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Loans (Tables)

6 Months Ended

Jun. 30, 2021

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.

Past Due Loans

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	1	—	539	540	763,969	764,509
Total commercial	1	—	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	4	—	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	1	2	—	3	817,405	817,408
Total commercial	266	2	—	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	7	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

Nonaccrual Loans

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.

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	—	—	5	—
Total commercial	—	—	5	—
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

Summary of TDRs

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	—	1	$—	$841	$—	$841
Commercial & industrial	—	2	—	460	—	460
Total commercial	—	3	—	1,301	—	1,301
Residential Real Estate:
Residential real estate	—	6	—	3,512	—	3,512
Consumer:
Home equity	—	3	—	802	—	802
Other	—	—	—	—	—	—
Total consumer	—	3	$—	$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	—	1	$—	$841	$—	$841
Commercial & industrial	—	2	—	460	—	460
Total commercial	—	3	—	1,301	—	1,301
Residential Real Estate:
Residential real estate	—	6	—	3,512	—	3,512
Consumer:
Home equity	—	3	—	802	—	802
Other	—	—	—	—	—	—
Total consumer	—	3	$—	$802	$—	$802
Total	—	12	$—	$5,615	$—	$5,615

TDRs by type of modification

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.

TDRs with payment default

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	—	1	$—	$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	1	—	$396	$—

Home equity	—	1	—	47

Collateral Dependent Individually Analyzed Loans

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

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	—	2	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	5	—	—	—	—	—	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

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	1	18,943
Past Due	19	1	—	—	88	7	3	—	118
Total other	5,233	2,242	1,237	1,544	636	7,857	311	1	19,061




Total Loans	$1,058,859	$734,581	$554,968	$476,043	$325,496	$699,479	$330,433	$16,131	$4,195,990

Consistent with industry practice, Washington Trust may renew commercial loans at or immediately prior to their maturity. In the tables above, renewals subject to full credit evaluation before being granted are reported as originations in the period renewed.