Business Segments

9 Months Ended

Sep. 30, 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 Corporate unit includes activity not allocated to the operating 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 operating 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

The Wealth Management Services operating segment 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 September 30,	2021	2020	2021	2020	2021	2020	2021	2020
Net interest income (expense)	$35,732	$33,103	($25)	($24)	$363	($1,425)	$36,070	$31,654
Provision for credit losses	—	1,325	—	—	—	—	—	1,325
Net interest income (expense) after provision for credit losses	35,732	31,778	(25)	(24)	363	(1,425)	36,070	30,329
Noninterest income	9,440	15,940	10,455	8,954	625	574	20,520	25,468
Noninterest expenses:
Depreciation and amortization expense	718	601	341	350	46	38	1,105	989
Other noninterest expenses	20,108	20,273	7,190	7,178	4,117	3,904	31,415	31,355
Total noninterest expenses	20,826	20,874	7,531	7,528	4,163	3,942	32,520	32,344
Income (loss) before income taxes	24,346	26,844	2,899	1,402	(3,175)	(4,793)	24,070	23,453
Income tax expense (benefit)	5,394	5,828	710	403	(785)	(1,100)	5,319	5,131
Net income (loss)	$18,952	$21,016	$2,189	$999	($2,390)	($3,693)	$18,751	$18,322
Total assets at period end	$4,520,169	$4,588,419	$75,438	$74,942	$1,407,036	$1,186,431	$6,002,643	$5,849,792
Expenditures for long-lived assets	309	360	13	20	16	26	338	406

(Dollars in thousands)	Commercial Banking		Wealth Management Services		Corporate		Consolidated Total
Nine months ended September 30,	2021	2020	2021	2020	2021	2020	2021	2020
Net interest income (expense)	$105,579	$94,692	($72)	($117)	($1,812)	$626	$103,695	$95,201
Provision for credit losses	(2,000)	10,561	—	—	—	—	(2,000)	10,561
Net interest income (expense) after provision for loan losses	107,579	84,131	(72)	(117)	(1,812)	626	105,695	84,640
Noninterest income	33,510	43,515	31,778	26,248	1,799	1,952	67,087	71,715
Noninterest expenses:
Depreciation and amortization expense	2,040	1,832	1,044	1,058	139	116	3,223	3,006
Other noninterest expenses	60,093	56,571	20,594	20,408	16,335	11,290	97,022	88,269
Total noninterest expenses	62,133	58,403	21,638	21,466	16,474	11,406	100,245	91,275
Income (loss) before income taxes	78,956	69,243	10,068	4,665	(16,487)	(8,828)	72,537	65,080
Income tax expense (benefit)	17,275	14,769	2,412	1,216	(3,832)	(2,168)	15,855	13,817
Net income (loss)	$61,681	$54,474	$7,656	$3,449	($12,655)	($6,660)	$56,682	$51,263
Total assets at period end	$4,520,169	$4,588,419	$75,438	$74,942	$1,407,036	$1,186,431	$6,002,643	$5,849,792
Expenditures for long-lived assets	2,026	1,147	87	86	53	98	2,166	1,331