Shareholders' Equity

3 Months Ended

Mar. 31, 2020

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Capital Requirements

Shareholders' Equity

2019 Stock Repurchase Program

The Corporation’s 2019 Stock Repurchase Program authorizes the repurchase of up to 850,000 shares, or approximately 5%, of the Corporation’s outstanding common stock. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The 2019 Stock Repurchase Program expires on October 31, 2020 and may be modified, suspended, or discontinued at any time.  As of March 31, 2020, 124,863 shares have been repurchased under the 2019 Stock Repurchase Program, totaling $4.3 million, at an average price of $34.61. Due to the economic uncertainty resulting from the COVID-19 pandemic, Washington Trust suspended its 2019 Stock Repurchase Program effective March 25, 2020.

Regulatory Capital Requirements

Capital levels at March 31, 2020 exceeded the regulatory minimum levels to be considered “well capitalized.”

The following table presents the Corporation’s and the Bank’s actual capital amounts and ratios, as well as the corresponding minimum and well capitalized regulatory amounts and ratios that were in effect during the respective periods:

(Dollars in thousands)	Actual				For Capital Adequacy Purposes				To Be “Well Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
March 31, 2020
Total Capital (to Risk-Weighted Assets):
Corporation		$500,239	12.42	%		$322,246	8.00	%	N/A		N/A
Bank	480,463		11.93		322,210		8.00			$402,763	10.00	%
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	468,122		11.62		241,685		6.00		N/A		N/A
Bank	448,346		11.13		241,658		6.00		322,210		8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Corporation	446,124		11.08		181,264		4.50		N/A		N/A
Bank	448,346		11.13		181,243		4.50		261,796		6.50
Tier 1 Capital (to Average Assets): (1)
Corporation	468,122		8.77		213,488		4.00		N/A		N/A
Bank	448,346		8.40		213,403		4.00		266,754		5.00
December 31, 2019
Total Capital (to Risk-Weighted Assets):
Corporation	494,603		12.94		305,728		8.00		N/A		N/A
Bank	490,993		12.85		305,693		8.00		382,116		10.00
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	467,296		12.23		229,296		6.00		N/A		N/A
Bank	463,686		12.13		229,270		6.00		305,693		8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Corporation	445,298		11.65		171,972		4.50		N/A		N/A
Bank	463,686		12.13		171,952		4.50		248,375		6.50
Tier 1 Capital (to Average Assets): (1)
Corporation	467,296		9.04		206,682		4.00		N/A		N/A
Bank	463,686		8.98		206,596		4.00		258,245		5.00

(1) Leverage ratio.

In addition to the minimum regulatory capital required for capital adequacy purposes outlined in the table above, the Corporation is required to maintain a minimum capital conservation buffer, in the form of common equity, of 2.50% in order to avoid restrictions on capital distributions and discretionary bonuses. The Corporation’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at March 31, 2020 and December 31, 2019.

The Bancorp owns the common stock of two capital trusts, which have issued trust preferred securities. In accordance with GAAP, the capital trusts are treated as unconsolidated subsidiaries. At both March 31, 2020 and December 31, 2019, $22.0 million in trust preferred securities were included in the Tier 1 Capital of the Corporation for regulatory capital reporting purposes pursuant to the FRB’s capital adequacy guidelines.

In response to the recent disruptions in economic conditions caused by the COVID-19 pandemic and the uncertainty of its overall effects on the economy, the FDIC issued an interim final rule (“IFR”) on March 27, 2020 that delays the estimated impact on regulatory capital stemming from the adoption of Topic 326, often referred to as CECL. The amount of capital relief provided in the CECL IFR is an estimate of the approximate difference in ACL under the CECL accounting methodology relative to the

previously used incurred loss accounting methodology for the first two years of the five-year transition period. The cumulative difference at the end of the second year of the transition period will then be phased-in to regulatory capital over a three-year transition period beginning in 2022. As discussed in Note 2, the Corporation has elected this five-year phase-in option.