EX-99 2 exhibit99.htm EXHIBIT 99.1 PRESS RELEASE FOR QUARTER 1 2007 DATED APRIL 23, 2007 Exhibit 99.1 Press Release for Quarter 1 2007 dated April 23, 2007
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 23, 2007
FOR IMMEDIATE RELEASE

Washington Trust Announces Earnings


Westerly, Rhode Island…Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced first quarter 2007 net income of $6.0 million, or 44 cents per diluted share. Net income for the first quarter of last year totaled $6.1 million, or 44 cents per diluted share. The returns on average equity and average assets for the three months ended March 31, 2007 were 13.66% and 1.00%, respectively, compared to 15.09% and 1.01%, respectively, for the same period in 2006.

“The first quarter results were solid and were achieved in the face of a difficult banking environment highlighted by unfavorable interest rates and soft consumer and residential loan demand,” said John C. Warren, Washington Trust Chairman and Chief Executive Officer.

Net interest income totaled $14.9 million for the first quarter of 2007, down $545 thousand, or 3.5 percent, from the first quarter a year ago. Included in net interest income in 2007 was an interest recovery of $322 thousand received on a previously charged off loan. The net interest margin for the first quarter of 2007 amounted to 2.81%, down 3 basis points from the first quarter of 2006 and up 7 basis points from the fourth quarter of 2006. Excluding 6 basis points attributable to the 2007 interest recovery, the net interest margin for the first quarter of 2007 was down 9 basis points from the first quarter of 2006 and up 1 basis point from the fourth quarter of 2006.

Total noninterest income amounted to $11.2 million for the first quarter of 2007, up $1.7 million from the same quarter a year ago. Included in noninterest income were net realized gains on sales of securities of $1.0 million and $59 thousand for the three months ended March 31, 2007 and 2006, respectively. Excluding net realized gains on sales of securities, noninterest income increased $751 thousand, or 8 percent, from the same quarter of 2006. This increase was largely attributable to higher revenues from wealth management services. Wealth management revenues were $6.9 million for the first quarter of 2007, up $430 thousand, or 6.7 percent, from the first quarter of 2006. Wealth management assets under

-M O R E-


Washington Trust
Page Two, April 23, 2007

administration totaled $3.806 billion at March 31, 2007, up $111 million, or 3 percent, in the first quarter of 2007 and up $363 million, or 11 percent, from March 31, 2006. This growth was due to business development efforts and financial market appreciation.

Noninterest expenses amounted to $17.1 million for the first quarter of 2007, up $1.4 million, or 8.9 percent, from the same quarter a year ago. During the first quarter of 2007, the Corporation prepaid $26.5 million in higher cost advances from Federal Home Loan Bank of Boston (“FHLBB”), resulting in a debt prepayment penalty charge, recorded in noninterest expense, of $1.1 million. The source of funds for the paydowns was maturities of investments as well as other borrowings. Excluding debt prepayment penalty expense, noninterest expenses increased $338 thousand, or 2.2 percent, over the same quarter last year.

Total assets were $2.4 billion at March 31, 2007, essentially unchanged from December 31, 2006. Loan growth was modest in the first quarter. Total loans increased by $10.2 million in the first quarter of 2007, principally due to growth in the commercial loan portfolio. The investment securities portfolio totaled $706.4 million at March 31, 2007, up $2.6 million from December 31, 2006.

Total deposits increased by $5.6 million from December 31, 2006. Excluding brokered certificates of deposit, in-market deposits were up $18.1 million, or 1.2 percent, in the first quarter of 2007. The Corporation has continued to experience a shift in the mix of deposits away from lower cost demand deposit accounts into higher cost money market accounts and certificates of deposit. FHLBB advances totaled $457.1 million at March 31, 2007, down $17.4 million from December 31, 2006. Other borrowings increased $11.1 million in the first quarter of 2007, mainly due to an increase in securities sold under repurchase agreements.

Asset quality, as measured by the level of nonperforming assets, remained strong in the first quarter of 2007. Nonperforming assets totaled $3.1 million, or 0.13% of total assets, at March 31, 2007, compared to $2.3 million, or 0.09% of total assets, a year ago. There are no assets acquired through foreclosure on the balance sheet at March 31, 2007. The Corporation has never offered a sub-prime or Alt-A residential mortgage loan program and we have not experienced any recent significant deterioration of asset quality as measured by delinquencies in residential and consumer loans. Total residential mortgage and consumer loan 30-day+ delinquencies amounted to $1.1 million, or 0.12% of these loans, at March 31, 2007, down from $1.4 million, or 0.16% of these loans, at December 31, 2006.


- M O R E -

Washington Trust
Page Three, April 23, 2007

The allowance for loan losses was $19.4 million, or 1.32% of total loans, at March 31, 2007, compared to $18.9 million, or 1.29% of total loans, at December 31, 2006 and $18.2 million, or 1.29% of total loans, at March 31, 2006. Loan recoveries, net of charge-offs, amounted to $166 thousand and $29 thousand, respectively, for the three months ended March 31, 2007 and 2006, respectively. The Corporation’s loan loss provision charged to earnings amounted to $300 thousand for the first quarter of 2007, unchanged from both the fourth quarter of 2006 and the first quarter of 2006.

Total shareholders’ equity amounted to $175.5 million at March 31, 2007, compared to $173.1 million at December 31, 2006. Under the Corporation’s Common Stock Repurchase Plan, 61,100 shares were repurchased at a total cost of $1.7 million during the first quarter of 2007. Book value per share as of March 31, 2007 and December 31, 2006 amounted to $13.12 and $12.89, respectively.

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, April 23, 2007 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 #: 235815. The replay will be available until 11:59 p.m. on April 30, 2007.

Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. Washington Trust offers personal banking, business banking and wealth management services through its offices in Rhode Island, Massachusetts and southeastern Connecticut. Washington Trust Bancorp, Inc.’s common stock trades on the NASDAQ Global 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. 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
  
   
Mar. 31,
  
Dec. 31,
  
Mar. 31,
  
(Dollars and shares in thousands, except per share amounts)
    
2007
    
2006
    
2006
  
                     
Operating Results
                    
Net interest income
  
$
14,870
  
$
14,976
  
$
15,415
  
Provision for loan losses
    
300
    
300
    
300
  
Net gains (1osses) on sales of securities
    
1,036
    
(16
)
  
59
  
Other noninterest income
    
10,212
    
10,449
    
9,461
  
Noninterest expenses
    
17,109
    
15,740
    
15,704
  
Income tax expense
    
2,734
    
3,166
    
2,858
  
Net income
    
5,975
    
6,203
    
6,073
  
                     
Per Share
                    
Basic earnings
  
$
0.45
  
$
0.46
  
$
0.45
  
Diluted earnings
  
$
0.44
  
$
0.45
  
$
0.44
  
Dividends declared
  
$
0.20
  
$
0.19
  
$
0.19
  
                     
Weighted Average Shares Outstanding
                    
Basic
    
13,412.1
    
13,452.5
    
13,386.8
  
Diluted
    
13,723.0
    
13,769.3
    
13,698.6
  
                     
Key Ratios
                    
Return on average assets
    
1.00
%
  
1.04
%
  
1.01
%
Return on average equity
    
13.66
%
  
14.06
%
  
15.09
%
Interest rate spread (taxable equivalent basis)
    
2.46
%
  
2.39
%
  
2.53
%
Net interest margin (taxable equivalent basis)
    
2.81
%
  
2.74
%
  
2.84
%
                     
Allowance for Loan Losses
                    
Balance at beginning of period
  
$
18,894
  
$
18,645
  
$
17,918
  
Provision charged to earnings
    
300
    
300
    
300
  
Net recoveries (charge-offs)
    
166
    
(51
)
  
29
  
Balance at end of period
  
$
19,360
  
$
18,894
  
$
18,247
  
Washington Trust Bancorp, Inc. and Subsidiaries
  
FINANCIAL SUMMARY
  
   
(Dollars and shares in thousands, except per share amounts)
  
Mar. 31,
  
Dec. 31,
  
Mar. 31,
  
Period-End Balance Sheet
  
2007
  
2006
  
2006
  
Assets
  
$
2,399,962
  
$
2,399,165
  
$
2,432,765
  
Total securities
    
706,406
    
703,851
    
786,674
  
Loans:
                    
Commercial and other:
                    
Mortgages
    
271,817
    
282,019
    
277,851
  
Construction and development
    
33,092
    
32,233
    
35,599
  
Other
    
294,261
    
273,145
    
245,376
  
Total commercial and other
    
599,170
    
587,397
    
558,826
  
Residential real estate:
                    
Mortgages
    
577,823
    
577,522
    
573,262
  
Homeowner construction
    
11,742
    
11,149
    
18,147
  
Total residential real estate
    
589,565
    
588,671
    
591,409
  
Consumer:
                    
Home equity lines
    
142,548
    
145,676
    
157,769
  
Home equity loans
    
94,521
    
93,947
    
76,107
  
Other
    
44,396
    
44,295
    
34,671
  
Total consumer
    
281,465
    
283,918
    
268,547
  
Total loans
    
1,470,200
    
1,459,986
    
1,418,782
  
Deposits:
                    
Demand deposits
    
175,010
    
186,533
    
181,345
  
NOW accounts
    
176,006
    
175,479
    
179,027
  
Money market accounts
    
290,273
    
286,998
    
227,433
  
Savings accounts
    
204,465
    
205,998
    
202,395
  
Time deposits
    
837,838
    
822,989
    
870,420
  
Total deposits
    
1,683,592
    
1,677,997
    
1,660,620
  
Brokered deposits included in time deposits
    
163,089
    
175,618
    
222,118
  
Federal Home Loan Bank advances
    
457,145
    
474,561
    
556,051
  
Shareholders’ equity
    
175,527
    
173,056
    
159,880
  
                     
Capital Ratios
                    
Tier 1 risk-based capital
    
9.47
%
  
9.57
%
  
9.26
%
Total risk-based capital
    
10.84
%
  
10.96
%
  
10.72
%
Tier 1 leverage ratio
    
6.14
%
  
6.01
%
  
5.64
%
                     
Share Information
                    
Shares outstanding at end of period
    
13,382.5
    
13,429.7
    
13,412.7
  
Book value per share
  
$
13.12
  
$
12.89
  
$
11.92
  
Tangible book value per share
  
$
8.86
  
$
8.61
  
$
7.90
  
Market value per share
  
$
26.81
  
$
27.89
  
$
28.07
  
                     
Credit Quality
                    
Nonaccrual loans:
                    
Commercial:
                    
Mortgages
  
$
1,157
  
$
981
  
$
328
  
Construction and development
    
-
    
-
    
-
  
Other
    
1,021
    
831
    
705
  
Residential real estate
    
709
    
721
    
1,040
  
Consumer
    
216
    
190
    
195
  
Total nonaccrual loans
  
$
3,103
  
$
2,723
  
$
2,268
  
Other real estate owned, net
    
-
    
-
    
-
  
Nonperforming assets to total assets
    
0.13
%
  
0.11
%
  
0.09
%
Nonaccrual loans to total loans
    
0.21
%
  
0.19
%
  
0.16
%
Allowance for loan losses to nonaccrual loans
    
623.91
%
  
693.87
%
  
804.54
%
Allowance for loan losses to total loans
    
1.32
%
  
1.29
%
  
1.29
%
                     
Assets Under Administration
                    
Market value
  
$
3,806,274
  
$
3,694,813
  
$
3,442,941
  
Washington Trust Bancorp, Inc. and Subsidiaries
  
CONSOLIDATED BALANCE SHEETS
  
           
(Dollars in thousands)
  
Mar. 31,
  
Dec. 31,
  
   
2007
  
2006
  
Assets:
          
Cash and due from banks
  
$
30,058
  
$
54,337
  
Federal funds sold
    
29,625
    
16,425
  
Other short-term investments
    
683
    
1,147
  
Mortgage loans held for sale
    
2,122
    
2,148
  
Securities:
              
Available for sale, at fair value; amortized cost $540,650 in 2007 and $525,966 in 2006
    
541,942
    
526,396
  
Held to maturity, at cost; fair value $162,974 in 2007 and $175,369 in 2006
    
164,464
    
177,455
  
Total securities
    
706,406
    
703,851
  
Federal Home Loan Bank stock, at cost
    
28,727
    
28,727
  
Loans:
              
Commercial and other
    
599,170
    
587,397
  
Residential real estate
    
589,565
    
588,671
  
Consumer
    
281,465
    
283,918
  
Total loans
    
1,470,200
    
1,459,986
  
Less allowance for loan losses
    
19,360
    
18,894
  
Net loans
    
1,450,840
    
1,441,092
  
Premises and equipment, net
    
24,603
    
24,307
  
Accrued interest receivable
    
11,572
    
11,268
  
Investment in bank-owned life insurance
    
40,161
    
39,770
  
Goodwill
    
44,558
    
44,558
  
Identifiable intangible assets, net
    
12,448
    
12,816
  
Other assets
    
18,159
    
18,719
  
Total assets
  
$
2,399,962
  
$
2,399,165
  
               
Liabilities:
              
Deposits:
              
Demand deposits
  
$
175,010
  
$
186,533
  
NOW accounts
    
176,006
    
175,479
  
Money market accounts
    
290,273
    
286,998
  
Savings accounts
    
204,465
    
205,998
  
Time deposits
    
837,838
    
822,989
  
Total deposits
    
1,683,592
    
1,677,997
  
Dividends payable
    
2,682
    
2,556
  
Federal Home Loan Bank advances
    
457,145
    
474,561
  
Junior subordinated debentures
    
22,681
    
22,681
  
Other borrowings
    
25,792
    
14,684
  
Accrued expenses and other liabilities
    
32,543
    
33,630
  
Total liabilities
    
2,224,435
    
2,226,109
  
               
Shareholders’ Equity:
              
Common stock of $.0625 par value; authorized 30,000,000 shares;
              
issued 13,492,110 shares in 2007 and 2006
    
843
    
843
  
Paid-in capital
    
35,697
    
35,893
  
Retained earnings
    
144,841
    
141,548
  
Accumulated other comprehensive loss
    
(2,876
)
  
(3,515
)
Treasury stock, at cost; 109,575 shares in 2007 and 62,432 in 2006
    
(2,978
)
  
(1,713
)
Total shareholders’ equity
    
175,527
    
173,056
  
Total liabilities and shareholders’ equity
  
$
2,399,962
  
$
2,399,165
  
Washington Trust Bancorp, Inc. and Subsidiaries,
  
CONSOLIDATED STATEMENTS OF INCOME
  
       
(Dollars and shares in thousands, except per share amounts)
      
       
Three months ended March 31,
  
2007
  
2006
  
Interest income:
              
Interest and fees on loans
  
$
23,934
  
$
21,897
  
Interest on securities:
              
Taxable
    
7,792
    
8,412
  
Nontaxable
    
668
    
328
  
Dividends on corporate stock and Federal Home Loan Bank stock
    
718
    
677
  
Interest on federal funds sold and other short-term investments
    
191
    
115
  
Total interest income
    
33,303
    
31,429
  
Interest expense:
              
Deposits
    
12,977
    
10,238
  
Federal Home Loan Bank advances
    
4,968
    
5,359
  
Junior subordinated debentures
    
338
    
338
  
Other
    
150
    
79
  
Total interest expense
    
18,433
    
16,014
  
Net interest income
    
14,870
    
15,415
  
Provision for loan losses
    
300
    
300
  
Net interest income after provision for loan losses
    
14,570
    
15,115
  
Noninterest income:
              
Wealth management services:
              
Trust and investment advisory fees
    
5,038
    
4,627
  
Mutual fund fees
    
1,262
    
1,130
  
Financial planning, commissions and other service fees
    
570
    
683
  
Wealth management services
    
6,870
    
6,440
  
Service charges on deposit accounts
    
1,125
    
1,119
  
Merchant processing fees
    
1,204
    
1,047
  
Income from bank-owned life insurance
    
391
    
279
  
Net gains on loan sales and commissions on loans originated for others
    
264
    
276
  
Net realized gains on sales of securities
    
1,036
    
59
  
Other income
    
358
    
300
  
Total noninterest income
    
11,248
    
9,520
  
Noninterest expense:
              
Salaries and employee benefits
    
9,812
    
9,619
  
Net occupancy
    
1,017
    
954
  
Equipment
    
832
    
799
  
Merchant processing costs
    
1,019
    
887
  
Outsourced services
    
519
    
518
  
Advertising and promotion
    
429
    
437
  
Legal, audit and professional fees
    
450
    
376
  
Amortization of intangibles
    
368
    
405
  
Debt prepayment penalties
    
1,067
    
-
  
Other
    
1,596
    
1,709
  
Total noninterest expense
    
17,109
    
15,704
  
Income before income taxes
    
8,709
    
8,931
  
Income tax expense
    
2,734
    
2,858
  
Net income
  
$
5,975
  
$
6,073
  
               
Weighted average shares outstanding - basic
    
13,412.1
    
13,386.8
  
Weighted average shares outstanding - diluted
    
13,723.0
    
13,698.6
  
Per share information:
              
Basic earnings per share
  
$
0.45
  
$
0.45
  
Diluted earnings per share
  
$
0.44
  
$
0.44
  
Cash dividends declared per share
  
$
0.20
  
$
0.19
  
Washington Trust Bancorp, Inc. and Subsidiaries
  
CONSOLIDATED AVERAGE BALANCE SHEETS
  
   
       
Three months ended March 31,
  
2007
  
2006
  
   
Average
      
Yield/
  
Average
      
Yield/
  
(Dollars in thousands)
  
Balance
  
Interest
  
Rate
  
Balance
  
Interest
  
Rate
  
Assets:
                                      
Residential real estate loans
  
$
592,059
  
$
7,773
    
5.32
%
$
589,837
  
$
7,404
    
5.09
%
Commercial and other loans
    
587,088
    
11,372
    
7.86
%
  
556,013
    
10,254
    
7.48
%
Consumer loans
    
281,572
    
4,825
    
6.95
%
  
267,068
    
4,289
    
6.51
%
Total loans
    
1,460,719
    
23,970
    
6.66
%
  
1,412,918
    
21,947
    
6.30
%
Federal funds sold and
                                     
other short-term investments
    
13,494
    
191
    
5.75
%
  
10,178
    
115
    
4.62
%
Taxable debt securities
    
622,981
    
7,792
    
5.07
%
  
737,563
    
8,412
    
4.63
%
Nontaxable debt securities
    
69,648
    
978
    
5.69
%
  
35,177
    
504
    
5.81
%
Corporate stocks and FHLBB stock
    
43,468
    
800
    
7.46
%
  
49,344
    
761
    
6.26
%
Total securities
    
749,591
    
9,761
    
5.28
%
  
832,262
    
9,792
    
4.77
%
Total interest-earning assets
    
2,210,310
    
33,731
    
6.19
%
  
2,245,180
    
31,739
    
5.73
%
Non interest-earning assets
    
171,033
                
149,361
              
Total assets
  
$
2,381,343
              
$
2,394,541
              
Liabilities and Shareholders’ Equity:
                                      
NOW accounts
  
$
169,675
  
$
68
    
0.16
%
$
170,421
  
$
67
    
0.16
%
Money market accounts
    
293,985
    
2,811
    
3.88
%
  
228,305
    
1,607
    
2.85
%
Savings accounts
    
205,572
    
710
    
1.40
%
  
204,768
    
287
    
0.57
%
Time deposits
    
832,492
    
9,388
    
4.57
%
  
851,298
    
8,277
    
3.94
%
FHLBB advances
    
467,448
    
4,968
    
4.31
%
  
547,391
    
5,359
    
3.97
%
Junior subordinated debentures
    
22,681
    
338
    
6.04
%
  
22,681
    
338
    
6.04
%
Other
    
12,797
    
150
    
4.73
%
  
7,017
    
79
    
4.64
%
Total interest-bearing liabilities
    
2,004,650
    
18,433
    
3.73
%
  
2,031,881
    
16,014
    
3.20
%
Demand deposits
    
170,977
                
179,954
              
Other liabilities
    
30,719
                
21,759
              
Shareholders’ equity
    
174,997
                
160,947
              
Total liabilities and shareholders’ equity
  
$
2,381,343
              
$
2,394,541
              
Net interest income (FTE)
        
$
15,298
              
$
15,725
        
Interest rate spread
                
2.46
%
              
2.53
%
Net interest margin
                
2.81
%
              
2.84
%