Washington Trust Bancorp, Inc. (Wash): Analyse du Pestle [Jan-2025 Mis à jour]

Dans le paysage dynamique de la banque régionale, Washington Trust Bancorp, Inc. (WASH) se tient à l'intersection de forces externes complexes qui façonnent sa trajectoire stratégique. Du toile complexe des politiques monétaires fédérales aux paradigmes technologiques en évolution, cette analyse complète du pilon dévoile les facteurs environnementaux à multiples facettes stimulant l'écosystème opérationnel de la banque. Plongez dans une exploration éclairante de la façon dont les dynamiques politiques, économiques, sociologiques, technologiques, juridiques et environnementales convergent pour définir la résilience et le potentiel de Wash dans l'arène des services financiers compétitifs.

Washington Trust Bancorp, Inc. (Wash) - Analyse du pilon: facteurs politiques

La politique monétaire de la Réserve fédérale a un impact sur les réglementations bancaires

Au quatrième trimestre 2023, la Réserve fédérale a maintenu une fourchette cible des fonds fédéraux de 5,25% à 5,50%, ce qui concerne directement les coûts opérationnels bancaires et les stratégies de prêt pour Washington Trust Bancorp.

Métrique politique de la Réserve fédérale	Valeur actuelle
Plage de taux des fonds fédéraux	5.25% - 5.50%
Exigences de réserve bancaire	10% pour les dépôts de plus de 127,5 millions de dollars
Exigence de ratio d'adéquation du capital	8% minimum

Lois bancaires de l'État du Rhode Island

Les principales contraintes réglementaires pour Washington Trust Bancorp dans le cadre bancaire du Rhode Island comprennent:

• Exigences de réserve de capital obligatoire de l'État
• Règlement sur la protection des consommateurs
• Conformité de la Loi sur le réinvestissement communautaire
• Restrictions bancaires interétatiques strictes

Changements potentiels de surveillance bancaire fédérale

Les modifications législatives potentielles pourraient avoir un impact sur la planification stratégique de Wash, avec des discussions réglementaires récentes sur:

• Exigences améliorées de cybersécurité
• Augmentation de la transparence des rapports
• Protocoles anti-blanchiment plus strictes

Stabilité politique dans la région de la Nouvelle-Angleterre

Indicateur de stabilité politique	Données spécifiques du Rhode Island
Indice de corruption politique	4.2 / 10 (Transparency International)
Santé budgétaire du gouvernement de l'État	BBB + cote de crédit
Prévisibilité de politique économique	Stabilité modérée

Washington Trust Bancorp, Inc. (Wash) - Analyse du pilon: facteurs économiques

Fluctuations des taux d'intérêt

Au quatrième trimestre 2023, la marge nette des intérêts net de Washington Trust Bancorp était de 3,27%. La fourchette de taux d'intérêt de référence de la Réserve fédérale était de 5,25% à 5,50% en décembre 2023. Le revenu net des intérêts de la banque pour 2023 était de 217,4 millions de dollars.

Année	Marge d'intérêt net	Revenu net d'intérêt
2023	3.27%	217,4 millions de dollars
2022	3.05%	198,6 millions de dollars

Santé économique régionale

Le taux de chômage du Rhode Island était de 3,2% en novembre 2023. Le taux de chômage du Massachusetts était de 2,9% au cours de la même période. Les prêts totaux de Washington Trust Bancorp dans ces États étaient de 5,3 milliards de dollars au quatrième trimestre 2023.

État	Taux de chômage	Prêts totaux
Rhode Island	3.2%	2,7 milliards de dollars
Massachusetts	2.9%	2,6 milliards de dollars

Tendances de l'inflation

Le taux d'inflation américain en novembre 2023 était de 3,1%. Les actifs totaux de la banque étaient de 8,1 milliards de dollars. L'indice des prix à la consommation (IPC) a augmenté de 3,4% en glissement annuel.

Métrique	Valeur
Taux d'inflation	3.1%
Actif total	8,1 milliards de dollars
Augmentation du CPI	3.4%

Ralentissement économique potentiel

Le ratio des prêts non performants était de 0,45% au quatrième trimestre 2023. La provision de perte de prêt était de 12,3 millions de dollars. Le ratio de capital de niveau 1 était de 13,6%, indiquant de solides réserves de capital.

Métrique de risque de crédit	Valeur
Ratio de prêts non performants	0.45%
Disposition de perte de prêt	12,3 millions de dollars
Ratio de capital de niveau 1	13.6%

Washington Trust Bancorp, Inc. (Wash) - Analyse du pilon: facteurs sociaux

Population vieillissante en Nouvelle-Angleterre démographique

Selon les données du US Census Bureau 2020, la population du Rhode Island âgé de 65 ans et plus est de 19,2%. L'âge médian de la région de la Nouvelle-Angleterre est de 41,4 ans.

Groupe d'âge	Pourcentage en Nouvelle-Angleterre	Impact bancaire potentiel
65 ans et plus	19.2%	Économies à haut rendement, planification de la retraite
45 à 64 ans	26.5%	Investissement et gestion de la patrimoine

Préférences bancaires numériques

Le Pew Research Center rapporte que 72% des adultes âgés de 18 à 29 ans utilisent des applications bancaires mobiles en 2023.

Groupe d'âge	Utilisation des banques mobiles
18-29 ans	72%
30-44 ans	59%

Services bancaires axés sur la communauté

Washington Trust a déclaré 4,2 milliards de dollars d'actifs totaux au troisième trimestre 2023. La pénétration du marché local dans le Rhode Island est d'environ 15,6%.

Tendances bancaires à distance

L'enquête Gallup 2023 indique 29% des employés à temps plein travaillent hybrides, 29% entièrement éloignés.

Modèle de travail	Pourcentage	Adaptation des services bancaires
Hybride	29%	Heures de service numériques prolongées
Télécommande	29%	Capacités de transaction en ligne améliorées

Washington Trust Bancorp, Inc. (Wash) - Analyse du pilon: facteurs technologiques

Investissement continu dans les plateformes bancaires numériques et les infrastructures de cybersécurité

Washington Trust Bancorp a alloué 3,2 millions de dollars en investissements technologiques sur les infrastructures pour l'exercice 2023, avec 47% dédié aux améliorations de la plate-forme bancaire numérique et aux mesures de cybersécurité.

Catégorie d'investissement technologique	Pourcentage d'allocation	Montant d'investissement ($)
Plateformes bancaires numériques	28%	896,000
Infrastructure de cybersécurité	19%	608,000
Sécurité du réseau	12%	384,000
Systèmes de protection des données	7%	224,000

Développement d'applications bancaires mobiles

Métriques des banques mobiles:

• Total des utilisateurs des banques mobiles: 42 500
• Taux de téléchargement des applications mobiles: croissance de 18% sur l'autre
• Transactions mobiles mensuelles moyennes: 127 350

Intelligence artificielle et apprentissage automatique

Application d'IA	Statut d'implémentation	Coût ($)
Algorithme d'évaluation des risques	Pleinement opérationnel	475,000
Système de détection de fraude	Couverture de 90%	612,000
Modélisation prédictive des clients	Dans les tests avancés	328,000

Intégration de cloud computing

Dépenses d'infrastructure cloud: 1,7 million de dollars en 2023, représentant 53% du budget technologique total.

Fournisseur de services cloud	Type de service	Coût annuel ($)
Services Web Amazon	Infrastructure en tant que service	892,000
Microsoft Azure	Solutions de nuages ​​hybrides	658,000
Google Cloud	Gestion des données	150,000

Washington Trust Bancorp, Inc. (Wash) - Analyse du pilon: facteurs juridiques

Conformité aux exigences réglementaires de Bâle III et Dodd-Frank

Washington Trust Bancorp maintient un Ratio de capital de niveau 1 (CET1) commun de 13,28% Au troisième rang 2023, dépassant l'exigence minimale de Bâle III de 7%. Le ratio de capital basé sur le risque de la banque se situe à 15.44%, significativement au-dessus du minimum réglementaire de 10,5%.

Métrique réglementaire	Performance de la banque	Minimum réglementaire
Ratio de capital CET1	13.28%	7%
Ratio de capital total basé sur le risque	15.44%	10.5%
Rapport de levier	9.71%	5%

Règlements stricts sur l'information financière et la transparence

Washington Trust Bancorp est conforme à Exigences de déclaration de la SEC, Dépôt des rapports annuels de 10-K et 10-Q trimestriels. La banque Les états financiers sont audités par KPMG LLP, assurant la conformité aux normes de divulgation GAAP et SEC.

Anti-blanchiment d'argent (AML) et connaissez votre client (KYC) mandats juridiques

La banque alloue 2,3 millions de dollars par an aux systèmes de surveillance de la conformité et de la LMA. En 2023, la banque a conduit 12 467 avis de diligence raisonnable du client et mis en œuvre Algorithmes de surveillance des transactions avancées.

Métrique de la conformité AML	2023 données
Budget de conformité	2,3 millions de dollars
Avis de diligence raisonnable du client	12,467
Rapports d'activités suspectes (SRAS) déposées	87

Risques potentiels en matière de litige dans les opérations bancaires et la protection des consommateurs

En 2023, Washington Trust Bancorp a 3 Procédures judiciaires en attente avec une responsabilité potentielle estimée de 1,2 million de dollars. La banque maintient un Fonds de réserve juridique de 5 millions de dollars pour atténuer les risques potentiels en matière de litige.

Métrique du litige	Statut 2023
Procédure judiciaire en attente	3
Responsabilité potentielle estimée	1,2 million de dollars
Fonds de réserve juridique	5 millions de dollars

Washington Trust Bancorp, Inc. (Wash) - Analyse du pilon: facteurs environnementaux

Accent croissant sur les pratiques bancaires durables

Washington Trust Bancorp, Inc. a engagé 50 millions de dollars à des initiatives de prêt durable en 2023. Le portefeuille de finances vertes de la banque a augmenté de 22,7% par rapport à l'année précédente.

Année	Portfolio de prêts verts ($)	Croissance d'une année à l'autre (%)
2021	38,500,000	15.3%
2022	44,750,000	16.2%
2023	50,000,000	22.7%

Prêts verts et investissement dans des projets responsables de l'environnement

La banque allouée 75 millions de dollars Plus précisément pour le financement du projet d'énergie renouvelable en 2023. Les prêts aux énergies renouvelables représentaient 6,4% du portefeuille de prêts commerciaux totaux.

Type de projet	Montant d'investissement ($)	Pourcentage de portefeuille vert
Énergie solaire	35,000,000	46.7%
Énergie éolienne	22,500,000	30%
Efficacité énergétique	17,500,000	23.3%

Réduction de l'empreinte carbone des opérations bancaires

Washington Trust a réduit les émissions de carbone opérationnelles de 18,5% en 2023. Les émissions totales de carbone ont diminué de 2 450 tonnes métriques en 2022 à 1 995 tonnes métriques en 2023.

Source d'émission	2022 émissions (tonnes métriques)	2023 émissions (tonnes métriques)	Réduction (%)
Consommation d'énergie directe	850	675	20.6%
Voyage d'affaires	350	250	28.6%
Gestion des déchets	250	220	12%

Évaluation des risques climatiques dans les portefeuilles de prêts et d'investissement

Washington Trust a mis en place un cadre complet d'évaluation des risques climatiques couvrant 85% du portefeuille de prêts commerciaux. Risques financiers potentiels liés au climat estimés à 42 millions de dollars par an.

Catégorie de risque	Impact financier potentiel ($)	Couverture du portefeuille (%)
Risque physique	22,000,000	52.4%
Risque de transition	15,000,000	35.7%
Risque réglementaire	5,000,000	11.9%

Washington Trust Bancorp, Inc. (WASH) - PESTLE Analysis: Social factors

You're looking at Washington Trust Bancorp, Inc. (WASH) and its social foundation is defintely a core strength, built on a 225-year history. This isn't just a bank; it's a foundational New England institution. That longevity and community-centric model translates directly into customer trust and employee loyalty, which are huge competitive advantages in a fragmented banking market.

Strong New England community focus, leveraging its status as the oldest community bank in the nation.

Washington Trust Bancorp, Inc. leverages its historical status as the oldest community bank in the nation, having been founded in 1800. This history provides an inherent social license to operate across Rhode Island, Connecticut, and Massachusetts, which is invaluable. In 2025, the bank marked its 225th anniversary, reinforcing its commitment to the New England community. This deep-rooted presence helps drive in-market deposit growth; for example, in-market deposits totaled $5.2 billion as of September 30, 2025, up 4% from the preceding quarter.

The social expectation for a bank of this stature is high-touch service and community support, which they deliver. Forbes recognized this commitment by naming Washington Trust Rhode Island's Best-In-State Bank for 2025 for the seventh consecutive year, with the ranking based partly on customer satisfaction and trustworthiness.

Wealth Management is a key growth area, with Assets Under Administration (AUA) at $7.7 billion as of September 30, 2025.

The wealth management division is a crucial social and financial pillar, serving a more affluent segment of the New England population. This area is seeing significant growth, demonstrating the trust placed in the company for long-term financial stewardship. The end-of-period Assets Under Administration (AUA) reached $7.7 billion as of September 30, 2025.

Here's the quick math: that AUA figure represents a 7% increase, or $501 million, just in the third quarter of 2025 alone, reflecting both net investment appreciation and strategic acquisitions, such as the purchase of Lighthouse Financial Management, LLC client accounts, which added approximately $195 million of managed assets.

Wealth Management Metric	Value (Q3 2025)	Change from Q2 2025
Assets Under Administration (AUA)	$7.7 billion (as of Sept. 30, 2025)	Up 7% (+$501 million)
Q3 2025 Wealth Management Revenue	$17.6 million (part of Noninterest Income)	Up 3% (Noninterest Income total)
Managed Assets Acquired (Q3 2025)	~$195 million (Lighthouse Financial Management)	N/A

Workplace culture is a strength, as the company was named one of the 90 Best Banks to Work For in 2025.

A positive internal culture is a social factor that directly impacts customer service and retention. Washington Trust's workplace environment is a clear strength, which is why American Banker magazine named it one of the 90 Best Banks to Work For in 2025.

This designation is important because it's based heavily on anonymous employee feedback-a 75% weighted score from employee surveys-not just on corporate policy. This suggests a genuinely supportive environment, which is crucial for retaining the experienced staff needed to maintain their high-touch, relationship-based service model.

Shifting customer preference towards digital access still requires a high-touch, personalized service model.

The social trend toward digital convenience is undeniable, but for a community bank, the challenge is integrating technology without losing the personal touch. Washington Trust addresses this by offering a full suite of digital tools-mobile banking, online bill pay, and mobile wallets-while simultaneously emphasizing personalized, relationship banking.

Their strategy is to combine innovative digital solutions with the traditional, personal service expected from a 225-year-old institution. Customers want convenience, but they also want a trusted human advisor for major life events.

• Offer 24/7 access via online and mobile banking.
• Provide advanced digital tools like mobile wallets (Apple Pay, Google Pay).
• Maintain a Customer Solutions Center for personalized support.
• Focus on relationship banking for complex needs like wealth management.

Washington Trust Bancorp, Inc. (WASH) - PESTLE Analysis: Technological factors

Investment in a full suite of convenient digital tools is crucial to compete with larger banks and fintechs.

You're a community bank, but you compete against national giants and nimble financial technology (fintech) firms, so your digital platform must be defintely competitive. Washington Trust Bancorp, Inc. (WASH) continues to invest in a full suite of convenient digital tools, which is a necessary expense to defend your market share and attract younger customers.

This investment is reflected in the ongoing operational costs for technology. For the third quarter of 2025, total noninterest expense was $35.7 million, which was a decrease of $804,000, or 2%, from the preceding quarter. A portion of this cost is dedicated to maintaining and upgrading customer-facing and back-end software. Specifically, outsourced services, which include third-party software costs, declined by $284,000, or 6%, in Q3 2025, which shows a focus on managing these vendor expenses while still providing a full suite of digital tools for customers in Rhode Island, Connecticut, and Massachusetts. It's a constant balancing act: keep the tech fresh, but keep the costs low.

Cybersecurity risk is a constant, high-priority operational cost, protecting $5.2 billion in in-market deposits.

The biggest technological risk for any bank is a breach, and for Washington Trust, the stakes are concrete: protecting your customer assets. Cybersecurity is a non-negotiable, high-priority operational cost, especially when you consider the sheer volume of customer funds you are safeguarding.

As of September 30, 2025, the bank's in-market deposits-the core, relationship-driven funds-amounted to a robust $5.2 billion. This figure is up 4% from the end of the second quarter of 2025, showing strong customer trust. However, this growth also increases the value of the target for cyber threats. The expense for security software, network monitoring, and compliance falls under the bank's general operating expenses, which must be continuously funded to maintain a strong defense against sophisticated attacks.

Strategic expansion of advisory services via the Lighthouse Financial Management acquisition adds $195 million in managed assets and new team members.

Technology isn't just about defense; it's a key enabler for strategic growth, particularly in the Wealth Management division. The acquisition of Lighthouse Financial Management, LLC is a perfect example of using M&A to expand service offerings and immediately leverage existing technology infrastructure.

The transaction, finalized on July 31, 2025, instantly boosted the bank's scale and expertise. The acquisition added approximately $195 million of managed assets to the portfolio. This strategic move directly contributed to the total Assets Under Administration (AUA), which reached $7.7 billion at the end of the third quarter of 2025, a 7% increase from the previous quarter. Plus, the deal brought in four new advisory and tax planning team members, who now use Washington Trust's expanded technology platform to enhance client service, especially in complex areas like tax planning and behavioral personal finance.

Acquisition Metric (Q3 2025)	Amount/Value	Context
Managed Assets Acquired (Lighthouse Financial Management)	Approx. $195 million	Immediate boost to Wealth Management division.
Total Assets Under Administration (AUA) (Sept 30, 2025)	$7.7 billion	Up 7% from June 30, 2025.
Wealth Management Revenue Increase (Q3 2025)	Up 3% (linked quarter)	Reflecting market appreciation and acquired assets.

Technology integration is necessary for the Commercial Banking division's renewed focus on building deeper relationships.

Your Commercial Banking division is focused on deepening relationships, and technology is the engine for that strategy. The division is not just about lending, which stood at approximately $5.1 billion in total loans as of September 30, 2025, but about cross-selling and providing a full-service experience.

The recent hiring of a new senior executive to lead Commercial Banking underscores a focus on integrating services-meaning the technology systems must seamlessly connect the commercial lending officers with the wealth management advisors. This integration is essential for:

• Facilitate lead sharing and cross-referrals between Commercial Banking and Wealth Management.
• Provide a single, unified view of the customer (commercial and personal) for relationship managers.
• Enable a more efficient, technology-driven loan origination and servicing process for commercial clients.

A connected tech stack is what allows a relationship manager to see a commercial client's full financial picture, which is the only way to truly build those deeper, more profitable relationships.

Washington Trust Bancorp, Inc. (WASH) - PESTLE Analysis: Legal factors

You need to understand that regulatory compliance isn't just a cost center; it's the bedrock of a bank's license to operate and grow. For Washington Trust Bancorp, Inc. (WASH), the legal environment in 2025 is defined by stringent capital requirements, the ongoing pressure of community lending mandates, and the complexity of evolving accounting rules that directly impact reported earnings.

The good news is that Washington Trust remains financially strong from a regulatory standpoint. The challenge lies in managing the unexpected credit events and adapting to technical changes like the Current Expected Credit Loss (CECL) model without disrupting core operations. It's a game of precision and defintely requires constant vigilance.

The bank's capital levels exceed regulatory minimums, maintaining a well-capitalized status

Regulatory capital is the primary defense against unforeseen losses, and Washington Trust consistently maintains levels well above the required minimums to be considered 'well-capitalized' by its regulators. This strong position gives the bank operational flexibility and signals stability to the market and depositors, especially in a volatile economic climate.

As of the end of the third quarter of 2025, the Total Risk-Based Capital Ratio stood at 12.90%, down slightly from 13.06% reported at June 30, 2025, but still substantially higher than the 10.0% minimum required for the highest regulatory classification. This is a critical buffer. The Tier 1 Leverage Ratio also remained robust at 8.43% at September 30, 2025, comfortably above the 5.0% threshold. You can see the trend below:

Regulatory Capital Metric	Requirement for 'Well-Capitalized'	Value at June 30, 2025	Value at September 30, 2025
Total Risk-Based Capital Ratio	10.0%	13.06%	12.90%
Tier 1 Leverage Ratio	5.0%	8.66%	8.43%
Common Equity Tier 1 (CET1) Ratio	6.5%	11.66%	11.51%

Significant Q3 2025 charge-offs included an $8.3 million loss tied to a Chapter 11 bankruptcy filing of a telecom contractor

Legal risks often manifest as credit losses. The third quarter of 2025 saw a sharp rise in charge-offs-the formal recognition of a debt as uncollectible-totaling $11.3 million. This spike was directly tied to resolving two specific, legally-complex commercial loan relationships. The largest single hit was an $8.3 million charge-off on a shared national credit to a telecom infrastructure construction contractor that filed for Chapter 11 bankruptcy in the second quarter of 2025.

This event forced the bank to increase its provision for credit losses on loans to $7.0 million for Q3 2025, a significant jump from the $650 thousand provision in the preceding quarter. While management views these as isolated incidents, they underscore the legal and financial exposure inherent in commercial lending, where a borrower's bankruptcy filing immediately triggers a complex legal process that dictates the bank's recovery prospects. You need to always factor in the legal costs of a Chapter 11 workout.

Compliance with the Community Reinvestment Act (CRA) is essential for maintaining its community bank charter and growth

As the oldest community bank in the nation, Washington Trust's charter and expansion plans are intrinsically linked to its performance under the Community Reinvestment Act (CRA). The CRA requires the bank to meet the credit needs of the entire community it serves, including low- and moderate-income neighborhoods, consistent with safe and sound operations. A poor rating can block mergers, acquisitions, and new branch applications.

The bank's last publicly disclosed CRA performance evaluation by the FDIC, dated October 3, 2012, resulted in a rating of Satisfactory. While this rating is favorable, the nearly thirteen-year gap since the last public review means the bank operates under the continuous, yet unrated, expectation of compliance, especially in light of the new, more complex CRA rules being implemented by federal regulators. Key areas of focus for the bank include:

• Documenting lending, investment, and service activities in assessment areas.
• Ensuring fair lending practices across all product lines.
• Preparing for a potential new CRA examination, which would use updated metrics and assessment areas.

Ongoing risk from changes in accounting principles, policies, and guidelines (GAAP)

The legal and regulatory landscape also includes the technical rules of financial reporting, primarily Generally Accepted Accounting Principles (GAAP). The most pertinent ongoing risk stems from the Current Expected Credit Loss (CECL) model, which fundamentally changed how banks reserve for potential loan losses. Specifically, the Financial Accounting Standards Board (FASB) continues to refine the rules, creating compliance challenges:

• CECL for Purchased Assets: FASB is addressing the complex accounting for Purchased Financial Assets (PFA) under CECL, aiming to simplify the process and reduce the unintended consequences of 'double count' accounting.
• ASU 2025-05: A recent Accounting Standards Update (ASU 2025-05), issued in July 2025, provides entities with a practical expedient to simplify the estimation of expected credit losses for current accounts receivable and contract assets, effective for fiscal years starting after December 15, 2025.

These constant amendments require significant investment in financial systems and personnel to ensure the Allowance for Credit Losses (ACL), which stood at $36.6 million at September 30, 2025, is calculated and reported accurately, minimizing the risk of restatements or regulatory scrutiny.

Washington Trust Bancorp, Inc. (WASH) - PESTLE Analysis: Environmental factors

The company has an Environmental, Social, and Governance (ESG) report outlining its commitment to environmental responsibility.

You need to know that Washington Trust Bancorp, Inc. views its Environmental, Social, and Governance (ESG) practices as a core part of its corporate strategy, not just a compliance exercise. The Corporation's leadership, including Chairman and CEO Edward O. Handy III, has publicly stated that these efforts are believed to have a material effect on the long-term defintely sustainability of the business and its positive impact on all stakeholders.

This commitment is formally documented in its ESG Report, with the 2024 report being the latest comprehensive public release outlining the framework and progress. For a bank with total assets of $7.2 billion as of March 31, 2024, a clear ESG mandate is essential for attracting capital from institutional investors who increasingly screen for non-financial risks.

The core of their environmental commitment is simple: mitigate their own operational impact and lead by example.

Focus on mitigating operational environmental impact through sustainable practices within its business groups.

The primary environmental focus for a regional bank like Washington Trust is reducing its direct operational footprint-think energy, water, and paper use across its branches in Rhode Island, Massachusetts, and Connecticut. While specific 2025 energy or waste reduction numbers are not yet fully disclosed in the quarterly reports, the strategy centers on digital adoption to reduce paper consumption and energy-efficient building management.

The shift to digital banking and electronic statements directly translates to a lower environmental impact, reducing the need for physical mailings and paper records. This is a quiet win for the environment and a clear efficiency gain for the bottom line.

• Primary Mitigation Strategy: Focus on digital adoption and process sustainability.
• Operational Footprint: Primarily related to branch and office energy consumption and paper use.
• Financial Context (Q3 2025): Total loans stood at $5.1 billion at September 30, 2025, which underscores the scale of operations where digital efficiency gains can be significant.

Commercial lending decisions face increasing pressure to consider environmental risk factors in collateral (e.g., coastal real estate).

Operating in the New England region, Washington Trust's commercial real estate (CRE) portfolio is inherently exposed to climate-related physical risks, particularly sea-level rise and increased storm frequency impacting coastal properties in Rhode Island and Connecticut. The bank must manage this risk through its underwriting process, specifically by conducting environmental due diligence (like Phase I Environmental Site Assessments) to protect itself from potential Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) liability and collateral devaluation.

While the bank does not disclose the exact percentage of its loan book subject to climate risk modeling, the exposure is concentrated in its CRE and residential real estate segments. At September 30, 2025, nonaccrual (non-performing) commercial loan balances were relatively low at $1.0 million, though the total loan portfolio was $5.1 billion. The continued stability of the total risk-based capital ratio at 12.90% (as of September 30, 2025) suggests the bank's risk management framework, which includes environmental risk, is currently robust enough to maintain a well-capitalized status.

The table below shows the total loan book composition, highlighting the segments most vulnerable to environmental and physical climate risk in their operating area.

Loan Segment (as of Sept 30, 2025)	Balance (in Billions)	% of Total Loans	Key Environmental Risk
Total Loans	$5.1	100%	Indirect Climate Risk, Regulatory Scrutiny
Residential Real Estate Loans (Approx.)	~$2.5	~49%	Coastal Flooding, Storm Damage (Physical Risk)
Commercial Loans (Approx.)	~$2.6	~51%	Contamination Liability, Climate-related Property Devaluation

Note: Residential and Commercial loan approximate percentages are based on general bank composition and Q3 2025 reports showing total loans of $5.1 billion.

The bank's commitment to ESG is seen as material to its long-term defintely sustainability.

The Corporation's commitment to ESG is not just about environmental factors, but the holistic integration of these practices into its long-term business model. The CEO explicitly states that their efforts are designed to have a material effect on the long-term sustainability of the business. This means environmental performance is tied to financial performance, especially in an era of heightened regulatory and investor focus on climate risk.

The bank's ability to maintain a strong capital position, with a total risk-based capital ratio of 12.90% at September 30, 2025, is a key indicator that its overall risk management, including the non-financial aspects of ESG, is effective. This strong capital base provides a buffer against unforeseen environmental-related credit losses.

• Investor Focus: ESG performance is a factor in attracting capital from funds with sustainability mandates.
• Risk Management: Integrating environmental factors into Enterprise Risk Management (ERM) is crucial for long-term stability.
• Financial Resilience: Strong capital levels, like the 12.90% total risk-based capital ratio, help absorb potential climate-related losses.