What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-25 · 545 added, 436 removed, 2150 unchanged (31% of the section changed)

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Description Page

Management’s Annual Report on Internal Control Over Financial Reporting

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

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Note 18 - Business Segments

Note 19 - Other Comprehensive Income (Loss)

Note 19 - Other Comprehensive Income

Note 20 - Earnings Per Common Share

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/s/ Crowe LLP

Washington, D.C.

February 24, 2026

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We have served as the Corporation’s auditor since 2019.

Washington, D.C.

February 24, 2026

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Net interest income after provision for credit losses 143,988 126,048 133,898

Noninterest income:

Noninterest income (loss):

Wealth management revenues 41,236 39,054 35,540

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Losses on sale of portfolio loans, net — ( 62,888 ) —

Gain on sale of bank-owned properties, net 6,994 988 —

Other income 1,691 3,579 1,335

Total noninterest (loss) income ( 27,797 ) 56,140 62,602

Total noninterest income (loss) 75,860 ( 27,797 ) 56,140

Noninterest expense:

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Amortization of intangibles 762 826 843

Pension plan settlement charge 6,436 — —

Other expenses 11,845 8,835 10,661

Total noninterest expense 152,435 137,069 133,557

(Loss) income before income taxes ( 38,818 ) 56,481 91,170

Income tax (benefit) expense ( 10,759 ) 8,305 19,489

Net (loss) income ($ 28,059 ) $ 48,176 $ 71,681

Net (loss) income available to common shareholders ($ 28,038 ) $ 48,091 $ 71,479

Income (loss) before income taxes 67,413 ( 38,818 ) 56,481

Income tax expense (benefit) 15,169 ( 10,759 ) 8,305

Net income (loss) $ 52,244 ($ 28,059 ) $ 48,176

Net income (loss) available to common shareholders $ 52,244 ($ 28,038 ) $ 48,091

Weighted average common shares outstanding - basic 19,180 17,149 17,033

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Per share information:

Basic (loss) earnings per common share ($ 1.63 ) $ 2.82 $ 4.14

Diluted (loss) earnings per common share ($ 1.63 ) $ 2.82 $ 4.11

Basic earnings (loss) per common share $ 2.72 ($ 1.63 ) $ 2.82

Diluted earnings (loss) per common share $ 2.71 ($ 1.63 ) $ 2.82

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

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Years ended December 31, 2025 2024 2023

Net (loss) income ($ 28,059 ) $ 48,176 $ 71,681

Net income (loss) $ 52,244 ($ 28,059 ) $ 48,176

Other comprehensive income (loss), net of tax:

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Net change in defined benefit plan obligations 6,370 149 ( 4,821 )

Total other comprehensive income (loss), net of tax 21,982 16,647 ( 137,819 )

Total comprehensive (loss) income ($ 6,077 ) $ 64,823 ($ 66,138 )

Total other comprehensive income, net of tax 39,862 21,982 16,647

Total comprehensive income (loss) $ 92,106 ($ 6,077 ) $ 64,823

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

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Net income — — — 48,176 — — 48,176

Total other comprehensive loss, net of tax — — — — ( 137,819 ) — ( 137,819 )

Total other comprehensive income, net of tax — — — — 16,647 — 16,647

Cash dividends declared ($ 2.24 per share)

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

Net income — — — 48,176 — — 48,176

Net loss — — — ( 28,059 ) — — ( 28,059 )

Total other comprehensive income, net of tax — — — — 21,982 — 21,982

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Share-based compensation — — 2,473 — — — 2,473

Common stock issued for equity offering, net 2,199 137 70,384 — — — 70,521

Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 44 1 ( 2,060 ) — — 2,028 ( 31 )

Treasury stock purchased under the 2023 Repurchase Program (1)

( 200 ) — — — — ( 8,814 ) ( 8,814 )

Balance at December 31, 2024 19,274 $ 1,223 $ 196,947 $ 434,014 ($ 119,171 ) ($ 13,285 ) $ 499,728

Net loss — — — ( 28,059 ) — — ( 28,059 )

Net income — — — 52,244 — — 52,244

Total other comprehensive income, net of tax — — — — 39,862 — 39,862

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Share-based compensation — — 3,026 — — — 3,026

Common stock issued in public offering, net 2,199 137 70,384 — — — 70,521

Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 29 — ( 1,650 ) — — 1,252 ( 398 )

Treasury stock purchased under the 2025 Repurchase Program (1)

( 268 ) — — — — ( 7,361 ) ( 7,361 )

Balance at December 31, 2025 19,035 $ 1,223 $ 198,323 $ 442,741 ($ 79,309 ) ($ 19,394 ) $ 543,584

(1) Treasury stock includes $ 73 thousand of excise tax attributable to shares repurchased in 2023.

(1) Treasury stock includes $ 65 thousand and $ 73 thousand, respectively, of excise tax attributable to shares repurchased in 2025 and 2023.

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

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Cash flows from operating activities:

Net (loss) income ($ 28,059 ) $ 48,176 $ 71,681

Net income (loss) $ 52,244 ($ 28,059 ) $ 48,176

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 9,200 2,400 3,200

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

Gain on sale of bank-owned properties, net ( 6,994 ) ( 988 ) —

Depreciation of premises and equipment 3,455 3,934 4,005

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Amortization of terminated cash flow hedge loss 8,581 8,605 6,465

Pension plan settlement charge 6,436 — —

Share-based compensation 3,026 2,473 2,064

Tax (expense) benefit from stock option exercises and other equity awards

( 183 ) ( 34 ) 78

Deferred income tax (benefit) expense ( 16,737 ) ( 3,690 ) 1,160

Tax expense from stock option exercises and other equity awards ( 210 ) ( 183 ) ( 34 )

Deferred income tax expense (benefit) 12,611 ( 16,737 ) ( 3,690 )

Income from bank-owned life insurance ( 3,349 ) ( 3,041 ) ( 3,488 )

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(Decrease) increase in operating lease liabilities ( 3,296 ) ( 2,449 ) 2,469

Increase in other assets ( 11,141 ) ( 3,000 ) ( 30,804 )

Increase (decrease) in other liabilities 7,163 ( 17,968 ) 34,070

Decrease (increase) in other assets 8,490 ( 11,141 ) ( 3,000 )

(Decrease) increase in other liabilities ( 939 ) 7,163 ( 17,968 )

Net cash provided by operating activities 80,310 57,668 31,603

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Net redemptions (purchases) of Federal Home Loan Bank stock 20,344 2,076 ( 8,430 )

Net decrease (increase) in loans 165,858 ( 537,467 ) ( 832,450 )

Net (increase) decrease in loans ( 11,226 ) 165,858 ( 537,467 )

Net proceeds from sale of portfolio loans 283,182 — —

Purchases of loans ( 946 ) ( 1,435 ) ( 5,743 )

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Proceeds from surrender of bank-owned life insurance — — 1,932

Purchase of intangible asset in asset acquisition ( 2,180 ) — —

Equity investments in real estate limited partnerships ( 1,486 ) ( 3,942 ) ( 8,115 )

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Cash flows from financing activities:

Net (decrease) increase in deposits ( 232,360 ) 329,198 38,911

Net increase (decrease) in deposits 154,190 ( 232,360 ) 329,198

Proceeds from Federal Home Loan Bank advances 1,857,000 2,385,000 3,515,000

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Net cash (used in) provided by financing activities ( 395,894 ) ( 265,267 ) 490,999

Net increase (decrease) in cash and cash equivalents 23,705 ( 28,238 ) ( 60,071 )

Net (decrease) increase in cash and cash equivalents ( 10,155 ) 23,705 ( 28,238 )

Cash and cash equivalents at beginning of year 113,889 90,184 118,422

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Interest payments $ 173,917 $ 217,154 $ 156,648

Income tax payments 7,236 9,926 17,706

Income taxes paid, net of refunds ( 142 ) 7,236 9,926

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

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Treasury bills.

Short-term investments designated in rabbi trusts or a QRP for employee benefits represent restricted cash equivalents.

Notes to Consolidated Financial Statements – (continued)

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Interest income is recognized when earned.

Realized gains or losses from sales of securities are recorded on the trade date, determined using the specific identification method and recognized within noninterest income in the Consolidated Statements of Income (Loss).

Realized gains or losses from sales of securities are recorded on the trade date, determined using the specific identification method and recognized within noninterest income.

The fair values of securities may be based on either quoted market prices or third-party pricing services.

The Corporation excludes accrued interest from the amortized cost basis of debt securities and reports accrued interest in other assets in the Consolidated Balance Sheets.

The Corporation excludes accrued interest from the amortized cost basis of debt securities and reports accrued interest in other assets.

The Corporation also excludes accrued interest from the estimate of credit losses on debt securities.

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For available for sale debt securities in an unrealized loss position, management first assesses whether the Corporation intends to sell, or if it is likely that the Corporation will be required to sell the security before recovery of its amortized cost basis.

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses recognized in the Consolidated Statements of Income (Loss).

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses.

For debt securities available for sale that do not meet either of these criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors.

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government were to default.

As such, the Corporation utilized a zero credit loss estimate for these securities.

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

For available for sale debt securities that are not guaranteed by U.S.

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Losses are charged against the ACL when management believes the uncollectability of an available for sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Notes to Consolidated Financial Statements – (continued)

Federal Home Loan Bank Stock

The Bank is a member of the FHLB, which is a cooperative that provides services, including funding in the form of advances, to its member banking institutions.

The primary reason for the Bank’s membership is to gain access to a reliable source of wholesale funding in order to manage interest rate risk.

The primary reason for the Bank’s membership is to gain access to a reliable source of

Notes to Consolidated Financial Statements – (continued)

wholesale funding in order to manage interest rate risk.

The purchase of FHLB stock is a requirement for a member to gain access to funding and the Bank must own a minimum amount of FHLB stock, calculated periodically based primarily on its level of borrowings from the FHLB.

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The Bank monitors its investment to determine if impairment exists.

Based on the capital adequacy and the liquidity position of the FHLB, management believes there is no impairment related to the carrying amount of FHLB stock included in the Consolidated Balance Sheets as of December 31, 2024.

Based on the capital adequacy and the liquidity position of the FHLB, management believes there is no impairment related to the carrying amount of FHLB stock as of December 31, 2025.

Long-lived Assets Held for Sale

Once all the criteria for held for sale in ASC 360 are met, assets are reclassified to held for sale and measured at lower of the assets carrying value or fair value less costs to sell.

If the carrying value of the assets to be sold exceed the fair value less cost to sell, a valuation allowance is established with a corresponding loss recognized within noninterest income in the Consolidated Statements of Income (Loss).

If the carrying value of the assets to be sold exceed the fair value less cost to sell, a valuation allowance is established with a corresponding loss recognized within noninterest income.

Mortgage Loans Held for Sale, at Lower of Cost or Market

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Mortgage servicing rights are included in other assets and are amortized as an offset to mortgage banking revenues over the period of estimated net servicing income.

Notes to Consolidated Financial Statements – (continued)

Mortgage servicing rights are periodically evaluated for impairment based on their fair value.

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Any impairment is recognized through a valuation allowance and as a reduction to mortgage banking revenues.

Notes to Consolidated Financial Statements – (continued)

Loan Servicing Fee Income

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Nonaccrual loans that become TLMs generally remain on nonaccrual status for six months, subsequent to being modified, before management considers their return to accrual status.

If a TLM is on accrual status prior to being modified, it is

Notes to Consolidated Financial Statements – (continued)

reviewed to determine if the modified loan should remain on accrual status.

If a TLM is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status.

If the TLM successfully meets all repayment terms according to the modification documents for a specified period of time (generally 12 months) and the borrower is no longer experiencing financial difficulty, it would be declassified from TLM status.

Notes to Consolidated Financial Statements – (continued)

Individually Analyzed Loans

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Allowance for Credit Losses on Loans

The ACL on loans is established through a provision for credit losses recognized in the Consolidated Statements of Income (Loss).

The ACL on loans is established through a provision for credit losses recognized in earnings.

The ACL on loans is also increased by recoveries of amounts previously charged-off and is reduced by charge-offs on loans.

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The ACL on loans is management’s estimate of expected lifetime credit losses on loans carried at amortized cost.

The Corporation made an accounting policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest in other assets in the Consolidated Balance Sheets.

The Corporation made an accounting policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest in other assets.

The Corporation also excludes accrued interest from the estimate of credit losses on loans.

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Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values for unobservable factors resulting from its knowledge of circumstances associated with the collateral.

For pooled loans, the Corporation utilizes a DCF methodology to estimate credit losses over the expected life of the loan.

For pooled loans, the ACL is measured utilizing a DCF methodology to estimate credit losses over the expected life of the loan.

The life of the loan excludes expected extensions, renewals and modifications, unless the extension or renewal options are included in the original or modified contract terms and not unconditionally cancellable by the Corporation.

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Default triggers include the loan has become past due by 90 or more days, a charge-off has occurred, the loan has been placed on nonaccrual status, the loan has been modified as a TLM, or the loan is risk-rated as special mention or classified.

Loss given default is estimated based on historical credit loss

Notes to Consolidated Financial Statements – (continued)

Loss given default is estimated based on historical credit loss experience.

Probability of default is estimated utilizing a regression model that incorporates econometric factors.

Econometric factors are selected based on the correlation of the factor to historical credit losses for each portfolio segment.

Notes to Consolidated Financial Statements – (continued)

The following table summarizes the econometric factors utilized for each loan portfolio segment as of the dates indicated:

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Deteriorating conditions or assumptions could lead to further increases in the ACL on loans, conversely improving conditions or assumptions could lead to further reductions in the ACL on loans.

A problem with one or more loans could also require a significant increase to the ACL.

In addition, various regulatory agencies periodically review the ACL on loans.

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The estimated funding factor applied to unfunded commitments represents the likelihood that the funding will occur and is based upon the Corporation’s average historical utilization rate for each portfolio.

The ACL on unfunded commitments is included in other liabilities.

The ACL on unfunded commitments is adjusted through a provision for credit losses recognized in earnings.

Notes to Consolidated Financial Statements – (continued)

The ACL on unfunded commitments is included in other liabilities in the Consolidated Balance Sheets.

The ACL on unfunded commitments is adjusted through a provision for credit losses recognized in the Consolidated Statements of Income (Loss).

Premises and Equipment

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Repairs and maintenance costs are charged to noninterest expense as incurred.

The Corporation has committed to rent premises used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception.

Operating leases are recorded on the balance sheet, through the recognition of an operating lease ROU asset and an operating lease liability at the commencement date of the new lease.

Under non-cancellable operating leases, the Corporation has committed to rent premises used in business operations.

Management determines if an arrangement meets the definition of a lease upon inception.

When an arrangement is determined to be a lease, management assesses whether it meets the criteria of an operating lease or a financing lease.

This assessment is performed at inception or at the time of modification.

Upon commencement, operating leases are recorded on the balance sheet, through the recognition of an operating lease ROU asset and an operating lease liability.

ROU assets represent a right to use an underlying asset for the contractual lease term.

Operating lease liabilities represent an obligation to make lease payments arising from the lease.

The Corporation’s leases do not provide an implicit interest rate, therefore the Corporation uses its incremental collateralized borrowing rates commensurate with the underlying lease terms to determine the present value of operating lease liabilities.

The Corporation recognizes an adjustment to the ROU asset and lease liability when lease agreements are modified.

The discount rate used in determining the present value of operating lease liabilities is based on the lessor’s implicit rate in the lease, if known, or the Corporation’s incremental borrowing rate for borrowing terms similar to the lease upon commencement date.

The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately.

The Corporation’s lease agreements do not contain any residual value guarantees.

Operating leases with terms of 12 months or less are included in ROU assets and operating lease liabilities recorded in the Consolidated Balance Sheets.

The Corporation made an accounting policy election to include operating leases with terms of 12 months or less in ROU assets and operating lease liabilities.

Operating lease terms include options to extend when it is reasonably certain that the Corporation will exercise such options, determined on a lease-by-lease basis.

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The financial strength of the insurance carrier is reviewed prior to the purchase of BOLI and annually thereafter.

Goodwill and Identifiable Intangible Assets

Goodwill represents the excess of the purchase price over the net fair value of the acquired businesses.

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Notes to Consolidated Financial Statements – (continued)

Intangible assets identified in acquisitions consist of advisory contracts.

The value attributed to intangible assets was based on the time period over which they are expected to generate economic benefits.

Intangible assets are amortized over their estimated lives using a method that approximates the amount of economic benefits that are realized by the Corporation.

Identifiable Intangible Assets

For acquisitions that meet the definition of a business combination, the value attributed to intangible assets at the acquisition date is based on the time period over which they are expected to generate economic benefits.

Additionally, asset acquisitions for single identifiable intangible assets are accounted for under a cost accumulation model.

The value of the intangible asset is based on cash consideration paid to acquire the asset, as well as the direct costs associated with the asset acquisition, such as those paid to third-party legal counsel, brokers and consultants.

At the acquisition date, a liability for the contingent consideration payments is not recognized, as the amounts to be paid are uncertain until a future measurement date.

Instead, contingent consideration payments are capitalized as part of the intangible asset acquired when the payments are probable and reasonably estimable.

Once capitalized, the contingent consideration will be amortized over the remaining life of the intangible asset.

The Corporation’s intangible assets consist of wealth management client advisory contracts and are amortized over their estimated lives using a method that approximates the amount of economic benefits that are realized by the Corporation.

Intangible assets with definite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

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Any excess of sales proceeds over the carrying value of the foreclosed property is first applied as a recovery to the valuation allowance, if any, with the remainder being recognized as a gain on sale.

Changes to the valuation allowance, operating expenses associated with ownership of these properties, and gains or losses recognized upon sale are included in other noninterest expense in the Consolidated Statements of Income (Loss).

Changes to the valuation allowance, operating expenses associated with ownership of these properties, and gains or losses recognized upon sale are included in other noninterest expense.

Investments in Real Estate Limited Partnerships

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The Bank neither actively participates in the management of nor has a controlling interest in the real estate limited partnerships.

The carrying value of such investments is recorded in other assets on the Consolidated Balance Sheets.

The carrying value of such investments is recorded in other assets.

Investments in real estate limited partnerships are accounted for using the proportional amortization method.

Unfunded commitments for future capital contributions are recognized and recorded in other liabilities on the Consolidated Balance Sheets.

Unfunded commitments for future capital contributions are recognized and recorded in other liabilities.

Under the proportional amortization method, the investment is amortized over the same tax period and in proportion to the total tax benefits expected to be allocated to the Bank.

The amortization is recognized as a component of income tax expense in the Consolidated Statements of Income (Loss).

The amortization is recognized as a component of income tax expense.

In addition, operating losses and tax credits generated by the partnership are also recorded as a reduction to income tax expense.

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The Corporation invests in equity investments without readily determinable fair value.

Such equity investments are classified within other assets in the Consolidated Balance Sheets.

Such equity investments are classified within other assets.

The Corporation has elected to carry equity investments without readily determinable fair value at cost, less impairment, if any, plus or minus changes in observable prices.

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If the equity investment is deemed to be impaired, an impairment loss is recognized in the amount by which the carrying value of the equity investment exceeds its estimated fair value.

The impairment loss is recognized as a reduction of other noninterest income in the Consolidated Statements of Income (Loss).

The impairment loss is recognized as a reduction of other noninterest income.

An impairment loss can be reversed in a subsequent period if there are observable transactions for the identical or similar investment of the same issuer at an amount that is greater than the carrying value of the investment that was established when the impairment loss was recognized.

The reversal of any impairment loss or other changes resulting from observable transactions are recognized in other noninterest income in the Consolidated Statements of Income (Loss).

Notes to Consolidated Financial Statements – (continued)

reversal of any impairment loss or other changes resulting from observable transactions are recognized in other noninterest income.

Impairment of Long - Lived Assets Other than Goodwill

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If impairment is determined to exist, any related impairment loss is calculated based on fair value.

Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less

Notes to Consolidated Financial Statements – (continued)

costs of disposal.

An impairment loss is recognized within noninterest expense in the Consolidated Statements of Income (Loss).

Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

An impairment loss is recognized within noninterest expense.

A previously recognized impairment loss cannot be reversed in a subsequent period.

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If the Corporation is an agent in the transaction (referring customers to another party to provide services), the Corporation reports its net fee or commission retained as revenue.

For certain commissions and incentives, 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.

For certain commissions and incentives, such as those paid to employees in our Wealth Management Services and 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.

Contract cost assets are included in other assets in the Consolidated Balance Sheets.

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

Contract cost assets are included in other assets.

The amortization of contract cost assets is recorded within salaries and employee benefits expense.

Notes to Consolidated Financial Statements – (continued)

Pension Costs

Pension benefits are accounted for using the net periodic benefit cost method, which recognizes the compensation cost of an employee’s pension benefit over that employee’s approximate service period.

The net periodic benefit cost accounting method recognizes the compensation cost of an employee’s pension benefit over that employee’s approximate service period.

Pension benefit costs and benefit obligations incorporate various actuarial and other assumptions, including discount rates, mortality, rates of return on plan assets and compensation increases.

Management evaluates these assumptions on an annual basis and makes modifications to the

Notes to Consolidated Financial Statements – (continued)

assumptions based on current rates and trends when it is appropriate to so do.

The effect of modifications to those assumptions is recorded in other comprehensive income (loss) and amortized to net periodic cost over future periods.

The service cost component of net periodic benefit cost is recognized within salaries and employee benefits expense in the Consolidated Statements of Income (Loss).

All other components of net periodic benefit cost are recognized in other noninterest expense in the Consolidated Statements of Income (Loss).

Management evaluates assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to so do.

The effect of modifications to those assumptions is recorded in other comprehensive income and amortized to net periodic cost over future periods.

The service cost component of net periodic benefit cost, when it was applicable, was recognized within salaries and employee benefits expense.

All other components of net periodic benefit cost are recognized in other noninterest expense.

The funded status of defined benefit pension plans, measured as the difference between the fair value of plan assets and the projected benefit obligation, is recognized in the Consolidated Balance Sheets.

The changes in the funded status of the defined benefit plans, including actuarial gains and losses and prior service costs and credits, are recognized in comprehensive income in the year in which the changes occur.

The changes in the funded status of the defined benefit plans, including actuarial gains and losses, are recognized in comprehensive income in the year in which the changes occur.

Share-Based Compensation

Share-based compensation plans provide for awards of stock options and other equity incentives, including restricted stock units and performance share units.

Compensation expense for awards is recognized over the service period based on the fair value at the date of grant and is included in salaries and employee benefits expense in the Consolidated Statements of Income (Loss).

Compensation expense for awards is recognized over the service period based on the fair value at the date of grant and is included in salaries and employee benefits expense.

Grant date fair value for stock options is estimated using the Black-Scholes option-pricing model.

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Excess tax benefits (expenses) result when tax return deductions differ from recognized share-based compensation cost that are determined using the grant-date fair value approach for financial statement purposes.

Excess tax benefits (expenses) related to the settlement of share-based awards are recorded as a decrease (increase) to income tax expense in the Consolidated Income Statements and are classified in the Consolidated Statements of Cash Flows as an operating activity.

Excess tax benefits (expenses) related to the settlement of share-based awards are recorded as a decrease (increase) to income tax expense and are classified in the Consolidated Statements of Cash Flows as an operating activity.

Dividends declared on restricted stock units issued under the 2013 Stock Option and Incentive Plan are nonforfeitable and paid quarterly in conjunction with dividends declared and paid to common shareholders.

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Penalties, if incurred, would be recognized as a component of income tax expense.

Notes to Consolidated Financial Statements – (continued)

Segment Reporting

The Corporation manages its operations through two reportable business segments, consisting of Commercial Banking and Wealth Management Services, as determined by the Corporation’s designated CODM.

The Corporation manages its operations through two reportable business segments, consisting of Banking and Wealth Management Services, as determined by the Corporation’s designated CODMs.

Additional information on the Corporation’s reportable business segments is presented in Note 18.

Notes to Consolidated Financial Statements – (continued)

An allocation methodology is utilized to allocate income and expenses to the business segments.

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Derivatives are recognized as either assets or liabilities and are measured at fair value.

Derivative assets are included in other assets and derivative liabilities are included in other liabilities in the Consolidated Balance Sheets.

Derivative assets are included in other assets and derivative liabilities are included in other liabilities.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation.

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For derivatives not designated as hedges, changes in fair value of the derivative instruments are recognized in earnings, in noninterest income.

Notes to Consolidated Financial Statements – (continued)

Net accrued interest receivable or payable on derivatives that qualify for hedge accounting are recorded in interest income or interest expense based on the item being hedged.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820, “Fair Value Measurements and Disclosures”, establishes a

Notes to Consolidated Financial Statements – (continued)

framework for measuring fair value and expands disclosures about fair value measurements.

ASC 820, “Fair Value Measurements and Disclosures”, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The required disclosures about fair value measurements have been included in Note 10.

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Accounting Standards Adopted in 2025

Segment Reporting - Topic 280

Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), was issued in November 2023 to enhance and provide additional transparency on segment disclosures, including disclosure of significant segment expense provided to the CODM, as well as disclosing the title and position of the CODM and how they use reported results in assessing segment performance and allocation of resources.

The Corporation adopted the provisions of ASU 2023-07 on December 31, 2024 on a retrospective basis.

The adoption of ASU 2023-07 did not have a material impact on the Corporation’s financial statements.

See Note 18 for additional information on business segments.

Accounting Standards Pending Adoption

Income Taxes - Topic 740

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2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures” (“ASU 2023-09”), was issued in December 2023 to enhance and provide additional transparency on income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The provisions under ASU 2023-09 should be applied on a prospective basis, however retrospective application is also permitted.

ASU 2023-09 is not expected to have a material impact on the Corporation’s financial statements.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

The Corporation adopted the provisions of ASU 2023-09 on a retrospective basis.

The adoption of ASU 2023-09 did not have a material impact on the Corporation’s financial statements.

Accounting Standards Pending Adoption

Income Statement - Reporting Comprehensive Income - Subtopic 220

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2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses” (“ASU 2024-03”), was issued in November 2024 to enhance and provide additional disclosure on certain costs and expenses.

The effective date of ASU 2024-03 was further clarified in a subsequent ASU issued in January 2025.

The effective date of ASU 2024-03 was further clarified in ASU 2025-01, which was subsequently issued in January 2025.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

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ASU 2024-03 is not expected to have a material impact on the Corporation’s financial statements.

Financial Instruments - Credit Losses - Topic 326

Accounting Standards Update No.

2025-05, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”) was issued in July 2025 to introduce a practical expedient intended to simplify the estimation of expected credit losses on current accounts receivable and contract assets arising from revenue transactions under ASC 606.

The practical expedient permits entities to assume that current conditions as of the reporting date remain unchanged for the remaining life of the asset.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.

The provisions under ASU 2025-05 should be applied on a prospective basis.

ASU 2025-05 is not expected to have a material impact on the Corporation’s financial statements.

Intangibles - Goodwill and Other - Internal-Use Software - Subtopic 350

Accounting Standards Update No.

2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”) was issued in September 2025 to modernize the accounting framework for internal-use software development costs to better reflect contemporary development practices.

ASU 2025-06 eliminates the previous stage-based model (i.e.

preliminary, application development, and post-implementation stages) and introduces a principles-based capitalization model.

Under this ASU, software development costs are capitalized when management has authorized and committed to funding the project, and it is probable that the project will be completed and the software will perform its intended function.

The ASU also consolidates guidance for website development costs into ASC 350-40 and aligns disclosure requirements with those under ASC 360-10, including the nature and amount of capitalized internal-use software costs, the accounting policy and capitalization criteria, any significant judgments and estimates applied, amortization methods and useful lives, and qualitative and quantitative information about major software projects.

ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted.

The provisions under ASU 2025-06 can be applied on either a prospective, modified retrospective, or full retrospective basis.

The Corporation is currently evaluating the impact of ASU 2025-06 on its financial statements.

Notes to Consolidated Financial Statements – (continued)

Derivatives and Hedging - Topic 815

Accounting Standards Update No.

2025‑09, “Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements” (“ASU 2025-09”) was issued in November 2025 to make targeted amendments to the hedge accounting guidance to better align accounting outcomes with an entity’s risk management activities and to clarify certain aspects of the guidance originally amended by ASU 2017‑12.

The amendments primarily affect cash flow hedges, but also include limited changes related to fair value hedges and net investment hedges.

Among other things, ASU 2025-09 expands the ability to hedge groups of forecasted transactions with similar risk exposures, provides a framework to facilitate hedge accounting for forecasted interest payments on variable‑rate debt instruments that permit changes to the reference rate and tenor, clarifies hedge accounting for forecasted purchases and sales of nonfinancial assets, updates guidance related to net written options used as hedging instruments, and addresses certain recognition and presentation matters involving foreign currency‑denominated debt used in multiple hedging relationships.

ASU 2025-09 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those periods, with early adoption permitted.

The amendments are required to be applied on a prospective basis, with transition provisions that allow certain hedging relationships to continue without de-designation.

The Corporation is currently evaluating the impact of ASU 2025-09 on its financial statements.

Interim Reporting - Topic 270

Accounting Standards Update No.

2025‑11, “Interim Reporting (Topic 270):

Narrow‑Scope Improvements” (“ASU 2025-11”) was issued in December 2025 to clarify the scope and applicability of interim reporting guidance, reorganize and clarify interim disclosure requirements, and introduce a disclosure principle requiring entities to disclose events occurring since the end of the most recent annual reporting period that have a material impact on the entity.

The amendments are intended to improve clarity and consistency in interim reporting and do not change the underlying recognition or measurement requirements under U.S.

ASU 2025‑11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The amendments can either be applied on a prospective or retrospective basis.

ASU 2025-11 is not expected to have a material impact on the Corporation’s financial statements.

Note 3 - Securities

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Obligations of U.S.

government agencies and U.S.

government-sponsored enterprises $ 41,751 $ — ($ 3,139 ) $ — $ 38,612

$ 250,450 $ 15 ($ 24,723 ) $ — $ 225,742

Mortgage-backed securities issued by U.S.

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984,546 52 ( 129,451 ) — 855,147

Obligations of states and political subdivisions

650 5 — — 655

Individual name issuer trust preferred debt securities

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Total available for sale debt securities $ 1,049,557 $ 57 ($ 133,309 ) $ — $ 916,305

Accrued interest receivable on available for sale debt securities totaled $ 3.2 million and $ 3.7 million, respectively, as of December 31, 2024 and 2023.

Available for sale debt securities balances exclude accrued interest receivable of $ 3.1 million and $ 3.2 million, respectively, as of December 31, 2025 and 2024.

At December 31, 2025 and 2024, securities with a fair value of $ 392.4 million and $ 310.5 million, respectively, were pledged as collateral for FHLB borrowings, potential borrowings with the FRBB, certain public deposits and for other purposes.

See Note 13 for additional discussion of FHLB borrowings.

In December 2024, the Bank sold available for sale debt securities with an amortized cost balance of $ 409.5 million (fair value of $ 378.4 million) and reinvested $ 378.4 million into purchases of available for sale debt securities.

Following the public offering of common stock by the Bancorp disclosed in Note 14, the Bank sold available for sale debt securities with an amortized cost balance of $ 409.5 million (fair value of $ 378.4 million) and reinvested $ 378.4 million into purchases of available for sale debt securities.

The sale of debt securities resulted in a net realized pre-tax loss of $ 31.0 million that was recognized in the December 2024.

See Note 14 for additional disclosure regarding the Corporation’s public offering of common stock.

The following table summarizes amounts related to the sale of available for debt securities:

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Due after one year to five years 363,046 330,618

306,246 269,810

Due after five years to ten years 249,847 226,075

244,841 212,662

Due after ten years 294,881 267,405

425,182 370,116

Total securities $ 1,035,205 $ 940,342

$ 1,049,557 $ 916,305

Included in the above table are debt securities with an amortized cost balance of $ 50.0 million and a fair value of $ 46.2 million at December 31, 2024 that are callable at the discretion of the issuers.

Final maturities of the callable securities range from 7 months to 20 years, with call features ranging from 1 month to 8 years.

Notes to Consolidated Financial Statements – (continued)

Included in the above table are debt securities with an amortized cost balance of $ 46.7 million and a fair value of $ 44.4 million at December 31, 2025 that are callable at the discretion of the issuers.

Final maturities of the callable securities range from 1 year to 19 years, with call features ranging from 1 month to 7 years.

Assessment of Available for Sale Debt Securities for Impairment

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The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at December 31, 2025.

As disclosed in Note 1, the Corporation utilizes a zero credit loss estimate for these securities.

Notes to Consolidated Financial Statements – (continued)

As disclosed in Note 1, 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 December 31, 2024 included three trust preferred securities issued by three individual companies in the banking sector.

These securities in an unrealized loss position at December 31, 2025 included two trust preferred securities issued by two 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 December 31, 2024, there was one individual name issuer trust preferred debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 107 thousand that was rated below investment grade by S&P.

As of December 31, 2025, there was one individual name issuer trust preferred debt security with an amortized cost of $ 2.0 million and an unrealized loss of $ 60 thousand that was rated below investment grade by S&P.

We noted no downgrades to below investment grade between December 31, 2025 and the filing date of this report.

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Corporate Bonds

These securities in an unrealized loss position at December 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 December 31, 2025 included three corporate bond holdings issued by three individual companies in the financial services industry.

As of December 31, 2024, there was one corporate bond debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 27 thousand that was rated below investment grade by S&P.

As of December 31, 2025, there was one corporate bond debt security with an amortized cost of $ 2.0 million and an unrealized gain of $ 2 thousand that was rated below investment grade by S&P.

We noted no downgrades to below investment grade between December 31, 2025 and the filing date of this report.

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

Also, includes a $ 1.5 million negative basis adjustment associated with fair value hedges at December 31, 2024.

Also, includes a negative basis adjustment associated with fair value hedges of $ 335 thousand and $ 1.5 million, respectively, at December 31, 2025 and 2024.

See Note 9 for additional disclosure.

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Total consumer 1,824 — 1,824 1,972 — 1,972

Total $ 22,283 $ 1,024 $ 23,307 $ 20,975 $ 23,643 $ 44,618

Total nonaccrual loans $ 11,654 $ 1,269 $ 12,923 $ 22,283 $ 1,024 $ 23,307

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

Nonaccrual loans of $ 4.6 million and $ 16.9 million, respectively, at December 31, 2025 and 2024 were current as to the payment of principal and interest.

As of December 31, 2024 and 2023, nonaccrual loans secured by one- to four-family residential property amounting to $ 1.0 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 December 31, 2024.

As of December 31, 2025 and 2024, nonaccrual loans secured by one- to four-family residential property amounting to $ 3.0 million and $ 1.0 million, respectively, were in process of foreclosure.

The following table presents interest income recognized on nonaccrual loans:

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Troubled Loan Modifications

In the course of resolving problem loans, the Corporation may choose to modify the contractual terms of certain loans.

A loan that has been modified is considered a TLM when the modification is made to a borrower experiencing financial difficulty and the modification has a direct impact to the contractual cash flows.

The decision to modify a loan, versus

If both of the aforementioned criteria are met, then the modification is considered a TLM and subject to the enhanced disclosure requirements.

In the course of resolving problem loans, the Corporation may choose to modify the contractual terms of loans to borrowers who are experiencing financial difficulty.

Such modifications to borrowers experiencing financial difficulty may include

Notes to Consolidated Financial Statements – (continued)

aggressively enforcing the collection of the loan, may benefit the Corporation by increasing the ultimate probability of collection.

Modifications to borrowers experiencing financial difficulty may include modified contractual terms that have a direct impact to contractual cash flows, including principal forgiveness, interest rate reductions, maturity extensions, other-than-insignificant payment delays, or any combination thereof.

modified contractual terms that have a direct impact to contractual cash flows, including principal forgiveness, interest rate reductions, maturity extensions, other-than-insignificant payment delays, or any combination thereof.

Debt could be bifurcated with separate terms for each tranche of the TLM.

Executing a TLM in lieu of aggressively enforcing the collection of the loan may benefit the Corporation by increasing the ultimate probability of collection.

Nonaccrual loans that become TLMs generally remain on nonaccrual status for six months, subsequent to being modified, before management considers their return to accrual status.

If a TLM is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status.

The following table presents the carrying value at December 31, 2025, of TLMs made during the year, segregated by class of loans and type of concession granted:

(Dollars in thousands)

Maturity Extension Other-than-Insignificant Payment Delay Combination (1)

Total % of Total Loan Class (2)

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

Commercial real estate $ 5,605 $ 5,605 — %

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Total $ 7,915 $ 7,915 — %

(1) Combination includes an interest rate reduction, payment deferral and maturity extension.

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

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Total commercial 3,855 5,000 6,713 15,568 1

Residential Real Estate:

Residential real estate — 260 — 260 —

Total $ 3,855 $ 5,260 $ 6,713 $ 15,828 — %

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

Notes to Consolidated Financial Statements – (continued)

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

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Financial Effect

Interest Rate Reduction:

Commercial real estate Provided interest rate reduction by a weighted average rate of 3 %

Maturity Extension:

Commercial real estate Provided maturity extension for a weighted average period of 12 months

Commercial & industrial Provided maturity extension for a weighted average period of 120 months

Other-than-Insignificant Payment Delay:

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

Commercial & industrial Provided payment delay for a weighted average period of 12 months

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

Notes to Consolidated Financial Statements – (continued)

Year ended December 31, 2024

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Commercial real estate Provided maturity extension for a weighted average period of 12 months

Commercial & industrial Provided maturity extension for a weighted average period of 120 months

Other-than-Insignificant Payment Delay:

Commercial real estate Provided payment delay for a weighted average period of 5 months

Commercial & industrial Provided payment delay for a weighted average period of 12 months

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

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

(Dollars in thousands) Days Past Due

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Commercial & industrial

5,000 515 — — 515 5,515

Total commercial 5,605 — — — — 5,605

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Total loans $ 7,652 $ 263 $ — $ — $ 263 $ 7,915

At December 31, 2024, a $ 515 thousand C&I loan and a $ 260 thousand residential real estate loan, which were modified as TLMs in the previous 12 months, had a subsequent payment default.

At December 31, 2025, a $ 263 thousand residential real estate loan, which was modified as a TLM in the previous 12 months, had a subsequent payment default.

(Dollars in thousands) Days Past Due

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Commercial & industrial

5,000 515 — — 515 5,515

Total commercial 15,053 515 — — 515 15,568

Residential Real Estate:

Residential real estate

260 — — — — 260

Total loans $ 15,313 $ 515 $ — $ — $ 515 $ 15,828

At December 31, 2023, there were no TLMs made in the previous 12 months for which there was a subsequent payment default.

At December 31, 2024, a $ 515 thousand C&I loan and a $ 260 thousand residential real estate loan, which were modified as

Notes to Consolidated Financial Statements – (continued)

TLMs in the previous 12 months, had a subsequent payment default.

There were no significant commitments to lend additional funds to borrowers experiencing financial difficulty whose loans were TLMs at December 31, 2025.

Individually Analyzed Loans

Individually analyzed loans include nonaccrual commercial loans, TLMs and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans.

Individually analyzed loans 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 December 31, 2025 and 2024, the carrying value of individually analyzed loans amounted to $ 8.9 million and $ 16.6 million, respectively.

The carrying value of collateral dependent individually analyzed loans was $ 7.5 million and $ 11.6 million, respectively, at December 31, 2025 and 2024.

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

Notes to Consolidated Financial Statements – (continued)

See Note 10 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.

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Commercial & industrial (2)

515 259 682 —

Total commercial 5,605 — 10,568 1,511

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Special Mention - Loans with potential weaknesses that deserve management’s close attention.

If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s position as creditor at some future date.

If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s position as creditor

Notes to Consolidated Financial Statements – (continued)

at some future date.

Special Mention assets are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification.

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“Loss” is not intended to imply that the loan has no recovery value, but rather, it is not practical or desirable to continue to carry the asset.

Notes to Consolidated Financial Statements – (continued)

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

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Notes to Consolidated Financial Statements – (continued)

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

In the tables below, renewals subject to full credit evaluation before being granted are reported as originations in the period renewed.

Loans with extensions of maturity dates of more than three months, including TLMs, are reported as originations in the period extended.

Gross charge-offs are reported in the loan’s initial origination year.

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 December 31, 2025:

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Residential Real Estate:

Residential real estate:

161,291 50,709 332,253 690,150 345,038 462,198 — — 2,041,639

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Gross charge-offs 323 — 1 — — 3 — — 327

Total loans, amortized cost $ 334,388 $ 897,170 $ 1,502,297 $ 771,287 $ 342,333 $ 958,894 $ 318,761 $ 14,189 $ 5,139,319

Total gross charge-offs $ 262 $ 10 $ — $ — $ 2 $ 2,139 $ — $ — $ 2,413

(1) Excludes a $ 1.5 million negative basis adjustment associated with fair value hedges.

Loans, amortized cost $ 739,363 $ 206,495 $ 743,308 $ 1,348,951 $ 676,185 $ 1,090,180 $ 313,376 $ 16,865 $ 5,134,723

Gross charge-offs $ 372 $ — $ 8,346 $ — $ — $ 6,017 $ — $ — $ 14,735

(1) Excludes a $ 335 thousand negative basis adjustment associated with fair value hedges.

See Note 9 for additional disclosure.

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Residential Real Estate:

Residential real estate:

Current 431,563 808,442 666,447 255,554 113,462 320,894 — — 2,596,362

74,458 383,983 746,566 375,848 173,676 365,380 — — 2,119,911

Past due — 287 1,434 — 1,290 4,730 — — 7,741

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Gross charge-offs 229 10 — — 2 3 — — 244

Total loans, amortized cost $ 878,981 $ 1,551,627 $ 1,144,330 $ 478,623 $ 372,009 $ 831,226 $ 375,764 $ 15,146 $ 5,647,706

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

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

In the tables above, renewals subject to full credit evaluation before being granted are reported as originations in the period renewed.

In addition, loans

Loans, amortized cost $ 334,388 $ 897,170 $ 1,502,297 $ 771,287 $ 342,333 $ 958,894 $ 318,761 $ 14,189 $ 5,139,319

Gross charge-offs $ 262 $ 10 $ — $ — $ 2 $ 2,139 $ — $ — $ 2,413

(1) Excludes a $ 1.5 million negative basis adjustment associated with fair value hedges.

See Note 9 for additional disclosure.

Notes to Consolidated Financial Statements – (continued)

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

Loan Servicing Activities

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Amortization ( 1,538 ) — ( 1,538 )

Increase in impairment reserve — ( 34 ) ( 34 )

Balance at December 31, 2023 8,546 ( 34 ) 8,512

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Amortization ( 1,567 ) — ( 1,567 )

Increase in impairment reserve — ( 34 ) ( 34 )

Decrease in impairment reserve — 34 34

Balance at December 31, 2024 7,667 — 7,667

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$ 19,766 $ 9,750 $ 29,516 $ 6,270 $ 1,186 $ 264 $ 1,450 $ 37,236

The elevated provision for credit losses in 2025 reflected the impact of charge-offs on two commercial loan relationships.

See additional disclosure regarding these two commercial loans in Note 10 under the caption “Items Recorded at Fair Value on a Nonrecurring Basis.”

The following table presents the activity in the ACL on loans for the year ended December 31, 2024:

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

For the purpose of estimating the ACL, management segregated the loan portfolio into the portfolio segments detailed in the above tables.

Each of these segments possesses unique risk characteristics that are considered when determining the appropriate level of ACL for each segment.

Some of the characteristics unique to each loan category include:

Commercial Loans

CRE loans consist of commercial mortgages secured by non-owner occupied real property where the primary source of repayment is derived from rental income associated with the property or the proceeds of the sale, refinancing or permanent financing of the property.

CRE loans also include construction loans made to businesses for land development or the on-site construction of industrial, commercial or residential buildings.

CRE loans frequently involve larger loan balances to single borrowers or groups of related borrowers.

Washington Trust’s commercial real estate loans are secured by a variety of

Notes to Consolidated Financial Statements – (continued)

property types, such as multi-family retail, industrial and warehouse, office, hospitality, healthcare facilities, as well as other specific use properties.

Collateral values are determined based upon third-party appraisals.

Permissible loan to value ratios at origination are governed by the Corporation’s policy and regulatory guidelines.

C&I loans consist of revolving, non-revolving and term loans extended to commercial borrowers for the purpose of providing working capital, equipment financing and financing for other business-related purposes.

C&I loans are frequently collateralized by equipment, inventory, accounts receivable and/or general business assets.

A portion of Washington Trust’s C&I loan portfolio is also collateralized by owner occupied real estate.

C&I loans also include tax-exempt loans made to states and political subdivisions, as well as industrial development or revenue bonds issued through quasi-public corporations for the benefit of a private or non-profit entity where that entity rather than the governmental entity is obligated to pay the debt service.

Washington Trust’s C&I loan portfolio includes loans to business sectors such as health care and social assistance, real estate rental and leasing, transportation and warehousing, educational services, retail trade, as well as other business sectors.

For the commercial portfolio, the Corporation typically obtains personal guarantees for payment from individuals holding material ownership interests in the borrowing entities.

Residential Real Estate Loans

Residential real estate loans held in the Corporation’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral.

Collateral consists of mortgage liens on one-to-four family residential properties, including condominiums.

Residential real estate loans also include loans to construct owner-occupied one-to-four family residential properties.

Collateral values are determined based upon third-party appraisals.

In general, loans must meet the underwriting and purchase standards imposed by Federal Home Loan Mortgage Corporation, Federal National Mortgage Association and other institutional investors as applicable.

Consumer Loans:

Home equity loans and credit lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on one-to-four family residential properties, including condominiums.

Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established guidelines, as set forth in the Corporation’s policy.

Other consumer loans consist of loans to individuals that are secured by general aviation aircraft and other installment loans made to qualified individuals for various purposes.

Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established guidelines, as set forth in the Corporation’s policy.

Notes to Consolidated Financial Statements – (continued)

Note 6 - Premises and Equipment

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In the second quarter of 2024, the Bank sold an operations facility and a net gain of $ 988 thousand was recognized within other noninterest income.

For the years ended 2023 and 2022, there were no sales of premises and equipment and therefore, no gains or losses were recognized in those periods.

For the year ended December 31, 2023, there were no sales of premises and equipment and therefore, no gains or losses were recognized in that period.

In the fourth quarter of 2024, land and premises associated with five branch locations with a total net book value of $ 4.8 million were reclassified to held for sale, as the Bank committed to sell these assets and lease them back from the buyers.

The sales-leaseback transactions for four of the five locations were completed on January 30, 2025.

The sale-leaseback transactions were completed for these five branch locations in the first quarter of 2025.

See Note 7 for additional information related to the leaseback of the assets.

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Note 7 - Leases

The Corporation has committed to rent premises used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception.

Operating lease ROU assets amounted to $ 26.9 million and $ 29.4 million, respectively, as of December 31, 2024 and 2023.

Operating lease liabilities totaled $ 29.6 million and $ 32.0 million, respectively, as of December 31, 2024 and 2023.

Under non-cancellable operating leases, the Corporation has committed to rent premises used in business operations, including branch offices, lending offices, and wealth management offices.

In the first quarter of 2025, sale-leaseback transactions were completed for five branch locations.

The transactions qualified as a sale under GAAP and as a result a pre-tax net gain on the sale of bank-owned properties totaling $ 7.0 million was recognized in noninterest income.

In addition, operating lease ROU assets of $ 10.0 million and operating lease liabilities of $ 10.0 million were recorded.

These leases expire in 17 years and include the option to renew for two additional 15 -year terms.

As of both December 31, 2025 and 2024, there were no operating leases that had not yet commenced.

1 unchanged sentence

At December 31, 2025 2024

Operating lease ROU assets

$ 35,904 $ 26,943

Operating lease liabilities $ 38,726 $ 29,578

Weighted average discount rate 5.41 % 3.80 %

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Range of lease renewal options

1 year - 5 years

3 years - 15 years

1 year - 5 years

Weighted average remaining lease term

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(1) Included in net occupancy expenses in the Consolidated Statements of Income (Loss).

On January 30, 2025, the Bank completed sales-leaseback transactions for four branch locations and recognized additional operating lease ROU assets of $ 9.4 million and operating lease liabilities of $ 9.4 million.

The leases expire in 17 years and include the option to renew for two additional 15 -year terms.

Notes to Consolidated Financial Statements – (continued)

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December 31, 2025 2024

Commercial Banking Segment $ 22,591 $ 22,591

Banking Segment $ 22,591 $ 22,591

Wealth Management Services Segment 41,318 41,318

Total goodwill $ 63,909 $ 63,909

The balance of goodwill in the Commercial Banking segment arose from the acquisition of First Financial Corp.

The balance of goodwill in the Banking segment arose from the acquisition of First Financial Corp.

The balance of goodwill in the Wealth Management Services segment arose from the 2005 acquisition of Weston and the 2015 acquisition of Halsey.

On July 31, 2025, the Bank's registered investment adviser subsidiary completed the purchase of wealth management client advisory contracts from Lighthouse in an asset acquisition.

This resulted in the recognition of an intangible asset totaling $ 2.2 million on the acquisition date.

The Corporation has not recognized a liability for the contingent consideration payments, as the amounts to be paid are uncertain until a future measurement date.

The contingent consideration payments are capitalizable as part of the intangible asset acquired when the payments are probable and reasonably estimable.

The following table presents the components of intangible assets:

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Net amount $ 4,303 $ 2,885

The balance of intangible assets at December 31, 2024 includes wealth management advisory contracts resulting from the 2005 acquisition of Weston and the 2015 acquisition of Halsey.

The wealth management advisory contracts resulting from the Weston acquisition are being amortized over a 20 -year life using a declining balance method, based on expected attrition for the current customer base derived from historical runoff data.

The wealth management advisory contracts resulting from the acquisition of Halsey are being amortized on a straight-line basis over a 15 -year life.

Weighted average remaining life (in years) 9.5 5.2

The gross carrying amount of intangible assets includes wealth management client advisory contracts resulting from the 2005 acquisition of Weston and the 2015 acquisition of Halsey, which were accounted for as business combinations.

In addition, the balance at December 31, 2025 includes wealth management client advisory contracts resulting from the Lighthouse asset acquisition.

In the third quarter of 2025, the Weston wealth management client advisory contracts were fully amortized.

Both the Halsey and Lighthouse wealth management client advisory contracts are being amortized on a straight-line basis over a 15 -year life.

Amortization expense for the years ended December 31, 2025, 2024, and 2023, amounted to $ 762 thousand, $ 826 thousand and $ 843 thousand, respectively.

3 unchanged sentences

2031 and thereafter 1,392

Notes to Consolidated Financial Statements – (continued)

Note 9 - Derivative Financial Instruments

1 unchanged sentence

Additionally, the Corporation enters into interest rate derivatives to accommodate the business requirements of its customers.

All derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value.

Notes to Consolidated Financial Statements – (continued)

Derivatives are measured at fair value.

Derivative assets are included in other assets and derivative liabilities are included in other liabilities in the Unaudited Consolidated Balance Sheets.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation.

Interest Rate Risk Management Agreements

3 unchanged sentences

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.

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

To minimize this risk, the Corporation enters into interest rate agreements only with highly rated counterparties that management believes to be creditworthy.

1 unchanged sentence

Cash Flow Hedging Instruments

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

In addition, at December 31, 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.

As of December 31, 2025 and 2024, the Corporation had interest rate swap contracts and interest rate collars that were designated as cash flow hedges.

These interest rate swaps and collars were executed to hedge the interest rate risk associated with short-term borrowings.

See Note 13 for additional disclosure on borrowings.

In addition, as of December 31, 2025, the Corporation had interest rate floor contracts that were also designated as cash flow hedges.

These interest rate floors were executed to hedge the interest rate risk associated with a pool of variable rate commercial loans.

The changes in fair value of these derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) and subsequently reclassified to earnings when gains or losses are realized (i.e., in the same period during which the hedged transactions affect earnings.)

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.

The Corporation previously 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.

3 unchanged sentences

Fair Value Hedging Instruments

As of December 31, 2024, the Corporation had interest rate swap contracts that were designated as fair value hedges.

As of December 31, 2025 and 2024, the Corporation had interest rate swap contracts that were designated as fair value hedges.

The fair value hedges were executed to hedge the interest rate risk associated with a closed-pool of fixed-rate residential real estate loans (the “hedged item”).

8 unchanged sentences

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

The Corporation retains the risk that is associated with the potential failure of counterparties and the risk inherent in originating loans.

The Corporation retains the

Notes to Consolidated Financial Statements – (continued)

risk that is associated with the potential failure of counterparties and the risk inherent in originating loans.

The interest rate contracts with counterparties are generally subject to bilateral collateralization terms.

5 unchanged sentences

Under a risk participation-out agreement, a derivative asset, the Corporation participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower for a fee paid to the participating bank.

Under a risk participation-in agreement, a derivative liability, the Corporation assumes, or participates in, a portion of the

Notes to Consolidated Financial Statements – (continued)

credit risk associated with the interest rate swap position with the commercial borrower for a fee received from the other bank.

Under a risk participation-in agreement, a derivative liability, the Corporation assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower for a fee received from the other bank.

Mortgage Loan Commitments

3 unchanged sentences

Both interest rate lock commitments and forward sale commitments are derivative financial instruments, but do not meet criteria for hedge accounting and therefore, the changes in fair value of these commitments are recognized in earnings.

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

Notes to Consolidated Financial Statements – (continued)

Derivative assets are included in other assets and derivative liabilities are included in other liabilities in the Consolidated Balance Sheets.

The following table presents the notional amounts and the fair values of derivative instruments:

(Dollars in thousands) December 31, 2025 December 31, 2024

6 unchanged sentences

Interest rate collar 100,000 — 17 50,000 — 30

Interest rate floors 200,000 125 — — — —

Derivatives Designated as Fair Value Hedging Instruments:

16 unchanged sentences

(1) The fair value of derivative assets includes accrued interest receivable of $ 35 thousand and $ 120 thousand, respectively, at December 31, 2025 and 2024.

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

The fair value of derivative liabilities includes accrued interest payable of $ 23 thousand at December 31, 2025.

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

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

1 unchanged sentence

Washington Trust may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

Notes to Consolidated Financial Statements – (continued)

The following table presents the balance sheet location, carrying value, and cumulative basis adjustment of the hedged item associated with fair value hedges:

2 unchanged sentences

Balance Sheet Location Carrying Value of Hedged Item (1)

Cumulative Basis Adjustment Carrying Value of Hedged Item Cumulative Basis Adjustment

Cumulative Basis Adjustment Carrying Value of Hedged Item

Cumulative Basis Adjustment

Residential real estate loans $ 99,665 ($ 335 ) $ 98,519 ($ 1,481 )

(1) Represents the carrying value of the hedged item associated with fair value hedges on a closed-pool of fixed-rate residential real estate loans that are expected to be outstanding for the designated hedged periods.

The amortized cost balance of the closed-pool of residential real estate loans used in the fair value hedges was $ 733.2 million at December 31, 2024.

The amortized cost balance of the closed-pool of residential real estate loans used in the fair value hedges was $ 608.5 million and $ 733.2 million, respectively, at December 31, 2025 and 2024.

Notes to Consolidated Financial Statements – (continued)

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

6 unchanged sentences

Interest rate collar 10 ( 22 ) —

Interest rate floors

Total $ 4,796 $ 7,681 $ 7,026

10 unchanged sentences

675 1,775 1,665

Interest rate floors Interest income:

Interest and fees on loans ( 50 ) — —

Derivatives Designated as Fair Value Hedging Instruments:

17 unchanged sentences

For derivatives designated as cash flow hedging instruments in the table above, the amounts represent the pre-tax reclassifications from AOCL into earnings.

Notes to Consolidated Financial Statements – (continued)

Note 10 - Fair Value Measurements

4 unchanged sentences

Fair value measurements are determined based on the assumptions the market participants would use in pricing the asset or liability.

In addition, GAAP specifies a hierarchy of valuation techniques based on whether the types of valuation information, or “inputs”, are observable or unobservable.

In addition, GAAP specifies a

Notes to Consolidated Financial Statements – (continued)

hierarchy of valuation techniques based on whether the types of valuation information, or “inputs”, are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Corporation’s market assumptions.

13 unchanged sentences

Aggregate principal balance 35,130 21,420

21,420 19,480

Difference between fair value and principal balance $ 703 $ 288

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 Consolidated Statements of Income (Loss).

Changes in fair value amounted to a decrease in mortgage banking revenues of $ 310 thousand in 2024, compared to an increase in mortgage banking revenues of $ 470 thousand in 2023.

Changes in fair value amounted to an increase in mortgage banking revenues of $ 415 thousand in 2025, compared to a decrease in mortgage banking revenues of $ 310 thousand in 2024.

There were no mortgage loans held for sale 90 days or more past due as of December 31, 2025 and 2024.

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government-sponsored enterprises, including mortgage-backed securities, individual name issuer trust preferred debt securities, and corporate bonds.

Notes to Consolidated Financial Statements – (continued)

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.

4 unchanged sentences

Interest rate derivative contracts are traded in over-the-counter markets where quoted market prices are not readily available.

Fair value measurements are determined using independent valuation software, which utilizes the present value of future cash flows discounted using market observable inputs such as forward rate assumptions.

Fair value measurements are determined using independent valuation software, which utilizes the present value of

Notes to Consolidated Financial Statements – (continued)

future cash flows discounted using market observable inputs such as forward rate assumptions.

The Corporation evaluates the credit risk of its counterparties, as well as that of the Corporation.

12 unchanged sentences

The following tables present the balances of assets and liabilities reported at fair value on a recurring basis:

(Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Dollars in thousands) Total

Level 1 Level 2 Level 3

December 31, 2025

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Notes to Consolidated Financial Statements – (continued)

(Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Dollars in thousands) Total Level 1 Level 2 Level 3

December 31, 2024

1 unchanged sentence

Obligations of U.S.

government-sponsored enterprises

$ 225,742 $ — $ 225,742 $ —

government agencies and U.S government-sponsored enterprises $ 38,612 $ — $ 38,612 $ —

Mortgage-backed securities issued by U.S.

2 unchanged sentences

855,147 — 855,147 —

Obligations of states and political subdivisions

Individual name issuer trust preferred debt securities

16 unchanged sentences

Collateral dependent individually analyzed loans are categorized as Level 3.

Loan Servicing Rights

Loans sold with the retention of servicing result in the recognition of loan servicing rights.

Loan servicing rights are originally recorded at fair value and then amortized as an offset to mortgage banking revenues over the estimated period of servicing.

Loan servicing rights are evaluated quarterly for impairment based on their fair value.

Impairment exists if the carrying value exceeds the estimated fair value.

Impairment is measured on an aggregated basis by stratifying the loan servicing rights based on homogeneous characteristics such as note rate and loan type.

The fair value is estimated using an independent valuation model that estimates the present value of expected cash flows, incorporating assumptions for discount rates and prepayment rates.

Loan servicing rights are categorized as Level 3.

Mortgage Loans Held for Sale, at Lower of Cost or Market

Following the public offering of common stock by the Corporation disclosed in Note 14 and pursuant to the terms of a sales agreement effective December 30, 2024, the Bank committed to sell residential mortgage loans with an amortized cost balance of $ 344.6 million that were held in portfolio.

Following the public offering of common stock by the Bancorp disclosed in Note 14 and pursuant to the terms of a sales agreement effective December 30, 2024, the Bank committed to sell residential mortgage loans with an amortized cost balance of $ 344.6 million that were held in portfolio.

These loans were reclassified to held for sale and written down to a fair value of $ 281.7 million, resulting in a net pre-tax loss of $ 62.9 million that was recognized in December 2024.

1 unchanged sentence

The sale of these loans was completed on January 24, 2025.

Notes to Consolidated Financial Statements – (continued)

Items Recorded at Fair Value on a Nonrecurring Basis

The following table presents the carrying value of assets held at December 31, 2024, which were written down to fair value during the twelve months ended December 31, 2024:

(Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

Collateral dependent individually analyzed loans $ 9,057 $ — $ — $ 9,057

Mortgage loans held for sale, at lower of cost or market 281,706 — 281,706 —

Total assets at fair value on a nonrecurring basis $ 290,763 $ — $ 281,706 $ 9,057

Assets written down to fair value in 2025 consisted of two collateral dependent individually analyzed loan relationships, which had no carrying value at December 31, 2025.

The first was a C&I relationship in which the borrower declared bankruptcy in the second quarter of 2025 due to cash flow problems, and at that time, the Corporation placed the loan relationship on nonaccrual status.

As of June 30, 2025, the C&I relationship had a carrying value of $ 9.3 million and a specific reserve of $ 2.3 million.

Based on ensuing developments in the bankruptcy proceedings during the third quarter of 2025, which resulted in updated recovery estimates, the Corporation revised its estimate of expected credit losses on this relationship and recognized a charge-off of $ 8.3 million in the third quarter of 2025.

The remaining carrying value of $ 1.0 million on this relationship was collected early in October 2025.

The second was a CRE loan with a carrying value, net of previous charge-offs taken, of $ 4.3 million at June 30, 2025.

This loan was previously placed on nonaccrual status in 2023 and was previously modified and reported as a TLM.

In September 2025, the Corporation changed its exit strategy and decided to sell this loan.

The sale closed, proceeds of $ 1.2 million were received, and a charge-off of $ 3.0 million was recognized in September 2025.

Notes to Consolidated Financial Statements – (continued)

The following table presents the carrying value of assets held at December 31, 2024, which were written down to fair value during the year ended December 31, 2024.

(Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Dollars in thousands) Total Level 1 Level 2 Level 3

Collateral dependent individually analyzed loans $ 9,057 $ — $ — $ 9,057

Loan servicing rights 8,512 — — 8,512

Mortgage loans held for sale, at lower of cost or market 281,706 — 281,706 —

Total assets at fair value on a nonrecurring basis $ 290,763 $ — $ 281,706 $ 9,057

The following tables present valuation techniques and unobservable inputs for assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:

(Dollars in thousands) Fair Value Valuation Technique Unobservable Input Inputs Utilized

December 31, 2024

Collateral dependent individually analyzed loans $ 9,057 Appraisals of collateral Discount for costs to sell 14 % - 49 % ( 16 %)

Appraisal adjustments 0 % - 10 % ( 7 %)

(Dollars in thousands) Fair Value Valuation Technique Unobservable Input Inputs Utilized (Weighted Average)

The following table presents valuation techniques and unobservable inputs for assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:

(Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range of Inputs Utilized (Weighted Average)

December 31, 2024

1 unchanged sentence

Appraisal adjustments 0 % - 10 % ( 7 %)

Loan servicing rights

8,512 Discounted Cash Flow Discount Rate 10 % - 14 % ( 10 %)

Prepayment rates 6 % - 53 % ( 9 %)

Notes to Consolidated Financial Statements – (continued)

Items for which Fair Value is Only Disclosed

1 unchanged sentence

(Dollars in thousands) Carrying Amount Total

Fair Value Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

Fair Value Level 1 Level 2 Level 3

December 31, 2025

12 unchanged sentences

Junior subordinated debentures 22,681 19,953 — 19,953 —

(1) The estimated fair value excludes a $ 1.5 million negative basis adjustment associated with fair value hedges.

(1) The estimated fair value excludes a $ 335 thousand negative basis adjustment associated with fair value hedges.

See Note 9 for additional disclosure.

Notes to Consolidated Financial Statements – (continued)

(Dollars in thousands) Carrying Amount Total

Fair Value Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

Fair Value Level 1 Level 2 Level 3

December 31, 2024

3 unchanged sentences

5,095,878 4,952,110 — — 4,952,110

49,817 49,817 — 49,817 —

Investment in BOLI

6 unchanged sentences

Junior subordinated debentures 22,681 19,602 — 19,602 —

Notes to Consolidated Financial Statements – (continued)

(1) The estimated fair value excludes a $ 1.5 million negative basis adjustment associated with fair value hedges.

See Note 9 for additional disclosure.

Note 11 - Income Taxes

The following table presents income (loss) before income tax expense (benefit):

(Dollars in thousands)

Years ended December 31, 2025 2024 2023

Income (Loss) Before Income Tax Expense (Benefit):

$ 67,413 ($ 38,818 ) $ 56,481

Total income (loss) before income tax expense (benefit) $ 67,413 ($ 38,818 ) $ 56,481

The following table presents the components of income tax expense (benefit):

2 unchanged sentences

Current Tax Expense:

$ 5,166 $ 10,494 $ 16,127

812 1,501 2,202

Federal $ 2,246 $ 5,166 $ 10,494

State 312 812 1,501

Total current tax expense

2,558 5,978 11,995

Deferred Tax (Benefit) Expense:

( 14,618 ) 412 1,012

( 2,119 ) ( 4,102 ) 148

Total deferred tax (benefit) expense (1)

Deferred Tax Expense (Benefit):

Federal 10,392 ( 14,618 ) 412

State 2,219 ( 2,119 ) ( 4,102 )

Total deferred tax expense (benefit) (1)

12,611 ( 16,737 ) ( 3,690 )

Total income tax (benefit) expense ($ 10,759 ) $ 8,305 $ 19,489

Total income tax expense (benefit) $ 15,169 ($ 10,759 ) $ 8,305

(1) The deferred income tax benefit recognized in 2024 was largely associated with loans that were reclassified to held for sale and written down to fair value in December 2024.

The sale of these loans was completed on January 24, 2025.

Notes to Consolidated Financial Statements – (continued)

Total income tax expense varies from the amount determined by applying the Federal income tax rate to income before income taxes.

2 unchanged sentences

(Dollars in thousands) Amount Rate Amount Rate Amount Rate

Tax (benefit) expense at Federal statutory rate ($ 8,152 ) 21.0 % $ 11,861 21.0 % $ 19,146 21.0 %

(Decrease) increase in taxes resulting from:

State income tax (benefit) expense, net of federal tax benefit ( 1,460 ) 3.8 1,107 2.0 1,856 2.1

federal statutory income tax $ 14,157 21.0 % ($ 8,152 ) 21.0 % $ 11,861 21.0 %

State and local income tax expense (benefit), net of federal tax effect (1)

2,212 3.3 ( 1,037 ) 2.7 ( 2,145 ) ( 3.7 )

Tax-exempt income, net ( 460 ) 1.2 ( 543 ) ( 1.0 ) ( 721 ) ( 0.8 )

Investments in low-income housing tax credits and other benefits, net ( 420 ) 1.1 ( 357 ) ( 0.6 ) ( 261 ) ( 0.3 )

Share-based compensation 151 ( 0.4 ) 29 0.1 ( 68 ) ( 0.1 )

Revaluation of net deferred tax assets for changes in state tax rates 323 ( 0.8 ) ( 4,093 ) ( 7.2 ) — —

State valuation allowance adjustment, net 1,628 ( 4.2 ) 2,153 3.8 — —

State net operating loss carryforward, net of federal tax ( 1,528 ) 3.9 ( 1,312 ) ( 2.3 ) — —

Foreign tax effects — — — — — —

Effect of changes in tax laws or rates enacted in the current period — — — — — —

Effect of cross-border tax laws — — — — — —

Investments in low-income housing limited partnerships ( 1,976 ) ( 2.9 ) ( 1,905 ) 4.9 ( 1,812 ) ( 3.2 )

Changes in valuation allowance — — — — — —

Nontaxable or nondeductible items:

( 703 ) ( 1.0 ) ( 639 ) 1.6 ( 732 ) ( 1.3 )

Investments in low-income housing limited partnerships proportional amortization and other benefits 1,594 2.3 1,485 ( 3.8 ) 1,455 2.6

Tax-exempt income ( 1,145 ) ( 1.7 ) ( 1,115 ) 2.9 ( 1,077 ) ( 1.9 )

Nondeductible interest expense 592 0.9 655 ( 1.7 ) 534 0.9

Other 438 0.6 ( 51 ) 0.1 221 0.3

Total income tax (benefit) expense ($ 10,759 ) 27.7 % $ 8,305 14.7 % $ 19,489 21.4 %

On October 6, 2023 the Commonwealth of Massachusetts enacted into law a tax bill, which made changes to how corporations calculate their Massachusetts taxable income.

The law enacted a single sales factor apportionment formula and prescribed a method for sourcing of income from investment and trading activities, effective on January 1, 2025.

Upon the enactment in 2023, the Corporation was required to revalue its deferred tax assets and liabilities reflecting the updated apportionment formula and income sourcing method.

Changes in unrecognized tax benefits — — — — — —

Total income tax expense (benefit) $ 15,169 22.5 % ($ 10,759 ) 27.7 % $ 8,305 14.7 %

(1) Massachusetts taxes represent the majority (greater than 50%) of state and local tax expense (benefit).

Also, 2023 includes the impact of a revaluation of deferred tax assets and liabilities due to a Commonwealth of Massachusetts tax bill enacted into law.

Income tax expense in 2024 was impacted by the execution of balance sheet repositioning transactions, including the sale of lower-yielding loans and securities.

See additional disclosure in Note 14 regarding use of proceeds from the public offering of common stock by the Bancorp.

The following table presents information regarding income taxes paid, net of refunds:

Years ended December 31, 2025 2024 2023

federal tax $ — $ 5,700 $ 8,500

state tax (1):

Massachusetts — 1,300 1,225

Connecticut ( 170 ) — —

New York 21 150 130

All other 7 86 71

Income taxes paid, net of refunds ($ 142 ) $ 7,236 $ 9,926

(1) Amounts separately stated for jurisdictions exceeding 5% of total income tax paid (net of refunds).

Notes to Consolidated Financial Statements – (continued)

4 unchanged sentences

Net unrealized losses on available for sale debt securities $ 23,716 $ 33,646

Loss on portfolio loans reclassified to held for sale 15,093 —

Allowance for credit losses on loans 10,595 10,470

Operating lease liabilities

Allowance for credit losses on loans 9,309 10,595

Deferred compensation liabilities 5,548 5,439

State net operating loss carryforwards 3,559 2,840

Cash flow hedges 2,595 5,250

Deferred loan origination fees

Defined benefit pension obligations

Share-based compensation

Deferred loan origination fees

Federal tax credit carryforwards 1,535 —

Cash flow hedges 965 2,595

Capital loss carryforward 368 1,550

Defined benefit pension obligations

Nonaccrual interest 606 511

Loss on portfolio loans reclassified to held for sale — 15,093

Deferred tax assets

7 unchanged sentences

( 5,772 ) ( 6,784 )

Depreciation of premises and equipment ( 1,956 ) ( 1,897 )

Non-elective employer 401(k) contributions ( 2,403 ) —

Loan servicing rights

( 1,639 ) ( 1,936 )

Depreciation of premises and equipment ( 1,257 ) ( 1,956 )

Deferred compensation assets ( 786 ) ( 577 )

Amortization of intangibles

( 546 ) ( 729 )

Deferred compensation assets ( 577 ) ( 467 )

Contract cost incentives ( 529 ) ( 440 )

( 711 ) ( 590 )

3 unchanged sentences

The Corporation’s net deferred tax asset is included in other assets in the Consolidated Balance Sheets.

Net deferred tax assets increased by $ 9.2 million during 2024 and included establishment of a deferred tax asset associated with loans that were reclassified to held for sale and written down to fair value in December 2024.

Net deferred tax assets decreased by $ 26.2 million during 2025.

This decrease included the realization of a deferred tax asset established in December 2024 associated with the loans that were reclassified to held for sale and written down to fair value as part of the balance sheet repositioning transactions.

This deferred tax asset was realized in January 2025 when the loan sale was completed.

See Note 10 for additional disclosure on loans reclassified to held for sale.

Excluding that item, the decrease largely reflected reductions in deferred tax assets associated with increases in fair value of securities available for sale.

Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

2 unchanged sentences

These operating loss carryforwards have various expirations beginning in 2042, the majority of which are subject to annual usage limitations.

Management’s assessment considered the Corporation’s forecasted future taxable income, existing taxable temporary differences along with tax planning strategies.

Management believes deferred tax assets, net of the valuation allowance, are more-likely-than-not to be realized.

Management’s assessment considered the

Notes to Consolidated Financial Statements – (continued)

Corporation’s forecasted future taxable income, existing taxable temporary differences along with tax planning strategies.

Management believes deferred tax assets, net of the valuation allowance, are more-likely-than-not to be realized.

The Corporation established a deferred tax asset of $ 1.5 million related to tax credit carryforwards in 2025.

These credits have various expirations beginning in 2041.

The Corporation had no unrecognized tax benefits as of December 31, 2025 and 2024.

18 unchanged sentences

Total deposits $ 5,269,990 $ 5,115,800

(1) Includes wholesale brokered time deposit balances of $ 297.5 million and $ 654.1 million, respectively, as of December 31, 2024 and 2023.

(1) There were no wholesale brokered time deposits at December 31, 2025.

Included in time deposits were $ 297.5 million of wholesale brokered time deposits at December 31, 2024.

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

12 unchanged sentences

Federal Home Loan Bank Advances

Advances payable to the FHLB amounted to $ 1.1 billion and $ 1.2 billion, respectively, at December 31, 2024 and 2023.

Advances payable to the FHLB amounted to $ 626.0 million and $ 1.1 billion, respectively, at December 31, 2025 and 2024.

See Note 9 for additional disclosure on derivatives designated as cash flow hedges that were executed to hedge the interest rate risk associated with short-term FHLB advances.

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

As of December 31, 2024 and 2023, the Bank had available borrowing capacity of $ 753.0 million and $ 1.1 billion, respectively, with the FHLB.

As of December 31, 2025 and 2024, the Bank had available borrowing capacity of $ 1.4 billion and $ 753.0 million, respectively, with the FHLB.

In addition, the Bank had access to a $ 40.0 million unused line of credit with the FHLB at both December 31, 2025 and 2024.

Furthermore, the Bank had standby letters of credit with the FHLB of $ 66.0 million and $ 65.0 million, respectively, at December 31, 2024 and December 31, 2023, to collateralize institutional deposits.

Furthermore, the Bank had standby letters of credit with the FHLB of $ 66.0 million at both December 31, 2025 and December 31, 2024 to collateralize institutional deposits.

The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of December 31, 2025:

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Common Stock Issued in Public Offering

On December 16, 2024, the Corporation completed an underwritten public offering of 2,198,528 shares of its common stock at a public offering price of $ 34.00 per share, and disclosed that the use of proceeds would include investments in the Bank and Bank balance sheet optimization strategies involving the sale of lower-yielding loans and securities, the purchase of debt securities with current market yields, and the repayment of wholesale funding balances.

The net proceeds received from the offering, after deducting underwriting discounts and commissions and operating expenses payable by the Corporation, were $ 70.5 million.

On December 16, 2024, the Bancorp completed an underwritten public offering of 2,198,528 shares of its common stock at a public offering price of $ 34.00 per share, and disclosed that the use of proceeds would include investments in the Bank and Bank balance sheet optimization strategies involving the sale of lower-yielding loans and securities, the purchase of debt securities, and the repayment of wholesale funding balances.

The net proceeds received from the offering, after deducting underwriting discounts and commissions and operating expenses were $ 70.5 million.

Stock Repurchase Program

During the second quarter of 2025, the 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.

This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations.

The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities.

Repurchases under the 2025 Repurchase Program are conducted pursuant to a trading plan adopted by the Bancorp that is designed to qualify under Rule 10b5-1 under the Exchange Act.

The 2025 Repurchase Program commenced on May 15, 2025 and expires on May 15, 2026 and may be modified, suspended, or discontinued at any time.

For the year ended December 31, 2025, the Bancorp repurchased a total of 267,658 shares, at an average price of $ 27.26 and a total cost of $ 7.4 million, under its 2025 Repurchase Program.

The total cost included $ 65 thousand of excise tax attributable to shares that were repurchased in 2025.

For the year ended December 31, 2024, there were no shares repurchased under the 2024 Repurchase Program.

The 2024 Repurchase Program expired on December 31, 2024.

For the year ended December 31, 2023, the Corporation repurchased 200,000 shares at an average price of $ 43.70 and a total cost of $ 8.8 million, under its 2023 Repurchase Program.

For the year ended December 31, 2023, the Bancorp repurchased 200,000 shares at an average price of $ 43.70 and a total cost of $ 8.8 million, under its 2023 Repurchase Program.

The total cost included $ 73 thousand of excise tax attributable to shares that were repurchased in 2023.

The 2023 Repurchase Program expired on December 31, 2023.

For the year ended December 31, 2022, the Corporation repurchased 194,162 shares at an average price of $ 48.82 and a total cost of $ 9.5 million, under its 2021 Repurchase Program.

The 2021 Repurchase Program expired on December 31, 2022.

The primary source of liquidity for the Bancorp is dividends received from the Bank.

51 unchanged sentences

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.

As a result, capital ratios exclude the full impact of the increased ACL on loans and unfunded loan commitments attributed to the adoption of ASC 326, adjusted for an approximation of the after-tax provision for credit losses attributable to ASC 326 relative to the incurred loss methodology during the two-year deferral period.

The cumulative difference quantified at the end of the deferral period was fully phased-in to regulatory capital on January 1, 2025.

The cumulative difference attributable to the adoption of ASC 326 that was quantified at the end of the deferral period was fully phased-in to regulatory capital on January 1, 2025.

Note 15 - Revenue from Contracts with Customers

21 unchanged sentences

Losses on sale of portfolio loans, net — — ( 62,888 ) — — —

Gain on sale of bank-owned properties, net (3)

6,994 6,994 988 — — —

1,691 1,142 3,579 1,142 1,335 1,226

Total noninterest income 75,860 57,744 ( 27,797 ) 48,224 56,140 44,493

2 unchanged sentences

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

(3) For the year ended December 31, 2025, included herein in accordance with sale-leaseback transaction provisions of ASC 842 and ASC 606.

The following table presents revenue from contracts with customers segregated by revenue recognition timing:

4 unchanged sentences

Service charges on deposit accounts 2,127 1,922 1,842

Gain on sale of bank-owned properties, net 6,994 — —

Other income 915 903 983

12 unchanged sentences

The balances of contract liabilities were insignificant at both December 31, 2025 and 2024 and were included in other liabilities in the 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.

For commissions and incentives that are in scope of ASC 606, such as those paid to employees in our Wealth Management Services and 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.

3 unchanged sentences

Defined Benefit Pension Plans

Washington Trust has a qualified pension plan for the benefit of certain eligible employees who were hired prior to October 1, 2007.

Washington Trust maintained a qualified pension plan for the benefit of certain eligible employees who were hired prior to October 1, 2007.

Washington Trust also has non-qualified retirement plans to provide supplemental retirement benefits to certain employees, as defined in the plans.

These defined benefit pension plans were previously amended to freeze benefit accruals after a 10-year transition period, which ended in December 2023.

In the fourth quarter of 2023, the Corporation’s Board of Directors approved a resolution to terminate the qualified pension plan effective December 31, 2023 and participants were notified of the termination.

In the first quarter of 2025, the qualified pension plan liability will be settled after plan assets are distributed through a combination of lump sum payments to participants and the purchase of a group annuity contract from a highly-rated insurance company.

This results in a pre-tax non-cash pension settlement charge of approximately $ 6.4 million being recognized in the Consolidated Statements of Income (Loss) the first quarter of 2025.

The settlement charge includes the recognition of pre-tax actuarial losses accumulated in AOCL and the effects of the remeasurement of plan assets and and liability upon settlement.

As a result of the plan’s over-funded status, remaining surplus plan assets of approximately $ 10.3 million are expected to be transferred directly to the Corporation’s 401(k) Plan (a qualified replacement plan) to fund future non-elective employer contributions.

The qualified pension plan is funded on a current basis, in compliance with the requirements of ERISA.

Pension benefit costs and benefit obligations incorporate various actuarial and other assumptions, including discount rates, mortality, rates of return on plan assets and compensation increases.

Washington Trust evaluates these assumptions annually.

The actuarial assumptions also included considerations for the termination of the qualified pension plan.

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.

In the first quarter of 2025, the qualified pension plan liability was settled through a combination of lump sum payments to participants and the purchase of a group annuity contract from a highly-rated insurance company.

This resulted in a pre-tax non-cash pension settlement charge of $ 6.4 million being recognized in noninterest expenses the first quarter of 2025.

The settlement charge included the recognition of pre-tax actuarial losses accumulated in AOCL and the effects of the remeasurement of plan assets and liabilities upon settlement.

In the third quarter of 2025 and as a result of the plan’s over-funded status, remaining surplus plan assets of $ 10.5 million were transferred directly to the Corporation’s 401(k) Plan (a QRP) to fund non-elective employer contributions.

Pension benefit costs and benefit obligations may incorporate various actuarial and other assumptions, such as discount rates, mortality, rate of return on plan assets, and compensation increases.

Starting in 2024, pension benefit cost for the qualified pension plan also included considerations for the termination of the qualified pension plan.

Washington Trust evaluates assumptions annually.

Notes to Consolidated Financial Statements – (continued)

8 unchanged sentences

Service cost (1)

500 1,403 — 156

Interest cost

17 unchanged sentences

( 271 ) ( 841 ) — —

Fair value of plan assets at end of period

Transfer to QRP

( 10,507 ) — — —

Fair value of plan assets at end of period

Funded (unfunded) status at end of period (2)

5 unchanged sentences

Securities available for sale and other short-term investments designated for this purpose, with the carrying value of $ 12.8 million and $ 13.0 million are included in the Consolidated Balance Sheets at December 31, 2025 and 2024, respectively.

There was no accumulated benefit obligation for the qualified pension plan at December 31, 2025, compared to $ 69.7 million at December 31, 2024.

The accumulated benefit obligation for the non-qualified retirement plans amounted to $ 13.0 million and $ 12.7 million, respectively, at December 31, 2025 and 2024.

The following table presents the amounts included in AOCL related to the qualified pension plan and non-qualified retirement plans:

5 unchanged sentences

$ — $ 8,936 $ 3,144 $ 2,640

The accumulated benefit obligation for the qualified pension plan was $ 69.7 million and $ 75.3 million, respectively, at December 31, 2024 and 2023.

The accumulated benefit obligation for the non-qualified retirement plans amounted to $ 12.7 million and $ 13.2 million, respectively, at December 31, 2024 and 2023.

Notes to Consolidated Financial Statements – (continued)

13 unchanged sentences

— — — 115 123 237

Net periodic benefit cost before settlement ( 19 ) ( 280 ) 353 767 772 1,099

Pension plan settlement charge 6,436 — — — — —

Net periodic benefit cost

1 unchanged sentence

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (on a pre-tax basis):

Net loss (gain) 99 6,991 ( 2,074 ) ( 299 ) ( 516 ) ( 4,572 )

Net change ( 8,936 ) 99 6,991 504 ( 299 ) ( 516 )

Recognized in other comprehensive income (loss)

6 unchanged sentences

The following table presents the measurement date and weighted-average assumptions used to determine benefit obligations at December 31, 2025 and 2024:

Pension Plan Non-Qualified Retirement Plans

Pension Plan Non-Qualified

Retirement Plans

2025 2024 2025 2024

Measurement date Dec 31, 2025 Dec 31, 2024 Dec 31, 2025 Dec 31, 2024

Discount rate 4.53 % 4.51 % 5.60 % 5.10 %

Rate of compensation increase N/A 0.50 N/A N/A

Discount rate N/A 4.53 % 5.33 % 5.60 %

Rate of compensation increase N/A N/A N/A N/A

The following table presents the measurement date and weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2025, 2024 and 2023:

3 unchanged sentences

Equivalent single discount rate for benefit obligations

4.51 % 5.54 % 3.00 % 5.15 % 5.50 % 2.89 %

Equivalent single discount rate for service cost

N/A 4.51 % 5.54 % 5.64 % 5.15 % 5.50 %

Equivalent single discount rate for service cost

N/A N/A 5.60 N/A 5.27 5.61

Equivalent single discount rate for interest cost

4.51 5.43 2.67 5.11 5.40 2.48

N/A 4.51 5.43 5.34 5.11 5.40

Expected long-term return on plan assets

4.75 5.25 5.25 N/A N/A N/A

N/A 4.75 5.25 N/A N/A N/A

Rate of compensation increase

0.50 5.00 3.75 N/A 5.00 3.75

The expected long-term rate of return on plan assets is based on what the Corporation believes is realistically achievable based on the types of assets held by the plan and the plan’s investment practices.

The assumption is updated annually, taking into account the asset allocation, historical asset return trends on the types of assets held and the current and expected economic conditions.

Decreases in the long-term rate of return assumption on plan assets increase pension costs.

Increases in the long-term rate of return on plan assets have the opposite effect.

Notes to Consolidated Financial Statements – (continued)

N/A 0.50 5.00 N/A N/A 5.00

The discount rate assumption for defined benefit pension plans is reset on the measurement date.

Discount rates are selected for each plan by matching expected future benefit payments stream to a yield curve based on a selection of high-quality fixed-income debt securities.

Discount rates are selected by matching expected future benefit payments stream to a yield curve based on a selection of high-quality fixed-income debt securities.

Decreases in discount rates increase the present value of pension obligations and increase our pension costs, while increases in discount rates have the opposite effect.

Notes to Consolidated Financial Statements – (continued)

The "spot rate approach" was utilized in the calculation of interest and service cost.

The spot rate approach applies separate discount rates for each projected benefit payment in the calculation of interest and service cost.

This approach provides a more precise measurement of service and interest cost by improving the correlation between projected benefit cash flows and their corresponding spot rates.

The following tables present the fair values of the qualified pension plan’s assets:

(Dollars in thousands) Fair Value Measurements Using

December 31, 2024 Level 1 Level 2 Level 3

Cash and cash equivalents $ 29,950 $ — $ — $ 29,950

Obligations of U.S.

government-sponsored enterprises — 42,052 — 42,052

Obligations of states and political subdivisions — 816 — 816

Corporate bonds — 496 — 496

Mutual funds 4,087 — — 4,087

Total plan assets $ 34,037 $ 43,364 $ — $ 77,401

This approach provides a more precise measurement of interest cost and service cost by improving the correlation between projected benefit cash flows and their corresponding spot rates.

As noted above, the defined benefit pension plans were previously amended to freeze benefit accruals, and therefore there is no longer a service cost component.

The expected long-term rate of return on plan assets was based on what the Corporation believed was realistically achievable based on the types of assets held by the plan and the plan’s investment practices.

The assumption was updated annually, taking into account the asset allocation, historical asset return trends on the types of assets held and the current and expected economic conditions.

Decreases in the long-term rate of return assumption on plan assets increase pension costs.

As disclosed, the termination of the qualified pension plan was completed in 2025 and remaining surplus assets were transferred directly to the Corporation’s 401(k) plan.

The following table presents the fair values of the qualified pension plan’s assets at December 31, 2024:

(Dollars in thousands) Fair Value Measurements Using

8 unchanged sentences

Total plan assets $ 34,037 $ 43,364 $ — $ 77,401

The qualified pension plan uses fair value measurements to record fair value adjustments to the securities held in its investment portfolio.

When available, the qualified pension plan uses quoted market prices to determine the fair value of securities;

such items are classified as Level 1.

This category includes cash and cash equivalents, as well as exchange-traded mutual funds.

Level 2 securities in the qualified pension plan include debt securities with quoted prices, which are traded less frequently than exchange-traded instruments, whose values are determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

This category includes obligations of U.S.

The qualified pension plan used fair value measurements to record fair value adjustments to the securities held in its investment portfolio.

When available, the qualified pension plan used quoted market prices to determine the fair value of securities;

such items were classified as Level 1.

This category included cash and cash equivalents, as well as exchange-traded mutual funds.

Level 2 securities in the qualified pension plan included debt securities with quoted prices, which are traded less frequently than exchange-traded instruments, whose values were determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

This category included obligations of U.S.

government-sponsored enterprises, obligations of states and political subdivisions and corporate bonds.

In certain cases where there is limited activity or less transparency around inputs to the valuation, securities may be classified as Level 3.

As of December 31, 2024 and 2023, the qualified pension plan did not have any securities in the Level 3 category.

Notes to Consolidated Financial Statements – (continued)

The following table presents the asset allocations of the qualified pension plan, by asset category:

December 31, 2024 2023

In certain cases where there was limited activity or less transparency around inputs to the valuation, securities would be classified as Level 3.

As of December 31, 2024, the qualified pension plan did not have any securities in the Level 3 category.

The following table presents the asset allocations of the qualified pension plan, by asset category, at December 31, 2024:

Asset Category:

4 unchanged sentences

(1) Includes obligations of U.S.

government agencies and U.S.

government-sponsored enterprises, obligations of states and political subdivisions and corporate bonds.

The assets of the qualified defined benefit pension plan trust are managed to ensure that all present and future benefit obligations are met as they come due.

It seeks to achieve this goal while trying to mitigate volatility in plan funded status and expense by aligning the characteristics of the plan assets to that of the plan liabilities.

At December 31, 2024, the qualified pension plan was well-funded.

In addition, the plan termination process is expected to be completed in 2025 after the plan assets are distributed through lump sum payments to participants and the purchase of a group annuity contract from a highly-rated insurance company.

Our investment approach took into consideration the expected distribution of plan assets in the first quarter of 2025, and as a result we increased our allocation in cash and cash equivalents and reduced fixed income securities balances to more closely align with lump sum payments expected to be paid to plan participants.

Cash inflow includes investment income from portfolio holdings, while cash outflow is for the purpose of paying plan benefits and certain plan expenses.

As early as possible each year, the trustee is advised of the estimations of benefit payments.

government agencies, U.S.

government-sponsored enterprises, states and political subdivisions, and corporate bonds.

Notes to Consolidated Financial Statements – (continued)

Contributions

The Code permits flexibility in plan contributions so that normally a range of contributions is possible.

The Corporation does not expect to make contributions to the qualified pension plan in the future due to the plan’s termination that is expected to be completed in 2025 and the plan’s funded status.

In addition, the Corporation expects to contribute $ 859 thousand in benefit payments to the non-qualified retirement plans in 2025.

The Corporation expects to contribute $ 1.0 million in benefits payments to the non-qualified retirement plans in 2026.

Estimated Future Benefit Payments

The following table presents the benefit payments, which reflect expected future service, as appropriate, expected to be paid:

(Dollars in thousands) Qualified

Pension Plan Non-Qualified

The following table presents the benefit payments expected to be paid:

(Dollars in thousands) Non-Qualified

Retirement Plans

1 unchanged sentence

2031 and thereafter 4,847

(1) As noted above, the termination of the qualified pension plan is expected to be completed in 2025.

The Corporation’s 401(k) Plan, which covers substantially all employees, provides a matching contribution of up to a maximum of 3 % of an employee’s eligible compensation.

1 unchanged sentence

Prior to January 1, 2024, only employees who were ineligible for participation in the qualified defined benefit pension plan received the non-elective employer contribution of 4%.

As noted above, as the result of the terminated qualified pension plan’s over-funded status, remaining surplus assets were transferred directly to the Corporation’s 401(k) Plan, a QRP, and are being used to fund non-elective employer contributions.

QRP assets amounted to $ 10.0 million at December 31, 2025, are invested in a money market mutual fund and are included in short-term investments in the Consolidated Balance Sheets.

Total employer contributions under this plan amounted to $ 4.3 million, $ 4.2 million and $ 3.5 million in 2025, 2024 and 2023, respectively.

Notes to Consolidated Financial Statements – (continued)

Deferred Compensation Plan

7 unchanged sentences

The Corporation’s equity compensation plans include the 2003 Stock Incentive Plan, the 2013 Stock Option and Incentive Plan and the 2022 Long Term Incentive Plan, which have been approved by the Corporation’s Board of Directors and shareholders.

Awards are being granted only from the 2022 Long Term Incentive Plan, as there are no securities available for future grants under the 2003 Stock Incentive Plan or 2013 Stock Option and Incentive Plan.

Awards are being granted from the 2022 Long Term Incentive Plan, as there are no securities remaining available for grants under the 2003 Stock Incentive Plan or 2013 Stock Option and Incentive Plan.

The maximum number of shares of common stock that may be issued under the 2022 Long Term Incentive Plan is 770,486 at December 31, 2025 and is subject to adjustment in accordance with the terms of this plan.

3 unchanged sentences

As of December 31, 2025, a total of 999,105 common stock shares were reserved for issuance under the 2003 Stock Incentive Plan, 2013 Stock Option and Incentive Plan and 2022 Long Term Incentive Plan.

Notes to Consolidated Financial Statements – (continued)

Share-based Compensation Expense

5 unchanged sentences

$ 547 $ 441 $ 492

(1) Includes $ 183 thousand and $ 34 thousand, respectively, of excess tax expense recognized upon the settlement of share-based compensation awards in 2024 and 2023, compared to $ 78 thousand of excess tax benefits in 2022.

(1) Includes $ 210 thousand, $ 183 thousand, and $ 34 thousand, respectively, of excess tax expense recognized upon the settlement of share-based compensation awards in 2025, 2024, and 2023.

As of December 31, 2025, there was $ 4.8 million of total unrecognized compensation cost related to share-based compensation arrangements, including stock options, restricted stock units and performance share units granted under the Plans.

9 unchanged sentences

Treasury yield curve in effect at the date of grant.

Notes to Consolidated Financial Statements – (continued)

The following presents the assumptions used in determining the grant date fair value of the stock option awards granted to certain key employees:

7 unchanged sentences

Weighted average grant-date fair value $ 6.92 $ 7.89 $ 6.71

Notes to Consolidated Financial Statements – (continued)

The following table presents a summary of stock options outstanding as of and for the year ended December 31, 2025:

7 unchanged sentences

The total intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date.

There were no stock options exercised in 2025 or 2023.

The total intrinsic value of stock options exercised in 2024 was $ 56 thousand.

The following table presents additional information concerning options outstanding and options exercisable at December 31, 2025:

14 unchanged sentences

Total 478,870 5.78 $ 41.36 305,870 $ 47.79

The total intrinsic value of stock options exercised in 2024 was $ 56 thousand.

There were no stock options exercised in 2023.

The total intrinsic value of stock options exercised in 2022 was $ 142 thousand.

Restricted Stock Units

In 2024, 2023 and 2022, the Corporation granted to directors and certain key employees 74,751 , 30,862 and 21,467 restricted stock units, respectively, with 3 -year cliff vesting.

Notes to Consolidated Financial Statements – (continued)

The Corporation grants restricted stock units to directors and certain key employees, which vest over 3 -years with either cliff or graded vesting.

The Corporation granted restricted stock units totaling 80,462 , 74,751 and 30,862 , respectively, in 2025, 2024 and 2023.

The following table presents a summary of restricted stock units as of and for the year ended December 31, 2025:

6 unchanged sentences

Performance Share Units

The Corporation granted performance share units to certain key employees providing the opportunity to earn shares of common stock over a 3 -year performance period.

The Corporation grants performance share units to certain key employees providing the opportunity to earn shares of common stock over a 3 -year performance period.

The number of shares to be vested will be contingent upon the Corporation’s attainment of certain performance measures as detailed in the performance share unit award agreements.

Notes to Consolidated Financial Statements – (continued)

The following table presents a summary of outstanding performance share units as of December 31, 2025:

13 unchanged sentences

(1) The number of forfeited shares also includes adjustments made to performance measure estimates on outstanding awards that have not yet vested.

Notes to Consolidated Financial Statements – (continued)

Note 18 - Business Segments

The Corporation manages its operations through two reportable business segments, consisting of Commercial Banking and Wealth Management Services.

The Corporation’s reportable business segments are determined by the Senior Executive Vice President, Chief Financial Officer and Treasurer, the designated CODM.

The Corporation manages its operations through two reportable business segments, consisting of Banking and Wealth Management Services.

The Corporation’s reportable business segments are determined by the Chairman and Chief Executive Officer, and the Senior Executive Vice President, Chief Financial Officer and Treasurer, the designated CODMs.

An allocation methodology is utilized to allocate income and expenses to the business segments.

1 unchanged sentence

Indirect activities, such as corporate, technology and other support functions, are allocated to business segments primarily based upon full-time equivalent employee computations.

The Commercial Banking segment includes commercial, residential, and consumer lending activities;

The Banking segment includes commercial, residential, and consumer lending activities;

mortgage banking activities;

deposit generation;

cash management activities;

banking activities, including customer support and the operation of ATMs, telephone banking, internet banking, and mobile banking services;

treasury management services;

other banking activities, including customer support and the operation of ATMs, telephone banking, internet banking, and mobile banking services;

as well as investment portfolio and wholesale funding activities.

The Wealth Management Services segment includes investment management;

Wealth management services and operations are provided through the Bank and its registered investment adviser subsidiary.

The Wealth Management Services segment provides investment management;

holistic financial planning services;

2 unchanged sentences

and institutional trust services, including custody and fiduciary services.

The CODM evaluates the financial performance of each business segment, which is measured based upon the business segment’s net income.

Components of net income for the business segments that are reviewed by the CODM include net interest income, provision for credit losses, noninterest income, noninterest expense, and income tax expense.

The CODM, in conjunction with management committees (such as the ALCO) and certain members of executive management, evaluates financial performance to make decisions related to the products and services that are offered, pricing, and the allocation of resources, for each business segment.

The CODMs evaluate the financial performance of each business segment, which is measured based upon the business segment’s net income.

Components of net income for the business segments that are reviewed by the CODMs include net interest income, provision for credit losses, noninterest income, noninterest expense, and income tax expense.

The CODMs, in conjunction with management committees (such as the ALCO) and certain members of executive management, evaluates financial performance to make decisions related to the products and services that are offered, pricing, and the allocation of resources, for each business segment.

Notes to Consolidated Financial Statements – (continued)

1 unchanged sentence

(Dollars in thousands)

Year ended December 31, 2024 Commercial

Year ended December 31, 2025

Banking Wealth

5 unchanged sentences

Net interest income after provision for credit losses 143,988 — 143,988

Noninterest (loss) income ( 69,609 ) 41,812 ( 27,797 )

Noninterest income 33,887 41,973 75,860

Noninterest expenses:

10 unchanged sentences

Total noninterest expense 119,914 32,521 152,435

(Loss) income before income taxes ( 52,350 ) 13,532 ( 38,818 )

Income tax (benefit) expense ( 13,530 ) 2,771 ( 10,759 )

Net (loss) income ($ 38,820 ) $ 10,761 ($ 28,059 )

Income before income taxes 57,961 9,452 67,413

Income tax expense 12,772 2,397 15,169

Net income $ 45,189 $ 7,055 $ 52,244

Supplemental Information:

4 unchanged sentences

(1) Included in net occupancy and equipment expenses in the table above.

The sale of securities and reclassification of residential mortgage loans to held for sale in connection with the balance sheet repositioning transactions that were executed in December 2024 impacted the results for the Commercial Banking segment.

See additional discussion of the impact of these transactions in Notes 3 and 10.

Noninterest income in 2025 for the Banking segment included a $ 7.0 million net gain associated with sale-leaseback transactions that were completed for five branch locations.

See additional disclosure regarding the sale-leaseback transactions in Note 7.

Also, in 2025, total other expenses included a $ 6.4 million pension plan settlement charge, of which $ 4.9 million was included in the Banking segment and $ 1.5 million was included in the Wealth Management Services segment.

See additional disclosure regarding the pension plan settlement charge in Note 16.

Notes to Consolidated Financial Statements – (continued)

(Dollars in thousands)

Year ended December 31, 2023 Commercial

Year ended December 31, 2024

Banking Wealth

5 unchanged sentences

Net interest income after provision for credit losses 126,048 — 126,048

Noninterest income 20,006 36,134 56,140

Noninterest (loss) income ( 69,609 ) 41,812 ( 27,797 )

Noninterest expenses:

10 unchanged sentences

Total noninterest expense 108,789 28,280 137,069

Income before income taxes 50,901 5,580 56,481

Income tax expense 7,028 1,277 8,305

Net income $ 43,873 $ 4,303 $ 48,176

(Loss) income before income taxes ( 52,350 ) 13,532 ( 38,818 )

Income tax (benefit) expense ( 13,530 ) 2,771 ( 10,759 )

Net (loss) income ($ 38,820 ) $ 10,761 ($ 28,059 )

Supplemental Information:

4 unchanged sentences

(1) Included in net occupancy and equipment expenses in the statement of operations above.

Noninterest income in 2024 for the Wealth Management Services segment included income of $ 2.1 million associated with a litigation settlement.

Additionally, the sale of securities and reclassification of residential mortgage loans to held for sale in connection with the balance sheet repositioning transactions that were executed in December 2024 impacted the results for the Banking segment.

See additional discussion of the impact of these transactions in Notes 3 and 10.

Notes to Consolidated Financial Statements – (continued)

(Dollars in thousands)

Year ended December 31, 2022 Commercial

Year ended December 31, 2023

Banking Wealth

2 unchanged sentences

Total interest expense 171,561 — 171,561

Net interest income (expense) 156,040 ( 50 ) 155,990

Net interest income 137,061 37 137,098

Provision for credit losses 3,200 — 3,200

Net interest income (expense) after provision for credit losses 157,340 ( 50 ) 157,290

Net interest income after provision for credit losses 133,861 37 133,898

Noninterest income 20,006 36,134 56,140

21 unchanged sentences

Notes to Consolidated Financial Statements – (continued)

Note 19 - Other Comprehensive Income (Loss)

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

Note 19 - Other Comprehensive Income

The following tables present the activity in other comprehensive income:

(Dollars in thousands)

Year ended December 31, 2024 Pre-tax Amounts Income Tax Expense Net of Tax

Year ended December 31, 2025 Pre-tax Amounts Income Tax (Expense)

Benefit Net of Tax

Available for Sale Debt Securities:

1 unchanged sentence

$ 38,389 ($ 9,693 ) $ 28,696

Net realized losses on securities reclassified into earnings 31,047 ( 7,502 ) 23,545

Net change in fair value of available for sale debt securities 18,997 ( 4,845 ) 14,152

Cash Flow Hedges:

2 unchanged sentences

Net cash flow hedge losses reclassified into earnings (1)

7,956 ( 2,003 ) 5,953

Net change in the fair value of cash flow hedges 6,416 ( 1,620 ) 4,796

Defined Benefit Plan Obligations:

Defined benefit plan obligation adjustment

Amortization of net actuarial losses (2)

Defined benefit plan obligation remeasurement 1,881 ( 408 ) 1,473

Amortization of net actuarial losses into earnings (2)

115 ( 29 ) 86

Pension plan settlement charge reclassified into earnings 6,436 ( 1,625 ) 4,811

Net change in defined benefit plan obligations 8,432 ( 2,062 ) 6,370

Total other comprehensive income $ 53,237 ($ 13,375 ) $ 39,862

(1) See Note 9 for additional information on the pre-tax amounts related to cash flow hedges that were reclassified into earnings.

(2) See Note 16 for additional information on the pre-tax amounts related to defined benefit plans that were reclassified into earnings.

(Dollars in thousands)

Year ended December 31, 2023 Pre-tax Amounts Income Tax Expense Net of Tax

Year ended December 31, 2024 Pre-tax Amounts Income Tax (Expense)

Benefit Net of Tax

Available for Sale Debt Securities:

1 unchanged sentence

($ 12,050 ) $ 2,657 ($ 9,393 )

Net losses on securities reclassified into earnings 31,047 ( 7,502 ) 23,545

Net change in fair value of available for sale debt securities 18,997 ( 4,845 ) 14,152

Cash Flow Hedges:

2 unchanged sentences

Net cash flow hedge losses reclassified into earnings (1)

6,830 ( 1,737 ) 5,093

Net change in the fair value of cash flow hedges 10,336 ( 2,655 ) 7,681

Defined Benefit Plan Obligations:

Defined benefit plan obligation adjustment

Defined benefit plan obligation remeasurement 77 ( 19 ) 58

Amortization of net actuarial losses into earnings (2)

123 ( 32 ) 91

Amortization of net actuarial losses 237 ( 58 ) 179

Net change in defined benefit plan obligations 200 ( 51 ) 149

Total other comprehensive income $ 29,533 ($ 7,551 ) $ 21,982

(1) See Note 9 for additional information on the pre-tax amounts related to cash flow hedges that were reclassified into earnings.

(2) See Note 16 for additional information on the pre-tax amounts related to defined benefit plans that were reclassified into earnings.

Notes to Consolidated Financial Statements – (continued)

(Dollars in thousands)

Year ended December 31, 2022 Pre-tax Amounts Income Tax Benefit Net of Tax

Year ended December 31, 2023 Pre-tax Amounts Income Tax

(Expense)Benefit Net of Tax

Available for Sale Debt Securities:

4 unchanged sentences

1,647 ( 346 ) 1,301

Net cash flow hedge gains reclassified into earnings 2,828 ( 679 ) 2,149

Net cash flow hedge losses reclassified into earnings (1)

7,563 ( 1,838 ) 5,725

Net change in the fair value of cash flow hedges 9,210 ( 2,184 ) 7,026

Defined Benefit Plan Obligations:

Defined benefit plan obligation adjustment

Defined benefit plan obligation remeasurement ( 6,712 ) 1,712 ( 5,000 )

Amortization of net actuarial losses into earnings (2)

237 ( 58 ) 179

Amortization of net actuarial losses 1,712 ( 411 ) 1,301

Net change in defined benefit plan obligations ( 6,475 ) 1,654 ( 4,821 )

Total other comprehensive loss ($ 181,341 ) $ 43,522 ($ 137,819 )

Total other comprehensive income $ 22,898 ($ 6,251 ) $ 16,647

(1) See Note 9 for additional information on the pre-tax amounts related to cash flow hedges that were reclassified into earnings.

(2) See Note 16 for additional information on the pre-tax amounts related to defined benefit plans that were reclassified into earnings.

The following tables present the changes in AOCL by component, net of tax:

1 unchanged sentence

Balance at December 31, 2024 ($ 102,439 ) ($ 7,938 ) ($ 8,794 ) ($ 119,171 )

Other comprehensive (loss) income before reclassifications ( 9,393 ) 2,588 58 ( 6,747 )

Other comprehensive income (loss) before reclassifications 28,696 ( 1,157 ) 1,473 29,012

Amounts reclassified from AOCL

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

Other comprehensive income (loss) before reclassifications 14,442 1,301 ( 5,000 ) 10,743

Other comprehensive (loss) income before reclassifications ( 9,393 ) 2,588 58 ( 6,747 )

Amounts reclassified from AOCL

23,545 5,093 91 28,729

Net other comprehensive income (loss) 14,442 7,026 ( 4,821 ) 16,647

Net other comprehensive income 14,152 7,681 149 21,982

Balance at December 31, 2024 ($ 102,439 ) ($ 7,938 ) ($ 8,794 ) ($ 119,171 )

Notes to Consolidated Financial Statements – (continued)

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

(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

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

Other comprehensive (loss) income before reclassifications ( 124,238 ) ( 20,781 ) 3,750 ( 141,269 )

Other comprehensive income (loss) before reclassifications 14,442 1,301 ( 5,000 ) 10,743

Amounts reclassified from AOCL

— 5,725 179 5,904

Net other comprehensive (loss) income ( 124,238 ) ( 18,632 ) 5,051 ( 137,819 )

Net other comprehensive income (loss) 14,442 7,026 ( 4,821 ) 16,647

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

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Earnings for basic and diluted EPS calculations:

Net (loss) income ($ 28,059 ) $ 48,176 $ 71,681

Net income (loss) $ 52,244 ($ 28,059 ) $ 48,176

dividends and undistributed earnings allocated to participating securities — ( 21 ) 85

Net (loss) income available to common shareholders ($ 28,038 ) $ 48,091 $ 71,479

Net income (loss) available to common shareholders $ 52,244 ($ 28,038 ) $ 48,091

Shares for basic and diluted EPS calculations:

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19,281 17,149 17,062

Basic (loss) earnings per common share ($ 1.63 ) $ 2.82 $ 4.14

Diluted (loss) earnings per common share ($ 1.63 ) $ 2.82 $ 4.11

Awards excluded from the calculation of diluted EPS:

Basic earnings (loss) per common share $ 2.72 ($ 1.63 ) $ 2.82

Diluted earnings (loss) per common share $ 2.71 ($ 1.63 ) $ 2.82

Shares excluded from the calculation of diluted EPS:

Weighted average anti-dilutive common stock equivalents (1)

(1) For 2024, the dilutive effect of common stock equivalents was excluded from the calculation of diluted EPS because the Corporation reported a net loss and the inclusion would have an anti-dilutive effect.

(1) For 2025 and 2023, weighted average anti-dilutive common stock equivalents represent share-based compensation awards not included in the calculation of common shares outstanding for purposes of calculating diluted EPS as the grant prices were greater than the average market price of Bancorp’s common stock, and therefore were anti-dilutive.

For 2024, the dilutive effect of common stock equivalents was excluded from the calculation of diluted EPS because the Corporation reported a net loss and the inclusion would have an anti-dilutive effect.

Notes to Consolidated Financial Statements – (continued)

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The Corporation is involved in various claims and legal proceedings arising out of the ordinary course of business.

Management is of the opinion, based on its review with counsel of the development of such matters to date, that the ultimate disposition of such matters will not materially affect the consolidated balance sheets or statements of income of the Corporation.

Other Matters

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.

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 previously announced new branch in Olneyville, Rhode Island.

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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Washington Trust has experienced an insignificant number of repurchase demands over a period of many years.

The carrying value of loans repurchased due to representation and warranty claims was $ 1.5 million as of both December 31, 2024 and 2023.

The carrying value of loans repurchased due to representation and warranty claims was $ 1.4 million and $ 1.5 million, respectively, as of December 31, 2025 and 2024.

Washington Trust has recorded a reserve for its exposure to losses for premium recapture and the obligation to indemnify or repurchase previously sold residential real estate mortgage loans.

The reserve balance amounted to

Notes to Consolidated Financial Statements – (continued)

$ 245 thousand at both December 31, 2024 and 2023, and is included in other liabilities in the Consolidated Balance Sheets.

The reserve balance amounted to $ 310 thousand and $ 245 thousand, respectively, at December 31, 2025 and 2024, and is included in other liabilities in the Consolidated Balance Sheets.

Any change in the estimate is recorded in mortgage banking revenues in the Consolidated Statements of Income (Loss).

Notes to Consolidated Financial Statements – (continued)

Note 22 - Parent Company Financial Statements

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Total liabilities and shareholders’ equity $ 578,105 $ 534,420

Statements of Income (Dollars in thousands)

Statements of Income (Loss) (Dollars in thousands)

Years ended December 31, 2025 2024 2023

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Non-bank — ( 1 ) —

Net (loss) income ($ 28,059 ) $ 48,176 $ 71,681

Net income (loss) $ 52,244 ($ 28,059 ) $ 48,176

Notes to Consolidated Financial Statements – (continued)

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Cash flows from operating activities:

Net (loss) income ($ 28,059 ) $ 48,176 $ 71,681

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Equity in undistributed (earnings) losses of subsidiaries:

Net income (loss) $ 52,244 ($ 28,059 ) $ 48,176

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Equity in undistributed losses (earnings) of subsidiaries:

Bank 1,611 67,139 ( 11,290 )

Non-bank — 1 —

Tax (expense) benefit from stock option exercises and other equity awards ( 183 ) ( 34 ) 78

Deferred income tax (benefit) expense ( 7 ) ( 56 ) 5

Deferred income tax expense (benefit) 21 ( 7 ) ( 56 )

(Increase) decrease in dividend receivable ( 801 ) ( 275 ) 653

Decrease (increase) in other assets 77 8 ( 175 )

Increase in accrued expenses and other liabilities 266 113 93

(Increase) decrease in other assets ( 159 ) 77 8

(Decrease) increase in accrued expenses and other liabilities ( 363 ) 266 113

Other, net — 1 2

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Equity investment in subsidiary bank — ( 70,500 ) —

Repayment of equity investment in subsidiary — — 1,096

Purchases of other equity investments, net ( 375 ) ( 338 ) ( 263 )

Net cash (used in) provided by investing activities ( 70,838 ) ( 263 ) 721

Net cash used in investing activities ( 375 ) ( 70,838 ) ( 263 )

Cash flows from financing activities:

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Cash dividends paid ( 43,325 ) ( 38,397 ) ( 38,631 )

Net cash provided by (used in) financing activities 32,093 ( 48,199 ) ( 47,947 )

Net cash (used in) provided by financing activities ( 51,084 ) 32,093 ( 48,199 )

Net increase (decrease) in cash 1,094 398 ( 10,856 )

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-K

Item 8. Financial Statements and Supplementary Data