Business Segments

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Business Segments

Business Segments

Washington Trust segregates financial information in assessing its results among its Commercial Banking and Wealth Management Services operating segments.  The amounts in the Corporate unit include activity not related to the segments.

Management uses certain methodologies to allocate income and expenses to the business lines.  The methodologies are periodically reviewed and revised. Results may be restated, when necessary, to reflect changes in organizational structure or allocation methodology. A funds transfer pricing (“FTP”) methodology is used to assign interest income and interest expense to each interest-earning asset and interest-bearing liability on a matched maturity funding basis.  The matched maturity funding concept considers the origination date and the earlier of the maturity date or the repricing date of a financial instrument to assign an FTP rate for loans and deposits originated. Loans are assigned a FTP rate for funds used and deposits are assigned a FTP rate for funds provided. Certain indirect expenses are allocated to segments.  These include indirect expenses such as technology, operations and other support functions.

Commercial Banking

The Commercial Banking segment includes commercial, residential and consumer lending activities; mortgage banking activities; deposit generation; cash management activities; and direct banking activities, which include the operation of ATMs, telephone banking, internet banking and mobile banking services and customer support and sales.

Wealth Management Services

Wealth Management Services includes investment management; holistic financial planning services; personal trust and estate services, including services as trustee, personal representative, custodian and guardian; settlement of decedents’ estates; and institutional trust services, including custody and fiduciary services.

Corporate

Corporate includes the Treasury Unit, which is responsible for managing the wholesale investment portfolio and wholesale funding needs.  It also includes income from bank-owned life insurance (“BOLI”), as well as administrative and executive expenses not allocated to the operating segments and the residual impact of methodology allocations such as FTP offsets.

The following table presents the statement of operations and total assets for Washington Trust’s reportable segments:

(Dollars in thousands)	Commercial Banking		Wealth Management Services		Corporate		Consolidated Total
Three months ended March 31,	2021	2020	2021	2020	2021	2020	2021	2020
Net interest income (expense)	$34,520	$29,009	($23)	($67)	($1,626)	$3,660	$32,871	$32,602
Provision for credit losses	(2,000)	7,036	—	—	—	—	(2,000)	7,036
Net interest income (expense) after provision for credit losses	36,520	21,973	(23)	(67)	(1,626)	3,660	34,871	25,566
Noninterest income	14,515	10,665	10,895	8,689	564	573	25,974	19,927
Noninterest expenses:
Depreciation and amortization expense	657	619	351	354	46	40	1,054	1,013
Other noninterest expenses	20,001	18,842	6,386	6,846	7,272	3,752	33,659	29,440
Total noninterest expenses	20,658	19,461	6,737	7,200	7,318	3,792	34,713	30,453
Income (loss) before income taxes	30,377	13,177	4,135	1,422	(8,380)	441	26,132	15,040
Income tax expense (benefit)	6,592	2,764	954	356	(1,885)	19	5,661	3,139
Net income (loss)	$23,785	$10,413	$3,181	$1,066	($6,495)	$422	$20,471	$11,901
Total assets at period end	$4,491,675	$4,367,469	$74,902	$74,283	$1,152,812	$1,179,227	$5,719,389	$5,620,979
Expenditures for long-lived assets	835	526	58	53	18	49	911	628