Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table presents the notional amounts and fair values of derivative instruments in the Unaudited Consolidated Balance Sheets:


(Dollars in thousands)	September 30, 2025			December 31, 2024
		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	$211	$999	$120,000	$1,529	$229
Interest rate collars	100,000	—	26	50,000	—	30
Interest rate floors	200,000	189	—	—	—	—
Derivatives Designated as Fair Value Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	100,000	254	—	100,000	1,477	—
Derivatives not Designated as Hedging Instruments:
Loan related derivative contracts:
Interest rate contracts with customers	869,141	6,722	29,572	886,912	2,468	51,372
Mirror contracts with counterparties	869,141	29,459	6,792	886,912	51,176	2,529
Risk participation agreements	305,593	33	—	343,935	29	—

Mortgage loan commitments:
Interest rate lock commitments	54,594	1,007	3	20,238	248	—
Forward sale commitments	102,458	130	675	52,100	163	291
Gross amounts		38,005	38,067		57,090	54,451
Less: amounts offset (2)		7,192	7,192		2,788	2,788
Derivative balances, net of offset		30,813	30,875		54,302	51,663
Less: collateral pledged (3)		—	—		—	—
Net amounts		$30,813	$30,875		$54,302	$51,663

(1)The fair value of derivative assets includes accrued interest receivable of $78 thousand and $120 thousand, respectively, at September 30, 2025 and December 31, 2024. There was no accrued interest payable included in the fair value of derivative liabilities at September 30, 2025 or at December 31, 2024.

(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)

September 30, 2025

December 31, 2024

Balance Sheet Location

Carrying Value of Hedged Item (1)

Cumulative Basis Adjustment

Carrying Value of Hedged Item (1)

Cumulative Basis Adjustment

Residential real estate loans

$99,745

($255)

$98,519

($1,481)

(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 $621.2 million and $733.2 million, respectively, at September 30, 2025 and December 31, 2024.

Derivative Instruments Effect in Statements of Income and Changes in Shareholders' Equity

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 (Loss), Net of Tax
	Three Months		Nine Months
Periods ended September 30,	2025	2024	2025	2024
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	$1,576	($992)	$3,269	$4,059
Interest rate collars	27	(116)	3	(147)

Interest rate floors	(81)	—	(81)	—
Total	$1,522	($1,108)	$3,191	$3,912

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		Nine Months
Periods ended September 30,	Statement of Income Location	2025	2024	2025	2024
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	Interest income: Interest and fees on loans	($2,163)	($2,164)	($6,418)	($6,441)
Interest rate swaps	Interest expense: FHLB advances	195	487	581	1,475

Interest rate floors	Interest income: Interest and fees on loans	(11)	—	(11)	—
Derivatives Designated as Fair Value Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	Interest income: Interest and fees on loans	75	19	(1,223)	19
Hedged item	Interest income: Interest and fees on loans	(76)	(19)	1,226	(19)
Derivatives not Designated as Hedging Instruments:
Loan related derivative contracts:
Interest rate contracts with customers	Loan related derivative income	($25)	$22,742	$14,129	($2,615)
Mirror interest rate contracts with counterparties	Loan related derivative income	300	(22,733)	(13,118)	2,981
Risk participation agreements	Loan related derivative income	(4)	117	37	93

Mortgage loan commitments:
Interest rate lock commitments	Mortgage banking revenues	240	(20)	755	180
Forward sale commitments	Mortgage banking revenues	(26)	(432)	(752)	(189)
Total		($1,495)	($2,003)	($4,794)	($4,516)

For derivatives designated as cash flow hedging instruments in the table above, the amounts represent the pre-tax reclassifications from AOCL into earnings.