• Washington Trust Bancorp, Inc.
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  • Washington Trust Reports Record Earnings for Third Quarter 2014
    Company Release - 10/20/2014 16:01

    WESTERLY, R.I., Oct. 20, 2014 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced net income of $10.5 million, or 62 cents per diluted share, for the third quarter of 2014, up from second quarter of 2014 net income of $9.8 million, or 58 cents per diluted share.

    "Washington Trust's strong performance continued into the third quarter, as earnings reached an all-time quarterly high," stated Joseph J. MarcAurele, Washington Trust Chairman and CEO. "These results are truly a company-wide effort, as we had good growth along key business lines."

    Selected highlights for the third quarter of 2014 included:

    • Returns on average equity and average assets were 12.15% and 1.25%, respectively. Comparable amounts for the second quarter of 2014 were 11.52% and 1.22%, respectively.
    • Total loans at September 30, 2014 were $2.67 billion, up by a solid $92.9 million, or 4%, from June 30, 2014.
    • Deposit growth was strong in the third quarter, with an increase of $152.8 million, or 6%, from June 30, 2014. Total deposits reached $2.74 billion at September 30, 2014.
    • In September, we declared a quarterly dividend of 32 cents per share, representing a 3 cent increase over the dividend paid last quarter and our third dividend increase in the past year.

    Net Interest Income

    Net interest income totaled $24.9 million for the third quarter of 2014, up by 2% from $24.5 million for the second quarter of 2014. The net interest margin was 3.21% for the third quarter of 2014, compared to 3.35% for the second quarter of 2014. Significant linked quarter changes included:

    • Average interest-earning assets increased by $146.2 million, reflecting growth in average loan balances. The yield on interest-earning assets declined by 14 basis points from the previous quarter, due to the combined effect of lower rates on loan originations and purchased securities and runoff of higher yielding loan and security balances.
    • Average interest-bearing liabilities increased by $118.0 million, with growth in average wholesale funding balances and average interest-bearing deposits. The cost of funds declined by 1 basis point from the previous quarter.

    Noninterest Income

    Noninterest income totaled $13.1 million for the third quarter of 2014, up by 2% from $12.8 million for the second quarter of 2014. Included in noninterest income were the following:

    • Wealth management revenues totaled $8.4 million for the third quarter of 2014, down by $156 thousand, or 2%, with a $324 thousand decline in transaction-based revenues, partially offset by a $168 thousand increase in asset-based revenues. The decline in transaction-based revenues was primarily attributable to a decrease in tax preparation fees, which are typically concentrated in the second quarter.
    • Net gains on loan sales and commissions on loans originated for others totaled $1.7 million for the third quarter of 2014, up by $35 thousand, or 2%. Residential mortgage loans sold to the secondary market were $80.1 million in the third quarter, up by $3.1 million from the second quarter.
    • Net gains on interest rate swap contracts amounted to $339 thousand for the third quarter of 2014, up by $376 thousand from the previous quarter, due to an increase in customer-related interest rate swap transactions.

    Noninterest Expenses

    Noninterest expenses totaled $22.0 million for the third quarter of 2014, down by 2% from $22.4 million for the second quarter of 2014. Included in noninterest expenses were the following:

    • Salaries and employee benefit costs totaled $14.5 million for the third quarter of 2014, down by $255 thousand, or 2%, from the previous quarter, largely due to lower payroll tax expense.
    • Advertising and promotion costs amounted to $368 thousand for the third quarter of 2014, down by $172 thousand, or 32%, as a result of seasonal promotion efforts that occurred in the second quarter.

    Income tax expense amounted to $4.9 million for the third quarter of 2014, up by $291 thousand, or 6%, from $4.6 million for the second quarter of 2014. The effective tax rate for the third quarter of 2014 was 31.6%, compared to 31.9% for the second quarter of 2014. Based on current federal and applicable state income tax statutes, the Corporation currently expects the full-year effective tax rate to be approximately 31.8% for 2014.

    Asset Quality

    Total nonaccrual loans amounted to $17.0 million, or 0.63% of total loans, at September 30, 2014, up from $12.5 million, or 0.49%, at June 30, 2014. The increase in nonaccrual loans during the third quarter was principally due to the classification into nonaccrual status of one commercial real estate loan with a carrying value of $4.9 million. Total past due loans amounted to $19.9 million, or 0.75% of total loans, at September 30, 2014, down from $21.1 million, or 0.82% of total loans, at June 30, 2014. Loans classified as troubled debt restructurings amounted to $18.3 million at September 30, 2014, down from $26.5 million at the end of the previous quarter, reflecting the payoff of an $8.0 million commercial real estate loan.

    The loan loss provision charged to earnings in the third quarter of 2014 totaled $600 thousand, up from $450 thousand in the second quarter of 2014. Net charge-offs amounted to $101 thousand in the third quarter of 2014, compared to $224 thousand in the second quarter of 2014. The allowance for loan losses was $27.8 million, or 1.04% of total loans, at September 30, 2014, compared to $27.3 million, or 1.06% of total loans, at June 30, 2014.

    Loans

    Total loans amounted to $2.67 billion at September 30, 2014, up by $92.9 million, or 4%, from the balance at June 30, 2014. This increase was comprised of the following:

    • The residential real estate loan portfolio grew by $68.9 million, or 8%.
    • Total commercial loans increased by $24.2 million, or 2%, with growth in both commercial real estate and commercial and industrial loans.
    • Consumer loans declined slightly by $221 thousand, or 0.1%.

    Investment Securities

    The securities portfolio amounted to $402.6 million, or 12% of total assets, at September 30, 2014, up from $355.4 million, or 11%, at June 30, 2014. The net increase of $47.2 million included purchases of $74.1 million of debt obligations and mortgage-backed securities issued by U.S. government-sponsored enterprises. The purchases were offset, in part, by principal payments received on mortgage-backed securities, maturities and calls of debt obligations of U.S. sponsored enterprises and state and political subdivisions.

    Deposits and Borrowings

    Deposits totaled $2.74 billion at September 30, 2014, up by $152.8 million, or 6%, from the balance at June 30, 2014. This increase was comprised of the following:

    • Demand deposits increased by $65.2 million, or 16%, while NOW account balances decreased slightly by $669 thousand, or 0.2%.
    • Money market and savings account balances increased by $59.7 million, or 6%.
    • Time deposits increased by $28.6 million, or 4%.

    FHLBB advances amounted to $261.7 million at September 30, 2014, down by $60.4 million from June 30, 2014, primarily due to deposit inflows.

    Capital Management

    Capital levels continued to exceed the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 13.26% at September 30, 2014, compared to 13.24% at June 30, 2014. Total shareholder's equity was $348.6 million at September 30, 2014, up by $5.1 million from June 30, 2014.

    Dividends Declared

    The Board of Directors declared a quarterly dividend of 32 cents per share for the quarter ended September 30, 2014, a 3 cent increase over the dividend paid in the previous quarter. The dividend was paid on October 15, 2014 to shareholders of record on October 1, 2014.

    Conference Call

    Washington Trust will host a conference call to discuss third quarter results, business highlights and outlook on Tuesday, October 21, 2014 at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-877-407-0784. An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-877-870-5176 and entering the Replay PIN Number 13591326; the audio replay will be available through October 31, 2014. Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, www.washtrustbancorp.com, and will be available through December 31, 2014.

    Background

    Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a state-chartered bank headquartered in Westerly, Rhode Island. Founded in 1800, Washington Trust is the oldest community bank in the nation and is the largest independent bank headquartered in Rhode Island. Washington Trust offers a full range of financial services, including commercial banking, small business banking, personal banking, and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts. The Corporation's common stock trades on NASDAQ OMX® under the symbol WASH. Investor information is available on the Corporation's web site: www.washtrustbancorp.com.

    Forward-Looking Statements

    This press release contains statements that are "forward-looking statements". We may also make written or oral forward-looking statements in other documents we file with the SEC, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Washington Trust. These risks, uncertainties and other factors may cause the actual results, performance or achievements of Washington Trust to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

    Some of the factors that might cause these differences include the following: continued weakness in national, regional or local economies; reductions in net interest income resulting from a sustained low interest rate environment as well as changes in the balance and mix of loans and deposits; reductions in the market value of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of Corporation's competition; changes in legislation or regulation and accounting principles, policies and guidelines; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under "Risk Factors" in Item 1A of our Annual Report on Form 10-K, as filed with the SEC and as updated by our Quarterly Reports on Form 10-Q and other SEC filings, may result in these differences. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this press release, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

    Supplemental Information - Explanation of Non-GAAP Financial Measures

    In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures. Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED BALANCE SHEETS (unaudited)
                       
     Sep 30,Dec 31,
    (Dollars in thousands, except par value) 2014 2013
    Assets:    
    Cash and due from banks$86,132$81,939
    Short-term investments 3,869 3,378
    Mortgage loans held for sale, at fair value 35,473 11,636
    Securities:    
    Available for sale, at fair value 376,073 392,903
    Held to maturity, at amortized cost (fair value $27,074 in 2014 and $29,865 in 2013) 26,480 29,905
    Total securities 402,553 422,808
    Federal Home Loan Bank stock, at cost 37,730 37,730
    Loans:    
    Commercial 1,390,373 1,363,335
    Residential real estate 945,580 772,674
    Consumer 338,094 326,875
    Total loans 2,674,047 2,462,884
    Less allowance for loan losses 27,768 27,886
    Net loans 2,646,279 2,434,998
    Premises and equipment, net 26,367 25,402
    Investment in bank-owned life insurance 63,026 56,673
    Goodwill 58,114 58,114
    Identifiable intangible assets, net 5,004 5,493
    Other assets 51,335 50,696
    Total assets$3,415,882$3,188,867
    Liabilities:    
    Deposits:    
    Demand deposits$476,808$440,785
    NOW accounts 313,391 309,771
    Money market accounts 833,318 666,646
    Savings accounts 290,561 297,357
    Time deposits 824,810 790,762
    Total deposits 2,738,888 2,505,321
    Federal Home Loan Bank advances 261,685 288,082
    Junior subordinated debentures 22,681 22,681
    Other liabilities 44,066 43,137
    Total liabilities 3,067,320 2,859,221
    Shareholders' Equity:    
    Common stock of $.0625 par value; authorized 30,000,000 shares; issued and outstanding 16,721,172 shares in 2014 and 16,613,561 shares in 2013 1,045 1,038
    Paid-in capital 100,044 97,566
    Retained earnings 247,052 232,595
    Accumulated other comprehensive income (loss) 421 (1,553)
    Total shareholders' equity 348,562 329,646
    Total liabilities and shareholders' equity$3,415,882$3,188,867
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED STATEMENTS OF INCOME (unaudited)
                       
    (Dollars and shares in thousands, except per share amounts) Three Months Nine Months
    Periods ended September 30, 2014 2013 2014 2013
    Interest income:                  
    Interest and fees on loans          $27,239$26,096$78,997$76,832
       Interest on securities: Taxable           2,397 2,582 8,038 8,003
                                               Nontaxable           519 629 1,658 1,935
    Dividends on Federal Home Loan Bank stock           140 36 420 113
    Other interest income 36 47 99 99
    Total interest and dividend income 30,331 29,390 89,212 86,982
    Interest expense:                  
    Deposits           3,317 3,064 9,406 9,354
    Federal Home Loan Bank advances           1,832 2,693 5,831 8,109
    Junior subordinated debentures           241 241 723 1,243
    Other interest expense 3 4 10 12
    Total interest expense 5,393 6,002 15,970 18,718
    Net interest income           24,938 23,388 73,242 68,264
    Provision for loan losses 600 700 1,350 2,000
    Net interest income after provision for loan losses 24,338 22,688 71,892 66,264
    Noninterest income:                  
    Wealth management revenues           8,374 7,629 24,969 23,015
    Merchant processing fees           3,359 1,291 7,949
    Net gains on loan sales and commissions on loans originated for others           1,742 3,883 4,688 11,534
    Service charges on deposit accounts           881 855 2,459 2,436
    Card interchange fees           804 731 2,264 2,013
    Income from bank-owned life insurance           468 464 1,354 1,392
    Net gains on interest rate swap contracts           339 54 562 225
    Equity in earnings (losses) of unconsolidated subsidiaries           (63) (47) (213) (65)
    Gain on sale of business line           6,265
    Other income 580 472 1,670 1,233
    Noninterest income, excluding other-than-temporary impairment losses 13,125 17,400 45,309 49,732
    Total other-than-temporary impairment losses on securities (613)
    Portion of loss recognized in other comprehensive income (before tax) (2,159)
    Net impairment losses recognized in earnings (2,772)
    Total noninterest income 13,125 17,400 45,309 46,960
    Noninterest expense:                  
    Salaries and employee benefits           14,516 14,640 43,845 45,624
    Net occupancy           1,557 1,404 4,672 4,282
    Equipment           1,211 1,222 3,682 3,658
    Merchant processing costs           2,862 1,050 6,746
    Outsourced services           1,138 878 3,197 2,590
    Legal, audit and professional fees           494 529 1,710 1,691
    FDIC deposit insurance costs           442 448 1,295 1,330
    Advertising and promotion           368 312 1,140 1,143
    Amortization of intangibles           161 170 489 516
    Foreclosed property costs           27 38 48 222
    Debt prepayment penalties           1,125 6,294 1,125
    Other expenses 2,133 1,920 6,365 5,810
    Total noninterest expense 22,047 25,548 73,787 74,737
    Income before income taxes           15,416 14,540 43,414 38,487
    Income tax expense 4,878 4,580 13,781 12,123
    Net income$10,538$9,960$29,633$26,364
                       
    Weighted average common shares outstanding - basic           16,714 16,563 16,673 16,473
    Weighted average common shares outstanding - diluted           16,855 16,696 16,832 16,600
    Per share information:   Basic earnings per common share          $0.63$0.60$1.77  $1.59
                                                Diluted earnings per common share          $0.62$0.59$1.75$1.58
                                                Cash dividends declared per share          $0.32$0.26$0.90$0.76
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
                       
      At or for the Quarters Ended
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars and shares in thousands, except per share amounts) 2014 2014 2014 2013 2013
    Financial Data:                  
    Total assets        $3,415,882$3,317,022$3,194,146$3,188,867$3,131,958
    Total loans         2,674,047 2,581,124 2,478,603 2,462,884 2,353,766
    Total securities         402,553 355,392 389,889 422,808 419,349
    Total deposits         2,738,888 2,586,097 2,591,654 2,505,321 2,454,831
    Total shareholders' equity         348,562 343,450 335,858 329,646 323,585
    Net interest income         24,938 24,468 23,836 23,521 23,388
    Provision for loan losses         600 450 300 400 700
    Noninterest income, excluding OTTI losses         13,125 12,814 19,370 15,837 17,400
    Net OTTI losses recognized in earnings         (717)
    Noninterest expense         22,047 22,448 29,292 24,048 25,548
    Income tax expense         4,878 4,587 4,316 4,404 4,580
    Net income         10,538 9,797 9,298 9,789 9,960
                       
    Share Data:                  
    Basic earnings per common share        $0.63$0.59$0.56$0.59$0.60
    Diluted earnings per common share        $0.62$0.58$0.55$0.58$0.59
    Dividends declared per share        $0.32$0.29$0.29$0.27$0.26
    Book value per share        $20.85$20.56$20.19$19.84$19.51
    Tangible book value per share - Non-GAAP (1)        $17.07$16.77$16.38$16.01$15.66
    Market value per share        $32.99$36.77$37.47$37.22$31.43
    Shares outstanding at end of period         16,721 16,705 16,635 16,614 16,589
    Weighted average common shares outstanding - basic         16,714 16,678 16,626 16,602 16,563
    Weighted average common shares outstanding - diluted         16,855 16,831 16,800 16,770 16,696
                       
    Key Ratios:                  
    Return on average assets         1.25% 1.22% 1.17% 1.24% 1.29%
    Return on average tangible assets - Non-GAAP (1)         1.27% 1.24% 1.20% 1.26% 1.31%
    Return on average equity         12.15% 11.52% 11.10% 11.98% 12.82%
    Return on average tangible equity - Non-GAAP (1)         14.86% 14.15% 13.70% 14.80% 16.13%
    Tier 1 risk-based capital         12.16% (i) 12.13% 12.42% 12.12% 12.23%
    Total risk-based capital         13.26% (i) 13.24% 13.56% 13.29% 13.44%
    Tier 1 leverage ratio         9.35% (i) 9.62% 9.56% 9.41% 9.41%
    Equity to assets         10.20% 10.35% 10.51% 10.34% 10.33%
    Tangible equity to tangible assets - Non-GAAP (1)         8.51% 8.61% 8.70% 8.51% 8.47%
    (i) - estimated                  
                       
    Wealth Management Revenues:                  
    Trust and investment management fees        $6,982$6,828$6,685$6,637$6,291
    Mutual fund fees 1,100 1,086 1,081 1,104 1,075
    Asset-based revenues         8,082 7,914 7,766 7,741 7,366
    Transaction-based revenues 292 616 299 1,069 263
    Total wealth management revenues$8,374$8,530$8,065$8,810$7,629
                       
    Wealth Management Assets Under Administration:                  
    Balance at beginning of period        $5,010,588$4,806,381$4,781,958$4,595,594$4,433,574
    Net investment appreciation (depreciation) & income         (29,199) 131,269 44,335 248,727 190,931
    Net client cash flows 2,075 72,938 (19,912) (62,363) (28,911)
    Balance at end of period$4,983,464$5,010,588$4,806,381$4,781,958$4,595,594
    (1) See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
                       
      Nine Months Ended
     Sep 30,Sep 30,
    (Dollars and shares in thousands, except per share amounts) 2014 2013
    Key Ratios:                  
    Return on average assets               1.21% 1.15%
    Return on average tangible assets - Non-GAAP (1)               1.24% 1.18%
    Return on average equity               11.60% 11.54%
    Return on average tangible equity - Non-GAAP (1)               14.24% 14.61%
                       
    Allowance for Loan Losses:                  
    Balance at beginning of period              $27,886$30,873
    Provision charged to earnings               1,350 2,000
    Charge-offs               (1,638) (5,319)
    Recoveries 170 454
    Balance at end of period$27,768$28,008
                       
    Net Loan Charge-Offs (Recoveries):                  
    Commercial mortgages              $958$4,524
    Other commercial               328 132
    Residential real estate mortgages               36 45
    Consumer 146 164
    Total$1,468$4,865
                       
    Net charge-offs to average loans (annualized)               0.08% 0.27%
                       
    Wealth Management Revenues:                  
    Trust and investment management fees              $20,495$18,587
    Mutual fund fees 3,267 3,174
    Asset-based revenues               23,762 21,761
    Transaction-based revenues 1,207 1,254
    Total wealth management revenues$24,969$23,015
                       
    Wealth Management Assets Under Administration:                  
    Balance at beginning of period              $4,781,958$4,199,640
    Net investment appreciation & income               146,405 383,954
    Net client cash flows 55,101 12,000
    Balance at end of period$4,983,464$4,595,594
    (1)  See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
                       
      For the Quarters Ended
             Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
      2014 2014 2014 2013 2013
    Average Yield / Rate (taxable equivalent basis):                  
    Assets:                  
    Commercial loans         4.20% 4.35% 4.43% 4.52% 4.67%
    Residential real estate loans, including mortgage loans held for sale 4.06% 4.12% 4.15% 4.09% 4.06%
    Consumer loans         3.83% 3.81% 3.83% 3.77% 3.78%
    Total loans         4.10% 4.20% 4.26% 4.28% 4.35%
    Cash, federal funds sold and other short-term investments 0.19% 0.19% 0.23% 0.22% 0.21%
    FHLBB stock         1.47% 1.47% 1.53% 0.37% 0.38%
    Taxable debt securities         2.94% 3.36% 3.47% 3.40% 3.44%
    Nontaxable debt securities         5.86% 5.92% 5.98% 5.88% 5.87%
    Total securities         3.36% 3.74% 3.84% 3.78% 3.88%
    Total interest-earning assets         3.89% 4.03% 4.08% 4.02% 4.12%
    Liabilities:                  
    Interest-bearing demand deposits         —% —% —% —% —%
    NOW accounts         0.06% 0.06% 0.06% 0.06% 0.06%
    Money market accounts         0.41% 0.38% 0.36% 0.34% 0.31%
    Savings accounts         0.06% 0.06% 0.06% 0.06% 0.06%
    Time deposits         1.15% 1.14% 1.15% 1.19% 1.23%
    FHLBB advances         2.57% 3.20% 3.37% 3.49% 3.25%
    Junior subordinated debentures         4.22% 4.26% 4.31% 4.22% 4.22%
    Other         7.88% 9.90% 7.03% 2.52% 4.50%
    Total interest-bearing liabilities         0.84% 0.85% 0.93% 0.98% 1.01%
                       
    Interest rate spread (taxable equivalent basis)         3.05% 3.18% 3.15% 3.04% 3.11%
    Net interest margin (taxable equivalent basis)         3.21% 3.35% 3.34% 3.24% 3.29%
                       
      At September 30, 2014
                Amortized Unrealized Unrealized Fair
    (Dollars in thousands) Cost (1) Gains Losses Value
    Securities Available for Sale:                  
    Obligations of U.S. government-sponsored enterprises  $ 31,008  $—    ($89)  $ 30,919
    Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 248,369 9,012 (160) 257,221
    Obligations of states and political subdivisions 52,526 1,991 54,517
    Individual name issuer trust preferred debt securities 30,743 (3,546) 27,197
    Corporate bonds 6,122 104 (7) 6,219
    Total securities available for sale 368,768 11,107 (3,802) 376,073
    Held to Maturity:                  
    Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 26,480 594 27,074
    Total securities held to maturity 26,480 594 27,074
    Total securities  $ 395,248  $ 11,701   ($3,802)  $ 403,147
    (1)  Net of other-than-temporary impairment losses recognized in earnings.
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
                       
      Period End Balances At
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars in thousands) 2014 2014 2014 2013 2013
    Loans:                 
    Commercial:                   Mortgages        $766,703$772,772$788,836$796,249$727,375
                                     Construction & development         58,750 38,574 24,696 36,289 51,951
                                     Other 564,920 554,824 523,751 530,797 518,566
                                     Total commercial         1,390,373 1,366,170 1,337,283 1,363,335 1,297,892
    Residential real estate: Mortgages         912,956 846,187 784,623 749,163 711,427
                                      Homeowner construction 32,624 30,452 25,770 23,511 20,265
                                     Total residential real estate         945,580 876,639 810,393 772,674 731,692
    Consumer:                      Home equity lines         240,567 237,390 233,728 231,362 227,063
                                     Home equity loans         46,455 45,632 41,991 40,212 41,158
                                     Other 51,072 55,293 55,208 55,301 55,961
                                     Total consumer 338,094 338,315 330,927 326,875 324,182
                                     Total loans$2,674,047$2,581,124$2,478,603$2,462,884$2,353,766
                       
      At September 30, 2014
    (Dollars in thousands) Balance % of Total
    Commercial Real Estate Loans by Property Location:                  
    Rhode Island, Connecticut, Massachusetts              $778,746 94.4%
    New York, New Jersey               38,131 4.6%
    New Hampshire 8,576 1.0%
    Total commercial real estate loans (1)$825,453 100.0%
    (1)  Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.
                       
      At September 30, 2014
    (Dollars in thousands) Balance % of Total
    Residential Mortgages by Property Location:                  
    Rhode Island, Connecticut, Massachusetts              $926,029 98.1%
    New Hampshire               9,522 1.0%
    New York, Virginia, New Jersey, Maryland, Pennsylvania               5,138 0.5%
    Ohio               2,025 0.2%
    Washington, Oregon               1,337 0.1%
    Georgia               1,067 0.1%
    New Mexico 462 —%
    Total residential mortgages$945,580 100.0%
                       
      Period End Balances At
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars in thousands) 2014 2014 2014 2013 2013
    Deposits:                  
    Demand deposits        $476,808$411,586$445,570$440,785$420,075
    NOW accounts         313,391 314,060 311,461 309,771 301,250
    Money market accounts         833,318 772,084 704,434 666,646 623,631
    Savings accounts         290,561 292,112 293,322 297,357 292,765
    Time deposits 824,810 796,255 836,867 790,762 817,110
    Total deposits$2,738,888$2,586,097$2,591,654$2,505,321$2,454,831
                       
    Out-of-market brokered certificates of deposits included in time deposits$211,222$171,216$171,275$98,009$106,231
    In-market deposits, excluding out-of-market brokered certificates of deposit$2,527,666$2,414,881$2,420,379$2,407,312$2,348,600
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
                       
      Period End Balances At
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars in thousands) 2014 2014 2014 2013 2013
    Asset Quality Data:                  
    Nonperforming Assets:                  
    Commercial mortgages        $6,022$2,290$2,293$7,492$8,956
    Commercial construction and development        
    Other commercial         1,326 1,615 1,198 1,291 1,248
    Residential real estate mortgages         7,890 7,417 8,975 8,315 8,095
    Consumer 1,727 1,213 1,108 1,204 1,204
    Total nonaccrual loans         16,965 12,535 13,574 18,302 19,503
    Nonaccrual investment securities         547 425
    Property acquired through foreclosure or repossession 988 1,309 750 932 594
    Total nonperforming assets$17,953$13,844$14,324$19,781$20,522
                       
    Total past due loans to total loans         0.75% 0.82% 0.73% 0.89% 1.02%
    Nonperforming assets to total assets         0.53% 0.42% 0.45% 0.62% 0.66%
    Nonaccrual loans to total loans         0.63% 0.49% 0.55% 0.74% 0.83%
    Allowance for loan losses to nonaccrual loans         163.68% 217.54% 199.23% 152.37% 143.61%
    Allowance for loan losses to total loans         1.04% 1.06% 1.09% 1.13% 1.19%
                       
    Troubled Debt Restructured Loans:                  
    Accruing troubled debt restructured loans:                  
    Commercial mortgages        $9,677$22,603$22,796$22,800$23,892
    Other commercial         1,036 969 989 1,265 1,576
    Residential real estate mortgages         1,258 1,459 1,467 1,442 870
    Consumer 164 167 233 236 239
    Accruing troubled debt restructured loans 12,135 25,198 25,485 25,743 26,577
    Nonaccrual troubled debt restructured loans:                  
    Commercial mortgages         4,898
    Other commercial         854 872 369 542 547
    Residential real estate mortgages         441 448 447
    Consumer 29 38 40
    Nonaccrual troubled debt restructured loans 6,193 1,320 845 580 587
    Total troubled debt restructured loans$18,328$26,518$26,330$26,323$27,164
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
                       
      Period End Balances At
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars in thousands) 2014 2014 2014 2013 2013
    Past Due Loans:                  
    Loans 30-59 Days Past Due:                  
    Commercial mortgages         $—$311 $— $— $—
    Other commercial loans         1,129 1,785 3,351 276 2,648
    Residential real estate mortgages         2,582 5,249 2,232 4,040 2,624
    Consumer loans 1,677 1,889 1,365 1,322 1,013
    Loans 30-59 days past due$5,388$9,234$6,948$5,638$6,285
                       
    Loans 60-89 Days Past Due:                  
    Commercial mortgages         $—$1,583$15 $—$730
    Other commercial loans         314 773 127 302 8
    Residential real estate mortgages         2,001 855 1,265 1,285 1,960
    Consumer loans 356 1,102 658 166 328
    Loans 60-89 days past due$2,671$4,313$2,065$1,753$3,026
                       
    Loans 90 Days or more Past Due:                  
    Commercial mortgages        $5,995$2,250$2,238$7,492$8,226
    Other commercial loans         970 417 428 731 929
    Residential real estate mortgages         3,922 4,335 5,634 5,633 4,843
    Consumer loans 989 512 701 656 693
    Loans 90 days or more past due$11,876$7,514$9,001$14,512$14,691
                       
    Total Past Due Loans:                  
    Commercial mortgages        $5,995$4,144$2,253$7,492$8,956
    Other commercial loans         2,413 2,975 3,906 1,309 3,585
    Residential real estate mortgages         8,505 10,439 9,131 10,958 9,427
    Consumer loans 3,022 3,503 2,724 2,144 2,034
    Total past due loans$19,935$21,061$18,014$21,903$24,002
                       
    Accruing loans 90 days or more past due         $— $— $— $— $—
    Nonaccrual loans included in past due loans        $14,364$10,432$11,487$15,591$17,275
                       
      For the Quarters Ended
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars in thousands)  2014 2014 2014 2013 2013
    Allowance for Loan Losses:                  
    Balance at beginning of period          $27,269  $27,043  $27,886  $28,008  $27,884
    Provision charged to earnings         600 450 300 400 700
    Charge-offs         (148) (267) (1,223) (703) (770)
    Recoveries 47 43 80 181 194
    Balance at end of period  $27,768  $27,269  $27,043  $27,886  $28,008
                       
    Net Loan Charge-Offs (Recoveries):                  
    Commercial mortgages          ($7)  $26  $939  $309  $602
    Other commercial         63 95 170 73 (2)
    Residential real estate mortgages         (1) 30 7 80
    Consumer 46 73 27 60 (24)
    Total  $101  $224  $1,143  $522  $576
                       
    The following tables present average balance and interest rate information. Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes, net of the related federal tax benefit. For dividends on corporate stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency. Unrealized gains (losses) on available for sale securities are excluded from the average balance and yield calculations. Nonaccrual and renegotiated loans, as well as interest earned on these loans (to the extent recognized in the Consolidated Statements of Income) are included in amounts presented for loans.
                       
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
                       
      Three Months Ended
     September 30, 2014June 30, 2014September 30, 2013
          Yield/     Yield/     Yield/
    (Dollars in thousands) Average Balance Interest Rate Average Balance Interest Rate Average Balance Interest Rate
    Assets:                  
    Commercial loans$1,380,229$14,624 4.20%$1,339,310$14,509 4.35%$1,297,705$15,274 4.67%
    Residential real estate loans, including loans held for sale 946,738 9,685 4.06% 856,955 8,811 4.12% 780,323 7,991 4.06%
    Consumer loans 337,598 3,259 3.83% 333,881 3,171 3.81% 323,398 3,083 3.78%
    Total loans 2,664,565 27,568 4.10% 2,530,146 26,491 4.20% 2,401,426 26,348 4.35%
    Cash, federal funds sold and short-term investments 74,569 36 0.19% 59,507 28 0.19% 87,048 47 0.21%
    FHLBB stock 37,730 140 1.47% 37,730 138 1.47% 37,730 36 0.38%
    Taxable debt securities 323,140 2,397 2.94% 322,418 2,699 3.36% 297,532 2,582 3.44%
    Nontaxable debt securities 53,374 789 5.86% 57,422 847 5.92% 64,836 960 5.87%
    Total securities 376,514 3,186 3.36% 379,840 3,546 3.74% 362,368 3,542 3.88%
    Total interest-earning assets 3,153,378 30,930 3.89% 3,007,223 30,203 4.03% 2,888,572 29,973 4.12%
    Noninterest-earning assets 216,945     207,426     209,656    
    Total assets$3,370,323    $3,214,649    $3,098,228    
    Liabilities and Shareholders' Equity:                  
    Interest-bearing demand deposits$12,862 $— —%$9,067 $— —%$6,688 $— —%
    NOW accounts 311,077 47 0.06% 311,948 47 0.06% 293,634 45 0.06%
    Money market accounts 798,273 830 0.41% 759,704 713 0.38% 591,860 456 0.31%
    Savings accounts 291,386 46 0.06% 291,671 45 0.06% 295,821 47 0.06%
    Time deposits 827,267 2,394 1.15% 813,558 2,315 1.14% 811,850 2,516 1.23%
    FHLBB advances 283,219 1,832 2.57% 220,088 1,758 3.20% 328,705 2,693 3.25%
    Junior subordinated debentures 22,681 241 4.22% 22,681 241 4.26% 22,681 241 4.22%
    Other 151 3 7.88% 162 4 9.90% 353 4 4.50%
    Total interest-bearing liabilities 2,546,916 5,393 0.84% 2,428,879 5,123 0.85% 2,351,592 6,002 1.01%
    Demand deposits 439,353     409,851     384,665    
    Other liabilities 37,217     35,684     51,186    
    Shareholders' equity 346,837     340,235     310,785    
    Total liabilities and shareholders' equity$3,370,323    $3,214,649    $3,098,228    
    Net interest income (FTE)  $25,537    $25,080    $23,971  
    Interest rate spread     3.05%     3.18%     3.11%
    Net interest margin     3.21%     3.35%     3.29%
                       
    Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
                       
    (Dollars in thousands) Three Months Ended
     Sep 30,
    2014
    Jun 30,
    2014
    Sep 30,
    2013
    Commercial loans            $329$322$252
    Nontaxable debt securities 270 290 331
    Total$599$612$583
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
                       
      Nine Months Ended
     September 30, 2014September 30, 2013
                Yield/     Yield/
    (Dollars in thousands) Average Balance Interest Rate Average Balance Interest Rate
    Assets:                  
    Commercial loans      $1,352,271$43,733 4.32%$1,277,753$44,443 4.65%
    Residential real estate loans, including loans held for sale 869,230 26,704 4.11% 766,162 23,805 4.15%
    Consumer loans 333,127 9,527 3.82% 323,871 9,226 3.81%
    Total loans       2,554,628 79,964 4.19% 2,367,786 77,474 4.37%
    Cash, federal funds sold and short-term investments 65,486 99 0.20% 61,945 99 0.21%
    FHLBB stock       37,730 420 1.49% 38,409 113 0.39%
    Taxable debt securities       329,779 8,038 3.26% 304,854 8,003 3.51%
    Nontaxable debt securities 56,894 2,520 5.92% 66,444 2,949 5.93%
    Total securities 386,673 10,558 3.65% 371,298 10,952 3.94%
    Total interest-earning assets       3,044,517 91,041 4.00% 2,839,438 88,638 4.17%
    Noninterest-earning assets 209,286     211,108    
    Total assets$3,253,803    $3,050,546    
    Liabilities and Shareholders' Equity:                  
    Interest-bearing demand deposits      $10,906 $— —%$2,299 $— —%
    NOW accounts       309,101 141 0.06% 288,871 135 0.06%
    Money market accounts       748,121 2,152 0.38% 541,160 1,189 0.29%
    Savings accounts       291,949 136 0.06% 287,360 139 0.06%
    Time deposits       812,871 6,977 1.15% 841,418 7,891 1.25%
    FHLBB advances       257,814 5,831 3.02% 333,544 8,109 3.25%
    Junior subordinated debentures       22,681 723 4.26% 28,988 1,243 5.73%
    Other 162 10 8.25% 565 12 2.84%
    Total interest-bearing liabilities       2,453,605 15,970 0.87% 2,324,205 18,718 1.08%
    Demand deposits       424,120     370,508    
    Other liabilities       35,335     51,250    
    Shareholders' equity 340,743     304,583    
    Total liabilities and shareholders' equity$3,253,803    $3,050,546    
    Net interest income (FTE)  $75,071    $69,920  
    Interest rate spread           3.13%     3.09%
    Net interest margin     3.30%     3.29%
                       
    Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
                       
    (Dollars in thousands) Nine Months Ended
     Sep 30,
    2014
    Sep 30,
    2013
    Commercial loans              $967$642
    Nontaxable debt securities 862 1,014
    Total$1,829$1,656
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
                       
      At or for the Quarters Ended
     Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
    (Dollars in thousands, except per share amounts) 2014 2014 2014 2013 2013
    Calculation of Tangible Book Value per Share:                  
    Total shareholders' equity at end of period        $348,562$343,450$335,858$329,646$323,585
    Less:                  
    Goodwill         58,114 58,114 58,114 58,114 58,114
    Identifiable intangible assets, net 5,004 5,165 5,329 5,493 5,657
    Total tangible shareholders' equity at end of period$285,444$280,171$272,415$266,039$259,814
                       
    Shares outstanding at end of period 16,721 16,705 16,635 16,614 16,589
                       
    Book value per share - GAAP$20.85$20.56$20.19$19.84$19.51
    Tangible book value per share - Non-GAAP$17.07$16.77$16.38$16.01$15.66
                       
    Calculation of Tangible Equity to Tangible Assets:                  
    Total tangible shareholders' equity at end of period$285,444$280,171$272,415$266,039$259,814
                       
    Total assets at end of period        $3,415,882$3,317,022$3,194,146$3,188,867$3,131,958
    Less:                  
    Goodwill         58,114 58,114 58,114 58,114 58,114
    Identifiable intangible assets, net 5,004 5,165 5,329 5,493 5,657
    Total tangible assets at end of period$3,352,764$3,253,743$3,130,703$3,125,260$3,068,187
                       
    Equity to assets - GAAP 10.20% 10.35% 10.51% 10.34% 10.33%
    Tangible equity to tangible assets - Non-GAAP 8.51% 8.61% 8.70% 8.51% 8.47%
                       
    Calculation of Return on Average Tangible Assets:                  
    Net income$10,538$9,797$9,298$9,789$9,960
                       
    Total average assets        $3,370,323$3,214,649$3,174,281$3,163,042$3,098,228
    Less:                  
    Average goodwill         58,114 58,114 58,114 58,114 58,114
    Average identifiable intangible assets, net 5,082 5,245 5,410 5,573 5,739
    Total average tangible assets$3,307,127$3,151,290$3,110,757$3,099,355$3,034,375
                       
    Return on average assets - GAAP 1.25% 1.22% 1.17% 1.24% 1.29%
    Return on average tangible assets - Non-GAAP 1.27% 1.24% 1.20% 1.26% 1.31%
                       
    Calculation of Return on Average Tangible Equity:                  
    Net income$10,538$9,797$9,298$9,789$9,960
                       
    Total average shareholders' equity        $346,837$340,235$335,029$326,866$310,785
    Less:                  
    Average goodwill         58,114 58,114 58,114 58,114 58,114
    Average identifiable intangible assets, net 5,082 5,245 5,410 5,573 5,739
    Total average tangible shareholders' equity$283,641$276,876$271,505$263,179$246,932
                       
    Return on average shareholders' equity - GAAP 12.15% 11.52% 11.10% 11.98% 12.82%
    Return on average tangible shareholders' equity - Non-GAAP 14.86% 14.15% 13.70% 14.80% 16.13%
                       
    Washington Trust Bancorp, Inc. and Subsidiaries
    SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
                       
      Nine Months Ended
     Sep 30,Sep 30,
    (Dollars in thousands)  2014 2013
    Calculation of return on average tangible assets:    
    Net income$29,633$26,364
                       
    Total average assets              $3,253,803$3,050,546
    Less:                  
    Average goodwill               58,114 58,114
    Average identifiable intangible assets, net 5,244 5,911
    Total average tangible assets$3,190,445$2,986,521
                       
    Return on average assets - GAAP 1.21% 1.15%
    Return on average tangible assets - Non-GAAP 1.24% 1.18%
                       
                       
    Calculation of return on average tangible equity:                  
    Net income$29,633$26,364
                       
    Total average shareholders' equity              $340,743$304,583
    Less:                  
    Average goodwill               58,114 58,114
    Average identifiable intangible assets, net 5,244 5,911
    Total average tangible shareholders' equity$277,385$240,558
                       
    Return on average shareholders' equity - GAAP 11.60% 11.54%
    Return on average tangible shareholders' equity - Non-GAAP 14.24% 14.61%
    CONTACT: Elizabeth B. Eckel
             Senior Vice President, Marketing
             Telephone: (401) 348-1309
             E-mail: ebeckel@washtrust.com

    Source: Washington Trust Bancorp, Inc.