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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
June 30, 2021 or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______.
Commission file number:  001-32991
WASHINGTON TRUST BANCORP, INC.
(Exact name of registrant as specified in its charter)
Rhode Island
05-0404671
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
23 Broad Street
Westerly, Rhode Island 02891
(Address of principal executive offices) (Zip Code)

(401) 348-1200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
COMMON STOCK, $.0625 PAR VALUE PER SHARE WASH The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
The number of shares of common stock of the registrant outstanding as of July 31, 2021 was 17,320,449.



FORM 10-Q
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARIES
For the Quarter Ended June 30, 2021
TABLE OF CONTENTS
Page Number
3
4
5
6
8
9
9
9

-2-


PART I.  Financial Information
Item 1.  Financial Statements
Washington Trust Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
(Dollars in thousands, except par value)
June 30,
2021
December 31,
2020
Assets:
Cash and due from banks $127,743  $194,143 
Short-term investments 4,463  8,125 
Mortgage loans held for sale, at fair value
31,492  61,614 
Available for sale debt securities, at fair value (amortized cost of $1,051,661, net of allowance for credit losses on securities of $0 at June 30, 2021; and amortized cost of $881,570; net of allowance for credit losses on securities of $0 at December 31, 2020)
1,052,577  894,571 
Federal Home Loan Bank stock, at cost 22,757  30,285 
Loans:
Total loans
4,299,800  4,195,990 
Less: allowance for credit losses on loans
41,879  44,106 
Net loans
4,257,921  4,151,884 
Premises and equipment, net 29,031  28,870 
Operating lease right-of-use assets 28,329  29,521 
Investment in bank-owned life insurance 92,355  84,193 
Goodwill 63,909  63,909 
Identifiable intangible assets, net 5,853  6,305 
Other assets 135,550  159,749 
Total assets
$5,851,980  $5,713,169 
Liabilities:
Deposits:
Noninterest-bearing deposits
$901,801  $832,287 
Interest-bearing deposits
3,823,858  3,546,066 
Total deposits
4,725,659  4,378,353 
Federal Home Loan Bank advances 408,592  593,859 
Junior subordinated debentures 22,681  22,681 
Operating lease liabilities 30,558  31,717 
Other liabilities 116,634  152,364 
Total liabilities
5,304,124  5,178,974 
Commitments and contingencies (Note 18)
Shareholders’ Equity:
Common stock of $.0625 par value; authorized 60,000,000 shares; 17,363,457 shares issued and 17,320,446 shares outstanding at June 30, 2021 and 17,363,457 shares issued and 17,265,337 shares outstanding at December 31, 2020
1,085  1,085 
Paid-in capital 125,442  125,610 
Retained earnings 437,927  418,246 
Accumulated other comprehensive loss (15,128) (7,391)
Treasury stock, at cost; 43,011 shares at June 30, 2021 and 98,120 shares at December 31, 2020
(1,470) (3,355)
Total shareholders’ equity
547,856  534,195 
Total liabilities and shareholders’ equity
$5,851,980  $5,713,169 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-3-



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, 2021 2020 2021 2020
Interest income:
Interest and fees on loans
$34,820  $36,005  $68,979  $76,013 
Interest on mortgage loans held for sale
405  440  846  725 
Taxable interest on debt securities
3,441  5,477  6,683  11,311 
Dividends on Federal Home Loan Bank stock
110  654  243  1,294 
Other interest income
32  36  65  385 
Total interest and dividend income
38,808  42,612  76,816  89,728 
Interest expense:    
Deposits
2,961  7,112  6,624  15,648 
Federal Home Loan Bank advances
1,001  4,382  2,381  10,147 
Junior subordinated debentures
92  171  186  384 
Other interest expense
—  — 
Total interest expense
4,054  11,667  9,191  26,181 
Net interest income 34,754  30,945  67,625  63,547 
Provision for credit losses —  2,200  (2,000) 9,236 
Net interest income after provision for credit losses 34,754  28,745  69,625  54,311 
Noninterest income:
Wealth management revenues
10,428  8,605  20,323  17,294 
Mortgage banking revenues
5,994  14,851  17,921  20,947 
Card interchange fees
1,316  1,031  2,449  1,978 
Service charges on deposit accounts
635  517  1,244  1,377 
Loan related derivative income
1,175  99  1,642  2,554 
Income from bank-owned life insurance
607  791  1,163  1,355 
Other income
438  426  1,825  742 
Total noninterest income
20,593  26,320  46,567  46,247 
Noninterest expense:
Salaries and employee benefits
22,082  19,464  43,609  38,932 
Outsourced services
3,217  2,784  6,417  5,784 
Net occupancy
2,042  1,909  4,170  3,928 
Equipment
975  895  1,969  1,872 
Legal, audit and professional fees
678  659  1,275  1,481 
FDIC deposit insurance costs
374  674  719  1,096 
Advertising and promotion
560  186  782  445 
Amortization of intangibles
225  230  451  460 
Debt prepayment penalties
895  —  4,230  — 
Other expenses
1,964  1,677  4,103  4,933 
Total noninterest expense
33,012  28,478  67,725  58,931 
Income before income taxes 22,335  26,587  48,467  41,627 
Income tax expense 4,875  5,547  10,536  8,686 
Net income
$17,460  $21,040  $37,931  $32,941 
Net income available to common shareholders $17,408  $21,000  $37,823  $32,869 
Weighted average common shares outstanding - basic 17,314  17,257  17,295  17,301 
Weighted average common shares outstanding - diluted 17,436  17,292  17,445  17,377 
Per share information: Basic earnings per common share $1.01  $1.22  $2.19  $1.90 
Diluted earnings per common share $1.00  $1.21  $2.17  $1.89 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-4-



Washington Trust Bancorp, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (unaudited)
(Dollars in thousands)

Three Months Six Months
Periods ended June 30, 2021 2020 2021 2020
Net income $17,460  $21,040  $37,931  $32,941 
Other comprehensive income (loss), net of tax:
Net change in fair value of available for sale debt securities
4,134  (1,808) (9,185) 10,998 
Net change in fair value of cash flow hedges
70  367  (1,042)
Net change in defined benefit plan obligations
674  409  1,081  819 
Total other comprehensive income (loss), net of tax 4,878  (1,391) (7,737) 10,775 
Total comprehensive income $22,338  $19,649  $30,194  $43,716 


The accompanying notes are an integral part of these unaudited consolidated financial statements.
-5-



Washington Trust Bancorp, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity (unaudited)
(Dollars and shares in thousands)

For the three months ended June 30, 2021 Common
Shares Outstanding
Common
Stock
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Treasury Stock Total
Balance at March 31, 2021 17,306  $1,085  $124,882  $429,598  ($20,006) ($1,960) $533,599 
Net income
—  —  —  17,460  —  —  17,460 
Total other comprehensive income, net of tax —  —  —  —  4,878  —  4,878 
Cash dividends declared ($0.52 per share)
—  —  —  (9,131) —  —  (9,131)
Share-based compensation —  —  964  —  —  —  964 
Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
14  —  (404) —  —  490  86 
Balance at June 30, 2021 17,320  $1,085  $125,442  $437,927  ($15,128) ($1,470) $547,856 
For the six months ended June 30, 2021 Common
Shares Outstanding
Common
Stock
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury Stock Total
Balance at December 31, 2020 17,265  $1,085  $125,610  $418,246  ($7,391) ($3,355) $534,195 
Net income
—  —  —  37,931  —  —  37,931 
Total other comprehensive loss, net of tax —  —  —  —  (7,737) —  (7,737)
Cash dividends declared ($1.04 per share)
—  —  —  (18,250) —  —  (18,250)
Share-based compensation —  —  1,882  —  —  —  1,882 
Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
55  —  (2,050) —  —  1,885  (165)
Balance at June 30, 2021 17,320  $1,085  $125,442  $437,927  ($15,128) ($1,470) $547,856 

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)

For the three months ended June 30, 2020 Common
Shares Outstanding
Common
Stock
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock Total
Balance at March 31, 2020 17,252  $1,085  $123,167  $387,243  $929  ($3,827) $508,597 
Net income
—  —  —  21,040  —  —  21,040 
Total other comprehensive loss, net of tax —  —  —  —  (1,391) —  (1,391)
Cash dividends declared ($0.51 per share)
—  —  —  (8,897) —  —  (8,897)
Share-based compensation —  —  855  —  —  —  855 
Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
—  (338) —  —  297  (41)
Balance at June 30, 2020 17,260  $1,085  $123,684  $399,386  ($462) ($3,530) $520,163 
For the six months ended June 30, 2020 Common
Shares Outstanding
Common
Stock
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Treasury Stock Total
Balance at December 31, 2019 17,363  $1,085  $123,281  $390,363  ($11,237) $—  $503,492 
Cumulative effect of change in accounting principle - Topic 326 —  —  —  (6,108) —  —  (6,108)
Net income
—  —  —  32,941  —  —  32,941 
Total other comprehensive income, net of tax —  —  —  —  10,775  —  10,775 
Cash dividends declared ($1.02 per share)
—  —  —  (17,810) —  —  (17,810)
Share-based compensation —  —  1,613  —  —  —  1,613 
Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
22  —  (1,210) —  —  792  (418)
Treasury stock purchased under the 2019 Stock Repurchase Program (125) —  —  —  —  (4,322) (4,322)
Balance at June 30, 2020 17,260  $1,085  $123,684  $399,386  ($462) ($3,530) $520,163 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
-7-



Washington Trust Bancorp, Inc. and Subsidiaries
Consolidated Statement of Cash Flows (unaudited)
(Dollars in thousands)

Six months ended June 30, 2021 2020
Cash flows from operating activities:
Net income
$37,931  $32,941 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
(2,000) 9,236 
Depreciation of premises and equipment
1,667  1,557 
Net amortization of premiums and discounts on debt securities and loans
2,356  2,716 
Amortization of intangibles
451  460 
Share-based compensation
1,882  1,613 
Tax benefit (expense) from stock option exercises and other equity awards 127  (77)
Income from bank-owned life insurance
(1,163) (1,355)
Net gains on loan sales, including fair value adjustments
(17,876) (21,074)
Proceeds from sales of loans, net
535,722  447,859 
Loans originated for sale
(492,461) (451,539)
Decrease (increase) in operating lease right-of-use assets 1,192  (230)
(Decrease) increase in operating lease liabilities (1,159) 264 
Decrease (increase) in other assets 26,859  (67,028)
(Decrease) increase in other liabilities (34,102) 59,577 
Net cash provided by operating activities 59,426  14,920 
Cash flows from investing activities:
Purchases of:
Available for sale debt securities: Mortgage-backed (227,131) (149,481)
Available for sale debt securities: Other (174,669) (98,500)
Maturities, calls and principal payments of:
Available for sale debt securities: Mortgage-backed 206,479  120,745 
Available for sale debt securities: Other 20,500  100,500 
Net redemption of Federal Home Loan Bank stock 7,528  836 
Net increase in loans (56,094) (336,489)
Purchases of loans
(40,881) (51,081)
Proceeds from the sale of property acquired through foreclosure or repossession
—  1,107 
Purchases of premises and equipment
(1,828) (925)
Purchases of bank-owned life insurance
(7,000) — 
Proceeds from surrender of bank-owned life insurance
—  787 
Net cash used in investing activities
(273,096) (412,501)
Cash flows from financing activities:
Net increase in deposits 347,306  602,554 
Proceeds from Federal Home Loan Bank advances
1,009,000  1,346,999 
Repayment of Federal Home Loan Bank advances
(1,194,267) (1,483,412)
Proceeds from Payment Protection Program Lending Facility
—  38,900 
Treasury stock purchased
—  (4,322)
Net proceeds from stock option exercises and issuance of other equity awards, net of awards surrendered
(165) (418)
Cash dividends paid
(18,266) (17,835)
Net cash provided by financing activities
143,608  482,466 
Net (decrease) increase in cash and cash equivalents (70,062) 84,885 
Cash and cash equivalents at beginning of period
202,268  138,455 
Cash and cash equivalents at end of period
$132,206  $223,340 
Noncash Activities:
Loans charged off $381  $961 
Loans transferred to property acquired through foreclosure or repossession —  28 
Supplemental Disclosures:
Interest payments $10,798  $27,257 
Income tax payments 9,966  8,234 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-8-



Condensed Notes to Unaudited Consolidated Financial Statements

Note 1 - Basis of Presentation
Washington Trust Bancorp, Inc. (the “Bancorp”) is a publicly-owned registered bank holding company that has elected to be a financial holding company.  The Bancorp’s subsidiaries include The Washington Trust Company, of Westerly (the “Bank”), a Rhode Island chartered financial institution founded in 1800, and Weston Securities Corporation (“WSC”).  Through its subsidiaries, the Bancorp offers a complete product line of financial services, including commercial, residential and consumer lending, retail and commercial deposit products, and wealth management services through its offices in Rhode Island, eastern Massachusetts and Connecticut.

The Unaudited Consolidated Financial Statements include the accounts of the Bancorp and its subsidiaries (collectively the “Corporation” or “Washington Trust”).  All intercompany balances and transactions have been eliminated in consolidation.

The Bancorp also owns the common stock of two capital trusts, which have issued trust preferred securities. These capital trusts are variable interest entities in which the Bancorp is not the primary beneficiary and, therefore, are not consolidated. The capital trust’s only assets are junior subordinated debentures issued by the Bancorp, which were acquired by the capital trusts using the proceeds from the issuance of the trust preferred securities and common stock. The Bancorp’s equity interest investment in the capital trusts, which is classified in other assets, and the junior subordinated debentures are included in the Unaudited Consolidated Balance Sheets. Interest expense on the junior subordinated debentures is included in the Unaudited Consolidated Statements of Income.

The accounting and reporting policies of the Corporation conform to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices of the banking industry.  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. Material estimates that are particularly susceptible to change are the determination of the allowance for credit losses on loans, the valuation of goodwill and identifiable intangible assets and the accounting for defined benefit pension plans.

The Unaudited Consolidated Financial Statements of the Corporation presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP. 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, 2020.

Note 2 - Recently Issued Accounting Pronouncements
Accounting Standards Adopted in 2021
Income Taxes - ASC 745
Accounting Standards Update No. 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), was issued in December 2019 to simplify the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Certain provisions under ASU 2019-12 require prospective application, some require modified retrospective application through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, while other provisions require retrospective application to all periods presented in the consolidated financial statements upon adoption. The Corporation adopted the provisions of ASU 2019-12 effective January 1, 2021 and the adoption did not have a material impact on the Corporation’s consolidated financial statements.

Receivables - ASC 310
Accounting Standards Update No. 2020-08, “Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs” (“ASU 2020-08”), was issued in October 2020 to provide further clarification and update the previously issued guidance in ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20: Premium Amortization on Purchased Callable Debt Securities” (“ASU 2017-08”). ASU 2017-08 shortened the amortization period for certain callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date. The Corporation early adopted the provisions of ASU 2017-08, effective January 1, 2017. ASU 2020-08 requires that at each reporting period, to the extent that the amortized cost of an individual callable debt security exceeds the amount

-9-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
repayable by the issuer at the next call date, the excess premium shall be amortized to the next call date. ASU 2020-08 is effective for fiscal years ending after December 15, 2020 and early adoption is not permitted. The provisions under ASU 2020-08 are required to be applied prospectively. The Corporation adopted the provisions of ASU 2020-08 effective January 1, 2020 and the adoption did not have an impact on the Corporation’s consolidated financial statements.

Accounting Standards Pending Adoption
There were no recently issued accounting pronouncements, applicable to the Corporation, that are pending adoption as of June 30, 2021.

Note 3 - Cash and Due from Banks
The Bank maintains certain average reserve balances to meet the requirements of the Federal Reserve Bank of Boston (“FRB”).  Some or all of these reserve requirements may be satisfied with vault cash. Effective March 26, 2020, the FRB reduced the reserve requirement ratios to zero percent to eliminate the need for depository institutions, such as the Bank, to maintain balances in accounts at the FRB to satisfy reserve requirements. As a result, there were no reserve balances included in cash and due from banks in the Unaudited Consolidated Balance Sheets at June 30, 2021 and December 31, 2020.

Cash and due from banks included interest-bearing deposits in other banks of $93.9 million and $138.4 million, respectively, at June 30, 2021 and December 31, 2020.

See Note 10 for additional disclosure regarding cash collateral pledged to derivative counterparties.

Note 4 - Securities
Available for Sale Debt Securities
The following tables present the amortized cost, gross unrealized holding gains, gross unrealized holding losses, allowance for credit losses (“ACL”) on securities and fair value of securities by major security type and class of security:
(Dollars in thousands)
June 30, 2021 Amortized Cost Unrealized Gains Unrealized Losses Allowance for Credit Losses Fair Value
Available for Sale Debt Securities:
Obligations of U.S. government-sponsored enterprises
$186,051  $248  ($2,044) $—  $184,255 
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises
841,102  10,009  (6,075) —  845,036 
Individual name issuer trust preferred debt securities
11,360  —  (294) —  11,066 
Corporate bonds
13,148  —  (928) —  12,220 
Total available for sale debt securities $1,051,661  $10,257  ($9,341) $—  $1,052,577 

(Dollars in thousands)
December 31, 2020 Amortized Cost Unrealized Gains Unrealized Losses Allowance for Credit Losses Fair Value
Available for Sale Debt Securities:
Obligations of U.S. government-sponsored enterprises
$131,186  $628  ($145) $—  $131,669 
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises
725,890  14,942  (527) —  740,305 
Individual name issuer trust preferred debt securities
13,341  —  (672) —  12,669 
Corporate bonds
11,153  —  (1,225) —  9,928 
Total available for sale debt securities $881,570  $15,570  ($2,569) $—  $894,571 

Amortized cost of available for sale debt securities excludes accrued interest receivable of $2.6 million and $2.4 million, respectively, as of June 30, 2021 and December 31, 2020. Accrued interest receivable is included in other assets in the Unaudited Consolidated Balance Sheets.


-10-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
As of June 30, 2021 and December 31, 2020, debt securities with a fair value of $333.5 million and $291.9 million, respectively, were pledged as collateral for Federal Home Loan Bank of Boston (“FHLB”) borrowings, potential borrowings with the FRB’s discount window, certain public deposits and for other purposes. See Note 8 for additional disclosure 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.
(Dollars in thousands)
June 30, 2021 Amortized Cost Fair Value
Due in one year or less $182,321  $183,170 
Due after one year to five years
420,900  422,554 
Due after five years to ten years
358,203  356,788 
Due after ten years
90,237  90,065 
Total debt securities
$1,051,661  $1,052,577 

Included in the above table are debt securities with an amortized cost balance of $209.8 million and a fair value of $206.7 million at June 30, 2021 that are callable at the discretion of the issuers.  Final maturities of the callable securities range from 3 years to 16 years, with call features ranging from 1 month to 1 year.
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.

A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a debt security placed on nonaccrual is reversed against interest income. There were no debt securities on nonaccrual status at June 30, 2021 and 2020 and, therefore there was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2021 and 2020.

The following tables summarize available for sale debt securities in an unrealized loss position, for which an allowance for credit losses 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, 2021 # Fair
Value
Unrealized
Losses
# Fair
Value
Unrealized
Losses
# Fair
Value
Unrealized
Losses
Obligations of U.S. government-sponsored enterprises 10  $102,856  ($2,044) —  $—  $—  10  $102,856  ($2,044)
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises
41  441,852  (5,962) 6,349  (113) 43  448,201  (6,075)
Individual name issuer trust preferred debt securities
—  —  —  11,066  (294) 11,066  (294)
Corporate bonds —  —  —  12,220  (928) 12,220  (928)
Total
51  $544,708  ($8,006) 10  $29,635  ($1,335) 61  $574,343  ($9,341)



-11-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
(Dollars in thousands) Less than 12 Months 12 Months or Longer Total
December 31, 2020 # Fair
Value
Unrealized
Losses
# Fair
Value
Unrealized
Losses
# Fair
Value
Unrealized
Losses
Obligations of U.S. government-sponsored enterprises
$63,856  ($145) —  $—  $—  $63,856  ($145)
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises
16  107,283  (527) —  —  —  16  107,283  (527)
Individual name issuer trust preferred debt securities
—  —  —  12,669  (672) 12,669  (672)
Corporate bonds —  —  —  9,928  (1,225) 9,928  (1,225)
Total
22  $171,139  ($672) $22,597  ($1,897) 30  $193,736  ($2,569)

Deterioration in credit quality of the underlying issuers of the securities, deterioration in the condition of the financial services industry, worsening of the current economic environment, or declines in real estate values, among other things, may further affect the fair value of these securities and increase the potential that certain unrealized losses be designated as credit losses, and the Corporation may incur write-downs.

Obligations of U.S. Government Agency and U.S. Government-Sponsored Enterprise Securities, including Mortgage-Backed Securities
The gross unrealized losses on U.S. government agency and U.S. government-sponsored debt securities, including mortgage-backed securities, were primarily attributable to relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at June 30, 2021. Management believes that the unrealized losses on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. Furthermore, the Corporation does not intend to sell these securities and it is likely that the Corporation will not be required to sell these securities before recovery of their cost basis, which may be maturity. Therefore, no allowance for credits losses on securities was recorded at June 30, 2021.

Individual Name Issuer Trust Preferred Debt Securities
Included in debt securities in an unrealized loss position at June 30, 2021 were four trust preferred securities issued by four individual companies in the banking sector.  Based on the information available through the filing date of this report, all individual name issuer trust preferred debt securities held in our portfolio continue to accrue interest and make payments as expected with no payment deferrals or defaults on the part of the issuers. 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, 2021, there were two individual name issuer trust preferred debt securities with an amortized cost of $4.0 million and unrealized losses of $169 thousand that were rated below investment grade by Standard & Poors, Inc. (“S&P”). We noted no additional downgrades to below investment grade between June 30, 2021 and the filing date of this report.  Management believes the unrealized losses on these debt securities are primarily attributable to changes in the investment spreads and interest rates and not changes in the credit quality of the issuers of the debt securities.  Management expects to recover the entire amortized cost basis of these securities.  Furthermore, the Corporation does not intend to sell these securities and it is likely that the Corporation will not be required to sell these securities before recovery of their cost basis, which may be maturity.  Therefore, no allowance for credit losses on securities was recorded at June 30, 2021.

Corporate Bonds
At June 30, 2021, the Corporation had four corporate bond holdings with unrealized losses totaling $928 thousand. These investment grade corporate bonds were issued by large corporations in the financial services industry. The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at June 30, 2021. 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. Management believes the unrealized losses on these debt securities are primarily attributable to changes in

-12-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
the investment spreads and interest rates and not changes in the credit quality of the issuers of the debt securities. Management expects to recover the entire amortized cost basis of these securities. Furthermore, the Corporation does not intend to sell these securities and it is likely that the Corporation will not be required to sell these securities before recovery of their cost basis, which may be maturity.  Therefore, no allowance for credit losses was recorded at June 30, 2021.

Note 5 - Loans
The following is a summary of loans:
(Dollars in thousands) June 30,
2021
December 31, 2020
Commercial:
Commercial real estate (1)
$1,669,624  $1,633,024 
Commercial & industrial (2)
764,509  817,408 
Total commercial 2,434,133  2,450,432 
Residential Real Estate:
Residential real estate (3)
1,590,389  1,467,312 
Consumer:
Home equity
254,802  259,185 
Other (4)
20,476  19,061 
Total consumer 275,278  278,246 
Total loans (5)
$4,299,800  $4,195,990 
(1)Commercial real estate (“CRE”) consists of commercial mortgages primarily secured by 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)Commercial and industrial (“C&I”) consists of loans to businesses and individuals, a portion of which are fully or partially collateralized by real estate. C&I also includes $147.0 million and $199.8 million, respectively, of PPP loans as of June 30, 2021 and December 31, 2020.
(3)Residential real estate consists of mortgage and homeowner construction loans secured by one- to four-family residential properties.
(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 $2.1 million and $1.5 million, respectively, at June 30, 2021 and December 31, 2020 and net unamortized premiums on purchased loans of $558 thousand and $787 thousand, respectively, at June 30, 2021 and December 31, 2020.

Loan balances exclude accrued interest receivable of $11.5 million and $11.3 million, respectively, as of June 30, 2021 and December 31, 2020. Accrued interest receivable is included in other assets in the Unaudited Consolidated Balance Sheets.

As of June 30, 2021 and December 31, 2020, loans amounting to $2.0 billion and $2.1 billion, respectively, were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRB. See Note 8 for additional disclosure regarding borrowings.

Loan Modifications Under the CARES Act
The Corporation has elected to account for eligible loan modifications under Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), as amended by the Coronavirus Response and Relief Supplemental Appropriations Act (the “CRRSA Act”). To be eligible, a loan modification must be (1) related to the COVID-19 pandemic; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the national emergency declared by the President on March 13, 2020 concerning the COVID-19 outbreak (the “national emergency”) or (B) January 1, 2022. Eligible loan modifications are not required to be classified as troubled debt restructurings (“TDRs”) and are not reported as past due provided that they are performing in accordance with the modified terms. Interest income will continue to be recognized unless the loan is placed on nonaccrual status in accordance with the nonaccrual loans accounting policy described below.

Washington Trust has processed loan payment deferral modifications, or "deferments", on 654 loans totaling $728 million since the beginning of the second quarter of 2020, in response to the COVID-19 pandemic The majority of these deferments qualified as eligible loan modifications under Section 4013 of the CARES Act, as amended. As of June 30, 2021, we had active deferments on 22 loans totaling $93.4 million, or 2% of total loans excluding Paycheck Protection Program (“PPP”) loans.


-13-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
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.

Past Due Loans
Past due status is based on the contractual payment terms of the loan. The following tables present an age analysis of loans, segregated by class of loans:
(Dollars in thousands) Days Past Due
June 30, 2021 30-59 60-89 Over 90 Total Past Due Current Total Loans
Commercial:
Commercial real estate
$—  $—  $—  $—  $1,669,624  $1,669,624 
Commercial & industrial
—  539  540  763,969  764,509 
Total commercial —  539  540  2,433,593  2,434,133 
Residential Real Estate:
Residential real estate
3,055  —  3,601  6,656  1,583,733  1,590,389 
Consumer:
Home equity
595  212  424  1,231  253,571  254,802 
Other
24  —  28  20,448  20,476 
Total consumer 619  216  424  1,259  274,019  275,278 
Total loans $3,675  $216  $4,564  $8,455  $4,291,345  $4,299,800 

(Dollars in thousands) Days Past Due
December 31, 2020 30-59 60-89 Over 90 Total Past Due Current Total Loans
Commercial:
Commercial real estate
$265  $—  $—  $265  $1,632,759  $1,633,024 
Commercial & industrial
—  817,405  817,408 
Total commercial 266  —  268  2,450,164  2,450,432 
Residential Real Estate:
Residential real estate
4,466  701  5,172  10,339  1,456,973  1,467,312 
Consumer:
Home equity
894  129  644  1,667  257,518  259,185 
Other
23  88  118  18,943  19,061 
Total consumer 917  136  732  1,785  276,461  278,246 
Total loans $5,649  $839  $5,904  $12,392  $4,183,598  $4,195,990 

Included in past due loans as of June 30, 2021 and December 31, 2020, were nonaccrual loans of $5.8 million and $8.5 million, respectively.

All loans 90 days or more past due at June 30, 2021 and December 31, 2020 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

-14-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
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 for a period of time, 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.

The following table presents the carrying value of nonaccrual loans:
(Dollars in thousands) Jun 30,
2021
Dec 31,
2020
Commercial:
Commercial real estate
$—  $— 
Commercial & industrial
539  — 
Total commercial 539  — 
Residential Real Estate:
Residential real estate
8,926  11,981 
Consumer:
Home equity
1,016  1,128 
Other
—  88 
Total consumer 1,016  1,216 
Total nonaccrual loans $10,481  $13,197 
Accruing loans 90 days or more past due $—  $— 

Nonaccrual loans of $4.7 million at both June 30, 2021 and December 31, 2020 were current as to the payment of principal and interest.

No ACL was deemed necessary on nonaccrual loans with a carrying value of $3.7 million and $3.0 million, respectively, as of June 30, 2021 and December 31, 2020.

As of June 30, 2021 and December 31, 2020, nonaccrual loans secured by one- to four-family residential property amounting to $2.5 million and $3.4 million, respectively, were in process of foreclosure.

There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at June 30, 2021.


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Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The following table presents interest income recognized on nonaccrual loans:
(Dollars in thousands) Three Months Six Months
Periods ended June 30, 2021 2020 2021 2020
Commercial:
Commercial real estate
$—  $—  $—  $— 
Commercial & industrial
—  —  — 
Total commercial —  —  — 
Residential Real Estate:
Residential real estate
72  103  129  271 
Consumer:
Home equity
13  17  36  40 
Other
—  —  —  — 
Total consumer 13  17  36  40 
Total $85  $120  $170  $311 

Troubled Debt Restructurings
A loan that has been modified or renewed is considered to be a TDR when two conditions are met: (1) the borrower is experiencing financial difficulty and (2) concessions are made for the borrower’s benefit that would not otherwise be considered for a borrower or a transaction with similar credit risk characteristics. These concessions may include modifications of the terms of the debt such as deferral of payments, extension of maturity, reduction of principal balance, reduction of the stated interest rate other than normal market rate adjustments, or a combination of these concessions. Debt may be bifurcated with separate terms for each tranche of the restructured debt. Restructuring of a loan in lieu of aggressively enforcing the collection of the loan may benefit the Corporation by increasing the ultimate probability of collection.

The Corporation's ACL reflects the effects of a TDR when management reasonably expects at the reporting date that a TDR will be executed with an individual borrower. A TDR is considered reasonably expected no later than the point when management concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession to avoid a default. Reasonably expected TDRs and executed TDRs are evaluated individually to determine the required ACL. TDRs that did not involve a below-market rate concession and perform in accordance with their modified contractual terms for a reasonable period of time may be included in the Corporation’s existing pools based on the underlying risk characteristics of the loan to measure the ACL.

TDRs are classified as accruing or non-accruing based on management’s assessment of the collectability of the loan.  Loans that are already on nonaccrual status at the time of the restructuring generally remain on nonaccrual status for approximately six months before management considers such loans for return to accruing status.  Accruing restructured loans are placed into nonaccrual status if and when the borrower fails to comply with the restructured terms and management deems it unlikely that the borrower will return to a status of compliance in the near term and full collection of principal and interest is in doubt.

TDRs are reported as such for at least one year from the date of the restructuring.  In years after the restructuring, TDRs are removed from this classification if the restructuring did not involve a below-market rate concession and the loan is performing in accordance with their modified contractual terms for a reasonable period of time.

The recorded investment in TDRs consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs. For accruing TDRs, the recorded investment also includes accrued interest.


-16-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The following table presents the recorded investment in TDRs and other pertinent information:
(Dollars in thousands) Jun 30,
2021
Dec 31,
2020
Accruing TDRs $8,619  $13,418 
Nonaccrual TDRs 2,278  2,345 
Total TDRs $10,897  $15,763 
Specific reserves on TDRs included in the ACL on loans $233  $159 
Additional commitments to lend to borrowers with TDRs $—  $— 

The following tables present TDRs occurring during the period indicated and the recorded investment pre- and post- modification:
(Dollars in thousands) Outstanding Recorded Investment
# of Loans Pre-Modifications Post-Modifications
Three months ended June 30, 2021 2020 2021 2020 2021 2020
Commercial:
Commercial real estate
—  $—  $841  $—  $841 
Commercial & industrial
—  —  460  —  460 
Total commercial —  —  1,301  —  1,301 
Residential Real Estate:
Residential real estate
—  —  3,512  —  3,512 
Consumer:
Home equity
—  —  802  —  802 
Other
—  —  —  —  —  — 
Total consumer —  $—  $802  $—  $802 
Total —  12  $—  $5,615  $—  $5,615 


(Dollars in thousands) Outstanding Recorded Investment
# of Loans Pre-Modifications Post-Modifications
Six months ended June 30, 2021 2020 2021 2020 2021 2020
Commercial:
Commercial real estate
—  $—  $841  $—  $841 
Commercial & industrial
—  —  460  —  460 
Total commercial —  —  1,301  —  1,301 
Residential Real Estate:
Residential real estate
—  —  3,512  —  3,512 
Consumer:
Home equity
—  —  802  —  802 
Other
—  —  —  —  —  — 
Total consumer —  $—  $802  $—  $802 
Total —  12  $—  $5,615  $—  $5,615 


-17-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The following table presents TDRs occurring during the period indicated by type of modification:
(Dollars in thousands) Three Months Six Months
Periods ended June 30, 2021 2020 2021 2020
Below-market interest rate concession $—  $—  $—  $— 
Payment deferral —  5,202  —  5,202 
Maturity / amortization concession —  —  —  — 
Interest only payments —  —  —  — 
Combination (1)
—  413  —  413 
Total $—  $5,615  $—  $5,615 
(1)Loans included in this classification were modified with a combination of any two of the concessions listed in this table.

The following tables present information on TDRs modified within the previous 12 months for which there was a payment default:
(Dollars in thousands) # of Loans Recorded Investment
Three months ended June 30, 2021 2020 2021 2020
TDRs with a Payment Default:
Home equity —  $—  $47 

(Dollars in thousands) # of Loans Recorded Investment
Six months ended June 30, 2021 2020 2021 2020
TDRs with a Payment Default:
Residential real estate —  $396  $— 
Home equity —  —  47 

Individually Analyzed Loans
Individually analyzed loans include nonaccrual commercial loans, reasonably expected TDRs and executed TDRs, 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, 2021, the carrying value of individually analyzed loans amounted to $13.4 million, of which $4.3 million were considered collateral dependent. As of December 31, 2020, the carrying value of individually analyzed loans amounted to $18.3 million, of which $8.4 million were considered collateral dependent.

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 11 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.


-18-



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, 2021 December 31, 2020
Carrying Value Related Allowance Carrying Value Related Allowance
Commercial:
Commercial real estate (1)
$—  $—  $1,792  $— 
Commercial & industrial (2)
537  —  451  — 
Total commercial 537  —  2,243  — 
Residential Real Estate:
Residential real estate (3)
3,325  57  5,947  38 
Consumer:
Home equity (3)
394  183  254  183 
Other
—  —  —  — 
Total consumer 394  183  254  183 
Total $4,256  $240  $8,444  $221 
(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. 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 allowance for credit losses on loans. See Note 6 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 Small Business Administration (“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

-19-



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, loans with active deferrals resulting from the COVID-19 pandemic, 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 (“FICO”) score and an updated estimated loan to value (“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 consideration in the determination of qualitative loss factors for residential real estate and home equity consumer credits.


-20-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The following table summarizes the Corporation’s loan portfolio by credit quality indicator and loan portfolio segment as of June 30, 2021:
(Dollars in thousands) Term Loans Amortized Cost by Origination Year
2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Loans Total
Commercial:
CRE:
Pass
$186,095  $256,609  $330,127  $214,239  $208,316  $348,282  $7,173  $2,334  $1,553,175 
Special Mention
6,013  880  29,727  39,019  16,133  23,311  408  —  115,491 
Classified
—  958  —  —  —  —  —  —  958 
Total CRE
192,108  258,447  359,854  253,258  224,449  371,593  7,581  2,334  1,669,624 
C&I:
Pass
137,678  133,756  108,668  92,357  53,552  104,976  102,733  1,127  734,847 
Special Mention
—  —  678  4,682  6,528  13,257  1,186  —  26,331 
Classified
—  537  —  —  —  2,792  —  3,331 
Total C&I
137,678  134,293  109,346  97,039  60,080  121,025  103,919  1,129  764,509 
Residential Real Estate:
Residential real estate:
Current
386,456  412,948  196,129  117,079  112,458  358,663  —  —  1,583,733 
Past Due
—  237  1,673  1,206  793  2,747  —  —  6,656 
Total residential real estate
386,456  413,185  197,802  118,285  113,251  361,410  —  —  1,590,389 
Consumer:
Home equity:
Current
6,059  7,919  5,261  3,041  1,260  4,258  216,565  9,208  253,571 
Past Due
—  —  —  29  —  133  205  864  1,231 
Total home equity
6,059  7,919  5,261  3,070  1,260  4,391  216,770  10,072  254,802 
Other:
Current
4,865  4,887  1,508  1,069  871  6,987  261  —  20,448 
Past Due
13  10  —  —  —  —  —  28 
Total other
4,878  4,897  1,513  1,069  871  6,987  261  —  20,476 
Total Loans $727,179  $818,741  $673,776  $472,721  $399,911  $865,406  $328,531  $13,535  $4,299,800 


-21-



Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The following table summarizes the Corporation’s loan portfolio by credit quality indicator and loan portfolio segment as of December 31, 2020:
(Dollars in thousands) Term Loans Amortized Cost by Origination Year
2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Loans Total
Commercial:
CRE:
Pass
$283,341  $353,875  $260,917  $236,310  $136,490  $249,359  $10,333  $2,386  $1,533,011 
Special Mention
756  20,235  39,387  16,222  11,318  10,367  771  —  99,056 
Classified
957  —  —  —  —  —  —  —  957 
Total CRE
285,054  374,110  300,304  252,532  147,808  259,726  11,104  2,386  1,633,024 
C&I:
Pass
293,493  95,775  98,146  56,792  44,445  91,128  95,817  1,296  776,892 
Special Mention
1,123  722  3,210  6,839  3,141  14,853  3,806  56  33,750 
Classified
403  —  —  —  —  6,363  —  —  6,766 
Total C&I
295,019  96,497  101,356  63,631  47,586  112,344  99,623  1,352  817,408 
Residential Real Estate:
Residential real estate:
Current
463,477  253,228  146,839  155,976  128,139  309,314  —  —  1,456,973 
Past Due
238  1,698  1,310  886  110  6,097  —  —  10,339 
Total residential real estate
463,715  254,926  148,149  156,862  128,249  315,411  —  —  1,467,312 
Consumer:
Home equity:
Current
9,838  6,771  3,898  1,474  1,217  3,955  219,085  11,280  257,518 
Past Due
—  35  24  —  —  186  310  1,112  1,667 
Total home equity
9,838  6,806  3,922  1,474  1,217  4,141  219,395  12,392  259,185 
Other:
Current
5,214  2,241  1,237  1,544  548  7,850  308  18,943 
Past Due
19  —  —  88  —  118 
Total other
5,233  2,242  1,237  1,544  636  7,857  311  19,061 
Total Loans $1,058,859  $734,581  $554,968  $476,043  $325,496  $699,479  $330,433  $16,131