Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2026

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)	September 30, 2026			December 31, 2025
		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	$1,562	$47	$120,000	$126	$979
Interest rate collars	50,000	55	—	100,000	—	17
Interest rate floors	200,000	12	—	200,000	125	—
Derivatives Designated as Fair Value Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	100,000	2,255	—	100,000	335	—
Derivatives not Designated as Hedging Instruments:
Loan related derivative contracts:
Interest rate contracts with customers	965,418	163	50,933	882,941	6,326	27,959
Mirror contracts with counterparties	965,418	50,777	163	882,941	27,857	6,392
Risk participation agreements	293,229	—	—	304,854	28	1

Mortgage loan commitments:
Interest rate lock commitments	40,517	267	207	30,373	603	12
Forward sale commitments	72,877	1,077	186	90,813	13	828
Gross amounts		56,168	51,536		35,413	36,188
Less: amounts offset (2)		210	210		6,643	6,643
Derivative balances, net of offset		55,958	51,326		28,770	29,545
Less: collateral pledged (3)		—	—		—	—
Net amounts		$55,958	$51,326		$28,770	$29,545

(1)The fair value of derivative assets includes accrued interest receivable of $31 thousand and $35 thousand, respectively, at September 30, 2026 and December 31, 2025. The fair value of derivative liabilities includes accrued interest payable of $47 thousand and $23 thousand, respectively, at September 30, 2026 and December 31, 2025.

(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 amount, and cumulative basis adjustment of the hedged item associated with fair value hedges:

(Dollars in thousands)

September 30, 2026

December 31, 2025

Balance Sheet Location

Carrying Amount of Hedged Item (1)

Cumulative Basis Adjustment

Carrying Amount of Hedged Item (1)

Cumulative Basis Adjustment

Residential real estate loans

$97,790

($2,210)

$99,665

($335)

(1)Represents the carrying amount 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 $577.3 million and $608.5 million, respectively, at September 30, 2026 and December 31, 2025.

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, Net of Tax
	Three Months		Nine Months
Periods ended September 30,	2026	2025	2026	2025
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	$676	$1,576	$3,931	$3,269
Interest rate collars	26	27	54	3

Interest rate floors	14	(81)	—	(81)
Total	$716	$1,522	$3,985	$3,191

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		Nine Months
Periods ended September 30,	Statement of Income Location	2026	2025	2026	2025
Derivatives Designated as Cash Flow Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	Interest income: Interest and fees on loans	$—	($2,163)	($2,845)	($6,418)
Interest rate swaps	Interest expense: FHLB advances	81	195	107	581

Interest rate floors	Interest income: Interest and fees on loans	(38)	(11)	(113)	(11)
Derivatives Designated as Fair Value Hedging Instruments:
Interest rate risk management contracts:
Interest rate swaps	Interest income: Interest and fees on loans	718	75	1,858	(1,223)
Hedged item	Interest income: Interest and fees on loans	(726)	(76)	(1,875)	1,226
Derivatives not Designated as Hedging Instruments:
Loan related derivative contracts:
Interest rate contracts with customers	Loan related derivative income	($23,536)	($25)	($35,353)	$14,129
Mirror interest rate contracts with counterparties	Loan related derivative income	25,002	300	37,789	(13,118)
Risk participation agreements	Loan related derivative income	41	(4)	(119)	37

Mortgage loan commitments:
Interest rate lock commitments	Mortgage banking revenues	(1,030)	240	(531)	755
Forward sale commitments	Mortgage banking revenues	1,921	(26)	1,999	(752)
Total		$2,433	($1,495)	$917	($4,794)

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