8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

----------------------

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

October 23, 2006

WASHINGTON TRUST BANCORP, INC.

-----------------------------

(Exact Name of Registrant as Specified in Charter)

Rhode Island	0-13091	05-0404671
--------------------	--------------------	---------------------
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

23 Broad Street, Westerly, Rhode Island 02891

------------------------------------------------------------

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (401) 348-1200

Former name or address, if changed from last report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On October 23, 2006, Washington Trust Bancorp, Inc. issued a press release in which it disclosed unaudited financial information related to third quarter consolidated earnings. A copy of the press release relating to such announcement, dated October 23, 2006, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Pursuant to General Instructions B.2 of Form 8-K, this information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(c)	Exhibits.
	Exhibit No.	Exhibit
	99.1	Press Release dated October 23, 2006*
	*Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WASHINGTON TRUST BANCORP, INC.
Date: October 23, 2006	By:	/s/ David V. Devault
		David V. Devault
		Executive Vice President, Secretary, Treasurer and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Press Release dated October 23, 2006*
* Filed herewith

EX-99

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: October 23, 2006

FOR IMMEDIATE RELEASE

Washington Trust Reports Third Quarter Earnings

Westerly, Rhode Island…Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced third quarter 2006 net income of $6.6 million, up 13.0 percent from the $5.8 million reported for the third quarter of 2005. On a per diluted share basis, net income was 48 cents, up 5 cents, or 11.6 percent, from the 43 cents earned for the same quarter in 2005. For the nine months ended September 30, 2006, net income was $18.8 million compared to $16.9 million reported for the same period a year ago. On a per diluted share basis, net income was $1.37 for the nine months ended September 30, 2006, up 13 cents from the $1.24 reported for the comparable period in 2005.

Certain non-core items affected the computation of earnings in accordance with generally accepted accounting principles (“GAAP”) in both 2005 and 2006. The following items are included (net of tax) in the Corporation’s reported GAAP earnings. Share impact is on a diluted share basis.

·   The Corporation received an additional quarterly dividend of approximately $305 thousand (2 cents per share) in the third quarter of 2006 from the Federal Home Loan Bank of Boston (“FHLBB”), following the decision by the FHLBB to delay its normal second quarter dividend on its stock.

·   The Corporation recorded $247 thousand (2 cents per share) in net realized losses on sales of securities in the third quarter of 2006 in connection with securities portfolio deleveraging and other portfolio transactions.

·   Acquisition-related costs of $440 thousand (3 cents per share) were recognized in the third quarter of 2005.

All references in this release to adjusted results reflect the exclusion of the impact of the various items noted above. Reconciliations of the items excluded from the Corporation’s adjusted earnings for the three and nine month periods ended September 30, 2006 and 2005 are presented in the financial tables which accompany this release under the heading “Reconciliation Tables - Non-GAAP Financial Information”.

-M O R E-

Washington Trust

Page Two, October 23, 2006

Excluding these non-core items, adjusted net income for the quarter and nine month periods ended September 30, 2006 were $6.5 million and $18.8 million, respectively, up 4.1% and 8.5% from the same periods in 2005. On a per diluted share basis, adjusted earnings per share for the quarter and nine month periods ended September 30, 2006 were $.48 and $1.37, respectively, an increase of $.02, or 4. 4%, and $.10, or 7.9%, respectively, from the same periods last year.

“The third quarter earnings represent a continuation of the strong financial results we have experienced in 2006,” stated John C. Warren, Washington Trust Chairman and Chief Executive Officer. “More recently however, loan demand has been weak, competition for loans and deposits has intensified and the inverted yield curve continues to apply pressure to our margins. While these conditions may continue to create a difficult banking environment, we will remain focused on managing our company to enhance the long term value of our shareholders.”

Net interest income totaled $15.9 million for the third quarter of 2006, up $506 thousand from the third quarter a year ago. Included in net interest income is a catch-up for the delayed second quarter dividend on the Corporation’s investment in FHLBB stock of approximately $450 thousand. Adjusted net interest income, excluding the impact of the additional FHLBB dividend, was $15.4 million, essentially unchanged from the same period in 2005. The net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) for the third quarter of 2006 amounted to 2.86%. The additional FHLBB dividend represented approximately 8 basis points of the third quarter 2006 net interest margin. Excluding the effect of the delay of the second quarter FHLBB dividend until the third quarter, the net interest margin was unchanged from the third quarter of 2005 and down by 5 basis points from the second quarter of 2006. The continued rise in short-term rates in 2006 has caused deposit costs to rise, while yields on loans and securities have remained relatively flat. The Corporation expects that this negative trend will continue.

Excluding net realized gains and losses on securities, noninterest income amounted to $11.1 million for the third quarter of 2006, an increase of 33 percent from the same 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. (“Weston Financial”), which was completed on August 31, 2005.

-M O R E-

Washington Trust

Page Three, October 23, 2006

Wealth management and trust services revenues were $6.0 million for the third quarter of 2006, up $2.0 million, or 49 percent, from the third quarter of 2005. As previously stated, this increase was primarily attributable to the acquisition of Weston Financial in the third quarter of 2005. Assets under administration totaled $3.551 billion at September 30, 2006, up $126 million in the third quarter of 2006 and up $279 million, or 9 percent, from $3.272 billion at December 31, 2005. The increase is due to financial market appreciation and business development efforts.

Noninterest expenses amounted to $16.6 million for the quarter ended September 30, 2006, an increase of $1.8 million, or 12 percent, over the comparable quarter a year ago. Approximately $1.2 million, or 69 percent, of this increase was attributable to the operating expenses of Weston Financial. Included in noninterest expenses in the third quarter of 2005 were direct acquisition and acquisition related costs amounting to $605 thousand and debt prepayment penalty expense of $129 thousand.

The returns on average equity and average assets for the quarter ended September 30, 2006 were 15.62% and 1.09%, respectively, compared to 14.75% and 0.98%, respectively, for the comparable quarter in 2005. The returns on average equity and average assets for the nine months ended September 30, 2006 were 15.33% and 1.04%, respectively, compared to 14.51% and 0.96%, respectively, for the comparable period in 2005.

Total assets were $2.403 billion at September 30, 2006, up $1.3 million from December 31, 2005. The Corporation has experienced relatively modest loan demand during 2006 and has also reduced its investment securities portfolio.

During the first nine months of 2006 total loans increased by $26.6 million, or 1.9 percent. Consumer loans rose by $15.3 million, or 5.8 percent, led by growth in home equity loans. Total commercial and commercial real estate loans rose by $6.6 million, or 1.2 percent. Residential mortgages increased by $4.7 million, or 0.8 percent, for the nine months ended September 30, 2006.

The investment securities portfolio has declined by $42.6 million since December 31, 2005, primarily resulting from deleveraging transactions in response to the flat to inverted yield curve shape in effect during most of this period. Net realized losses on securities of $365 thousand were recognized in the third quarter of 2006 including sales of mortgage-backed and other debt securities totaling $56.5 million with a realized loss of $2.4 million and sales of equity securities with a realized gain of $2.0 million. For the nine month period in 2006, net realized gains on securities sales amounted to $78 thousand, excluding a realized gain of

-M O R E-

Washington Trust

Page Four, October 23, 2006

$381 thousand recognized in the second quarter in connection with the charitable donation of appreciated equity securities. Realized gains and losses on securities sales during the same three and nine month periods in 2005 were insignificant. Proceeds from these sales transactions amounting to $56.8 million during the third quarter were primarily used to reduce advances from the FHLBB, which have declined by $79.4 million and $81.2 million during the three and nine month periods ended September 30, 2006, respectively.

Deposits totaled $1.700 billion at September 30, 2006, up $60.9 million, or 3.7 percent, from December 31, 2005. Excluding a $13.9 million decrease in brokered certificates of deposit, in-market deposits were up $74.9 million, or 5.2 percent, for the nine months ended September 30, 2006. Due to increases in short-term interest rates, the Corporation has continued to experience a shift in the mix of deposits away from savings accounts and into higher cost money market accounts and certificates of deposit.

During the third quarter of 2006, the Corporation recognized a liability of $4.6 million, with a corresponding increase in goodwill, related to the contingent payment terms of its August 2005 acquisition of Weston Financial. This amount represents the 2006 payment for the three-year earn-out period ending December 31, 2008.

Asset quality continues to remain strong , with nonperforming assets (nonaccrual loans and property acquired through foreclosure) amounting to $2.6 million, or 0.11% of total assets, at September 30, 2006, compared to $2.4 million, or 0.10% of total assets at December 31, 2005. Net charge-offs amounted to $173 thousand for the nine months ended September 30, 2006, compared to net loan recoveries of $193 thousand for the same period a year ago.

The allowance for loan losses was $18.6 million, or 1.31% of total loans, at September 30, 2006, compared to $17.6 million, or 1.26% of total loans, at September 30, 2005. The Corporation’s loan loss provision charged to earnings amounted to $300 and $900 thousand, respectively, for the three and nine months ended September 30, 2006, unchanged from the amounts recorded for the same periods in 2005.

Total shareholders’ equity amounted to $172.4 million at September 30, 2006, compared to $158.4 million at December 31, 2005. Book value per share as of September 30, 2006 and December 31, 2005 amounted to $12.82 and $11.86, respectively.

- M O R E -

Washington Trust

Page Five, October 23, 2006

The Corporation has previously announced its intentions to open two de novo branches, one in Cranston, Rhode Island and one in Warwick, Rhode Island. The expected opening dates for these branches are the second quarters of 2007 and 2008, respectively, and are subject to various regulatory approvals.

Washington Trust President and Chief Executive Officer John C. Warren, and David V. Devault, Executive Vice President, Secretary, Treasurer, and Chief Financial Officer, will host a conference call on Monday, October 23, at 4:30 p.m. (Eastern Time) to discuss the Corporation’s third 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 #: 215333. The replay will be available until 11:59 p.m. on October 31, 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 Global Market^Ò under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrust.com.

# # #

This report contains certain statements that may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including statements regarding our strategy, effectiveness of investment programs, evaluations of future interest rate trends and liquidity, expectations as to growth in assets, deposits and results of operations, success of acquisitions, future operations, market position, financial position, and prospects, plans, goals and objectives of management are forward-looking statements. The actual results, performance or achievements of the Corporation could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of wealth management and trust assets under administration, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default and charge-off rates, changes in the size and nature of the Corporation’s competition, changes in legislation or regulation and accounting principles, policies and guidelines, and changes in the assumptions used in making such forward-looking statements. The Corporation assumes no obligation to update forward-looking statements or update the reasons actual results, performance or achievements could differ materially from those provided in the forward-looking statements, except as required by law.

Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
	Three Months Ended
	September 30,			June 30,			September 30,
(Dollars and shares in thousands, except per share amounts)	2006			2006			2005
Operating Results
Net interest income	$	15,866		$	15,217		$	15,360
Provision for loan losses		300			300			300
Net realized (1osses) gains on securities		(365	)		765			17
Other noninterest income		11,148			10,682			8,357
Noninterest expenses		16,611			17,280			14,810
Income tax expense		3,160			2,907			2,802
Net income		6,578			6,177			5,822
Per Share
Basic earnings	$	0.49		$	0.46		$	0.44
Diluted earnings	$	0.48		$	0.45		$	0.43
Dividends declared	$	0.19		$	0.19		$	0.18
Weighted Average Shares Outstanding
Basic		13,436.6			13,419.9			13,330.3
Diluted		13,726.3			13,703.2			13,641.9
Key Ratios
Return on average assets		1.09	%		1.02	%		0.98	%
Return on average equity		15.62	%		15.28	%		14.75	%
Interest rate spread (taxable equivalent basis)		2.51	%		2.43	%		2.46	%
Net interest margin (taxable equivalent basis)		2.86	%		2.75	%		2.78	%
Allowance for Loan Losses
Balance at beginning of period	$	18,480		$	18,247		$	17,442
Provision charged to earnings		300			300			300
Reclassification of allowance on off-balance sheet exposures		-			-			(250	)
Net (charge-offs) recoveries		(135	)		(67	)		122
Balance at end of period	$	18,645		$	18,480		$	17,614

Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
	Nine Months Ended
	September 30,			September30,
(Dollars and shares in thousands, except per share amounts)	2006			2005
Operating Results
Net interest income	$	46,498		$	44,953
Provision for loan losses		900			900
Net realized gains on securities		459			20
Other noninterest income		31,291			21,427
Noninterest expenses		49,595			40,627
Income tax expense		8,925			8,002
Net income		18,828			16,871
Per Share
Basic earnings	$	1.40		$	1.27
Diluted earnings	$	1.37		$	1.24
Dividends declared	$	0.57		$	0.54
Weighted Average Shares Outstanding
Basic		13,414.6			13,303.2
Diluted		13,708.2			13,615.8
Key Ratios
Return on average assets		1.04	%		0.96	%
Return on average equity		15.33	%		14.51	%
Interest rate spread (taxable equivalent basis)		2.49	%		2.48	%
Net interest margin (taxable equivalent basis)		2.82	%		2.77	%
Allowance for Loan Losses
Balance at beginning of period	$	17,918		$	16,771
Provision charged to earnings		900			900
Reclassification of allowance on off-balance sheet exposures		-			(250	)
Net (charge-offs) recoveries		(173	)		193
Balance at end of period	$	18,645		$	17,614

Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
	September 30,			Dec. 31,			September 30,
(Dollars and shares in thousands, except per share amounts)	2006			2005			2005
Period-End Balance Sheet
Assets	$	2,403,266		$	2,402,003		$	2,403,161
Total securities		741,350			783,941			782,207
Loans:
Commercial and other:
Mortgages		274,635			291,292			285,450
Construction and development		29,653			37,190			33,862
Other		257,026			226,252			235,457
Total commercial and other		561,314			554,734			554,769
Residential real estate:
Mortgages		572,399			565,680			568,675
Homeowner construction		14,973			17,028			16,302
Total residential real estate		587,372			582,708			584,977
Consumer:
Home equity lines		147,897			161,100			163,727
Other		131,901			103,366			92,639
Total consumer		279,798			264,466			256,366
Total loans		1,428,484			1,401,908			1,396,112
Deposits:
Demand deposits		189,329			196,102			216,061
NOW accounts		172,317			178,677			186,615
Money market accounts		295,431			223,255			219,982
Savings accounts		193,029			212,499			227,834
Time deposits		850,080			828,725			759,746
Total deposits		1,700,186			1,639,258			1,610,238
Brokered deposits included in time deposits		186,184			200,115			172,598
Federal Home Loan Bank advances		464,148			545,323			577,936
Shareholders’ equity		172,420			158,446			157,251
Capital Ratios
Tier 1 risk-based capital		9.55	%		9.06	%		8.82	%
Total risk-based capital		10.97	%		10.51	%		10.31	%
Tier 1 leverage ratio		5.81	%		5.45	%		5.32	%
Share Information
Shares outstanding at end of period		13,445.1			13,361.8			13,347.0
Book value per share	$	12.82		$	11.86		$	11.78
Tangible book value per share	$	8.53		$	7.79		$	7.68
Market value per share	$	26.51		$	26.18		$	27.19
Credit Quality
Nonaccrual loans	$	2,180		$	2,414		$	1,873
Other real estate owned, net		402			-			-
Nonperforming assets to total assets		0.11	%		0.10	%		0.08	%
Nonaccrual loans to total loans		0.15	%		0.17	%		0.13	%
Allowance for loan losses to nonaccrual loans		855.28	%		742.25	%		940.42	%
Allowance for loan losses to total loans		1.31	%		1.28	%		1.26	%
Assets Under Administration
Market value	$	3,550,965		$	3,271,756		$	3,219,011

Washington Trust Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLES - NON-GAAP FINANCIAL INFORMATION

(Dollars and shares in thousands, except per share amounts)	Three Months Ended					Nine Months Ended
	September 30,					September 30,
		2006			2005		2006			2005
NET INCOME (GAAP)	$	6,578		$	5,822	$	18,828		$	16,871
Add: Acquisition costs, net of tax		-			440		-			440
Add: Net realized loss on sales of securities, net of tax		247			-		-			-
Less: Net realized gain on sales of securities, net of tax (1)		-			-		(53	)		-
Less: Additional FHLBB dividend received		(305	)		-		-			-
ADJUSTED NET INCOME (NON-GAAP)	$	6,520		$	6,262	$	18,775		$	17,311

DILUTED EARNINGS PER SHARE (GAAP)	$	.48		$	.43	$	1.37	$	1.24
Add: Acquisition costs, net of tax		-		$	.03		-	$	.03
Add: Net realized loss on sales of securities, net of tax		.02			-		-		-
Less: Net realized gain on sales of securities, net of tax (1)		-			-		-		-
Less: Additional FHLBB dividend received		(.02	)		-		-		-
DILUTED EARNINGS PER SHARE, ADJUSTED (NON-GAAP)	$	.48		$	.46	$	1.37	$	1.27

NET INTEREST INCOME (GAAP)	$	15,866		$	15,360	$	46,498		$	44,953
Less: Additional FHLBB dividend received		(450	)		-		(450	)		-
NET INTEREST INCOME, ADJUSTED (NON-GAAP)	$	15,416		$	15,360	$	46,048		$	44,953

RETURN ON AVERAGE ASSETS (GAAP)	1.09	%	0.98	%	1.04	%	0.96	%
Add: Acquisition costs, net of tax	-	%	0.02	%	-	%	0.02	%
Add: Net realized loss on sales of securities, net of tax	0.01	%	-	%	-	%	-	%
Less: Net realized gain on sales of securities, net of tax (1)	-	%	-	%	0.00	%	-	%
Less: Additional FHLBB dividend received	(0.01	%)	-	%	-	%	-	%
ADJUSTED RETURN ON AVERAGE ASSETS (NON-GAAP)	1.09	%	1.00	%	1.04	%	0.98	%

RETURN ON AVERAGE EQUITY (GAAP)	15.62	%	14.75	%	15.33	%	14.51	%
Add: Acquisition costs, net of tax	-	%	0.28	%	-	%	0.28	%
Add: Net realized loss on sales of securities, net of tax	0.15	%	-	%	-	%	-	%
Less: Net realized gain on sales of securities, net of tax (1)	-	%	-	%	(0.03	%)	-	%
Less: Additional FHLBB dividend received	(0.18	%)	-	%	-	%	-	%
ADJUSTED RETURN ON AVERAGE EQUITY (NON-GAAP)	15.59	%	15.03	%	15.30	%	14.79	%

(1)   Excludes $258 realized gains on equity securities, net of tax, realized in connection with charitable donation of appreciated securities in the second quarter of 2006.

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
	(Unaudited)
(Dollars in thousands)	September 30,			December 31,
	2006			2005
Assets:
Cash and due from banks	$	52,862		$	48,997
Federal funds sold and other short-term investments		15,923			17,166
Mortgage loans held for sale		2,913			439
Securities:
Available for sale, at fair value; amortized cost $581,154 in 2006 and $620,638 in 2005		580,506			619,234
Held to maturity, at cost; fair value $159,099 in 2006 and $162,756 in 2005		160,844			164,707
Total securities		741,350			783,941
Federal Home Loan Bank stock, at cost		31,966			34,966
Loans:
Commercial and other		561,314			554,734
Residential real estate		587,372			582,708
Consumer		279,798			264,466
Total loans		1,428,484			1,401,908
Less allowance for loan losses		18,645			17,918
Net loans		1,409,839			1,383,990
Premises and equipment, net		24,068			23,737
Accrued interest receivable		11,441			10,594
Investment in bank-owned life insurance		39,374			30,360
Goodwill		44,558			39,963
Identifiable intangible assets, net		13,200			14,409
Other assets		15,772			13,441
Total assets	$	2,403,266		$	2,402,003
Liabilities:
Deposits:
Demand deposits	$	189,329		$	196,102
NOW accounts		172,317			178,677
Money market accounts		295,431			223,255
Savings accounts		193,029			212,499
Time deposits		850,080			828,725
Total deposits		1,700,186			1,639,258
Dividends payable		2,558			2,408
Federal Home Loan Bank advances		464,148			545,323
Junior subordinated debentures		22,681			22,681
Other borrowings		14,928			9,774
Accrued expenses and other liabilities		26,345			24,113
Total liabilities		2,230,846			2,243,557
Shareholders’ Equity:
Common stock of $.0625 par value; authorized 30,000,000 shares;
issued 13,459,740 shares in 2006 and 13,372,295 in 2005		841			836
Paid-in capital		35,096			32,778
Retained earnings		137,900			126,735
Accumulated other comprehensive loss		(1,050	)		(1,653	)
Treasury stock, at cost; 14,676 shares in 2006 and 10,519 in 2005		(367	)		(250	)
Total shareholders’ equity		172,420			158,446
Total liabilities and shareholders’ equity	$	2,403,266		$	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					Nine Months
Periods ended September 30,	2006			2005		2006		2005
Interest income:
Interest and fees on loans	$	23,430		$	20,418	$	68,457	$	57,339
Interest on securities
Taxable		8,493			8,085		25,553		24,804
Nontaxable		405			221		1,104		610
Dividends on corporate stock and Federal Home Loan Bank stock		1,197			594		2,124		1,838
Interest on federal funds sold and other short-term investments		252			187		517		321
Total interest income		33,777			29,505		97,755		84,912
Interest expense:
Deposits		12,473			8,241		33,872		22,800
Federal Home Loan Bank advances		5,011			5,741		16,115		16,960
Junior subordinated debentures		338			124		1,014		124
Other		89			39		256		75
Total interest expense		17,911			14,145		51,257		39,959
Net interest income		15,866			15,360		46,498		44,953
Provision for loan losses		300			300		900		900
Net interest income after provision for loan losses		15,566			15,060		45,598		44,053
Noninterest income:
Wealth management and trust services		6,040			4,066		18,099		10,764
Service charges on deposit accounts		1,312			1,158		3,667		3,337
Merchant processing fees		2,125			1,932		4,828		4,047
Income from bank-owned life insurance		389			282		1,014		833
Net gains on loan sales		417			415		1,029		1,320
Net realized (losses) gains on securities		(365	)		17		459		20
Other income		865			504		2,654		1,126
Total noninterest income		10,783			8,374		31,750		21,447
Noninterest expense:
Salaries and employee benefits		9,651			8,194		29,100		23,103
Net occupancy		934			828		2,906		2,483
Equipment		872			832		2,552		2,583
Merchant processing costs		1,796			1,623		4,090		3,357
Advertising and promotion		371			460		1,489		1,496
Outsourced services		490			406		1,504		1,263
Legal, audit and professional fees		563			513		1,342		1,425
Amortization of intangibles		398			196		1,209		442
Other		1,536			1,758		5,403		4,475
Total noninterest expense		16,611			14,810		49,595		40,627
Income before income taxes		9,738			8,624		27,753		24,873
Income tax expense		3,160			2,802		8,925		8,002
Net income	$	6,578		$	5,822	$	18,828	$	16,871
Weighted average shares outstanding - basic		13,436.6			13,330.3		13,414.6		13,303.2
Weighted average shares outstanding - diluted		13,726.3			13,641.9		13,708.2		13,615.8
Per share information:
Basic earnings per share	$	0.49		$	0.44	$	1.40	$	1.27
Diluted earnings per share	$	0.48		$	0.43	$	1.37	$	1.24
Cash dividends declared per share	$	0.19		$	0.18	$	0.57	$	0.54

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS
	(Unaudited)
Three months ended September 30,	2006							2005
	Average				Yield/			Average				Yield/
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Residential real estate loans	$	588,488	$	7,596		5.12	%	$	574,344	$	7,104		4.91	%
Commercial and other loans		564,804		10,990		7.72	%		539,145		9,684		7.13	%
Consumer loans		278,864		4,898		6.97	%		251,540		3,677		5.80	%
Total loans		1,432,156		23,484		6.51	%		1,365,029		20,465		5.95	%
Federal funds sold and
other short-term investments		20,132		252		4.96	%		22,562		186		3.27	%
Taxable debt securities		706,319		8,493		4.77	%		764,617		8,085		4.19	%
Nontaxable debt securities		42,842		622		5.76	%		23,467		341		5.76	%
Corporate stocks and FHLBB stock		48,704		1,289		10.50	%		49,828		677		5.40	%
Total securities		817,997		10,656		5.17	%		860,474		9,289		4.28	%
Total interest-earning assets		2,250,153		34,140		6.02	%		2,225,503		29,754		5.30	%
Non interest-earning assets		160,883							142,845
Total assets	$	2,411,036						$	2,368,348
Liabilities and Shareholders’ Equity:
NOW accounts	$	174,740	$	78		0.18	%	$	180,292	$	76		0.17	%
Money market accounts		281,559		2,584		3.64	%		203,149		1,141		2.23	%
Savings deposits		191,232		327		0.68	%		229,049		332		0.58	%
Time deposits		868,487		9,484		4.33	%		741,127		6,692		3.58	%
FHLBB advances		480,033		5,011		4.14	%		609,050		5,741		3.74	%
Junior subordinated debentures		22,681		338		5.91	%		8,136		124		6.04	%
Other		7,624		89		4.66	%		3,514		40		4.55	%
Total interest-bearing liabilities		2,026,356		17,911		3.51	%		1,974,317		14,146		2.84	%
Demand deposits		192,626							214,256
Other liabilities		23,589							21,936
Shareholders’ equity		168,465							157,839
Total liabilities and shareholders’ equity	$	2,411,036						$	2,368,348
Net interest income (FTE)			$	16,229						$	15,608
Interest rate spread						2.51	%						2.46	%
Net interest margin						2.86	%						2.78	%

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS
	(Unaudited)
Nine months ended September 30,	2006							2005
	Average				Yield/			Average				Yield/
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Residential real estate loans	$	589,635	$	22,505		5.10	%	$	554,771	$	20,498		4.94	%
Commercial and other loans		563,284		32,294		7.67	%		523,242		27,032		6.91	%
Consumer loans		272,960		13,819		6.77	%		242,084		9,945		5.49	%
Total loans		1,425,879		68,618		6.43	%		1,320,097		57,475		5.82	%
Federal funds sold and
other short-term investments		14,416		517		4.79	%		15,127		320		2.83	%
Taxable debt securities		727,175		25,553		4.70	%		799,620		24,804		4.15	%
Nontaxable debt securities		39,254		1,697		5.78	%		21,338		938		5.88	%
Corporate stocks and FHLBB stock		49,723		2,393		6.44	%		51,386		2,122		5.52	%
Total securities		830,568		30,160		4.86	%		887,471		28,184		4.25	%
Total interest-earning assets		2,256,447		98,778		5.85	%		2,207,568		85,659		5.19	%
Non interest-earning assets		155,006							132,209
Total assets	$	2,411,453						$	2,339,777
Liabilities and Shareholders’ Equity:
NOW accounts	$	174,156	$	225		0.17	%	$	177,201	$	231		0.17	%
Money market accounts		247,979		6,026		3.25	%		195,585		2,900		1.98	%
Savings deposits		197,035		888		0.60	%		239,794		1,081		0.60	%
Time deposits		863,831		26,733		4.14	%		721,502		18,588		3.44	%
FHLBB advances		527,108		16,115		4.09	%		631,831		16,960		3.59	%
Junior subordinated debentures		22,681		1,014		5.98	%		2,742		124		6.04	%
Other		7,331		256		4.67	%		2,311		76		4.37	%
Total interest-bearing liabilities		2,040,121		51,257		3.36	%		1,970,966		39,960		2.71	%
Demand deposits		185,088							195,451
Other liabilities		22,517							18,366
Shareholders’ equity		163,727							154,994
Total liabilities and shareholders’ equity	$	2,411,453						$	2,339,777
Net interest income (FTE)			$	47,521						$	45,699
Interest rate spread						2.49	%						2.48	%
Net interest margin						2.82	%						2.77	%