Business Segments

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Business Segments

Business Segments

The Corporation manages its operations through two reportable business segments, consisting of Commercial Banking and Wealth Management Services. The Corporation’s reportable business segments are determined by the Senior Executive Vice President, Chief Financial Officer and Treasurer, the designated CODM.

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 Commercial Banking segment includes commercial, residential, and consumer lending activities; mortgage banking activities; deposit generation; cash management services; other banking activities, including customer support and the operation of ATMs, telephone banking, internet banking, and mobile banking services; as well as investment portfolio and wholesale funding activities.

Wealth management services and operations are provided through the Bank and its registered investment adviser subsidiary. The Wealth Management Services segment provides investment management; holistic financial planning services; personal trust and estate services, including services as trustee, personal representative, and custodian; settlement of decedents’ estates; and institutional trust services, including custody and fiduciary services.

The CODM evaluates the financial performance of each business segment, which is measured based upon the business segment’s net income. Components of net income for the business segments that are reviewed by the CODM include net interest income, provision for credit losses, noninterest income, noninterest expense, and income tax expense. The CODM, in conjunction with management committees (such as the ALCO) and certain members of executive management, evaluates financial performance to make decisions related to the products and services that are offered, pricing, and the allocation of resources, for each business segment.

The following tables presents the components of net income, as well as other supplemental information for Washington Trust’s reportable business segments:

(Dollars in thousands)	Commercial Banking		Wealth Management Services		Consolidated Total
Three months ended March 31,	2025	2024	2025	2024	2025	2024
Total interest income and dividend income	$79,463	$85,256	$—	$—	$79,463	$85,256
Total interest expense	43,041	53,591	—	—	43,041	53,591
Net interest income	36,422	31,665	—	—	36,422	31,665
Provision for credit losses	1,200	700	—	—	1,200	700
Net interest income after provision for credit losses	35,222	30,965	—	—	35,222	30,965
Noninterest income	12,635	5,572	10,008	11,591	22,643	17,163
Noninterest expenses:
Salaries and employee benefits	16,979	16,570	5,443	5,205	22,422	21,775
Outsourced services	3,265	2,848	1,081	932	4,346	3,780
Net occupancy	2,471	2,306	270	255	2,741	2,561
Equipment	815	901	76	119	891	1,020
Legal, audit and professional fees	527	590	223	116	750	706
FDIC deposit insurance costs	1,262	1,441	—	—	1,262	1,441
Advertising and promotion	348	466	62	82	410	548
Amortization of intangibles	—	—	204	208	204	208
Other expenses	6,879	1,911	2,291	413	9,170	2,324
Total noninterest expenses	32,546	27,033	9,650	7,330	42,196	34,363
Income before income taxes	15,311	9,504	358	4,261	15,669	13,765
Income tax expense	3,347	1,906	143	923	3,490	2,829
Net income	$11,964	$7,598	$215	$3,338	$12,179	$10,936
Supplemental Information:
Total assets at period end	$6,525,532	$7,190,644	$60,483	$58,480	$6,586,015	$7,249,124
Expenditures for long-lived assets	87	556	1	70	88	626
Depreciation expense (1)	808	892	86	109	894	1,001

(1)Included in net occupancy and equipment expenses in the table above.

For the three months ended March 31, 2025, noninterest income for the Commercial Banking segment included a $7.0 million net gain associated with sales-leaseback transactions that were completed for five branch locations. See additional disclosure regarding the sale-leaseback transactions in Note 6.

Also, for the three months ended March 31, 2025, total other expenses included a $6.4 million pension plan settlement charge, of which $4.9 million was included in the Commercial Banking segment and $1.5 million was included in the Wealth Management Services segment. See additional disclosure regarding the pension plan settlement charge in Note 13.

For the three months ended March 31, 2024, noninterest income for the Wealth Management Services segment included income of $2.1 million associated with a litigation settlement.