EX-99.HTM 2 exhibit99.htm EXHIBIT 99 TO FORM 8-K FOR QUARTER 4 2007 EARNINGS RELEASE exhibit99.htm 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:  January 22, 2008
FOR IMMEDIATE RELEASE

Washington Trust Announces Fourth Quarter 2007 Earnings


Westerly, Rhode Island…Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced fourth quarter 2007 net income of $5.8 million, or 43 cents per diluted share.  Net income for the fourth quarter of last year totaled $6.2 million, or 45 cents per diluted share.  The year-over-year decline in fourth quarter 2007 net income was primarily attributable to a higher provision for loan losses.  The increase in the provision is based on management’s assessment of various factors affecting the loan portfolio, including, among others, growth in the portfolio, ongoing evaluation of credit quality and economic conditions.  The returns on average equity and average assets for the fourth quarter of 2007 were 12.73% and 0.94%, respectively, compared to 14.06% and 1.04%, respectively, for the fourth quarter of 2006.

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

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

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Washington Trust
Page Two, January 22, 2008

are seeing.  We continue to be pleased with the strong growth in our commercial loan portfolio, but have general concerns with the overall economic environment.”

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

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

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

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

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Washington Trust
Page Three, January 22, 2008

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

Noninterest expenses amounted to $16.7 million for the fourth quarter of 2007, up $1.0 million, or 6 percent, from the same quarter a year earlier.  For the year 2007, noninterest expenses totaled $68.9 million, up $3.6 million, or 6 percent, from 2006.  Included in this increase was $1.1 million in debt prepayment penalties that were incurred in the first quarter of 2007 as a result of prepayments of higher cost FHLBB advances.  Excluding the debt prepayment penalty expense, noninterest expenses for 2007 increased $2.5 million, or 4 percent, over last year.
 
Income tax expense amounted to $2.6 million and $10.8 million, respectively, for the quarter and year ended December 31, 2007 as compared to $3.2 million and $12.1 million, respectively for the same periods in 2006.  The Corporation’s effective tax rate for the quarter and year ended December 31, 2007 was 31.1% and 31.3%, respectively, down from 33.8% and 32.6%, respectively, for the same periods in 2006, primarily due to higher average balances in nontaxable state and municipal debt obligations.

ASSET QUALITY
Nonperforming assets (nonaccrual loans and property acquired though foreclosure) amounted to $4.3 million, or 0.17% of total assets, at December 31, 2007, compared to $2.7 million, or 0.11% of total

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Washington Trust
Page Four, January 22, 2008

assets, at December 31, 2006.  There are no assets acquired through foreclosure on the balance sheet at December 31, 2007.  Nonaccrual loans as a percent of total loans stood at 0.27% at December 31, 2007 compared to 0.18% of total loans at September 30, 2007 and 0.19% of total loans at December 31, 2006.

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

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

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

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


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Washington Trust
Page Five, January 22, 2008

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

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

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

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

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


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Washington Trust
Page Six, January 22, 2008

CONFERENCE CALL
Washington Trust Chairman and Chief Executive Officer John C. Warren, and David V. Devault, Executive Vice President, Secretary, Treasurer, and Chief Financial Officer, will host a conference call on Wednesday, January 23, 2008 at 8:30 a.m. (Eastern Time) to discuss the Corporation’s fourth quarter and year end results.  This call is being webcast by TalkPoint and can be accessed through the Investor Relations section of the Washington Trust website, www.washtrust.com.  A replay of the call will be posted in this same location on the website shortly after the conclusion of the call.  You may also listen to a replay by dialing (877) 344-7529 and entering Conference ID #: 414901.  The replay will be available until 11:59 p.m. on January 31, 2008.

BACKGROUND
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800.  Washington Trust offers personal banking, business banking and wealth management services through its offices in Rhode Island, Massachusetts and southeastern Connecticut.  Washington Trust Bancorp, Inc.’s common stock trades on the NASDAQ Global MarketÒ under the symbol WASH.  Investor information is available on the Corporation’s web site: www.washtrust.com.

FORWARD-LOOKING STATEMENTS
This press release contains certain statements that may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical facts, including statements regarding our strategy, effectiveness of investment programs, evaluations of future interest rate trends and liquidity, expectations as to growth in assets, deposits and results of operations, success of acquisitions, future operations, market position, financial position, and prospects, plans, goals and objectives of management are forward-looking statements.  The actual results, performance or achievements of the Corporation could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of wealth management assets under administration, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan collectibility,  default and charge-off rates, changes in the size and nature of the Corporation’s competition, changes in legislation or regulation and accounting principles, policies and guidelines, and changes in the assumptions used in making such forward-looking statements.  The Corporation assumes no obligation to update forward-looking statements or update the reasons actual results, performance or achievements could differ materially from those provided in the forward-looking statements, except as required by law.
Washington Trust Bancorp, Inc. and Subsidiaries
  
CONSOLIDATED BALANCE SHEETS
  
   
(unaudited)
  
(Dollars in thousands)
  
December 31,
    
December 31,
  
   
2007
    
2006
  
Assets:
            
Cash and due from banks
   $
32,790
     $
54,337
  
Federal funds sold
    
7,600
      
16,425
  
Other short-term investments
    
722
      
1,147
  
Mortgage loans held for sale
    
1,981
      
2,148
  
Securities:
                
Available for sale, at fair value; amortized cost $750,583 in 2007 and $525,966 in 2006
    
751,778
      
526,396
  
Held to maturity, at cost; fair value $175,369 in 2006
    
−
      
177,455
  
Total securities
    
751,778
      
703,851
  
Federal Home Loan Bank stock, at cost
    
31,725
      
28,727
  
Loans:
                
Commercial and other
    
680,266
      
587,397
  
Residential real estate
    
599,671
      
588,671
  
Consumer
    
293,715
      
283,918
  
Total loans
    
1,573,652
      
1,459,986
  
Less allowance for loan losses
    
20,277
      
18,894
  
Net loans
    
1,553,375
      
1,441,092
  
Premises and equipment, net
    
25,420
      
24,307
  
Accrued interest receivable
    
11,427
      
11,268
  
Investment in bank-owned life insurance
    
41,363
      
39,770
  
Goodwill
    
50,479
      
44,558
  
Identifiable intangible assets, net
    
11,433
      
12,816
  
Other assets
    
19,847
      
18,719
  
Total assets
   $
2,539,940
     $
2,399,165
  
                 
Liabilities:
                
Deposits:
                
Demand deposits
   $
175,542
     $
186,533
  
NOW accounts
    
164,944
      
175,479
  
Money market accounts
    
321,600
      
286,998
  
Savings accounts
    
176,278
      
205,998
  
Time deposits
    
807,841
      
822,989
  
Total deposits
    
1,646,205
      
1,677,997
  
Dividends payable
    
2,677
      
2,556
  
Federal Home Loan Bank advances
    
616,417
      
474,561
  
Junior subordinated debentures
    
22,681
      
22,681
  
Other borrowings
    
32,560
      
14,684
  
Accrued expenses and other liabilities
    
32,887
      
33,630
  
Total liabilities
    
2,353,427
      
2,226,109
  
                 
Shareholders’ Equity:
                
Common stock of $.0625 par value; authorized 30,000,000 shares;
                
issued 13,492,110 shares in 2007 and 2006
    
843
      
843
  
Paid-in capital
    
34,874
      
35,893
  
Retained earnings
    
154,647
      
141,548
  
Accumulated other comprehensive loss
     (239 )     (3,515 )
Treasury stock, at cost; 137,652 shares in 2007 and 62,432 in 2006
     (3,612 )     (1,713 )
Total shareholders’ equity
    
186,513
      
173,056
  
Total liabilities and shareholders’ equity
   $
2,539,940
     $
2,399,165
  
Washington Trust Bancorp, Inc. and Subsidiaries
  
CONSOLIDATED STATEMENTS OF INCOME
  
   
(Dollars and shares in thousands, except per share amounts)
  
(unaudited)
  
   
Three Months
    
Twelve Months
  
Periods ended December 31,
  
2007
    
2006
    
2007
    
2006
  
Interest income:
                        
Interest and fees on loans
   $
25,340
     $
23,733
     $
98,720
     $
92,190
  
Interest on securities:
                                
Taxable
    
7,967
      
8,210
      
31,163
      
33,763
  
Nontaxable
    
775
      
514
      
2,983
      
1,618
  
Dividends on corporate stock and Federal Home Loan Bank stock
    
665
      
718
      
2,737
      
2,842
  
Interest on federal funds sold and other short-term investments
    
181
      
204
      
831
      
721
  
Total interest income
    
34,928
      
33,379
      
136,434
      
131,134
  
Interest expense:
                                
Deposits
    
13,090
      
13,110
      
52,422
      
46,982
  
Federal Home Loan Bank advances
    
6,318
      
4,801
      
21,641
      
20,916
  
Junior subordinated debentures
    
338
      
338
      
1,352
      
1,352
  
Other
    
345
      
154
      
1,075
      
410
  
Total interest expense
    
20,091
      
18,403
      
76,490
      
69,660
  
Net interest income
    
14,837
      
14,976
      
59,944
      
61,474
  
Provision for loan losses
    
1,000
      
300
      
1,900
      
1,200
  
Net interest income after provision for loan losses
    
13,837
      
14,676
      
58,044
      
60,274
  
Noninterest income:
                                
Wealth management services:
                                
Trust and investment advisory fees
    
5,498
      
5,063
      
21,124
      
19,099
  
Mutual fund fees
    
1,430
      
1,092
      
5,430
      
4,665
  
Financial planning, commissions and other service fees
    
547
      
583
      
2,462
      
2,616
  
Wealth management services
    
7,475
      
6,738
      
29,016
      
26,380
  
Service charges on deposit accounts
    
1,154
      
1,248
      
4,713
      
4,915
  
Merchant processing fees
    
1,425
      
1,380
      
6,710
      
6,208
  
Income from bank-owned life insurance
    
427
      
396
      
1,593
      
1,410
  
Net gains on loan sales and commissions on loans originated for others
    
288
      
394
      
1,493
      
1,423
  
Net realized gains (losses) on securities
    
119
       (16 )    
455
      
443
  
Other income
    
400
      
293
      
1,529
      
1,404
  
Total noninterest income
    
11,288
      
10,433
      
45,509
      
42,183
  
Noninterest expense:
                                
Salaries and employee benefits
    
9,791
      
9,598
      
39,986
      
38,698
  
Net occupancy
    
1,074
      
982
      
4,150
      
3,888
  
Equipment
    
909
      
818
      
3,473
      
3,370
  
Merchant processing costs
    
1,193
      
1,167
      
5,686
      
5,257
  
Outsourced services
    
570
      
505
      
2,180
      
2,009
  
Advertising and promotion
    
557
      
405
      
2,024
      
1,894
  
Legal, audit and professional fees
    
463
      
295
      
1,761
      
1,637
  
Amortization of intangibles
    
326
      
384
      
1,383
      
1,593
  
Debt prepayment penalties
    
-
      
-
      
1,067
      
-
  
Other
    
1,842
      
1,586
      
7,196
      
6,989
  
Total noninterest expense
    
16,725
      
15,740
      
68,906
      
65,335
  
Income before income taxes
    
8,400
      
9,369
      
34,647
      
37,122
  
Income tax expense
    
2,613
      
3,166
      
10,847
      
12,091
  
Net income
   $
5,787
     $
6,203
      
23,800
     $
25,031
  
                                 
Weighted average shares outstanding - basic
    
13,347.5
      
13,452.5
      
13,355.5
      
13,424.1
  
Weighted average shares outstanding - diluted
    
13,580.7
      
13,769.3
      
13,604.1
      
13,723.2
  
Per share information:
                                
Basic earnings per share
   $
0.43
     $
0.46
     $
1.78
     $
1.86
  
Diluted earnings per share
   $
0.43
     $
0.45
     $
1.75
     $
1.82
  
Cash dividends declared per share
   $
0.20
     $
0.19
     $
0.80
     $
0.76
  
Washington Trust Bancorp, Inc. and Subsidiaries
  
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
  
   
   
At or for the Quarters Ended
  
                               
   
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
    
Dec. 31,
  
(Dollars in thousands, except per share amounts)
  
2007
    
2007
    
2007
    
2007
    
2006
  
Financial Data
                              
Total assets
   $
2,539,940
     $
2,431,762
     $
2,393,882
     $
2,399,962
     $
2,399,165
  
Total loans
    
1,573,652
      
1,514,493
      
1,489,174
      
1,470,200
      
1,459,986
  
Total securities
    
751,778
      
688,709
      
676,204
      
706,406
      
703,851
  
Total deposits
    
1,646,205
      
1,655,887
      
1,669,089
      
1,683,592
      
1,677,997
  
Total shareholders equity
    
186,513
      
177,897
      
171,188
      
175,527
      
173,056
  
Net income
    
5,787
      
6,556
      
5,482
      
5,975
      
6,203
  
                                         
Per Share Data
                                        
Basic earnings per share
   $
0.43
     $
0.49
     $
0.41
     $
0.45
     $
0.46
  
Diluted earnings per share
   $
0.43
     $
0.48
     $
0.40
     $
0.44
     $
0.45
  
Dividends declared per share
   $
0.20
     $
0.20
     $
0.20
     $
0.20
     $
0.19
  
Book value per share
   $
13.97
     $
13.33
     $
12.87
     $
13.12
     $
12.89
  
Tangible book value per share
   $
9.33
     $
8.66
     $
8.61
     $
8.86
     $
8.61
  
Market value per share
   $
25.23
     $
26.97
     $
25.21
     $
26.81
     $
27.89
  
                                         
Key Ratios
                                        
Return on average assets
     0.94 %     1.10 %     0.92 %     1.00 %     1.04 %
Return on average equity
     12.73 %     14.99 %     12.57 %     13.66 %     14.06 %
                                         
Capital Ratios
                                        
Tier 1 risk-based capital
     9.10 %     9.11 %     9.40 %     9.47 %     9.57 %
Total risk-based capital
     10.39 %     10.43 %     10.73 %     10.84 %     10.96 %
Tier 1 leverage ratio
     6.09 %     6.11 %     6.16 %     6.14 %     6.01 %
                                         
Average Yields (taxable equivalent basis)
                                        
Assets
                                        
Residential real estate loans
     5.41 %     5.35 %     5.31 %     5.32 %     5.18 %
Commercial and other loans
     7.39 %     7.62 %     7.64 %     7.86 %     7.77 %
Consumer loans
     6.74 %     7.01 %     6.98 %     6.95 %     6.98 %
Total loans
     6.51 %     6.62 %     6.59 %     6.66 %     6.55 %
Federal funds sold and
                                        
other short-term investments
     4.72 %     5.10 %     4.36 %     5.75 %     5.43 %
Taxable debt securities
     5.19 %     5.16 %     5.17 %     5.07 %     4.86 %
Nontaxable debt securities
     5.59 %     5.61 %     5.65 %     5.69 %     5.80 %
Corporate stocks and FHLBB stock
     7.00 %     7.03 %     7.15 %     7.46 %     7.11 %
Total securities
     5.33 %     5.31 %     5.32 %     5.28 %     5.06 %
Total interest-earning assets
     6.12 %     6.20 %     6.16 %     6.19 %     6.03 %
Liabilities
                                        
NOW accounts
     0.20 %     0.17 %     0.15 %     0.16 %     0.18 %
Money market accounts
     3.93 %     3.90 %     3.92 %     3.88 %     3.94 %
Savings accounts
     1.32 %     1.32 %     1.35 %     1.40 %     1.14 %
Time deposits
     4.55 %     4.60 %     4.61 %     4.57 %     4.47 %
FHLBB advances
     4.56 %     4.44 %     4.35 %     4.31 %     4.16 %
Junior subordinated debentures
     5.91 %     5.91 %     5.98 %     6.04 %     5.91 %
Other
     4.36 %     4.47 %     4.51 %     4.73 %     4.91 %
Total interest-bearing liabilities
     3.85 %     3.78 %     3.77 %     3.73 %     3.64 %
                                         
Interest rate spread (taxable equivalent basis)
     2.27 %     2.42 %     2.39 %     2.46 %     2.39 %
Net interest margin (taxable equivalent basis)
     2.65 %     2.81 %     2.76 %     2.81 %     2.74 %
                                         
Wealth Management Assets (1)
                                        
Market value of assets under administration
   $
4,014,352
     $
4,025,877
     $
3,867,674
     $
3,715,987
     $
3,609,180
  
                                         
(1) Certain prior period amounts have been adjusted to conform to the current year presentation.
Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
   
At or for the Quarters Ended
  
   
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
    
Dec. 31,
(Dollars in thousands)
  
2007
    
2007
    
2007
    
2007
    
2006
Period End Balances
                            
Loans
                            
Commercial:
                            
Mortgages
   $
278,821
     $
276,995
     $
265,560
     $
271,817
     $
282,019
  
Construction and development
    
60,361
      
48,899
      
43,755
      
33,092
      
32,233
  
Other
    
341,084
      
324,129
      
313,673
      
294,261
      
273,145
  
Total commercial
    
680,266
      
650,023
      
622,988
      
599,170
      
587,397
  
Residential real estate:
                                    
Mortgages
    
588,628
      
566,776
      
572,321
      
577,823
      
577,522
  
Homeowner construction
    
11,043
      
12,040
      
11,071
      
11,742
      
11,149
  
Total residential real estate
    
599,671
      
578,816
      
583,392
      
589,565
      
588,671
  
Consumer:
                                    
Home equity lines
    
144,429
      
139,732
      
139,256
      
142,548
      
145,676
  
Home equity loans
    
99,827
      
99,798
      
97,253
      
94,521
      
93,947
  
Other
    
49,459
      
46,124
      
46,285
      
44,396
      
44,295
  
Total consumer
    
293,715
      
285,654
      
282,794
      
281,465
      
283,918
  
Total loans
   $
1,573,652
     $
1,514,493
     $
1,489,174
     $
1,470,200
     $
1,459,986
  
Deposits
                                    
Demand deposits
   $
175,542
     $
182,830
     $
177,210
     $
175,010
     $
186,533
  
NOW accounts
    
164,944
      
172,378
      
174,715
      
176,006
      
175,479
  
Money market accounts
    
321,600
      
312,257
      
290,046
      
290,273
      
286,998
  
Savings accounts
    
176,278
      
189,157
      
196,105
      
204,465
      
205,998
  
Time deposits
    
807,841
      
799,265
      
831,013
      
837,838
      
822,989
  
Total deposits
   $
1,646,205
     $
1,655,887
     $
1,669,089
     $
1,683,592
     $
1,677,997
  
                                     
Brokered deposits included in time deposits
    
129,798
      
130,017
      
159,297
      
163,089
      
175,618
  
                                     
Asset Quality Data
                                    
Allowance for Loan Losses
                                        
Balance at beginning of period
   $
19,472
     $
19,327
     $
19,360
     $
18,894
     $
18,645
  
Provision charged to earnings
    
1,000
      
300
      
300
      
300
      
300
  
Net charge-offs
     (195 )     (155 )     (333 )    
166
       (51 )
Balance at end of period
   $
20,277
     $
19,472
     $
19,327
     $
19,360
     $
18,894
  
                                         
Loans 30 days or More Past Due
                                        
Commercial categories
   $
4,726
     $
2,239
     $
7,224
     $
6,935
     $
5,807
  
Residential mortgages
    
2,100
      
3,266
      
1,697
      
914
     $
1,299
  
Consumer loans
    
197
      
358
      
145
      
169
      
108
  
Total
   $
7,023
     $
5,863
     $
9,066
     $
8,018
     $
7,214
  
                                         
Nonperforming Assets
                                        
Commercial mortgages
   $
1,094
     $
1,099
     $
1,385
     $
1,157
     $
981
  
Commercial construction and development
    
–
      
–
      
–
      
–
      
–
  
Other commercial
    
1,781
      
581
      
645
      
1,021
      
831
  
Residential real estate
    
1,158
      
731
      
698
      
709
      
721
  
Consumer
    
271
      
262
      
241
      
216
      
190
  
Total nonaccrual loans
   $
4,304
     $
2,673
     $
2,969
     $
3,103
     $
2,723
  
Other real estate owned, net
    
-
      
-
      
-
      
-
      
-
  
Total nonperforming assets
   $
4,304
     $
2,673
     $
2,969
     $
3,103
     $
2,723
  
                                         
Loans 30 days or more past due to total loans
     0.45 %     0.39 %     0.61 %     0.55 %     0.49 %
Nonperforming assets to total assets
     0.17 %     0.11 %     0.12 %     0.13 %     0.11 %
Nonaccrual loans to total loans
     0.27 %     0.18 %     0.20 %     0.21 %     0.19 %
Allowance for loan losses to nonaccrual loans
     471.12 %     728.47 %     650.96 %     623.91 %     693.87 %
Allowance for loan losses to total loans
     1.29 %     1.29 %     1.30 %     1.32 %     1.29 %
Washington Trust Bancorp, Inc. and Subsidiaries
  
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
  
   
   
Years Ended
  
   
December 31,
    
December 31,
  
(Dollars and shares in thousands, except per share amounts)
  
2007
    
2006
  
             
Operating Results
            
Net interest income
   $
59,944
     $
61,474
  
Provision for loan losses
    
1,900
      
1,200
  
Net realized gains on securities
    
455
      
443
  
Other noninterest income
    
45,054
      
41,740
  
Noninterest expenses
    
68,906
      
65,335
  
Income tax expense
    
10,847
      
12,091
  
Net income
    
23,800
      
25,031
  
                 
Basic earnings per share
   $
1.78
     $
1.86
  
Diluted earnings per share
   $
1.75
     $
1.82
  
Dividends declared per share
   $
0.80
     $
0.76
  
                 
Weighted average shares outstanding - basic
    
13,355.5
      
13,424.1
  
Weighted average shares outstanding - diluted
    
13,604.1
      
13,723.2
  
Shares outstanding at end of period
    
13,354.5
      
13,429.7
  
                 
Key Ratios
                
Return on average assets
     0.99 %     1.04 %
Return on average equity
     13.48 %     14.99 %
Interest rate spread (taxable equivalent basis)
     2.39 %     2.47 %
Net interest margin (taxable equivalent basis)
     2.76 %     2.80 %
                 
Allowance for Loan Losses
                
Balance at beginning of period
   $
18,894
     $
17,918
  
Provision charged to earnings
    
1,900
      
1,200
  
Net charge-offs
     (517 )     (224 )
Balance at end of period
   $
20,277
     $
18,894
  
                 
Net charge-offs (recoveries) to average loans
     .03 %     .02 %
                 
                 
   
Three Months
    
Year
  
   
Ended
    
Ended
  
(Dollars in thousands)
  
Dec. 31, 2007
    
Dec. 31, 2007
  
                 
Wealth Management Assets Under Administration (1)
                
Balance at beginning of period
   $
4,025,877
     $
3,609,180
  
Net investment appreciation (depreciation) and income
     (11,751 )    
272,398
  
Net customer cash flows
    
226
      
132,774
  
Balance at end of period
   $
4,014,352
     $
4,014,352
  
                 
(1) Certain prior period amounts have been adjusted to conform to the current year presentation.
Washington Trust Bancorp, Inc. and Subsidiaries
  
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
  
   
       
Three months ended December 31,
  
2007
    
2006
  
   
Average
          
Yield/
    
Average
          
Yield/
  
(Dollars in thousands)
  
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Assets
                                    
Residential real estate loans
   $
592,025
     $
8,069
       5.41 %   $
592,055
     $
7,732
       5.18 %
Commercial and other loans
    
666,142
      
12,407
       7.39 %    
567,356
      
11,115
       7.77 %
Consumer loans
    
288,975
      
4,910
       6.74 %    
280,118
      
4,929
       6.98 %
Total loans
    
1,547,142
      
25,386
       6.51 %    
1,439,529
      
23,776
       6.55 %
Federal funds sold and
                                                
other short-term investments
    
15,147
      
181
       4.72 %    
14,940
      
204
       5.43 %
Taxable debt securities
    
608,827
      
7,967
       5.19 %    
670,523
      
8,210
       4.86 %
Nontaxable debt securities
    
80,637
      
1,137
       5.59 %    
54,024
      
789
       5.80 %
Corporate stocks and FHLBB stock
    
41,791
      
735
       7.00 %    
45,233
      
811
       7.11 %
Total securities
    
746,402
      
10,020
       5.33 %    
784,720
      
10,014
       5.06 %
Total interest-earning assets
    
2,293,544
      
35,406
       6.12 %    
2,224,249
      
33,790
       6.03 %
Non interest-earning assets
    
170,781
                      
171,361
                  
Total assets
   $
2,464,325
                     $
2,395,610
                  
Liabilities and Shareholders’ Equity
                                                
NOW accounts
   $
161,722
     $
83
       0.20 %   $
170,111
     $
76
       0.18 %
Money market accounts
    
324,685
      
3,217
       3.93 %    
306,036
      
3,037
       3.94 %
Savings accounts
    
180,977
      
601
       1.32 %    
201,031
      
577
       1.14 %
Time deposits
    
801,107
      
9,189
       4.55 %    
836,645
      
9,420
       4.47 %
FHLBB advances
    
549,388
      
6,318
       4.56 %    
457,690
      
4,801
       4.16 %
Junior subordinated debentures
    
22,681
      
338
       5.91 %    
22,681
      
338
       5.91 %
Other
    
31,319
      
345
       4.36 %    
12,472
      
154
       4.91 %
Total interest-bearing liabilities
    
2,071,879
      
20,091
       3.85 %    
2,006,666
      
18,403
       3.64 %
Demand deposits
    
176,242
                      
186,017
                  
Other liabilities
    
34,298
                      
26,482
                  
Shareholders’ equity
    
181,906
                      
176,445
                  
Total liabilities and shareholders’ equity
   $
2,464,325
                     $
2,395,610
                  
Net interest income (FTE)
           $
15,315
                     $
15,387
          
Interest rate spread
                     2.27 %                     2.39 %
Net interest margin
                     2.65 %                     2.74 %
 
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
 
(Dollars in thousands)
            
             
Three months ended December 31,
  
2007
    
2006
  
Commercial and other loans
   $
46
     $
43
  
Nontaxable debt securities
    
362
      
275
  
Corporate stocks
    
70
      
93
  
Total
   $
478
     $
411
  
Washington Trust Bancorp, Inc. and Subsidiaries
  
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
  
   
       
Years ended December 31,
  
2007
    
2006
  
   
Average
          
Yield/
    
Average
          
Yield/
  
(Dollars in thousands)
  
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Assets
                                    
Residential real estate loans
   $
589,619
     $
31,540
       5.35 %   $
590,245
     $
30,237
       5.12 %
Commercial and other loans
    
626,309
      
47,713
       7.62 %    
564,310
      
43,409
       7.69 %
Consumer loans
    
283,873
      
19,634
       6.92 %    
274,764
      
18,748
       6.82 %
Total loans
    
1,499,801
      
98,887
       6.59 %    
1,429,319
      
92,394
       6.46 %
Federal funds sold and
                                                
other short-term investments
    
16,759
      
831
       4.96 %    
14,548
      
721
       4.96 %
Taxable debt securities
    
605,443
      
31,163
       5.15 %    
712,870
      
33,763
       4.74 %
Nontaxable debt securities
    
77,601
      
4,368
       5.63 %    
42,977
      
2,486
       5.79 %
Corporate stocks and FHLBB stock
    
42,544
      
3,047
       7.16 %    
48,643
      
3,205
       6.59 %
Total securities
    
742,347
      
39,409
       5.31 %    
819,038
      
40,175
       4.91 %
Total interest-earning assets
    
2,242,148
      
138,296
       6.17 %    
2,248,357
      
132,569
       5.90 %
Non interest-earning assets
    
165,561
                      
159,115
                  
Total assets
   $
2,407,709
                     $
2,407,472
                  
Liabilities and Shareholders’ Equity
                                                
NOW accounts
   $
166,580
     $
285
       0.17 %   $
173,137
     $
302
       0.17 %
Money market accounts
    
303,138
      
11,846
       3.91 %    
262,613
      
9,063
       3.45 %
Savings accounts
    
194,342
      
2,619
       1.35 %    
198,040
      
1,464
       0.74 %
Time deposits
    
821,951
      
37,672
       4.58 %    
856,979
      
36,153
       4.22 %
FHLBB advances
    
489,229
      
21,641
       4.42 %    
509,611
      
20,916
       4.10 %
Junior subordinated debentures
    
22,681
      
1,352
       5.96 %    
22,681
      
1,352
       5.96 %
Other
    
23,990
      
1,075
       4.48 %    
8,627
      
410
       4.76 %
Total interest-bearing liabilities
    
2,021,911
      
76,490
       3.78 %    
2,031,688
      
69,660
       3.43 %
Demand deposits
    
177,342
                      
185,322
                  
Other liabilities
    
31,886
                      
23,517
                  
Shareholders’ equity
    
176,570
                      
166,945
                  
Total liabilities and shareholders’ equity
   $
2,407,709
                     $
2,407,472
                  
Net interest income (FTE)
           $
61,806
                     $
62,909
          
Interest rate spread
                     2.39 %                     2.47 %
Net interest margin
                     2.76 %                     2.80 %
 
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
 
(Dollars in thousands)
            
             
Years ended December 31,
  
2007
    
2006
  
Commercial and other loans
   $
167
     $
204
  
Nontaxable debt securities
    
1,385
      
868
  
Corporate stocks
    
310
      
363
  
Total
   $
1,862
     $
1,435