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Loans (Tables)

9 Months Ended

Sep. 30, 2021

The following is a summary of loans:


(Dollars in thousands)	September 30, 2021	December 31, 2020
Commercial:


Commercial real estate (1)	$1,661,785	$1,633,024
Commercial & industrial (2)	682,774	817,408
Total commercial	2,344,559	2,450,432
Residential Real Estate:


Residential real estate (3)	1,672,364	1,467,312
Consumer:


Home equity	249,874	259,185
Other (4)	19,607	19,061
Total consumer	269,481	278,246
Total loans (5)	$4,286,404	$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 $77.4 million and $199.8 million, respectively, of PPP loans as of September 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 $5.0 million and $1.5 million, respectively, at September 30, 2021 and December 31, 2020 and net unamortized premiums on purchased loans of $489 thousand and $787 thousand, respectively, at September 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
September 30, 2021	30-59	60-89	Over 90	Total Past Due	Current	Total Loans
Commercial:


Commercial real estate	$—	$—	$—	$—	$1,661,785	$1,661,785
Commercial & industrial	1	1	—	2	682,772	682,774
Total commercial	1	1	—	2	2,344,557	2,344,559
Residential Real Estate:


Residential real estate	3,452	2,319	2,927	8,698	1,663,666	1,672,364
Consumer:


Home equity	398	323	103	824	249,050	249,874
Other	19	5	—	24	19,583	19,607
Total consumer	417	328	103	848	268,633	269,481
Total loans	$3,870	$2,648	$3,030	$9,548	$4,276,856	$4,286,404


(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)	Sep 30, 2021	Dec 31, 2020
Commercial:
Commercial real estate	$—	$—
Commercial & industrial	—	—
Total commercial	—	—
Residential Real Estate:
Residential real estate	10,321	11,981
Consumer:
Home equity	655	1,128
Other	—	88
Total consumer	655	1,216
Total nonaccrual loans	$10,976	$13,197
Accruing loans 90 days or more past due	$—	$—

Nonaccrual loans of $4.0 million and $4.7 million, respectively, at September 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 $4.0 million and $3.0 million, respectively, as of September 30, 2021 and December 31, 2020.

As of September 30, 2021 and December 31, 2020, nonaccrual loans secured by one- to four-family residential property amounting to $1.5 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 September 30, 2021.

The following table presents interest income recognized on nonaccrual loans:


(Dollars in thousands)	Three Months		Nine Months

Periods ended September 30,	2021	2020	2021	2020
Commercial:
Commercial real estate	$—	$—	$—	$—
Commercial & industrial	—	—	—	—
Total commercial	—	—	—	—
Residential Real Estate:
Residential real estate	131	70	288	341
Consumer:
Home equity	9	11	44	51
Other	—	—	—	—
Total consumer	9	11	44	51
Total	$140	$81	$332	$392

Summary of TDRs

The following table presents the recorded investment in TDRs and other pertinent information:


(Dollars in thousands)	Sep 30, 2021	Dec 31, 2020
Accruing TDRs	$8,047	$13,418
Nonaccrual TDRs	1,732	2,345
Total TDRs	$9,779	$15,763

Specific reserves on TDRs included in the ACL on loans	$195	$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 September 30,	2021	2020	2021	2020	2021	2020
Commercial:
Commercial real estate	—	—	$—	$—	$—	$—
Commercial & industrial	—	—	—	—	—	—
Total commercial	—	—	—	—	—	—
Residential Real Estate:
Residential real estate	—	4	—	2,092	—	2,092
Consumer:
Home equity	—	1	—	71	—	71
Other	—	—	—	—	—	—
Total consumer	—	1	$—	$71	$—	$71
Total	—	5	$—	$2,163	$—	$2,163



(Dollars in thousands)			Outstanding Recorded Investment
	# of Loans		Pre-Modifications		Post-Modifications
Nine months ended September 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	—	10	—	5,604	—	5,604
Consumer:
Home equity	—	4	—	873	—	873
Other	—	—	—	—	—	—
Total consumer	—	4	$—	$873	$—	$873
Total	—	17	$—	$7,778	$—	$7,778

TDRs by type of modification

The following table presents TDRs occurring during the period indicated by type of modification:




(Dollars in thousands)	Three Months		Nine Months
Periods ended September 30,	2021	2020	2021	2020
Below-market interest rate concession	$—	$—	$—	$—
Payment deferral	—	2,163	—	7,365
Maturity / amortization concession	—	—	—	—
Interest only payments	—	—	—	—
Combination (1)	—	—	—	413

Total	$—	$2,163	$—	$7,778

(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 September 30,	2021	2020	2021	2020
TDRs with a Payment Default:




Residential real estate	1	1	$330	$903

Home equity	—	1	—	47

Totals	1	2	$330	$950



(Dollars in thousands)	# of Loans		Recorded Investment
Nine months ended September 30,	2021	2020	2021	2020
TDRs with a Payment Default:




Residential real estate	1	1	$330	$903

Home equity	—	1	—	47

Totals	1	2	$330	$950

Collateral Dependent Individually Analyzed Loans

The following table presents the carrying value of collateral dependent individually analyzed loans:


(Dollars in thousands)	September 30, 2021		December 31, 2020
	Carrying Value	Related Allowance	Carrying Value	Related Allowance
Commercial:
Commercial real estate (1)	$4,009	$321	$1,792	$—
Commercial & industrial (2)	—	—	451	—
Total commercial	4,009	321	2,243	—
Residential Real Estate:
Residential real estate (3)	3,716	538	5,947	38
Consumer:
Home equity (3)	—	—	254	183
Other	—	—	—	—
Total consumer	—	—	254	183
Total	$7,725	$859	$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 September 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	$260,038	$250,606	$305,492	$215,877	$179,618	$322,267	$8,466	$2,279	$1,544,643
Special Mention	6,002	786	29,670	37,010	16,091	23,209	364	—	113,132
Classified	—	4,010	—	—	—	—	—	—	4,010
Total CRE	266,040	255,402	335,162	252,887	195,709	345,476	8,830	2,279	1,661,785
C&I:
Pass	120,412	96,441	106,652	90,595	52,440	99,439	87,001	1,096	654,076
Special Mention	—	—	642	4,641	6,419	13,019	1,186	—	25,907
Classified	—	—	—	—	—	2,791	—	—	2,791
Total C&I	120,412	96,441	107,294	95,236	58,859	115,249	88,187	1,096	682,774





Residential Real Estate:
Residential real estate:
Current	573,380	387,179	174,478	99,480	95,794	333,355	—	—	1,663,666
Past Due	—	1,407	272	1,299	763	4,957	—	—	8,698
Total residential real estate	573,380	388,586	174,750	100,779	96,557	338,312	—	—	1,672,364
Consumer:
Home equity:
Current	8,170	7,294	4,315	2,682	1,125	3,939	213,010	8,515	249,050
Past Due	—	—	—	—	—	185	241	398	824
Total home equity	8,170	7,294	4,315	2,682	1,125	4,124	213,251	8,913	249,874
Other:
Current	6,128	3,936	1,381	708	784	6,360	286	—	19,583
Past Due	14	10	—	—	—	—	—	—	24
Total other	6,142	3,946	1,381	708	784	6,360	286	—	19,607




Total Loans	$974,144	$751,669	$622,902	$452,292	$353,034	$809,521	$310,554	$12,288	$4,286,404

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.