• Washington Trust Bancorp, Inc.
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  • Washington Trust Announces First Quarter 2008 Earnings
    Company Release - 04/21/2008 08:00

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

    Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced first quarter 2008 net income of $5.8 million, or 43 cents per diluted share. Net income for the first quarter of last year totaled $6.0 million, or 44 cents per diluted share. The returns on average equity and average assets for the first quarter of 2008 were 12.22% and 0.90%, respectively, compared to 13.66% and 1.00%, respectively, for the same period in 2007.

        First Quarter 2008 Overview:
    
        --  The modest reduction in net income and earnings per share from
            the first quarter of 2007 was primarily due to a decline in
            the net interest margin. This condition reflects the impact of
            Federal Reserve rate cuts in recent months. In addition, the
            loan loss provision charged to earnings was $450 thousand in
            the first quarter of 2008 compared to $300 thousand in the
            same quarter last year, for the most part in response to loan
            growth.
    
        --  Wealth Management revenues for the first quarter of 2008 were
            up by 6 percent from the same quarter a year ago. Wealth
            management assets under administration increased by 4 percent
            from March 31, 2007 and declined by 3 percent from
            December 31, 2007. The decline in assets under administration
            in the first quarter of 2008 reflects declines in the
            financial markets as evidenced by the 9.9 percent decline in
            the S&P 500 Index.
    
        --  Noninterest expenses for the first quarter of 2008 were up by
            7 percent compared to the same quarter last year, excluding
            the first quarter 2007 debt prepayment penalty expense of
            $1.1 million. Approximately 56 percent of the 2008 increase,
            on this basis, represents costs attributable to our wealth
            management business, an increase in FDIC deposit insurance
            costs and to a de novo branch opened in June 2007.
    
        --  Commercial loan growth continued to be strong with an increase
            of $46.0 million in the quarter, representing the sixth
            consecutive quarter of firm growth. Commercial loans have
            increased $127.1 million, or 21 percent, from the balance at
            March 31, 2007.
    
        --  Nonperforming assets remain at very manageable levels with a
            modest increase in nonperforming assets from $4.3 million, or
            0.17% of total assets, at December 31, 2007 to $5.7 million,
            or 0.22% of total assets, at March 31, 2008. Net charge-offs
            were $3 thousand in the first quarter of 2008.
    

    John C. Warren, Washington Trust Chairman and CEO stated, "Washington Trust had a good quarter, particularly in light of the challenges facing the financial services industry. We had very strong commercial loan growth, which further reinforced our position as one of the area's top business banks. We continue to maintain good asset quality and will retain that focus in this economic environment."

    RESULTS OF OPERATIONS

    Total revenue, which consists of net interest income and noninterest income, amounted to $26.1 million for the first quarter of 2008, essentially the same as the amounts reported for the fourth quarter of 2007 and the first quarter of 2007.

    Net interest income totaled $15.1 million for the first quarter of 2008, up $239 thousand, or 2 percent, compared to the fourth quarter of 2007 and up $206 thousand, or 1 percent, from the first quarter a year ago. The net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) for the first quarter of 2008 was 2.59%, down 6 basis points from the fourth quarter of 2007 and down 22 basis points from the first quarter of 2007. Included in net interest income in 2007 was an interest recovery of $322 thousand received on a previously charged off loan. Excluding the 6 basis points attributable to the 2007 interest recovery, the net interest margin for the first quarter of 2008 was down 16 basis points from the first quarter of 2007. The decline in net interest margin is 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 less commensurate reduction in deposit rates paid during the same period.

    Total noninterest income amounted to $11.0 million for the first quarter of 2008, down $204 thousand from the same quarter a year ago. Included in noninterest income were net losses on securities of $45 thousand in the first quarter of 2008 and net gains on securities of $1.0 million for the first quarter a year ago. Included in the first quarter 2008 net losses of $45 thousand was the recognition of an impairment charge of $858 thousand on an equity security holding, realized gains of $232 thousand on the sale of commercial debt securities and realized gains of $581 thousand on the sale of equity securities.

    Excluding net gains and losses on securities, noninterest income amounted to $11.1 million for the first three months of 2008, up $877 thousand, or 9 percent, from the same period a year ago. The increase was attributable to higher revenues from wealth management services and increases in net gains on loan sales and commissions on loans originated for others. Wealth management revenues for the first quarter of 2008 were up $388 thousand, or 6 percent, from the first quarter of 2007. Wealth management assets under administration totaled $3.879 billion at March 31, 2008, down $135.6 million, or 3 percent, from December 31, 2007 and up $162.8 million, or 4 percent, from March 31, 2007. The decline in assets under administration in the first quarter of 2008 was primarily due to adverse financial market conditions.

    Noninterest expenses amounted to $17.1 million for the first quarter of 2008, up $33 thousand from the same quarter a year ago. Included in noninterest expenses for 2007 was $1.1 million in debt prepayment penalties that were incurred in the first quarter of 2007 as a result of the prepayment of higher cost Federal Home Loan Bank ("FHLB") advances. Excluding the debt prepayment penalty expense, noninterest expenses for the first three months of 2008 increased $1.1 million, or 7 percent, over the same period last year. Salaries and employee benefits, the largest component of noninterest expenses, increased $531 thousand, or 5 percent, from the first quarter of 2007.

    Income tax expense amounted to $2.7 million for the quarters ended March 31, 2008 and 2007. The Corporation's effective tax rate for the quarter ended March 31, 2008 was 31.8% compared to 31.4% for the same quarter last year.

    ASSET QUALITY

    Nonperforming assets (nonaccrual loans and property acquired through foreclosure) amounted to $5.7 million, or 0.22% of total assets, at March 31, 2008, compared to $4.3 million, or 0.17% of total assets, at December 31, 2007 and $3.1 million, or 0.13% of total assets, at March 31, 2007. There were no properties acquired through foreclosure on the balance sheet at March 31, 2008 and December 31, 2007. Nonaccrual loans as a percent of total loans stood at 0.36% at March 31, 2008 compared to 0.27% of total loans at December 31, 2007 and 0.21% of total loans at March 31, 2007. The increase in nonaccrual loans was largely due to certain commercial loan relationships moving into the non-accruing loan classification.

    Total 30 day+ delinquencies amounted to $10.4 million, or 0.65% of total loans, at March 31, 2008, up $3.4 million in the first quarter of 2008, and up $2.4 million from the balance at March 31, 2007. The $3.4 million increase in total 30 day+ delinquencies in the first quarter of 2008 was primarily due to a single commercial lending relationship with a carrying value of $3.6 million at March 31, 2008, which is classified as performing.

    Total residential mortgage and consumer loan 30 day+ delinquencies declined in the first quarter to $1.4 million, or 0.16% of these loans, at March 31, 2008, compared to $2.3 million, or 0.26%, at December 31, 2007. Total 90 day+ delinquencies in the residential mortgage and consumer loans portfolios amounted to $441 thousand (two loans) and $36 thousand (one loan), respectively, as of March 31, 2008. Total nonaccrual loans, which include the 90 day+ delinquencies, amounted to $1.1 million and $208 thousand in the residential mortgage and consumer loan categories, respectively, at March 31, 2008. Washington Trust has never offered a subprime residential loan program.

    The Corporation's loan loss provision charged to earnings amounted to $450 thousand for the quarter ended March 31, 2008, compared to $1.0 million for the fourth quarter of 2007 and $300 thousand for the first quarter of 2007. The 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 and general economic conditions. Net charge-offs amounted to $3 thousand for the first three months of 2008, compared to net recoveries of $166 thousand for the same period in 2007.

    The Corporation will continue to assess the adequacy of its allowance for loan losses in accordance with its established policies. The allowance for loan losses was $20.7 million, or 1.30% of total loans, at March 31, 2008, compared to $20.3 million, or 1.29% of total loans, at December 31, 2007, and $19.4 million, or 1.32% of total loans, at March 31, 2007.

    FINANCIAL CONDITION

    Total assets were $2.564 billion at March 31, 2008, up $24.4 million from December 31, 2007. Total loans grew by $24.9 million, or 2 percent, during the first quarter of 2008 and amounted to $1.6 billion. Commercial loans rose by $46.0 million, or 7 percent, in the first three months of 2008, and were up by $127.1 million, or 21 percent, from the March 31, 2007 balance. Residential loans decreased by $21.8 million, or 4 percent, in the first quarter of 2008. This decrease included $18.1 million in loans sold from portfolio for interest rate risk and balance sheet management purposes, which resulted in a gain on sale of $77 thousand. Consumer loans were essentially flat, increasing by $660 thousand, or 0.2 percent, in the quarter. The investment securities portfolio totaled $747.1 million at March 31, 2008, down $4.7 million from December 31, 2007. Included in the investment securities portfolio at March 31, 2008 were mortgage-backed securities with a fair value of $525.3 million. All of the Corporation's mortgage-backed securities are issued by U.S. Government sponsored agencies.

    Total deposits decreased by $11.2 million in the first three months of 2008. Excluding brokered certificates of deposit, in-market deposits fell by $8.4 million, or 0.6 percent, with $14.6 million in certificate of deposit runoff and an increase of $6.8 million in money market and savings accounts. FHLBB advances totaled $658.0 million at March 31, 2008, up $41.6 million from December 31, 2007.

    During the first quarter of 2008 the Corporation paid approximately $8.1 million, representing the 2007 earn-out payment pursuant to the Stock Purchase Agreement for the August 2005 acquisition of Weston Financial Group, Inc. This deferred acquisition obligation had previously been recognized as a liability in 2007 and was classified in other borrowings at December 31, 2007.

    Total shareholders' equity amounted to $191.2 million at March 31, 2008, compared to $186.5 million at December 31, 2007. Book value per share as of March 31, 2008 and December 31, 2007 amounted to $14.30 and $13.97, respectively. In 2008, the Corporation adopted the required measurement date change provisions of Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit Pension and Other Post Retirement Plans." The effect of this accounting change was a net reduction to equity of $677 thousand effective January 1, 2008.

    The Corporation's capital ratios at March 31, 2008 place the Corporation in the "well-capitalized" category according to regulatory standards.

    In April 2008, the Corporation sponsored the creation of Washington Preferred Capital Trust ("Washington Preferred"). Washington Preferred is a newly formed Delaware statutory trust created for the sole purpose of issuing trust preferred securities and investing the proceeds in junior subordinated debentures of the Corporation. Washington Trust Bancorp, Inc. is the owner of all of the common securities of Washington Preferred. In accordance with FASB Interpretation 46-R, "Consolidation of Variable Interest Entities--Revised", Washington Preferred is treated as an unconsolidated subsidiary. The common stock investment in the statutory trust will be included in "Other Assets" in the Consolidated Balance Sheet.

    In April 2008, Washington Preferred issued $10,000,000 of trust preferred securities in a private placement to two institutional investors. The trust preferred securities mature in June 2038, are redeemable at the Corporation's option beginning after five years, and require quarterly distributions by Washington Preferred to the holders of the trust preferred securities, at a rate of 6.2275% until June 15, 2008, and resets quarterly thereafter at a rate equal to the three-month LIBOR rate plus 3.50%. The proceeds of the trust preferred securities, along with the proceeds of $310,000 from the issuance of common securities by Washington Preferred to the Corporation, were used to purchase $10,310,000 of the Corporation's floating rate junior subordinated debentures. The Corporation will use the proceeds from the sale of the junior subordinated debentures for general corporate purposes. Like the trust preferred securities, the junior subordinated debentures bear interest at a rate of 6.2275% until June 15, 2008, and resets quarterly thereafter at a rate equal to the three-month LIBOR rate plus 3.50%.

    In April 2008, the Corporation also entered into a five-year interest rate swap contract with a notional amount of $10,000,000. Under the terms of this contract, Washington Trust will pay a fixed rate of 6.97% and receive a rate equal to three-month LIBOR plus 3.50%.

    DIVIDENDS DECLARED

    The Board of Directors declared a quarterly dividend of 20 cents per share for the quarter ended March 31, 2008. The dividend was paid on April 11, 2008 to shareholders of record on March 31, 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 Monday April 21, 2008 at 4:30 p.m. (Eastern Time) to discuss the Corporation's first quarter results. This call is being webcast by SNL IR Solutions 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 #: 417524. The replay will be available until 11:59 p.m. on April 26, 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, reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits, reductions in the market value of wealth management assets under administration, reductions in loan demand, 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. In addition, the factors described under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as filed with the Securities and Exchange Commission, 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. 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)
    (Dollars in thousands)                        March 31,   December 31,
                                                     2008         2007
    ----------------------------------------------------------------------
    Assets:
    Cash and noninterest-bearing balances due
     from banks                                      $32,420      $30,817
    Interest-bearing balances due from banks           1,080        1,973
    Federal funds sold and securities purchased
     under resale agreements                           8,808        7,600
    Other short-term investments                       1,211          722
    Mortgage loans held for sale                       1,854        1,981
    Securities available for sale, at fair
     value; amortized cost $742,875 in 2008 and
     $750,583 in 2007                                747,053      751,778
    Federal Home Loan Bank stock, at cost             35,273       31,725
    Loans:
     Commercial and other                            726,315      680,266
     Residential real estate                         577,892      599,671
     Consumer                                        294,375      293,715
    ----------------------------------------------------------------------
     Total loans                                   1,598,582    1,573,652
     Less allowance for loan losses                   20,724       20,277
    ----------------------------------------------------------------------
     Net loans                                     1,577,858    1,553,375
    Premises and equipment, net                       24,989       25,420
    Accrued interest receivable                       10,976       11,427
    Investment in bank-owned life insurance           41,809       41,363
    Goodwill                                          50,479       50,479
    Identifiable intangible assets, net               11,107       11,433
    Other assets                                      19,470       19,847
    ----------------------------------------------------------------------
     Total assets                                 $2,564,387   $2,539,940
    ----------------------------------------------------------------------
    
    Liabilities:
    Deposits:
     Demand deposits                                $165,822     $175,542
     NOW accounts                                    174,146      164,944
     Money market accounts                           327,562      321,600
     Savings accounts                                177,110      176,278
     Time deposits                                   790,385      807,841
    ----------------------------------------------------------------------
     Total deposits                                1,635,025    1,646,205
    Dividends payable                                  2,678        2,677
    Federal Home Loan Bank advances                  658,048      616,417
    Junior subordinated debentures                    22,681       22,681
    Other borrowings                                  23,057       32,560
    Accrued expenses and other liabilities            31,679       32,887
    ----------------------------------------------------------------------
     Total liabilities                             2,373,168    2,353,427
    ----------------------------------------------------------------------
    
    Shareholders' Equity:
    Common stock of $.0625 par value; authorized
     30,000,000 shares; issued 13,492,110 shares
     in 2008 and 2007                                    843          843
    Paid-in capital                                   34,779       34,874
    Retained earnings                                157,065      154,647
    Accumulated other comprehensive income
     (loss)                                            1,784         (239)
    Treasury stock, at cost; 124,092 shares in
     2008 and 137,652 in 2007                         (3,252)      (3,612)
    ----------------------------------------------------------------------
     Total shareholders' equity                      191,219      186,513
    ----------------------------------------------------------------------
     Total liabilities and shareholders' equity   $2,564,387   $2,539,940
    ----------------------------------------------------------------------
    
    Washington Trust Bancorp, Inc. and Subsidiaries,
                      CONSOLIDATED STATEMENTS OF INCOME
    
    (Dollars and shares in thousands, except per
     share amounts)
                                                          (unaudited)
    Three months ended March 31,                         2008      2007
    ----------------------------------------------------------------------
    Interest income:
     Interest and fees on loans                         $24,970    $23,934
     Interest on securities:
       Taxable                                            8,416      7,792
       Nontaxable                                           780        668
     Dividends on corporate stock and Federal Home
      Loan Bank stock                                       620        718
     Other interest income                                  140        191
    ----------------------------------------------------------------------
     Total interest income                               34,926     33,303
    ----------------------------------------------------------------------
    Interest expense:
     Deposits                                            11,899     12,977
     Federal Home Loan Bank advances                      7,299      4,968
     Junior subordinated debentures                         338        338
     Other interest expense                                 314        150
    ----------------------------------------------------------------------
     Total interest expense                              19,850     18,433
    ----------------------------------------------------------------------
    Net interest income                                  15,076     14,870
    Provision for loan losses                               450        300
    ----------------------------------------------------------------------
    Net interest income after provision for loan
     losses                                              14,626     14,570
    ----------------------------------------------------------------------
    Noninterest income:
     Wealth management services:
       Trust and investment advisory fees                 5,342      5,038
       Mutual fund fees                                   1,341      1,262
       Financial planning, commissions and other
        service fees                                        575        570
    ----------------------------------------------------------------------
         Wealth management services                       7,258      6,870
     Service charges on deposit accounts                  1,160      1,125
     Merchant processing fees                             1,272      1,204
     Income from bank-owned life insurance                  447        391
     Net gains on loan sales and commissions on loans
      originated for others                                 491        264
     Net (losses) gains on securities                       (45)     1,036
     Other income                                           461        358
    ----------------------------------------------------------------------
     Total noninterest income                            11,044     11,248
    ----------------------------------------------------------------------
    Noninterest expense:
     Salaries and employee benefits                      10,343      9,812
     Net occupancy                                        1,138      1,017
     Equipment                                              944        832
     Merchant processing costs                            1,068      1,019
     Outsourced services                                    636        519
     Advertising and promotion                              386        429
     Legal, audit and professional fees                     543        450
     Amortization of intangibles                            326        368
     Debt prepayment penalties                                -      1,067
     Other expenses                                       1,758      1,596
    ----------------------------------------------------------------------
     Total noninterest expense                           17,142     17,109
    ----------------------------------------------------------------------
    Income before income taxes                            8,528      8,709
    Income tax expense                                    2,712      2,734
    ----------------------------------------------------------------------
     Net income                                          $5,816     $5,975
    ----------------------------------------------------------------------
    
    Weighted average shares outstanding - basic        13,358.1   13,412.1
    Weighted average shares outstanding - diluted      13,560.6   13,723.0
    Per share information:
     Basic earnings per share                             $0.44      $0.45
     Diluted earnings per share                           $0.43      $0.44
     Cash dividends declared per share                    $0.20      $0.20
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                  SELECTED FINANCIAL HIGHLIGHTS (unaudited)
    
                                 At or for the Quarters Ended
    ----------------------------------------------------------------------
    
                     Mar. 31,   Dec. 31,  Sept. 30,   June 30,   Mar. 31,
    (Dollars in
     thousands,
     except per
     share amounts)    2008       2007       2007       2007       2007
    ----------------------------------------------------------------------
    Financial Data
    ---------------
    Total assets    $2,564,387 $2,539,940 $2,431,762 $2,393,882 $2,399,962
    Total loans      1,598,582  1,573,652  1,514,493  1,489,174  1,470,200
    Total
     securities        747,053    751,778    688,709    676,204    706,406
    Total deposits   1,635,025  1,646,205  1,655,887  1,669,089  1,683,592
    Total
     shareholders'
     equity            191,219    186,513    177,897    171,188    175,527
    Net income           5,816      5,787      6,556      5,482      5,975
    
    Per Share Data
    ---------------
    Basic earnings
     per share           $0.44      $0.43      $0.49      $0.41      $0.45
    Diluted
     earnings per
     share               $0.43      $0.43      $0.48      $0.40      $0.44
    Dividends
     declared per
     share               $0.20      $0.20      $0.20      $0.20      $0.20
    Book value per
     share              $14.30     $13.97     $13.33     $12.87     $13.12
    Tangible book
     value per
     share               $9.70      $9.33      $8.66      $8.61      $8.86
    Market value
     per share          $24.82     $25.23     $26.97     $25.21     $26.81
    
    Key Ratios
    ---------------
    Return on
     average assets      0.90%      0.94%      1.10%      0.92%      1.00%
    Return on
     average equity     12.22%     12.73%     14.99%     12.57%     13.66%
    
    Capital Ratios
    ---------------
    Tier 1 risk-
     based capital       9.23%      9.10%      9.11%      9.40%      9.47%
    Total risk-
     based capital      10.49%     10.39%     10.43%     10.73%     10.84%
    Tier 1 leverage
     ratio               5.93%      6.09%      6.11%      6.16%      6.14%
    
    Average Yields
     (taxable
     equivalent
     basis)
    ---------------
    Assets
    Residential
     real estate
     loans               5.55%      5.41%      5.35%      5.31%      5.32%
    Commercial and
     other loans         6.95%      7.39%      7.62%      7.64%      7.86%
    Consumer loans       6.18%      6.74%      7.01%      6.98%      6.95%
     Total loans         6.28%      6.51%      6.62%      6.59%      6.66%
    Short-term
     investments,
     federal funds
     sold and other      2.69%      4.72%      5.10%      4.36%      5.75%
    Taxable debt
     securities          5.06%      5.19%      5.16%      5.17%      5.07%
    Nontaxable debt
     securities          5.68%      5.59%      5.61%      5.65%      5.69%
    Corporate
     stocks and
     FHLBB stock         5.89%      7.00%      7.03%      7.15%      7.46%
     Total
      securities         5.11%      5.33%      5.31%      5.32%      5.28%
     Total
      interest-
      earning
      assets             5.89%      6.12%      6.20%      6.16%      6.19%
    Liabilities
    NOW accounts         0.19%      0.20%      0.17%      0.15%      0.16%
    Money market
     accounts            3.13%      3.93%      3.90%      3.92%      3.88%
    Savings
     accounts            1.00%      1.32%      1.32%      1.35%      1.40%
    Time deposits        4.38%      4.55%      4.60%      4.61%      4.57%
    FHLBB advances       4.37%      4.56%      4.44%      4.35%      4.31%
    Junior
     subordinated
     debentures          5.99%      5.91%      5.91%      5.98%      6.04%
    Other                4.32%      4.36%      4.47%      4.51%      4.73%
     Total
      interest-
      bearing
      liabilities        3.63%      3.85%      3.78%      3.77%      3.73%
    
    Interest rate
     spread
     (taxable
     equivalent
     basis)              2.26%      2.27%      2.42%      2.39%      2.46%
    Net interest
     margin
     (taxable
     equivalent
     basis)              2.59%      2.65%      2.81%      2.76%      2.81%
    
    Wealth
     Management
     Assets (1)
    ---------------
    Market value of
     assets under
     administration $3,878,746$4,014,352$4,025,877$3,867,674$3,715,987

    (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
    ----------------------------------------------------------------------
                    Mar. 31,   Dec. 31,   Sept. 30,  June 30,   Mar. 31,
    (Dollars in
     thousands)       2008       2007       2007       2007       2007
    ----------------------------------------------------------------------
    Period End
     Balances
    ---------------
    Loans
     Commercial:
      Mortgages      $309,684   $278,821   $276,995   $265,560   $271,817
      Construction
       and
       development     62,489     60,361     48,899     43,755     33,092
      Other           354,142    341,084    324,129    313,673    294,261
    ----------------------------------------------------------------------
      Total
       commercial     726,315    680,266    650,023    622,988    599,170
     Residential
      real estate:
      Mortgages       565,031    588,628    566,776    572,321    577,823
      Homeowner
       construction    12,861     11,043     12,040     11,071     11,742
    ----------------------------------------------------------------------
      Total
       residential
       real estate    577,892    599,671    578,816    583,392    589,565
     Consumer:
      Home equity
       lines          146,471    144,429    139,732    139,256    142,548
      Home equity
       loans           96,883     99,827     99,798     97,253     94,521
      Other            51,021     49,459     46,124     46,285     44,396
    ----------------------------------------------------------------------
      Total
       consumer       294,375    293,715    285,654    282,794    281,465
    ----------------------------------------------------------------------
      Total loans  $1,598,582$1,573,652$1,514,493$1,489,174$1,470,200
    ----------------------------------------------------------------------
    Deposits
     Demand
      deposits       $165,822   $175,542   $182,830   $177,210   $175,010
     NOW accounts     174,146    164,944    172,378    174,715    176,006
     Money market
      accounts        327,562    321,600    312,257    290,046    290,273
     Savings
      accounts        177,110    176,278    189,157    196,105    204,465
     Time deposits    790,385    807,841    799,265    831,013    837,838
    ----------------------------------------------------------------------
     Total deposits$1,635,025 $1,646,205$1,655,887$1,669,089$1,683,592
    ----------------------------------------------------------------------
    
    Brokered
     deposits
     included in
     time deposits   $126,972   $129,798   $130,017   $159,297   $163,089
    
    Asset Quality
     Data
    ---------------
    Allowance for
     Loan Losses
    Balance at
     beginning of
     period           $20,277    $19,472    $19,327    $19,360    $18,894
    Provision
     charged to
     earnings             450      1,000        300        300        300
    Net (charge-
     offs)
     recoveries            (3)      (195)      (155)      (333)       166
    ----------------------------------------------------------------------
    Balance at end
     of period        $20,724    $20,277    $19,472    $19,327    $19,360
    ----------------------------------------------------------------------
    
    Loans 30 days
     or More Past
     Due
    Commercial
     categories        $9,043     $4,726     $2,239     $7,224     $6,935
    Residential
     mortgages          1,260      2,100      3,266      1,697        914
    Consumer loans        101        197        358        145        169
    ----------------------------------------------------------------------
    Total             $10,404     $7,023     $5,863     $9,066     $8,018
    ----------------------------------------------------------------------
    
    Nonperforming
     Assets
    Commercial
     mortgages         $1,300     $1,094     $1,099     $1,385     $1,157
    Commercial
     construction
     and
     development            -          -          -          -          -
    Other
     commercial         3,081      1,781        581        645      1,021
    Residential
     real estate        1,111      1,158        731        698        709
    Consumer              208        271        262        241        216
    ----------------------------------------------------------------------
    Total
     nonaccrual
     loans             $5,700     $4,304     $2,673     $2,969     $3,103
    Other real
     estate owned,
     net                    -          -          -          -          -
    ----------------------------------------------------------------------
    Total
     nonperforming
     assets            $5,700     $4,304     $2,673     $2,969     $3,103
    ----------------------------------------------------------------------
    
    Loans 30 days
     or more past
     due to total
     loans               0.65%      0.45%      0.39%      0.61%      0.55%
    Nonperforming
     assets to
     total assets        0.22%      0.17%      0.11%      0.12%      0.13%
    Nonaccrual
     loans to total
     loans               0.36%      0.27%      0.18%      0.20%      0.21%
    Allowance for
     loan losses to
     nonaccrual
     loans             363.58%    471.12%    728.47%    650.96%    623.91%
    Allowance for
     loan losses to
     total loans         1.30%      1.29%      1.29%      1.30%      1.32%
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                  SELECTED FINANCIAL HIGHLIGHTS (unaudited)
    
                                                     Three Months Ended
    ----------------------------------------------------------------------
                                                    March 31,   March 31,
    (Dollars and shares in thousands, except per
     share amounts)                                   2008        2007
    ----------------------------------------------------------------------
    
    Operating Results
    ----------------------------------------------
    Net interest income                               $15,076     $14,870
    Provision for loan losses                             450         300
    Net (losses) gains on securities                      (45)      1,036
    Other noninterest income                           11,089      10,212
    Noninterest expenses                               17,142      17,109
    Income tax expense                                  2,712       2,734
    Net income                                          5,816       5,975
    
    Basic earnings per share                            $0.44       $0.45
    Diluted earnings per share                          $0.43       $0.44
    Dividends declared per share                        $0.20       $0.20
    
    Weighted average shares outstanding - basic      13,358.1    13,412.1
    Weighted average shares outstanding - diluted    13,560.6    13,723.0
    Shares outstanding at end of period              13,492.1    13,492.1
    
    Key Ratios
    ----------------------------------------------
    Return on average assets                             0.90%       1.00%
    Return on average equity                            12.22%      13.66%
    Interest rate spread (taxable equivalent
     basis)                                              2.26%       2.46%
    Net interest margin (taxable equivalent basis)       2.59%       2.81%
    
    Allowance for Loan Losses
    ----------------------------------------------
    Balance at beginning of period                    $20,277     $18,894
    Provision charged to earnings                         450         300
    Net (charge-offs) recoveries                           (3)        166
    ----------------------------------------------------------------------
    Balance at end of period                          $20,724     $19,360
    ----------------------------------------------------------------------
    
    Net (charge-offs) recoveries to average loans         .00%        .01%
    
    Wealth Management Assets Under Administration
     (1)
    ----------------------------------------------
    Balance at beginning of period                 $4,014,352  $3,609,180
    Net investment (depreciation) appreciation and
     income                                          (201,915)     47,673
    Net customer cash flows                            66,309      59,134
    ----------------------------------------------------------------------
    Balance at end of period                       $3,878,746  $3,715,987
    ----------------------------------------------------------------------
    

    (1) Prior period amounts have been adjusted to conform to the current year presentation.

    The following table presents average balance and interest rate information. Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate. 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 March 31,            2008                       2007
    ----------------------------------------------------------------------
                      Average            Yield/  Average            Yield/
    (Dollars in
     thousands)       Balance   Interest  Rate   Balance   Interest  Rate
    ----------------------------------------------------------------------
    Assets
    Residential real
     estate loans      $601,564   $8,297  5.55%   $592,059   $7,773  5.32%
    Commercial and
     other loans        707,073   12,221  6.95%    587,088   11,372  7.86%
    Consumer loans      292,800    4,497  6.18%    281,572    4,825  6.95%
    ----------------------------------------------------------------------
     Total loans      1,601,437   25,015  6.28%  1,460,719   23,970  6.66%
    Short-term
     investments,
     federal funds
     sold and other      20,985      140  2.69%     13,494      191  5.75%
    Taxable debt
     securities         668,701    8,416  5.06%    622,981    7,792  5.07%
    Nontaxable debt
     securities          81,025    1,143  5.68%     69,648      978  5.69%
    Corporate stocks
     and FHLBB stock     46,860      687  5.89%     43,468      800  7.46%
    ----------------------------------------------------------------------
     Total
      securities        817,571   10,386  5.11%    749,591    9,761  5.28%
    ----------------------------------------------------------------------
     Total interest-
      earning assets  2,419,008   35,401  5.89%  2,210,310   33,731  6.19%
    Non interest-
     earning assets     168,709                    171,033
    ----------------------------------------------------------------------
     Total assets    $2,587,717                 $2,381,343
    ----------------------------------------------------------------------
    Liabilities and
     Shareholders'
     Equity
    NOW accounts       $162,509      $78  0.19%   $169,675      $68  0.16%
    Money market
     accounts           327,877    2,552  3.13%    293,985    2,811  3.88%
    Savings accounts    174,733      432  1.00%    205,572      710  1.40%
    Time deposits       811,767    8,837  4.38%    832,492    9,388  4.57%
    FHLBB advances      672,116    7,299  4.37%    467,448    4,968  4.31%
    Junior
     subordinated
     debentures          22,681      338  5.99%     22,681      338  6.04%
    Other                29,247      314  4.32%     12,797      150  4.73%
    ----------------------------------------------------------------------
     Total interest-
      bearing
      liabilities     2,200,930   19,850  3.63%  2,004,650   18,433  3.73%
    Demand deposits     165,934                    170,977
    Other
     liabilities         30,534                     30,719
    Shareholders'
     equity             190,319                    174,997
    ----------------------------------------------------------------------
     Total
      liabilities
      and
      shareholders'
      equity         $2,587,717                 $2,381,343
    ----------------------------------------------------------------------
     Net interest
      income (FTE)               $15,551                    $15,298
    ----------------------------------------------------------------------
    Interest rate
     spread                               2.26%                      2.46%
    Net interest
     margin                               2.59%                      2.81%
    

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

    (Dollars in thousands)
    
    Three months ended March 31,                              2008    2007
    ----------------------------------------------------------------------
    Commercial and other loans                                 $45     $36
    Nontaxable debt securities                                 363     310
    Corporate stocks                                            67      82
    ----------------------------------------------------------------------
     Total                                                    $475    $428
    ----------------------------------------------------------------------
    

    Source: Washington Trust Bancorp, Inc.


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