WASHINGTON TRUST BANCORP INC

Previous wording

The following discussion should be read in conjunction with the Corporation’s Audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025, and in conjunction with the condensed Unaudited Consolidated Financial Statements and notes thereto included in Item 1 of this report. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results for the full-year ended December 31, 2026 or any future period.

Current wording

The following discussion should be read in conjunction with the Corporation’s Audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025, and in conjunction with the condensed Unaudited Consolidated Financial Statements and notes thereto included in Item 1 of this report. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results for the full-year ended December 31, 2026 or any future period.

Previous wording

•changes in general business and economic conditions (including the impact of ongoing armed conflicts, tariffs, inflation, current or future U.S. government shutdowns, and concerns about liquidity) on a national basis and in the local markets in which we operate;

Current wording

•changes in general business and economic conditions (including the impact of ongoing armed conflicts, tariffs, inflation, future U.S. government shutdowns, and concerns about liquidity) on a national basis and in the local markets in which we operate;

Previous wording

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

Current wording

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

Previous wording

(2)Calculated as income tax expense, adjusted for the tax impact of the adjustments as outlined in the table above, divided by income before income taxes, adjusted for the pre-tax impact of the adjustments as outlined in the table above.

Current wording

(3)Calculated as income tax expense, adjusted for the tax impact of the adjustments as outlined in the table above, divided by income before income taxes, adjusted for the pre-tax impact of the adjustments as outlined in the table above.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

(3)Net income divided by total average assets.

Previous wording

(4)Net income divided by total average equity.

Current wording

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

Previous wording

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

Current wording

(5)Net income divided by total average equity.

Previous wording

We continue to leverage our strong regional brand to build market share and remain steadfast in our commitment to provide superior service. We believe the key to future growth is providing customers with convenient in-person service and digital banking solutions.

Current wording

We continue to leverage our strong regional brand to build market share and remain steadfast in our commitment to provide superior service. We believe the key to future growth is providing customers with convenient in-person service and digital banking solutions. We have plans to open two new full-service branches later in 2026; one in Pawtucket and another in Bristol, Rhode Island.

Previous wording

Net income totaled $12.6 million for the three months ended March 31, 2026, compared to $12.2 million reported for the same period in 2025. These results included the following infrequent transactions:

Current wording

Net income totaled $16.0 million and $28.6 million, respectively, for the three and six months ended June 30, 2026, compared to $13.2 million and $25.4 million, respectively, reported for the same periods in 2025. The prior year results included the following infrequent transactions:

Previous wording

Excluding these items, adjusted net income (non-GAAP) for the three months ended March 31, 2026 was $12.6 million, compared to $11.8 million for the same period in 2025, up by $838 thousand, or 7%. These results reflected higher net interest income, as well as growth in wealth management and mortgage banking revenues, partially offset by an elevated provision for credit losses and higher salaries and benefits costs.

Current wording

Excluding these items, adjusted net income (non-GAAP) for the three and six months ended June 30, 2026 was $16.0 million and $28.6 million, respectively, compared to $13.2 million and $25.0 million, respectively, for the same periods in 2025. These results reflected higher net interest income, as well as growth in wealth management and mortgage banking revenues, partially offset by an elevated provision for credit losses and higher salaries and benefits costs.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The improvement in net interest income, FTE net interest income and NIM discussed below largely reflected continued benefits from the December 2024 balance sheet repositioning transactions, as well as the cessation of amortization of a deferred loss associated with a previously terminated cash flow hedge. As of May 1, 2026, the remaining deferred loss was fully amortized. As noted in the Unaudited Consolidated Statements of Cash Flows, amortization of the terminated cash flow hedge loss (a reduction to net interest income) amounted to $2.8 million in 2026, compared to $4.3 million in 2025.

Previous wording

FTE net interest income for the three months ended March 31, 2026 amounted to $40.7 million, up by $4.1 million from the same period in 2025. For the three months ended March 31, 2026, decreases in average interest-bearing liability balances net of decreases in average interest-earning assets increased net interest income by $793 thousand. Decreases in funding costs outpaced decreases in asset yields, increasing net interest income by $3.3 million for the three months ended March 31, 2026.

Current wording

FTE net interest income for the three and six months ended June 30, 2026 amounted to $42.0 million and $82.7 million, respectively, up by $4.6 million and $8.7 million, respectively, from the same periods in 2025. For the three and six months ended June 30, 2026, decreases in average interest-bearing liability balances net of decreases in average interest-earning assets increased net interest income by $1.3 million and $2.0 million, respectively. Decreases in funding costs outpaced decreases in asset yields, increasing net interest income by $3.3 million and $6.7 million, respectively, for the three and six months ended June 30, 2026.

Previous wording

Total average securities for the three months ended March 31, 2026 decreased by $20.1 million from the same period a year earlier primarily due to routine pay-downs. The FTE rate of return on the securities portfolio for the three months ended March 31, 2026 was 3.48%, up by 5 basis points from the same period in 2025.

Current wording

Total average securities for the three and six months ended June 30, 2026 decreased by $70.5 million and $45.4 million, respectively, from the same periods a year earlier primarily due to routine pay-downs. The FTE rate of return on the securities portfolio for the three and six months ended June 30, 2026 was 3.41% and 3.44%, respectively, down by 6 and 1 basis points, respectively, from the same periods in 2025.

Previous wording

Total average loan balances for the three months ended March 31, 2026 decreased by $21.8 million from the comparable 2025 period, largely reflecting a decrease in the residential real estate loan portfolio. The yield on total loans for the three months ended March 31, 2026 was 5.14%, down by 17 basis points from the same period in 2025.

Current wording

Total average loan balances for the three and six months ended June 30, 2026 decreased by $116.5 million and $69.4 million, respectively, from the comparable 2025 periods, reflecting decreases in the residential and commercial real estate loan portfolios. The yield on total loans for the three and six months ended June 30, 2026 was 5.20% and 5.17%, respectively, down by 9 and 13 basis points, respectively, from the same periods in 2025. The decrease reflected the impact of lower market interest rates, partially offset by the benefit from the cessation of deferred loss amortization discussed above.

Previous wording

FHLB advances and brokered time deposits are utilized as wholesale funding sources. The average balance of FHLB advances for the three months ended March 31, 2026 decreased by $299.2 million from the comparable period in 2025. The average rate paid on such advances for the three months ended March 31, 2026 was 4.16%, down by 46 basis points from the same period in 2025. There were no wholesale brokered time deposits for the three months ended March 31, 2026, compared to $188.4 million for the three months ended March 31, 2025 that had an average rate of 5.05%. The decline in wholesale funding balances reflected the benefits from the balance sheet repositioning transactions mentioned above, as well as increases in the average balances of in-market deposits. Rates paid on wholesale funding have declined from the prior year reflecting lower market interest rates.

Current wording

FHLB advances and brokered time deposits are utilized as wholesale funding sources. The average balance of FHLB advances for the three and six months ended June 30, 2026 decreased by $397.2 million and $348.5 million, respectively, from the comparable periods in 2025. The average rate paid on such advances for the three and six months ended June 30, 2026 was 4.10% and 4.13%, respectively, down by 39 and 43 basis points, respectively, from the same periods in 2025. There were no wholesale brokered time deposits for the three and six months ended June 30, 2026. This compared to

Previous wording

Average in-market interest-bearing deposits, which excludes wholesale brokered deposits, for the three months ended March 31, 2026 increased by $279.1 million from the same period in 2025, largely reflecting increases in average balances of savings accounts and interest-bearing demand deposits. The average rate paid on in-market interest-bearing deposits for the three months ended March 31, 2026 was 2.42%, down by 35 basis points from the same period in 2025, largely reflecting

Current wording

Average in-market interest-bearing deposits, which excludes wholesale brokered deposits, for the three and six months ended June 30, 2026 increased by $192.2 million and $235.4 million, respectively, from the same periods in 2025, largely reflecting increases in average balances of savings accounts and interest-bearing demand deposits. The average rate paid on in-market interest-bearing deposits for both the three and six months ended June 30, 2026 was 2.41%, down by 40 and 38 basis points, respectively, from the same periods in 2025, largely reflecting lower market interest rates. The average balance of noninterest-bearing demand deposits for the three and six months ended June 30, 2026 increased by $6.0 million and decreased by $5.2 million, respectively, from the same periods in 2025.

Previous wording

The following table presents certain information on an FTE basis regarding changes in our interest income and interest expense for the period indicated. The net change attributable to both volume and rate has been allocated proportionately.

Current wording

The following table presents certain information on an FTE basis regarding changes in our interest income and interest expense for the periods indicated. The net change attributable to both volume and rate has been allocated proportionately.

Previous wording

The following table presents the provision for credit losses:

Current wording

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

Previous wording

The provision for credit losses for the three months ended March 31, 2026, largely reflected an increase in specific reserves on two CRE office segment loans, which was partially offset by a decline in loan portfolio balances. See additional discussion regarding these two loans under the caption “Nonaccrual Loans.”

Current wording

The provision for credit losses for the three and six months ended June 30, 2026 provided for an increase in specific reserves and for changes in our loan portfolio. See additional discussion under the caption “Nonaccrual Loans.”

Previous wording

Net charge-offs totaled $10 thousand for the three months ended March 31, 2026, compared to $2.3 million for the same period in 2025. See additional discussion regarding the ACL under the caption “Asset Quality” below.

Current wording

Net charge-offs totaled $55 thousand and $65 thousand, respectively, for the three and six months ended June 30, 2026, compared to $647 thousand and $3.0 million, respectively, for the same periods in 2025. See additional discussion regarding the ACL under the caption “Asset Quality” below.

Previous wording

Total noninterest income amounted to $17.3 million for the three months ended March 31, 2026, compared to $22.6 million for the same period in 2025. Total noninterest income in 2025 was impacted by the gain on sale-leaseback transactions as described under the caption “Summary” above. Excluding the impact of this infrequent transaction, adjusted noninterest income (non-GAAP) for the three months ended March 31, 2026 was up by $1.7 million, or 11%, from the same period in 2025.

Current wording

Total noninterest income amounted to $18.7 million and $36.0 million, respectively, for the three and six months ended June 30, 2026, compared to $17.1 million and $39.7 million, respectively, for the same periods in 2025. Total noninterest income in the six months ended 2025 was impacted by the gain on sale-leaseback transactions as described under the caption “Summary” above. Excluding the impact of this infrequent transaction, adjusted noninterest income (non-GAAP) for the three and six months ended June 30, 2026 was up by $1.6 million and $3.2 million, respectively, from the same periods in 2025.

Previous wording

Wealth management revenues for the three months ended March 31, 2026 increased by $756 thousand, or 8%, from the same period in 2025, largely reflecting an increase in asset-based revenues. The increase in asset-based revenues correlated with the change in average AUA balances. The average balance of AUA for the three months ended March 31, 2026 increased by 10% over the average balance for the same period in 2025, primarily reflecting net investment appreciation of AUA.

Current wording

Wealth management revenues for the three and six months ended June 30, 2026 increased by $1.1 million and $1.8 million, respectively, from the same periods in 2025, reflecting an increase in asset-based revenues. The increase in asset-based revenues correlated with the change in average AUA balances. The average balance of AUA for the three and six months ended June 30, 2026 increased by 13% and 11%, respectively, over the average balances for the same periods in 2025, largely reflecting net investment appreciation of AUA.

Previous wording

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

Current wording

For the three and six months ended June 30, 2026, mortgage banking revenues were up by $439 thousand and $1.2 million, respectively, compared to the same periods in 2025, largely reflecting an increase in sales volume. Mortgage banking revenues are also impacted by changes in the fair value of mortgage loans held for sale and forward loan commitments, which are primarily based on current market prices in the secondary market and correlate to changes in the size of the mortgage pipeline.

Previous wording

Total noninterest expense amounted to $37.8 million for the three months ended March 31, 2026, compared to $42.2 million for the same period in 2025. Total noninterest expense in 2025 was impacted by the settlement charge associated with termination of the Corporation’s qualified pension plan, as described under the caption “Summary” above. Excluding the impact of this infrequent transaction, adjusted noninterest expense (non-GAAP) for the three months ended March 31, 2026, was up by $2.0 million, or 6%, from the same period in 2025.

Current wording

Total noninterest expense amounted to $38.6 million and $76.4 million, respectively, for the three and six months ended June 30, 2026, compared to $36.5 million and $78.7 million, respectively, for the same periods in 2025. Total noninterest expense in the six months ended 2025 was impacted by the settlement charge associated with termination of the Corporation’s qualified pension plan, as described under the caption “Summary” above. Excluding the impact of this infrequent transaction, adjusted noninterest expense (non-GAAP) for the three and six months ended June 30, 2026, was up by $2.1 million and $4.1 million, respectively, from the same periods in 2025.

Previous wording

Salaries and employee benefits expense, the largest component of total noninterest expense, for the three months ended March 31, 2026 increased by $1.9 million, or 9%, compared to the same period in 2025. This primarily reflected merit increases and the addition of resources in our commercial banking and wealth management business lines, as well as volume-related increases in mortgage originator commission expense.

Current wording

Salaries and employee benefits expense, the largest component of total noninterest expense, for the three and six months ended June 30, 2026 increased by $2.3 million and $4.2 million, respectively, compared to the same periods in 2025. This reflected annual merit and staffing increases, including the addition of resources in our commercial banking and wealth management business lines.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The Corporation’s net deferred tax assets are reported in other assets and amounted to $36.6 million at March 31, 2026, down from $36.9 million at December 31, 2025. Management believes deferred tax assets, net of the valuation allowance, are more-likely-than-not to be realized.

Current wording

The Corporation’s net deferred tax assets are reported in other assets and amounted to $36.3 million at June 30, 2026, compared to $36.9 million at December 31, 2025. Management believes deferred tax assets, net of the valuation allowance, are more-likely-than-not to be realized.

Previous wording

Net interest income for the Banking segment for the three months ended March 31, 2026 increased by $4.1 million from the same period in 2025. Net interest income benefited from lower rates paid on, and decreases in, average interest-bearing liability balances, which was partially offset by lower yields on, and decreases in, average interest-earning asset balances. See additional discussion under the caption “Net Interest Income” above.

Current wording

Net interest income for the Banking segment for the three and six months ended June 30, 2026 increased by $4.6 million and $8.7 million, respectively, from the same periods in 2025. Net interest income benefited from lower rates paid on, and decreases in, average interest-bearing liability balances, which was partially offset by decreases in, and lower yields on, average interest-earning asset balances. See additional discussion under the caption “Net Interest Income” above.

Previous wording

The provision for credit losses for the three months ended March 31, 2026 increased by $2.8 million from the same period in 2025. See additional discussion under the caption “Provision for Credit Losses” above.

Current wording

The provision for credit losses for the three and six months ended June 30, 2026 increased by $1.0 million and $3.8 million, respectively, from the same periods in 2025. See additional discussion under the caption “Provision for Credit Losses” above.

Previous wording

Noninterest income derived from the Banking segment was $6.4 million for the three months ended March 31, 2026, compared to $12.6 million for the same period in 2025. Included in the three months ended March 31, 2025 was a $7.0 million net gain recognized on sale-leaseback transactions. Excluding this item, Banking noninterest income increased by $789 thousand, largely reflecting increases in mortgage banking revenues. See additional disclosure under the caption “Noninterest Income” above.

Current wording

Noninterest income derived from the Banking segment was $7.3 million and $13.7 million, respectively, for the three and six months ended June 30, 2026, compared to $6.7 million and $19.4 million, respectively, for the same periods in 2025. Included in the six months ended June 30, 2025 was a $7.0 million net gain recognized on sale-leaseback transactions. Excluding this item, Banking noninterest income for the three and six months ended June 30, 2026 increased by $530 thousand and $1.3 million, respectively, largely reflecting increases in mortgage banking revenues. See additional disclosure under the caption “Noninterest Income” above.

Previous wording

Banking noninterest expenses for the three months ended March 31, 2026 totaled $30.1 million compared to $32.5 million for the same period in 2025. Included in the three months ended March 31, 2025 was $4.9 million of the total pension plan settlement charge that was allocated to the Banking segment. Excluding this item, noninterest expenses for the Banking segment increased by $2.5 million, reflecting increases in salaries and employee benefits expense and outsourced services expense, partially offset by a decrease in FDIC insurance costs. See additional discussion under the caption “Noninterest Expense” above.

Current wording

Banking noninterest expenses for the three and six months ended June 30, 2026 totaled $31.0 million and $61.1 million, respectively, compared to $28.5 million and $61.1 million, respectively, for the same periods in 2025. Included in the six months ended June 30, 2025 was $4.9 million of the total pension plan settlement charge that was allocated to the Banking segment. Excluding this item, noninterest expenses for the Banking segment for the three and six months ended June 30, 2026 increased by $2.5 million and $4.9 million, respectively, reflecting increases in salaries and employee benefits expense and outsourced services expense, partially offset by a decrease in FDIC deposit insurance costs. The increase in outsourced services reflected changes in third-party provided services, including software as a service and processing costs. See

Previous wording

Noninterest income derived from the Wealth Management Services segment for the three months ended March 31, 2026 increased by $865 thousand from the same period in 2025, largely reflecting an increase in asset-based revenues. See further discussion under the caption “Noninterest Income” above.

Current wording

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

Previous wording

Noninterest expenses for the Wealth Management Services segment for the three months ended March 31, 2026 totaled $7.7 million, compared to $9.7 million for the same period in 2025. Included in the three months ended March 31, 2025 was $1.5 million of the total pension plan settlement charge that was allocated to the Wealth Management Services segment. Excluding this item, noninterest expenses for the Wealth Management Services segment decreased by $451 thousand. This included a decrease in outsourced services expense, partially offset by higher salaries and benefits expense. See additional discussion under the caption “Noninterest Expense” above.

Current wording

Noninterest expenses for the Wealth Management Services segment for the three and six months ended June 30, 2026 totaled $7.6 million and $15.3 million, respectively, compared to $8.0 million and $17.7 million, respectively, for the same periods in 2025. Included in the six months ended June 30, 2025 was $1.5 million of the total pension plan settlement charge that was allocated to the Wealth Management Services segment. Excluding this item, noninterest expenses for the Wealth Management Services segment for the three and six months ended June 30, 2026 decreased by $421 thousand and $872 thousand, respectively, reflecting decreases in outsourced services expense, partially offset by an increase in salaries and employee benefits expense. The decrease in outsourced services was attributable to changes in third-party provided services, including software as a service. See additional discussion of salaries and employee benefits expense under the caption “Noninterest Expense” above.

Previous wording

The Corporation’s securities portfolio is managed to generate interest income, to implement interest rate risk management strategies, and to provide a readily available source of liquidity for balance sheet management. Securities are designated as either available for sale, held to maturity or trading at the time of purchase. The Corporation does not maintain a portfolio of trading securities and does not have securities designated as held to maturity. Securities available for sale may be sold in response to changes in market conditions, prepayment risk, rate fluctuations, liquidity, or capital requirements. Debt

Current wording

The Corporation’s securities portfolio is managed to generate interest income, to implement interest rate risk management strategies, and to provide a readily available source of liquidity for balance sheet management. Securities are designated as either available for sale, held to maturity or trading at the time of purchase. The Corporation does not maintain a portfolio of trading securities and does not have securities designated as held to maturity. Securities available for sale may be sold in response to changes in market conditions, prepayment risk, rate fluctuations, liquidity, or capital requirements. Debt securities available for sale are reported at fair value, with any unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of tax, until realized.

Previous wording

The securities portfolio decreased by $28.4 million, or 3%, from the end of 2025. This largely reflected routine pay-downs on mortgage-backed securities.

Current wording

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

Previous wording

The carrying amounts of available for sale debt securities as of March 31, 2026 and December 31, 2025 included net unrealized losses of $96.6 million and $94.9 million, respectively. The net unrealized losses were primarily concentrated in obligations of U.S. government agencies and U.S. government-sponsored enterprises, including mortgage-backed securities, and primarily attributable to relative changes in market interest rates since the time of purchase. See Note 3 to the Unaudited Consolidated Financial Statements for additional information.

Current wording

The carrying amounts of available for sale debt securities as of June 30, 2026 and December 31, 2025 included net unrealized losses of $96.7 million and $94.9 million, respectively. The net unrealized losses were primarily concentrated in obligations of U.S. government agencies and U.S. government-sponsored enterprises, including mortgage-backed securities, and primarily attributable to relative changes in market interest rates since the time of purchase. See Note 3 to the Unaudited Consolidated Financial Statements for additional information.

Previous wording

We primarily serve individuals and businesses located in southern New England, and a substantial portion of our loans are secured by properties in southern New England. Total loans amounted to $5.0 billion at March 31, 2026, down by $119.5 million, or 2%, from the end of 2025.

Current wording

We primarily serve individuals and businesses located in southern New England, and a substantial portion of our loans are secured by properties in southern New England. Total loans amounted to $5.1 billion at June 30, 2026, down by $31.3 million, or 1%, from the end of 2025.