What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 269 added, 197 removed, 857 unchanged (35% of the section changed)

1 unchanged sentence

The following discussion should be read in conjunction with the Corporation’s Audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025, and in conjunction with the condensed Unaudited Consolidated Financial Statements and notes thereto included in Item 1 of this report.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results for the full-year ended December 31, 2026 or any future period.

Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results for the full-year ended December 31, 2026 or any future period.

Forward-Looking Statements

4 unchanged sentences

Some of the factors that might cause these differences include the following:

• changes in general business and economic conditions (including the impact of ongoing armed conflicts, tariffs, inflation, current or future U.S.

• changes in general business and economic conditions (including the impact of ongoing armed conflicts, tariffs, inflation, future U.S.

government shutdowns, and concerns about liquidity) on a national basis and in the local markets in which we operate;

27 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended March 31, 2026 2025

For the six months ended June 30, 2026 2025

Adjusted Noninterest Income:

31 unchanged sentences

$28,581 $25,007

(1) Recognized in the three months ended March 31, 2025.

(2) Calculated as income tax expense divided by income before income taxes.

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(Dollars in thousands, except per share amounts)

Three months ended March 31, 2026 2025

For the six months ended June 30, 2026 2025

Adjusted Diluted Earnings per Common Share:

3 unchanged sentences

(1) Net income divided by weighted average diluted common and potential shares outstanding.

(2) Recognized in the three months ended March 31, 2025.

(3) Net income, adjusted for the after-tax impact of adjustments as outlined in the table above, divided by weighted average diluted common and potential shares outstanding.

1 unchanged sentence

(Dollars in thousands)

Three months ended March 31, 2026 2025

For the six months ended June 30, 2026 2025

Adjusted Return on Average Assets (1) :

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(1) Annualized based on the actual number of days in the period.

(2) Recognized in the three months ended March 31, 2025.

(3) Net income divided by total average assets.

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(6) Net income, adjusted for the after-tax impact of adjustments as outlined in the table above, divided by total average equity.

Management's Discussion and Analysis

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.

2 unchanged sentences

Our principal noninterest expenses include salaries and employee benefit costs, outsourced services (including software-as-a-service) provided by third-party vendors, occupancy and facility-related costs, and other administrative expenses.

Management's Discussion and Analysis

We continue to leverage our strong regional brand to build market share and remain steadfast in our commitment to provide superior service.

We believe the key to future growth is providing customers with convenient in-person service and digital banking solutions.

We have plans to open two new full-service branches later in 2026;

one in Pawtucket and another in Bristol, Rhode Island.

Results of Operations

The following table presents a summarized consolidated statement of operations:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Net interest income $41,803 $37,185 $4,618 12 % $82,328 $73,607 $8,721 12 %

8 unchanged sentences

$15,981 $13,245 $2,736 21 % $28,581 $25,007 $3,574 14 %

Net income totaled $12.6 million for the three months ended March 31, 2026, compared to $12.2 million reported for the same period in 2025.

These results included the following infrequent transactions:

Net income totaled $16.0 million and $28.6 million, respectively, for the three and six months ended June 30, 2026, compared to $13.2 million and $25.4 million, respectively, reported for the same periods in 2025.

The prior year results included the following infrequent transactions:

• In the first quarter of 2025, sale-leaseback transactions were completed for five branch locations and a pre-tax net gain on the sale of the bank-owned properties totaling $7.0 million was recognized within noninterest income.

• Also in the first quarter of 2025 and in connection with the termination of the Corporation's qualified pension plan, a pre-tax non-cash pension plan settlement charge of $6.4 million was recognized within noninterest expenses.

Excluding these items, adjusted net income (non-GAAP) for the three months ended March 31, 2026 was $12.6 million, compared to $11.8 million for the same period in 2025, up by $838 thousand, or 7%.

Excluding these items, adjusted net income (non-GAAP) for the three and six months ended June 30, 2026 was $16.0 million and $28.6 million, respectively, compared to $13.2 million and $25.0 million, respectively, for the same periods in 2025.

These results reflected higher net interest income, as well as growth in wealth management and mortgage banking revenues, partially offset by an elevated provision for credit losses and higher salaries and benefits costs.

Management's Discussion and Analysis

The following table presents a summary of performance metrics and ratios:

Three months ended March 31, 2026 2025

Three Months Six Months

Periods ended June 30, 2026 2025 2026 2025

Diluted earnings per common share $0.83 $0.68 $1.49 $1.31

Adjusted diluted earnings per common share (non-GAAP)

$0.83 $0.68 $1.49 $1.29

Return on average assets (net income divided by average assets) 0.99 % 0.80 % 0.88 % 0.76 %

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Interest income attributable to nonaccrual loans is included in accordance with accounting policy as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Three months ended March 31, 2026 2025 Change

Three months ended June 30, 2026 2025 Change

(Dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate

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(Dollars in thousands)

Three months ended March 31, 2026 2025 Change

Three months ended June 30, 2026 2025 Change

Commercial loans $180 $219 ($39)

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Total $180 $219 ($39)

Six months ended June 30, 2026 2025 Change

(Dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate

Cash, federal funds sold, and short-term investments $106,290 $1,907 3.62 % $138,950 $3,022 4.39 % ($32,660) ($1,115) (0.77 %)

Mortgage loans held for sale 28,105 853 6.12 66,145 1,400 4.27 (38,040) (547) 1.85

Taxable debt securities 1,009,682 17,236 3.44 1,055,109 18,057 3.45 (45,427) (821) (0.01)

Nontaxable debt securities 650 17 5.27 650 16 4.96 — 1 0.31

Total debt securities 1,010,332 17,253 3.44 1,055,759 18,073 3.45 (45,427) (820) (0.01)

28,048 1,091 7.84 42,482 1,814 8.61 (14,434) (723) (0.77)

Commercial real estate 2,099,003 57,311 5.51 2,150,209 61,579 5.78 (51,206) (4,268) (0.27)

Commercial & industrial 581,981 16,267 5.64 544,352 15,841 5.87 37,629 426 (0.23)

Total commercial 2,680,984 73,578 5.53 2,694,561 77,420 5.79 (13,577) (3,842) (0.26)

Residential real estate 2,031,620 45,421 4.51 2,108,429 46,350 4.43 (76,809) (929) 0.08

Home equity 319,702 9,984 6.30 297,695 10,229 6.93 22,007 (245) (0.63)

Other 16,171 422 5.26 17,174 423 4.97 (1,003) (1) 0.29

Total consumer 335,873 10,406 6.25 314,869 10,652 6.82 21,004 (246) (0.57)

Total loans 5,048,477 129,405 5.17 5,117,859 134,422 5.30 (69,382) (5,017) (0.13)

Total interest-earning assets 6,221,252 150,509 4.88 6,421,195 158,731 4.98 (199,943) (8,222) (0.10)

Noninterest-earning assets 293,820 282,682 11,138

Total assets $6,515,072 $6,703,877 ($188,805)

Liabilities and Shareholders’ Equity:

Interest-bearing demand deposits (in-market) $739,174 $11,640 3.18 % $646,489 $12,126 3.78 % $92,685 ($486) (0.60 %)

NOW accounts 680,693 524 0.16 674,985 685 0.20 5,708 (161) (0.04)

Money market accounts 1,179,738 16,217 2.77 1,207,072 19,806 3.31 (27,334) (3,589) (0.54)

Savings accounts 821,989 7,074 1.74 614,573 4,932 1.62 207,416 2,142 0.12

Time deposits (in-market) 1,166,833 19,482 3.37 1,209,927 22,611 3.77 (43,094) (3,129) (0.40)

Interest-bearing in-market deposits 4,588,427 54,937 2.41 4,353,046 60,160 2.79 235,381 (5,223) (0.38)

Wholesale brokered time deposits — — — 97,939 2,452 5.05 (97,939) (2,452) (5.05)

Total interest-bearing deposits 4,588,427 54,937 2.41 4,450,985 62,612 2.84 137,442 (7,675) (0.43)

FHLB advances

598,431 12,268 4.13 946,906 21,397 4.56 (348,475) (9,129) (0.43)

Junior subordinated debentures 22,681 618 5.49 22,681 693 6.16 — (75) (0.67)

Total interest-bearing liabilities 5,209,539 67,823 2.63 5,420,572 84,702 3.15 (211,033) (16,879) (0.52)

Noninterest-bearing demand deposits 613,141 618,373 (5,232)

Other liabilities 139,652 146,524 (6,872)

Shareholders’ equity 552,740 518,408 34,332

Total liabilities and shareholders’ equity $6,515,072 $6,703,877 ($188,805)

Net interest income (FTE)

$82,686 $74,029 $8,657

Interest rate spread 2.25 % 1.83 % 0.42 %

Net interest margin 2.68 % 2.32 % 0.36 %

Management's Discussion and Analysis

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

(Dollars in thousands)

Six months ended June 30, 2026 2025 Change

Commercial loans $348 $425 ($77)

Nontaxable debt securities 2 1 1

Total $350 $426 ($76)

Net Interest Income

Net interest income, the primary source of our operating income, totaled $40.5 million for the three months ended March 31, 2026, compared to $36.4 million, for the same period in 2025.

Net interest income, the primary source of our operating income, totaled $41.8 million and $82.3 million, respectively, for the three and six months ended June 30, 2026, compared to $37.2 million and $73.6 million, respectively, for the same periods in 2025.

Net interest income is affected by factors including, but not limited to, the level of and changes in interest rates, changes in the amount and composition of interest-earning assets and interest-bearing liabilities, loan and deposit pricing strategies and competitive conditions, loan prepayment speeds, and the level of nonaccrual loans.

NIM is calculated as net interest income on a fully-taxable equivalent basis as a percentage of average interest-earning assets.

The improvement in net interest income, FTE net interest income and NIM discussed below largely reflected continued benefits from the December 2024 balance sheet repositioning transactions.

The improvement in net interest income, FTE net interest income and NIM discussed below largely reflected continued benefits from the December 2024 balance sheet repositioning transactions, as well as the cessation of amortization of a deferred loss associated with a previously terminated cash flow hedge.

As of May 1, 2026, the remaining deferred loss was fully amortized.

As noted in the Unaudited Consolidated Statements of Cash Flows, amortization of the terminated cash flow hedge loss (a reduction to net interest income) amounted to $2.8 million in 2026, compared to $4.3 million in 2025.

The following discussion presents net interest income on an FTE basis by adjusting income and yields on tax-exempt loans to be comparable to taxable loans.

FTE net interest income for the three months ended March 31, 2026 amounted to $40.7 million, up by $4.1 million from the same period in 2025.

For the three months ended March 31, 2026, decreases in average interest-bearing liability balances net of decreases in average interest-earning assets increased net interest income by $793 thousand.

Decreases in funding costs outpaced decreases in asset yields, increasing net interest income by $3.3 million for the three months ended March 31, 2026.

NIM was 2.63% for the three months ended March 31, 2026, up by 34 basis points from 2.29% for the same period in 2025.

Total average securities for the three months ended March 31, 2026 decreased by $20.1 million from the same period a year earlier primarily due to routine pay-downs.

The FTE rate of return on the securities portfolio for the three months ended March 31, 2026 was 3.48%, up by 5 basis points from the same period in 2025.

Total average loan balances for the three months ended March 31, 2026 decreased by $21.8 million from the comparable 2025 period, largely reflecting a decrease in the residential real estate loan portfolio.

The yield on total loans for the three months ended March 31, 2026 was 5.14%, down by 17 basis points from the same period in 2025.

FTE net interest income for the three and six months ended June 30, 2026 amounted to $42.0 million and $82.7 million, respectively, up by $4.6 million and $8.7 million, respectively, from the same periods in 2025.

For the three and six months ended June 30, 2026, decreases in average interest-bearing liability balances net of decreases in average interest-earning assets increased net interest income by $1.3 million and $2.0 million, respectively.

Decreases in funding costs outpaced decreases in asset yields, increasing net interest income by $3.3 million and $6.7 million, respectively, for the three and six months ended June 30, 2026.

NIM was 2.73% and 2.68%, respectively, for the three and six months ended June 30, 2026, up from 2.36% and 2.32%, respectively, for the same periods in 2025.

Total average securities for the three and six months ended June 30, 2026 decreased by $70.5 million and $45.4 million, respectively, from the same periods a year earlier primarily due to routine pay-downs.

The FTE rate of return on the securities portfolio for the three and six months ended June 30, 2026 was 3.41% and 3.44%, respectively, down by 6 and 1 basis points, respectively, from the same periods in 2025.

Total average loan balances for the three and six months ended June 30, 2026 decreased by $116.5 million and $69.4 million, respectively, from the comparable 2025 periods, reflecting decreases in the residential and commercial real estate loan portfolios.

The yield on total loans for the three and six months ended June 30, 2026 was 5.20% and 5.17%, respectively, down by 9 and 13 basis points, respectively, from the same periods in 2025.

The decrease reflected the impact of lower market interest rates, partially offset by the benefit from the cessation of deferred loss amortization discussed above.

FHLB advances and brokered time deposits are utilized as wholesale funding sources.

The average balance of FHLB advances for the three months ended March 31, 2026 decreased by $299.2 million from the comparable period in 2025.

The average rate paid on such advances for the three months ended March 31, 2026 was 4.16%, down by 46 basis points from the same period in 2025.

There were no wholesale brokered time deposits for the three months ended March 31, 2026, compared to $188.4 million for the three months ended March 31, 2025 that had an average rate of 5.05%.

The average balance of FHLB advances for the three and six months ended June 30, 2026 decreased by $397.2 million and $348.5 million, respectively, from the comparable periods in 2025.

The average rate paid on such advances for the three and six months ended June 30, 2026 was 4.10% and 4.13%, respectively, down by 39 and 43 basis points, respectively, from the same periods in 2025.

There were no wholesale brokered time deposits for the three and six months ended June 30, 2026.

This compared to

Management's Discussion and Analysis

$8.5 million and $97.9 million, respectively for the three and six months ended June 30, 2025 with average rates of 4.96% and 5.05%, respectively.

The decline in wholesale funding balances reflected the benefits from the balance sheet repositioning transactions mentioned above, as well as increases in the average balances of in-market deposits.

Rates paid on wholesale funding have declined from the prior year reflecting lower market interest rates.

Average in-market interest-bearing deposits, which excludes wholesale brokered deposits, for the three months ended March 31, 2026 increased by $279.1 million from the same period in 2025, largely reflecting increases in average balances of savings accounts and interest-bearing demand deposits.

The average rate paid on in-market interest-bearing deposits for the three months ended March 31, 2026 was 2.42%, down by 35 basis points from the same period in 2025, largely reflecting

Average in-market interest-bearing deposits, which excludes wholesale brokered deposits, for the three and six months ended June 30, 2026 increased by $192.2 million and $235.4 million, respectively, from the same periods in 2025, largely reflecting increases in average balances of savings accounts and interest-bearing demand deposits.

The average rate paid on in-market interest-bearing deposits for both the three and six months ended June 30, 2026 was 2.41%, down by 40 and 38 basis points, respectively, from the same periods in 2025, largely reflecting lower market interest rates.

The average balance of noninterest-bearing demand deposits for the three and six months ended June 30, 2026 increased by $6.0 million and decreased by $5.2 million, respectively, from the same periods in 2025.

Management's Discussion and Analysis

lower market interest rates.

The average balance of noninterest-bearing demand deposits for the three months ended March 31, 2026 decreased by $16.5 million from the same period in 2025.

Volume / Rate Analysis - Interest Income and Expense (FTE Basis)

The following table presents certain information on an FTE basis regarding changes in our interest income and interest expense for the period indicated.

The following table presents certain information on an FTE basis regarding changes in our interest income and interest expense for the periods indicated.

The net change attributable to both volume and rate has been allocated proportionately.

(Dollars in thousands) Three Months Ended March 31, 2026 vs.

Change Due to

Volume Rate Net Change

(Dollars in thousands) Three Months Ended June 30, 2026 vs.

2025 Six Months Ended June 30, 2026 vs.

Change Due to Change Due to

Volume Rate Net Change Volume Rate Net Change

Interest on Interest-Earning Assets:

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Management's Discussion and Analysis

The following table presents the provision for credit losses:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

The following table presents the provision for credit losses for the periods indicated:

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Provision for credit losses on loans $1,500 $650 $850 131 % $5,400 $2,050 $3,350 163 %

1 unchanged sentence

Provision for credit losses $1,600 $600 $1,000 167 % $5,600 $1,800 $3,800 211 %

The provision for credit losses for the three months ended March 31, 2026, largely reflected an increase in specific reserves on two CRE office segment loans, which was partially offset by a decline in loan portfolio balances.

See additional discussion regarding these two loans under the caption “Nonaccrual Loans.”

Net charge-offs totaled $10 thousand for the three months ended March 31, 2026, compared to $2.3 million for the same period in 2025.

The provision for credit losses for the three and six months ended June 30, 2026 provided for an increase in specific reserves and for changes in our loan portfolio.

See additional discussion under the caption “Nonaccrual Loans.”

Net charge-offs totaled $55 thousand and $65 thousand, respectively, for the three and six months ended June 30, 2026, compared to $647 thousand and $3.0 million, respectively, for the same periods in 2025.

See additional discussion regarding the ACL under the caption “Asset Quality” below.

2 unchanged sentences

The principal categories of noninterest income are shown in the following table:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Noninterest income:

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Noninterest Income Analysis

Total noninterest income amounted to $17.3 million for the three months ended March 31, 2026, compared to $22.6 million for the same period in 2025.

Total noninterest income in 2025 was impacted by the gain on sale-leaseback transactions as described under the caption “Summary” above.

Excluding the impact of this infrequent transaction, adjusted noninterest income (non-GAAP) for the three months ended March 31, 2026 was up by $1.7 million, or 11%, from the same period in 2025.

Total noninterest income amounted to $18.7 million and $36.0 million, respectively, for the three and six months ended June 30, 2026, compared to $17.1 million and $39.7 million, respectively, for the same periods in 2025.

Total noninterest income in the six months ended 2025 was impacted by the gain on sale-leaseback transactions as described under the caption “Summary” above.

Excluding the impact of this infrequent transaction, adjusted noninterest income (non-GAAP) for the three and six months ended June 30, 2026 was up by $1.6 million and $3.2 million, respectively, from the same periods in 2025.

Wealth management revenues represent our largest source of noninterest income.

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The categories of wealth management revenues are shown in the following table:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Wealth management revenues:

5 unchanged sentences

2026 December 31,

2025 March 31,

2025 June 30,

AUA (market value as of the date indicated)

$7,916,933 $7,777,250 $7,181,715

Wealth management revenues for the three months ended March 31, 2026 increased by $756 thousand, or 8%, from the same period in 2025, largely reflecting an increase in asset-based revenues.

Wealth management revenues for the three and six months ended June 30, 2026 increased by $1.1 million and $1.8 million, respectively, from the same periods in 2025, reflecting an increase in asset-based revenues.

The increase in asset-based revenues correlated with the change in average AUA balances.

The average balance of AUA for the three months ended March 31, 2026 increased by 10% over the average balance for the same period in 2025, primarily reflecting net investment appreciation of AUA.

The average balance of AUA for the three and six months ended June 30, 2026 increased by 13% and 11%, respectively, over the average balances for the same periods in 2025, largely reflecting net investment appreciation of AUA.

Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets.

The composition of mortgage banking revenues and the volume of loans sold to the secondary market are shown in the following table:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Mortgage banking revenues:

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(4) Includes brokered loans (loans originated for others).

For the three months ended March 31, 2026, mortgage banking revenues were up by $741 thousand, or 32%, compared to the same period in 2025, largely reflecting an increase in sales volume.

For the three and six months ended June 30, 2026, mortgage banking revenues were up by $439 thousand and $1.2 million, respectively, compared to the same periods in 2025, largely reflecting an increase in sales volume.

Mortgage banking revenues are also impacted by changes in the fair value of mortgage loans held for sale and forward loan commitments, which are primarily based on current market prices in the secondary market and correlate to changes in the size of the mortgage pipeline.

Management's Discussion and Analysis

1 unchanged sentence

The following table presents noninterest expense comparisons:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Noninterest expense:

14 unchanged sentences

Noninterest Expense Analysis

Total noninterest expense amounted to $37.8 million for the three months ended March 31, 2026, compared to $42.2 million for the same period in 2025.

Total noninterest expense in 2025 was impacted by the settlement charge associated with termination of the Corporation’s qualified pension plan, as described under the caption “Summary” above.

Excluding the impact of this infrequent transaction, adjusted noninterest expense (non-GAAP) for the three months ended March 31, 2026, was up by $2.0 million, or 6%, from the same period in 2025.

Salaries and employee benefits expense, the largest component of total noninterest expense, for the three months ended March 31, 2026 increased by $1.9 million, or 9%, compared to the same period in 2025.

This primarily reflected merit increases and the addition of resources in our commercial banking and wealth management business lines, as well as volume-related increases in mortgage originator commission expense.

FDIC insurance costs for the three months ended March 31, 2026 decreased by $327 thousand, or 26%, compared to the same period in 2025, reflecting a decrease in average assets from a year ago and a lower FDIC deposit assessment rate.

Total noninterest expense amounted to $38.6 million and $76.4 million, respectively, for the three and six months ended June 30, 2026, compared to $36.5 million and $78.7 million, respectively, for the same periods in 2025.

Total noninterest expense in the six months ended 2025 was impacted by the settlement charge associated with termination of the Corporation’s qualified pension plan, as described under the caption “Summary” above.

Excluding the impact of this infrequent transaction, adjusted noninterest expense (non-GAAP) for the three and six months ended June 30, 2026, was up by $2.1 million and $4.1 million, respectively, from the same periods in 2025.

Salaries and employee benefits expense, the largest component of total noninterest expense, for the three and six months ended June 30, 2026 increased by $2.3 million and $4.2 million, respectively, compared to the same periods in 2025.

This reflected annual merit and staffing increases, including the addition of resources in our commercial banking and wealth management business lines.

FDIC insurance costs for the three and six months ended June 30, 2026 decreased by $283 thousand and $610 thousand, respectively, compared to the same periods in 2025, reflecting a decrease in average assets from a year ago and a lower FDIC deposit assessment rate.

The following table presents the Corporation’s income tax provision and applicable tax rates for the periods indicated:

(Dollars in thousands)

Three months ended March 31, 2026 2025

Three Months Six Months

Periods ended June 30, 2026 2025 2026 2025

Income tax expense $4,287 $3,888 $7,750 $7,378

Adjusted income tax expense (non-GAAP)

4,287 3,888 7,750 7,237

Effective tax rate 21.2 % 22.7 % 21.3 % 22.5 %

2 unchanged sentences

Blended statutory rate 25.0 % 25.3 % 25.0 % 25.3 %

Management's Discussion and Analysis

The effective tax rates differed from the federal rate of 21%, primarily due to state income tax expense, which was partially offset by benefits from tax-exempt income, income from BOLI, and federal tax credits.

The blended statutory rates include the federal income tax rate of 21% and a blended state income tax rate net of a federal tax benefit.

The decrease in the effective tax rate reflected changes in state tax expense and increased federal tax credit benefits.

Management's Discussion and Analysis

The Corporation’s net deferred tax assets are reported in other assets and amounted to $36.6 million at March 31, 2026, down from $36.9 million at December 31, 2025.

The decrease in the effective tax rate in 2026 reflected changes in state tax expense and increased federal tax credit benefits.

The Corporation’s net deferred tax assets are reported in other assets and amounted to $36.3 million at June 30, 2026, compared to $36.9 million at December 31, 2025.

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

3 unchanged sentences

The following table presents a summarized statement of operations for the Banking business segment:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Net interest income $41,803 $37,185 $4,618 12 % $82,328 $73,607 $8,721 12 %

7 unchanged sentences

Net income $13,027 $11,510 $1,517 13 % $23,146 $23,474 ($328) (1 %)

Net interest income for the Banking segment for the three months ended March 31, 2026 increased by $4.1 million from the same period in 2025.

Net interest income benefited from lower rates paid on, and decreases in, average interest-bearing liability balances, which was partially offset by lower yields on, and decreases in, average interest-earning asset balances.

Net interest income for the Banking segment for the three and six months ended June 30, 2026 increased by $4.6 million and $8.7 million, respectively, from the same periods in 2025.

Net interest income benefited from lower rates paid on, and decreases in, average interest-bearing liability balances, which was partially offset by decreases in, and lower yields on, average interest-earning asset balances.

See additional discussion under the caption “Net Interest Income” above.

The provision for credit losses for the three months ended March 31, 2026 increased by $2.8 million from the same period in 2025.

The provision for credit losses for the three and six months ended June 30, 2026 increased by $1.0 million and $3.8 million, respectively, from the same periods in 2025.

See additional discussion under the caption “Provision for Credit Losses” above.

Noninterest income derived from the Banking segment was $6.4 million for the three months ended March 31, 2026, compared to $12.6 million for the same period in 2025.

Included in the three months ended March 31, 2025 was a $7.0 million net gain recognized on sale-leaseback transactions.

Excluding this item, Banking noninterest income increased by $789 thousand, largely reflecting increases in mortgage banking revenues.

Noninterest income derived from the Banking segment was $7.3 million and $13.7 million, respectively, for the three and six months ended June 30, 2026, compared to $6.7 million and $19.4 million, respectively, for the same periods in 2025.

Included in the six months ended June 30, 2025 was a $7.0 million net gain recognized on sale-leaseback transactions.

Excluding this item, Banking noninterest income for the three and six months ended June 30, 2026 increased by $530 thousand and $1.3 million, respectively, largely reflecting increases in mortgage banking revenues.

See additional disclosure under the caption “Noninterest Income” above.

Banking noninterest expenses for the three months ended March 31, 2026 totaled $30.1 million compared to $32.5 million for the same period in 2025.

Included in the three months ended March 31, 2025 was $4.9 million of the total pension plan settlement charge that was allocated to the Banking segment.

Excluding this item, noninterest expenses for the Banking segment increased by $2.5 million, reflecting increases in salaries and employee benefits expense and outsourced services expense, partially offset by a decrease in FDIC insurance costs.

See additional discussion under the caption “Noninterest Expense” above.

Banking noninterest expenses for the three and six months ended June 30, 2026 totaled $31.0 million and $61.1 million, respectively, compared to $28.5 million and $61.1 million, respectively, for the same periods in 2025.

Included in the six months ended June 30, 2025 was $4.9 million of the total pension plan settlement charge that was allocated to the Banking segment.

Excluding this item, noninterest expenses for the Banking segment for the three and six months ended June 30, 2026 increased by $2.5 million and $4.9 million, respectively, reflecting increases in salaries and employee benefits expense and outsourced services expense, partially offset by a decrease in FDIC deposit insurance costs.

The increase in outsourced services reflected changes in third-party provided services, including software as a service and processing costs.

Management's Discussion and Analysis

additional discussion of salaries and employee benefits expense and FDIC deposit insurance costs under the caption “Noninterest Expense” above.

Wealth Management Services

The following table presents a summarized statement of operations for the Wealth Management Services business segment:

(Dollars in thousands)

Three months ended March 31, 2026 2025 $ %

(Dollars in thousands) Three Months Six Months

Change Change

Periods ended June 30, 2026 2025 $ % 2026 2025 $ %

Net interest income $— $— $— — % $— $— $— — %

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Net income $2,954 $1,735 $1,219 70 % $5,435 $1,950 $3,485 179 %

Noninterest income derived from the Wealth Management Services segment for the three months ended March 31, 2026 increased by $865 thousand from the same period in 2025, largely reflecting an increase in asset-based revenues.

Noninterest income derived from the Wealth Management Services segment for the three and six months ended June 30, 2026 increased by $1.1 million and $1.9 million, respectively, from the same periods in 2025, largely reflecting an increase in asset-based revenues.

See further discussion under the caption “Noninterest Income” above.

Noninterest expenses for the Wealth Management Services segment for the three months ended March 31, 2026 totaled $7.7 million, compared to $9.7 million for the same period in 2025.

Included in the three months ended March 31, 2025 was $1.5 million of the total pension plan settlement charge that was allocated to the Wealth Management Services segment.

Excluding this item, noninterest expenses for the Wealth Management Services segment decreased by $451 thousand.

This included a decrease in outsourced services expense, partially offset by higher salaries and benefits expense.

See additional discussion under the caption “Noninterest Expense” above.

Noninterest expenses for the Wealth Management Services segment for the three and six months ended June 30, 2026 totaled $7.6 million and $15.3 million, respectively, compared to $8.0 million and $17.7 million, respectively, for the same periods in 2025.

Included in the six months ended June 30, 2025 was $1.5 million of the total pension plan settlement charge that was allocated to the Wealth Management Services segment.

Excluding this item, noninterest expenses for the Wealth Management Services segment for the three and six months ended June 30, 2026 decreased by $421 thousand and $872 thousand, respectively, reflecting decreases in outsourced services expense, partially offset by an increase in salaries and employee benefits expense.

The decrease in outsourced services was attributable to changes in third-party provided services, including software as a service.

See additional discussion of salaries and employee benefits expense under the caption “Noninterest Expense” above.

Financial Condition

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Reports on the activities conducted by the Investment Committee and the ALCO are presented to the Board of Directors on a regular basis.

Management's Discussion and Analysis

The Corporation’s securities portfolio is managed to generate interest income, to implement interest rate risk management strategies, and to provide a readily available source of liquidity for balance sheet management.

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Securities available for sale may be sold in response to changes in market conditions, prepayment risk, rate fluctuations, liquidity, or capital requirements.

Management's Discussion and Analysis

securities available for sale are reported at fair value, with any unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of tax, until realized.

Debt securities available for sale are reported at fair value, with any unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of tax, until realized.

Determination of Fair Value

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In addition, management periodically performs independent price tests of securities to ensure proper valuation and to verify our understanding of how securities are priced.

As of March 31, 2026 and December 31, 2025, management did not make any adjustments to the prices provided by the pricing service.

As of June 30, 2026 and December 31, 2025, management did not make any adjustments to the prices provided by the pricing service.

Our fair value measurements generally utilize Level 2 inputs, representing 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 input assumptions are observable in active markets.

2 unchanged sentences

The carrying amounts of securities held are as follows:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Amount % of Total Amount % of Total

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Total available for sale debt securities $885,321 100 % $940,342 100 %

The securities portfolio represented 14% of total assets at both March 31, 2026 and December 31, 2025.

The securities portfolio represented 14% of total assets at both June 30, 2026 and December 31, 2025.

The largest component of the securities portfolio is mortgage-backed securities, all of which are issued by U.S.

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government-sponsored enterprises.

The securities portfolio decreased by $28.4 million, or 3%, from the end of 2025.

This largely reflected routine pay-downs on mortgage-backed securities.

The carrying amounts of available for sale debt securities as of March 31, 2026 and December 31, 2025 included net unrealized losses of $96.6 million and $94.9 million, respectively.

The securities portfolio decreased by $55.0 million, or 6%, from the end of 2025, largely reflecting routine pay-downs on mortgage-backed securities.

The carrying amounts of available for sale debt securities as of June 30, 2026 and December 31, 2025 included net unrealized losses of $96.7 million and $94.9 million, respectively.

The net unrealized losses were primarily concentrated in obligations of U.S.

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See Note 3 to the Unaudited Consolidated Financial Statements for additional information.

We primarily serve individuals and businesses located in southern New England, and a substantial portion of our loans are secured by properties in southern New England.

Total loans amounted to $5.0 billion at March 31, 2026, down by $119.5 million, or 2%, from the end of 2025.

Management's Discussion and Analysis

We primarily serve individuals and businesses located in southern New England, and a substantial portion of our loans are secured by properties in southern New England.

Total loans amounted to $5.1 billion at June 30, 2026, down by $31.3 million, or 1%, from the end of 2025.

The following table sets forth the composition of the Corporation’s loan portfolio:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Amount % of Total Amount % of Total

9 unchanged sentences

Total loans $5,103,069 100 % $5,134,388 100 %

(1) Includes negative basis adjustments associated with fair value hedges of $923 thousand and $335 thousand, respectively, at March 31, 2026 and December 31, 2025.

(1) Includes negative basis adjustments associated with fair value hedges of $1.5 million and $335 thousand, respectively, at June 30, 2026 and December 31, 2025.

See Note 6 to the Unaudited Consolidated Financial Statements for additional disclosure.

Commercial Loans

The commercial loan portfolio represented 53% of total loans at March 31, 2026, compared to 54% at December 31, 2025.

The commercial loan portfolio represented 53% of total loans at June 30, 2026, compared to 54% at December 31, 2025.

In making commercial loans, we may occasionally solicit the participation of other banks.

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In such cases, these loans are individually underwritten by us using standards similar to those employed for our self-originated loans.

Our participation in commercial loans originated by other banks amounted to $543.6 million and $613.5 million, respectively, at March 31, 2026 and December 31, 2025.

Our participation in commercial loans originated by other banks also includes shared national credits.

Shared national credits are defined as participation in loans or loan commitments of at least $100.0 million that are shared by three or more banks.

Our participation in commercial loans originated by other banks amounted to $528.6 million and $613.5 million, respectively, at June 30, 2026 and December 31, 2025.

Our participation in commercial loans originated by other banks also includes SNCs.

SNCs are defined as participation in loans or loan commitments of at least $100.0 million that are shared by three or more banks.

Commercial loans fall into two main categories, CRE and C&I loans.

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Commercial Real Estate Loans

CRE loans totaled $2.1 billion at March 31, 2026, down by $99.2 million, or 4.5%, from the balance at December 31, 2025.

In the first three months of 2026, CRE advances and originations amounted to $39.3 million and were more than offset by payments.

CRE loans totaled $2.1 billion at June 30, 2026, down by $133.7 million, or 6%, from the balance at December 31, 2025.

In the first six months of 2026, CRE advances and originations amounted to $147.3 million, which were more than offset by payments.

Management's Discussion and Analysis

The following table presents a geographic summary of CRE loans by property location:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Outstanding Balance % of Total Outstanding Balance % of Total

8 unchanged sentences

The following table presents a summary of CRE loans by property type segmentation:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Outstanding Balance (1)

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$65,523 $65,509

(1) Does not include unfunded commitments of $144.3 million and $127.1 million, respectively, as of March 31, 2026 and December 31, 2025.

(2) Includes shared national credits balances of $27.5 million and $45.6 million, respectively, as of March 31, 2026 and December 31, 2025.

There were no classified shared national credit balances as of March 31, 2026 or December 31, 2025.

(1) Does not include unfunded commitments of $147.4 million and $127.1 million, respectively, as of June 30, 2026 and December 31, 2025.

(2) Includes SNC balances of $27.9 million and $45.6 million, respectively, as of June 30, 2026 and December 31, 2025.

There were no classified SNC balances as of June 30, 2026 or December 31, 2025.

(3) Total commitment (outstanding loan balance plus unfunded commitments) divided by number of loans.

Multi-family, our largest single CRE segment, totaled $640.0 million as of March 31, 2026, representing 13% of total loans and 31% of the total CRE portfolio.

Multi-family, our largest single CRE segment, totaled $644.2 million as of June 30, 2026, representing 13% of total loans and 31% of the total CRE portfolio.

This segment includes non-owner occupied residential properties consisting of four or more units that are rented to tenants.

At March 31, 2026, the credit quality of the multi-family segment was 100% pass-rated.

Also, there were no nonaccrual loans and all loans were current with respect to payment terms at March 31, 2026 in this segment.

At June 30, 2026, the credit quality of the multi-family segment was 100% pass-rated.

Also, there were no nonaccrual loans and all loans were current with respect to payment terms at June 30, 2026 in this segment.

There continues to be heightened focus in the banking industry on the CRE office sector, given the continuation of remote work and elevated vacancies across the office market.

As of March 31, 2026, Washington Trust’s CRE office loan segment totaled $231.0 million, or 5% of total loans and 11% of the total CRE loans.

As of June 30, 2026, Washington Trust’s CRE office loan segment totaled $212.1 million, or 4% of total loans and 10% of the total CRE loans.

The loans are secured by non-owner occupied office properties, including medical office and lab space, located in our primary lending market area of southern New England - Massachusetts, Connecticut, and Rhode Island.

Furthermore, approximately 62% of the CRE office segment balance is secured by properties located in suburban areas.

As of March 31, 2026, 97% of the CRE office segment was current with respect to payment terms, and 87% of the CRE office segment was on accruing status.

Additionally, the credit

As of June 30, 2026, 86% of the CRE office segment was on accruing status and current with respect to payment terms.

Additionally, the credit quality of the CRE office loan segment was 69% pass-rated, 15% special mention-rated, and 17% classified as of June 30, 2026.

Management's Discussion and Analysis

quality of the CRE office loan segment was 71% pass-rated, 14% special mention-rated, and 15% classified as of March 31, 2026.

Commercial and Industrial Loans

C&I loans amounted to $568.2 million at March 31, 2026, up by $4.1 million, or 1%, from the balance at December 31, 2025.

In the first three months of 2026, C&I originations and advances amounted to $19.6 million and were partially offset by payments.

C&I loans amounted to $665.9 million at June 30, 2026, up by $101.8 million, or 18%, from the balance at December 31, 2025, largely reflecting growth from our institutional banking team who serve educational, healthcare and non-profit institutions.

In the first six months of 2026, C&I originations and advances amounted to $123.7 million and were partially offset by payments.

Management considers the C&I portfolio to be well-diversified with loans across several industries.

The following table presents a summary of C&I loan by industry segmentation:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Outstanding Balance (1)

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Healthcare and social assistance $150,391 23 % $150,061 27 %

Educational services 135,253 20 54,245 10

Retail trade 71,933 11 48,289 9

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55,038 8 55,315 10

Educational services 53,831 9 54,245 10

Accommodation and food services 32,585 5 26,431 5

Manufacturing 27,592 4 23,714 4

Finance and insurance

27,017 4 22,727 4

Manufacturing 25,540 4 23,714 4

Arts, entertainment, and recreation

1 unchanged sentence

21,196 3 21,843 4

Real estate rental and leasing 20,009 4 57,113 10

Professional, scientific, and technical services

20,936 3 12,490 2

Real estate rental and leasing 20,600 3 57,113 10

Public administration

8 unchanged sentences

$32,274 $33,001

(1) Does not include unfunded commitments of $320.2 million and $306.9 million, respectively, as of March 31, 2026 and December 31, 2025.

(2) Includes shared national credits balances of $79.3 million and $72.0 million, respectively, as of March 31, 2026 and December 31, 2025, all of which were pass-rated.

(1) Does not include unfunded commitments of $304.8 million and $306.9 million, respectively, as of June 30, 2026 and December 31, 2025.

(2) Includes SNC balances of $76.5 million and $72.0 million, respectively, as of June 30, 2026 and December 31, 2025, all of which were pass-rated.

(3) Total commitment (outstanding loan balance plus unfunded commitments) divided by number of loans.

Healthcare and social assistance, our largest single C&I segment, totaled $149.3 million as of March 31, 2026, representing 3% of total loans and 26% of the total C&I portfolio.

Healthcare and social assistance, our largest single C&I segment, totaled $150.4 million as of June 30, 2026, representing 3% of total loans and 23% of the total C&I portfolio.

This segment includes specialty medical practices, elder services, and community and mental health centers.

At March 31, 2026, the credit quality of the healthcare and social assistance segment was 100% pass-rated.

Also, there were no nonaccrual loans and all loans were current with respect to payment terms at March 31, 2026 in this segment.

At June 30, 2026, the credit quality of the healthcare and social assistance segment was 100% pass-rated.

Also, there were no nonaccrual loans and all loans were current with respect to payment terms at June 30, 2026 in this segment.

Residential Real Estate Loans

The residential real estate loan portfolio represented 40% of total loans at both March 31, 2026 and December 31, 2025.

Residential real estate loans amounted to $2.0 billion at March 31, 2026, down by $21.3 million, or 1%, from the balance at December 31, 2025, as loan originations were more than offset by payments.

The residential real estate loan portfolio represented 40% of total loans at both June 30, 2026 and December 31, 2025.

Residential real estate loans amounted to $2.0 billion at June 30, 2026, down by $8.0 million, or 0.4%, from the balance at December 31, 2025, as loan originations were more than offset by payments.

Management's Discussion and Analysis

The following is a geographic summary of residential real estate loans by property location:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Amount % of Total Amount % of Total

6 unchanged sentences

$2,042,406 100 % $2,050,399 100 %

(1) Includes residential mortgage loans purchased from and serviced by other financial institutions totaling $37.6 million and $38.5 million, respectively, as of March 31, 2026 and December 31, 2025.

(1) Includes residential mortgage loans purchased from and serviced by other financial institutions totaling $35.1 million and $38.5 million, respectively, as of June 30, 2026 and December 31, 2025.

Residential real estate loans are originated both for sale to the secondary market as well as for retention in the Bank’s loan portfolio.

2 unchanged sentences

The table below presents residential real estate loan origination activity:

(Dollars in thousands)

Three months ended March 31, 2026 2025

Amount % of Total Amount % of Total

(Dollars in thousands) Three Months Six Months

Periods ended June 30, 2026 2025 2026 2025

Amount % of Total Amount % of Total Amount % of Total Amount % of Total

Originations for retention in portfolio (1)

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(Dollars in thousands)

Three months ended March 31, 2026 2025

Amount % of Total Amount % of Total

Three Months Six Months

Periods ended June 30, 2026 2025 2026 2025

Amount % of Total Amount % of Total Amount % of Total Amount % of Total

Loans sold with servicing rights retained $7,586 6 % $7,762 7 % $12,256 5 % $24,581 13 %

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

The net balance of capitalized servicing rights amounted to $6.3 million and $6.6 million, respectively, as of March 31, 2026 and December 31, 2025.

The balance of residential mortgage loans serviced for others, which are not included in the Unaudited Consolidated Balance Sheets, amounted to $1.3 billion at both March 31, 2026 and December 31, 2025.

The net balance of capitalized servicing rights amounted to $6.1 million and $6.6 million, respectively, as of June 30, 2026 and December 31, 2025.

The balance of residential mortgage loans serviced for others, which are not included in the Unaudited Consolidated Balance Sheets, amounted to $1.3 billion at both June 30, 2026 and December 31, 2025.

Management's Discussion and Analysis

Consumer Loans

The consumer loan portfolio represented 7% of total loans at March 31, 2026, compared to 6% at December 31, 2025.

The consumer loan portfolio represented 7% of total loans at June 30, 2026, compared to 6% at December 31, 2025.

Consumer loans include home equity loans and lines of credit and personal installment loans.

Home equity lines of credit and home equity loans represented 95% of the total consumer portfolio at March 31, 2026.

Home equity lines of credit and home equity loans represented 95% of the total consumer portfolio at June 30, 2026.

Our home equity line and home equity loan origination activities are conducted primarily in southern New England.

The Bank estimates that approximately 45% of the combined home equity lines of credit and home equity loan balances are first lien positions or subordinate to other Washington Trust mortgages.

The consumer loan portfolio totaled $332.8 million at March 31, 2026, down by $3.1 million, or 1%, from December 31, 2025, largely reflecting a decrease in home equity lines.

The consumer loan portfolio totaled $344.6 million at June 30, 2026, up by $8.6 million, or 3%, from December 31, 2025, reflecting an increase in home equity lines and loans.

Asset Quality

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The following table presents nonperforming assets and additional asset quality data:

(Dollars in thousands) March 31,

(Dollars in thousands) June 30,

2026 December 31,

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Nonaccrual Loans

During the three months ended March 31, 2026, the Corporation made no changes in its practices or policies concerning the placement of loans into nonaccrual status.

During the six months ended June 30, 2026, the Corporation made no changes in its practices or policies concerning the placement of loans into nonaccrual status.

Management's Discussion and Analysis

The following table presents the activity in nonaccrual loans:

(Dollars in thousands)

For the three months ended March 31, 2026 2025

(Dollars in thousands) Three Months Six Months

For the periods ended June 30, 2026 2025 2026 2025

Balance at beginning of period $40,440 $21,626 $12,923 $23,307

6 unchanged sentences

The following table presents additional detail on nonaccrual loans:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Days Past Due Days Past Due

13 unchanged sentences

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

As of March 31, 2026, the composition of nonaccrual loans was 72% commercial and 28% residential and consumer.

As of June 30, 2026, the composition of nonaccrual loans was 73% commercial and 27% residential and consumer.

As of December 31, 2025, nonaccrual loans were 100% residential and consumer.

Nonaccrual loans at March 31, 2026 totaled $40.4 million, up by $27.5 million from the end of 2025.

Two CRE office segment loans with underlying properties located in our primary lending area of Southern New England were placed on nonaccrual status.

The first loan had a carrying value of $22.3 million at March 31, 2026 and was placed on nonaccrual status when notification of a tenant’s intent to vacate was received in March and workout discussions continued.

The underlying office property is approximately 60% occupied.

As management works to resolve this problem loan, a specific reserve was added in first quarter reflecting the estimated loss resulting from a proposed modification structure.

The second loan had a carrying value of $6.6 million at March 31, 2026 and was placed on nonaccrual status as the loan matured and renewal terms were being negotiated in March.

The loan is collateral dependent and a specific reserve was added in the first quarter reflecting the estimated decrease in the fair value of the collateral based on a new appraisal that was received in early April .

Nonaccrual loans at June 30, 2026 totaled $39.8 million, up by $26.9 million from the end of 2025.

Two CRE office segment loans with underlying properties located in our primary lending area were placed on nonaccrual status in the first quarter of 2026.

The first loan, with a carrying value of $22.3 million at June 30, 2026, was placed on nonaccrual status when notification of a tenant’s intent to vacate was received in March and workout discussions ensued.

Management continues efforts to resolve this problem loan and specific reserves have been established reflecting the estimated loss resulting from a proposed modification structure.

The second loan, with a carrying value of $6.6 million at June 30, 2026, was placed on nonaccrual status when the loan matured.

Negotiations of renewal terms commenced in March 2026 and are ongoing.

Specific reserves have been established on this loan based on a recent appraisal of the underlying collateral and continued negotiations with the borrower.

Management's Discussion and Analysis

1 unchanged sentence

The following table presents past due loans by class:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Commercial real estate $28,923 1.41 % $648 0.03 %

8 unchanged sentences

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

The composition of past due loans (loans past due 30 days or more) was 57% residential and consumer and 43% commercial as of March 31, 2026, compared to 94% residential and consumer and 6% commercial as of December 31, 2025.

Total past due loans increased by $5.1 million from the end of 2025, due to the nonaccrual CRE loan with a carrying value of $6.6 million at March 31, 2026 that matured in first quarter and is further discussed above.

Total past due loans included $12.3 million of nonaccrual loans as of March 31, 2026, compared to $8.3 million as of December 31, 2025.

All loans 90 days or more past due at March 31, 2026 and December 31, 2025 were classified as nonaccrual.

The composition of past due loans (loans past due 30 days or more) was 71% commercial and 29% residential and consumer as of June 30, 2026, compared to 6% commercial and 94% residential and consumer as of December 31, 2025.

Total past due loans increased by $30.0 million from the end of 2025, primarily due to the two CRE office segment loans that were placed on nonaccrual status in the first quarter of 2026 and are further discussed above.

Total past due loans included $36.2 million of nonaccrual loans as of June 30, 2026, compared to $8.3 million as of December 31, 2025.

All loans 90 days or more past due at June 30, 2026 and December 31, 2025 were classified as nonaccrual.

Potential Problem Loans

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The Corporation classifies certain loans as “substandard,” “doubtful,” or “loss” based on criteria consistent with guidelines provided by banking regulators.

Management considers potential problem loans to be classified accruing commercial loans that were less than 90 days past due at March 31, 2026.

Management considers potential problem loans to be classified accruing commercial loans that were less than 90 days past due at June 30, 2026.

Potential problem loans are not included in the amounts of nonaccrual loans presented above.

1 unchanged sentence

Accordingly, there can be no assurance that other loans will not become 90 days or more past due, be placed on nonaccrual, become modified, or require an increased allowance coverage and provision for credit losses on loans.

Management has identified $6.1 million in potential problem loans at March 31, 2026, compared to $28.4 million at December 31, 2025.

As of March 31, 2026, the balance of potential problem loans consisted of one CRE loan secured by an office property in our primary lending market area.

At March 31, 2026, this loan was current with respect to payment terms.

Management has identified $6.1 million in potential problem loans at June 30, 2026, compared to $28.4 million at December 31, 2025.

As of June 30, 2026, the balance of potential problem loans consisted of one CRE loan secured by an office property in our primary lending market area.

At June 30, 2026, this loan was current with respect to payment terms.

Allowance for Credit Losses on Loans

2 unchanged sentences

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

There were no significant changes in our modeling methodology to determine the ACL on loans during the three months ended March 31, 2026.

There were no significant changes in our modeling methodology to determine the ACL on loans during the three and six months ended June 30, 2026.

Management's Discussion and Analysis

9 unchanged sentences

The following table presents additional detail on the Corporation’s loan portfolio and associated allowance:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Loans Related Allowance Allowance / Loans Loans Related Allowance Allowance / Loans

3 unchanged sentences

Total $5,104,553 $42,571 0.83 % $5,134,723 $37,236 0.73 %

(1) The amount reported for pooled loans excludes negative basis adjustments associated with fair value hedges of $923 thousand and $335 thousand, respectively, at March 31, 2026 and December 31, 2025.

(1) The amount reported for pooled loans excludes negative basis adjustments associated with fair value hedges of $1.5 million and $335 thousand, respectively, at June 30, 2026 and December 31, 2025.

See Note 6 to the Unaudited Consolidated Financial Statements for additional disclosure.

The ACL on loans amounted to $41.1 million at March 31, 2026, up by $3.9 million, or 10%, from the balance at December 31, 2025.

The ACL on loans as a percentage of total loans, also known as the reserve coverage ratio, was 0.82% at March 31, 2026, compared to 0.73% at December 31, 2025.

ACL on loans as percentage of nonaccrual loans was 101.70% at March 31, 2026, compared to 288.14% at December 31, 2025.

Net charge-offs totaled $10 thousand for the three months ended March 31, 2026, compared to $2.3 million for the three months ended March 31, 2025.

The ACL on loans amounted to $42.6 million at June 30, 2026, up by $5.3 million, or 14%, from the balance at December 31, 2025.

The ACL on loans as a percentage of total loans, also known as the reserve coverage ratio, was 0.83% at June 30, 2026, compared to 0.73% at December 31, 2025.

ACL on loans as percentage of nonaccrual loans was 106.92% at June 30, 2026, compared to 288.14% at December 31, 2025.

The increase in the ACL on loans from December 31, 2025 largely reflected specific reserve allocations on the two individually analyzed nonaccrual CRE office segment loans noted above.

6 unchanged sentences

The total ACL on loans is available to absorb losses from any segment of the loan portfolio.

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Allocated ACL

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Sources of Funds

Our sources of funds include in-market deposits, wholesale brokered deposits, FHLB advances, other borrowings, and proceeds from the sales, maturities, and payments of loans and investment securities.

Our sources of funds may include in-market deposits, wholesale brokered deposits, FHLB advances, other borrowings, and proceeds from the sales, maturities, and payments of loans and investment securities.

The Corporation uses funds to originate and purchase loans, purchase investment securities, conduct operations, expand the branch network, and pay dividends to shareholders.

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The following table presents a summary of deposits:

(Dollars in thousands) March 31, 2026 December 31, 2025 Balance Change

(Dollars in thousands) June 30, 2026 December 31, 2025 Balance Change

Amount % of Total Amount % of Total $ %

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Management's Discussion and Analysis

In-market deposits, which exclude wholesale brokered time deposits, were down by $105.4 million, or 2%, from the balance at December 31, 2025.

There were no wholesale brokered time deposits at March 31, 2026 or December 31, 2025.

Total deposits were up by $88.9 million, or 2%, from the balance at December 31, 2025, reflecting growth in new depositor relationships established by our commercial institutional banking and treasury management teams.

There were no wholesale brokered time deposits at June 30, 2026 or December 31, 2025.

Competition for deposits in our market area is strong, and continued demand for higher‑cost deposit products remains.

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The following table presents a summary of the Bank’s uninsured deposits:

(Dollars in thousands) March 31, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Balance % of Total Deposits Balance % of Total Deposits

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Borrowings primarily consist of FHLB advances, which are used as a source of funding for liquidity and interest rate risk management purposes.

FHLB advances totaled $576.0 million at March 31, 2026, down by $50.0 million, or 8%, from the balance at the end of 2025.

FHLB advances totaled $456.0 million at June 30, 2026, down by $170.0 million, or 27%, from the balance at the end of 2025.

For additional information regarding FHLB advances see Note 9 to the Unaudited Consolidated Financial Statements.

FHLB advances decreased from the end of 2025 reflecting increases in in-market deposits and timing of liquidity management activities.

Liquidity and Capital Resources

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Capital Resources

Total shareholders’ equity amounted to $546.8 million at March 31, 2026, up by $3.2 million from December 31, 2025.

Total shareholders’ equity amounted to $553.5 million at June 30, 2026, up by $9.9 million from December 31, 2025.

This net increase primarily reflected net income of $28.6 million, partially offset by dividend declarations of $21.7 million.

Washington Trust declared a quarterly dividend of 56 cents per share for the three months ended March 31, 2026, unchanged from the 56 cents per share declared for the same period in 2025.

The ratio of total equity to total assets amounted to 8.47% at March 31, 2026, compared to a ratio of 8.21% at December 31, 2025.

Book value per share was $28.72 at March 31, 2026, compared to $28.56 at December 31, 2025.

The Bancorp and the Bank are subject to various regulatory capital requirements and are considered “well capitalized,” with a total risk-based capital ratio of 13.38% at March 31, 2026, compared to 12.95% at December 31, 2025.

Washington Trust declared a quarterly dividend of 56 cents per share for the three months ended June 30, 2026, unchanged from the 56 cents per share declared for the same period in 2025.

The ratio of total equity to total assets amounted to 8.45% at June 30, 2026, compared to a ratio of 8.21% at December 31, 2025.

Book value per share was $29.02 at June 30, 2026, compared to $28.56 at December 31, 2025.

The Bancorp and the Bank are subject to various regulatory capital requirements.

See Note 10 to the Unaudited Consolidated Financial Statements for additional discussion regarding shareholders’ equity.

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The Corporation has a comprehensive ERM program through which the Corporation identifies, measures, monitors, and controls current and emerging material risks.

The Board of Directors is responsible for oversight of the ERM program.

The ERM program enables the aggregation of risk across the Corporation and ensures the Corporation has the tools, programs, and processes in place to support informed

Management's Discussion and Analysis

decision making, to anticipate risks before they materialize and to maintain the Corporation’s risk profile consistent with its risk strategy.

The Board of Directors is responsible for oversight of the ERM program.

The ERM program enables the aggregation of risk across the Corporation and ensures the Corporation has the tools, programs, and processes in place to support informed decision making, to anticipate risks before they materialize and to maintain the Corporation’s risk profile consistent with its risk strategy.

The Board of Directors has approved an ERM Policy and risk appetite statement that addresses each category of risk and outlines the types and levels of risk the Corporation is willing to accept to achieve its strategic objectives.

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The ALCO reviews simulation results to determine whether the Corporation’s exposure to a decline in net interest income remains within established tolerance levels over the simulation horizons and to develop appropriate strategies to manage this exposure.

As of March 31, 2026 and December 31, 2025, net interest income simulations indicated that exposure to changing interest rates over the simulation horizons remained within tolerance levels established by the Corporation.

As of June 30, 2026 and December 31, 2025, net interest income simulations indicated that exposure to changing interest rates over the simulation horizons remained within tolerance levels established by the Corporation.

All changes are measured in comparison to the projected net interest income that would result from an “unchanged” rate scenario where both interest rates and the composition of the Corporation’s balance sheet remain stable.

The unchanged rate scenario as of March 31, 2026 shows net interest income trending higher over the next 12- and 24-month periods.

The unchanged rate scenario as of June 30, 2026 shows net interest income trending higher over the next 12- and 24-month periods.

The ALCO regularly reviews a wide variety of interest rate shift scenario results to evaluate interest rate risk exposure, including parallel changes in interest rates and scenarios showing the effect of steepening or flattening changes in the yield curve.

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Management's Discussion and Analysis

The following table sets forth the estimated change in net interest income compared to an unchanged rate scenario over the periods indicated for parallel changes in market interest rates using the Corporation’s on- and off-balance sheet financial instruments as of March 31, 2026 and December 31, 2025.

Interest rates are assumed to shift by parallel rate changes as shown in the table below.

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It should be noted that the rate scenarios shown do not necessarily reflect the ALCO’s view of the “most likely” change in interest rates over the periods indicated.

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Months 1 - 12 Months 13 - 24 Months 1 - 12 Months 13 - 24

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The relative change in interest rate sensitivity from December 31, 2025, as shown in the above table, was attributable to changes in balance sheet composition and market interest rates.

The changes reflected lower balances in loans, in-market deposits, and wholesale funding.

The changes reflected a shift in the mix of in-market deposits, as well as lower balances of loans and wholesale funding.

The ALCO estimates that as interest rates change, interest-earning assets would reprice more quickly than interest-bearing liabilities.

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Results are calculated using industry-standard analytical techniques and securities data.

The following table summarizes the potential change in market value of the Corporation’s available for sale debt securities as of March 31, 2026 and December 31, 2025 resulting from immediate parallel rate shifts:

The following table summarizes the potential change in market value of the Corporation’s available for sale debt securities as of June 30, 2026 and December 31, 2025 resulting from immediate parallel rate shifts:

(Dollars in thousands)

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Trust preferred debt and other corporate debt securities 57 (111)

Total change in market value as of March 31, 2026 $40,790 ($103,438)

Total change in market value as of June 30, 2026 $42,778 ($103,201)

Total change in market value as of December 31, 2025 $43,783 ($110,315)

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Liquidity is the ability of a financial institution to meet maturing liability obligations and customer loan demand.

The Corporation’s primary source of liquidity is in-market deposits, which funded approximately 79% of total average assets in the three months ended March 31, 2026.

The Corporation’s primary source of liquidity is in-market deposits, which funded approximately 80% of total average assets in the six months ended June 30, 2026.

While the generally preferred funding strategy is to attract and retain low-cost deposits, the ability to do so is affected by competitive interest rates and terms in the marketplace.

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Percentage of total contingent liquidity to uninsured deposits, after exclusions 173.9 % 181.7 %

(1) As of March 31, 2026 and December 31, 2025, loans with a carrying value of $2.8 billion and $2.9 billion, respectively, and securities available for sale with carrying values of $70.3 million and $71.8 million, respectively, were pledged to the FHLB resulting in this additional borrowing capacity.

(2) As of March 31, 2026 and December 31, 2025, loans with a carrying value of $55.0 million and $58.3 million, respectively, and securities available for sale with a carrying value of $55.9 million and $57.6 million, respectively, were pledged to the FRBB for the discount window resulting in this additional unused borrowing capacity.

(1) As of June 30, 2026 and December 31, 2025, loans with a carrying value of $2.8 billion and $2.9 billion, respectively, and securities available for sale with carrying values of $68.5 million and $71.8 million, respectively, were pledged to the FHLB resulting in this additional borrowing capacity.

(2) As of June 30, 2026 and December 31, 2025, loans with a carrying value of $57.5 million and $58.3 million, respectively, and securities available for sale with a carrying value of $54.3 million and $57.6 million, respectively, were pledged to the FRBB for the discount window resulting in this additional unused borrowing capacity.

(3) Available cash liquidity excludes amounts restricted for collateral purposes and designated for operating needs.

In addition to the amounts presented above, the Bank also had access to a $40.0 million unused line of credit with the FHLB at March 31, 2026 and December 31, 2025.

In addition to the amounts presented above, the Bank also had access to a $40.0 million unused line of credit with the FHLB at June 30, 2026 and December 31, 2025.

The ALCO establishes and monitors internal liquidity measures to manage liquidity exposure.

Liquidity remained within target ranges established by the ALCO during the three months ended March 31, 2026.

Liquidity remained within target ranges established by the ALCO during the six months ended June 30, 2026.

Based on its assessment of the liquidity considerations described above, management believes the Corporation’s sources of funding meet anticipated funding needs.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis