extent of other banking relationships maintained with customers. Rates are further subject to competitive pressures, the current interest rate environment, availability of funds and government regulations.

$335.6 $502.1 million, while loans originated for sale into the secondary market, including loans originated in a broker capacity, totaled $427.0 million.$1.2 billion.

plan”) for the benefit of certain eligible employees who were hired prior to October 1, 2007. Washington Trust also has non-qualified defined benefit retirement plans to provide supplemental retirement benefits to certain employees, as described in these plans. The defined benefit pension plans were previously amended to freeze benefit accruals after a ten-year transition period ending in December 2023. See Note 17 to the Consolidated Financial Statements for additional information on certain employee benefit programs.

companies are permitted to company may engage directly or indirectly in, and acquire control of companies engaged in, activities that the Federal Reserve hadhas determined as of November 11, 1999 to be so closely related to banking as to be a proper incident thereto,or managing and controlling banks, subject to certain prior notification procedures and other requirements. In 2005, the Bancorp elected financial holding company status pursuant to the provisions of the Gramm-Leach-Bliley Act of 1999 (“GLBA”).  As a financial holding company, the Bancorp is authorized to engage in certain financial activities in which a bank holding company that has not elected to be a financial holding company may not engage.  “Financial activities” is broadly defined to include not only banking, insurance and securities activities, but also merchant banking and additional activities that the Federal Reserve, in consultation with the Secretary of the Treasury, determines to be financial in nature, incidental to such financial activities, or complementary activities that do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.  Currently, as a financial holding company, the Bancorp engages, through its subsidiary WSC, in broker-dealer activities pursuant to this authority.

insurance reserves to estimated insured deposits the designated reserve ratio, to reach 1.35% by September 30, 2020, and it mandates that the reserve ratio designated by the FDIC for any year may not be less than 1.35%.  Further, the Dodd-Frank Act required that, in setting assessments, the FDIC offset with credits the effect of the increaseheld in the minimum reserve ratio from 1.15% to 1.35% on banks with less than $10 billion in assets.

same right and capacity. Deposit insurance premiums are based on assets.  To determine its deposit insurance premium, the Bank computes the base amount of its average consolidated assets less its average tangible equity (defined as the amount of Tier 1 capital) and the applicable assessment rate. In 2016, the FDIC’s Board of Directors adopted a final rule that changed the manner in which deposit insurance assessment rates are calculated for established small banks, generally those banks with less than $10 billion of assets that have been insured for at least five years.The rule utilizes the CAMELS rating system, which is a supervisory rating system designed to take into account and reflect all financial and operational risks that a bank may face, including capital adequacy, asset quality, management capability, earnings, liquidity and sensitivity to market risk.To determine a bank’s assessment rate, each of seven financial ratios and a weighted average of CAMELS component ratings are multiplied by a corresponding pricing multiplier.The sum of these products is added to a uniform amount, with the resulting sum being an institution’s initial base assessment rate (subject to minimum or maximum assessment rates based on a bank’s CAMELS composite rating).This method takes into account various measures, including an institution’s leverage ratio, brokered deposit ratio, one year asset growth, the ratio of net income before taxes to total assets and considerations related to asset quality. Assessments for established small banks with a CAMELS rating of 1 or 2 range from 1.5 to 16 basis points, after adjustments, while assessment rates for established small banks with a CAMELS rating of 4 or 5 range from 11 to 30 basis points, after adjustments. Assessments for established small banks with a CAMELS rating of 3 range from 3 to 30 basis points.

exempt a capped amount of reciprocal deposits from treatment as brokered deposits for certain insured depository institutions. Specifically, the Growth Act provides that reciprocal deposits received by an agent depository institution that places deposits (other than those obtained by or through a deposit broker) with a deposit placement network are not considered to be funds obtained by or through a deposit broker to the extent the total amount of such reciprocal deposits does not exceed the lesser of $5 billion or 20% of the depository institution’s total liabilities. However, a depository institution that is less than well capitalized may not accept or roll over such excluded reciprocal deposits at a rate of interest that is significantly higher than the prevailing rate in its market area or a national rate cap established by the FDIC. At December 31, 2018, the Bank had reciprocal deposits of less than $5 billion and less than 20% of the Bank’s total liabilities.

provisions of the Dodd-Frank Act, bank holding companies were permitted to include trust preferred securities and cumulative perpetual preferred stock in Tier 1 capital, subject to limitations.  However, the Federal Reserve’s capital rule applicable to bank holding companies permanently grandfathers non-qualifying capital instruments, including trust preferred securities, issued before May 19, 2010 by

agencies have proposed a community bank leverage ratio of 9%, which means that qualifying institutions with a community bank leverage ratio exceeding 9% would be eligible for the relief provided by Section 201 of the Growth Act. The federal banking agencies have also proposed excluding from this relief institutions with levels of off-balance sheet exposures, trading assets and liabilities, mortgage servicing assets and deferred tax assets exceeding certain levels as well as all advanced approaches banking organizations. The Bank continues to monitor the status of the proposed rules.ratio.

may not lend money to, or engage in covered transactions with, its non-depository institution affiliates if the aggregate amount of “covered transactions” outstanding involving the bank, plus the proposed transaction exceeds the following limits: (i) in the case of any one such affiliate, the aggregate amount of “covered transactions” of the insured depository institution and its subsidiaries cannot exceed 10% of the capital stock and surplus of the insured depository institution; and (ii) in the case of all affiliates, the aggregate amount of covered transactions of the insured depository institution and its subsidiaries cannot exceed 20% of the capital stock and surplus of the insured depository institution. For this purpose, “covered transactions” are defined by statute to includeinclude: a loan or extension of credit to an affiliate, a purchase of or investment in securities issued by an affiliate, a purchase of assets from an affiliate unless exempted by the Federal Reserve, the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any person or company, the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate, securities borrowing or lending transactions with an affiliate that creates a credit exposure to such affiliate, or a derivatives transaction with an affiliate that creates a credit exposure to such affiliate.  “Covered transactions” are also subject to certain collateral security requirements. “Covered transactions” as well as other types of transactions between a bank and a bank holding company must be on marketconducted under terms and not otherwise undulyconditions, including credit standards, that are at least as favorable to the holding company or an affiliatebank as prevailing market terms. If a banking organization elects to use the community bank leverage ratio framework described in “Capital Adequacy and Safety and Soundness - Regulatory Capital Requirements” above, the banking organization would be required to measure the amount of the holding company.covered transactions as a percentage of Tier 1 capital, subject to certain adjustments. Moreover, Section 106 of the Bank Holding Company Act Amendments of 1970 provides that, to further competition, a bank holding company and its subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit, lease or sale of property of any kind, or the furnishing of any service.

the Bank develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information (as defined under GLBA), to protect against anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.  The Bank is also required to send a notice to customers whose sensitive information has been compromised if unauthorized use of the information is reasonably possible.  Most states, including the states where the Bank operates, have enacted legislation concerning breaches of data security and the duties of the Bank in response to a data breach.  Congress continues to consider federal legislation that would require consumer notice of data security breaches.  In addition, Massachusetts has promulgated data security regulations with respect to personal information of Massachusetts residents.  Pursuant to the FACT Act, the Bank had to develop and implement a written identity theft prevention program to detect, prevent, and mitigate identity theft in connection with the opening of certain accounts or certain existing accounts.  Additionally, the FACT Act amends the Fair Credit Reporting Act to generally prohibit a person from using information received from an affiliate to make a solicitation for marketing purposes to a consumer, unless the consumer is given notice and a reasonable opportunity and a reasonable and simple method to opt out of the making of such solicitations.

Commonwealth of Massachusetts,Act imposes numerous obligations on registered investment advisers, including those related to sales methods, trading practices, the use and safekeeping of customers’ funds and securities, capital structure, record keeping and the conduct of directors, officers and employees. Each of the mutual funds for which Weston Financial acted an investment adviser was registeredcompliance with the SEC under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and was subject to requirements thereunder.  Shares of each mutual fund were registered with the SEC under the Securities Act of 1933, as amended, and were qualified for sale (or exempt from such qualification) under the laws of each state, the District of Columbia and the U.S. Virgin Islands to the extent such shares were sold in any of those jurisdictions. In the third quarter of 2017, the mutual funds were dissolved and liquidated pursuant to an Agreement and Plan of Dissolution and Liquidation approved by the shareholdersanti-fraud provisions of the mutual funds in August 2017.

Halsey is registered as an investment adviser with the SEC under the Investment Advisers Act and is subject to extensive regulation, supervision, and examination by the SEC and the Statefiduciary duties arising out of Connecticut, including those related to sales methods, trading practices, the use and safekeeping of customers’ funds and securities, capital structure, record keeping and the conduct of directors, officers and employees.

As investment advisers,provisions. Weston Financial and Halsey are subjectmust maintain a compliance program reasonably designed to prevent violations of the Investment Advisers Act and any regulations promulgated thereunder, including fiduciary,are also subject to recordkeeping, operational and disclosure obligations.  In addition, an adviser or subadvisor

reports as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the SEC. Information on the Washington Trust website is not incorporated by reference into this Annual Report on Form 10‑K.

CertainHowever, certain assets and liabilities may react differently to changes in market interest rates. Further, interest rates on some types of assets and liabilities may fluctuate prior to changes in broader market interest rates, while rates on other types of assets and liabilities may lag behind. Additionally, some assets such as adjustable-rate mortgage loans have features, such as rate caps and floors, which restrict changes in applicable interest rates.

The market values of most of our financial assetsThese rates are highly sensitive to fluctuations in market interest rates.  Fixed-rate investment securities, mortgage-backed securitiesmany factors beyond our control, including general economic conditions, both domestic and mortgage loans typically decline in value as interest rates rise.

Changes in market interest rates can also affect the extent to which our borrowers prepay loansforeign, and the ratemonetary and fiscal policies of prepayments on mortgage-backed securities. various governmental and regulatory authorities.

decrease, loan prepayments generally increase. Prepayments may adversely affect the value of such loans and investment securities and the income generated by them. Particularly in a decreasing interest rate environment, prepaymentsreceipt of payments on mortgage-backed securities generally increase, and may result in the proceeds having to be reinvested at a lower rate than the loan or mortgage-backed security being prepaid. Changes in interest rates can also affect the amount of loans that we originate, as well as the value of loans and our ability to realize gains on the sale of loans.

Increasesinvestment securities. Fixed-rate investment securities, mortgage-backed securities and mortgage loans typically decline in value as interest rates might cause depositors to shift funds from accounts that have a comparatively lower cost, such as regular savings accounts, to accounts with a higher cost, such as certificates of deposit. If the cost of interest-bearing deposits increases at a rate greater than the yields on interest-earning assets increase, our net interest income will be negatively affected.  Changes in the asset and liability mix may also affect our net interest income.rise.

We compete with larger bank and non-bank financial institutions for loans and deposits in the communities we serve, and we may face even greater competition in the future due to legislative, regulatory and technological changes and continued consolidation.  Many of our competitors have significantly greater resources and lending limits than we have.  Banks and other financial services firms can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service.  In addition, technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as automated transferto evolving industry standards and automaticconsumer preferences.

systems.  Many competitors have fewer regulatory constraints and may have lower cost structures than we do.  Additionally, due systems, could require substantial expenditures to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range ofmodify or adapt our existing products and services as well as better pricing for thosewe grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions. We might not be successful in developing or introducing new products and services, than we can.  Our long-term success depends onintegrating new products or services into our abilityexisting offerings, responding or adapting to compete successfully with other financial institutionschanges in consumer behavior, preferences, spending, investing and/or saving habits, achieving market acceptance of our service areas.products and services, reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.

Our success depends, in large part, on our ability to attract and retain key personnel.  Competition for qualified personnelrisks that exist, or that develop in the financial services industry can be intense and we mayfuture, that the Corporation has not be able to hireappropriately anticipated, identified or retain the key personnel that we depend upon for success. Certain key personnel that have regular direct contact with customers and clients often build strong relationships that are important to our business. The unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business because of their skills, knowledge of the markets inmitigated, which we operate, years of industry experience and the difficulty of promptly finding qualified replacement personnel. Also, the loss of key personnel could jeopardize our relationships with customers and clients and could lead to unexpected losses and the lossCorporation's results of accounts. Losses of such accountsoperations or financial condition could have a material adverse impact on our business.be materially adversely affected.

From timeexecute strategic plans and initiatives; to timedevelop competitive products and technologies; and to attract, retain and develop a highly skilled employee workforce. Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors’ investment products, level of investment performance, client services and marketing and distribution capabilities. If we are named as a defendant or are otherwise involved in various legal proceedings, including class actions and other litigation or disputes with third parties. There is no assurance that litigation with private parties will not increase in the future. Actions currently pending against us may result in judgments, settlements, fines, penalties or other results adverse to us, which could materially adversely affectsuccessful, our business, financial condition or results of operations or cause serious reputational harmand financial condition may be negatively impacted.

Our businesses and operationsdepend upon for success. Frequently, we compete in the market for talent with entities that are alsonot subject to increasing regulatory oversightcomprehensive regulation, including with respect to the structure of incentive compensation. The unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business because of their skills, knowledge of the markets in which we operate, years of industry experience and scrutiny, which may lead to additional regulatory investigations or enforcement actions. Thesethe difficulty of promptly finding qualified replacement personnel. Also, the loss of key personnel could jeopardize our relationships with customers and other initiatives from federalclients and state officials may subject us to further judgments, settlements, fines or penalties, or cause us to be required to restructure our operations and activities, all of which could lead to reputational issues, or higher operational costs, thereby reducing our profitability.

The financial services industry is subject to intense scrutiny from bank supervisors in the examination process and aggressive enforcementloss of federal and state regulations, particularly with respect to mortgage-related practices and other consumer compliance matters, and compliance with anti-money laundering, Bank Secrecy Act and Officeaccounts. Losses of Foreign Assets Control regulations, and economic sanctions against certain foreign countries and nationals. Enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there were systems and procedures designed to ensure compliance in place

Liquidity iscreating an increasing level of concern for the ability to meet cash flow needs on a timely basis at a reasonable cost. Our liquidity is used principally to originate or purchase loans, to repay deposit liabilities and other liabilities when they come due, and to fund operating costs. Customer demand for non-maturity deposits can be difficult to predict. Changes in market interest rates, increased competition within our markets, and other factors may make deposit gathering more difficult. Disruptions instate of the capital markets or interest rate changes may make the terms of wholesale funding sources, which include FHLB advances, brokered time certificates of deposit, federal funds purchased and securities sold under repurchase agreements, less favorable and may make it difficult to sell securities when needed to provide additional liquidity.global environment. As a result, there is a risk thatpolitical and social attention to the costissue of funding will increase or that we will notclimate change has increased. In recent years, governments across the world have sufficient fundsentered into international agreements to meet our obligations when they come due.

Significant components of our liquidity needs are met through our access to funding pursuant to our membership in the FHLB. The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for joining the FHLB is to obtain funding. Therequired purchase of stockemission credits, and the implementation of significant operational changes, each of which may require us to expend significant capital and incur compliance, operating, maintenance, and remediation costs. Consumers and businesses may also change their behavior on their own as a result of these concerns. The impact on our customers will likely vary depending on their specific attributes, including reliance on, or role in, the FHLB is a requirement for a membercarbon intensive activities. Our efforts to gain access to funding. Any deteriorationtake these risks into account in the FHLB’s performance or financial condition may affectmaking lending and other decisions, including by increasing our ability to access funding and/or require Washington Trust to deem the required investment in FHLB stock to be impaired. If we are not able to access funding through the FHLB, webusiness with climate-friendly companies, may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition. Similarly, if we deem all or part of our investmenteffective in FHLB stock impaired, such action could have an adverse effect on our financial condition or results of operations.

The Bancorp is a legal entity separate and distinctprotecting us from the Bank. Revenuesnegative impact of the Bancorp are derived primarily from dividends paid to it by the Bank. The right of the Bancorp,new laws and consequently the right of shareholders of the Bancorp, to participateregulations or changes in any distribution of the assetsconsumer or earnings of the Bank, through the payment of such dividends or otherwise, is necessarily subject to the prior claims of creditors of the Bank (including depositors), except to the extent that certain claims of the Bancorp in a creditor capacity may be recognized.business behavior.

In 2017, Congress enacted The Corporation assesses the Tax Cuts and Jobs Act (“Tax Act”), which has had both positive and negative effects on

our financial performance. The enactment of the Tax Act required a revaluation of our net deferred tax assets in lightperiodically to determine the likelihood of the new federal income tax rate This had an adverse impactCorporation’s ability to our financial performancerealize the benefits. Management judgment is