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Loans (Tables)

9 Months Ended

Sep. 30, 2022

The following table presents a summary of loans:


(Dollars in thousands)	September 30, 2022	December 31, 2021
Commercial:


Commercial real estate (1)	$1,762,687	$1,639,062
Commercial & industrial (2)	652,758	641,555
Total commercial	2,415,445	2,280,617
Residential Real Estate:


Residential real estate (3)	2,144,098	1,726,975
Consumer:


Home equity	273,742	247,697
Other (4)	15,588	17,636
Total consumer	289,330	265,333
Total loans (5)	$4,848,873	$4,272,925

(1)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)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 $1.4 million and $38.0 million, respectively, of PPP loans as of September 30, 2022 and December 31, 2021.

(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 $10.7 million and $6.7 million, respectively, at September 30, 2022 and December 31, 2021 and net unamortized premiums on purchased loans of $329 thousand and $414 thousand, respectively, at September 30, 2022 and December 31, 2021.

Past Due Loans

The following tables present an aging analysis of past due loans, segregated by class of loans:


(Dollars in thousands)	Days Past Due
September 30, 2022	30-59	60-89	Over 90	Total Past Due	Current	Total Loans
Commercial:
Commercial real estate	$—	$—	$—	$—	$1,762,687	$1,762,687
Commercial & industrial	4	—	—	4	652,754	652,758
Total commercial	4	—	—	4	2,415,441	2,415,445
Residential Real Estate:
Residential real estate	1,607	219	5,430	7,256	2,136,842	2,144,098
Consumer:
Home equity	202	—	50	252	273,490	273,742
Other	17	—	—	17	15,571	15,588
Total consumer	219	—	50	269	289,061	289,330
Total loans	$1,830	$219	$5,480	$7,529	$4,841,344	$4,848,873


(Dollars in thousands)	Days Past Due
December 31, 2021	30-59	60-89	Over 90	Total Past Due	Current	Total Loans
Commercial:
Commercial real estate	$—	$—	$—	$—	$1,639,062	$1,639,062
Commercial & industrial	3	—	—	3	641,552	641,555
Total commercial	3	—	—	3	2,280,614	2,280,617
Residential Real Estate:
Residential real estate	1,784	3,176	4,662	9,622	1,717,353	1,726,975
Consumer:
Home equity	580	77	108	765	246,932	247,697
Other	21	—	—	21	17,615	17,636
Total consumer	601	77	108	786	264,547	265,333
Total loans	$2,388	$3,253	$4,770	$10,411	$4,262,514	$4,272,925

Nonaccrual Loans

The following table is a summary of nonaccrual loans, segregated by class of loans:


(Dollars in thousands)	Sep 30, 2022	Dec 31, 2021
Commercial:
Commercial real estate	$—	$—
Commercial & industrial	—	—
Total commercial	—	—
Residential Real Estate:
Residential real estate	11,700	13,576
Consumer:
Home equity	422	627
Other	—	—
Total consumer	422	627
Total nonaccrual loans	$12,122	$14,203
Accruing loans 90 days or more past due	$—	$—

No ACL was deemed necessary on nonaccrual loans with carrying values of $4.3 million and $4.2 million, respectively, as of September 30, 2022 and December 31, 2021.

Nonaccrual loans of $5.1 million and $4.8 million, respectively, at September 30, 2022 and December 31, 2021 were current as to the payment of principal and interest.

As of September 30, 2022 and December 31, 2021, nonaccrual loans secured by one- to four-family residential property amounting to $4.4 million and $1.5 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, 2022.

The following table presents interest income recognized on nonaccrual loans:


(Dollars in thousands)	Three Months		Nine Months

Periods ended September 30,	2022	2021	2022	2021
Commercial:
Commercial real estate	$—	$—	$—	$—
Commercial & industrial	—	—	—	—
Total commercial	—	—	—	—
Residential Real Estate:
Residential real estate	77	131	242	288
Consumer:
Home equity	9	9	21	44
Other	—	—	3	—
Total consumer	9	9	24	44
Total	$86	$140	$266	$332

Summary of TDRs

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


(Dollars in thousands)	Sep 30, 2022	Dec 31, 2021
Accruing TDRs	$7,275	$16,564
Nonaccrual TDRs	2,890	2,819
Total TDRs	$10,165	$19,383

Specific reserves on TDRs included in the ACL on loans	$132	$148
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,	2022	2021	2022	2021	2022	2021
Commercial:
Commercial real estate	—	—	$—	$—	$—	$—
Commercial & industrial	2	—	844	—	844	—
Total commercial	2	—	844	—	844	—






Total	2	—	$844	$—	$844	$—



(Dollars in thousands)			Outstanding Recorded Investment
	# of Loans		Pre-Modifications		Post-Modifications
Nine months ended September 30,	2022	2021	2022	2021	2022	2021
Commercial:
Commercial real estate	—	—	$—	$—	$—	$—
Commercial & industrial	2	—	844	—	844	—
Total commercial	2	—	844	—	844	—






Total	2	—	$844	$—	$844	$—

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,	2022	2021	2022	2021
Below-market interest rate concession	$—	$—	$—	$—
Payment deferral	—	—	—	—
Maturity / amortization concession	—	—	—	—
Interest only payments	—	—	—	—
Combination (1)	844	—	844	—

Total	$844	$—	$844	$—

(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 table presents information on TDRs modified within the previous 12 months for which there was a payment default:



(Dollars in thousands)	Three Months				Nine Months
	# of Loans		Recorded Investment		# of Loans		Recorded Investment
Periods ended September 30,	2022	2021	2022	2021	2022	2021	2022	2021
TDRs with a Payment Default:




Residential real estate	—	1	$—	$330	—	1	$—	$330

Collateral Dependent Individually Analyzed Loans

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


(Dollars in thousands)	September 30, 2022		December 31, 2021
	Carrying Value	Related Allowance	Carrying Value	Related Allowance
Commercial:
Commercial real estate (1)	$3,609	$—	$10,603	$—
Commercial & industrial	—	—	—	—
Total commercial	3,609	—	10,603	—
Residential Real Estate:
Residential real estate (2)	4,612	520	3,803	534
Consumer:
Home equity (2)	71	—	—	—
Other	—	—	—	—
Total consumer	71	—	—	—
Total	$8,292	$520	$14,406	$534

(1) Secured by income-producing property.

(2) 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, 2022:


(Dollars in thousands)	Term Loans Amortized Cost by Origination Year
	2022	2021	2020	2019	2018	Prior	Revolving Loans Amortized Cost	Revolving Loans Converted to Term Loans	Total
Commercial:
CRE:
Pass	$461,435	$354,011	$175,390	$193,425	$175,084	$316,290	$3,579	$1,466	$1,680,680
Special Mention	14,142	22,345	406	13,115	17,567	10,633	190	—	78,398
Classified	—	—	510	—	2,685	414	—	—	3,609
Total CRE	475,577	376,356	176,306	206,540	195,336	327,337	3,769	1,466	1,762,687
C&I:
Pass	86,981	63,805	76,341	88,235	94,240	121,837	103,130	798	635,367
Special Mention	1,605	—	—	—	1,444	12,123	1,497	—	16,669
Classified	—	—	—	26	—	—	696	—	722
Total C&I	88,586	63,805	76,341	88,261	95,684	133,960	105,323	798	652,758





Residential Real Estate:
Residential real estate:
Current	622,899	718,371	283,621	127,157	74,789	310,005	—	—	2,136,842
Past Due	—	—	1,397	1,156	2,107	2,596	—	—	7,256
Total residential real estate	622,899	718,371	285,018	128,313	76,896	312,601	—	—	2,144,098
Consumer:
Home equity:
Current	15,354	8,709	3,842	2,643	2,106	3,428	229,083	8,326	273,491
Past Due	—	—	—	—	—	81	95	75	251
Total home equity	15,354	8,709	3,842	2,643	2,106	3,509	229,178	8,401	273,742
Other:
Current	3,182	4,400	1,742	736	258	4,987	266	—	15,571
Past Due	17	—	—	—	—	—	—	—	17
Total other	3,199	4,400	1,742	736	258	4,987	266	—	15,588




Total Loans	$1,205,615	$1,171,641	$543,249	$426,493	$370,280	$782,394	$338,536	$10,665	$4,848,873

The following table summarizes the Corporation’s loan portfolio by credit quality indicator and loan portfolio segment as of December 31, 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	$417,705	$212,649	$260,940	$206,164	$163,132	$266,067	$7,015	$2,202	$1,535,874
Special Mention	9,089	489	33,982	28,432	—	20,273	320	—	92,585
Classified	—	958	—	2,685	6,959	1	—	—	10,603
Total CRE	426,794	214,096	294,922	237,281	170,091	286,341	7,335	2,202	1,639,062
C&I:
Pass	116,959	78,601	104,827	87,619	51,579	83,182	89,686	911	613,364
Special Mention	—	—	606	4,599	6,195	15,605	1,186	—	28,191
Classified	—	—	—	—	—	—	—	—	—
Total C&I	116,959	78,601	105,433	92,218	57,774	98,787	90,872	911	641,555





Residential Real Estate:
Residential real estate:
Current	733,658	353,742	158,140	85,656	88,365	297,792	—	—	1,717,353
Past Due	—	1,402	1,167	2,379	763	3,911	—	—	9,622
Total residential real estate	733,658	355,144	159,307	88,035	89,128	301,703	—	—	1,726,975
Consumer:
Home equity:
Current	10,434	5,850	3,703	2,380	1,064	3,592	211,488	8,421	246,932
Past Due	—	—	185	—	—	245	115	220	765
Total home equity	10,434	5,850	3,888	2,380	1,064	3,837	211,603	8,641	247,697
Other:
Current	5,536	3,264	1,313	407	747	6,090	258	—	17,615
Past Due	21	—	—	—	—	—	—	—	21
Total other	5,557	3,264	1,313	407	747	6,090	258	—	17,636




Total Loans	$1,293,402	$656,955	$564,863	$420,321	$318,804	$696,758	$310,068	$11,754	$4,272,925

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.