• Washington Trust Bancorp, Inc.
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  • Washington Trust Announces 14% Increase In 2nd Quarter Earnings
    Company Release - 07/17/2003 15:14

    WESTERLY, R.I.--(BUSINESS WIRE)--July 17, 2003--Washington Trust Bancorp, Inc. (NASDAQ: WASH), parent company of The Washington Trust Company, today reported net income of $4.574 million for the three months ended June 30, 2003, up 14 percent from the $4.024 million reported for the second quarter of 2002. On a diluted earnings per share basis, the Corporation earned 34 cents for the three months ended June 30, 2003, compared to 31 cents per diluted share for the second quarter of 2002. In June 2003, the Corporation incurred an after tax charge of $649 thousand, or 5 cents per diluted share, related to the prepayment of certain higher interest rate Federal Home Loan Bank advances. Excluding this special item in 2003 and excluding merger related charges of $417 thousand after tax, or 3 cents per diluted share, in the second quarter 2002, earnings for the three months ended June 30, 2003 were $5.223 million, or 39 cents per diluted share, as compared to $4.441 million, or 34 cents per share, for the same period a year ago.

    The return on average assets and return on average equity for the three months ended June 30, 2003 were 1.01% and 13.57%, compared to 1.03% and 13.68%, respectively, for the three months ended June 30, 2002.

    John C. Warren, Washington Trust's Chairman and Chief Executive Officer stated, "We're pleased with our second quarter results. They reflect the Bank's solid performance throughout our lines of business, and our success in maintaining excellent asset quality in a challenging economic environment. Strong residential loan sale gains afforded us the opportunity to prepay certain higher interest rate borrowings to reduce our future borrowing costs, while still realizing a respectable increase in earnings."

    Net income for the six months ended June 30, 2003 amounted to $9.3 million, or 70 cents per diluted share, as compared to $7.8 million, or 62 cents per diluted share for the same period in 2002. Excluding the 2003 debt prepayment charges and the 2002 merger related charges described previously, earnings for the six months ended June 30, 2003 totaled $10.0 million, or 75 cents per diluted share, as compared to $8.2 million, or 65 cents per diluted share for the corresponding period in 2002.

    The return on average assets for the six months ended June 30, 2003 was similar to that of the same period a year ago, 1.04% as compared to 1.07%, while the return on average equity declined to 14.06% for the six months ended June 30, 2003, as compared to 14.27% for the same period in 2002.

    Net interest income for the second quarter of 2003 increased by 6 percent to $12.3 million from the second quarter of 2002. Net interest income for the six months ended June 30, 2003 amounted to $24.2 million, up 15% from the $21.0 million reported for the corresponding 2002 period, largely due to the April 2002 acquisition of First Financial Corp. The increase in net interest income was due to earning asset growth, however net interest income was adversely affected by a decline in the net interest margin. The net interest margin for the six months ended June 30, 2003 amounted to 2.97%, down 22 basis points from the 3.19% reported for the same period a year ago. The net interest margin has been affected by the significant decline in market interest rates and reflects a decline in yields on loans and securities offset somewhat by lower funding costs of interest-bearing deposits and Federal Home Loan Bank advances.

    Noninterest income, excluding net realized gains on securities, totaled $7.0 million for the quarter ended June 30, 2003, up 29 percent from the $5.4 million reported for the second quarter of 2002. For the six months ended June 30, 2003, noninterest income amounted to $12.8 million, an increase of 23 percent from the comparable 2002 amount of $10.3 million.

    The growth in noninterest income was attributable to increases in gains on loan sales and service charges on deposits. For the first six months of 2003, gains on loan sales amounted to $2.7 million, an increase of $1.8 million from the same period in 2002. As a result of the decline in interest rates, the Corporation has experienced heavy residential mortgage activity, predominantly refinancing, which increased the amount of loans sold into the secondary market. The Corporation expects this activity to remain strong during the third quarter of 2003, however this level of activity may not be sustainable in future periods. For the six months ended June 30, 2003, service charges on deposit accounts amounted to $2.4 million, up $646 thousand from the corresponding period in 2002. Growth in deposits and changes in the fee structure of various deposit products were contributing factors in this increase. Revenue from trust and investment management services continues to be the largest component of noninterest income. Trust and investment management income, which is closely tied to the performance of the financial markets, totaled $5.3 million for the six months ended June 30, 2003, essentially unchanged from the amount reported for the corresponding period in 2002. Revenue growth has slowed reflecting the financial market declines. Trust and investment assets under administration amounted to $1.576 billion at June 30, 2003, compared to $1.524 billion at December 31, 2002.

    The Corporation recognized net realized gains on securities amounting to $400 thousand and $381 thousand in the second quarter of 2003 and 2002, respectively, related to annual contributions of appreciated equity securities to the Corporation's charitable foundation. The costs associated with the contributions amounted to $433 thousand and $403 thousand and were included in other noninterest expenses in the second quarter of 2003 and 2002, respectively. For the six months ended June 30, 2003 and 2002, net realized gains on securities totaled $630 thousand and $672 thousand, respectively.

    For the second quarter of 2003, noninterest expenses totaled $12.8 million, up $1.4 million from the amount of noninterest expenses reported for second quarter of 2002. For the six months ended June 30, 2003, noninterest expenses amounted to $23.8 million, up $3.2 million from the comparable 2002 amount. Included in noninterest expenses in the second quarter of 2003 were $941 thousand in prepayment penalty charges associated with the prepayment of certain Federal Home Loan Bank advances totaling $23 million. The prepayment of certain higher interest rate borrowings was consummated in June 2003 to reduce future funding costs. The Corporation expects that this debt restructuring will result in future interest expense savings of approximately $510 thousand on an annualized basis over the remaining term of the prepaid debt. Included in the second quarter of 2002 were $605 thousand of acquisition costs incurred in connection with acquisition of First Financial Corp. Exclusive of the debt prepayment penalties in 2003 and the acquisition costs in 2002, the increase in noninterest expenses was primarily due to normal growth and higher operating costs resulting from the acquisition of First Financial Corp. Salaries and benefits, the largest component of total noninterest expense, amounted to $13.2 million for the six months ended June 30, 2003, compared to the $11.6 million reported for the first six months of 2002.

    In the first six months of 2003, total loans increased $27.7 million to $822.8 million at June 30, 2003. Consumer loans increased $11.3 million, or 9 percent, from the balance at December 31, 2002, primarily due to growth in home equity lines. Commercial loans increased $12.6 million, or 3 percent, to $394.8 million at June 30, 2003. Residential real estate loans were impacted by the refinancing of fixed rate residential loans being sold into the secondary market. Total residential real estate loans amounted to $284.6 million at June 30, 2003, up from $280.9 million at December 31, 2002.

    Total securities were $846.9 million at June 30, 2003, up $51.1 million from the December 31, 2002 balance. The increase in securities was primarily due to purchases of mortgage-backed securities, corporate bonds and U.S. government agency securities.

    Total deposits at June 30, 2003 amounted to $1.136 billion, up $25.7 million from the December 31, 2002 balance of $1.110 billion. Demand deposits rose $26.3 million, or 17 percent, in the first six months of 2003 and totaled $183.8 million at June 30, 2003. Savings deposits increased $11.5 million from December 31, 2002 and amounted to $482.9 million at June 30, 2003. Time deposits amounted to $469.5 million at June 30, 2003, down from the December 31, 2002 balance of $481.6 million. In the six months ended June 30, 2003, Federal Home Loan Bank advances increased $63.8 million to $543.9 million at June 30, 2003.

    Asset quality continues to be strong, as measured by the level of nonperforming assets. Nonaccrual loans as a percentage of total loans at June 30, 2003 were .38%, compared to .53% at December 31, 2002. Similarly, nonperforming assets (nonaccrual loans and property acquired through foreclosure) as a percent of total assets at June 30, 2003 amounted to .17%, as compared to .24% at December 31, 2002. The Corporation's allowance for loan losses amounted to $15.7 million at June 30, 2003, compared to $15.5 million at December 31, 2002.

    Total shareholders' equity amounted to $135.2 million at June 30, 2003, up from $128.7 million at December 31, 2002. Book value per share as of June 30, 2003 and December 31, 2002 amounted to $10.31 and $9.87, respectively.

    Washington Trust Bancorp, Inc. Chairman and Chief Executive Officer, John C. Warren, and David V. Devault, Executive Vice President, Treasurer, and Chief Financial Officer will host a conference call today, Thursday, July 17, at 4:30 p.m. (Eastern Daylight Time) to discuss the Corporation's second quarter earnings. Access to the call is available in a listen-only mode on Washington Trust's web site, www.washtrust.com. The link can be found in the Investor Relations section of the site under the subhead "Investor Information" and then "Presentations." In addition, a replay of the call will be posted in this same section of the web site shortly after conclusion of the call.

    Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. The Bank offers a full range of financial services, including trust and investment management, through its offices in Rhode Island and southeastern Connecticut. Washington Trust Bancorp, Inc.'s common stock trades on The Nasdaq Stock Market(R) under the symbol WASH. Investor information is available on the Corporation's web site: www.washtrust.com.

    Note: This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Corporation's management uses these non-GAAP measures in its analysis of the Corporation's performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of acquisitions and costs related to the integration of merged entities. These non-GAAP measures also may exclude other significant gains or losses that are unusual in nature. Because these items and their impact on the Corporation's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Corporation's core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other Corporations. A quantitative reconciliation of the differences between the non-GAAP financial information discussed herein and the most directly comparable financial information calculated and presented in accordance with GAAP is contained in the Financial Summary statements attached to this press release.

    This report contains certain statements that may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Corporation's actual results, performance or achievements could differ materially from those projected in the forward-looking statements as a result, among other factors, of changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of trust and investment assets under management, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in the size and nature of the Corporation's competition, changes in loan default and charge-off rates and changes in the assumptions used in making such forward-looking statements.

    Washington Trust Bancorp, Inc. and Subsidiary
                              FINANCIAL SUMMARY
    
                                                  THREE MONTHS ENDED
                                            ------------------------------
                                                JUN.      JUN.      MAR.
    (Dollars and shares in thousands,            30,       30,        31,
     except per share amounts)                   2003      2002      2003
                                            ------------------------------
    
    OPERATING RESULTS
    ----------------------------------------
    Net interest income                       $12,282$11,621$11,929
    Provision for loan losses                     160       100       100
    Net realized gains on securities              400       381       230
    Other noninterest income                    6,955     5,404     5,803
    Noninterest expenses                       12,848    11,474    10,978
    Income tax expense                          2,055     1,808     2,134
    Net income                                  4,574     4,024     4,750
    
    PER SHARE
    ----------------------------------------
    Basic earnings                              $0.35$0.31$0.36
    Diluted earnings                            $0.34$0.31$0.36
    Dividends declared                          $0.15$0.14$0.15
    
    SHARES OUTSTANDING
    ----------------------------------------
    Weighted Average:      Basic             13,089.4  12,858.7  13,059.3
                           Diluted           13,304.9  13,065.1  13,230.2
    
    AVERAGE BALANCE SHEET
    ----------------------------------------
    Federal funds sold and other short-term
     investments                              $15,447$11,482$14,946
    Taxable debt securities                   784,166   665,520   764,975
    Nontaxable debt securities                 16,137    19,819    17,462
    Corporate stocks and Federal Home Loan
     Bank stock                                51,795    43,750    48,025
    
    Loans:              Commercial            395,967   348,262   389,545
                        Residential           296,484   240,671   292,276
                        Consumer              137,929   118,191   133,050
                                            ------------------------------
    
                      Total loans             830,380   707,124   814,871
    
    Earning assets                          1,697,925 1,447,695 1,660,279
    Total assets                            1,819,463 1,559,298 1,778,338
    
    Deposits:            Demand               166,156   144,642   155,944
                         Savings              472,358   371,284   459,777
                         Time                 479,266   469,109   481,766
                                            ------------------------------
    
                      Total deposits        1,117,780   985,035 1,097,487
    
    Federal Home Loan Bank advances           549,161   439,461   532,698
    Shareholders' equity                      134,814   117,683   130,506
    
    KEY RATIOS
    ----------------------------------------
    Return on average assets                     1.01%     1.03%     1.07%
    Return on average equity                    13.57%    13.68%    14.56%
    Interest rate spread (taxable equivalent
     basis)                                      2.67%     2.90%     2.68%
    Net interest margin (taxable equivalent
     basis)                                      2.96%     3.29%     2.97%
    
    ALLOWANCE FOR LOAN LOSSES
    ----------------------------------------
    Balance at beginning of period            $15,495$13,665$15,487
    Allowance on acquired loans                     -     1,829         -
    Provision charged to earnings                 160       100       100
    Net (charge-offs) recoveries                   87      (128)      (92)
                                            ------------------------------
    
    Balance at end of period                  $15,742$15,466$15,495
                                            ------------------------------
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                              FINANCIAL SUMMARY
    
                                                    THREE MONTHS ENDED
                                                --------------------------
                                                   JUN.     JUN.      MAR.
    (Dollars and shares in thousands,               30,      30,       31,
     except per share amounts)                     2003     2002     2003
                                                -------- -------- --------
    
    EARNINGS AND RATIOS EXCLUDING SPECIAL ITEMS
    -------------------------------------------
    (Non GAAP Financial Information):
    Noninterest expenses (1)                    $11,907$10,869$10,978
    Return on average assets (2)                   1.15%    1.14%    1.07%
    Return on average equity (2)                  15.50%   15.09%   14.56%
    
    Reconciliation Table - Non GAAP
      Financial Information
    -------------------------------------------
    Net income, including special items          $4,574$4,024$4,750
    Add back special items, net of tax:
      Debt prepayment penalties                     649        -        -
      Acquisition costs                               -      417        -
    Net income, excluding special items          $5,223$4,441$4,750
    
    Basic earnings per share                      $0.35$0.31$0.36
    Effects of special items, net of tax           0.05     0.04        -
    Basic earnings per share, excluding special
     items                                        $0.40$0.35$0.36
    
    Diluted earnings per share                    $0.34$0.31$0.36
    Effects of special items, net of tax           0.05     0.03        -
    Diluted earnings per share, excluding
     special items                                $0.39$0.34$0.36
    
    Return on average assets                       1.01%    1.03%    1.07%
    Effects of special items, net of tax           0.14%    0.11%       -
    Return on average assets, excluding special
     items                                         1.15%    1.14%    1.07%
    
    Return on average equity                      13.57%   13.68%   14.56%
    Effects of special items, net of tax           1.93%    1.41%       -
    Return on average equity, excluding special
     items                                        15.50%   15.09%   14.56%
    
    (1) Excludes second quarter 2003 Federal Home Loan Bank debt
        prepayment penalties of $941 thousand (pretax) and second quarter
        2002 First Financial Corp. acquisition costs of $605 thousand
        (pretax).
    
    (2) Excludes second quarter 2003 Federal Home Loan Bank debt
        prepayment penalties of $649 thousand after income taxes and
        second quarter 2002 First Financial Corp. acquisition costs of
        $417 thousand after income taxes.
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                              FINANCIAL SUMMARY
    
    
                                                        SIX MONTHS ENDED
                                                      --------------------
                                                          JUN.      JUN.
    (Dollars and shares in thousands,                      30,       30,
     except per share amounts)                             2003      2002
                                                      --------------------
    
    OPERATING RESULTS
    --------------------------------------------------
    Net interest income                                 $24,211$21,005
    Provision for loan losses                               260       200
    Net realized gains on securities                        630       672
    Other noninterest income                             12,758    10,341
    Noninterest expenses                                 23,826    20,638
    Income tax expense                                    4,189     3,412
    Net income                                            9,324     7,768
    
    PER SHARE
    --------------------------------------------------
    Basic earnings                                        $0.71$0.62
    Diluted earnings                                      $0.70$0.62
    Dividends declared                                    $0.30$0.28
    
    SHARES OUTSTANDING
    --------------------------------------------------
    Weighted Average:      Basic                       13,074.4  12,434.1
                           Diluted                     13,265.2  12,622.4
    
    AVERAGE BALANCE SHEET
    --------------------------------------------------
    Federal funds sold and other short-term
     investments                                        $15,198$13,233
    Taxable debt securities                             774,624   628,022
    Nontaxable debt securities                           16,796    19,908
    Corporate stocks and Federal Home Loan Bank stock    49,920    42,871
    
    Loans:                           Commercial         392,774   304,534
                                     Residential        294,391   237,551
                                     Consumer           135,503   114,323
                                                      --------------------
    
                                   Total loans          822,668   656,408
    
    Earning assets                                    1,679,206 1,360,442
    Total assets                                      1,799,014 1,455,917
    
    Deposits:                       Demand              161,078   133,150
                                    Savings             466,102   342,591
                                    Time                480,509   425,452
                                                      --------------------
    
                                    Total deposits    1,107,689   901,193
    
    Federal Home Loan Bank advances                     540,975   431,161
    Shareholders' equity                                132,672   108,867
    
    KEY RATIOS
    --------------------------------------------------
    Return on average assets                               1.04%     1.07%
    Return on average equity                              14.06%    14.27%
    Interest rate spread (taxable equivalent basis)        2.67%     2.77%
    Net interest margin (taxable equivalent basis)         2.97%     3.19%
    
    ALLOWANCE FOR LOAN LOSSES
    --------------------------------------------------
    Balance at beginning of period                      $15,487$13,593
    Allowance on acquired loans                               -     1,829
    Provision charged to earnings                           260       200
    Net (charge-offs) recoveries                             (5)     (156)
                                                      --------------------
    
    Balance at end of period                            $15,742$15,466
                                                      --------------------
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                              FINANCIAL SUMMARY
    
                                                         SIX MONTHS ENDED
                                                         -----------------
                                                            JUN.     JUN.
    (Dollars and shares in thousands,                        30,      30,
     except per share amounts)                              2003     2002
                                                         -------- --------
    
    EARNINGS AND RATIOS EXCLUDING SPECIAL ITEMS
    -------------------------------------------
    (Non GAAP Financial Information):
    Noninterest expenses (1)                             $22,885$20,033
    Return on average assets (2)                            1.11%    1.12%
    Return on average equity (2)                           15.03%   15.04%
    
    Reconciliation Table - Non GAAP Financial Information
    -----------------------------------------------------
    Net income, including special items                   $9,324$7,768
    Add back special items, net of tax:
      Debt prepayment penalties                              649        -
      Acquisition costs                                        -      417
    Net income, excluding special items                   $9,973$8,185
    
    Basic earnings per share                               $0.71$0.62
    Effects of special items, net of tax                    0.05     0.04
    Basic earnings per share, excluding special items      $0.76$0.66
    
    Diluted earnings per share                             $0.70$0.62
    Effects of special items, net of tax                    0.05     0.03
    Diluted earnings per share, excluding special items    $0.75$0.65
    
    Return on average assets                                1.04%    1.07%
    Effects of special items, net of tax                    0.07%    0.05%
    Return on average assets, excluding special items       1.11%    1.12%
    
    Return on average equity                               14.06%   14.27%
    Effects of special items, net of tax                    0.97%    0.77%
    Return on average equity, excluding special items      15.03%   15.04%
    
    (1) Excludes second quarter 2003 Federal Home Loan Bank debt
        prepayment penalties of $941 thousand (pretax) and second quarter
        2002 First Financial Corp. acquisition costs of $605 thousand
        (pretax).
    
    (2) Excludes second quarter 2003 Federal Home Loan Bank debt
        prepayment penalties of $649 thousand after income taxes and
        second quarter 2002 First Financial Corp. acquisition costs of
        $417 thousand after income taxes.
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                              FINANCIAL SUMMARY
    
    
    (Dollars and shares in thousands,       JUN. 30,   JUN. 30,   DEC. 31,
     except per share amounts)                 2003       2002       2002
                                         ---------------------------------
    
    PERIOD END BALANCE SHEET
    -------------------------------------
    Assets                               $1,839,412$1,634,453$1,745,661
    Total securities                        846,901    734,647    795,833
    
    Loans:               Commercial         394,793    372,595    382,169
                         Residential        284,621    249,091    280,886
                         Consumer           143,380    121,301    132,071
                                         ---------------------------------
    
                        Total loans         822,794    742,987    795,126
    
    Deposits:           Demand              183,785    160,130    157,539
                        Savings             482,876    428,942    471,354
                        Time                469,543    468,372    481,600
                                         ---------------------------------
    
                        Total deposits    1,136,204  1,057,444  1,110,493
    
    Federal Home Loan Bank advances         543,878    432,731    480,080
    Shareholders' equity                    135,191    122,018    128,721
    
    
    SHARE INFORMATION
    -------------------------------------
    Shares outstanding at end of period    13,115.1   13,026.6   13,042.4
    Book value per share                     $10.31$9.37$9.87
    Market value per share                   $23.02$23.69$19.53
    
    
    CREDIT QUALITY
    -------------------------------------
    Nonaccrual loans                         $3,130$4,042$4,177
    Other real estate owned, net                 10         30         86
    Nonperforming assets to total assets       0.17%      0.25%      0.24%
    Nonaccrual loans to total loans            0.38%      0.54%      0.53%
    Allowance for loan losses to
     nonaccrual loans                        502.94%    382.63%    370.78%
    Allowance for loan losses to total
     loans                                     1.91%      2.08%      1.95%
    
    
    ASSETS UNDER MANAGEMENT
    -------------------------------------
    Market value                             $1,576$1,534$1,524Washington Trust Bancorp, Inc. and Subsidiary
                         CONSOLIDATED BALANCE SHEETS
    
    (Dollars in thousands)
                                                   (Unaudited)
                                                         June     December
                                                           30,        31,
                                                          2003       2002
    Assets:
    Cash and due from banks                            $45,961$39,298
    Federal funds sold and other short-term
     investments                                        11,475     11,750
    Mortgage loans held for sale                        11,212      4,566
    Securities:
     Available for sale, at fair value                 621,172    553,556
     Held to maturity, at cost; fair value $232,374
       in 2003 and $250,446 in 2002                    225,729    242,277
    ----------------------------------------------------------------------
    
     Total securities                                  846,901    795,833
    
    Federal Home Loan Bank stock, at cost               28,668     24,582
    
    Loans                                              822,794    795,126
    Less allowance for loan losses                      15,742     15,487
    ----------------------------------------------------------------------
    
     Net loans                                         807,052    779,639
    
    Premises and equipment, net                         25,521     24,415
    Accrued interest receivable                          8,059      7,773
    Goodwill and other intangibles                      24,903     25,260
    Other assets                                        29,660     32,545
    ----------------------------------------------------------------------
    
     Total assets                                   $1,839,412$1,745,661
    ----------------------------------------------------------------------
    
    Liabilities:
    
    Deposits:
     Demand                                           $183,785$157,539
     Savings                                           482,876    471,354
     Time                                              469,543    481,600
    ----------------------------------------------------------------------
    
     Total deposits                                  1,136,204  1,110,493
    
    Dividends payable                                    1,968      1,825
    Federal Home Loan Bank advances                    543,878    480,080
    Other borrowings                                     7,513      9,183
    Accrued expenses and other liabilities              14,658     15,359
    ----------------------------------------------------------------------
    
     Total liabilities                               1,704,221  1,616,940
    ----------------------------------------------------------------------
    
    Shareholders' Equity:
    
    Common stock of $.0625 par value; authorized 30
     million shares;
     issued 13,121,321 shares in 2003 and 13,086,795
      shares in 2002                                       820        818
    Paid-in capital                                     28,865     28,767
    Retained earnings                                   96,111     90,717
    Unamortized employee restricted stock                  (16)       (24)
    Accumulated other comprehensive income               9,533      9,294
    Treasury stock, at cost; 6,243 shares in 2003
     and 44,361 in 2002                                   (122)      (851)
    ----------------------------------------------------------------------
    
     Total shareholders' equity                        135,191    128,721
    ----------------------------------------------------------------------
    
     Total liabilities and shareholders' equity     $1,839,412$1,745,661
    ----------------------------------------------------------------------
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                      CONSOLIDATED STATEMENTS OF INCOME
    (Dollars and shares in thousands,
     except per share amounts)
                                                      (Unaudited)
                                           Three Months       Six Months
    Periods ended June 30,                2003     2002     2003     2002
    ----------------------------------------------------------------------
    Interest income:
     Interest and fees on loans        $12,853$12,823$25,499$23,804
     Interest on securities              8,333    9,307   16,888   17,495
     Dividends on corporate stock and
      Federal Home Loan Bank stock         531      497    1,018      980
     Interest on federal funds sold
      and other short-term investments      39       46       76      108
    ----------------------------------------------------------------------
    
     Total interest income              21,756   22,673   43,481   42,387
    ----------------------------------------------------------------------
    
    Interest expense:
     Savings deposits                      880    1,182    1,830    2,153
     Time deposits                       3,799    4,340    7,733    8,463
     Federal Home Loan Bank advances     4,777    5,510    9,670   10,729
     Other                                  18       20       37       37
    ----------------------------------------------------------------------
    
     Total interest expense              9,474   11,052   19,270   21,382
    ----------------------------------------------------------------------
    
    Net interest income                 12,282   11,621   24,211   21,005
    Provision for loan losses              160      100      260      200
    ----------------------------------------------------------------------
    
    Net interest income after
     provision for loan losses          12,122   11,521   23,951   20,805
    ----------------------------------------------------------------------
    
    Noninterest income:
     Trust and investment management     2,744    2,667    5,277    5,232
     Service charges on deposit
      accounts                           1,348      975    2,448    1,802
     Net gains on loan sales             1,441      398    2,679      914
     Merchant processing fees              862      776    1,319    1,222
     Income from bank-owned life
      insurance                            263      285      547      573
     Net realized gains on securities      400      381      630      672
     Other income                          297      303      488      598
    ----------------------------------------------------------------------
    
     Total noninterest income            7,355    5,785   13,388   11,013
    ----------------------------------------------------------------------
    
    Noninterest expense:
     Salaries and employee benefits      6,619    6,008   13,153   11,583
     Net occupancy                         736      670    1,498    1,295
     Equipment                             837      798    1,674    1,583
     Merchant processing costs             683      614    1,045      971
     Legal, audit and professional
      fees                                 281      221      586      394
     Advertising and promotion             542      436      812      676
     Outsourced services                   325      267      696      528
     Debt prepayment penalties             941        -      941        -
     Amortization of intangibles           179      189      359      221
     Acquisition related expenses            -      605        -      605
     Other                               1,705    1,666    3,062    2,782
    ----------------------------------------------------------------------
    
     Total noninterest expense          12,848   11,474   23,826   20,638
    ----------------------------------------------------------------------
    
    Income before income taxes           6,629    5,832   13,513   11,180
    Income tax expense                   2,055    1,808    4,189    3,412
    ----------------------------------------------------------------------
    
     Net income                         $4,574$4,024$9,324$7,768
    ----------------------------------------------------------------------
    
    Weighted average shares
     outstanding - basic              13,089.4 12,858.7 13,074.4 12,434.1
    Weighted average shares
     outstanding - diluted            13,304.9 13,065.1 13,265.2 12,622.4
    Per share information:
     Basic earnings per share             $.35     $.31     $.71     $.62
     Diluted earnings per share           $.34     $.31     $.70     $.62
     Cash dividends declared per share    $.15     $.14     $.30     $.28
    
    
        CONTACT: Washington Trust Bancorp
                 David V. Devault, 401-348-1319
                 dvdevault@washtrust.com
    
        SOURCE: Washington Trust Bancorp, Inc.