WASHINGTON TRUST BANCORP INCWASH

WASHINGTON TRUST BANCORP INC Leases Disclosure

10-KFiled Feb 24, 20262 min read
Leases
Under non-cancellable operating leases, the Corporation has committed to rent premises used in business operations, including branch offices, lending offices, and wealth management offices.

In the first quarter of 2025, sale-leaseback transactions were completed for five branch locations. The transactions qualified as a sale under GAAP and as a result a pre-tax net gain on the sale of bank-owned properties totaling $7.0 million was recognized in noninterest income. In addition, operating lease ROU assets of $10.0 million and operating lease liabilities of $10.0 million were recorded. These leases expire in 17 years and include the option to renew for two additional 15-year terms.

As of both December 31, 2025 and 2024, there were no operating leases that had not yet commenced.

The following table presents information regarding the Corporation’s operating leases:
At December 31, 20252024
Operating lease ROU assets
$35,904 $26,943 
Operating lease liabilities$38,726 $29,578 
Weighted average discount rate5.41%3.80%
Range of lease expiration dates
4 months - 22 years
4 months - 23 years
Range of lease renewal options
3 years - 15 years
1 year - 5 years
Weighted average remaining lease term
12.9 years12.6 years

The following table presents the undiscounted annual lease payments under the terms of the Corporation’s operating leases at December 31, 2025, including a reconciliation to the present value of operating lease liabilities recognized in the Consolidated Balance Sheets:
(Dollars in thousands)
Years ending December 31:2026$4,882 
20274,485 
20284,205 
20294,101 
20304,109 
2031 and thereafter32,472 
Total operating lease payments54,254 
Less: interest15,528 
Present value of operating lease liabilities (1)
$38,726 
(1)Includes short-term operating lease liabilities of $3.0 million.

The following table presents the components of total lease expense and operating cash flows:
(Dollars in thousands)
Year ended December 31,202520242023
Lease Expense:
Operating lease expense$5,298 $4,482 $4,476 
Variable lease expense206 170 201 
Total lease expense (1)
$5,504 $4,652 $4,677 
Cash Paid:
Cash paid reducing operating lease liabilities$5,111 $4,510 $4,275 
(1)Included in net occupancy expenses in the Consolidated Statements of Income (Loss).

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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