WASHINGTON TRUST BANCORP INC 10-Q

Item 1. Financial Statements Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited) (Dollars in thousands, except par value) March 31, 2026 December 31, 2025 Assets: Cash and due from banks $ 27,781 $ 29,481 Interest-earning deposits with correspondent banks 60,090 61,375 Short-term investments 12,313 12,878 Mortgage loans held for sale, at fair value 32,127 35,833 Available for sale debt securities, at fair value (amortized cost of $ 1,008,600 , net of allowance for credit losses on securities of $ 0 at March 31, 2026; and amortized cost of $ 1,035,205 ; net of allowance for credit losses on securities of $ 0 at December 31, 2025) 911,958 940,342 Federal Home Loan Bank stock, at cost 28,273 29,473 Loans: Total loans 5,014,885 5,134,388 Less: allowance for credit losses on loans 41,126 37,236 Net loans 4,973,759 5,097,152 Premises and equipment, net 25,900 25,402 Operating lease right-of-use assets 35,855 35,904 Investment in bank-owned life insurance 116,010 115,126 Goodwill 63,909 63,909 Identifiable intangible assets, net 4,148 4,303 Other assets 167,073 170,516 Total assets $ 6,459,196 $ 6,621,694 Liabilities: Deposits: Noninterest-bearing deposits $ 585,415 $ 595,092 Interest-bearing deposits 4,579,218 4,674,898 Total deposits 5,164,633 5,269,990 Federal Home Loan Bank advances 576,000 626,000 Junior subordinated debentures 22,681 22,681 Operating lease liabilities 38,724 38,726 Other liabilities 110,385 120,713 Total liabilities 5,912,423 6,078,110 Commitments and contingencies (Note 15) Shareholders’ Equity: Common stock of $ .0625 par value; authorized 60,000,000 shares; 19,561,985 shares issued and 19,040,844 shares outstanding at March 31, 2026 and 19,561,985 shares issued and 19,034,935 shares outstanding at December 31, 2025 1,223 1,223 Paid-in capital 198,654 198,323 Retained earnings 444,508 442,741 Accumulated other comprehensive loss ( 78,435 ) ( 79,309 ) Treasury stock, at cost; 521,141 shares at March 31, 2026 and 527,050 shares at December 31, 2025 ( 19,177 ) ( 19,394 ) Total shareholders’ equity 546,773 543,584 Total liabilities and shareholders’ equity $ 6,459,196 $ 6,621,694 The accompanying notes are an integral part of these unaudited consolidated financial statements. -4- Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statements of Income (unaudited) (Dollars and shares in thousands, except per share amounts) Three months ended March 31, 2026 2025 Interest income: Interest and fees on loans $ 64,338 $ 66,656 Interest on mortgage loans held for sale 375 958 Taxable interest on debt securities 8,768 8,827 Nontaxable interest on debt securities 7 7 Dividends on Federal Home Loan Bank stock 585 1,022 Other interest income 909 1,993 Total interest and dividend income 74,982 79,463 Interest expense: Deposits 27,370 31,748 Federal Home Loan Bank advances 6,777 10,946 Junior subordinated debentures 310 347 Total interest expense 34,457 43,041 Net interest income 40,525 36,422 Provision for credit losses 4,000 1,200 Net interest income after provision for credit losses 36,525 35,222 Noninterest income: Wealth management revenues 10,647 9,891 Mortgage banking revenues 3,045 2,304 Card interchange fees 1,385 1,509 Service charges on deposit accounts 785 744 Loan related derivative income 227 101 Income from bank-owned life insurance 885 769 Gain on sale of bank-owned properties, net — 6,994 Other income 329 331 Total noninterest income 17,303 22,643 Noninterest expense: Salaries and employee benefits 24,340 22,422 Outsourced services 4,383 4,346 Net occupancy 2,890 2,741 Equipment 903 891 Legal, audit, and professional fees 936 750 FDIC deposit insurance costs 935 1,262 Advertising and promotion 547 410 Amortization of intangibles 155 204 Pension plan settlement charge — 6,436 Other expenses 2,676 2,734 Total noninterest expense 37,765 42,196 Income before income taxes 16,063 15,669 Income tax expense 3,463 3,490 Net income $ 12,600 $ 12,179 Weighted average common shares outstanding - basic 19,039 19,276 Weighted average common shares outstanding - diluted 19,173 19,370 Per share information: Basic earnings per common share $ 0.66 $ 0.63 Diluted earnings per common share $ 0.66 $ 0.63 The accompanying notes are an integral part of these unaudited consolidated financial statements. -5- Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (unaudited) (Dollars in thousands) Three months ended March 31, 2026 2025 Net income $ 12,600 $ 12,179 Other comprehensive income, net of tax: Net change in fair value of available for sale debt securities ( 1,334 ) 12,630 Net change in fair value of cash flow hedges 2,190 593 Net change in defined benefit plan obligations 18 6,769 Total other comprehensive income, net of tax 874 19,992 Total comprehensive income $ 13,474 $ 32,171 The accompanying notes are an integral part of these unaudited consolidated financial statements. -6- Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statements of Changes in Shareholders' Equity (unaudited) (Dollars and shares in thousands, except per share amounts) For the three months ended March 31, 2026 Common Shares Outstanding Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Balance at December 31, 2025 19,035 $ 1,223 $ 198,323 $ 442,741 ($ 79,309 ) ($ 19,394 ) $ 543,584 Net income — — — 12,600 — — 12,600 Total other comprehensive income, net of tax — — — — 874 — 874 Cash dividends declared ($ 0.56 per share) — — — ( 10,833 ) — — ( 10,833 ) Share-based compensation — — 651 — — — 651 Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 6 — ( 320 ) — — 217 ( 103 ) Balance at March 31, 2026 19,041 $ 1,223 $ 198,654 $ 444,508 ($ 78,435 ) ($ 19,177 ) $ 546,773 For the three months ended March 31, 2025 Common Shares Outstanding Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Balance at December 31, 2024 19,274 $ 1,223 $ 196,947 $ 434,014 ($ 119,171 ) ($ 13,285 ) $ 499,728 Net income — — — 12,179 — — 12,179 Total other comprehensive income, net of tax — — — — 19,992 — 19,992 Cash dividends declared ($ 0.56 per share) — — — ( 10,960 ) — — ( 10,960 ) Share-based compensation — — 780 — — — 780 Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 2 — ( 157 ) — — 118 ( 39 ) Balance at March 31, 2025 19,276 $ 1,223 $ 197,570 $ 435,233 ($ 99,179 ) ($ 13,167 ) $ 521,680 The accompanying notes are an integral part of these unaudited consolidated financial statements. -7- Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statement of Cash Flows (unaudited) (Dollars in thousands) Three months ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 12,600 $ 12,179 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 4,000 1,200 Gain on sale of bank-owned properties, net — ( 6,994 ) Depreciation of premises and equipment 807 894 Net amortization of premiums and discounts on debt securities and loans 37 94 Amortization of intangibles 155 204 Amortization of terminated cash flow hedge loss 2,116 2,116 Pension plan settlement charge — 6,436 Share-based compensation 651 780 Tax expense from stock option exercises and other equity awards ( 10 ) ( 21 ) Income from bank-owned life insurance ( 885 ) ( 769 ) Net gains on loan sales, including changes in fair value ( 2,534 ) ( 1,709 ) Proceeds from sales of loans, net 117,481 74,377 Loans originated for sale ( 111,945 ) ( 72,919 ) Decrease in operating lease right-of-use assets 862 898 Decrease in operating lease liabilities ( 815 ) ( 866 ) Decrease in other assets 4,147 6,066 Decrease in other liabilities ( 10,532 ) ( 13,516 ) Net cash provided by operating activities 16,135 8,450 Cash flows from investing activities: Maturities, calls, and principal payments of: Available for sale debt securities: Mortgage-backed 24,377 15,400 Available for sale debt securities: Other 2,000 — Net redemptions of Federal Home Loan Bank stock 1,200 10,918 Net decrease in loans 120,889 38,469 Net proceeds from sale of portfolio loans — 283,182 Purchases of loans ( 501 ) ( 453 ) Purchases of premises and equipment ( 1,306 ) ( 88 ) Net proceeds from the sale of bank-owned properties — 11,780 Equity investments in real estate limited partnerships ( 67 ) — Purchases of other equity investments ( 125 ) ( 250 ) Net cash provided by investing activities 146,467 358,958 Cash flows from financing activities: Net decrease in deposits ( 105,357 ) ( 75,219 ) Proceeds from Federal Home Loan Bank advances 635,000 270,000 Repayments of Federal Home Loan Bank advances ( 685,000 ) ( 545,000 ) Net proceeds from stock option exercises and issuance of other equity awards, net of awards surrendered ( 103 ) ( 39 ) Cash dividends paid ( 10,692 ) ( 10,800 ) Net cash used in by financing activities ( 166,152 ) ( 361,058 ) Net (decrease) increase in cash and cash equivalents ( 3,550 ) 6,350 Cash and cash equivalents at beginning of period 103,734 113,889 Cash and cash equivalents at end of period $ 100,184 $ 120,239 Noncash Investing and Financing Activities: Loans charged-off $ 84 $ 2,522 Commitment for equity investments in real estate limited partnerships 14,525 — Supplemental Disclosures: Interest payments $ 35,329 $ 49,732 Income taxes paid 3,395 23 The accompanying notes are an integral part of these unaudited consolidated financial statements. -8- Condensed Notes to Unaudited Consolidated Financial Statements Note 1 - Basis of Presentation Nature of Operations The Bancorp is a publicly-owned registered bank holding company that has elected to be a financial holding company. The Bancorp’s principal subsidiary is the Bank, a Rhode Island chartered financial institution founded in 1800. The Bank is the oldest community bank in the nation and the largest state-chartered bank headquartered in Rhode Island. Washington Trust offers a full range of financial services, including commercial, residential, and consumer lending, retail and commercial deposit products, and wealth management and trust services through its offices in Rhode Island, Massachusetts, and Connecticut. Basis of Presentation The accounting and reporting policies of the Washington Trust conform to GAAP and to general practices of the banking industry. The Corporation’s Unaudited Consolidated Financial Statements include the accounts of the Bancorp and its wholly-owned subsidiaries, except subsidiaries that are not deemed necessary to be consolidated. Through consolidation, intercompany balances and transactions have been eliminated. The Unaudited Consolidated Financial Statements of the Corporation presented herein have been prepared pursuant to the rules of the SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying Unaudited Consolidated Financial Statements have been included. Interim results are not necessarily indicative of the results of the entire year. The accompanying Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Use of Estimates In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ from those estimates. Management considers the ACL on loans to be a material estimate that is particularly susceptible to change. Note 2 - Recently Issued Accounting Pronouncements Accounting Standards Adopted in 2026 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 Corporation adopted the provisions of ASU 2025-05 on a prospective basis. The adoption of ASU 2025-05 did not have a material impact on the Corporation’s financial statements. Accounting Standards Pending Adoption Income Statement - Reporting Comprehensive Income - Subtopic 220 Accounting Standards Update No. 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 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. The provisions under ASU 2024-03 can be applied on either a prospective or retrospective basis. ASU 2024-03 is not expected to have a material impact on the Corporation’s financial statements. -9- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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. 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. GAAP. 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. -10- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 3 - Securities Available for Sale Debt Securities The following tables present the amortized cost, gross unrealized holding gains, gross unrealized holding losses, ACL on securities, and fair value of securities by major security type and class of security: (Dollars in thousands) March 31, 2026 Amortized Cost Unrealized Gains Unrealized Losses ACL Fair Value Available for Sale Debt Securities: Obligations of U.S. government agencies and U.S. government-sponsored enterprises $ 41,639 $ 47 ($ 1,821 ) $ — $ 39,865 Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 948,909 3,627 ( 97,814 ) — 854,722 Obligations of states and political subdivisions 650 3 — — 653 Individual name issuer trust preferred debt securities 6,187 — ( 114 ) — 6,073 Corporate bonds 11,215 — ( 570 ) — 10,645 Total available for sale debt securities $ 1,008,600 $ 3,677 ($ 100,319 ) $ — $ 911,958 (Dollars in thousands) December 31, 2025 Amortized Cost Unrealized Gains Unrealized Losses ACL Fair Value Available for Sale Debt Securities: Obligations of U.S. government agencies and U.S. government-sponsored enterprises $ 41,639 $ 93 ($ 1,774 ) $ — $ 39,958 Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 973,520 5,100 ( 97,726 ) — 880,894 Obligations of states and political subdivisions 650 13 — — 663 Individual name issuer trust preferred debt securities 6,186 — ( 83 ) — 6,103 Corporate bonds 13,210 2 ( 488 ) — 12,724 Total available for sale debt securities $ 1,035,205 $ 5,208 ($ 100,071 ) $ — $ 940,342 Available for sale debt securities balances exclude accrued interest receivable of $ 2.3 million and $ 3.1 million, respectively, as of March 31, 2026 and December 31, 2025. At March 31, 2026 and December 31, 2025, securities with a fair value of $ 377.6 million and $ 392.4 million, respectively, were pledged as collateral for FHLB borrowings, potential borrowings with the FRBB, certain public deposits, and for other purposes. See Note 9 for additional discussion on FHLB borrowings. The schedule of maturities of available for sale debt securities is presented below. Mortgage-backed securities are included based on weighted average maturities, adjusted for anticipated prepayments. All other debt securities are included based on contractual maturities. Actual maturities may differ from amounts presented because certain issuers have the right to call or prepay obligations with or without call or prepayment penalties. -11- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (Dollars in thousands) March 31, 2026 Amortized Cost Fair Value Due in one year or less $ 116,027 $ 105,359 Due after one year to five years 344,887 312,778 Due after five years to ten years 247,120 222,592 Due after ten years 300,566 271,229 Total debt securities $ 1,008,600 $ 911,958 Included in the above table are debt securities with an amortized cost balance of $ 44.7 million and a fair value of $ 42.2 million at March 31, 2026 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 Management assesses the decline in fair value of investment securities on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. The following tables summarize available for sale debt securities in an unrealized loss position, for which an ACL on securities has not been recorded, segregated by length of time that the securities have been in a continuous unrealized loss position: (Dollars in thousands) Less than 12 Months 12 Months or Longer Total March 31, 2026 # Fair Value Unrealized Losses # Fair Value Unrealized Losses # Fair Value Unrealized Losses Obligations of U.S. government agencies and U.S. government-sponsored enterprises 4 $ 1,274 ($ 15 ) 3 $ 23,543 ($ 1,806 ) 7 $ 24,817 ($ 1,821 ) Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 4 24,722 ( 39 ) 89 444,293 ( 97,775 ) 93 469,015 ( 97,814 ) Individual name issuer trust preferred debt securities — — — 2 6,073 ( 114 ) 2 6,073 ( 114 ) Corporate bonds — — — 3 10,645 ( 570 ) 3 10,645 ( 570 ) Total 8 $ 25,996 ($ 54 ) 97 $ 484,554 ($ 100,265 ) 105 $ 510,550 ($ 100,319 ) (Dollars in thousands) Less than 12 Months 12 Months or Longer Total December 31, 2025 # Fair Value Unrealized Losses # Fair Value Unrealized Losses # Fair Value Unrealized Losses Obligations of U.S. government agencies and U.S. government-sponsored enterprises 2 $ 611 ($ 5 ) 3 $ 23,582 ($ 1,769 ) 5 $ 24,193 ($ 1,774 ) Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 1 1,519 ( 1 ) 91 453,251 ( 97,725 ) 92 454,770 ( 97,726 ) Individual name issuer trust preferred debt securities — — — 2 6,103 ( 83 ) 2 6,103 ( 83 ) Corporate bonds — — — 3 10,724 ( 488 ) 3 10,724 ( 488 ) Total 3 $ 2,130 ($ 6 ) 99 $ 493,660 ($ 100,065 ) 102 $ 495,790 ($ 100,071 ) There were no debt securities on nonaccrual status at March 31, 2026 and 2025 and, therefore there was no accrued interest related to debt securities reversed against interest income for the three months ended March 31, 2026 and 2025. -12- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) As of March 31, 2026, the Corporation does not intend to sell the debt securities in an unrealized loss position and has determined that it is more-likely-than-not that the Corporation will not be required to sell each security before the recovery of its amortized cost basis. In addition, management does not believe that any of the securities are impaired due to reasons of credit quality. As further described below, management believes the unrealized losses on these debt securities are primarily attributable to changes in the investment spreads and interest rates. Therefore, no ACL was recorded at both March 31, 2026 and December 31, 2025. Obligations of U.S. Government Agency and U.S. Government-Sponsored Enterprise Securities, including Mortgage-Backed Securities The contractual cash flows for these securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. The issuers of these securities continue to make timely principal and interest payments, and none of these securities were past due at March 31, 2026. Additionally, the Corporation utilizes a zero credit loss estimate for these securities. Individual Name Issuer Trust Preferred Debt Securities These securities in an unrealized loss position at March 31, 2026 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 March 31, 2026, there was one individual name issuer trust preferred debt security with an amortized cost of $ 2.0 million and unrealized losses of $ 69 thousand that was rated below investment grade by S&P. We noted no downgrades to below investment grade between March 31, 2026 and the filing date of this report. Based on the information available through the filing date of this report, all individual name issuer trust preferred debt securities continue to accrue interest and make payments as expected with no payment deferrals or defaults on the part of the issuers. Corporate Bonds These securities in an unrealized loss position at March 31, 2026 included three corporate bond holdings issued by two individual companies in the financial services industry. Management reviewed the collectability of these securities taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date, as well as credit rating changes between the reporting period date and the filing date of this report, and other information. As of March 31, 2026, there were no corporate bond debt securities that were rated below investment grade by S&P. We noted no downgrades to below investment grade between March 31, 2026 and the filing date of this report. Based on the information available through the filing date of this report, all corporate bond debt securities continue to accrue interest and make payments as expected with no payment deferrals or defaults on the part of the issuers. -13- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 4 - Loans The following table presents the carrying value of loans, segregated by class of loans: (Dollars in thousands) March 31, 2026 December 31, 2025 Commercial: Commercial real estate (1) $ 2,084,804 $ 2,183,985 Commercial & industrial (2) 568,177 564,082 Total commercial 2,652,981 2,748,067 Residential Real Estate: Residential real estate (3) 2,029,092 2,050,399 Consumer: Home equity 316,353 318,862 Other (4) 16,459 17,060 Total consumer 332,812 335,922 Total loans (5) $ 5,014,885 $ 5,134,388 (1) CRE consists of commercial mortgages primarily secured by non-owner occupied income-producing property, as well as construction and development loans. Construction and development loans are made to businesses for land development or the on-site construction of industrial, commercial, or residential buildings. (2) C&I consists of loans to businesses and individuals, a portion of which are fully or partially collateralized by owner occupied real estate. (3) Residential real estate consists of mortgage and homeowner construction loans secured by one- to four-family residential properties. Also, includes negative basis adjustments associated with fair value hedges of $ 923 thousand and $ 335 thousand, respectively, at March 31, 2026 and December 31, 2025. See Note 6 for additional disclosure. (4) Other consists of loans to individuals secured by general aviation aircraft and other personal installment loans. (5) Includes net unamortized loan origination costs of $ 11.3 million and $ 11.0 million, respectively, at March 31, 2026 and December 31, 2025 and net unamortized premiums on loans purchased from and serviced by other financial institutions of $ 193 thousand and $ 198 thousand, respectively, at March 31, 2026 and December 31, 2025. The carrying value of loans excludes accrued interest receivable of $ 19.5 million and $ 20.1 million, respectively, as of March 31, 2026 and December 31, 2025. As of both March 31, 2026 and December 31, 2025, loans amounting to $ 2.9 billion were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRBB for the discount window. See Note 9 for additional disclosure regarding borrowings. Concentrations of Credit Risk A significant portion of our loan portfolio is concentrated among borrowers in southern New England, and a substantial portion of the portfolio is collateralized by real estate in this area. The ability of single family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the market area and real estate values. The ability of commercial borrowers to honor their repayment commitments is dependent on the general economy, as well as the health of the real estate economic sector in the Corporation’s market area. -14- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Past Due Loans Past due status is based on the contractual payment terms of the loan. The following tables present an aging analysis of past due loans, segregated by class of loans: (Dollars in thousands) Days Past Due March 31, 2026 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 2,078,230 $ 6,574 $ — $ — $ 6,574 $ 2,084,804 Commercial & industrial 567,707 344 — 126 470 568,177 Total commercial 2,645,937 6,918 — 126 7,044 2,652,981 Residential Real Estate: Residential real estate 2,022,465 3,018 1,185 2,424 6,627 2,029,092 Consumer: Home equity 313,607 854 1,545 347 2,746 316,353 Other 16,428 28 — 3 31 16,459 Total consumer 330,035 882 1,545 350 2,777 332,812 Total loans $ 4,998,437 $ 10,818 $ 2,730 $ 2,900 $ 16,448 $ 5,014,885 (Dollars in thousands) Days Past Due December 31, 2025 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 2,183,337 $ 648 $ — $ — $ 648 $ 2,183,985 Commercial & industrial 564,075 7 — — 7 564,082 Total commercial 2,747,412 655 — — 655 2,748,067 Residential Real Estate: Residential real estate 2,041,304 3,533 2,560 3,002 9,095 2,050,399 Consumer: Home equity 317,255 1,095 166 346 1,607 318,862 Other 17,034 26 — — 26 17,060 Total consumer 334,289 1,121 166 346 1,633 335,922 Total loans $ 5,123,005 $ 5,309 $ 2,726 $ 3,348 $ 11,383 $ 5,134,388 Included in past due loans as of March 31, 2026 and December 31, 2025, were nonaccrual loans of $ 12.3 million and $ 8.3 million, respectively. In addition, all loans 90 days or more past due at March 31, 2026 and December 31, 2025 were classified as nonaccrual. Nonaccrual Loans Loans, with the exception of certain well-secured loans that are in the process of collection, are placed on nonaccrual status and interest recognition is suspended when such loans are 90 days or more overdue with respect to principal and/or interest, or sooner if considered appropriate by management. Well-secured loans are permitted to remain on accrual status provided that full collection of principal and interest is assured and the loan is in the process of collection. Loans are also placed on nonaccrual status when, in the opinion of management, full collection of principal and interest is doubtful. When loans are placed on nonaccrual status, interest previously accrued but not collected is reversed against current period income. Subsequent interest payments received on nonaccrual loans are applied to the outstanding principal balance of the loan or recognized as interest income depending on management’s assessment of the ultimate collectability of the loan. Loans are removed from nonaccrual status when they have been current as to principal and interest (generally for six months), the borrower has demonstrated an ability to comply with repayment terms, and when, in management’s opinion, the loans are considered to be fully collectible. -15- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table is a summary of nonaccrual loans, segregated by class of loans: (Dollars in thousands) March 31, 2026 December 31, 2025 Nonaccrual Loans Nonaccrual Loans With an ACL Without an ACL Total With an ACL Without an ACL Total Commercial: Commercial real estate $ 28,923 $ — $ 28,923 $ — $ — $ — Commercial & industrial 126 — 126 — — — Total commercial 29,049 — 29,049 — — — Residential Real Estate: Residential real estate 8,633 998 9,631 9,830 1,269 11,099 Consumer: Home equity 1,757 — 1,757 1,824 — 1,824 Other 3 — 3 — — — Total consumer 1,760 — 1,760 1,824 — 1,824 Total nonaccrual loans $ 39,442 $ 998 $ 40,440 $ 11,654 $ 1,269 $ 12,923 Accruing loans 90 days or more past due $ — $ — Nonaccrual loans of $ 28.1 million and $ 4.6 million, respectively, at March 31, 2026 and December 31, 2025 were current as to the payment of principal and interest. As of March 31, 2026 and December 31, 2025, nonaccrual loans secured by one- to four-family residential properties amounting to $ 2.0 million and $ 3.0 million, respectively, were in process of foreclosure. The following table presents interest income recognized on nonaccrual loans: (Dollars in thousands) Three months ended March 31, 2026 2025 Commercial: Commercial real estate $ 588 $ — Commercial & industrial — 2 Total commercial 588 2 Residential Real Estate: Residential real estate 152 153 Consumer: Home equity 22 37 Other — — Total consumer 22 37 Total $ 762 $ 192 Troubled Loan Modifications 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. 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 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 -16- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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. 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. There were no loans modified as a TLM for the three months ended March 31, 2026. The following table presents the carrying value at March 31, 2025 of TLMs made during the period indicated, segregated by class of loans and type of concession granted: (Dollars in thousands) Three months ended March 31, 2025 Other-than-Insignificant Payment Delay Total % of Loan Class (1) Residential Real Estate: Residential real estate $ 1,431 $ 1,431 — % Total $ 1,431 $ 1,431 — % (1) Percentage of TLMs to the total loans outstanding within the respective loan class. The following table describes the financial effect of TLMs made during the periods indicated, segregated by class of loans: Three months ended March 31, 2025 Financial Effect Other-than-Insignificant Payment Delay: Residential real estate Provided payment delay for a weighted average period of 6 months Management closely monitors the performance of TLMs to understand the effectiveness of the modifications. As of the dates indicated, the following tables present an aging analysis of TLMs that have been modified in the past 12 months: (Dollars in thousands) Days Past Due March 31, 2026 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 5,605 $ — $ — $ — $ — $ 5,605 Commercial & industrial — — — — — — Total commercial 5,605 — — — — 5,605 Residential Real Estate: Residential real estate 633 — — — — 633 Total loans $ 6,238 $ — $ — $ — $ — $ 6,238 -17- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (Dollars in thousands) Days Past Due March 31, 2025 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 7,605 $ — $ — $ — $ — $ 7,605 Commercial & industrial 5,000 — — — — 5,000 Total commercial 12,605 — — — — 12,605 Residential Real Estate: Residential real estate 1,686 — — — — 1,686 Total loans $ 14,291 $ — $ — $ — $ — $ 14,291 At both March 31, 2026 and March 31, 2025, there were no TLMs made in the previous 12 months for which there was a subsequent payment default. There were no significant commitments to lend additional funds to borrowers experiencing financial difficulty whose loans were modified as TLMs at March 31, 2026. Individually Analyzed 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 March 31, 2026 and December 31, 2025, the carrying value of individually analyzed loans amounted to $ 37.6 million and $ 8.9 million, respectively. The carrying value of collateral dependent individually analyzed loans was $ 13.8 million and $ 7.5 million, respectively, at March 31, 2026 and December 31, 2025. For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. See Note 7 for additional disclosure regarding fair value of individually analyzed collateral dependent loans. The following table presents the carrying value of collateral dependent individually analyzed loans: (Dollars in thousands) March 31, 2026 December 31, 2025 Carrying Value Related Allowance Carrying Value Related Allowance Commercial: Commercial real estate (1) $ 12,179 $ 1,500 $ 5,605 $ — Commercial & industrial (2) — — — — Total commercial 12,179 1,500 5,605 — Residential Real Estate: Residential real estate (3) 1,631 — 1,903 — Consumer: Home equity (3) — — — — Other 3 3 — — Total consumer 3 3 — — Total $ 13,813 $ 1,503 $ 7,508 $ — (1) Secured by income-producing property. (2) Secured by business assets. (3) Secured by one- to four-family residential properties. -18- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Credit Quality Indicators Commercial The Corporation utilizes an internal rating system to assign a risk to each of its commercial loans. Loans are rated on a scale of 1 to 10. This scale can be assigned to three broad categories including “pass” for ratings 1 through 6, “special mention” for 7-rated loans, and “classified” for loans rated 8, 9 or 10. Additionally, ratings 7 through 10 are considered criticized, as defined by regulatory agencies. The loan risk rating system takes into consideration parameters including the borrower’s financial condition, the borrower’s performance with respect to loan terms, the adequacy of collateral, the adequacy of guarantees, and other credit quality characteristics. The Corporation takes the risk rating into consideration along with other credit attributes in the establishment of an appropriate ACL on loans. See Note 5 for additional information. A description of the commercial loan categories is as follows: Pass - Loans with acceptable credit quality, defined as ranging from superior or very strong to a status of lesser stature. Superior or very strong credit quality is characterized by a high degree of cash collateralization or strong balance sheet liquidity. Lesser stature loans have an acceptable level of credit quality, but may exhibit some weakness in various credit metrics such as collateral adequacy, cash flow, performance or may be in an industry or of a loan type known to have a higher degree of risk. These weaknesses may be mitigated by secondary sources of repayment, including SBA guarantees. Special Mention - Loans with potential weaknesses that deserve management’s close attention. 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. Special Mention assets are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification. Examples of these conditions include but are not limited to outdated or poor quality financial data, strains on liquidity and leverage, losses or negative trends in operating results, marginal cash flow, weaknesses in occupancy rates or trends in the case of commercial real estate, and frequent delinquencies. Classified - Loans identified as “substandard,” “doubtful” or “loss” based on criteria consistent with guidelines provided by banking regulators. A “substandard” loan has defined weaknesses which make payment default or principal exposure likely, but not yet certain. Such loans are apt to be dependent upon collateral liquidation, a secondary source of repayment or an event outside of the normal course of business. The loans are closely watched and are either already on nonaccrual status or may be placed on nonaccrual status when management determines there is uncertainty of collectability. A “doubtful” loan is placed on nonaccrual status and has a high probability of loss, but the extent of the loss is difficult to quantify due to dependency upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty. A loan in the “loss” category is considered generally uncollectible or the timing or amount of payments cannot be determined. “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. The Corporation’s procedures call for loan risk ratings and classifications to be revised whenever information becomes available that indicates a change is warranted. On a quarterly basis, management reviews a watched asset list, which generally consists of commercial loans that are risk-rated 6 or worse, highly leveraged transaction loans, high-volatility commercial real estate, and other selected loans. Management’s review focuses on the current status of the loans, the appropriateness of risk ratings and strategies to improve the credit. An annual credit review program is conducted by a third party to provide an independent evaluation of the creditworthiness of the commercial loan portfolio, the quality of the underwriting and credit risk management practices, and the appropriateness of the risk rating classifications. This review is supplemented with selected targeted internal reviews of the commercial loan portfolio. Residential and Consumer Management monitors the relatively homogeneous residential real estate and consumer loan portfolios on an ongoing basis using delinquency information by loan type. In addition, other techniques are utilized to monitor indicators of credit deterioration in the residential real estate loans and home equity consumer loans. Among these techniques is the periodic tracking of loans with an updated Fair Isaac Corporation (commonly known as “FICO”) score and an updated estimated LTV ratio. LTV is estimated based on such factors as geographic location, the original appraised value, and changes in median home prices, and takes into consideration the age of the loan. The results of these analyses and other credit review procedures, including selected targeted internal -19- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) reviews, are taken into account in the determination of qualitative loss factors for residential real estate and home equity consumer credits. 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 March 31, 2026: (Dollars in thousands) Term Loans Amortized Cost by Origination Year 2026 2025 2024 2023 2022 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Loans Total Commercial: CRE: Pass $ 58,895 $ 369,781 $ 98,630 $ 282,310 $ 475,205 $ 701,930 $ 9,303 $ 929 $ 1,996,983 Special mention — 27,521 — 11,977 9,502 3,773 — — 52,773 Classified — 6,574 — — 22,349 6,125 — — 35,048 Total CRE 58,895 403,876 98,630 294,287 507,056 711,828 9,303 929 2,084,804 Gross charge-offs — — — — — — — — — C&I: Pass 9,120 91,604 38,889 53,572 127,057 174,893 70,653 317 566,105 Special mention — — 784 — 335 126 701 — 1,946 Classified — — — — — 126 — — 126 Total C&I 9,120 91,604 39,673 53,572 127,392 175,145 71,354 317 568,177 Gross charge-offs 17 — — — — — — — 17 Residential Real Estate: Current (1) 30,985 161,148 46,821 317,827 676,119 790,488 — — 2,023,388 Past due — — — — 1,023 5,604 — — 6,627 Total residential real estate 30,985 161,148 46,821 317,827 677,142 796,092 — — 2,030,015 Gross charge-offs — — — — — — — — — Consumer: Home equity: Current 2,885 16,260 9,461 13,964 9,646 10,877 236,681 13,833 313,607 Past due — — 73 212 49 392 458 1,562 2,746 Total home equity 2,885 16,260 9,534 14,176 9,695 11,269 237,139 15,395 316,353 Gross charge-offs — — — — — — — — — Other: Current 802 4,058 2,456 3,001 1,738 4,110 263 — 16,428 Past due 24 5 — — — 1 1 — 31 Total other 826 4,063 2,456 3,001 1,738 4,111 264 — 16,459 Gross charge-offs 66 — — 1 — — — — 67 Loans, amortized cost $ 102,711 $ 676,951 $ 197,114 $ 682,863 $ 1,323,023 $ 1,698,445 $ 318,060 $ 16,641 $ 5,015,808 Gross charge-offs $ 83 $ — $ — $ 1 $ — $ — $ — $ — $ 84 (1) Excludes a $ 923 thousand negative basis adjustment associated with fair value hedges. See Note 6 for additional disclosure. -20- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table includes information on credit quality indicators and gross charge-offs for the Corporation’s loan portfolio, segregated by class of loans as of December 31, 2025: (Dollars in thousands) Term Loans Amortized Cost by Origination Year 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Loans Total Commercial: CRE: Pass $ 432,404 $ 102,312 $ 338,922 $ 490,011 $ 302,383 $ 438,112 $ 9,426 $ 942 $ 2,114,512 Special mention 33,416 — — 27,743 — 2,157 — — 63,316 Classified — — — — — 6,157 — — 6,157 Total CRE 465,820 102,312 338,922 517,754 302,383 446,426 9,426 942 2,183,985 Gross charge-offs — — — — — 5,715 — — 5,715 C&I: Pass 87,523 39,556 54,047 125,846 20,057 159,707 58,146 315 545,197 Special mention 3,569 788 — 3,442 1,095 3,865 6,000 — 18,759 Classified — — — — 126 — — — 126 Total C&I 91,092 40,344 54,047 129,288 21,278 163,572 64,146 315 564,082 Gross charge-offs 49 — 8,345 — — 299 — — 8,693 Residential Real Estate: Current (1) 161,291 50,709 332,253 690,150 345,038 462,198 — — 2,041,639 Past due — — — — 543 8,552 — — 9,095 Total residential real estate 161,291 50,709 332,253 690,150 345,581 470,750 — — 2,050,734 Gross charge-offs — — — — — — — — — Consumer: Home equity: Current 16,839 10,508 14,662 9,969 5,190 6,086 238,734 15,267 317,255 Past due — 34 58 — 137 223 814 341 1,607 Total home equity 16,839 10,542 14,720 9,969 5,327 6,309 239,548 15,608 318,862 Gross charge-offs — — — — — — — — — Other: Current 4,295 2,588 3,366 1,790 1,616 3,123 256 — 17,034 Past due 26 — — — — — — — 26 Total other 4,321 2,588 3,366 1,790 1,616 3,123 256 — 17,060 Gross charge-offs 323 — 1 — — 3 — — 327 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 6 for additional disclosure. -21- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 5 - Allowance for Credit Losses on Loans The ACL on loans is management’s estimate of expected lifetime credit losses on loans carried at amortized cost. The level of the ACL on loans is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The following table presents the activity in the ACL on loans for the three months ended March 31, 2026: (Dollars in thousands) Commercial Consumer CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total Beginning Balance $ 19,766 $ 9,750 $ 29,516 $ 6,270 $ 1,186 $ 264 $ 1,450 $ 37,236 Charge-offs — ( 17 ) ( 17 ) — — ( 67 ) ( 67 ) ( 84 ) Recoveries — 59 59 1 1 13 14 74 Provision 4,265 ( 145 ) 4,120 ( 268 ) 7 41 48 3,900 Ending Balance $ 24,031 $ 9,647 $ 33,678 $ 6,003 $ 1,194 $ 251 $ 1,445 $ 41,126 The elevated provision for credit losses in 2026 largely reflected specific reserve allocations on two individually analyzed nonaccrual CRE office segment loans. The following table presents the activity in the ACL on loans for the three months ended March 31, 2025: (Dollars in thousands) Commercial Consumer CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total Beginning Balance $ 26,485 $ 7,277 $ 33,762 $ 6,832 $ 1,031 $ 335 $ 1,366 $ 41,960 Charge-offs ( 2,450 ) ( 7 ) ( 2,457 ) — — ( 65 ) ( 65 ) ( 2,522 ) Recoveries 200 4 204 — 1 13 14 218 Provision 972 382 1,354 ( 56 ) 25 77 102 1,400 Ending Balance $ 25,207 $ 7,656 $ 32,863 $ 6,776 $ 1,057 $ 360 $ 1,417 $ 41,056 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 property types, such as multi-family, retail, industrial and warehouse, hospitality, office, 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, retail trade, transportation and warehousing, educational services, as well as other business sectors. -22- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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. Note 6 - Derivative Financial Instruments The Corporation’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Corporation’s known or expected cash receipts and its known or expected cash payments, principally to manage the Corporation’s interest rate risk. Additionally, the Corporation enters into interest rate derivatives to accommodate the business requirements of its customers. 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 Interest rate risk management agreements, such as swaps, caps, floors, and collars, are used from time to time as part of the Corporation’s interest rate risk management strategy. Interest rate swaps are agreements in which the Corporation and another party agree to exchange interest payments (e.g., fixed-rate for variable-rate payments or variable-rate for fixed-rate payments) computed on a notional principal amount. Interest rate caps and floors represent options purchased by the Corporation to manage the interest rate paid throughout the term of the option contract. An interest rate collar is a derivative instrument that represents simultaneously buying an interest rate cap and selling an interest rate floor. The credit risk associated with these 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. The notional amounts of these agreements do not represent amounts exchanged by the parties and, thus, are not a measure of the potential loss exposure. Cash Flow Hedging Instruments As of March 31, 2026 and December 31, 2025, the Corporation had interest rate swaps, interest rate collars, and interest rate floors that were designated as cash flow hedges. The interest rate swaps and collars were executed to hedge the interest rate risk associated with short-term borrowings. See Note 9 for additional disclosure on borrowings. The 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 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. The loss on this interest rate swap included in the AOCL component of shareholders’ equity was updated to its termination date fair value of $ 26.5 million, or $ 20.1 million -23- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) after tax. This loss is being amortized into earnings as a reduction of interest income on a straight-line basis over the remaining life of the original interest rate swap term, or through May 1, 2026. At March 31, 2026, the remaining unamortized balance of the loss included in the AOCL component of shareholders’ equity was $ 729 thousand, or $ 547 thousand after tax. Fair Value Hedging Instruments As of March 31, 2026 and December 31, 2025, 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”). The hedged item is measured at fair value through a basis adjustment recognized on the balance sheet. The changes in fair value of derivatives designated as fair value hedges, as well as the offsetting changes in fair value of the hedged item are recognized in earnings. Loan Related Derivative Contracts Interest Rate Derivative Contracts with Customers The Corporation enters into interest rate swap and interest rate cap contracts to help commercial loan borrowers manage their interest rate risk. These interest rate swap contracts allow borrowers to convert variable-rate loan payments to fixed-rate loan payments, while interest rate cap contracts allow borrowers to limit their interest rate exposure in a rising rate environment. When the Corporation enters into an interest rate derivative contract with a commercial loan borrower, it simultaneously enters into a “mirror” interest rate contract with a third party. For interest rate swaps, the third party exchanges the client’s fixed-rate loan payments for variable-rate loan payments. 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 interest rate contracts with counterparties are generally subject to bilateral collateralization terms. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings. Risk Participation Agreements The Corporation has entered into risk participation agreements with other banks in commercial loan arrangements. Participating banks guarantee the performance on borrower-related interest rate swap contracts. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings. 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 credit risk associated with the interest rate swap position with the commercial borrower for a fee received from the other bank. Mortgage Loan Commitments Interest rate lock commitments are extended to borrowers and relate to the origination of mortgage loans held for sale. To mitigate the interest rate risk and pricing risk associated with rate locks and mortgage loans that are originated and intended for sale, the Corporation enters into forward sale commitments. Forward sale commitments are contracts for delayed delivery or net settlement of the underlying instrument, such as a residential mortgage loan, where the seller agrees to deliver on a specified future date, either a specified instrument at a specified price or yield or the net cash equivalent of an underlying instrument. 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. -24- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents the notional amounts and fair values of derivative instruments in the Unaudited Consolidated Balance Sheets: (Dollars in thousands) March 31, 2026 December 31, 2025 Fair Value Fair Value Notional Amounts Derivative Assets Derivative Liabilities Notional Amounts Derivative Assets Derivative Liabilities Derivatives Designated as Cash Flow Hedging Instruments: Interest rate risk management contracts: Interest rate swaps (1) $ 120,000 $ 341 $ 470 $ 120,000 $ 126 $ 979 Interest rate collars 100,000 — 3 100,000 — 17 Interest rate floors 200,000 116 — 200,000 125 — Derivatives Designated as Fair Value Hedging Instruments: Interest rate risk management contracts: Interest rate swaps 100,000 921 — 100,000 335 — Derivatives not Designated as Hedging Instruments: Loan related derivative contracts: Interest rate contracts with customers 846,233 4,690 28,875 882,941 6,326 27,959 Mirror contracts with counterparties 846,233 28,755 4,783 882,941 27,857 6,392 Risk participation agreements 298,536 40 1 304,854 28 1 Mortgage loan commitments: Interest rate lock commitments 40,650 593 13 30,373 603 12 Forward sale commitments 83,715 334 440 90,813 13 828 Gross amounts 35,790 34,585 35,413 36,188 Less: amounts offset (2) 5,240 5,240 6,643 6,643 Derivative balances, net of offset 30,550 29,345 28,770 29,545 Less: collateral pledged (3) — — — — Net amounts $ 30,550 $ 29,345 $ 28,770 $ 29,545 (1) The fair value of derivative assets includes accrued interest receivable of $ 23 thousand and $ 35 thousand, respectively, at March 31, 2026 and December 31, 2025. The fair value of derivative liabilities includes accrued interest payable of $ 49 thousand and $ 23 thousand, respectively, March 31, 2026 and December 31, 2025. (2) Interest rate risk management contracts and loan related derivative contracts with counterparties are subject to master netting arrangements. (3) Collateral contractually required to be pledged to derivative counterparties is in the form of cash. Washington Trust may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions. The following table presents the balance sheet location, carrying value, and cumulative basis adjustment of the hedged item associated with fair value hedges: (Dollars in thousands) March 31, 2026 December 31, 2025 Balance Sheet Location Carrying Value of Hedged Item (1) Cumulative Basis Adjustment Carrying Value of Hedged Item (1) Cumulative Basis Adjustment Residential real estate loans $ 99,077 ($ 923 ) $ 99,665 ($ 335 ) (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 $ 600.0 million and $ 608.5 million, respectively, at March 31, 2026 and December 31, 2025. -25- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents the effect of derivative instruments in the Unaudited Consolidated Statements of Changes in Shareholders’ Equity: (Dollars in thousands) Amounts Recognized in Other Comprehensive Income, Net of Tax Three months ended March 31, 2026 2025 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate risk management contracts: Interest rate swaps $ 2,158 $ 600 Interest rate collars 11 ( 7 ) Interest rate floors 21 — Total $ 2,190 $ 593 The following table presents the effect of derivative instruments in the Unaudited Consolidated Statements of Income: (Dollars in thousands) Amount of Gain (Loss) Recognized in the Unaudited Consolidated Statements of Income Three months ended March 31, Statement of Income Location 2026 2025 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate risk management contracts: Interest rate swaps Interest income: Interest and fees on loans ($ 2,116 ) ($ 2,116 ) Interest rate swaps Interest expense: FHLB advances ( 8 ) 193 Interest rate floors Interest income: Interest and fees on loans ( 37 ) — Derivatives Designated as Fair Value Hedging Instruments: Interest rate risk management contracts: Interest rate swaps Interest income: Interest and fees on loans 586 ( 779 ) Hedged item Interest income: Interest and fees on loans ( 588 ) 782 Derivatives not Designated as Hedging Instruments: Loan related derivative contracts: Interest rate contracts with customers Loan related derivative income ($ 4,805 ) $ 9,797 Mirror interest rate contracts with counterparties Loan related derivative income 5,020 ( 9,728 ) Risk participation agreements Loan related derivative income 12 32 Mortgage loan commitments: Interest rate lock commitments Mortgage banking revenues ( 11 ) 570 Forward sale commitments Mortgage banking revenues 499 ( 639 ) Total ($ 1,448 ) ($ 1,888 ) For derivatives designated as cash flow hedging instruments in the table above, the amounts represent the pre-tax reclassifications from AOCL into earnings. -26- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 7 - Fair Value Measurements The Corporation uses fair value measurements to record fair value adjustments on certain assets and liabilities and to determine fair value disclosures. Items recorded at fair value on a recurring basis include securities available for sale, mortgage loans that are originated and intended for sale to the secondary market, and derivatives. Additionally, from time to time, we may be required to record other assets at fair value on a nonrecurring basis, such as collateral dependent individually analyzed loans, loan servicing rights, property acquired through foreclosure or repossession, and mortgage loans reclassified to held for sale from portfolio. Fair value is a market-based measurement, not an entity-specific measurement. 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. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Corporation’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 – Quoted prices for identical assets or liabilities in active markets. • Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in the markets and which reflect the Corporation’s market assumptions. Fair Value Option Election GAAP allows for the irrevocable option to elect fair value accounting for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. The Corporation has elected the fair value option for mortgage loans that are originated and intended for sale to the secondary market to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. The following table presents a summary of mortgage loans held for sale accounted for under the fair value option: (Dollars in thousands) March 31, 2026 December 31, 2025 Aggregate fair value $ 32,127 $ 35,833 Aggregate principal balance 31,958 35,130 Difference between fair value and principal balance $ 169 $ 703 Changes in fair value of mortgage loans held for sale accounted for under the fair value option election are included in mortgage banking revenues in the Unaudited Consolidated Statements of Income. Changes in fair value amounted to a decrease in mortgage banking revenues of $ 534 thousand for the three months ended March 31, 2026, compared to an increase in mortgage banking revenues of $ 225 thousand for the three months ended March 31, 2025. There were no mortgage loans held for sale 90 days or more past due as of March 31, 2026 and December 31, 2025. Valuation Techniques for Items Recorded at Fair Value on a Recurring Basis Available for Sale Debt Securities Available for sale debt securities are recorded at fair value on a recurring basis. When available, the Corporation uses quoted market prices to determine the fair value of debt securities; such items are classified as Level 1. There were no Level 1 debt securities held at March 31, 2026 and December 31, 2025. Level 2 debt securities are traded less frequently than exchange-traded instruments. The fair value of these securities is 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. government-sponsored enterprises, including mortgage-backed securities, individual name issuer trust preferred debt securities, and corporate bonds. -27- Condensed Notes to Unaudited 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. There were no Level 3 debt securities held at March 31, 2026 and December 31, 2025. Mortgage Loans Held for Sale, at Fair Value The Corporation has elected the fair value option for mortgage loans that are originated and intended for sale to the secondary market. The fair value is estimated based on current market prices for similar loans in the secondary market and therefore are classified as Level 2 assets. Derivatives 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. The Corporation evaluates the credit risk of its counterparties, as well as that of the Corporation. Accordingly, factors such as the likelihood of default by the Corporation and its counterparties, its net exposures, and remaining contractual life are considered in determining if any fair value adjustments related to credit risk are required. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of collateral securing the position, if any. The Corporation has determined that the majority of the inputs used to value its derivative positions fall within Level 2 of the fair value hierarchy. However, the credit valuation adjustments utilize Level 3 inputs. As of March 31, 2026 and December 31, 2025, the Corporation has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation. As a result, the Corporation has classified its derivative valuations in their entirety as Level 2. Fair value measurements of forward loan commitments (interest rate lock commitments and forward sale commitments) are primarily based on current market prices for similar assets in the secondary market and therefore are classified as Level 2 assets. The fair value of interest rate lock commitments is also dependent on the ultimate closing of the loans. Pull-through rates are based on the Corporation’s historical data and reflect the Corporation’s best estimate of the likelihood that a commitment will result in a closed loan. Although the pull-through rates are Level 3 inputs, the Corporation has assessed the significance of the impact of pull-through rates on the overall valuation of its interest rate lock commitments and has determined that they are not significant to the overall valuation. As a result, the Corporation has classified its interest rate lock commitments as Level 2. -28- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Items Recorded at Fair Value on a Recurring Basis 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 (Level 3) March 31, 2026 Assets: Available for sale debt securities: Obligations of U.S. government agencies and U.S government sponsored enterprises $ 39,865 $ — $ 39,865 $ — Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 854,722 — 854,722 — Obligations of states and political subdivisions 653 — 653 — Individual name issuer trust preferred debt securities 6,073 — 6,073 — Corporate bonds 10,645 — 10,645 — Mortgage loans held for sale 32,127 — 32,127 — Derivative assets 30,550 — 30,550 — Total assets at fair value on a recurring basis $ 974,635 $ — $ 974,635 $ — Liabilities: Derivative liabilities $ 29,345 $ — $ 29,345 $ — Total liabilities at fair value on a recurring basis $ 29,345 $ — $ 29,345 $ — (Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025 Assets: Available for sale debt securities: Obligations of U.S. government agencies and U.S government sponsored enterprises $ 39,958 $ — $ 39,958 $ — Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 880,894 — 880,894 — Obligations of states and political subdivisions 663 — 663 — Individual name issuer trust preferred debt securities 6,103 — 6,103 — Corporate bonds 12,724 — 12,724 — Mortgage loans held for sale 35,833 — 35,833 — Derivative assets 28,770 — 28,770 — Total assets at fair value on a recurring basis $ 1,004,945 $ — $ 1,004,945 $ — Liabilities: Derivative liabilities $ 29,545 $ — $ 29,545 $ — Total liabilities at fair value on a recurring basis $ 29,545 $ — $ 29,545 $ — Valuation Techniques for Items Recorded at Fair Value on a Nonrecurring Basis Collateral Dependent Individually Analyzed Loans Collateral dependent individually analyzed loans are valued based upon the lower of amortized cost or fair value. Fair value is determined based on the appraised value of the underlying collateral. Such collateral primarily consists of real estate and, to a lesser extent, other business assets. For collateral dependent loans that are expected to be repaid substantially through the sale of the collateral, management adjusts the fair value for estimated costs to sell. Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values resulting from its knowledge of -29- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) the collateral. Internal valuations may be utilized to determine the fair value of other business assets. Collateral dependent individually analyzed loans are categorized as Level 3. Items Recorded at Fair Value on a Nonrecurring Basis The following table presents the carrying value of assets held at March 31, 2026, which were written down to fair value during the three months ended March 31, 2026: (Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Collateral dependent individually analyzed loans $ 5,074 $ — $ — $ 5,074 Total assets at fair value on a nonrecurring basis $ 5,074 $ — $ — $ 5,074 Assets written down to fair value for the year ended December 31, 2025 consisted of two collateral dependent individually analyzed loan relationships, which had no carrying value at December 31, 2025. See additional disclosure on these two relationships in Note 10 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 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) March 31, 2026 Collateral dependent individually analyzed loans $ 5,074 Appraisals of collateral Discount for costs to sell 10 % Appraisal adjustments 0 % Items for which Fair Value is Only Disclosed The estimated fair values and related carrying amounts for financial instruments for which fair value is only disclosed are presented in the tables below: (Dollars in thousands) March 31, 2026 Carrying Amount Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets: Cash and cash equivalents $ 100,184 $ 100,184 $ 100,184 $ — $ — Loans, net of allowance for credit losses on loans (1) 4,973,759 4,858,427 — — 4,858,427 FHLB stock 28,273 28,273 — 28,273 — Investment in BOLI 116,010 116,010 — 116,010 — Financial Liabilities: Non-maturity deposits $ 3,998,202 $ 3,998,202 $ — $ 3,998,202 $ — Time deposits 1,166,431 1,162,582 — 1,162,582 — FHLB advances 576,000 577,807 — 577,807 — Junior subordinated debentures 22,681 19,461 — 19,461 — (1) The estimated fair value excludes a $ 923 thousand negative basis adjustment associated with fair value hedges. See Note 6 for additional disclosure. -30- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (Dollars in thousands) December 31, 2025 Carrying Amount Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets: Cash and cash equivalents $ 103,734 $ 103,734 $ 103,734 $ — $ — Loans, net of allowance for credit losses on loans (1) 5,097,152 4,972,651 — — 4,972,651 FHLB stock 29,473 29,473 — 29,473 — Investment in BOLI 115,126 115,126 — 115,126 — Financial Liabilities: Non-maturity deposits $ 4,049,307 $ 4,049,307 $ — $ 4,049,307 $ — Time deposits 1,220,683 1,218,361 — 1,218,361 — FHLB advances 626,000 629,484 — 629,484 — Junior subordinated debentures 22,681 19,953 — 19,953 — (1) The estimated fair value excludes a $ 335 thousand negative basis adjustment associated with fair value hedges. See Note 6 for additional disclosure. Note 8 - Deposits The following table presents a summary of deposits: (Dollars in thousands) March 31, 2026 December 31, 2025 Noninterest-bearing: Noninterest-bearing demand deposits $ 585,415 $ 595,092 Interest-bearing: Interest-bearing demand deposits 758,524 756,794 NOW accounts 690,987 715,114 Money market accounts 1,132,421 1,185,420 Savings accounts 830,855 796,887 Time deposits (1) 1,166,431 1,220,683 Total interest-bearing deposits 4,579,218 4,674,898 Total deposits $ 5,164,633 $ 5,269,990 (1) There were no wholesale brokered time deposits at March 31, 2026 or December 31, 2025. The following table presents scheduled maturities of time certificates of deposit: (Dollars in thousands) Scheduled Maturity Weighted Average Rate April 1, 2026 to December 31, 2026 $ 972,539 3.48 % 2027 127,776 2.98 2028 52,824 3.07 2029 5,784 2.83 2030 5,629 2.17 2031 and thereafter 1,879 1.92 Balance at March 31, 2026 $ 1,166,431 3.40 % Time certificates of deposit in denominations of $250 thousand or more totaled $ 356.2 million and $ 355.9 million, -31- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) respectively, at March 31, 2026 and December 31, 2025. Note 9 - Borrowings Advances payable to the FHLB amounted to $ 576.0 million and $ 626.0 million, respectively, at March 31, 2026 and December 31, 2025. See Note 6 for additional disclosure on derivatives designated as cash flow hedges 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. The Bank had available borrowing capacity of $ 1.4 billion with the FHLB as of both March 31, 2026 and December 31, 2025. In addition, the Bank had access to a $ 40.0 million unused line of credit with the FHLB at both March 31, 2026 and December 31, 2025. The Bank had standby letters of credit with the FHLB of $ 65.1 million and $ 66.0 million at March 31, 2026 and December 31, 2025 to collateralize institutional deposits. The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of March 31, 2026: (Dollars in thousands) Scheduled Maturity Weighted Average Rate April 1, 2026 to December 31, 2026 $ 340,000 4.07 % 2027 60,000 4.12 2028 90,000 4.33 2029 80,000 3.82 2030 6,000 3.33 2031 and thereafter — — Balance at March 31, 2026 $ 576,000 4.07 % Note 10 - Shareholders' Equity Stock Repurchase Program The 2025 Repurchase Program adopted by the Board of Directors 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. Through March 31, 2026, the Bancorp has 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. -32- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Regulatory Capital Requirements Capital levels at March 31, 2026 exceeded the regulatory minimum levels to be considered “well capitalized.” The following table presents the Corporation’s and the Bank’s actual capital amounts and ratios, as well as the corresponding minimum and well capitalized regulatory amounts and ratios that were in effect during the respective periods: (Dollars in thousands) Actual For Capital Adequacy Purposes To Be “Well Capitalized” Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio March 31, 2026 Total Capital (to Risk-Weighted Assets): Corporation $ 622,030 13.38 % $ 372,027 8.00 % N/A N/A Bank 614,658 13.22 371,824 8.00 $ 464,781 10.00 % Tier 1 Capital (to Risk-Weighted Assets): Corporation 579,664 12.46 279,020 6.00 N/A N/A Bank 572,292 12.31 278,868 6.00 371,824 8.00 Common Equity Tier 1 Capital (to Risk-Weighted Assets): Corporation 557,667 11.99 209,265 4.50 N/A N/A Bank 572,292 12.31 209,151 4.50 302,107 6.50 Tier 1 Capital (to Average Assets): (1) Corporation 579,664 8.80 263,555 4.00 N/A N/A Bank 572,292 8.69 263,425 4.00 329,281 5.00 December 31, 2025 Total Capital (to Risk-Weighted Assets): Corporation 615,600 12.95 380,342 8.00 N/A N/A Bank 607,862 12.79 380,144 8.00 475,180 10.00 Tier 1 Capital (to Risk-Weighted Assets): Corporation 577,224 12.14 285,256 6.00 N/A N/A Bank 569,486 11.98 285,108 6.00 380,144 8.00 Common Equity Tier 1 Capital (to Risk-Weighted Assets): Corporation 555,227 11.68 213,942 4.50 N/A N/A Bank 569,486 11.98 213,831 4.50 308,867 6.50 Tier 1 Capital (to Average Assets): (1) Corporation 577,224 8.65 267,046 4.00 N/A N/A Bank 569,486 8.53 266,921 4.00 333,651 5.00 (1) Leverage ratio. In addition to the minimum regulatory capital required for capital adequacy outlined in the table above, the Corporation and the Bank are required to maintain a minimum capital conservation buffer, in the form of common equity, of 2.50%, resulting in a requirement for the Corporation and the Bank to effectively maintain total capital, Tier 1 capital, and common equity Tier 1 capital ratios of 10.50%, 8.50%, and 7.00%, respectively. The Corporation and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends and discretionary bonuses. The Corporation’s and the Bank’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at March 31, 2026 and December 31, 2025. The Bancorp owns the common stock of two capital trusts, which have issued trust preferred securities. In accordance with GAAP, the capital trusts are treated as unconsolidated subsidiaries. At both March 31, 2026 and December 31, 2025, $ 22.0 million in trust preferred securities were included in the Tier 1 capital of the Corporation for regulatory capital reporting purposes pursuant to the capital adequacy guidelines of the Federal Reserve. -33- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 11 - Revenue from Contracts with Customers The following table summarizes total revenues as presented in the Unaudited Consolidated Statements of Income and the related amounts that are from contracts with customers within the scope of ASC 606. As shown below, a substantial portion of our revenues are specifically excluded from the scope of ASC 606. For the three months ended March 31, 2026 2025 (Dollars in thousands) Revenue (1) ASC 606 Revenue (2) Revenue (1) ASC 606 Revenue (2) Net interest income $ 40,525 $ — $ 36,422 $ — Noninterest income: Wealth management revenues 10,647 10,647 9,891 9,891 Mortgage banking revenues 3,045 — 2,304 — Card interchange fees 1,385 1,385 1,509 1,509 Service charges on deposit accounts 785 785 744 744 Loan related derivative income 227 — 101 — Income from bank-owned life insurance 885 — 769 — Gain on sale of bank-owned properties, net (3) — — 6,994 6,994 Other income 329 262 331 264 Total noninterest income 17,303 13,079 22,643 19,402 Total revenues $ 57,828 $ 13,079 $ 59,065 $ 19,402 (1) As reported in the Unaudited Consolidated Statements of Income. (2) Revenue from contracts with customers in scope of ASC 606. (3) For the three months ended March 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 based on the timing of revenue recognition: (Dollars in thousands) Three months ended March 31, 2026 2025 Revenue recognized at a point in time: Card interchange fees $ 1,385 $ 1,509 Service charges on deposit accounts 518 463 Gain on sale of bank-owned properties, net — 6,994 Other income 209 204 Revenue recognized over time: Wealth management revenues 10,647 9,891 Service charges on deposit accounts 267 281 Other income 53 60 Total revenues from contracts with customers in scope of ASC 606 $ 13,079 $ 19,402 Receivables for revenue from contracts with customers primarily consist of amounts due for wealth management services performed for which the Corporation’s performance obligations have been fully satisfied. Receivables amounted to $ 6.0 million and $ 7.0 million, respectively, at March 31, 2026 and December 31, 2025 and were included in other assets in the Unaudited Consolidated Balance Sheets. Deferred revenues, which are considered contract liabilities under ASC 606, represent advance consideration received from customers for which the Corporation has a remaining performance obligation to fulfill. Contract liabilities are recognized as revenue over the life of the contract as the performance obligations are satisfied. The balances of contract liabilities were insignificant at both March 31, 2026 and December 31, 2025 and were included in other liabilities in the Unaudited Consolidated Balance Sheets. -34- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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. The carrying value of contract cost assets amounted to $ 2.1 million and $ 2.3 million, respectively at March 31, 2026 and December 31, 2025 and were included in other assets in the Unaudited Consolidated Balance Sheets. The amortization of contract cost assets is recorded within salaries and employee benefits expense in the Unaudited Consolidated Statements of Income. Note 12 - Business Segments 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. Direct activities are assigned to the appropriate business segment to which the activity relates. Indirect activities, such as corporate, technology and other support functions, are allocated to business segments primarily based upon full-time equivalent employee computations. The Banking segment includes commercial, residential, and consumer lending activities; mortgage banking activities; deposit generation; 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. 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; personal trust and estate services, including services as trustee, personal representative, and custodian; settlement of decedents’ estates; and institutional trust services, including custody and fiduciary services. 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. -35- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents the components of net income, as well as other supplemental information for Washington Trust’s reportable business segments: (Dollars in thousands) Banking Wealth Management Services Consolidated Total Three months ended March 31, 2026 2025 2026 2025 2026 2025 Total interest income and dividend income $ 74,982 $ 79,463 $ — $ — $ 74,982 $ 79,463 Total interest expense 34,457 43,041 — — 34,457 43,041 Net interest income 40,525 36,422 — — 40,525 36,422 Provision for credit losses 4,000 1,200 — — 4,000 1,200 Net interest income after provision for credit losses 36,525 35,222 — — 36,525 35,222 Noninterest income 6,430 12,635 10,873 10,008 17,303 22,643 Noninterest expenses: Salaries and employee benefits 18,790 16,979 5,550 5,443 24,340 22,422 Outsourced services 3,599 3,265 784 1,081 4,383 4,346 Net occupancy 2,663 2,471 227 270 2,890 2,741 Equipment 843 815 60 76 903 891 Legal, audit and professional fees 662 527 274 223 936 750 FDIC deposit insurance costs 935 1,262 — — 935 1,262 Advertising and promotion 463 348 84 62 547 410 Amortization of intangibles — — 155 204 155 204 Other expenses 2,147 6,879 529 2,291 2,676 9,170 Total noninterest expenses 30,102 32,546 7,663 9,650 37,765 42,196 Income before income taxes 12,853 15,311 3,210 358 16,063 15,669 Income tax expense 2,734 3,347 729 143 3,463 3,490 Net income $ 10,119 $ 11,964 $ 2,481 $ 215 $ 12,600 $ 12,179 Supplemental Information: Total assets at period end $ 6,395,861 $ 6,525,532 $ 63,335 $ 60,483 $ 6,459,196 $ 6,586,015 Expenditures for long-lived assets 1,165 87 141 1 1,306 88 Depreciation expense (1) 736 808 71 86 807 894 (1) Included in net occupancy and equipment expenses in the table above. For the three months ended March 31, 2025, noninterest income for the Banking segment included a $ 7.0 million net gain recognized in the first quarter associated with sale-leaseback transactions that were completed for five branch locations. Also, for the three months ended March 31, 2025, total other expenses included a $ 6.4 million pension plan settlement charge recognized in the first quarter, of which $ 4.9 million was included in the Banking segment and $ 1.5 million was included in the Wealth Management Services segment. -36- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 13 - Other Comprehensive Income The following table presents the activity in other comprehensive income: Three months ended March 31, 2026 2025 (Dollars in thousands) Pre-tax Amounts Income Tax (Expense) Benefit Net of Tax Pre-tax Amounts Income Tax (Expense) Benefit Net of Tax Available for Sale Debt Securities: Change in fair value of available for sale debt securities ($ 1,779 ) $ 445 ($ 1,334 ) $ 16,896 ($ 4,266 ) $ 12,630 Cash Flow Hedges: Change in fair value of cash flow hedges 758 ( 190 ) 568 ( 1,130 ) 286 ( 844 ) Net cash flow hedge losses reclassified into earnings (1) 2,161 ( 539 ) 1,622 1,923 ( 486 ) 1,437 Net change in fair value of cash flow hedges 2,919 ( 729 ) 2,190 793 ( 200 ) 593 Defined Benefit Plan Obligations: Defined benefit plan obligation remeasurement — — — 2,665 ( 728 ) 1,937 Pension plan settlement charge reclassified into earnings — — — 6,436 ( 1,625 ) 4,811 Amortization of net actuarial losses into earnings 24 ( 6 ) 18 29 ( 8 ) 21 Net change in defined benefit plan obligations 24 ( 6 ) 18 9,130 ( 2,361 ) 6,769 Total other comprehensive income $ 1,164 ($ 290 ) $ 874 $ 26,819 ($ 6,827 ) $ 19,992 (1) See Note 6 for additional information on pre-tax amounts related to cash flow hedges that were reclassified into earnings. The following tables present the changes in AOCL by component, net of tax: (Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total For the three months ended March 31, 2026 Balance at December 31, 2025 ($ 73,743 ) ($ 3,142 ) ($ 2,424 ) ($ 79,309 ) Other comprehensive (loss) income before reclassifications ( 1,334 ) 568 — ( 766 ) Amounts reclassified from AOCL — 1,622 18 1,640 Net other comprehensive (loss) income ( 1,334 ) 2,190 18 874 Balance at March 31, 2026 ($ 75,077 ) ($ 952 ) ($ 2,406 ) ($ 78,435 ) (Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total For the three months ended March 31, 2025 Balance at December 31, 2024 ($ 102,439 ) ($ 7,938 ) ($ 8,794 ) ($ 119,171 ) Other comprehensive income (loss) before reclassifications 12,630 ( 844 ) 1,937 13,723 Amounts reclassified from AOCL — 1,437 4,832 6,269 Net other comprehensive income 12,630 593 6,769 19,992 Balance at March 31, 2025 ($ 89,809 ) ($ 7,345 ) ($ 2,025 ) ($ 99,179 ) -37- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 14 - Earnings per Common Share The following table presents the calculation of EPS: (Dollars and shares in thousands, except per share amounts) Three months ended March 31, 2026 2025 Earnings for basic and diluted EPS calculations: Net income $ 12,600 $ 12,179 Shares for basic and diluted EPS calculations: Weighted average common shares outstanding for basic EPS 19,039 19,276 Dilutive effect of common stock equivalents 134 94 Weighted average common and potential common shares outstanding for diluted EPS 19,173 19,370 EPS: Basic earnings per common share $ 0.66 $ 0.63 Diluted earnings per common share $ 0.66 $ 0.63 Shares excluded from the calculation of diluted EPS: Weighted average anti-dilutive common stock equivalents (1) 369 388 (1) 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 the Bancorp’s common stock, and therefore were anti-dilutive. -38- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 15 - Commitments and Contingencies Financial Instruments with Off-Balance Sheet Risk The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to manage the Corporation’s exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby letters of credit, as well as derivative financial instruments, such as mortgage loan commitments, loan related derivative contracts and interest rate risk management contracts. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Unaudited Consolidated Balance Sheets. The contract or notional amounts of these instruments reflect the extent of involvement the Corporation has in particular classes of financial instruments. See Note 6 for additional disclosure pertaining to derivative financial instruments. Financial Instruments Whose Contract Amounts Represent Credit Risk (Unfunded Commitments) Commitments to Extend Credit Commitments to extend credit are agreements to lend to a customer as long as there are no violations of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Each borrower’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained is based on management’s credit evaluation of the borrower. Standby Letters of Credit Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These standby letters of credit are primarily issued to support the financing needs of the Bank’s commercial customers. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan facilities to customers. The collateral supporting those commitments is essentially the same as for other commitments. Most standby letters of credit extend for one year. At March 31, 2026 and December 31, 2025, there were no liabilities to beneficiaries resulting from standby letters of credit. Should the Corporation be required to make payments to the beneficiary, repayment from the customer to the Corporation is required. The following table presents the contractual and notional amounts of financial instruments with off-balance sheet risk: (Dollars in thousands) March 31, 2026 December 31, 2025 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 1,017,062 $ 952,599 Standby letters of credit 7,317 7,774 -39- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) ACL on Unfunded Commitments The ACL on unfunded commitments is management’s estimate of expected lifetime credit losses over the expected contractual term in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation. The activity in the ACL on unfunded commitments for the three months ended March 31, 2026 is presented below: (Dollars in thousands) Commercial Consumer CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total Beginning Balance $ 518 $ 590 $ 1,108 $ 23 $ — $ 9 $ 9 $ 1,140 Provision 61 40 101 — — ( 1 ) ( 1 ) 100 Ending Balance $ 579 $ 630 $ 1,209 $ 23 $ — $ 8 $ 8 $ 1,240 The activity in the ACL on unfunded commitments for the three months ended March 31, 2025 is presented below: (Dollars in thousands) Commercial Consumer CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total Beginning Balance $ 822 $ 589 $ 1,411 $ 18 $ — $ 11 $ 11 $ 1,440 Provision ( 128 ) ( 71 ) ( 199 ) ( 1 ) — — — ( 200 ) Ending Balance $ 694 $ 518 $ 1,212 $ 17 $ — $ 11 $ 11 $ 1,240 Other Contingencies Litigation 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. -40- Management's Discussion and Analysis