries, would decrease the ACL.

Any such additional provisions for credit losses or charge-offs could have a material adverse effect on our financial condition and results of operations.

We are a holding company and depend on the Bank for dividends, distributions, and other payments.

The Bancorp is a legal entity separate and distinct from the Bank.

Revenues of the Bancorp are derived primarily from dividends paid to it by the Bank.

Revenues and cash flows of the Bancorp (on a non-consolidated basis) are derived primarily from dividends paid to it by the Bank.

The right of the Bancorp, and consequently the right of shareholders of the Bancorp, to participate in any distribution of the assets or earnings of the Bank, through the payment of such dividends or otherwise, is necessarily subject to the prior claims of creditors of the Bank (including depositors), except to the extent that certain claims of the Bancorp in a creditor capacity may be recognized.

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Although we have historically declared cash dividends on our common stock, we are not required to do so, and our Board of Directors may reduce or eliminate our common stock dividend in the future.

The Federal Reserve has authority to prohibit bank holding companies from paying dividends if such payment is deemed to be an unsafe or unsound practice.

Additionally, the FDIC has the authority to use its enforcement powers to prohibit the Bank from paying dividends if, in its opinion, the payment of dividends would constitute an unsafe or unsound practice.

Further, our ability to pay dividends would be restricted if we do not maintain a capital conservation buffer.

A reduction or elimination of dividends could adversely affect the market price of our common stock.

The Bancorp and the Bank are potentially subject to various regulatory restrictions on our ability to pay dividends.

See Item 1 “Business-Supervision and Regulation-Dividend Restrictions” and “Business - Supervision and Regulation-Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements.”

We cannot guarantee that our allocation of capital to various alternatives, including share repurchase programs, will enhance long-term shareholder value.

Our business plan calls for us to execute a variety of strategies to allocate and deploy capital including, but not limited to, continued organic balance sheet growth and diversification, implementation of share repurchase programs, and payment of regular cash dividends.

If we are unable to effectively and timely deploy capital through these strategies, it may constrain growth in earnings and return on equity and thereby diminish potential growth in shareholder value.

During the second quarter of 2025, our Board of Directors adopted the 2025 Repurchase Program, which authorizes the repurchase of up to 850,000 shares, or approximately 4%, of the Bancorp’s outstanding common stock.

Repurchases are made at management’s discretion at prices management considers to be attractive and in the best interests of both the Corporation and its shareholders, subject to the availability of shares, general market conditions, the trading price of the shares, alternative uses for capital, and the Corporation’s financial performance.

We have credit and market risk inherent in our investment securities portfolio.

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government agency and government-sponsored enterprise securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.

A possible future downgrade of the sovereign credit ratings of the U.S.

A possible future downgrade of the sovereign credit rating of the U.S.

government and a decline in the perceived creditworthiness of U.S.

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A downgrade may also adversely affect the market value of such instruments.

We cannot predict if, when or how any changes to the credit ratings or perceived

creditworthiness of these organizations will affect economic conditions.

Such ratings actions could result in a significant adverse impact on us.

Among other things, a downgrade of the sovereign credit ratings of the U.S.

We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions.

Such ratings actions could have a significant adverse impact on us.

Among other things, a downgrade of the sovereign credit rating of the U.S.

government could adversely impact the value of our investment securities portfolio and may trigger requirements to post additional collateral for trades relative to these securities.

A downgrade of the sovereign credit ratings of the U.S.

A downgrade of the sovereign credit rating of the U.S.

government or the credit ratings of related institutions, agencies or instruments could significantly exacerbate the other risks to which we are subject and any related adverse effects on the business, financial condition and results of operations.

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Market volatility that results in clients liquidating investments, as well as lower asset values, can reduce the level of assets under management and administration and decrease our wealth management revenues, which could materially adversely affect our results of operations.

We face continuing and growing security risks to our information base, including the information we maintain relating to our customers.

We face continuing security risks to our data, including the information we maintain relating to our customers.

In the ordinary course of business, we rely on electronic communications and information systems to conduct our business and to store sensitive data, including financial information regarding customers.

Our electronic communications and information systems infrastructure could be susceptible to cyberattacks, hacking, identity theft or terrorist activity.

We have implemented and regularly review and update extensive systems of internal controls and procedures as well as corporate governance policies and procedures intended to protect our business operations, including the security and privacy of all confidential customer information.

In addition, we rely on the services of a variety of third-party service providers to meet our data processing and communication needs.

No matter how well designed or implemented our controls are, we cannot provide an absolute guarantee to protect our business operations from every type of problem in every situation.

A failure or circumvention of these controls could have a material adverse effect on our business operations and financial condition.

We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are escalating.

We also review and assess the cybersecurity risk of our third-party service providers.

Our electronic communications and information systems infrastructure, as well as the systems infrastructure of the third-party vendors we use to meet our data processing and communication needs, could be susceptible to cyberattacks, such as denial of service attacks, hacking, terrorist activities, or identity theft.

Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage systems, often through the introduction of computer viruses or malware, cyber-attacks and other means.

Denial of service attacks have been launched against a number of large financial services institutions.

Hacking and identity theft risks, in particular, could cause serious reputational harm.

Notwithstanding the strength of defensive measures, cybersecurity threats

and the tactics, techniques, and procedures used in cyberattacks change, develop, and evolve rapidly and continuously, including from growth in third-party services that facilitate or carry out cyberattacks and from emerging technologies, including artificial intelligence, which may be used to enhance the tactics, techniques, and procedures described above and facilitate new cyber threats.

Although to date we have not experienced any material losses relating to cyberattacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.

A failure or circumvention of our security systems could have a material adverse effect on our business operations and financial condition.

We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are ongoing.

As a result, cybersecurity and the continued enhancement of our controls and processes to protect our systems, data and networks from attacks, unauthorized access or significant damage remain a priority.

Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures.

Any breach of our system security could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, litigation exposure and other liability.

A breach could negatively impact customer confidence, damaging our reputation and undermining our ability to attract and keep customers.

Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our earnings.

Also, any failure to prevent a security breach or to quickly and effectively deal with such a breach could negatively impact customer confidence, damaging our reputation and undermining our ability to attract and keep customers.

We rely on other companies to provide key components of our business infrastructure.

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In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.

Our business may be adversely affected if we fail to adapt our products and services to evolving industry standards and consumer preferences.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services.

The widespread adoption of new technologies, including cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

The introduction of new or modified products or services can entail significant time and resources.

We might not be successful in developing or introducing new or modified products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences, spending, investing and/or saving habits, achieving market acceptance of our products and services, reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.

Products and services relying on internet and mobile technologies may expose us to fraud and cybersecurity risks.

Implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences due to their limitations, potential manipulation, or our failure to use them effectively.

Failure to successfully manage these risks in the development and implementation of new or modified products or services could have an adverse effect on our business and reputation.

We may incur significant losses as a result of ineffective risk management processes and strategies.

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We are dependent on our reputation within our market area, as a trusted and responsible financial services company, for all aspects of our business with customers, employees, vendors, third-party service providers, and others, with whom we conduct business or potential future businesses.

Negative public opinion about the financial services industry generally (including the

types of banking and wealth management services that we provide) or us specifically could adversely affect our reputation and our ability to keep and attract customers and employees.

Negative public opinion about the financial services industry generally (including the types of banking and wealth management services that we provide) or us specifically could adversely affect our reputation and our ability to keep and attract customers and employees.

Our actual or perceived failure to address various issues could give rise to negative public opinion and reputational risk that could cause harm to us and our business prospects.

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We may not be able to compete effectively.

We compete with financial and non-financial services firms, including traditional banks, online banks, financial technology companies, and investment management and wealth advisory firms, including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms.

We operate in a highly competitive environment that includes financial and non-financial services firms, including traditional banks, online banks, financial technology companies, and investment management and wealth advisory firms, including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms.

These companies compete on the basis of, among other factors, size, location, quality and type of products and services offered, price, technology, brand recognition, and reputation.

Emerging technologies have the potential to further intensify competition and accelerate disruption in the financial services industry.

In recent years, non-financial services firms, such as financial technology companies, have begun to offer services traditionally provided by financial institutions.

These firms attempt to use technology and mobile platforms to enhance the ability of companies and individuals to borrow, save and invest money.

Emerging technologies, such as artificial intelligence (including machine learning and generative artificial intelligence) and quantum computing, have the potential to further intensify competition and accelerate disruption in the financial services industry.

Financial technology companies now offer services traditionally provided by financial institutions.

These firms use technology and mobile platforms to enhance the ability of companies and individuals to borrow, save and invest money.

Additionally, financial technology companies and other firms have begun to offer services such as stablecoins that may serve as alternatives to traditional banking products such as deposits.

Many of these non-financial services competitors have fewer regulatory constraints and may have lower cost structures than we do.

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and to attract, retain and develop a highly skilled employee workforce.

Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors’ investment products, level of investment performance, client services and marketing and distribution capabilities.

If we are not successful, our results of operations and financial condition may be negatively impacted.

We may not be as timely or successful in assessing the evolving competitive landscape and developing or introducing new products and services as our competitors.

Our business may be negatively impacted if we, or our third-party providers, do not timely develop and apply emerging technologies, or if our initiatives in these areas are deficient or fail.

Our, or our third-party providers’, inability or resistance to timely innovate or adapt operations, products, and services to evolving regulatory and market environments, industry standards, and consumer preferences could result in service disruptions, harm our business, and adversely affect our results of operations and reputation.

We may be unable to attract and retain key personnel.

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Certain key personnel that have regular direct contact with customers and clients often build strong relationships that are important to our business.

In addition, we rely on key personnel to manage and operate its business, including major revenue producing functions, such as loan and deposit generation and wealth management services.

In addition, we rely on key personnel to manage and operate our business, including major revenue producing functions, such as loan and deposit generation and wealth management services.

Competition for qualified personnel in the financial services industry can be intense, and we may not be able to hire or retain the key personnel that we depend upon for success.

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Despite the recent changes in the U.S.

Administration, Congressional leadership and regulatory agency leadership, state legislatures and federal and state regulatory agencies may continue to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change.

Administration, state legislatures and regulatory agencies may continue to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change.

These agreements and measures may result in the imposition of taxes and fees, the required purchase of emission credits, and the implementation of significant operational changes, each of which may require us to expend significant capital and incur compliance, operating, maintenance, and remediation costs.

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There can be no assurance that future evaluations of goodwill or intangible assets will not result in findings of impairment and related write-downs, which would have an adverse effect on our financial condition and results of operations.

Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.

Pursuant to GAAP, we are required to use certain assumptions and estimates in preparing our financial statements, including in determining allowance for credit losses on loans, among other items.

If assumptions or estimates underlying our financial statements are incorrect, we may experience material losses.

Changes in accounting standards can materially impact our financial statements.

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The FDIC and the banking divisions or departments of states in which we are licensed to do business have the power to issue consent orders to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the Federal Reserve possesses similar powers with respect to bank holding companies.

In addition, WTA, a registered investment advisor subsidiary, is subject to regulation under federal and state securities laws and fiduciary laws.

In addition, WTA, a registered investment advisor subsidiary, is

subject to regulation under federal and state securities laws and fiduciary laws.

Further, we expect to become subject to future laws, rules and regulations beyond those currently proposed, adopted or contemplated in the U.S., as well as evolving interpretations of existing and future laws, rules and regulations.

These and other restrictions limit the manner in which we may conduct business and obtain financing.

Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and define “capital” for calculating these ratios.

The minimum capital requirements are:

(i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%.

The regulations also establish a “capital conservation buffer” of 2.5%.

An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount.

The application of these capital requirements could, among other things, require us to maintain higher capital resulting in lower returns on equity, and we may be required to obtain additional capital to comply or result in regulatory actions if we are unable to comply with such requirements.

The Bancorp and the Bank are subject to regulatory capital requirements that could, among other things, require us to maintain higher capital resulting in lower returns on equity, and we may be required to obtain additional capital to comply or result in regulatory actions if we are unable to comply with such requirements.

The laws, rules, regulations, and supervisory guidance and policies applicable to us are subject to regular modification and change.

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limit the types of financial services and products we may offer;

and/or increase the ability of non-banks to offer competing financial

services and products.

and/or increase the ability of non-banks to offer competing financial services and products.

Failure to comply with laws, regulations, policies, or supervisory guidance could result in enforcement and other legal actions by federal and state authorities, including criminal and civil penalties, the loss of FDIC insurance, revocation of a banking charter or registration as an investment adviser, other sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, and results of operations.

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however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there were systems and procedures designed to ensure compliance in place at the time.

On September 27, 2023, the Bank entered into a settlement with the DOJ through an agreement to resolve allegations that it violated fair lending laws in the state of Rhode Island from 2016 to 2021.

Under the settlement, the Bank agreed to provide $7.0 million in loan subsidies over a five-year period with the goal of increasing home mortgage loans, home improvement loans, and home refinance loans in specific census tracts in Rhode Island.

Loan subsidies may include originating a loan for a home purchase, refinancing or home improvement at an interest rate below the otherwise prevailing market interest rate offered by Washington Trust and payment of the initial mortgage insurance premium on loans subject to such mortgage insurance.

The cost of such subsidies will generally be recognized over the life of the respective loans.

Loan subsidies may also include down payment assistance and closing cost assistance.

The Bank also agreed to commit $2.0 million for focused community outreach and marketing efforts over a five-year period.

The expenses associated with community outreach and marketing efforts are being recorded in the period in which the activities occur and are consistent with historical spending levels.

In addition, the Bank committed to opening two full-service branches in specific census tracts in Rhode Island, including the previously announced new branch in Olneyville, Rhode Island.

As previously disclosed in 2023, the Bank entered into a settlement with the DOJ through an agreement to resolve allegations that it violated fair lending laws in the state of Rhode Island from 2016 to 2021.

Under the settlement, the Bank agreed, over a five-year period, to (i) provide $7.0 million in loan subsidies and (ii) commit $2.0 million for focused community outreach and marketing efforts.

The expenses associated with community outreach and marketing efforts are being recorded in the

period in which the activities occur and are consistent with historical spending levels.

In addition, the Bank committed to opening two full-service branches in specific census tracts in Rhode Island, including the branch in Olneyville, Rhode Island that opened in 2024 and the branch in Pawtucket, Rhode Island, which is expected to open in the latter half of 2026.

The settlement included no civil penalties levied against the Bank.

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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-K

Item 1A. Risk Factors