Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table presents the notional amounts and fair values of derivative instruments in the Unaudited Consolidated Balance Sheets:


(Dollars in thousands)	June 30, 2025			December 31, 2024
		Fair Value			Fair Value
	Notional Amounts	Derivative Assets	Derivative Liabilities	Notional Amounts	Derivative Assets	Derivative Liabilities
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:

Interest rate swaps (1)	$120,000	$279	$1,011	$120,000	$1,529	$229
Interest rate collars	100,000	—	63	50,000	—	30

Derivatives Designated as Fair Value Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	100,000	179	—	100,000	1,477	—
Derivatives not Designated as Hedging Instruments:
Loan related derivative contracts:
Interest rate contracts with customers	856,539	6,134	32,834	886,912	2,468	51,372
Mirror contracts with counterparties	856,539	32,710	6,221	886,912	51,176	2,529
Risk participation agreements	322,425	37	—	343,935	29	—

Mortgage loan commitments:
Interest rate lock commitments	37,232	785	23	20,238	248	—
Forward sale commitments	84,050	4	1,012	52,100	163	291
Gross amounts		40,128	41,164		57,090	54,451
Less: amounts offset (2)		6,500	6,500		2,788	2,788
Derivative balances, net of offset		33,628	34,664		54,302	51,663
Less: collateral pledged (3)		—	—		—	—
Net amounts		$33,628	$34,664		$54,302	$51,663

(1)The fair value of derivative assets includes accrued interest receivable of $79 thousand and $120 thousand, respectively, at June 30, 2025 and December 31, 2024. There was no accrued interest payable included in the fair value of derivative liabilities at June 30, 2025 or at December 31, 2024.

(2)Interest rate risk management contracts and loan related derivative contracts with counterparties are subject to master netting arrangements.

(3)Collateral contractually required to be pledged to derivative counterparties is in the form of cash. Washington Trust may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

The following table presents the balance sheet location, carrying value, and cumulative basis adjustment of the hedged item associated with fair value hedges:

(Dollars in thousands)

June 30, 2025

December 31, 2024

Balance Sheet Location

Carrying Value of Hedged Item (1)

Cumulative Basis Adjustment

Carrying Value of Hedged Item (1)

Cumulative Basis Adjustment

Residential real estate loans

$99,821

($179)

$98,519

($1,481)

(1)Represents the carrying value of the hedged item associated with fair value hedges on a closed-pool of fixed-rate residential real estate loans that are expected to be outstanding for the designated hedged periods. The amortized cost balance of the closed-pool of residential real estate loans used in the fair value hedges was $634.8 million and $733.2 million, respectively, at June 30, 2025 and December 31, 2024.

Derivative Instruments Effect in Statements of Income and Changes in Shareholders' Equity

The following table presents the effect of derivative instruments in the Unaudited Consolidated Statements of Changes in Shareholders’ Equity:


(Dollars in thousands)	Amounts Recognized in Other Comprehensive Income (Loss), Net of Tax
	Three Months		Six Months
Periods ended June 30,	2025	2024	2025	2024
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	$1,094	$1,846	$1,693	$5,051
Interest rate collars	(18)	(31)	(24)	(31)


Total	$1,076	$1,815	$1,669	$5,020

The following table presents the effect of derivative instruments in the Unaudited Consolidated Statements of Income:


(Dollars in thousands)		Amount of Gain (Loss) Recognized in the Unaudited Consolidated Statements of Income
		Three Months		Six Months
Periods ended June 30,	Statement of Income Location	2025	2024	2025		2024
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	Interest income: Interest and fees on loans	($2,139)	($2,140)	$	(4,255)	$	(4,279)
Interest rate swaps	Interest expense: FHLB advances	192	495	386		988

Derivatives Designated as Fair Value Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	Interest income: Interest and fees on loans	(519)	—	(1,298)		—
Hedged item	Interest income: Interest and fees on loans	520	—	1,302		—
Derivatives not Designated as Hedging Instruments:
Loan related derivative contracts:
Interest rate contracts with customers	Loan related derivative income	$4,357	($6,348)	$14,154		($25,357)
Mirror interest rate contracts with counterparties	Loan related derivative income	(3,690)	6,404	(13,418)		25,714
Risk participation agreements	Loan related derivative income	9	(7)	41		(24)

Mortgage loan commitments:
Interest rate lock commitments	Mortgage banking revenues	(55)	(48)	515		200
Forward sale commitments	Mortgage banking revenues	(87)	177	(726)		243
Total		($1,412)	($1,467)	($3,299)		($2,515)

For derivatives designated as cash flow hedging instruments in the table above, the amounts represent the pre-tax reclassifications from AOCL into earnings.