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) June 30, 2026 December 31, 2025 Assets: Cash and due from banks $ 26,443 $ 29,481 Interest-earning deposits with correspondent banks 89,069 61,375 Short-term investments 11,883 12,878 Mortgage loans held for sale, at fair value 33,608 35,833 Available for sale debt securities, at fair value (amortized cost of $ 981,994 , net of allowance for credit losses on securities of $ 0 at June 30, 2026; and amortized cost of $ 1,035,205 ; net of allowance for credit losses on securities of $ 0 at December 31, 2025) 885,321 940,342 Federal Home Loan Bank stock, at cost 23,809 29,473 Loans: Total loans 5,103,069 5,134,388 Less: allowance for credit losses on loans 42,571 37,236 Net loans 5,060,498 5,097,152 Premises and equipment, net 26,171 25,402 Operating lease right-of-use assets 35,029 35,904 Investment in bank-owned life insurance 116,914 115,126 Goodwill 63,909 63,909 Identifiable intangible assets, net 3,992 4,303 Other assets 171,258 170,516 Total assets $ 6,547,904 $ 6,621,694 Liabilities: Deposits: Noninterest-bearing deposits $ 644,011 $ 595,092 Interest-bearing deposits 4,714,862 4,674,898 Total deposits 5,358,873 5,269,990 Federal Home Loan Bank advances 456,000 626,000 Junior subordinated debentures 22,681 22,681 Operating lease liabilities 37,935 38,726 Other liabilities 118,892 120,713 Total liabilities 5,994,381 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 19,070,704 shares outstanding at June 30, 2026 and 19,561,985 shares issued and 19,034,935 shares outstanding at December 31, 2025 1,223 1,223 Paid-in capital 198,088 198,323 Retained earnings 449,650 442,741 Accumulated other comprehensive loss ( 77,360 ) ( 79,309 ) Treasury stock, at cost; 491,281 shares at June 30, 2026 and 527,050 shares at December 31, 2025 ( 18,078 ) ( 19,394 ) Total shareholders’ equity 553,523 543,584 Total liabilities and shareholders’ equity $ 6,547,904 $ 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 Six Months Periods ended June 30, 2026 2025 2026 2025 Interest income: Interest and fees on loans $ 64,711 $ 67,345 $ 129,049 $ 134,001 Interest on mortgage loans held for sale 478 442 853 1,400 Taxable interest on debt securities 8,468 9,230 17,236 18,057 Nontaxable interest on debt securities 8 8 15 15 Dividends on Federal Home Loan Bank stock 506 792 1,091 1,814 Other interest income 998 1,029 1,907 3,022 Total interest and dividend income 75,169 78,846 150,151 158,309 Interest expense: Deposits 27,567 30,864 54,937 62,612 Federal Home Loan Bank advances 5,491 10,451 12,268 21,397 Junior subordinated debentures 308 346 618 693 Total interest expense 33,366 41,661 67,823 84,702 Net interest income 41,803 37,185 82,328 73,607 Provision for credit losses 1,600 600 5,600 1,800 Net interest income after provision for credit losses 40,203 36,585 76,728 71,807 Noninterest income: Wealth management revenues 11,201 10,120 21,848 20,011 Mortgage banking revenues 3,473 3,034 6,518 5,338 Card interchange fees 1,305 1,247 2,690 2,756 Service charges on deposit accounts 842 808 1,627 1,552 Loan related derivative income 583 676 810 777 Income from bank-owned life insurance 904 826 1,789 1,595 Gain on sale of bank-owned properties, net — — — 6,994 Other income 354 367 683 698 Total noninterest income 18,662 17,078 35,965 39,721 Noninterest expense: Salaries and employee benefits 25,312 23,025 49,652 45,447 Outsourced services 4,266 4,404 8,649 8,750 Net occupancy 2,735 2,662 5,625 5,403 Equipment 887 930 1,790 1,821 Legal, audit, and professional fees 824 726 1,760 1,476 FDIC deposit insurance costs 952 1,235 1,887 2,497 Advertising and promotion 771 717 1,318 1,127 Amortization of intangibles 156 203 311 407 Pension plan settlement charge — — — 6,436 Other expenses 2,694 2,628 5,370 5,362 Total noninterest expense 38,597 36,530 76,362 78,726 Income before income taxes 20,268 17,133 36,331 32,802 Income tax expense 4,287 3,888 7,750 7,378 Net income $ 15,981 $ 13,245 $ 28,581 $ 25,424 Weighted average common shares outstanding - basic 19,064 19,285 19,051 19,280 Weighted average common shares outstanding - diluted 19,204 19,374 19,189 19,372 Per share information: Basic earnings per common share $ 0.84 $ 0.69 $ 1.50 $ 1.32 Diluted earnings per common share $ 0.83 $ 0.68 $ 1.49 $ 1.31 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 Six Months Periods ended June 30, 2026 2025 2026 2025 Net income $ 15,981 $ 13,245 $ 28,581 $ 25,424 Other comprehensive income, net of tax: Net change in fair value of available for sale debt securities ( 23 ) 2,132 ( 1,357 ) 14,762 Net change in fair value of cash flow hedges 1,079 1,076 3,269 1,669 Net change in defined benefit plan obligations 19 22 37 6,791 Total other comprehensive income, net of tax 1,075 3,230 1,949 23,222 Total comprehensive income $ 17,056 $ 16,475 $ 30,530 $ 48,646 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 June 30, 2026 Common Shares Outstanding Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Balance at March 31, 2026 19,041 $ 1,223 $ 198,654 $ 444,508 ($ 78,435 ) ($ 19,177 ) $ 546,773 Net income — — — 15,981 — — 15,981 Total other comprehensive income, net of tax — — — — 1,075 — 1,075 Cash dividends declared ($ 0.56 per share) — — — ( 10,839 ) — — ( 10,839 ) Share-based compensation — — 847 — — — 847 Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 30 — ( 1,413 ) — — 1,099 ( 314 ) Balance at June 30, 2026 19,071 $ 1,223 $ 198,088 $ 449,650 ($ 77,360 ) ($ 18,078 ) $ 553,523 For the six months ended June 30, 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 — — — 28,581 — — 28,581 Total other comprehensive income, net of tax — — — — 1,949 — 1,949 Cash dividends declared ($ 1.12 per share) — — — ( 21,672 ) — — ( 21,672 ) Share-based compensation — — 1,498 — — — 1,498 Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 36 — ( 1,733 ) — — 1,316 ( 417 ) Balance at June 30, 2026 19,071 $ 1,223 $ 198,088 $ 449,650 ($ 77,360 ) ($ 18,078 ) $ 553,523 The accompanying notes are an integral part of these unaudited consolidated financial statements. -7- Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statements of Changes in Shareholders' Equity (unaudited) (Dollars and shares in thousands, except per share amounts) For the three months ended June 30, 2025 Common Shares Outstanding Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Balance at March 31, 2025 19,276 $ 1,223 $ 197,570 $ 435,233 ($ 99,179 ) ($ 13,167 ) $ 521,680 Net income — — — 13,245 — — 13,245 Total other comprehensive income, net of tax — — — — 3,230 — 3,230 Cash dividends declared ($ 0.56 per share) — — — ( 10,958 ) — — ( 10,958 ) Share-based compensation — — 873 — — — 873 Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 17 — ( 1,051 ) — — 796 ( 255 ) Treasury stock purchased under 2025 Repurchase Program ( 10 ) — — — — ( 296 ) ( 296 ) Balance at June 30, 2025 19,283 $ 1,223 $ 197,392 $ 437,520 ($ 95,949 ) ($ 12,667 ) $ 527,519 For the six months ended June 30, 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 — — — 25,424 — — 25,424 Total other comprehensive income, net of tax — — — — 23,222 — 23,222 Cash dividends declared ($ 1.12 per share) — — — ( 21,918 ) — — ( 21,918 ) Share-based compensation — — 1,653 — — — 1,653 Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered 19 — ( 1,208 ) — — 914 ( 294 ) Treasury stock purchased under 2025 Repurchase Program ( 10 ) — — — — ( 296 ) ( 296 ) Balance at June 30, 2025 19,283 $ 1,223 $ 197,392 $ 437,520 ($ 95,949 ) ($ 12,667 ) $ 527,519 The accompanying notes are an integral part of these unaudited consolidated financial statements. -8- Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statement of Cash Flows (unaudited) (Dollars in thousands) Six months ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 28,581 $ 25,424 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 5,600 1,800 Gain on sale of bank-owned properties, net — ( 6,994 ) Depreciation of premises and equipment 1,622 1,770 Net amortization of premiums and discounts on debt securities and loans 243 364 Amortization of intangibles 311 407 Amortization of terminated cash flow hedge loss 2,845 4,255 Pension plan settlement charge — 6,436 Share-based compensation 1,498 1,653 Tax expense from stock option exercises and other equity awards ( 12 ) ( 174 ) Income from bank-owned life insurance ( 1,789 ) ( 1,595 ) Net gains on loan sales, including changes in fair value ( 5,494 ) ( 4,187 ) Proceeds from sales of loans, net 244,765 189,449 Loans originated for sale ( 237,754 ) ( 199,134 ) Decrease in operating lease right-of-use assets 1,742 1,783 Decrease in operating lease liabilities ( 1,657 ) ( 1,697 ) Decrease in other assets 2,936 8,949 Decrease in other liabilities ( 4,195 ) ( 8,717 ) Net cash provided by operating activities 39,242 19,792 Cash flows from investing activities: Purchases of: Available for sale debt securities: Mortgage-backed — ( 73,303 ) Maturities, calls, and principal payments of: Available for sale debt securities: Mortgage-backed 50,734 34,271 Available for sale debt securities: Other 2,000 3,250 Net redemptions of Federal Home Loan Bank stock 5,664 4,544 Net decrease (increase) in loans 32,697 ( 6,367 ) Net proceeds from sale of portfolio loans — 283,182 Purchases of loans ( 501 ) ( 453 ) Purchases of premises and equipment ( 2,391 ) ( 489 ) Net proceeds from the sale of bank-owned properties — 11,780 Purchases of bank-owned life insurance — ( 5,000 ) Equity investments in real estate limited partnerships ( 494 ) ( 74 ) Purchases of other equity investments ( 125 ) ( 375 ) Net cash provided by investing activities 87,584 250,966 Cash flows from financing activities: Net increase (decrease) in deposits 88,883 ( 70,552 ) Proceeds from Federal Home Loan Bank advances 1,015,000 1,022,000 Repayments of Federal Home Loan Bank advances ( 1,185,000 ) ( 1,146,000 ) Treasury stock purchased — ( 296 ) Net proceeds from stock option exercises and issuance of other equity awards, net of awards surrendered ( 417 ) ( 294 ) Cash dividends paid ( 21,631 ) ( 21,781 ) Net cash used in financing activities ( 103,165 ) ( 216,923 ) Net increase in cash and cash equivalents 23,661 53,835 Cash and cash equivalents at beginning of period 103,734 113,889 Cash and cash equivalents at end of period $ 127,395 $ 167,724 Noncash Investing and Financing Activities: Loans charged-off $ 162 $ 3,189 Commitment for equity investments in real estate limited partnerships 14,098 — Supplemental Disclosures: Interest payments $ 69,108 $ 92,695 Income taxes paid 5,515 23 The accompanying notes are an integral part of these unaudited consolidated financial statements. -9- 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. -10- 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. -11- 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) June 30, 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 $ 41,641 $ 19 ($ 1,870 ) $ — $ 39,790 Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 922,297 3,266 ( 97,428 ) — 828,135 Obligations of states and political subdivisions 650 10 — — 660 Individual name issuer trust preferred debt securities 6,189 — ( 93 ) — 6,096 Corporate bonds 11,217 — ( 577 ) — 10,640 Total available for sale debt securities $ 981,994 $ 3,295 ($ 99,968 ) $ — $ 885,321 (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 $ 2.2 million and $ 3.1 million, respectively, as of June 30, 2026 and December 31, 2025. At June 30, 2026 and December 31, 2025, securities with a fair value of $ 384.3 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. -12- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (Dollars in thousands) June 30, 2026 Amortized Cost Fair Value Due in one year or less $ 111,726 $ 101,550 Due after one year to five years 322,379 291,296 Due after five years to ten years 242,087 217,371 Due after ten years 305,802 275,104 Total debt securities $ 981,994 $ 885,321 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 June 30, 2026 that are callable at the discretion of the issuers. Final maturities of the callable securities range from 10 months to 18 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 June 30, 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 $ 1,269 ($ 21 ) 3 $ 23,501 ($ 1,849 ) 7 $ 24,770 ($ 1,870 ) Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 2 1,410 ( 14 ) 89 434,135 ( 97,414 ) 91 435,545 ( 97,428 ) Individual name issuer trust preferred debt securities — — — 2 6,096 ( 93 ) 2 6,096 ( 93 ) Corporate bonds — — — 3 10,640 ( 577 ) 3 10,640 ( 577 ) Total 6 $ 2,679 ($ 35 ) 97 $ 474,372 ($ 99,933 ) 103 $ 477,051 ($ 99,968 ) (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 June 30, 2026 and 2025 and, therefore there was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2026 and 2025. -13- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) As of June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 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. -14- 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) June 30, 2026 December 31, 2025 Commercial: Commercial real estate (1) $ 2,050,249 $ 2,183,985 Commercial & industrial (2) 665,855 564,082 Total commercial 2,716,104 2,748,067 Residential Real Estate: Residential real estate (3) 2,042,406 2,050,399 Consumer: Home equity 328,802 318,862 Other (4) 15,757 17,060 Total consumer 344,559 335,922 Total loans (5) $ 5,103,069 $ 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 $ 1.5 million and $ 335 thousand, respectively, at June 30, 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 June 30, 2026 and December 31, 2025 and net unamortized premiums on loans purchased from and serviced by other financial institutions of $ 185 thousand and $ 198 thousand, respectively, at June 30, 2026 and December 31, 2025. The carrying value of loans excludes accrued interest receivable of $ 19.4 million and $ 20.1 million, respectively, as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, loans amounting to $ 2.8 billion and $ 2.9 billion, respectively, were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRBB for the discount window. See Note 9 for additional disclosure regarding borrowings. 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. -15- 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 June 30, 2026 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 2,021,326 $ — $ — $ 28,923 $ 28,923 $ 2,050,249 Commercial & industrial 665,391 4 334 126 464 665,855 Total commercial 2,686,717 4 334 29,049 29,387 2,716,104 Residential Real Estate: Residential real estate 2,032,498 4,358 4,059 1,491 9,908 2,042,406 Consumer: Home equity 326,716 1,220 136 730 2,086 328,802 Other 15,730 26 1 — 27 15,757 Total consumer 342,446 1,246 137 730 2,113 344,559 Total loans $ 5,061,661 $ 5,608 $ 4,530 $ 31,270 $ 41,408 $ 5,103,069 (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 June 30, 2026 and December 31, 2025, were nonaccrual loans of $ 36.2 million and $ 8.3 million, respectively. In addition, all loans 90 days or more past due at June 30, 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. -16- 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) June 30, 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 28,923 126 29,049 — — — Residential Real Estate: Residential real estate 8,309 763 9,072 9,830 1,269 11,099 Consumer: Home equity 1,668 27 1,695 1,824 — 1,824 Other — — — — — — Total consumer 1,668 27 1,695 1,824 — 1,824 Total nonaccrual loans $ 38,900 $ 916 $ 39,816 $ 11,654 $ 1,269 $ 12,923 Accruing loans 90 days or more past due $ — $ — Nonaccrual loans of $ 3.7 million and $ 4.6 million, respectively, at June 30, 2026 and December 31, 2025 were current as to the payment of principal and interest. As of June 30, 2026 and December 31, 2025, nonaccrual loans secured by one- to four-family residential properties amounting to $ 1.7 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 Six Months Periods ended June 30, 2026 2025 2026 2025 Commercial: Commercial real estate $ — $ — $ 588 $ — Commercial & industrial — 2 — 32 Total commercial — 2 588 32 Residential Real Estate: Residential real estate 93 124 240 268 Consumer: Home equity 29 48 42 83 Other — — — — Total consumer 29 48 42 83 Total $ 122 $ 174 $ 870 $ 383 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 -17- 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. As of June 30, 2026 and December 31, 2025, the carrying value of TLMs amounted to $ 7.9 million and $ 8.2 million, respectively. There were no loans modified as a TLM during the three months or six months ended June 30, 2026. The following tables present the carrying value at June 30, 2025 of TLMs made during the periods indicated, segregated by class of loans and type of concession granted: (Dollars in thousands) Three months ended June 30, 2025 Combination (1) Total % of Loan Class (2) Commercial: Commercial real estate $ 4,276 $ 4,276 — % Total $ 4,276 $ 4,276 — % (1) Combination includes an interest rate reduction, maturity extension and other-than-insignificant payment delay. (2) Percentage of TLMs to the total loans outstanding within the respective loan class. (Dollars in thousands) Six months ended June 30, 2025 Other-than-Insignificant Payment Delay Combination (1) Total % of Loan Class (2) Commercial: Commercial real estate $ — $ 4,276 $ 4,276 — % Residential Real Estate: Residential real estate 1,429 — 1,429 — Total $ 1,429 $ 4,276 $ 5,705 — % (1) Combination includes an interest rate reduction, maturity extension and other-than-insignificant payment delay. (2) Percentage of TLMs to the total loans outstanding within the respective loan class. The following tables describe the financial effect of TLMs made during the periods indicated, segregated by class of loans: Three months ended June 30, 2025 Financial Effect Combination - Interest Rate Reduction, Maturity Extension and Other-than-Insignificant Payment Delay: Commercial real estate Provided a weighted average interest rate reduction of 1.7 %, maturity extension of 8 months, and payment delay of 8 months -18- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Six months ended June 30, 2025 Financial Effect Combination - Interest Rate Reduction, Maturity Extension and Other-than-Insignificant Payment Delay: Commercial real estate Provided a weighted average interest rate reduction of 1.7 %, maturity extension of 8 months, and payment delay of 8 months Other-than-Insignificant Payment Delay: Residential real estate Provided a weighted average payment delay 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 June 30, 2026 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 5,593 $ — $ — $ — $ — $ 5,593 Residential Real Estate: Residential real estate 629 — — — — 629 Total loans $ 6,222 $ — $ — $ — $ — $ 6,222 (Dollars in thousands) Days Past Due June 30, 2025 Current 30-59 60-89 90 or More Total Past Due Total Loans Commercial: Commercial real estate $ 4,276 $ — $ — $ — $ — $ 4,276 Commercial & industrial 5,000 — — — — 5,000 Total commercial 9,276 — — — — 9,276 Residential Real Estate: Residential real estate 1,429 — — — — 1,429 Total loans $ 10,705 $ — $ — $ — $ — $ 10,705 At both June 30, 2026 and June 30, 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 June 30, 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 June 30, 2026 and December 31, 2025, the carrying value of individually analyzed loans amounted to $ 37.7 million and $ 8.9 million, respectively. The carrying value of collateral dependent individually analyzed loans was $ 13.1 million and $ 7.5 million, respectively, at June 30, 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. -19- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents the carrying value of collateral dependent individually analyzed loans: (Dollars in thousands) June 30, 2026 December 31, 2025 Carrying Value Related Allowance Carrying Value Related Allowance Commercial: Commercial real estate (1) $ 12,167 $ 2,300 $ 5,605 $ — Commercial & industrial (2) 126 — — — Total commercial 12,293 2,300 5,605 — Residential Real Estate: Residential real estate (3) 763 — 1,903 — Consumer: Home equity (3) 27 — — — Other — — — — Total consumer 27 — — — Total $ 13,083 $ 2,300 $ 7,508 $ — (1) Secured by income-producing property. (2) Secured by business assets. (3) Secured by one- to four-family residential properties. 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 -20- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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 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 June 30, 2026: -21- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (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 $ 166,154 $ 326,073 $ 93,411 $ 231,216 $ 441,280 $ 663,308 $ 45,358 $ 915 $ 1,967,715 Special mention — 27,904 — 11,979 3,883 3,750 — — 47,516 Classified — 6,574 — — 22,349 6,095 — — 35,018 Total CRE 166,154 360,551 93,411 243,195 467,512 673,153 45,358 915 2,050,249 Gross charge-offs — — — — — — — — — C&I: Pass 128,445 96,727 38,260 51,167 116,844 162,292 69,715 298 663,748 Special mention — — 778 — 334 119 750 — 1,981 Classified — — — — — 126 — — 126 Total C&I 128,445 96,727 39,038 51,167 117,178 162,537 70,465 298 665,855 Gross charge-offs 29 — — — — — — — 29 Residential Real Estate: Current (1) 101,518 158,800 45,022 298,432 660,672 769,538 — — 2,033,982 Past due — — — 768 2,668 6,472 — — 9,908 Total residential real estate 101,518 158,800 45,022 299,200 663,340 776,010 — — 2,043,890 Gross charge-offs — — — — — — — — — Consumer: Home equity: Current 12,113 15,573 9,339 13,039 9,048 10,413 242,755 14,436 326,716 Past due — — — 86 387 486 863 264 2,086 Total home equity 12,113 15,573 9,339 13,125 9,435 10,899 243,618 14,700 328,802 Gross charge-offs — — — — — — — — — Other: Current 1,321 3,815 2,183 2,889 1,521 3,734 267 — 15,730 Past due 26 — — — — — 1 — 27 Total other 1,347 3,815 2,183 2,889 1,521 3,734 268 — 15,757 Gross charge-offs 129 — — 1 — 2 1 — 133 Loans, amortized cost $ 409,577 $ 635,466 $ 188,993 $ 609,576 $ 1,258,986 $ 1,626,333 $ 359,709 $ 15,913 $ 5,104,553 Gross charge-offs $ 158 $ — $ — $ 1 $ — $ 2 $ 1 $ — $ 162 (1) Excludes a $ 1.5 million negative basis adjustment associated with fair value hedges. See Note 6 for additional disclosure. -22- 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. -23- 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 June 30, 2026: (Dollars in thousands) Commercial Consumer CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total Beginning Balance $ 24,031 $ 9,647 $ 33,678 $ 6,003 $ 1,194 $ 251 $ 1,445 $ 41,126 Charge-offs — ( 12 ) ( 12 ) — — ( 66 ) ( 66 ) ( 78 ) Recoveries — 12 12 — — 11 11 23 Provision 1,415 ( 90 ) 1,325 147 31 ( 3 ) 28 1,500 Ending Balance $ 25,446 $ 9,557 $ 35,003 $ 6,150 $ 1,225 $ 193 $ 1,418 $ 42,571 The following table presents the activity in the ACL on loans for the six months ended June 30, 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 — ( 29 ) ( 29 ) — — ( 133 ) ( 133 ) ( 162 ) Recoveries — 71 71 1 1 24 25 97 Provision 5,680 ( 235 ) 5,445 ( 121 ) 38 38 76 5,400 Ending Balance $ 25,446 $ 9,557 $ 35,003 $ 6,150 $ 1,225 $ 193 $ 1,418 $ 42,571 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 June 30, 2025: (Dollars in thousands) Commercial Consumer CRE C&I Total Commercial Residential Real Estate Home Equity Other Total Consumer Total Beginning Balance $ 25,207 $ 7,656 $ 32,863 $ 6,776 $ 1,057 $ 360 $ 1,417 $ 41,056 Charge-offs ( 274 ) ( 317 ) ( 591 ) — — ( 76 ) ( 76 ) ( 667 ) Recoveries — 10 10 — 1 9 10 20 Provision ( 5,329 ) 5,809 480 143 49 ( 22 ) 27 650 Ending Balance $ 19,604 $ 13,158 $ 32,762 $ 6,919 $ 1,107 $ 271 $ 1,378 $ 41,059 -24- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents the activity in the ACL on loans for the six months ended June 30, 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 ( 2,724 ) ( 324 ) ( 3,048 ) — — ( 141 ) ( 141 ) ( 3,189 ) Recoveries 200 14 214 — 2 22 24 238 Provision ( 4,357 ) 6,191 1,834 87 74 55 129 2,050 Ending Balance $ 19,604 $ 13,158 $ 32,762 $ 6,919 $ 1,107 $ 271 $ 1,378 $ 41,059 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. 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. -25- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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 June 30, 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. During the quarter ended June 30, 2026, an interest rate collar with a notional amount of $ 50 million matured. 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. On that date, the derivative liability was derecognized and the deferred loss that was included in the AOCL component of shareholders’ equity was updated to its termination date fair value of $ 26.5 million, or $ 20.1 million after tax. The deferred loss was amortized into earnings as a reduction of interest income on a straight-line basis over the life of the original interest rate swap term. The deferred loss was fully amortized as of May 1, 2026. Fair Value Hedging Instruments As of June 30, 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 -26- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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. -27- 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) June 30, 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 $ 770 $ 170 $ 120,000 $ 126 $ 979 Interest rate collars 50,000 20 — 100,000 — 17 Interest rate floors 200,000 33 — 200,000 125 — Derivatives Designated as Fair Value Hedging Instruments: Interest rate risk management contracts: Interest rate swaps 100,000 1,503 — 100,000 335 — Derivatives not Designated as Hedging Instruments: Loan related derivative contracts: Interest rate contracts with customers 897,320 3,053 32,189 882,941 6,326 27,959 Mirror contracts with counterparties 897,320 32,090 3,118 882,941 27,857 6,392 Risk participation agreements 311,701 50 — 304,854 28 1 Mortgage loan commitments: Interest rate lock commitments 57,294 1,102 12 30,373 603 12 Forward sale commitments 93,612 62 921 90,813 13 828 Gross amounts 38,683 36,410 35,413 36,188 Less: amounts offset (2) 3,288 3,288 6,643 6,643 Derivative balances, net of offset 35,395 33,122 28,770 29,545 Less: collateral pledged (3) — — — — Net amounts $ 35,395 $ 33,122 $ 28,770 $ 29,545 (1) The fair value of derivative assets includes accrued interest receivable of $ 23 thousand and $ 35 thousand, respectively, at June 30, 2026 and December 31, 2025. The fair value of derivative liabilities includes accrued interest payable of $ 53 thousand and $ 23 thousand, respectively, at June 30, 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) June 30, 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 $ 98,516 ($ 1,484 ) $ 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 $ 590.2 million and $ 608.5 million, respectively, at June 30, 2026 and December 31, 2025. -28- 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 Six Months Periods ended June 30, 2026 2025 2026 2025 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate risk management contracts: Interest rate swaps $ 1,096 $ 1,094 $ 3,254 $ 1,693 Interest rate collars 17 ( 18 ) 28 ( 24 ) Interest rate floors ( 34 ) — ( 13 ) — Total $ 1,079 $ 1,076 $ 3,269 $ 1,669 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 Six Months Periods ended June 30, Statement of Income Location 2026 2025 2026 2025 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate risk management contracts: Interest rate swaps Interest income: Interest and fees on loans ($ 729 ) ($ 2,139 ) ($ 2,845 ) ($ 4,255 ) Interest rate swaps Interest expense: FHLB advances 34 192 26 386 Interest rate floors Interest income: Interest and fees on loans ( 38 ) — ( 75 ) — Derivatives Designated as Fair Value Hedging Instruments: Interest rate risk management contracts: Interest rate swaps Interest income: Interest and fees on loans 554 ( 519 ) 1,140 ( 1,298 ) Hedged item Interest income: Interest and fees on loans ( 561 ) 520 ( 1,149 ) 1,302 Derivatives not Designated as Hedging Instruments: Loan related derivative contracts: Interest rate contracts with customers Loan related derivative income ($ 7,012 ) $ 4,357 ($ 11,817 ) $ 14,154 Mirror interest rate contracts with counterparties Loan related derivative income 7,767 ( 3,690 ) 12,787 ( 13,418 ) Risk participation agreements Loan related derivative income ( 172 ) 9 ( 160 ) 41 Mortgage loan commitments: Interest rate lock commitments Mortgage banking revenues 510 ( 55 ) 499 515 Forward sale commitments Mortgage banking revenues ( 421 ) ( 87 ) 78 ( 726 ) Total ($ 68 ) ($ 1,412 ) ($ 1,516 ) ($ 3,299 ) For derivatives designated as cash flow hedging instruments in the table above, the amounts represent the pre-tax reclassifications from AOCL into earnings. -29- 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) June 30, 2026 December 31, 2025 Aggregate fair value $ 33,608 $ 35,833 Aggregate principal balance 32,970 35,130 Difference between fair value and principal balance $ 638 $ 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 an increase in mortgage banking revenues of $ 468 thousand and a decrease of $ 65 thousand, respectively, for the three and six months ended June 30, 2026, compared to an increase in mortgage banking revenues of $ 292 thousand and $ 517 thousand, respectively, for the three and six months ended June 30, 2025. There were no mortgage loans held for sale 90 days or more past due as of June 30, 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 June 30, 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. -30- 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 June 30, 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 June 30, 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. 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) June 30, 2026 Assets: Available for sale debt securities: Obligations of U.S. government agencies and U.S government sponsored enterprises $ 39,790 $ — $ 39,790 $ — Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 828,135 — 828,135 — Obligations of states and political subdivisions 660 — 660 — Individual name issuer trust preferred debt securities 6,096 — 6,096 — Corporate bonds 10,640 — 10,640 — Mortgage loans held for sale 33,608 — 33,608 — Derivative assets 35,395 — 35,395 — Total assets at fair value on a recurring basis $ 954,324 $ — $ 954,324 $ — Liabilities: Derivative liabilities $ 33,122 $ — $ 33,122 $ — Total liabilities at fair value on a recurring basis $ 33,122 $ — $ 33,122 $ — -31- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (Dollars in thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (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 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 June 30, 2026, which were written down to fair value during the six months ended June 30, 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 $ 4,274 $ — $ — $ 4,274 Total assets at fair value on a nonrecurring basis $ 4,274 $ — $ — $ 4,274 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. -32- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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) June 30, 2026 Collateral dependent individually analyzed loans $ 4,274 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) June 30, 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 $ 127,395 $ 127,395 $ 127,395 $ — $ — Loans, net of allowance for credit losses on loans (1) 5,060,498 4,940,841 — — 4,940,841 FHLB stock 23,809 23,809 — 23,809 — Investment in BOLI 116,914 116,914 — 116,914 — Financial Liabilities: Non-maturity deposits $ 4,225,371 $ 4,225,371 $ — $ 4,225,371 $ — Time deposits 1,133,502 1,127,900 — 1,127,900 — FHLB advances 456,000 456,366 — 456,366 — Junior subordinated debentures 22,681 19,876 — 19,876 — (1) The estimated fair value excludes a $ 1.5 million negative basis adjustment associated with fair value hedges. See Note 6 for additional disclosure. (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. -33- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 8 - Deposits The following table presents a summary of deposits: (Dollars in thousands) June 30, 2026 December 31, 2025 Noninterest-bearing: Noninterest-bearing demand deposits $ 644,011 $ 595,092 Interest-bearing: Interest-bearing demand deposits 745,273 756,794 NOW accounts 701,615 715,114 Money market accounts 1,270,616 1,185,420 Savings accounts 863,856 796,887 Time deposits (1) 1,133,502 1,220,683 Total interest-bearing deposits 4,714,862 4,674,898 Total deposits $ 5,358,873 $ 5,269,990 (1) There were no wholesale brokered time deposits at June 30, 2026 or December 31, 2025. The following table presents scheduled maturities of time certificates of deposit: (Dollars in thousands) Scheduled Maturity Weighted Average Rate July 1, 2026 to December 31, 2026 $ 745,069 3.38 % 2027 294,503 3.23 2028 79,283 3.18 2029 6,250 2.77 2030 6,034 2.14 2031 and thereafter 2,363 2.00 Balance at June 30, 2026 $ 1,133,502 3.31 % Time certificates of deposit in denominations of $250 thousand or more totaled $ 344.0 million and $ 355.9 million, respectively, at June 30, 2026 and December 31, 2025. Note 9 - Borrowings Advances payable to the FHLB amounted to $ 456.0 million and $ 626.0 million, respectively, at June 30, 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 June 30, 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 June 30, 2026 and December 31, 2025. The Bank had standby letters of credit with the FHLB of $ 65.1 million and $ 66.0 million at June 30, 2026 and December 31, 2025 to collateralize institutional deposits. -34- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of June 30, 2026: (Dollars in thousands) Scheduled Maturity Weighted Average Rate July 1, 2026 to December 31, 2026 $ 220,000 3.98 % 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 June 30, 2026 $ 456,000 4.03 % Note 10 - Shareholders' Equity Stock Repurchase Program The Board of Directors adopted the 2026 Repurchase Program, which authorizes the repurchase of up to 850,000 shares, or approximately 4.5 %, 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 2026 Repurchase Program will be conducted pursuant to a trading plan adopted by the Bancorp that is designed to qualify under Rule 10b5-1 under the Exchange Act. The 2026 Repurchase Program commenced on May 16, 2026 and expires on May 16, 2027 and may be modified, suspended, or discontinued at any time. There have been no shares repurchased under the 2026 Repurchase Program. The 2025 Repurchase Program expired on May 15, 2026. The Bancorp had repurchased a total of 267,658 shares, at an average price of $ 27.26 and a total cost of $ 7.4 million, under the 2025 Repurchase Program. No shares were repurchased in the three and six months ended June 30, 2026. The total cost included $ 65 thousand of excise tax attributable to shares that were repurchased. -35- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Regulatory Capital Requirements Capital levels at June 30, 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 June 30, 2026 Total Capital (to Risk-Weighted Assets): Corporation $ 629,376 13.28 % $ 379,010 8.00 % N/A N/A Bank 622,523 13.15 378,811 8.00 $ 473,513 10.00 % Tier 1 Capital (to Risk-Weighted Assets): Corporation 585,465 12.36 284,258 6.00 N/A N/A Bank 578,612 12.22 284,108 6.00 378,811 8.00 Common Equity Tier 1 Capital (to Risk-Weighted Assets): Corporation 563,468 11.89 213,193 4.50 N/A N/A Bank 578,612 12.22 213,081 4.50 307,784 6.50 Tier 1 Capital (to Average Assets): (1) Corporation 585,465 9.02 259,727 4.00 N/A N/A Bank 578,612 8.92 259,584 4.00 324,480 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 June 30, 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 June 30, 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. -36- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 11 - Revenue from Contracts with Customers The following tables summarize total revenues as presented in the Unaudited Consolidated Statements of Income and the related amounts that are from contracts with customers within the scope of ASC 606. As shown below, a substantial portion of our revenues are specifically excluded from the scope of ASC 606. For the three months ended June 30, 2026 2025 (Dollars in thousands) Revenue (1) ASC 606 Revenue (2) Revenue (1) ASC 606 Revenue (2) Net interest income $ 41,803 $ — $ 37,185 $ — Noninterest income: Wealth management revenues 11,201 11,201 10,120 10,120 Mortgage banking revenues 3,473 — 3,034 — Card interchange fees 1,305 1,305 1,247 1,247 Service charges on deposit accounts 842 842 808 808 Loan related derivative income 583 — 676 — Income from bank-owned life insurance 904 — 826 — Other income 354 291 367 287 Total noninterest income 18,662 13,639 17,078 12,462 Total revenues $ 60,465 $ 13,639 $ 54,263 $ 12,462 (1) As reported in the Unaudited Consolidated Statements of Income. (2) Revenue from contracts with customers in scope of ASC 606. For the six months ended June 30, 2026 2025 (Dollars in thousands) Revenue (1) ASC 606 Revenue (2) Revenue (1) ASC 606 Revenue (2) Net interest income $ 82,328 $ — $ 73,607 $ — Noninterest income: Wealth management revenues 21,848 21,848 20,011 20,011 Mortgage banking revenues 6,518 — 5,338 — Card interchange fees 2,690 2,690 2,756 2,756 Service charges on deposit accounts 1,627 1,627 1,552 1,552 Loan related derivative income 810 — 777 — Income from bank-owned life insurance 1,789 — 1,595 — Gain on sale of bank-owned properties, net (3) — — 6,994 6,994 Other income 683 553 698 551 Total noninterest income 35,965 26,718 39,721 31,864 Total revenues $ 118,293 $ 26,718 $ 113,328 $ 31,864 (1) As reported in the Unaudited Consolidated Statements of Income. (2) Revenue from contracts with customers in scope of ASC 606. (3) For the six months ended June 30, 2025, included herein in accordance with sale-leaseback transaction provisions of ASC 842 and ASC 606. -37- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The following table presents revenue from contracts with customers based on the timing of revenue recognition: (Dollars in thousands) Three Months Six Months Periods ended June 30, 2026 2025 2026 2025 Revenue recognized at a point in time: Card interchange fees $ 1,305 $ 1,247 $ 2,690 $ 2,756 Service charges on deposit accounts 571 540 1,089 1,003 Gain on sale of bank-owned properties, net — — — 6,994 Other income 226 225 435 429 Revenue recognized over time: Wealth management revenues 11,201 10,120 21,848 20,011 Service charges on deposit accounts 271 268 538 549 Other income 65 62 118 122 Total revenues from contracts with customers in scope of ASC 606 $ 13,639 $ 12,462 $ 26,718 $ 31,864 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 $ 7.0 million at both June 30, 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 June 30, 2026 and December 31, 2025 and were included in other liabilities in the Unaudited Consolidated Balance Sheets. For commissions and incentives that are in scope of ASC 606, such as those paid to employees in our wealth management services and banking segments in order to obtain customer contracts, contract cost assets are established. The contract cost assets are capitalized and amortized over the estimated useful life that the asset is expected to generate benefits. The carrying value of contract cost assets amounted to $ 2.0 million and $ 2.3 million, respectively at June 30, 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. -38- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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. The following tables present 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 June 30, 2026 2025 2026 2025 2026 2025 Total interest and dividend income $ 75,169 $ 78,846 $ — $ — $ 75,169 $ 78,846 Total interest expense 33,366 41,661 — — 33,366 41,661 Net interest income 41,803 37,185 — — 41,803 37,185 Provision for credit losses 1,600 600 — — 1,600 600 Net interest income after provision for credit losses 40,203 36,585 — — 40,203 36,585 Noninterest income 7,250 6,720 11,412 10,358 18,662 17,078 Noninterest expenses: Salaries and employee benefits 19,750 17,434 5,562 5,591 25,312 23,025 Outsourced services 3,587 3,374 679 1,030 4,266 4,404 Net occupancy 2,511 2,393 224 269 2,735 2,662 Equipment 830 855 57 75 887 930 Legal, audit and professional fees 578 525 246 201 824 726 FDIC deposit insurance costs 952 1,235 — — 952 1,235 Advertising and promotion 653 601 118 116 771 717 Amortization of intangibles — — 156 203 156 203 Other expenses 2,139 2,095 555 533 2,694 2,628 Total noninterest expenses 31,000 28,512 7,597 8,018 38,597 36,530 Income before income taxes 16,453 14,793 3,815 2,340 20,268 17,133 Income tax expense 3,426 3,283 861 605 4,287 3,888 Net income $ 13,027 $ 11,510 $ 2,954 $ 1,735 $ 15,981 $ 13,245 Supplemental Information: Total assets at period end $ 6,484,406 $ 6,683,840 $ 63,498 $ 61,327 $ 6,547,904 $ 6,745,167 Expenditures for long-lived assets 1,060 388 25 13 1,085 401 Depreciation expense (1) 745 790 70 86 815 876 (1) Included in net occupancy and equipment expenses in the table above. -39- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) (Dollars in thousands) Banking Wealth Management Services Consolidated Total Six months ended June 30, 2026 2025 2026 2025 2026 2025 Total interest and dividend income $ 150,151 $ 158,309 $ — $ — $ 150,151 $ 158,309 Total interest expense 67,823 84,702 — — 67,823 84,702 Net interest income 82,328 73,607 — — 82,328 73,607 Provision for credit losses 5,600 1,800 — — 5,600 1,800 Net interest income after provision for credit losses 76,728 71,807 — — 76,728 71,807 Noninterest income 13,680 19,355 22,285 20,366 35,965 39,721 Noninterest expenses: Salaries and employee benefits 38,540 34,413 11,112 11,034 49,652 45,447 Outsourced services 7,186 6,639 1,463 2,111 8,649 8,750 Net occupancy 5,174 4,864 451 539 5,625 5,403 Equipment 1,673 1,670 117 151 1,790 1,821 Legal, audit and professional fees 1,240 1,052 520 424 1,760 1,476 FDIC deposit insurance costs 1,887 2,497 — — 1,887 2,497 Advertising and promotion 1,116 949 202 178 1,318 1,127 Amortization of intangibles — — 311 407 311 407 Other expenses 4,286 8,974 1,084 2,824 5,370 11,798 Total noninterest expenses 61,102 61,058 15,260 17,668 76,362 78,726 Income before income taxes 29,306 30,104 7,025 2,698 36,331 32,802 Income tax expense 6,160 6,630 1,590 748 7,750 7,378 Net income $ 23,146 $ 23,474 $ 5,435 $ 1,950 $ 28,581 $ 25,424 Total assets at period end $ 6,484,406 $ 6,683,840 $ 63,498 $ 61,327 $ 6,547,904 $ 6,745,167 Expenditures for long-lived assets 2,225 475 166 14 2,391 489 Depreciation expense (1) 1,481 1,598 141 172 1,622 1,770 (1) Included in net occupancy and equipment expenses in the table above. For the six months ended June 30, 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 six months ended June 30, 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. -40- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) Note 13 - Other Comprehensive Income The following tables present the activity in other comprehensive income: Three months ended June 30, 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 ($ 31 ) $ 8 ($ 23 ) $ 2,852 ($ 720 ) $ 2,132 Cash Flow Hedges: Change in fair value of cash flow hedges 708 ( 176 ) 532 ( 507 ) 128 ( 379 ) Net cash flow hedge losses reclassified into earnings (1) 733 ( 186 ) 547 1,947 ( 492 ) 1,455 Net change in fair value of cash flow hedges 1,441 ( 362 ) 1,079 1,440 ( 364 ) 1,076 Defined Benefit Plan Obligations: Amortization of net actuarial losses into earnings 25 ( 6 ) 19 29 ( 7 ) 22 Net change in defined benefit plan obligations 25 ( 6 ) 19 29 ( 7 ) 22 Total other comprehensive income $ 1,435 ($ 360 ) $ 1,075 $ 4,321 ($ 1,091 ) $ 3,230 (1) See Note 6 for additional information on pre-tax amounts related to cash flow hedges that were reclassified into earnings. Six months ended June 30, 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 Securities available for sale: Change in fair value of available for sale debt securities ($ 1,810 ) $ 453 ($ 1,357 ) $ 19,748 ($ 4,986 ) $ 14,762 Cash flow hedges: Change in fair value of cash flow hedges 1,466 ( 366 ) 1,100 ( 1,636 ) 413 ( 1,223 ) Net cash flow hedge losses reclassified into earnings (1) 2,894 ( 725 ) 2,169 3,869 ( 977 ) 2,892 Net change in fair value of cash flow hedges 4,360 ( 1,091 ) 3,269 2,233 ( 564 ) 1,669 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 49 ( 12 ) 37 58 ( 15 ) 43 Net change in defined benefit plan obligations 49 ( 12 ) 37 9,159 ( 2,368 ) 6,791 Total other comprehensive income $ 2,599 ($ 650 ) $ 1,949 $ 31,140 ($ 7,918 ) $ 23,222 (1) See Note 6 for additional information on pre-tax amounts related to cash flow hedges that were reclassified into earnings. -41- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) 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) Gains on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total For the three months ended June 30, 2026 Balance at March 31, 2026 ($ 75,077 ) ($ 952 ) ($ 2,406 ) ($ 78,435 ) Other comprehensive (loss) income before reclassifications ( 23 ) 532 — 509 Amounts reclassified from AOCL — 547 19 566 Net other comprehensive (loss) income ( 23 ) 1,079 19 1,075 Balance at June 30, 2026 ($ 75,100 ) $ 127 ($ 2,387 ) ($ 77,360 ) (Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized (Losses) Gains on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total For the six months ended June 30, 2026 Balance at December 31, 2025 ($ 73,743 ) ($ 3,142 ) ($ 2,424 ) ($ 79,309 ) Other comprehensive (loss) income before reclassifications ( 1,357 ) 1,100 — ( 257 ) Amounts reclassified from AOCL — 2,169 37 2,206 Net other comprehensive (loss) income ( 1,357 ) 3,269 37 1,949 Balance at June 30, 2026 ($ 75,100 ) $ 127 ($ 2,387 ) ($ 77,360 ) (Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total For the three months ended June 30, 2025 Balance at March 31, 2025 ($ 89,809 ) ($ 7,345 ) ($ 2,025 ) ($ 99,179 ) Other comprehensive income (loss) before reclassifications 2,132 ( 379 ) — 1,753 Amounts reclassified from AOCL — 1,455 22 1,477 Net other comprehensive income 2,132 1,076 22 3,230 Balance at June 30, 2025 ($ 87,677 ) ($ 6,269 ) ($ 2,003 ) ($ 95,949 ) (Dollars in thousands) Net Unrealized Losses on Available For Sale Debt Securities Net Unrealized Losses on Cash Flow Hedges Net Unrealized Losses on Defined Benefit Plan Obligations Total For the six months ended June 30, 2025 Balance at December 31, 2024 ($ 102,439 ) ($ 7,938 ) ($ 8,794 ) ($ 119,171 ) Other comprehensive income (loss) before reclassifications 14,762 ( 1,223 ) 1,937 15,476 Amounts reclassified from AOCL — 2,892 4,854 7,746 Net other comprehensive income 14,762 1,669 6,791 23,222 Balance at June 30, 2025 ($ 87,677 ) ($ 6,269 ) ($ 2,003 ) ($ 95,949 ) -42- 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 Six Months Periods ended June 30, 2026 2025 2026 2025 Earnings for basic and diluted EPS calculations: Net income $ 15,981 $ 13,245 $ 28,581 $ 25,424 Shares for basic and diluted EPS calculations: Weighted average common shares outstanding for basic EPS 19,064 19,285 19,051 19,280 Dilutive effect of common stock equivalents 140 89 138 92 Weighted average common and potential common shares outstanding for diluted EPS 19,204 19,374 19,189 19,372 EPS: Basic earnings per common share $ 0.84 $ 0.69 $ 1.50 $ 1.32 Diluted earnings per common share $ 0.83 $ 0.68 $ 1.49 $ 1.31 Shares excluded from the calculation of diluted EPS: Weighted average anti-dilutive common stock equivalents (1) 368 516 369 487 (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. -43- 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 June 30, 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) June 30, 2026 December 31, 2025 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 1,005,018 $ 952,599 Standby letters of credit 7,002 7,774 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 June 30, 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 $ 579 $ 630 $ 1,209 $ 23 $ — $ 8 $ 8 $ 1,240 Provision 138 ( 48 ) 90 11 — ( 1 ) ( 1 ) 100 Ending Balance $ 717 $ 582 $ 1,299 $ 34 $ — $ 7 $ 7 $ 1,340 -44- Condensed Notes to Unaudited Consolidated Financial Statements – (continued) The activity in the ACL on unfunded commitments for the six months ended June 30, 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 199 ( 8 ) 191 11 — ( 2 ) ( 2 ) 200 Ending Balance $ 717 $ 582 $ 1,299 $ 34 $ — $ 7 $ 7 $ 1,340 The activity in the ACL on unfunded commitments for the three months ended June 30, 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 $ 694 $ 518 $ 1,212 $ 17 $ — $ 11 $ 11 $ 1,240 Provision ( 274 ) 223 ( 51 ) 3 — ( 2 ) ( 2 ) ( 50 ) Ending Balance $ 420 $ 741 $ 1,161 $ 20 $ — $ 9 $ 9 $ 1,190 The activity in the ACL on unfunded commitments for the six months ended June 30, 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 ( 402 ) 152 ( 250 ) 2 — ( 2 ) ( 2 ) ( 250 ) Ending Balance $ 420 $ 741 $ 1,161 $ 20 $ — $ 9 $ 9 $ 1,190 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. -45- Management's Discussion and Analysis