EX-99 2 ex99.htm EXHIBIT FOR PRESS RELEASE DATED APRIL 24, 2006 Exhibit for Press Release dated April 24, 2006
Exhibit 99.1

 
[Graphic Omitted]
NASDAQ: WASH
 
Contact: Elizabeth B. Eckel
        Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: April 24, 2006
FOR IMMEDIATE RELEASE

Washington Trust Quarterly Earnings Up 12%

Westerly, Rhode Island…Washington Trust Bancorp, Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington Trust Company, today announced first quarter 2006 net income of $6.1 million, an increase of 12 percent from the $5.4 million reported for the first quarter of 2005. On a per diluted share basis, the Corporation earned 44 cents for the first quarter of 2006, up 4 cents, or 10 percent, from the 40 cents earned for the same quarter in 2005. The returns on average equity and average assets for the three months ended March 31, 2006 were 15.09% and 1.01%, respectively, compared to 14.20% and 0.94%, respectively, for the same period in 2005.

“Washington Trust had a very good first quarter despite intense price competition and a challenging interest rate environment, stated John C. Warren, Washington Trust Chairman and Chief Executive Officer. He added, “A key to our success in the first quarter was a significant increase in wealth management and trust revenues, which were 83% higher than the first quarter last year.”

Warren also noted that the Bank has plans to open two new branches in 2007; a branch at 1195 Oaklawn Avenue in Cranston, RI and a branch in Warwick, RI. Warren stated, “We’ve had tremendous growth in Cranston and Warwick areas and these branches are part of our plan to expand our footprint in the Greater Providence market.” The opening of these branches is subject to regulatory approvals.

Net interest income is Washington Trust’s largest source of revenue, representing 62% of total revenue for the first quarter of 2006. Net interest income totaled $15.4 million, up 5% from the first quarter a year ago. The increase in net interest income is primarily attributable to growth in average earning assets and a higher amount of loans as a percentage of total interest-earning assets. The rise in short-term rates in the first quarter of 2006 caused deposit costs to rise, however, this was offset in part by higher yields on loans and securities. The net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) for the three months ended March 31, 2006 amounted to 2.84%, unchanged from the fourth quarter of 2005, and up 8 basis points from the first quarter of 2005.

-M O R E-

Washington Trust
Page Two, April 24, 2006

Noninterest income, excluding gains on securities, comprised 38% of total revenue for first quarter of 2006, compared with 29% for the same period in 2005. Noninterest income amounted to $9.5 million for the three months ended March 31, 2006, an increase of 56% over the first quarter of 2005. This increase is primarily attributable to higher revenues from wealth management and trust services, mainly due to the acquisition of Weston Financial Group, Inc. in the third quarter of 2005.

Revenue from wealth management and trust services, the largest component of noninterest income, totaled $5.9 million, up $2.7 million, or 83%, from the first quarter of 2005. As previously stated, this increase was primarily attributable to the acquisition of Weston Financial Group, Inc. completed on August 31, 2005. Revenue from wealth management and trust services is largely dependent on the value of assets under administration and is closely tied to the performance of the financial markets. Assets under administration totaled $3.443 billion at March 31, 2006, up $171 million, or 5%, from $3.272 billion at December 31, 2005. The increase is due to business development efforts and financial market appreciation. Assets under administration at March 31, 2005, prior to the Weston acquisition, were $1.831 billion.

Noninterest expenses for the first quarter of 2006 increased $3.3 million, or 26%, over the first quarter a year ago. Approximately $1.9 million, or 59%, of this increase was attributable to the operating expenses of Weston Financial Group, Inc.

The Corporation’s effective tax rate for the first quarter of 2006 was 32.0%, unchanged from the rate during the same period in 2005 and down slightly from the effective rate of 32.7% recorded during the fourth quarter of 2005.

Total assets were $2.433 billion at March 31, 2006, up from $2.402 billion at December 31, 2005. Loan growth was relatively quiet in the first quarter, with total loans increasing by $16.9 million, or 1.2%. Total commercial and commercial real estate loans rose by $4.1 million, or 0.7%. Residential mortgages increased by $8.7 million, or 1.5%, which includes the effect of $11.8 million in purchased mortgages during the period. Consumer loans rose by $4.1 million, or 1.5%, led by growth in home equity loans. The securities portfolio was little changed, up $2.7 million, or 0.3% during the quarter.

Total deposits rose by $21.4 million, or 1.3%. Excluding a $22.0 million increase in brokered certificates of deposit, in-market deposits were down slightly by $641 thousand during the first quarter of 2006. This decrease reflects a seasonality trend whereby the Corporation has experienced outflow of demand deposit balances during the first quarter in recent years. Due to increases in short-term interest rates, the Corporation also experienced a continuation of a shift in the mix of deposits away from savings accounts and into

- M O R E -

Washington Trust
Page Three, April 24, 2006

premium money market accounts and certificates of deposit. Federal Home Loan Bank advances and other borrowings increased by $7.1 million during the quarter.

Asset quality, as measured by the level of nonperforming assets, remained strong in the first quarter of 2006. Nonperforming assets (nonaccrual loans and property acquired through foreclosure) totaled $2.3 million, or 0.09% of total assets, at March 31, 2006, compared to $2.4 million, or 0.10%, a year ago. Loan recoveries, net of charge-offs, amounted to $29 thousand in the first quarter of 2006, compared to net charge-offs of $13 thousand in the same period a year ago.

The allowance for loan losses was $18.2 million, or 1.29% of total loans, at March 31, 2006, compared to $17.1 million, or 1.32% of total loans, at March 31, 2005. The Corporation’s loan loss provision charged to earnings amounted to $300 thousand for the first quarter of 2006, unchanged from both the fourth quarter of 2005 and the first quarter of 2005.

Total shareholders’ equity amounted to $159.9 million at March 31, 2006, compared to $158.4 million at December 31, 2005. Book value per share as of March 31, 2006 and December 31, 2005 amounted to $11.92 and $11.86, respectively.

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 24, at 4:30 p.m. (Eastern Time) to discuss the Corporation’s first quarter results. This call is being webcast by VCall and can be accessed through the Investor Relations section of the Washington Trust website, www.washtrust.com. A replay of the call will be posted in this same location on the website shortly after the conclusion of the call. You may also listen to a replay by dialing (877) 660-6853, and entering Account #: 286 and Conference ID #: 193942. The replay will be available until 11:59 p.m. on April 30, 2006.

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 Stock MarketÒ under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrust.com.
# # #
This report contains certain statements that may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The actual results, performance or achievements of the Corporation could differ materially from those projected in the forward-looking statements as a result, among other factors, of changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of wealth management and trust assets under administration, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default and charge-off rates, changes in the size and nature of the Corporation’s competition, changes in legislation or regulation and accounting principles, policies and guidelines, and changes in the assumptions used in making such forward-looking statements. The Corporation assumes no obligation to update forward-looking statements or update the reasons actual results, performance or achievements could differ materially from those provided in the forward-looking statements, except as required by law.


Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
 
 
  
Three Months Ended 
   
Mar. 31, 
    
Dec. 31,
 
  
Mar. 31,
 
(Dollars and shares in thousands, except per share amounts)
    
2006
    
2005
    
2005
  
                     
Operating Results
                    
Net interest income
  
$
15,415
  
$
15,703
  
$
14,621
  
Provision for loan losses
    
300
    
300
    
300
  
Net realized gains on securities
    
59
    
337
    
-
  
Other noninterest income
    
9,461
    
9,162
    
6,079
  
Noninterest expenses
    
15,704
    
15,766
    
12,444
  
Income tax expense
    
2,858
    
2,983
    
2,546
  
Net income
    
6,073
    
6,153
    
5,410
  
                     
Per Share
                    
Basic earnings
  
$
0.45
  
$
0.46
  
$
0.41
  
Diluted earnings
  
$
0.44
  
$
0.45
  
$
0.40
  
Dividends declared
  
$
0.19
  
$
0.18
  
$
0.18
  
                     
Weighted Average Shares Outstanding
                    
Basic
    
13,386.8
    
13,352.4
    
13,282.7
  
Diluted
    
13,698.6
    
13,659.6
    
13,617.3
  
                     
Key Ratios
                    
Return on average assets
    
1.01
%
  
1.03
%
  
0.94
%
Return on average equity
    
15.09
%
  
15.63
%
  
14.20
%
Interest rate spread (taxable equivalent basis)
    
2.53
%
  
2.53
%
  
2.49
%
Net interest margin (taxable equivalent basis)
    
2.84
%
  
2.84
%
  
2.76
%
                     
Allowance for Loan Losses
                    
Balance at beginning of period
  
$
17,918
  
$
17,614
  
$
16,771
  
Provision charged to earnings
    
300
    
300
    
300
  
Net (charge-offs) recoveries
    
29
    
4
    
(13
)
Balance at end of period
  
$
18,247
  
$
17,918
  
$
17,058
  

 

Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
 
   
Mar. 31, 
    
Dec. 31,
    
Mar. 31,
 
(Dollars and shares in thousands, except per share amounts)
    
2006
    
2005
    
2005
 
Period-End Balance Sheet
                    
Assets
  
$
2,432,765
  
$
2,402,003
  
$
2,342,138
  
Total securities
    
786,674
    
783,941
    
866,873
  
Loans:
                    
Commercial and other:
                    
Mortgages
    
277,851
    
291,292
    
260,058
  
Construction and development
    
35,599
    
37,190
    
31,060
  
Other
    
245,376
    
226,252
    
219,346
  
Total commercial and other
    
558,826
    
554,734
    
510,464
  
Residential real estate:
                    
Mortgages
    
573,262
    
565,680
    
529,177
  
Homeowner construction
    
18,147
    
17,028
    
19,663
  
Total residential real estate
    
591,409
    
582,708
    
548,840
  
Consumer:
                    
Home equity lines
    
157,769
    
161,100
    
157,752
  
Other
    
110,778
    
103,366
    
77,134
  
Total consumer
    
268,547
    
264,466
    
234,886
  
Total loans
    
1,418,782
    
1,401,908
    
1,294,190
  
                     
Deposits:
                    
Demand deposits
    
181,345
    
196,102
    
190,883
  
NOW accounts
    
179,027
    
178,677
    
180,240
  
Money market accounts
    
227,433
    
223,255
    
189,870
  
Savings accounts
    
202,395
    
212,499
    
248,852
  
Time deposits
    
870,420
    
828,725
    
719,202
  
Total deposits
    
1,660,620
    
1,639,258
    
1,529,047
  
Brokered deposits included in time deposits
    
222,118
    
200,115
    
207,652
  
Federal Home Loan Bank advances
    
556,051
    
545,323
    
639,874
  
Shareholders’ equity
    
159,880
    
158,446
    
149,225
  
                     
Capital Ratios
                    
Tier 1 risk-based capital
    
9.26
%
  
9.06
%
  
9.21
%
Total risk-based capital
    
10.72
%
  
10.51
%
  
10.75
%
Tier 1 leverage ratio
    
5.64
%
  
5.45
%
  
5.44
%
                     
Share Information
                    
Shares outstanding at end of period
    
13,412.7
    
13,361.8
    
13,291.1
  
Book value per share
  
$
11.92
  
$
11.86
  
$
11.23
  
Tangible book value per share
  
$
7.90
  
$
7.79
  
$
9.44
  
Market value per share
  
$
28.07
  
$
26.18
  
$
27.48
  
                     
Credit Quality
                    
Nonaccrual loans
  
$
2,268
  
$
2,414
  
$
2,376
  
Other real estate owned, net
    
-
    
-
    
4
  
Nonperforming assets to total assets
    
0.09
%
  
0.10
%
  
0.10
%
Nonaccrual loans to total loans
    
0.16
%
  
0.17
%
  
0.18
%
Allowance for loan losses to nonaccrual loans
    
804.54
%
  
742.25
%
  
717.93
%
Allowance for loan losses to total loans
    
1.29
%
  
1.28
%
  
1.32
%
                     
Assets Under Administration
                    
Market value
  
$
3,442,941
  
$
3,271,756
  
$
1,831,045
  

 
Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
 
 
(Unaudited)
        
(Dollars in thousands)
    
March 31,
    
December 31,
 
     
2006
    
2005
  
Assets:
              
Cash and due from banks
  
$
42,781
  
$
48,997
  
Federal funds sold and other short-term investments
    
29,794
    
17,166
  
Mortgage loans held for sale
    
2,211
    
439
  
Securities:
              
Available for sale, at fair value; amortized cost $627,902 in 2006 and $620,638 in 2005
    
621,516
    
619,234
  
Held to maturity, at cost; fair value $161,571 in 2006 and $162,756 in 2005
    
165,158
    
164,707
  
Total securities
    
786,674
    
783,941
  
Federal Home Loan Bank stock, at cost
    
34,966
    
34,966
  
Loans:
              
Commercial and other
    
558,826
    
554,734
  
Residential real estate
    
591,409
    
582,708
  
Consumer
    
268,547
    
264,466
  
Total loans
    
1,418,782
    
1,401,908
  
Less allowance for loan losses
    
18,247
    
17,918
  
Net loans
    
1,400,535
    
1,383,990
  
Premises and equipment, net
    
24,106
    
23,737
  
Accrued interest receivable
    
11,238
    
10,594
  
Investment in bank-owned life insurance
    
30,639
    
30,360
  
Goodwill
    
39,963
    
39,963
  
Identifiable intangible assets
    
14,004
    
14,409
  
Other assets
    
15,854
    
13,441
  
Total assets
  
$
2,432,765
  
$
2,402,003
  
               
Liabilities:
              
Deposits:
              
Demand deposits
  
$
181,345
  
$
196,102
  
NOW accounts
    
179,027
    
178,677
  
Money market accounts
    
227,433
    
223,255
  
Savings accounts
    
202,395
    
212,499
  
Time deposits
    
870,420
    
828,725
  
Total deposits
    
1,660,620
    
1,639,258
  
Dividends payable
    
2,551
    
2,408
  
Federal Home Loan Bank advances
    
556,051
    
545,323
  
Junior subordinated debentures
    
22,681
    
22,681
  
Other borrowings
    
6,108
    
9,774
  
Accrued expenses and other liabilities
    
24,874
    
24,113
  
Total liabilities
    
2,272,885
    
2,243,557
  
               
Shareholders’ Equity:
              
Common stock of $.0625 par value; authorized 30,000,000 shares;
              
issued 13,425,573 shares in 2006 and 13,372,295 in 2005
    
839
    
836
  
Paid-in capital
    
34,006
    
33,676
  
Retained earnings
    
130,257
    
126,735
  
Unearned stock-based compensation
    
-
    
(898
)
Accumulated other comprehensive (loss) income
   
(4,903
)
  
(1,653
)
Treasury stock, at cost; 12,843 shares in 2006 and 10,519 in 2005
    
(319
)
  
(250
)
Total shareholders’ equity
    
159,880
    
158,446
  
Total liabilities and shareholders’ equity
  
$
2,432,765
  
$
2,402,003
  
 

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
 
(Dollars and shares in thousands, except per share amounts)
  
(Unaudited)
     
Three months ended March 31,
    
2006
    
2005
  
Interest income:
              
Interest and fees on loans
  
$
21,897
  
$
17,825
  
Interest on securities:
              
Taxable
    
8,412
    
8,434
  
Nontaxable
    
328
    
185
  
Dividends on corporate stock and Federal Home Loan Bank stock
    
677
    
619
  
Interest on federal funds sold and other short-term investments
    
115
    
55
  
Total interest income
    
31,429
    
27,118
  
Interest expense:
              
Deposits
    
10,238
    
6,932
  
Federal Home Loan Bank advances
    
5,359
    
5,549
  
Junior subordinated debentures
    
338
    
-
  
Other
   
79
    
16
  
Total interest expense
    
16,014
    
12,497
  
Net interest income
    
15,415
    
14,621
  
Provision for loan losses
    
300
    
300
  
Net interest income after provision for loan losses
    
15,115
    
14,321
  
Noninterest income:
              
Wealth management and trust services
    
5,882
    
3,212
  
Service charges on deposit accounts
    
1,119
    
1,011
  
Merchant processing fees
    
1,047
    
778
  
Income from bank-owned life insurance
    
279
    
272
  
Net gains on loan sales
    
276
    
487
  
Net realized gains on securities
    
59
    
-
  
Other income
    
858
    
319
  
Total noninterest income
    
9,520
    
6,079
  
Noninterest expense:
              
Salaries and employee benefits
    
9,619
    
7,459
  
Net occupancy
    
954
    
853
  
Equipment
    
799
    
882
  
Merchant processing costs
    
887
    
636
  
Outsourced services
    
518
    
413
  
Advertising and promotion
    
437
    
303
  
Legal, audit and professional fees
    
376
    
392
  
Amortization of intangibles
    
405
    
147
  
Other
    
1,709
    
1,359
  
Total noninterest expense
    
15,704
    
12,444
  
Income before income taxes
    
8,931
    
7,956
  
Income tax expense
    
2,858
    
2,546
  
Net income
  
$
6,073
  
$
5,410
  
               
Weighted average shares outstanding - basic
    
13,386.8
    
13,282.7
  
Weighted average shares outstanding - diluted
    
13,698.6
    
13,617.3
  
Per share information:
              
Basic earnings per share
  
$
0.45
  
$
0.41
  
Diluted earnings per share
  
$
0.44
  
$
0.40
  
Cash dividends declared per share
  
$
0.19
  
$
0.18
  

 
 
Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS
 
 
  
(Unaudited) 
Three months ended March 31,
  
2006
2005
 
    
Average 
          
Yield/
 
 
Average
 
 
 
 
 
Yield/
 
(Dollars in thousands)
 
 
Balance
 
 
Interest
 
 
Rate
 
 
Balance
 
 
Interest
 
 
Rate
  
Assets:
                                      
Residential real estate loans
  
$
589,837
  
$
7,404
    
5.09
%
$
530,845
  
$
6,505
    
4.97
%
Commercial and other loans
    
556,013
    
10,254
    
7.48
%
  
512,260
    
8,426
    
6.67
%
Consumer loans
    
267,068
    
4,289
    
6.51
%
  
230,728
    
2,939
    
5.17
%
Total loans
    
1,412,918
    
21,947
    
6.30
%
  
1,273,833
    
17,870
    
5.69
%
Federal funds sold and
                                     
other short-term investments
    
10,178
    
115
    
4.62
%
  
10,670
    
55
    
2.10
%
Taxable debt securities
    
737,563
    
8,412
    
4.63
%
  
830,738
    
8,434
    
4.12
%
Nontaxable debt securities
    
35,177
    
504
    
5.81
%
  
19,132
    
284
    
6.01
%
Corporate stocks and FHLB stock
    
49,344
    
761
    
6.26
%
  
52,852
    
723
    
5.54
%
Total securities
    
832,262
    
9,793
    
4.77
%
  
913,392
    
9,496
    
4.22
%
Total interest-earning assets
    
2,245,180
    
31,739
    
5.73
%
  
2,187,225
    
27,366
    
5.07
%
Non interest-earning assets
    
149,361
                
126,180
              
Total assets
  
$
2,394,541
              
$
2,313,405
              
Liabilities and Shareholders’ Equity:
                                      
NOW accounts
  
$
170,421
    $
67
    
0.16
%
$
171,108
  
$
78
    
0.18
%
Money market accounts
    
228,305
    
1,607
    
2.85
%
  
196,577
    
841
    
1.73
%
Savings deposits
    
204,768
    
287
    
0.57
%
  
248,957
    
377
    
0.61
%
Time deposits
    
851,298
    
8,277
    
3.94
%
  
688,878
    
5,636
    
3.32
%
FHLB advances
    
547,391
    
5,359
    
3.97
%
  
655,564
    
5,549
    
3.43
%
Junior subordinated debentures
    
22,681
    
338
    
6.04
%
  
-
    
-
    
-
  
Other
    
7,017
    
79
    
4.64
%
  
1,507
    
16
    
4.24
%
Total interest-bearing liabilities
    
2,031,881
    
16,014
    
3.20
%
  
1,962,591
    
12,497
    
2.58
%
Demand deposits
    
179,954
                
182,281
              
Other liabilities
    
21,759
                
16,113
              
Shareholders’ equity
    
160,947
                
152,420
              
Total liabilities and shareholders’ equity
  
$
2,394,541
              
$
2,313,405
              
Net interest income (FTE)
        
$
15,725
              
$
14,869
        
Interest rate spread
                
2.53
%
              
2.49
%
Net interest margin
                
2.84
%
              
2.76
%