• Washington Trust Bancorp, Inc.
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  • Washington Trust Announces Fourth Quarter 2007 Earnings
    Company Release - 01/22/2008 16:37

    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 2007 net income of $5.8 million, or 43 cents per diluted share. Net income for the fourth quarter of last year totaled $6.2 million, or 45 cents per diluted share. The year-over-year decline in fourth quarter 2007 net income was primarily attributable to a higher provision for loan losses. The increase in the provision is based on management's assessment of various factors affecting the loan portfolio, including, among others, growth in the portfolio, ongoing evaluation of credit quality and economic conditions. The returns on average equity and average assets for the fourth quarter of 2007 were 12.73% and 0.94%, respectively, compared to 14.06% and 1.04%, respectively, for the fourth quarter of 2006.

        Fourth Quarter 2007 highlights include:
    
        --  Revenues from wealth management services were up 4 percent
            from third quarter 2007 and up 11 percent compared to the
            fourth quarter a year ago.
    
        --  Noninterest income (excluding securities gains) amounted to
            43% of total revenues for the quarter.
    
        --  Commercial loan growth continued to be strong with an increase
            of $30.2 million in the quarter. Commercial loans grew by
            16 percent, or $92.9 million, for the full year 2007.
    
        --  Fourth quarter net interest margin declined 16 basis points
            from the third quarter of 2007.
    

    John C. Warren, Washington Trust Chairman and CEO stated, "Despite unfavorable economic and market conditions, Washington Trust's fourth quarter and year-end 2007 earnings were strong, particularly in comparison with our peers in the region. Our performance was driven by solid growth in both the wealth management and commercial lending areas." Warren added, "We recognize that 2008 will once again be a challenging year, but we will continue to focus on the keys to our success: providing superior service, maintaining very good asset quality, generating diversified earnings, and investing in our future. We believe that the increase in our loan loss provision is a prudent response to the conditions we are seeing. We continue to be pleased with the strong growth in our commercial loan portfolio, but have general concerns with the overall economic environment."

    Net income for the year ended December 31, 2007 was $23.8 million, or $1.75 per diluted share, compared to $25.0 million, or $1.82 per diluted share, for 2006. Results for the year 2007 included $1.1 million in debt prepayment charges, recorded in noninterest expense in the first quarter of 2007 as a result of prepayments of higher cost Federal Home Loan Bank of Boston ("FHLBB") advances as well as a $700 thousand increase in the provision for loan losses. There were no debt prepayment penalty charges in 2006. The returns on average equity and average assets for the year ended December 31, 2007 were 13.48% and 0.99%, respectively, compared to 14.99% and 1.04%, respectively, for the prior year.

    RESULTS OF OPERATIONS

    Net interest income totaled $14.8 million for the fourth quarter of 2007, down $473 thousand, or 3 percent, compared to the third quarter of 2007 and down $139 thousand, or 1 percent, from the fourth quarter a year ago. On a year to date basis, net interest income declined $1.5 million, or 2.5 percent, from 2006. The decline in net interest income was due to the fact that rates paid on deposits and borrowings have risen faster than earning asset yields and a higher rate of growth was experienced in higher cost deposit categories.

    The net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) for the fourth quarter 2007 was 2.65%, down 16 basis points from the third quarter of 2007 and down 9 basis points from the fourth quarter of 2006. The decline in net interest margin from the third quarter of 2007 was attributable to decreases in yields on prime-related commercial and consumer loans resulting from actions taken by the Federal Reserve to reduce short-term interest rates, with little commensurate reduction in deposit rates paid during the same period. The decline in net interest margin from the fourth quarter of 2006 is attributable to more rapid increases in rates paid on deposit and FHLB advances than asset yields, and to a change in funding mix resulting from declines in total average deposits and a resulting increase in higher cost FHLB advances. For the year 2007 net interest margin was 2.76%, compared to 2.80% for 2006.

    Total noninterest income amounted to $11.3 million and $45.5 million, respectively, for the quarter and year ended December 31, 2007 as compared to $10.4 million and $42.2 million for the same periods in 2006. Net realized gains on sales of securities included in noninterest income amounted to $119 thousand and $455 thousand, respectively, for the quarter and year ended December 31, 2007 as compared to net realized losses of $16 thousand and net realized gains of $443 thousand, respectively, for the same periods in 2006.

    Excluding net realized gains and losses on securities, noninterest income amounted to $11.2 million for the fourth quarter of 2007, up $720 thousand, or 7 percent, from the same quarter a year ago. For the year 2007, noninterest income on this basis totaled $45.1 million and increased $3.3 million, or 8 percent, from the prior year. The increase was largely attributable to higher revenues from wealth management services. Wealth management revenues for the quarter and year ended December 31, 2007 were up $737 thousand (11 percent) and $2.6 million (10 percent), respectively. Wealth management assets under administration totaled $4.014 billion at December 31, 2007, down slightly for the fourth quarter. For the full year 2007, investment performance as well as successful business development efforts and customer cash flows contributed to an increase of $405 million, or 11 percent, from December 31, 2006.

    Noninterest expenses amounted to $16.7 million for the fourth quarter of 2007, up $1.0 million, or 6 percent, from the same quarter a year earlier. For the year 2007, noninterest expenses totaled $68.9 million, up $3.6 million, or 6 percent, from 2006. Included in this increase was $1.1 million in debt prepayment penalties that were incurred in the first quarter of 2007 as a result of prepayments of higher cost FHLBB advances. Excluding the debt prepayment penalty expense, noninterest expenses for 2007 increased $2.5 million, or 4 percent, over last year.

    Income tax expense amounted to $2.6 million and $10.8 million, respectively, for the quarter and year ended December 31, 2007 as compared to $3.2 million and $12.1 million, respectively for the same periods in 2006. The Corporation's effective tax rate for the quarter and year ended December 31, 2007 was 31.1% and 31.3%, respectively, down from 33.8% and 32.6%, respectively, for the same periods in 2006, primarily due to higher average balances in nontaxable state and municipal debt obligations.

    ASSET QUALITY

    Nonperforming assets (nonaccrual loans and property acquired though foreclosure) amounted to $4.3 million, or 0.17% of total assets, at December 31, 2007, compared to $2.7 million, or 0.11% of total assets, at December 31, 2006. There are no assets acquired through foreclosure on the balance sheet at December 31, 2007. Nonaccrual loans as a percent of total loans stood at 0.27% at December 31, 2007 compared to 0.18% of total loans at September 30, 2007 and 0.19% of total loans at December 31, 2006.

    Total 30 day+ delinquencies amounted to $7.0 million, or 0.45% of total loans, at December 31, 2007, up $1.2 million in the fourth quarter of 2007, but down $191 thousand from the balance at December 31, 2006. The $1.2 million increase in total 30 day+ delinquencies in the fourth quarter of 2007 was primarily due to an increase in the commercial category that was offset in part by declines in residential and consumer loan delinquencies.

    Total residential mortgage and consumer loan 30 day+ delinquencies declined in the fourth quarter to $2.3 million, or 0.26% of these loans, at December 31, 2007, compared to $3.6 million, or 0.42%, at September 30, 2007. Total 90 day+ delinquencies in the residential mortgage and consumer loans portfolios amounted to $441 thousand (two loans) and $86 thousand (two loans), respectively, as of December 31, 2007. Total nonaccrual loans, which include the 90 day+ delinquencies, amounted to $1.2 million and $271 thousand in the residential mortgage and consumer loan categories, respectively, at December 31, 2007. The Corporation has never offered a sub-prime or Alt-A residential mortgage loan program.

    The Corporation's loan loss provision charged to earnings amounted to $1.0 million and $1.9 million for the quarter and year ended December 31, 2007, respectively, compared to $300 thousand and $1.2 million, respectively, for the same periods in 2006. The increase in the fourth quarter 2007 provision for loan losses was based on management's assessment of various factors affecting the loan portfolio, including, among others, growth in the portfolio, ongoing evaluation of credit quality, with particular emphasis on the commercial portfolio, and general economic conditions. Net charge-offs amounted to $517 thousand for 2007, including $195 thousand in the fourth quarter of 2007, compared to net charge-offs of $224 thousand for the year 2006.

    The Corporation will continue to assess the adequacy of its allowance for loan losses in accordance with its established policies. The provision for loan losses in 2008 is expected to increase somewhat above the 2007 level, subject to the achievement of anticipated portfolio growth and the future evaluation of economic conditions.

    The allowance for loan losses was $20.3 million, or 1.29% of total loans, at December 31, 2007, compared to $18.9 million, or 1.29% of total loans, at December 31, 2006, and $19.5 million, or 1.29% of total loans, at September 30, 2007.

    FINANCIAL CONDITION

    Total assets were $2.540 billion at December 31, 2007, up $140.5 million from December 31, 2006. Total loans grew $113.7 million, or 8 percent, during 2007 and amounted to $1.6 billion. Commercial loans increased $92.9 million (16 percent), residential loans increased by 11.0 million (2 percent), and consumer loans increased by $9.8 million (3 percent), during the year. The investment securities portfolio totaled $751.8 million at December 31, 2007, up $48.0 million from December 31, 2006. Included in the investment securities portfolio at December 31, 2007 were mortgage-backed securities with a fair value of $469.4 million. All of the Corporation's mortgage-backed securities are issued by U.S. Government sponsored agencies. The Corporation reclassified its Held To Maturity portfolio to the Available For Sale category during the second quarter of 2007.

    Total deposits decreased by $31.8 million from December 31, 2006. Excluding brokered certificates of deposit, in-market deposits were up $14.0 million during 2007. Declines in demand and savings deposits were offset by increases in money market accounts and in-market certificates of deposit. FHLBB advances totaled $616.4 million at December 31, 2007, up $141.9 million from December 31, 2006. Other borrowings increased $17.9 million in 2007, mainly due to an increase in securities sold under repurchase agreements.

    Total shareholders' equity amounted to $186.5 million at December 31, 2007, compared to $173.1 million at December 31, 2006. Under the Corporation's 2006 Stock Repurchase Plan, 185,400 shares were repurchased at a total cost of $4.8 million during the year ended December 31, 2007. There were no shares repurchased in the fourth quarter. Book value per share as of December 31, 2007 and December 31, 2006 amounted to $13.97 and $12.89, respectively.

    DIVIDENDS DECLARED

    The Board of Directors declared a quarterly dividend of 20 cents per share for the quarter ended December 31, 2007. The dividend was paid on January 11, 2008 to shareholders of record on January 3, 2008.

    CONFERENCE CALL

    Washington Trust Chairman 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 23, 2008 at 8:30 a.m. (Eastern Time) to discuss the Corporation's fourth quarter and year end results. This call is being webcast by TalkPoint 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) 344-7529 and entering Conference ID #: 414901. The replay will be available until 11:59 p.m. on January 31, 2008.

    BACKGROUND

    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.

    FORWARD-LOOKING STATEMENTS

    This press release 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 assets under administration, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan collectibility, 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
                         CONSOLIDATED BALANCE SHEETS
                                                         (unaudited)
                                                    December    December
    (Dollars in thousands)                             31,         31,
                                                      2007        2006
    ----------------------------------------------------------------------
    Assets:
    Cash and due from banks                        $   32,790  $   54,337
    Federal funds sold                                  7,600      16,425
    Other short-term investments                          722       1,147
    Mortgage loans held for sale                        1,981       2,148
    Securities:
     Available for sale, at fair value; amortized
      cost $750,583 in 2007 and $525,966 in 2006      751,778     526,396
     Held to maturity, at cost; fair value
      $175,369 in 2006                                      -     177,455
    ----------------------------------------------------------------------
     Total securities                                 751,778     703,851
    Federal Home Loan Bank stock, at cost              31,725      28,727
    Loans:
     Commercial and other                             680,266     587,397
     Residential real estate                          599,671     588,671
     Consumer                                         293,715     283,918
    ----------------------------------------------------------------------
     Total loans                                    1,573,652   1,459,986
     Less allowance for loan losses                    20,277      18,894
    ----------------------------------------------------------------------
     Net loans                                      1,553,375   1,441,092
    Premises and equipment, net                        25,420      24,307
    Accrued interest receivable                        11,427      11,268
    Investment in bank-owned life insurance            41,363      39,770
    Goodwill                                           50,479      44,558
    Identifiable intangible assets, net                11,433      12,816
    Other assets                                       19,847      18,719
    ----------------------------------------------------------------------
     Total assets                                  $2,539,940  $2,399,165
    ----------------------------------------------------------------------
    
    Liabilities:
    Deposits:
     Demand deposits                               $  175,542  $  186,533
     NOW accounts                                     164,944     175,479
     Money market accounts                            321,600     286,998
     Savings accounts                                 176,278     205,998
     Time deposits                                    807,841     822,989
    ----------------------------------------------------------------------
     Total deposits                                 1,646,205   1,677,997
    Dividends payable                                   2,677       2,556
    Federal Home Loan Bank advances                   616,417     474,561
    Junior subordinated debentures                     22,681      22,681
    Other borrowings                                   32,560      14,684
    Accrued expenses and other liabilities             32,887      33,630
    ----------------------------------------------------------------------
     Total liabilities                              2,353,427   2,226,109
    ----------------------------------------------------------------------
    
    Shareholders' Equity:
    Common stock of $.0625 par value; authorized
     30,000,000 shares;
     issued 13,492,110 shares in 2007 and 2006            843         843
    Paid-in capital                                    34,874      35,893
    Retained earnings                                 154,647     141,548
    Accumulated other comprehensive loss                 (239)     (3,515)
    Treasury stock, at cost; 137,652 shares in
     2007 and 62,432 in 2006                           (3,612)     (1,713)
    ----------------------------------------------------------------------
     Total shareholders' equity                       186,513     173,056
    ----------------------------------------------------------------------
     Total liabilities and shareholders' equity    $2,539,940  $2,399,165
    ----------------------------------------------------------------------
    
    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,        2007      2006      2007      2006
    ----------------------------------------------------------------------
    Interest income:
     Interest and fees on loans    $  25,340 $  23,733 $  98,720 $  92,190
     Interest on securities:
       Taxable                         7,967     8,210    31,163    33,763
       Nontaxable                        775       514     2,983     1,618
     Dividends on corporate stock
      and Federal Home Loan Bank
      stock                              665       718     2,737     2,842
     Interest on federal funds
      sold and other short-term
      investments                        181       204       831       721
    ----------------------------------------------------------------------
     Total interest income            34,928    33,379   136,434   131,134
    ----------------------------------------------------------------------
    Interest expense:
     Deposits                         13,090    13,110    52,422    46,982
     Federal Home Loan Bank
      advances                         6,318     4,801    21,641    20,916
     Junior subordinated
      debentures                         338       338     1,352     1,352
     Other                               345       154     1,075       410
    ----------------------------------------------------------------------
     Total interest expense           20,091    18,403    76,490    69,660
    ----------------------------------------------------------------------
    Net interest income               14,837    14,976    59,944    61,474
    Provision for loan losses          1,000       300     1,900     1,200
    ----------------------------------------------------------------------
    Net interest income after
     provision for loan losses        13,837    14,676    58,044    60,274
    ----------------------------------------------------------------------
    Noninterest income:
     Wealth management services:
       Trust and investment
        advisory fees                  5,498     5,063    21,124    19,099
       Mutual fund fees                1,430     1,092     5,430     4,665
       Financial planning,
        commissions and other
        service fees                     547       583     2,462     2,616
    ----------------------------------------------------------------------
         Wealth management
          services                     7,475     6,738    29,016    26,380
     Service charges on deposit
      accounts                         1,154     1,248     4,713     4,915
     Merchant processing fees          1,425     1,380     6,710     6,208
     Income from bank-owned life
      insurance                          427       396     1,593     1,410
     Net gains on loan sales and
      commissions on loans
      originated for others              288       394     1,493     1,423
     Net realized gains (losses)
      on securities                      119       (16)      455       443
     Other income                        400       293     1,529     1,404
    ----------------------------------------------------------------------
     Total noninterest income         11,288    10,433    45,509    42,183
    ----------------------------------------------------------------------
    Noninterest expense:
     Salaries and employee
      benefits                         9,791     9,598    39,986    38,698
     Net occupancy                     1,074       982     4,150     3,888
     Equipment                           909       818     3,473     3,370
     Merchant processing costs         1,193     1,167     5,686     5,257
     Outsourced services                 570       505     2,180     2,009
     Advertising and promotion           557       405     2,024     1,894
     Legal, audit and professional
      fees                               463       295     1,761     1,637
     Amortization of intangibles         326       384     1,383     1,593
     Debt prepayment penalties             -         -     1,067         -
     Other                             1,842     1,586     7,196     6,989
    ----------------------------------------------------------------------
     Total noninterest expense        16,725    15,740    68,906    65,335
    ----------------------------------------------------------------------
    Income before income taxes         8,400     9,369    34,647    37,122
    Income tax expense                 2,613     3,166    10,847    12,091
    ----------------------------------------------------------------------
     Net income                    $   5,787 $   6,203    23,800 $  25,031
    ----------------------------------------------------------------------
    
    Weighted average shares
     outstanding - basic            13,347.5  13,452.5  13,355.5  13,424.1
    Weighted average shares
     outstanding - diluted          13,580.7  13,769.3  13,604.1  13,723.2
    Per share information:
     Basic earnings per share      $    0.43 $    0.46 $    1.78 $    1.86
     Diluted earnings per share    $    0.43 $    0.45 $    1.75 $    1.82
     Cash dividends declared per
      share                        $    0.20 $    0.19 $    0.80 $    0.76
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                  SELECTED FINANCIAL HIGHLIGHTS (unaudited)
    
                                At or for the Quarters Ended
    ----------------------------------------------------------------------
    
    
     (Dollars in
      thousands,
      except per
      share         Dec. 31,  Sept. 30,   June 30,   Mar. 31,   Dec. 31,
      amounts)         2007       2007       2007       2007       2006
    ----------------------------------------------------------------------
    Financial Data
    ---------------
    Total assets   $2,539,940 $2,431,762 $2,393,882 $2,399,962 $2,399,165
    Total loans     1,573,652  1,514,493  1,489,174  1,470,200  1,459,986
    Total
     securities       751,778    688,709    676,204    706,406    703,851
    Total deposits  1,646,205  1,655,887  1,669,089  1,683,592  1,677,997
    Total
     shareholders
     equity           186,513    177,897    171,188    175,527    173,056
    Net income          5,787      6,556      5,482      5,975      6,203
    
    Per Share Data
    ---------------
    Basic earnings
     per share     $     0.43 $     0.49 $     0.41 $     0.45 $     0.46
    Diluted
     earnings per
     share         $     0.43 $     0.48 $     0.40 $     0.44 $     0.45
    Dividends
     declared per
     share         $     0.20 $     0.20 $     0.20 $     0.20 $     0.19
    Book value per
     share         $    13.97 $    13.33 $    12.87 $    13.12 $    12.89
    Tangible book
     value per
     share         $     9.33 $     8.66 $     8.61 $     8.86 $     8.61
    Market value
     per share     $    25.23 $    26.97 $    25.21 $    26.81 $    27.89
    
    Key Ratios
    ---------------
    Return on
     average assets      0.94%      1.10%      0.92%      1.00%      1.04%
    Return on
     average equity     12.73%     14.99%     12.57%     13.66%     14.06%
    
    Capital Ratios
    ---------------
    Tier 1 risk-
     based capital       9.10%      9.11%      9.40%      9.47%      9.57%
    Total risk-
     based capital      10.39%     10.43%     10.73%     10.84%     10.96%
    Tier 1 leverage
     ratio               6.09%      6.11%      6.16%      6.14%      6.01%
    
    Average Yields
     (taxable
     equivalent
     basis)
    ---------------
    Assets
    Residential
     real estate
     loans               5.41%      5.35%      5.31%      5.32%      5.18%
    Commercial and
     other loans         7.39%      7.62%      7.64%      7.86%      7.77%
    Consumer loans       6.74%      7.01%      6.98%      6.95%      6.98%
     Total loans         6.51%      6.62%      6.59%      6.66%      6.55%
    Federal funds
     sold and
     other short-
      term
      investments        4.72%      5.10%      4.36%      5.75%      5.43%
    Taxable debt
     securities          5.19%      5.16%      5.17%      5.07%      4.86%
    Nontaxable debt
     securities          5.59%      5.61%      5.65%      5.69%      5.80%
    Corporate
     stocks and
     FHLBB stock         7.00%      7.03%      7.15%      7.46%      7.11%
     Total
      securities         5.33%      5.31%      5.32%      5.28%      5.06%
     Total
      interest-
      earning
      assets             6.12%      6.20%      6.16%      6.19%      6.03%
    Liabilities
    NOW accounts         0.20%      0.17%      0.15%      0.16%      0.18%
    Money market
     accounts            3.93%      3.90%      3.92%      3.88%      3.94%
    Savings
     accounts            1.32%      1.32%      1.35%      1.40%      1.14%
    Time deposits        4.55%      4.60%      4.61%      4.57%      4.47%
    FHLBB advances       4.56%      4.44%      4.35%      4.31%      4.16%
    Junior
     subordinated
     debentures          5.91%      5.91%      5.98%      6.04%      5.91%
    Other                4.36%      4.47%      4.51%      4.73%      4.91%
     Total
      interest-
      bearing
      liabilities        3.85%      3.78%      3.77%      3.73%      3.64%
    
    Interest rate
     spread
     (taxable
     equivalent
     basis)              2.27%      2.42%      2.39%      2.46%      2.39%
    Net interest
     margin
     (taxable
     equivalent
     basis)              2.65%      2.81%      2.76%      2.81%      2.74%
    
    Wealth
     Management
     Assets (1)
    ---------------
    Market value
     of assets
     under
     administration$4,014,352 $4,025,877$3,867,674$3,715,987$3,609,180
    
    (1) Certain prior period amounts have been adjusted to conform to the
     current year presentation.
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                  SELECTED FINANCIAL HIGHLIGHTS (unaudited)
    
                                At or for the Quarters Ended
    ----------------------------------------------------------------------
                    Dec. 31,   Sept. 30,  June 30,   Mar. 31,   Dec. 31,
    (Dollars in
     thousands)       2007       2007       2007       2007       2006
    ----------------------------------------------------------------------
    Period End
     Balances
    ---------------
    Loans
     Commercial:
      Mortgages       278,821    276,995    265,560    271,817    282,019
      Construction
       and
       development     60,361     48,899     43,755     33,092     32,233
      Other           341,084    324,129    313,673    294,261    273,145
    ----------------------------------------------------------------------
      Total
       commercial     680,266    650,023    622,988    599,170    587,397
     Residential
      real estate:
      Mortgages       588,628    566,776    572,321    577,823    577,522
      Homeowner
       construction    11,043     12,040     11,071     11,742     11,149
    ----------------------------------------------------------------------
      Total
       residential
       real estate    599,671    578,816    583,392    589,565    588,671
     Consumer:
      Home equity
       lines          144,429    139,732    139,256    142,548    145,676
      Home equity
       loans           99,827     99,798     97,253     94,521     93,947
      Other            49,459     46,124     46,285     44,396     44,295
    ----------------------------------------------------------------------
      Total
       consumer       293,715    285,654    282,794    281,465    283,918
    ----------------------------------------------------------------------
      Total loans   1,573,652  1,514,493  1,489,174  1,470,200  1,459,986
    ----------------------------------------------------------------------
    Deposits
     Demand
      deposits        175,542    182,830    177,210    175,010    186,533
     NOW accounts     164,944    172,378    174,715    176,006    175,479
     Money market
      accounts        321,600    312,257    290,046    290,273    286,998
     Savings
      accounts        176,278    189,157    196,105    204,465    205,998
     Time deposits    807,841    799,265    831,013    837,838    822,989
    ----------------------------------------------------------------------
     Total deposits 1,646,205  1,655,887  1,669,089  1,683,592  1,677,997
    ----------------------------------------------------------------------
    
    Brokered
     deposits
     included in
     time deposits    129,798    130,017    159,297    163,089    175,618
    
    Asset Quality
     Data
    ---------------
    Allowance for
     Loan Losses
    Balance at
     beginning of
     period        $   19,472 $   19,327 $   19,360 $   18,894 $   18,645
    Provision
     charged to
     earnings           1,000        300        300        300        300
    Net charge-offs      (195)      (155)      (333)       166        (51)
    ----------------------------------------------------------------------
    Balance at end
     of period     $   20,277 $   19,472 $   19,327 $   19,360 $   18,894
    ----------------------------------------------------------------------
    
    Loans 30 days
     or More Past
     Due
    Commercial
     categories    $    4,726 $    2,239 $    7,224 $    6,935 $    5,807
    Residential
     mortgages          2,100      3,266      1,697        914 $    1,299
    Consumer loans        197        358        145        169        108
    ----------------------------------------------------------------------
    Total          $    7,023 $    5,863 $    9,066 $    8,018 $    7,214
    ----------------------------------------------------------------------
    
    ----------------------------------------------------------------------
    Nonperforming
     Assets
    Commercial
     mortgages     $    1,094 $    1,099 $    1,385 $    1,157 $      981
    Commercial
     construction
     and
     development            -          -          -          -          -
    Other
     commercial         1,781        581        645      1,021        831
    Residential
     real estate        1,158        731        698        709        721
    Consumer              271        262        241        216        190
    ----------------------------------------------------------------------
    Total
     nonaccrual
     loans         $    4,304 $    2,673 $    2,969 $    3,103 $    2,723
    Other real
     estate owned,
     net                    -          -          -          -          -
    ----------------------------------------------------------------------
    Total
     nonperforming
     assets        $    4,304 $    2,673 $    2,969 $    3,103 $    2,723
    ----------------------------------------------------------------------
    
    Loans 30 days
     or more past
     due to total
     loans               0.45%      0.39%      0.61%      0.55%      0.49%
    Nonperforming
     assets to
     total assets        0.17%      0.11%      0.12%      0.13%      0.11%
    Nonaccrual
     loans to total
     loans               0.27%      0.18%      0.20%      0.21%      0.19%
    Allowance for
     loan losses to
     nonaccrual
     loans             471.12%    728.47%    650.96%    623.91%    693.87%
    Allowance for
     loan losses to
     total loans         1.29%      1.29%      1.30%      1.32%      1.29%
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                  SELECTED FINANCIAL HIGHLIGHTS (unaudited)
    
                                                         Years Ended
    ----------------------------------------------------------------------
                                                    December    December
                                                       31,         31,
    (Dollars and shares in thousands, except per
     share amounts)                                   2007        2006
    ----------------------------------------------------------------------
    
    Operating Results
    ----------------------------------------------
    Net interest income                            $   59,944  $   61,474
    Provision for loan losses                           1,900       1,200
    Net realized gains on securities                      455         443
    Other noninterest income                           45,054      41,740
    Noninterest expenses                               68,906      65,335
    Income tax expense                                 10,847      12,091
    Net income                                         23,800      25,031
    
    Basic earnings per share                       $     1.78  $     1.86
    Diluted earnings per share                     $     1.75  $     1.82
    Dividends declared per share                   $     0.80  $     0.76
    
    Weighted average shares outstanding - basic      13,355.5    13,424.1
    Weighted average shares outstanding - diluted    13,604.1    13,723.2
    Shares outstanding at end of period              13,354.5    13,429.7
    
    Key Ratios
    ----------------------------------------------
    Return on average assets                             0.99%       1.04%
    Return on average equity                            13.48%      14.99%
    Interest rate spread (taxable equivalent
     basis)                                              2.39%       2.47%
    Net interest margin (taxable equivalent basis)       2.76%       2.80%
    
    Allowance for Loan Losses
    ----------------------------------------------
    Balance at beginning of period                 $   18,894  $   17,918
    Provision charged to earnings                       1,900       1,200
    Net charge-offs                                      (517)       (224)
    ----------------------------------------------------------------------
    Balance at end of period                       $   20,277  $   18,894
    ----------------------------------------------------------------------
    
    Net charge-offs (recoveries) to average loans         .03%        .02%
    
    
                                                     Three
                                                      Months      Year
                                                      Ended       Ended
                                                    Dec. 31,    Dec. 31,
    (Dollars in thousands)                             2007        2007
    ----------------------------------------------------------------------
    
    Wealth Management Assets Under Administration
     (1)
    ----------------------------------------------
    Balance at beginning of period                 $4,025,877  $3,609,180
    Net investment appreciation (depreciation) and
     income                                           (11,751)    272,398
    Net customer cash flows                               226     132,774
    ----------------------------------------------------------------------
    Balance at end of period                       $4,014,352  $4,014,352
    ----------------------------------------------------------------------
    
    (1) Certain prior period amounts have been adjusted to conform to the
     current year presentation.
    
    Washington Trust Bancorp, Inc. and Subsidiaries
               CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
    
    
    Three months ended
     December 31,                  2007                    2006
    ----------------------------------------------------------------------
                           Average          Yield/ Average          Yield/
    (Dollars in thousands) Balance  Interest Rate  Balance  Interest Rate
    ----------------------------------------------------------------------
    Assets
    Residential real
     estate loans         $  592,025 $ 8,069 5.41%$  592,055 $ 7,732 5.18%
    Commercial and other
     loans                   666,142  12,407 7.39%   567,356  11,115 7.77%
    Consumer loans           288,975   4,910 6.74%   280,118   4,929 6.98%
    ----------------------------------------------------------------------
     Total loans           1,547,142  25,386 6.51% 1,439,529  23,776 6.55%
    Federal funds sold and
     other short-term
      investments             15,147     181 4.72%    14,940     204 5.43%
    Taxable debt
     securities              608,827   7,967 5.19%   670,523   8,210 4.86%
    Nontaxable debt
     securities               80,637   1,137 5.59%    54,024     789 5.80%
    Corporate stocks and
     FHLBB stock              41,791     735 7.00%    45,233     811 7.11%
    ----------------------------------------------------------------------
     Total securities        746,402  10,020 5.33%   784,720  10,014 5.06%
    ----------------------------------------------------------------------
     Total interest-
      earning assets       2,293,544  35,406 6.12% 2,224,249  33,790 6.03%
    Non interest-earning
     assets                  170,781                 171,361
    ----------------------------------------------------------------------
     Total assets         $2,464,325              $2,395,610
    ----------------------------------------------------------------------
    Liabilities and
     Shareholders' Equity
    NOW accounts          $  161,722 $    83 0.20%$  170,111 $    76 0.18%
    Money market accounts    324,685   3,217 3.93%   306,036   3,037 3.94%
    Savings accounts         180,977     601 1.32%   201,031     577 1.14%
    Time deposits            801,107   9,189 4.55%   836,645   9,420 4.47%
    FHLBB advances           549,388   6,318 4.56%   457,690   4,801 4.16%
    Junior subordinated
     debentures               22,681     338 5.91%    22,681     338 5.91%
    Other                     31,319     345 4.36%    12,472     154 4.91%
    ----------------------------------------------------------------------
     Total interest-
      bearing liabilities  2,071,879  20,091 3.85% 2,006,666  18,403 3.64%
    Demand deposits          176,242                 186,017
    Other liabilities         34,298                  26,482
    Shareholders' equity     181,906                 176,445
    ----------------------------------------------------------------------
     Total liabilities and
      shareholders' equity$2,464,325              $2,395,610
    ----------------------------------------------------------------------
     Net interest income
      (FTE)                          $15,315                 $15,387
    ----------------------------------------------------------------------
    Interest rate spread                     2.27%                   2.39%
    Net interest margin                      2.65%                   2.74%
    

    Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

    (Dollars in thousands)
    
    Three months ended December 31,                              2007 2006
    ----------------------------------------------------------------------
    Commercial and other loans                                    $46  $43
    Nontaxable debt securities                                    362  275
    Corporate stocks                                               70   93
    ----------------------------------------------------------------------
     Total                                                       $478 $411
    ----------------------------------------------------------------------
    
    Washington Trust Bancorp, Inc. and Subsidiaries
               CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
    
    
    Years ended December
     31,                          2007                     2006
    ----------------------------------------------------------------------
                          Average          Yield/  Average          Yield/
    (Dollars in
     thousands)           Balance  Interest Rate   Balance  Interest Rate
    ----------------------------------------------------------------------
    Assets
    Residential real
     estate loans        $  589,619$ 31,540 5.35% $  590,245$ 30,237 5.12%
    Commercial and other
     loans                  626,309  47,713 7.62%    564,310  43,409 7.69%
    Consumer loans          283,873  19,634 6.92%    274,764  18,748 6.82%
    ----------------------------------------------------------------------
     Total loans          1,499,801  98,887 6.59%  1,429,319  92,394 6.46%
    Federal funds sold
     and
     other short-term
      investments            16,759     831 4.96%     14,548     721 4.96%
    Taxable debt
     securities             605,443  31,163 5.15%    712,870  33,763 4.74%
    Nontaxable debt
     securities              77,601   4,368 5.63%     42,977   2,486 5.79%
    Corporate stocks and
     FHLBB stock             42,544   3,047 7.16%     48,643   3,205 6.59%
    ----------------------------------------------------------------------
     Total securities       742,347  39,409 5.31%    819,038  40,175 4.91%
    ----------------------------------------------------------------------
     Total interest-
      earning assets      2,242,148 138,296 6.17%  2,248,357 132,569 5.90%
    Non interest-earning
     assets                 165,561                  159,115
    ----------------------------------------------------------------------
     Total assets        $2,407,709               $2,407,472
    ----------------------------------------------------------------------
    Liabilities and
     Shareholders'
     Equity
    NOW accounts         $  166,580$    285 0.17% $  173,137$    302 0.17%
    Money market
     accounts               303,138  11,846 3.91%    262,613   9,063 3.45%
    Savings accounts        194,342   2,619 1.35%    198,040   1,464 0.74%
    Time deposits           821,951  37,672 4.58%    856,979  36,153 4.22%
    FHLBB advances          489,229  21,641 4.42%    509,611  20,916 4.10%
    Junior subordinated
     debentures              22,681   1,352 5.96%     22,681   1,352 5.96%
    Other                    23,990   1,075 4.48%      8,627     410 4.76%
    ----------------------------------------------------------------------
     Total interest-
      bearing
      liabilities         2,021,911  76,490 3.78%  2,031,688  69,660 3.43%
    Demand deposits         177,342                  185,322
    Other liabilities        31,886                   23,517
    Shareholders' equity    176,570                  166,945
    ----------------------------------------------------------------------
     Total liabilities
      and shareholders'
      equity             $2,407,709               $2,407,472
    ----------------------------------------------------------------------
     Net interest income
      (FTE)                        $ 61,806                 $ 62,909
    ----------------------------------------------------------------------
    Interest rate spread                    2.39%                    2.47%
    Net interest margin                     2.76%                    2.80%
    

    Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

    (Dollars in thousands)
    
    Years ended December 31,                                  2007   2006
    ----------------------------------------------------------------------
    Commercial and other loans                                 $167   $204
    Nontaxable debt securities                                1,385    868
    Corporate stocks                                            310    363
    ----------------------------------------------------------------------
     Total                                                   $1,862 $1,435
    ----------------------------------------------------------------------
    

    Source: Washington Trust Bancorp, Inc.


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