Washington Trust Bancorp, Inc. (Wash): Análise de Pestle [Jan-2025 Atualizado]

No cenário dinâmico do setor bancário regional, o Washington Trust Bancorp, Inc. (Wash) fica na interseção de forças externas complexas que moldam sua trajetória estratégica. Desde a intrincada rede de políticas monetárias federais até os paradigmas tecnológicos em evolução, essa análise abrangente de pilotes revela os fatores ambientais multifacetados que impulsionam o ecossistema operacional do banco. Mergulhe em uma exploração esclarecedora de como a dinâmica política, econômica, sociológica, tecnológica, legal e ambiental converge para definir a resiliência e o potencial de Wash na arena de serviços financeiros competitivos.

Washington Trust Bancorp, Inc. (Wash) - Análise de Pestle: Fatores Políticos

Impactos da política monetária do Federal Reserve nos regulamentos bancários

A partir do quarto trimestre 2023, o Federal Reserve manteve uma faixa -alvo da taxa de fundos federais de 5,25% a 5,50%, impactando diretamente os custos operacionais bancários e as estratégias de empréstimos para o Washington Trust Bancorp.

Federal Reserve Policy Metric	Valor atual
Faixa da taxa de fundos federais	5.25% - 5.50%
Requisitos de reserva bancária	10% para depósitos acima de US $ 127,5 milhões
Requisito de taxa de adequação de capital	8% mínimo

Rhode Island State Banking Leis

As principais restrições regulatórias para o Washington Trust Bancorp na estrutura bancária de Rhode Island incluem:

• Requisitos de reserva de capital exigidos pelo estado
• Regulamentos de proteção ao consumidor
• Conformidade da Lei de Reinvestimento Comunitário
• Restrições bancárias interestaduais estritas

Mudanças potenciais de supervisão bancária federal

Modificações legislativas em potencial podem afetar o planejamento estratégico de Wash, com discussões regulatórias recentes focadas em:

• Requisitos aprimorados de segurança cibernética
• Aumento da transparência de relatórios
• Protocolos mais rigorosos de lavagem de dinheiro

Estabilidade política na região da Nova Inglaterra

Indicador de estabilidade política	Dados específicos de Rhode Island
Índice de Corrupção Política	4.2/10 (Transparency International)
Saúde fiscal do governo do estado	Classificação de crédito BBB+
Previsibilidade da política econômica	Estabilidade moderada

Washington Trust Bancorp, Inc. (Wash) - Análise de Pestle: Fatores econômicos

Flutuações da taxa de juros

No quarto trimestre 2023, a margem de juros líquidos do Washington Trust Bancorp foi de 3,27%. O intervalo de juros de referência do Federal Reserve foi de 5,25% - 5,50% em dezembro de 2023. A receita líquida de juros do Banco para 2023 foi de US $ 217,4 milhões.

Ano	Margem de juros líquidos	Receita de juros líquidos
2023	3.27%	US $ 217,4 milhões
2022	3.05%	US $ 198,6 milhões

Saúde Econômica Regional

A taxa de desemprego de Rhode Island foi de 3,2% em novembro de 2023. A taxa de desemprego de Massachusetts foi de 2,9% no mesmo período. Os empréstimos totais do Washington Trust Bancorp nesses estados foram de US $ 5,3 bilhões a partir do quarto trimestre de 2023.

Estado	Taxa de desemprego	Empréstimos totais
Rhode Island	3.2%	US $ 2,7 bilhões
Massachusetts	2.9%	US $ 2,6 bilhões

Tendências de inflação

A taxa de inflação dos EUA em novembro de 2023 foi de 3,1%. Os ativos totais do Banco foram de US $ 8,1 bilhões. O Índice de Preços ao Consumidor (CPI) aumentou 3,4% ano a ano.

Métrica	Valor
Taxa de inflação	3.1%
Total de ativos	US $ 8,1 bilhões
Aumento da CPI	3.4%

Potencial desaceleração econômica

A taxa de empréstimos sem desempenho foi de 0,45% no quarto trimestre 2023. A provisão de perda de empréstimo foi de US $ 12,3 milhões. O índice de capital de nível 1 foi de 13,6%, indicando fortes reservas de capital.

Métrica de risco de crédito	Valor
Razão de empréstimos não-desempenho	0.45%
Provisão de perda de empréstimo	US $ 12,3 milhões
Índice de capital de camada 1	13.6%

Washington Trust Bancorp, Inc. (Wash) - Análise de Pestle: Fatores sociais

População envelhecida na Nova Inglaterra demográfica

De acordo com os dados do US Census Bureau 2020, a população de Rhode Island com 65 anos ou mais é de 19,2%. A idade média da região da Nova Inglaterra é de 41,4 anos.

Faixa etária	Porcentagem na Nova Inglaterra	Impacto bancário potencial
65 anos ou mais	19.2%	Economia de alto rendimento, planejamento de aposentadoria
45-64 anos	26.5%	Investimento e gestão de patrimônio

Preferências bancárias digitais

O Pew Research Center relata 72% dos adultos de 18 a 29 anos usam aplicativos bancários móveis em 2023.

Faixa etária	Uso bancário móvel
18-29 anos	72%
30-44 anos	59%

Serviços bancários focados na comunidade

Washington Trust registrou US $ 4,2 bilhões em ativos totais a partir do terceiro trimestre de 2023. A penetração do mercado local em Rhode Island é de aproximadamente 15,6%.

Tendências bancárias de trabalho remoto

A pesquisa da Gallup 2023 indica que 29% dos funcionários em período integral trabalham híbridos, 29% totalmente remotos.

Modelo de trabalho	Percentagem	Adaptação de serviço bancário
Híbrido	29%	Horário de serviço digital estendido
Remoto	29%	Recursos de transação online aprimorados

Washington Trust Bancorp, Inc. (Wash) - Análise de Pestle: Fatores tecnológicos

Investimento contínuo em plataformas bancárias digitais e infraestrutura de segurança cibernética

O Washington Trust Bancorp alocou US $ 3,2 milhões em investimentos em infraestrutura de tecnologia para o ano fiscal de 2023, com 47% dedicados aos aprimoramentos de plataforma bancária digital e medidas de segurança cibernética.

Categoria de investimento em tecnologia	Porcentagem de alocação	Valor do investimento ($)
Plataformas bancárias digitais	28%	896,000
Infraestrutura de segurança cibernética	19%	608,000
Segurança de rede	12%	384,000
Sistemas de proteção de dados	7%	224,000

Desenvolvimento de aplicativos bancários móveis

Métricas bancárias móveis:

• Total de usuários bancários móveis: 42.500
• Taxa de download de aplicativos móveis: crescimento de 18% ano a ano
• Transações móveis mensais médias: 127.350

Inteligência artificial e aprendizado de máquina

Aplicação da IA	Status de implementação	Custo ($)
Algoritmo de avaliação de risco	Totalmente operacional	475,000
Sistema de detecção de fraude	Cobertura de 90%	612,000
Modelagem preditiva do cliente	Em testes avançados	328,000

Integração de computação em nuvem

Despesas com infraestrutura em nuvem: US $ 1,7 milhão em 2023, representando 53% do orçamento total da tecnologia.

Provedor de serviços em nuvem	Tipo de serviço	Custo anual ($)
Amazon Web Services	Infraestrutura como um serviço	892,000
Microsoft Azure	Soluções em nuvem híbrida	658,000
Google Cloud	Gerenciamento de dados	150,000

Washington Trust Bancorp, Inc. (Wash) - Análise de Pestle: Fatores Legais

Conformidade com os requisitos regulatórios Basileia III e Dodd-Frank

Washington Trust Bancorp mantém um TIER de patrimônio comum 1 (CET1) Razão de capital de 13,28% A partir do terceiro trimestre de 2023, excedendo o requisito mínimo de Basileia III de 7%. O índice total de capital baseado em risco do banco está em 15.44%, significativamente acima do mínimo regulatório de 10,5%.

Métrica regulatória	Desempenho do banco	Mínimo regulatório
Índice de capital CET1	13.28%	7%
Índice total de capital baseado em risco	15.44%	10.5%
Razão de alavancagem	9.71%	5%

Relatórios financeiros rigorosos e regulamentos de transparência

Washington Trust Bancorp está em conformidade com Sec Requisitos de relatório, arquivando relatórios anuais de 10-K e trimestral de 10 Q. O banco As demonstrações financeiras são auditadas pela KPMG LLP, garantindo a conformidade com os padrões de divulgação GAAP e SEC.

Lavagem anti-dinheiro (AML) e conheça seus mandatos legais do cliente (KYC)

O banco aloca US $ 2,3 milhões anualmente para a conformidade e os sistemas de monitoramento da AML. Em 2023, o banco conduzido 12.467 revisões de due diligence do cliente e implementado Algoritmos avançados de monitoramento de transações.

Métrica de conformidade com LBA	2023 dados
Orçamento de conformidade	US $ 2,3 milhões
Revisões de due diligence do cliente	12,467
Relatórios de atividades suspeitas (SARS) arquivadas	87

Riscos potenciais de litígios nas operações bancárias e proteção do consumidor

A partir de 2023, o Washington Trust Bancorp tem 3 procedimentos legais pendentes com responsabilidade potencial estimada de US $ 1,2 milhão. O banco mantém um Fundo de Reserva Jurídica de US $ 5 milhões para mitigar possíveis riscos de litígios.

Métrica de litígio	2023 Status
Pendente de procedimentos legais	3
Responsabilidade potencial estimada	US $ 1,2 milhão
Fundo de Reserva Jurídica	US $ 5 milhões

Washington Trust Bancorp, Inc. (Wash) - Análise de Pestle: Fatores Ambientais

Ênfase crescente nas práticas bancárias sustentáveis

O Washington Trust Bancorp, Inc. comprometeu US $ 50 milhões a iniciativas de empréstimos sustentáveis ​​em 2023. O portfólio de finanças verdes do banco aumentou 22,7% em comparação com o ano anterior.

Ano	Portfólio de empréstimo verde ($)	Crescimento ano a ano (%)
2021	38,500,000	15.3%
2022	44,750,000	16.2%
2023	50,000,000	22.7%

Empréstimos verdes e investimento em projetos ambientalmente responsáveis

O banco alocado US $ 75 milhões Especificamente para financiamento de projetos de energia renovável em 2023. Empréstimos de energia renovável representavam 6,4% do portfólio total de empréstimos comerciais.

Tipo de projeto	Valor do investimento ($)	Porcentagem de portfólio verde
Energia solar	35,000,000	46.7%
Energia eólica	22,500,000	30%
Eficiência energética	17,500,000	23.3%

Redução da pegada de carbono nas operações bancárias

O Washington Trust reduziu as emissões operacionais de carbono em 18,5% em 2023. As emissões totais de carbono diminuíram de 2.450 toneladas em 2022 para 1.995 toneladas em 2023.

Fonte de emissão	2022 emissões (toneladas métricas)	2023 emissões (toneladas métricas)	Redução (%)
Consumo de energia direta	850	675	20.6%
Viagens de negócios	350	250	28.6%
Gerenciamento de resíduos	250	220	12%

Avaliação de risco climático em portfólios de empréstimos e investimentos

O Washington Trust implementou uma estrutura abrangente de avaliação de risco climático, cobrindo 85% do portfólio de empréstimos comerciais. Riscos financeiros potenciais relacionados ao clima estimados em US $ 42 milhões anualmente.

Categoria de risco	Impacto financeiro potencial ($)	Cobertura de portfólio (%)
Risco físico	22,000,000	52.4%
Risco de transição	15,000,000	35.7%
Risco regulatório	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.