• Washington Trust Bancorp, Inc.
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  • Washington Trust Announces Earnings
    Company Release - 01/24/2007 08:05

    WESTERLY, R.I.--(BUSINESS WIRE)--

    Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced fourth quarter 2006 net income of $6.2 million, or 45 cents per diluted share. Net income for the fourth quarter of 2005 also totaled $6.2 million, or 45 cents per diluted share. For the year ended December 31, 2006, net income was $25.0 million, up $2.0 million, or 8.7 percent, from 2005. On a per diluted share basis, net income was $1.82 for the year ended December 31, 2006, up 13 cents, or 7.7 percent, from the $1.69 reported for 2005. Operating results for 2006 reflect the full year impact of Weston Financial Group, Inc. ("Weston Financial"), which was acquired in the third quarter of 2005.

        Other 2006 highlights include:
    
        --  2006 return on average equity and average assets were 14.99%
            and 1.04%, respectively, up from 14.80% and 0.98%,
            respectively, in 2005.
    
        --  Noninterest income, as a percent of total revenues, increased
            from 33.8% in 2005 to 40.7% in 2006.
    
        --  Asset quality remained strong as nonperforming assets to total
            assets amounted to 0.11% at December 31, 2006.
    

    "Washington Trust posted solid earnings in 2006, in light of a challenging interest rate environment and extremely competitive market," stated John C. Warren, Washington Trust Chairman and Chief Executive Officer. "We continue to gain market share, attract new clients, and build existing relationships by focusing on service excellence and offering superior retail, business and wealth management products."

    Net interest income totaled $15.0 million for the fourth quarter of 2006, down $727 thousand, or 4.6 percent, from the $15.7 million reported for the fourth quarter a year ago. The net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) for the fourth quarter of 2006 amounted to 2.74%, down 10 basis points from the fourth quarter of 2005. The net interest margin was down 4 basis points from the third quarter of 2006 (excluding 8 basis points attributable to an extra third quarter dividend received from the Federal Home Loan Bank of Boston). The continued rise in short-term rates in 2006 has caused deposit costs to rise, while yields on loans and securities have increased by lesser amounts. For the year 2006, net interest income amounted to $61.5 million, up $818 thousand, or 1.3 percent, from 2005. The net interest margin for 2006 was 2.80%, compared to 2.79% for 2005.

    Excluding net realized gains and losses on securities, noninterest income amounted to $10.4 million for the fourth quarter of 2006, an increase of $1.3 million, or 14 percent, from the same quarter of 2005. This increase is primarily attributable to higher revenues from wealth management services. Wealth management revenues were $6.7 million for the fourth quarter of 2006, up $898 thousand, or 15 percent, from the fourth quarter of 2005. Assets under administration totaled $3.695 billion at December 31, 2006, up $144 million in the fourth quarter of 2006 and up $423 million, or 13 percent, from $3.272 billion at December 31, 2005. These increases are due to financial market appreciation and business development efforts.

    Noninterest income, excluding net realized gains and losses on securities, totaled $41.7 million for the year 2006, up $11.2 million, or 36 percent, from 2005. This increase is primarily attributable to higher revenues from wealth management services, largely due to the acquisition of Weston Financial which was completed on August 31, 2005.

    Noninterest expenses amounted to $15.7 million for the fourth quarter of 2006, essentially unchanged from the same quarter a year ago although the fourth quarter of 2005 included the Corporation's annual charitable contribution of $522 thousand. The 2006 annual contribution occurred in the second quarter. For the year ended December 31, 2006, noninterest expenses totaled $65.3 million, up $8.9 million, or 16 percent, from 2005. Included in noninterest expenses were merchant processing costs representing third-party costs incurred that are directly attributable to handling merchant credit card transactions. Merchant processing costs for 2006 increased 22 percent from 2005 largely due to increased volume of transactions processed. Excluding the impact of Weston Financial operating expenses, the increase in merchant processing costs and $605 thousand of direct acquisition and acquisition related costs recognized in 2005, noninterest expenses for 2006 increased $3.2 million, or 6 percent, from 2005.

    The effective income tax rates for 2006 were 33.8% for the fourth quarter and 32.6% for the full year compared with 32.7% and 32.3%, respectively, for the same periods in 2005. The higher effective income tax rate in the fourth quarter of 2006 was largely attributable to a change in the Corporation's state tax position. The Corporation currently expects that the effective tax rate for 2007 will be in the range of 31.25% to 31.75%.

    The returns on average equity and average assets for the quarter ended December 31, 2006 were 14.06% and 1.04%, respectively, compared to 15.63% and 1.03%, respectively, for the comparable quarter in 2005. The returns on average equity and average assets for the year 2006 were 14.99% and 1.04%, respectively, compared to 14.80% and 0.98%, respectively, for 2005.

    Total assets were $2.399 billion at December 31, 2006, down $2.8 million from December 31, 2005. The Corporation has experienced relatively modest loan demand during 2006 and has also reduced its investment securities portfolio.

    Total loans increased by $31.5 million, or 2.2 percent, in the fourth quarter of 2006 and $58.1 million, or 4.1 percent, in the year, with the largest increase in the commercial loan category. Commercial and commercial real estate loans were up by $26.1 million on a linked quarter basis and $32.7 million for the year. Residential mortgages increased by $1.3 million from September 30, 2006 and $6.0 million from December 31, 2005. Led by growth in home equity loans, consumer loans rose by $4.1 million in the fourth quarter of 2006 and $19.4 million from the end of 2005.

    The investment securities portfolio has declined by $80.1 million since December 31, 2005, primarily resulting from balance sheet repositioning transactions in response to the flat to inverted yield curve shape in effect during most of this period. Net realized losses on securities of $16 thousand were recognized in the fourth quarter of 2006, including sales of mortgage-backed securities totaling $48.1 million with a realized loss of $1.2 million and sales of equity securities with a realized gain of $1.2 million. For the year ended December 31, 2006, net realized gains on securities sales amounted to $443 thousand. This included a realized gain of $381 thousand recognized in the second quarter of 2006 in connection with the annual charitable donation of appreciated equity securities. Net realized gains and losses on securities sales during 2005 totaled $357 thousand, resulting principally from the fourth quarter 2005 charitable donation of appreciated equity securities. Proceeds from the sales transactions during the fourth quarter of 2006 were primarily used to reduce advances from the Federal Home Loan Bank of Boston ("FHLBB"). FHLBB advances increased by $10.4 million and declined by $70.8 million during the three and twelve month periods ended December 31, 2006, respectively.

    Total deposits declined by $22.2 million, or 1.3 percent, in the fourth quarter of 2006 and increased by $38.7 million, or 2.4 percent, from December 31, 2005. Excluding brokered certificates of deposit, in-market deposits were down $11.6 million, or 0.8 percent, on a linked quarter basis and up $63.2 million, or 4.4 percent, for the year. The Corporation has generally experienced little in-market deposit growth during the fourth quarter in recent years.

    Asset quality continues to remain strong , with nonperforming assets (nonaccrual loans and property acquired through foreclosure) amounting to $2.7 million, or 0.11% of total assets, at December 31, 2006, compared to $2.4 million, or 0.10% of total assets at December 31, 2005. Net charge-offs amounted to $224 thousand for the year ended December 31, 2006, compared to net loan recoveries of $197 thousand for 2005.

    The allowance for loan losses was $18.9 million, or 1.29% of total loans, at December 31, 2006, compared to $17.9 million, or 1.28% of total loans, at December 31, 2005. The Corporation's loan loss provision charged to earnings amounted to $300 thousand and $1.2 million, respectively, for the quarter and year ended December 31, 2006, unchanged from the amounts recorded for the same periods in 2005.

    Total shareholders' equity amounted to $173.1 million at December 31, 2006, compared to $158.4 million at December 31, 2005. Book value per share as of December 31, 2006 and December 31, 2005 amounted to $12.89 and $11.86, respectively.

    The Corporation announced during the fourth quarter of 2006 that its Board of Directors has approved a new common stock repurchase plan to replace its prior stock repurchase plan. The new plan authorizes the repurchase of up to 400,000 shares, or approximately 3%, of the Corporation's common stock in open market transactions. During the fourth quarter of 2006, 50,000 shares were repurchased under the prior plan at a cost of $1.4 million.

    Washington Trust President and Chief Executive Officer John C. Warren, and David V. Devault, Executive Vice President, Secretary, Treasurer, and Chief Financial Officer, will host a conference call on Wednesday, January 24, 2007 at 4:30 p.m. (Eastern Time) to discuss the Corporation's fourth quarter and year-end results. This call is being webcast by VCall and can be accessed through the Investor Relations section of the Washington Trust website, www.washtrust.com. A replay of the call will be posted in this same location on the website shortly after the conclusion of the call. You may also listen to a replay by dialing (877) 660-6853, and entering Account #: 286 and Conference ID #: 226875. The replay will be available until 11:59 p.m. on January 31, 2007.

    Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. Washington Trust offers personal banking, business banking and wealth management services through its offices in Rhode Island, Massachusetts and southeastern Connecticut. Washington Trust Bancorp, Inc.'s common stock trades on the NASDAQ Global Market(R) under the symbol WASH. Investor information is available on the Corporation's web site: www.washtrust.com.

    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. All statements, other than statements of historical facts, including statements regarding our strategy, effectiveness of investment programs, evaluations of future interest rate trends and liquidity, expectations as to growth in assets, deposits and results of operations, success of acquisitions, future operations, market position, financial position, and prospects, plans, goals and objectives of management are forward-looking statements. The actual results, performance or achievements of the Corporation could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of wealth management and trust assets under administration, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default and charge-off rates, changes in the size and nature of the 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. The Corporation assumes no obligation to update forward-looking statements or update the reasons actual results, performance or achievements could differ materially from those provided in the forward-looking statements, except as required by law.

    Washington Trust Bancorp, Inc. and Subsidiaries
                              FINANCIAL SUMMARY
    
                                                  Three Months Ended
                                             -----------------------------
                                             Dec. 31,  Sep. 30,  Dec. 31,
     (Dollars and shares in thousands,
      except per share amounts)                2006      2006      2005
                                             --------- --------- ---------
    
    Operating Results
    ----------------------------------------
    Net interest income                       $14,976   $15,866   $15,703
    Provision for loan losses                     300       300       300
    Net realized (1osses) gains on
     securities                                   (16)     (365)      337
    Other noninterest income                   10,449    11,148     9,162
    Noninterest expenses                       15,740    16,611    15,766
    Income tax expense                          3,166     3,160     2,983
    Net income                                  6,203     6,578     6,153
    
    Per Share
    ----------------------------------------
    Basic earnings                              $0.46     $0.49     $0.46
    Diluted earnings                            $0.45     $0.48     $0.45
    Dividends declared                          $0.19     $0.19     $0.18
    
    Weighted Average Shares Outstanding
    ----------------------------------------
           Basic                             13,452.5  13,436.6  13,352.4
           Diluted                           13,769.3  13,726.3  13,659.6
    
    Key Ratios
    ----------------------------------------
    Return on average assets                     1.04%     1.09%     1.03%
    Return on average equity                    14.06%    15.62%    15.63%
    Interest rate spread (taxable equivalent
     basis)                                      2.39%     2.51%     2.53%
    Net interest margin (taxable equivalent
     basis)                                      2.74%     2.86%     2.84%
    
    Allowance for Loan Losses
    ----------------------------------------
    Balance at beginning of period            $18,645   $18,480   $17,614
    Provision charged to earnings                 300       300       300
    Net (charge-offs) recoveries                  (51)     (135)        4
                                             --------- --------- ---------
    Balance at end of period                  $18,894   $18,645   $17,918
                                             --------- --------- ---------
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                              FINANCIAL SUMMARY
    
                                                           Years Ended
                                                       -------------------
                                                       Dec. 31,  Dec. 31,
    (Dollars and shares in thousands, except per share
     amounts)                                            2006      2005
                                                       --------- ---------
    
    Operating Results
    --------------------------------------------------
    Net interest income                                 $61,474   $60,656
    Provision for loan losses                             1,200     1,200
    Net realized gains on securities                        443       357
    Other noninterest income                             41,740    30,589
    Noninterest expenses                                 65,335    56,393
    Income tax expense                                   12,091    10,985
    Net income                                           25,031    23,024
    
    Per Share
    --------------------------------------------------
    Basic earnings                                        $1.86     $1.73
    Diluted earnings                                      $1.82     $1.69
    Dividends declared                                    $0.76     $0.72
    
    Weighted Average Shares Outstanding
           Basic                                       13,424.1  13,315.2
           Diluted                                     13,723.2  13,626.7
    
    Key Ratios
    --------------------------------------------------
    Return on average assets                               1.04%     0.98%
    Return on average equity                              14.99%    14.80%
    Interest rate spread (taxable equivalent basis)        2.47%     2.49%
    Net interest margin (taxable equivalent basis)         2.80%     2.79%
    
    Allowance for Loan Losses
    --------------------------------------------------
    Balance at beginning of period                      $17,918   $16,771
    Provision charged to earnings                         1,200     1,200
    Reclassification of allowance on off-balance sheet
     exposures                                                -      (250)
    Net (charge-offs) recoveries                           (224)      197
                                                       --------- ---------
    Balance at end of period                            $18,894   $17,918
                                                       --------- ---------
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                              FINANCIAL SUMMARY
    
    (Dollars and shares in thousands,
     except per share amounts)          Dec. 31,    Sep. 30,    Dec. 31,
    Period-End Balance Sheet              2006        2006        2005
    ---------------------------------- ----------- ----------- -----------
    Assets                             $2,399,165  $2,403,266  $2,402,003
    Total securities                      703,851     741,350     783,941
    Loans:
           Commercial and other:
             Mortgages                    282,019     274,635     291,292
             Construction and
              development                  32,233      29,653      37,190
             Other                        273,145     257,026     226,252
           Total commercial and other     587,397     561,314     554,734
           Residential real estate:
             Mortgages                    577,522     572,399     565,680
             Homeowner construction        11,149      14,973      17,028
           Total residential real
            estate                        588,671     587,372     582,708
           Consumer:
             Home equity lines            145,676     147,897     161,100
             Home equity loans             93,947      90,711      72,288
             Other                         44,295      41,190      31,078
           Total consumer                 283,918     279,798     264,466
           Total loans                  1,459,986   1,428,484   1,401,908
    Deposits:
           Demand deposits                186,533     189,329     196,102
           NOW accounts                   175,479     172,317     178,677
           Money market accounts          286,998     295,431     223,255
           Savings accounts               205,998     193,029     212,499
           Time deposits                  822,989     850,080     828,725
           Total deposits               1,677,997   1,700,186   1,639,258
    Brokered deposits included in time
     deposits                             175,618     186,184     200,115
    Federal Home Loan Bank advances       474,561     464,148     545,323
    Shareholders' equity                  173,056     172,420     158,446
    
    Capital Ratios
    ----------------------------------
    Tier 1 risk-based capital                9.60%       9.55%       9.06%
    Total risk-based capital                11.00%      10.96%      10.51%
    Tier 1 leverage ratio                    6.04%       5.81%       5.45%
    
    Share Information
    ----------------------------------
    Shares outstanding at end of
     period                              13,429.7    13,445.1    13,361.8
    Book value per share                   $12.89      $12.82      $11.86
    Tangible book value per share           $8.61       $8.53       $7.79
    Market value per share                 $27.89      $26.51      $26.18
    
    Credit Quality
    ----------------------------------
    Nonaccrual loans:
           Commercial:
             Mortgages                       $981        $436        $394
             Construction and
              development                       -           -           -
             Other                            831         608         624
           Residential real estate            721       1,004       1,147
           Consumer                           190         132         249
                                       ----------- ----------- -----------
           Total nonaccrual loans          $2,723      $2,180      $2,414
    Other real estate owned, net                -         402           -
    Nonperforming assets to total
     assets                                  0.11%       0.11%       0.10%
    Nonaccrual loans to total loans          0.19%       0.15%       0.17%
    Allowance for loan losses to
     nonaccrual loans                      693.87%     855.28%     742.25%
    Allowance for loan losses to total
     loans                                   1.29%       1.31%       1.28%
    
    Assets Under Administration
    ----------------------------------
    Market value                       $3,694,813  $3,550,965  $3,271,756
    

    Certain prior year amounts have been reclassified to conform to the current year classification.

    Washington Trust Bancorp, Inc. and Subsidiaries
                         CONSOLIDATED BALANCE SHEETS
                                                    (Unaudited)
    (Dollars in thousands)                           Dec. 31,   Dec. 31,
                                                       2006       2005
                                                    ----------------------
    Assets:
    Cash and due from banks                            $54,337    $48,997
    Federal funds sold and other short-term
     investments                                        17,572     17,166
    Mortgage loans held for sale                         2,148        439
    Securities:
     Available for sale, at fair value; amortized
      cost $525,966 in 2006 and $620,638 in 2005       526,396    619,234
     Held to maturity, at cost; fair value $175,369
      in 2006 and $162,756 in 2005                     177,455    164,707
                                                    ----------------------
     Total securities                                  703,851    783,941
    Federal Home Loan Bank stock, at cost               28,727     34,966
    Loans:
      Commercial and other                             587,397    554,734
      Residential real estate                          588,671    582,708
      Consumer                                         283,918    264,466
                                                    ----------------------
      Total loans                                    1,459,986  1,401,908
     Less allowance for loan losses                     18,894     17,918
                                                    ----------------------
     Net loans                                       1,441,092  1,383,990
    Premises and equipment, net                         24,307     23,737
    Accrued interest receivable                         11,268     10,594
    Investment in bank-owned life insurance             39,770     30,360
    Goodwill                                            44,558     39,963
    Identifiable intangible assets, net                 12,816     14,409
    Other assets                                        18,719     13,441
                                                    ----------------------
     Total assets                                   $2,399,165 $2,402,003
                                                    ----------------------
    
    Liabilities:
    Deposits:
     Demand deposits                                  $186,533   $196,102
     NOW accounts                                      175,479    178,677
     Money market accounts                             286,998    223,255
     Savings accounts                                  205,998    212,499
     Time deposits                                     822,989    828,725
                                                    ----------------------
     Total deposits                                  1,677,997  1,639,258
    Dividends payable                                    2,556      2,408
    Federal Home Loan Bank advances                    474,561    545,323
    Junior subordinated debentures                      22,681     22,681
    Other borrowings                                    14,684      9,774
    Accrued expenses and other liabilities              33,630     24,113
                                                    ----------------------
     Total liabilities                               2,226,109  2,243,557
                                                    ----------------------
    
    Shareholders' Equity:
    Common stock of $.0625 par value; authorized
     30,000,000 shares;
      issued 13,492,110 shares in 2006 and
       13,372,295 in 2005                                  843        836
    Paid-in capital                                     35,893     32,778
    Retained earnings                                  141,548    126,735
    Accumulated other comprehensive loss                (3,515)    (1,653)
    Treasury stock, at cost; 62,432 shares in 2006
     and 10,519 in 2005                                 (1,713)      (250)
                                                    ----------------------
     Total shareholders' equity                        173,056    158,446
                                                    ----------------------
     Total liabilities and shareholders' equity     $2,399,165 $2,402,003
                                                    ----------------------
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF INCOME
    
    (Dollars and shares in thousands,
     except per share amounts)                     (Unaudited)
                                         Three Months     Twelve Months
    Periods ended December 31,          2006     2005     2006     2005
                                      ------------------------------------
    Interest income:
     Interest and fees on loans        $23,733  $21,592  $92,190  $78,931
     Interest on securities
       Taxable                           8,210    8,130   33,763   32,934
       Nontaxable                          514      276    1,618      886
     Dividends on corporate stock and
      Federal Home Loan Bank stock         718      653    2,842    2,491
     Interest on federal funds sold
      and other short-term investments     204      130      721      451
                                      ------------------------------------
     Total interest income              33,379   30,781  131,134  115,693
                                      ------------------------------------
    Interest expense:
     Deposits                           13,110    9,386   46,982   32,186
     Federal Home Loan Bank advances     4,801    5,273   20,916   22,233
     Junior subordinated debentures        338      334    1,352      458
     Other                                 154       85      410      160
                                      ------------------------------------
     Total interest expense             18,403   15,078   69,660   55,037
                                      ------------------------------------
    Net interest income                 14,976   15,703   61,474   60,656
    Provision for loan losses              300      300    1,200    1,200
                                      ------------------------------------
    Net interest income after
     provision for loan losses          14,676   15,403   60,274   59,456
                                      ------------------------------------
    Noninterest income:
     Wealth management services:
       Trust and investment advisory
        fees                            $5,063   $4,507  $19,099  $14,407
       Mutual fund fees                  1,092    1,032    4,665    1,336
       Financial planning, commissions
        and other service fees             583      301    2,616      919
                                      ------------------------------------
         Wealth management services      6,738    5,840   26,380   16,662
     Service charges on deposit
      accounts                           1,248    1,165    4,915    4,502
     Merchant processing fees            1,380    1,156    6,208    5,203
     Income from bank-owned life
      insurance                            396      277    1,410    1,110
     Net gains on loan sales               394      359    1,423    1,679
     Net realized (losses) gains on
      securities                           (16)     337      443      357
     Other income                          293      365    1,404    1,433
                                      ------------------------------------
     Total noninterest income           10,433    9,499   42,183   30,946
                                      ------------------------------------
    Noninterest expense:
     Salaries and employee benefits      9,598    9,030   38,698   32,133
     Net occupancy                         982      977    3,888    3,460
     Equipment                             818      873    3,370    3,456
     Merchant processing costs           1,167      962    5,257    4,319
     Outsourced services                   505      460    2,009    1,723
     Advertising and promotion             405      481    1,894    1,977
     Legal, audit and professional
      fees                                 295      475    1,637    1,900
     Amortization of intangibles           384      410    1,593      852
     Other                               1,586    2,098    6,989    6,573
                                      ------------------------------------
     Total noninterest expense          15,740   15,766   65,335   56,393
                                      ------------------------------------
    Income before income taxes           9,369    9,136   37,122   34,009
    Income tax expense                   3,166    2,983   12,091   10,985
                                      ------------------------------------
     Net income                         $6,203   $6,153  $25,031  $23,024
                                      ------------------------------------
    
    Weighted average shares
     outstanding - basic              13,452.5 13,352.4 13,424.1 13,315.2
    Weighted average shares
     outstanding - diluted            13,769.3 13,659.6 13,723.2 13,626.7
    Per share information:
     Basic earnings per share            $0.46    $0.46    $1.86    $1.73
     Diluted earnings per share          $0.45    $0.45    $1.82    $1.69
     Cash dividends declared per share   $0.19    $0.18    $0.76    $0.72
    

    Certain prior year amounts have been reclassified to conform to the current year classification.

    Washington Trust Bancorp, Inc. and Subsidiaries
                     CONSOLIDATED AVERAGE BALANCE SHEETS
    
                                           (Unaudited)
    Three months ended
     December 31,                 2006                     2005
                        --------------------------------------------------
                          Average          Yield/  Average          Yield/
    (Dollars in
     thousands)           Balance  Interest Rate   Balance  Interest Rate
                        --------------------------------------------------
    Assets:
    Residential real
     estate loans         $592,055  $7,732  5.18%  $586,775  $7,391  5.00%
    Commercial and other
     loans                 567,356  11,115  7.77%   555,746  10,212  7.29%
    Consumer loans         280,118   4,929  6.98%   261,424   4,039  6.13%
                        --------------------------------------------------
     Total loans         1,439,529  23,776  6.55% 1,403,945  21,642  6.12%
    Federal funds sold
     and other short-
     term investments       14,940     204  5.43%    13,444     130  3.86%
    Taxable debt
     securities            670,523   8,210  4.86%   736,309   8,131  4.38%
    Nontaxable debt
     securities             54,024     789  5.80%    29,235     423  5.75%
    Corporate stocks and
     FHLBB stock            45,233     811  7.11%    48,914     738  5.98%
                        --------------------------------------------------
     Total securities      784,720  10,014  5.06%   827,902   9,422  4.52%
                        --------------------------------------------------
     Total interest-
      earning assets     2,224,249  33,790  6.03% 2,231,847  31,065  5.52%
    Non interest-earning
     assets                171,361                  153,043
                        --------------------------------------------------
     Total assets       $2,395,610               $2,384,890
                        --------------------------------------------------
    Liabilities and
     Shareholders'
     Equity:
    NOW accounts          $170,111     $76  0.18%  $175,235     $64  0.15%
    Money market
     accounts              306,036   3,037  3.94%   228,173   1,485  2.58%
    Savings deposits       201,031     577  1.14%   218,043     312  0.57%
    Time deposits          836,645   9,420  4.47%   800,668   7,524  3.73%
    FHLBB advances         457,690   4,801  4.16%   549,888   5,274  3.80%
    Junior subordinated
     debentures             22,681     338  5.91%    22,681     334  5.85%
    Other                   12,472     154  4.91%     7,346      85  4.59%
                        --------------------------------------------------
     Total interest-
      bearing
      liabilities        2,006,666  18,403  3.64% 2,002,034  15,078  2.99%
    Demand deposits        186,017                  202,570
    Other liabilities       26,482                   22,857
    Shareholders' equity   176,445                  157,429
                        --------------------------------------------------
      Total liabilities
       and shareholders'
       equity           $2,395,610               $2,384,890
                        --------------------------------------------------
     Net interest income
      (FTE)                        $15,387                  $15,987
                        --------------------------------------------------
    Interest rate spread                    2.39%                    2.53%
    Net interest margin                     2.74%                    2.84%
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                     CONSOLIDATED AVERAGE BALANCE SHEETS
    
                                           (Unaudited)
    Twelve months ended
     December 31,                 2006                     2005
                        --------------------------------------------------
                          Average          Yield/  Average          Yield/
    (Dollars in
     thousands)           Balance  Interest Rate   Balance  Interest Rate
                        --------------------------------------------------
    Assets:
    Residential real
     estate loans         $590,245 $30,237  5.12%  $562,838 $27,890  4.96%
    Commercial and other
     loans                 564,310  43,409  7.69%   531,434  37,244  7.01%
    Consumer loans         274,764  18,748  6.82%   246,959  13,983  5.66%
                        --------------------------------------------------
     Total loans         1,429,319  92,394  6.46% 1,341,231  79,117  5.90%
    Federal funds sold
     and other short-
     term investments       14,548     721  4.96%    14,703     451  3.07%
    Taxable debt
     securities            712,870  33,763  4.74%   783,662  32,934  4.20%
    Nontaxable debt
     securities             42,977   2,486  5.79%    23,329   1,362  5.84%
    Corporate stocks and
     FHLBB stock            48,643   3,205  6.59%    50,763   2,858  5.63%
                        --------------------------------------------------
     Total securities      819,038  40,175  4.91%   872,457  37,605  4.31%
                        --------------------------------------------------
     Total interest-
      earning assets     2,248,357 132,569  5.90% 2,213,688 116,722  5.27%
    Non interest-earning
     assets                159,115                  137,460
                        --------------------------------------------------
     Total assets       $2,407,472               $2,351,148
                        --------------------------------------------------
    Liabilities and
     Shareholders'
     Equity:
    NOW accounts          $173,137    $302  0.17%  $176,706    $295  0.17%
    Money market
     accounts              262,613   9,063  3.45%   203,799   4,386  2.15%
    Savings deposits       198,040   1,464  0.74%   234,311   1,392  0.59%
    Time deposits          856,979  36,153  4.22%   741,456  26,113  3.52%
    FHLBB advances         509,611  20,916  4.10%   611,177  22,233  3.64%
    Junior subordinated
     debentures             22,681   1,352  5.96%     7,767     458  5.90%
    Other                    8,627     410  4.76%     3,581     160  4.48%
                        --------------------------------------------------
     Total interest-
      bearing
      liabilities        2,031,688  69,660  3.43% 1,978,797  55,037  2.78%
    Demand deposits        185,322                  197,245
    Other liabilities       23,517                   19,498
    Shareholders' equity   166,945                  155,608
                        --------------------------------------------------
      Total liabilities
       and shareholders'
       equity           $2,407,472               $2,351,148
                        --------------------------------------------------
     Net interest income
      (FTE)                        $62,909                  $61,685
                        --------------------------------------------------
    Interest rate spread                    2.47%                    2.49%
    Net interest margin                     2.80%                    2.79%
    

    Source: Washington Trust Bancorp, Inc.


    Contact: Washington Trust Bancorp, Inc. Elizabeth B. Eckel, 401-348-1309 Senior Vice President, Marketing ebeckel@washtrust.com