Commercial Banking
The Commercial Banking segment includes commercial, residential and consumer
lending activities; equity in losses of unconsolidated investments in real estate
limited partnerships, mortgage banking, secondary market and loan servicing
activities; deposit generation; merchant credit card services; cash management
activities; and direct banking activities, which include the operation of ATMs,
telephone and Internet banking services and customer support and sales.
Commercial Banking
Lending Activities
The Corporation’s lending activities are conducted primarily in southern
New England and, to a lesser extent, other states. Washington Trust offers a
variety of commercial and retail lending products. Interest rates charged on
loans may be fixed or variable and vary with the degree of risk, loan term,
underwriting and servicing costs, loan amount, and the 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.
Commercial Loans
Commercial lending represents a significant portion of the Bank’s loan
portfolio. Commercial loans fall into two major categories: commercial real
estate and commercial and industrial loans.
Commercial real estate loans consist of commercial mortgages secured by real
property where the primary source of repayment is derived from rental income
associated with the property or the proceeds of the sale, refinancing or permanent
financing of the property. Commercial real estate loans also include construction
loans made to businesses for land development or the on-site construction of
industrial, commercial, or residential buildings. Commercial real estate loans
frequently involve larger loan balances to single borrowers or groups of related
borrowers. The Bank’s commercial real estate loans are secured by a variety
of property types, such as office buildings, retail facilities, commercial mixed
use, multi-family dwellings, lodging and industrial and warehouse properties.
Commercial and industrial loans primarily provide working capital, equipment
financing and financing for other business-related purposes. Commercial and
industrial loans are frequently collateralized by equipment, inventory, accounts
receivable, and/or general business assets. A significant portion of the Bank’s
commercial and industrial loan portfolio is also collateralized by real estate.
Commercial and industrial loans also include tax exempt loans made to states
and political subdivisions, as well as industrial development or revenue bonds
issued through quasi-public corporations for the benefit of a private or non-profit
entity where that entity rather than the governmental entity is obligated to
pay the debt service. The Bank’s commercial and industrial loan portfolio
includes loans to business sectors such as healthcare/social assistance, owner
occupied and other real estate, manufacturing, retail trade, professional services,
entertainment and recreation, public administration, accommodation and food
services, construction businesses, and wholesale trade businesses.
Residential Real Estate Loans
The residential real estate loan portfolio consists of mortgage and homeowner
construction loans secured by one- to four-family residential properties. Residential
real estate loans are primarily originated by commissioned mortgage originator
employees. Residential real estate loans are originated both for sale in the
secondary market as well as for retention in the Bank’s loan portfolio.
Loan sales to the secondary market provide funds for additional lending and
other banking activities. Loans originated for sale in the secondary market
are sold to investors such as the Federal Home Loan Mortgage Corporation (“FHLMC”),
Federal National Mortgage Association (“FNMA”) and other institutional
investors. Washington Trust sells loans with servicing retained or released.
Wealth Management Services
Wealth Management Services includes investment management; financial planning;
personal trust and estate services, including services as trustee, personal
representative, custodian and guardian; and settlement of decedents’ estates.
Institutional trust services are also provided, including fiduciary services.
Wealth Management Services
Washington Trust provides a broad range of wealth management services to personal
and institutional clients and mutual funds. These services include investment
management; financial planning; personal trust and estate services, including
services as trustee, personal representative, custodian and guardian; and settlement
of decedents’ estates. Institutional trust services are also provided,
including custody and fiduciary services. Wealth management services are primarily
provided through the Bank and its registered investment adviser subsidiaries.
Corporate
Corporate includes the Treasury Unit, which is responsible for managing the
wholesale investment portfolio and wholesale funding needs. It also includes
income from bank-owned life insurance, net gain on sale of business line as
well as administrative and executive expenses not allocated to the operating
segments and the residual impact of methodology allocations such as funds transfer
pricing offsets.