form8-k20110126.htm

“I’m pleased to report that Washington Trust’s fourth quarter 2010 net income was the highest level in our 210+ year history, and full-year 2010 results were also outstanding,” stated Joseph J. MarcAurele,

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Washington Trust

Page Two, January 26, 2011

Washington Trust Chairman, President and Chief Executive Officer. He continued, “We achieved a record level of mortgage originations during the year, while wealth management assets under administration also reached an all-time high. We are also announcing plans to expand our retail network by opening a mortgage production office in Burlington, Massachusetts and a full-service branch in East Providence, Rhode Island. We’re pleased with our results and excited about the opportunities that lie ahead, but remain cautious about the challenges posed by local and national economic conditions.”

Net Interest Income

Net interest income totaled $20.3 million for the fourth quarter of 2010, essentially level with the third quarter of 2010 and up by $3.3 million, or 20%, over the fourth quarter of 2009. For the year 2010, net interest income increased by $11.3 million, or 17%, over 2009.

The net interest margin for the fourth quarter of 2010 was 3.05%, up by 4 basis points from the third quarter of 2010 and by 49 basis points over the fourth quarter of 2009. For the year 2010, the net interest margin was 2.93%, up by 45 basis points from 2009. The improvement in the net interest margin in 2010 as compared to 2009 was due in large part to lower funding costs. The cost of interest-bearing liabilities for the year 2010 declined by 68 basis points from 2009.

Noninterest Income

Noninterest income totaled $13.4 million for the fourth quarter of 2010, level on a linked quarter basis and up by $2.4 million, or 22%, over the fourth quarter a year ago.

Wealth management revenues for the fourth quarter of 2010 increased by $353 thousand, or 5%, on a linked quarter basis and by $468 thousand, or 7%, over the fourth quarter a year ago. Wealth management assets under administration rose to its highest level ever in the fourth quarter and totaled $4.123 billion at December 31, 2010, up by $230 million, or 6%, from September 30, 2010 and by $353 million, or 9%, from December, 31, 2009.

Merchant processing fees for the fourth quarter of 2010 decreased by $956 thousand, or 31%, on a linked quarter basis reflecting expected seasonal declines in transaction volume. Fourth quarter 2010 merchant processing fees were up by 17% from the fourth quarter of 2009 due to growth in the volume of transactions processed for existing and new customers. See discussion on the corresponding changes in merchant processing costs under the caption “Noninterest Expenses.”

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Due to strong residential mortgage refinancing activity, net gains on loan sales and commissions on loans originated for others totaled $2.2 million for the fourth quarter of 2010, compared to $1.0 million for the third quarter of 2010 and $1.2 million for the fourth quarter of 2009. The level of activity in the fourth quarter of 2010 was positively affected by the low mortgage interest rate environment. Mortgage refinancing activity has recently slowed as a result of a rise in market interest rates in the latter part of the fourth quarter.

There were no other-than-temporary impairment losses on investment securities recognized in the fourth quarter of 2010, compared to $679 thousand in the fourth quarter of 2009. Impairment losses on investment securities totaled $417 thousand in 2010, compared to $3.1 million in 2009.

Noninterest Expenses

Noninterest expenses totaled $21.8 million for the fourth quarter of 2010, down by $1.1 million, or 5%, from the third quarter of 2010 and up by $2.5 million, or 13%, over the fourth quarter of 2009. The decrease in noninterest expenses on a linked quarter basis reflected expected seasonal declines in merchant processing costs and third quarter debt prepayment penalty charge of $752 thousand, offset in part by an increase of $312 thousand in foreclosed property costs. The year over year increase in fourth quarter noninterest expenses was primarily attributable to higher commissions and incentives, which were being recognized at lower levels in 2009, and increased foreclosed property costs. Foreclosed property costs amounted to $515 thousand for the four th quarter of 2010, up by $497 thousand from the fourth quarter of 2009 due primarily to valuation adjustments on OREO properties.

Income tax expense amounted to $3.2 million and $10.3 million, respectively, for the quarter and year ended December 31, 2010, compared to $1.9 million and $6.3 million, respectively, for the same periods in 2009. The effective tax rates for the quarter and year ended December 31, 2010 were 30.4% and 30.0%, respectively, compared to 28.7% and 28.3%, respectively, for the same periods in 2009. Based on the current status of federal and applicable state income tax statutes, the Corporation currently expects the first quarter 2011 effective tax rate to be approximately 30.5%.

Asset Quality

Nonperforming assets (nonaccrual loans, nonaccrual investment securities and property acquired through foreclosure or repossession) amounted to $23.0 million, or 0.79% of total assets, at December 31, 2010, essentially unchanged on a linked quarter basis and down from $30.5 million, or 1.06% of total assets, at December 31, 2009.

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Nonaccrual loans totaled $18.5 million at December 31, 2010, down by $1.1 million in the fourth quarter and by $9.0 million from December 31, 2009. Property acquired through foreclosure or repossession amounted to $3.6 million at December 31, 2010, up by $1.0 million in the fourth quarter and up by $1.7 million from the balance at December 31, 2009.

At December 31, 2010, total past due loans amounted to $25.3 million, or 1.27% of total loans, up by $397 thousand in the fourth quarter and down by $6.3 million from December 31, 2009.

We believe that overall credit quality continues to be affected by weaknesses in national and regional economic conditions. These conditions, including relatively high unemployment levels, may continue for the next few quarters.

The loan loss provision charged to earnings amounted to $1.5 million for the fourth quarter of 2010, unchanged from the third quarter 2010 level and down by $500 thousand compared to the fourth quarter of 2009. Net charge-offs amounted to $1.1 million in the fourth quarter of 2010, as compared to net charge-offs of $1.3 million in the third quarter of 2010 and $1.0 million in the fourth quarter of 2009. The loan loss provision charged to earnings for 2010 totaled $6.0 million, down from $8.5 million in 2009. Net charge-offs amounted $4.8 million, or 0.24% of average loans, in 2010 and $4.8 million, or 0.25% of average loans, in 2009.

The allowance for loan losses was $28.6 million, or 1.43% of total loans, at December 31, 2010, compared to 1.40% of total loans at September 30, 2010 and 1.43% of total loans at December 31, 2009. Management will continue to assess the adequacy of the allowance for loan losses in accordance with its established policies.

Loans

Total loans amounted to $2.0 billion at December 31, 2010, down by $16 million, or 1%, on a linked quarter basis. The commercial loan portfolio was down $22 million in the fourth quarter, with the largest decrease in commercial construction and development loans. The residential real estate portfolio grew by $11 million, or 2%, in the fourth quarter, while the consumer loan portfolio decreased by $5 million. Total loans have grown by $76 million, or 4%, since December 31, 2009, with a $43 million increase in the commercial loan portfolio, a $39 million increase in the residential real estate portfolio and a $6.0 million decline in consumer loans.

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Washington Trust

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Deposits

Deposits totaled $2.0 billion at December 31, 2010, down by $20 million, or 1%, from the balance at September 30, 2010 and up by $113 million, or 6%, from the balance at December 31, 2009. Excluding out-of-market brokered certificates of deposit, in-market deposits were down slightly on a linked quarter basis and up by $155 million, or 8%, from the end of 2009. Demand deposits and NOW account balances grew by $74 million, or 19%, in 2010. Money market and savings account balances rose by $22 million, or 4%, in 2010. In-market time deposits were up by $58 million, or 7%, from the end of 2009.

Expansion Plans

Washington Trust also announces expansion plans for Rhode Island and Massachusetts in 2011. The Bank will open a mortgage loan production office in February 2011 in Burlington, Massachusetts, just north of Boston. This will be the Bank’s second mortgage loan office in Massachusetts; Washington Trust opened a mortgage office in Sharon, Massachusetts in August 2009. The Bank will also open a new retail branch office later this year in the Shopperstown Plaza at 587 Taunton Avenue in East Providence, Rhode Island. The branch, which is subject to local and bank regulatory approval, will be the Bank’s eighteenth branch office and its first in East Providence.

Dividends Declared

The Board of Directors declared a quarterly dividend of 21 cents per share for the quarter ended December 31, 2010. The dividend was paid on January 14, 2011 to shareholders of record on January 4, 2011.

Conference Call

Washington Trust will host a conference call on Thursday, January 27, 2011 at 8:30 a.m. Eastern Time to discuss fourth quarter results. This call is being webcast and can be accessed through the Investor Relations section of the Washington Trust web site, www.washtrust.com. Individuals may dial in to the call at 1-877-317-6789. The international dial-in number is 1-412-317-6789 and the Canada dial-in number is 1-866-605-3852.

A replay of the call will be posted in this same location on the web site shortly after the conclusion of the call. To listen to a replay of the conference call, dial 1-877-344-7529. For international access, dial 1-412-317-0088. The Conference Number for either replay is 447275. The replay will be available until 9:00 a.m. on February 11, 2011.

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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, eastern Massachusetts and southeastern Connecticut. Washington Trust Bancorp, Inc.’s common stock trades on the NASDAQ Global SelectÒ Market 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 Washington Trust could differ materially from th ose projected in the forward-looking statements as a result of, among other factors, changes in general national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets, volatility and disruption in national and international financial markets, government intervention in the U.S. financial system, reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits, reductions in the market value of wealth management assets under administration, changes in the value of securities and other assets, reductions in loan demand, changes in loan collectibility, default and charge-off rates, changes in the size and nature of the Washington Trust’s competition, changes in legislation or regulation and accounting principles, policies and guidelines, and changes in the assumptions used in making such forward-looking statements. In addition, the f actors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission and as updated by our Quarterly Reports on Form 10-Q, may result in these differences. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this press release, and Washington Trust assumes no obligation to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information – Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Washington Trust’s management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (unaudited)

	December 31,		December 31,
(Dollars in thousands, except par value)	2010		2009
Assets:
Cash and due from banks	$	85,971	$	51,853
Other short-term investments		6,765		5,407
Mortgage loans held for sale		13,894		9,909
Securities available for sale, at fair value;
amortized cost $578,897 in 2010 and $677,676 in 2009		594,100		691,484
Federal Home Loan Bank stock, at cost		42,008		42,008
Loans:
Commercial and other		1,027,065		984,550
Residential real estate		645,020		605,575
Consumer		323,553		329,543
Total loans		1,995,638		1,919,668
Less allowance for loan losses		28,583		27,400
Net loans		1,967,055		1,892,268
Premises and equipment, net		26,069		27,524
Investment in bank-owned life insurance		51,844		44,957
Goodwill		58,114		58,114
Identifiable intangible assets, net		7,852		8,943
Other assets		55,853		52,006
Total assets	$	2,909,525	$	2,884,473

Liabilities:
Deposits:
Demand deposits	$	228,437	$	194,046
NOW accounts		241,974		202,367
Money market accounts		396,455		403,333
Savings accounts		220,888		191,580
Time deposits		948,576		931,684
Total deposits		2,036,330		1,923,010
Federal Home Loan Bank advances		498,722		607,328
Junior subordinated debentures		32,991		32,991
Other borrowings		23,359		21,501
Other liabilities		49,259		44,697
Total liabilities		2,640,661		2,629,527

Shareholders’ Equity:
Common stock of $.0625 par value; authorized 30,000,000 shares;
issued 16,171,618 shares in 2010 and 16,061,748 shares in 2009		1,011		1,004
Paid-in capital		84,889		82,592
Retained earnings		178,939		168,514
Accumulated other comprehensive income		4,025		3,337
Treasury stock, at cost; 19,185 shares in 2009		–		(501	)
Total shareholders’ equity		268,864		254,946
Total liabilities and shareholders’ equity	$	2,909,525	$	2,884,473

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars and shares in thousands, except per share amounts)		Three Months						Twelve Months
Periods ended December 31,		2010			2009			2010			2009
Interest income:
Interest and fees on loans		$	24,846		$	24,207		$	98,070		$	96,796
Interest on securities:	Taxable		4,709			6,358			21,824			29,423
	Nontaxable		769			777			3,077			3,116
Dividends on corporate stock and Federal Home Loan Bank stock			34			55			198			245
Other interest income			26			11			85			50
Total interest income			30,384			31,408			123,254			129,630
Interest expense:
Deposits			4,465			7,033			20,312			32,638
Federal Home Loan Bank advances			4,993			6,739			22,786			28,172
Junior subordinated debentures			428			444			1,989			1,947
Other interest expense			245			246			976			981
Total interest expense			10,131			14,462			46,063			63,738
Net interest income			20,253			16,946			77,191			65,892
Provision for loan losses			1,500			2,000			6,000			8,500
Net interest income after provision for loan losses			18,753			14,946			71,191			57,392
Noninterest income:
Wealth management services:
Trust and investment advisory fees			5,448			4,887			20,670			18,128
Mutual fund fees			1,124			1,143			4,423			4,140
Financial planning, commissions and other service fees			266			340			1,299			1,518
Wealth management services			6,838			6,370			26,392			23,786
Service charges on deposit accounts			921			971			3,587			3,667
Merchant processing fees			2,094			1,790			9,156			7,844
Income from bank-owned life insurance			488			452			1,887			1,794
Net gains on loan sales and commissions on loans originated for others			2,163			1,165			4,052			4,352
Net realized gains on securities			(8	)		-			729			314
Net (losses) gains on interest rate swap contracts			77			204			(36	)		697
Other income			835			697			3,038			2,901
Noninterest income, excluding other-than-temporary impairment losses			13,408			11,649			48,805			45,355
Total other-than-temporary impairment losses on securities			-			(113	)		(245	)		(6,650	)
Portion of loss recognized in other comprehensive income (before taxes)			-			(566	)		(172	)		3,513
Net impairment losses recognized in earnings			-			(679	)		(417	)		(3,137	)
Total noninterest income			13,408			10,970			48,388			42,218
Noninterest expense:
Salaries and employee benefits			12,135			10,667			47,429			41,917
Net occupancy			1,188			1,210			4,851			4,790
Equipment			1,051			990			4,099			3,917
Merchant processing costs			1,802			1,516			7,822			6,652
Outsourced services			840			697			3,219			2,734
FDIC deposit insurance costs			724			795			3,163			4,397
Legal, audit and professional fees			449			558			1,813			2,443
Advertising and promotion			383			473			1,633			1,687
Amortization of intangibles			237			290			1,091			1,209
Debt prepayment penalties			-			-			752			-
Other expenses			2,987			2,061			9,354			7,422
Total noninterest expense			21,796			19,257			85,226			77,168
Income before income taxes			10,365			6,659			34,353			22,442
Income tax expense			3,154			1,911			10,302			6,346
Net income		$	7,211		$	4,748		$	24,051		$	16,096
Weighted average common shares outstanding – basic			16,160.6			16,035.4			16,113.9			15,994.9
Weighted average common shares outstanding – diluted			16,225.6			16,082.0			16,150.5			16,040.9
Per share information:	Basic earnings per common share	$	0.44		$	0.30		$	1.49		$	1.01
	Diluted earnings per common share	$	0.44		$	0.30		$	1.49		$	1.00
	Cash dividends declared per share	$	0.21		$	0.21		$	0.84		$	0.84

Certain prior period amounts have been reclassified to conform to current period 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, except per share amounts)	2010			2010			2010			2010			2009
Financial Data
Total assets	$	2,909,525		$	2,909,003		$	2,929,853		$	2,896,425		$	2,884,473
Total loans		1,995,638			2,011,148			1,972,498			1,937,524			1,919,668
Total securities		594,100			577,161			675,938			716,964			691,484
Total deposits		2,036,330			2,056,754			1,949,905			1,961,188			1,923,010
Total shareholders’ equity		268,864			267,109			265,411			259,529			254,946
Net interest income		20,253			20,101			18,833			18,004			16,946
Provision for loan losses		1,500			1,500			1,500			1,500			2,000
Noninterest income, excluding other-than-temporary
impairment losses		13,408			13,439			11,513			10,445			11,649
Net impairment losses recognized in earnings		-			-			(354	)		(63	)		(679	)
Noninterest expenses		21,796			22,855			20,983			19,592			19,257
Income tax expense		3,154			2,815			2,211			2,122			1,911
Net income		7,211			6,370			5,298			5,172			4,748

Share Data
Basic earnings per common share	$	0.44		$	0.39		$	0.33		$	0.32		$	0.30
Diluted earnings per common share	$	0.44		$	0.39		$	0.33		$	0.32		$	0.30
Dividends declared per share	$	0.21		$	0.21		$	0.21		$	0.21		$	0.21
Book value per share	$	16.63		$	16.55		$	16.46		$	16.14		$	15.89
Tangible book value per share – Non-GAAP*	$	12.55		$	12.45		$	12.34		$	11.99		$	11.71
Market value per share	$	21.88		$	19.12		$	17.04		$	18.64		$	15.58

Shares outstanding at end of period		16,171.6			16,135.4			16,120.7			16,079.1			16,042.6
Weighted average common shares outstanding–basic		16,160.6			16,131.4			16,104.6			16,057.7			16,035.4
Weighted average common shares outstanding–diluted		16,225.6			16,170.6			16,143.1			16,101.5			16,082.0

Key Ratios
Return on average assets		0.99	%		0.87	%		0.73	%		0.71	%		0.66	%
Return on average tangible assets – Non-GAAP*		1.01	%		0.89	%		0.74	%		0.73	%		0.67	%
Return on average equity		10.70	%		9.53	%		8.05	%		8.00	%		7.47	%
Return on average tangible equity – Non-GAAP*		14.17	%		12.67	%		10.78	%		10.80	%		10.16	%

Capital Ratios
Tier 1 risk-based capital		11.53	% (i)		11.24	%		11.22	%		11.24	%		11.14	%
Total risk-based capital		12.79	% (i)		12.50	%		12.47	%		12.50	%		12.40	%
Tier 1 leverage ratio		8.25	% (i)		8.04	%		7.94	%		7.89	%		7.82	%
Equity to assets		9.24	%		9.18	%		9.06	%		8.96	%		8.84	%
Tangible equity to tangible assets – Non-GAAP*		7.14	%		7.07	%		6.95	%		6.81	%		6.67	%
(i) – estimated

Wealth Management Assets Under Administration
Balance at beginning of period	$	3,893,144		$	3,659,383		$	3,900,783		$	3,770,193		$	3,603,424
Net investment appreciation (depreciation) & income		234,460			253,372			(249,214	)		95,855			88,690
Net customer cash flows		(4,593	)		(19,611	)		7,814			34,735			78,079
Balance at end of period	$	4,123,011		$	3,893,144		$	3,659,383		$	3,900,783		$	3,770,193

*	- See the section labeled “Supplemental Information – Non-GAAP Financial Measures” at the end of this document.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

	For the Years Ended
	Dec. 31,			Dec. 31,
(Dollars in thousands, except per share amounts)	2010			2009
Financial Data
Net interest income	$	77,191		$	65,892
Provision for loan losses		6,000			8,500
Noninterest income, excluding other-than-temporary impairment losses		48,805			45,355
Net impairment losses recognized in earnings		(417	)		(3,137	)
Noninterest expenses		85,226			77,168
Income tax expense		10,302			6,346
Net income		24,051			16,096

Share Data
Basic earnings per common share	$	1.49		$	1.01
Diluted earnings per common share	$	1.49		$	1.00
Dividends declared per share	$	0.84		$	0.84

Weighted average common shares outstanding – basic		16,113.9			15,994.9
Weighted average common shares outstanding – diluted		16,150.5			16,040.9

Key Ratios
Return on average assets		0.82	%		0.55	%
Return on average tangible assets – Non-GAAP*		0.84	%		0.56	%
Return on average equity		9.09	%		6.56	%
Return on average tangible equity – Non-GAAP*		12.13	%		9.05	%

Asset Quality Data
Allowance for Loan Losses
Balance at beginning of period	$	27,400		$	23,725
Provision charged to earnings		6,000			8,500
Charge-offs		(5,402	)		(5,162	)
Recoveries		585			337
Balance at end of period	$	28,583		$	27,400

Net Loan Charge-Offs
Commercial:
Mortgages	$	1,152		$	1,578
Construction and development		-			-
Other		2,787			2,656
Residential:
Mortgages		413			389
Homeowner construction		-			-
Consumer		465			202
Total	$	4,817		$	4,825

Net charge-offs to average loans (annualized)		0.24	%		0.25	%

Wealth Management Assets Under Administration
Balance at beginning of period	$	3,770,193		$	3,147,649
Net investment appreciation (depreciation) & income		334,473			547,091
Net customer cash flows		18,345			75,453
Balance at end of period	$	4,123,011		$	3,770,193

*	- See the section labeled “Supplemental Information – Non-GAAP Financial Measures” at the end of this document.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

	For the Quarters Ended
	Dec. 31,	Sept. 30,	June 30,	Mar. 31,	Dec. 31,
	2010	2010	2010	2010	2009
Average Yield / Rate (taxable equivalent basis)
Assets:
Commercial and other loans	5.22%	5.29%	5.23%	5.31%	5.19%
Residential real estate loans, including
mortgage loans held for sale	4.76%	4.94%	5.05%	5.19%	5.17%
Consumer loans	3.96%	3.99%	4.00%	3.99%	4.06%
Total loans	4.87%	4.97%	4.97%	5.05%	4.99%
Cash, federal funds sold
and other short-term investments	0.21%	0.20%	0.17%	0.23%	0.19%
FHLBB stock	–%	–%	–%	–%	–%
Taxable debt securities	3.79%	3.93%	3.93%	4.10%	4.09%
Nontaxable debt securities	5.76%	5.76%	5.83%	5.89%	5.74%
Corporate stocks	7.52%	7.56%	7.55%	7.74%	7.58%
Total securities	4.08%	4.19%	4.17%	4.33%	4.30%
Total interest-earning assets	4.54%	4.63%	4.64%	4.72%	4.70%
Liabilities:
NOW accounts	0.12%	0.12%	0.12%	0.13%	0.18%
Money market accounts	0.34%	0.40%	0.56%	0.61%	0.82%
Savings accounts	0.14%	0.14%	0.17%	0.18%	0.22%
Time deposits	1.65%	1.74%	1.94%	2.13%	2.52%
FHLBB advances	4.13%	4.16%	4.08%	4.26%	4.35%
Junior subordinated debentures	5.15%	5.82%	5.44%	7.75%	5.33%
Other	4.44%	4.59%	4.63%	4.66%	4.68%
Total interest-bearing liabilities	1.70%	1.84%	2.00%	2.17%	2.40%

Interest rate spread (taxable equivalent basis)	2.84%	2.79%	2.64%	2.55%	2.30%
Net interest margin (taxable equivalent basis)	3.05%	3.01%	2.86%	2.78%	2.56%

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

		Period End Balances At
(Dollars in thousands)		12/31/2010		9/30/2010		6/30/2010		3/31/2010		12/31/2009
Loans
Commercial:	Mortgages	$	518,623	$	522,355	$	510,315	$	493,102	$	496,996
	Construction and development		47,335		62,820		67,215		77,787		72,293
	Other		461,107		464,294		441,827		427,870		415,261
	Total commercial		1,027,065		1,049,469		1,019,357		998,759		984,550
Residential:	Mortgages		634,739		622,975		610,245		597,481		593,981
	Homeowner construction		10,281		10,593		12,368		11,577		11,594
	Total residential real estate		645,020		633,568		622,613		609,058		605,575
Consumer:	Home equity lines		218,288		218,898		218,440		213,841		209,801
	Home equity loans		50,624		54,923		57,682		59,390		62,430
	Other		54,641		54,290		54,406		56,476		57,312
	Total consumer		323,553		328,111		330,528		329,707		329,543
	Total loans	$	1,995,638	$	2,011,148	$	1,972,498	$	1,937,524	$	1,919,668

(Dollars in thousands)
	At Dec. 31, 2010
Commercial Real Estate Loans by Property Location	Balance		% of Total
Rhode Island, Connecticut, Massachusetts	$	512,173		90.5	%
New York, New Jersey, Pennsylvania		40,232		7.1	%
New Hampshire		11,846		2.1	%
Other		1,707		0.3	%
Total commercial real estate loans (1)	$	565,958		100.0	%

(1)	Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.

(Dollars in thousands)
	At Dec. 31, 2010
Residential Mortgages by Property Location	Balance		% of Total
Rhode Island, Connecticut, Massachusetts	$	612,419		94.9	%
New York, Virginia, New Jersey, Maryland, Pennsylvania, District of Columbia		13,921		2.2	%
Ohio		8,086		1.3	%
California, Washington, Oregon		4,562		0.7	%
Colorado, Texas, New Mexico, Utah		2,613		0.4	%
Georgia		1,680		0.3	%
New Hampshire		1,263		0.2	%
Wyoming		476		0.0	%
Total residential mortgages	$	645,020		100.0	%


	Period End Balances At
(Dollars in thousands)	12/31/2010		9/30/2010		6/30/2010		3/31/2010		12/31/2009
Deposits
Demand deposits	$	228,437	$	242,455	$	225,494	$	204,317	$	194,046
NOW accounts		241,974		236,775		234,014		196,905		202,367
Money market accounts		396,455		408,828		378,004		397,896		403,333
Savings accounts		220,888		210,271		209,616		202,236		191,580
Time deposits		948,576		958,425		902,777		959,834		931,684
Total deposits	$	2,036,330	$	2,056,754	$	1,949,905	$	1,961,188	$	1,923,010

Out-of-market brokered certificates of deposits
included in time deposits	$	52,347	$	69,385	$	94,641	$	88,748	$	93,684

In-market deposits, excluding out of market
brokered certificates of deposit	$	1,983,983	$	1,987,369	$	1,855,264	$	1,872,440	$	1,829,326

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

(Dollars in thousands)	At December 31, 2010
	Amortized		Unrealized		Unrealized			Fair
Securities Available for Sale	Cost (1)		Gains		Losses			Value
Obligations of U.S. government-sponsored enterprises	$	36,900	$	4,094	$	−		$	40,994
Mortgage-backed securities issued by U.S. government
agencies and U.S. government-sponsored enterprises		411,087		19,068		(384	)		429,771
States and political subdivisions		79,455		1,975		(375	)		81,055
Trust preferred securities:
Individual name issuers		30,601		−		(7,326	)		23,275
Collateralized debt obligations		4,466		−		(3,660	)		806
Corporate bonds		13,874		1,338		−			15,212
Common stocks		660		149		−			809
Perpetual preferred stocks		1,854		324		−			2,178
Total securities available for sale	$	578,897	$	26,948	$	(11,745	)	$	594,100


(Dollars in thousands)	At December 31, 2009
	Amortized		Unrealized		Unrealized			Fair
Securities Available for Sale	Cost (1)		Gains		Losses			Value
Obligations of U.S. government-sponsored enterprises	$	41,565	$	3,675	$	−		$	45,240
Mortgage-backed securities issued by U.S. government
agencies and U.S. government-sponsored enterprises		503,115		20,808		(477	)		523,446
States and political subdivisions		80,183		2,093		(214	)		82,062
Trust preferred securities:
Individual name issuers		30,563		−		(9,977	)		20,586
Collateralized debt obligations		4,966		−		(3,901	)		1,065
Corporate bonds		13,272		1,434		−			14,706
Common stocks		658		111		−			769
Perpetual preferred stocks		3,354		396		(140	)		3,610
Total securities available for sale	$	677,676	$	28,517	$	(14,709	)	$	691,484

(1)	Net of other-than-temporary impairment losses recognized in earnings.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

(Dollars in thousands)	For the Quarters Ended
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
Asset Quality Data	2010			2010			2010			2010			2009
Allowance for Loan Losses
Balance at beginning of period	$	28,165		$	27,985		$	27,711		$	27,400		$	26,431
Provision charged to earnings		1,500			1,500			1,500			1,500			2,000
Charge-offs		(1,396	)		(1,468	)		(1,263	)		(1,275	)		(1,215	)
Recoveries		314			148			37			86			184
Balance at end of period	$	28,583		$	28,165		$	27,985		$	27,711		$	27,400

Net Loan Charge-Offs (Recoveries)
Commercial:
Mortgages	$	226		$	(96	)	$	531		$	491		$	333
Construction and development		–			–			–			–			–
Other		695			1,026			558			508			627
Residential:
Mortgages		(99	)		301			90			121			29
Homeowner construction		–			–			–			–			–
Consumer		260			89			47			69			42
Total	$	1,082		$	1,320		$	1,226		$	1,189		$	1,031

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

(Dollars in thousands)
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
Asset Quality Data	2010		2010		2010		2010		2009
Past Due Loans
Loans 30–59 Days Past Due
Commercial real estate	$	2,185	$	1,685	$	3,898	$	2,302	$	1,909
Other commercial loans		1,862		2,632		3,284		2,362		1,831
Residential mortgages		3,073		2,828		2,680		1,549		2,409
Consumer loans		2,005		2,218		3,364		2,019		1,258
Loans 30–59 days past due	$	9,125	$	9,363	$	13,226	$	8,232	$	7,407

Loans 60–89 Days Past Due
Commercial real estate	$	514	$	–	$	19	$	2,390	$	1,648
Other commercial loans		953		492		1,195		519		292
Residential mortgages		1,477		430		861		1,035		1,383
Consumer loans		448		420		195		202		591
Loans 60-89 days past due	$	3,392	$	1,342	$	2,270	$	4,146	$	3,914

Loans 90 Days or more Past Due
Commercial real estate	$	5,322	$	4,952	$	3,695	$	8,374	$	11,227
Other commercial loans		3,376		4,240		2,919		3,142		4,829
Residential mortgages		4,041		4,696		5,942		5,559		4,028
Consumer loans		11		277		634		635		164
Loans 90 days or more past due	$	12,750	$	14,165	$	13,190	$	17,710	$	20,248

Total Past Due Loans
Commercial real estate	$	8,021	$	6,637	$	7,612	$	13,066	$	14,784
Other commercial loans		6,191		7,364		7,398		6,023		6,952
Residential mortgages		8,591		7,954		9,483		8,143		7,820
Consumer loans		2,464		2,915		4,193		2,856		2,013
Total past due loans	$	25,267	$	24,870	$	28,686	$	30,088	$	31,569

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)

(Dollars in thousands)
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
Asset Quality Data	2010			2010			2010			2010			2009
Nonperforming Assets
Commercial mortgages	$	6,624		$	6,426		$	6,680		$	8,933		$	11,588
Commercial construction and development		–			–			–			–			–
Other commercial		5,259			6,256			8,418			8,225			9,075
Residential real estate mortgages		6,414			6,080			6,850			6,395			6,038
Consumer		213			824			789			827			769
Total nonaccrual loans	$	18,510		$	19,586		$	22,737		$	24,380		$	27,470
Nonaccrual investment securities		806			841			872			1,154			1,065
Property acquired through foreclosure or repossession		3,644			2,612			2,338			1,974			1,974
Total nonperforming assets	$	22,960		$	23,039		$	25,947		$	27,508		$	30,509

Total past due loans to total loans		1.27	%		1.24	%		1.45	%		1.55	%		1.64	%
Nonperforming assets to total assets		0.79	%		0.79	%		0.89	%		0.95	%		1.06	%
Nonaccrual loans to total loans		0.93	%		0.97	%		1.15	%		1.26	%		1.43	%
Allowance for loan losses to nonaccrual loans		154.42	%		143.80	%		123.08	%		113.66	%		99.75	%
Allowance for loan losses to total loans		1.43	%		1.40	%		1.42	%		1.43	%		1.43	%


Troubled Debt Restructured Loans
Accruing troubled debt restructured loans
Commercial mortgages	$	11,736		$	11,812		$	6,176		$	5,813		$	5,566
Other commercial		4,594			2,498			2,224			1,217			540
Residential real estate mortgages		2,863			2,870			2,234			2,622			2,736
Consumer		509			817			997			1,398			858
Accruing troubled debt restructured loans		19,702			17,997			11,631			11,050			9,700
Nonaccrual troubled debt restructured loans
Commercial mortgages		1,302			1,473			986			2,238			–
Other commercial		431			213			301			247			228
Residential real estate mortgages		948			823			381			887			336
Consumer		41			43			43			44			45
Nonaccrual troubled debt restructured loans		2,722			2,552			1,711			3,416			609
Total troubled debt restructured loans	$	22,424		$	20,549		$	13,342		$	14,466		$	10,309

The following tables present average balance and interest rate information. Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes, net of the related federal tax benefit. For dividends on corporate stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency. Unrealized gains (losses) on available for sale securities are excluded from the average balance and yield calculations. Nonaccrual and renegotiated loans, as well as interest earned on these loans (to the extent recognized in the Consolidated Statements of Income) are included in amounts presented for loans.

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)

Three months ended December 31,	2010							2009
	Average				Yield/			Average				Yield/
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets
Commercial and other loans	$	1,044,263	$	13,741		5.22	%	$	983,087	$	12,861		5.19	%
Residential real estate loans, including
mortgage loans held for sale		661,108		7,936		4.76	%		616,184		8,035		5.17	%
Consumer loans		324,703		3,239		3.96	%		328,020		3,359		4.06	%
Total loans		2,030,074		24,916		4.87	%		1,927,291		24,255		4.99	%
Cash, federal funds sold
and other short-term investments		49,381		26		0.21	%		22,222		11		0.19	%
FHLBB stock		42,008		–		–	%		42,008		–		–	%

Taxable debt securities		492,684		4,709		3.79	%		616,206		6,358		4.09	%
Nontaxable debt securities		79,457		1,154		5.76	%		80,501		1,164		5.74	%
Corporate stocks		2,512		47		7.52	%		4,013		77		7.58	%
Total securities		574,653		5,910		4.08	%		700,720		7,599		4.30	%
Total interest-earning assets		2,696,116		30,852		4.54	%		2,692,241		31,865		4.70	%
Non interest-earning assets		216,654							194,800
Total assets	$	2,912,770						$	2,887,041
Liabilities and shareholders’ equity
NOW accounts	$	245,857	$	74		0.12	%	$	189,185	$	85		0.18	%
Money market accounts		414,425		357		0.34	%		392,156		806		0.82	%
Savings accounts		211,513		72		0.14	%		190,770		108		0.22	%
Time deposits		951,545		3,962		1.65	%		948,544		6,034		2.52	%
FHLBB advances		479,703		4,993		4.13	%		614,909		6,739		4.35	%
Junior subordinated debentures		32,991		428		5.15	%		32,991		444		5.33	%
Other		21,965		245		4.44	%		20,879		246		4.68	%
Total interest-bearing liabilities		2,357,999		10,131		1.70	%		2,389,434		14,462		2.40	%
Demand deposits		239,100							197,327
Other liabilities		46,101							46,069
Shareholders’ equity		269,570							254,211
Total liabilities and shareholders’ equity	$	2,912,770						$	2,887,041
Net interest income (FTE)			$	20,721						$	17,403
Interest rate spread						2.84	%						2.30	%
Net interest margin						3.05	%						2.56	%

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

(Dollars in thousands)

Three months ended December 31,	2010		2009
Commercial and other loans	$	70	$	48
Nontaxable debt securities		385		387
Corporate stocks		13		22
Total	$	468	$	457

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)

Years ended December 31,	2010							2009
	Average				Yield/			Average				Yield/
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets
Commercial and other loans	$	1,019,304	$	53,628		5.26	%	$	941,833	$	50,092		5.32	%
Residential real estate loans, including
mortgage loans held for sale		634,735		31,609		4.98	%		629,035		33,410		5.31	%
Consumer loans		327,770		13,062		3.98	%		323,576		13,494		4.17	%
Total loans		1,981,809		98,299		4.96	%		1,894,444		96,996		5.12	%
Cash, federal funds sold
and other short-term investments		41,407		85		0.21	%		20,201		50		0.25	%
FHLBB stock		42,008		–		–	%		42,008		–		–	%

Taxable debt securities		553,531		21,824		3.94	%		694,248		29,423		4.24	%
Nontaxable debt securities		79,491		4,618		5.81	%		80,629		4,662		5.78	%
Corporate stocks		3,595		274		7.60	%		4,420		339		7.68	%
Total securities		636,617		26,716		4.20	%		779,297		34,424		4.42	%
Total interest-earning assets		2,701,841		125,100		4.63	%		2,735,950		131,470		4.81	%
Non interest-earning assets		213,644							185,345
Total assets	$	2,915,485						$	2,921,295
Liabilities and shareholders’ equity
NOW accounts	$	220,875	$	268		0.12	%	$	181,171	$	327		0.18	%
Money market accounts		403,489		1,918		0.48	%		375,175		3,960		1.06	%
Savings accounts		205,767		318		0.15	%		187,862		530		0.28	%
Time deposits		955,222		17,808		1.86	%		957,449		27,821		2.91	%
FHLBB advances		547,974		22,786		4.16	%		687,210		28,172		4.10	%
Junior subordinated debentures		32,991		1,989		6.03	%		32,991		1,947		5.90	%
Other		21,321		976		4.58	%		21,476		981		4.57	%
Total interest-bearing liabilities		2,387,639		48,063		1.93	%		2,443,334		63,738		2.61	%
Demand deposits		221,350							187,800
Other liabilities		41,804							44,712
Shareholders’ equity		264,692							245,449
Total liabilities and shareholders’ equity	$	2,915,485						$	2,921,295
Net interest income (FTE)			$	79,037						$	67,732
Interest rate spread						2.70	%						2.20	%
Net interest margin						2.93	%						2.48	%

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

(Dollars in thousands)

Years ended December 31,	2010		2009
Commercial and other loans	$	229	$	200
Nontaxable debt securities		1,541		1,546
Corporate stocks		76		94
Total	$	1,846	$	1,840

Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)

	At or for the Quarters Ended
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
(Dollars in thousands, except per share amounts)	2010			2010			2010			2010			2009
Calculation of tangible book value per share
Total shareholders’ equity at end of period	$	268,864		$	267,109		$	265,411		$	259,529		$	254,946
Less:
Goodwill		58,114			58,114			58,114			58,114			58,114
Identifiable intangible assets, net		7,852			8,089			8,362			8,652			8,943
Total tangible shareholders’ equity at end of period	$	202,898		$	200,906		$	198,935		$	192,763		$	187,889

Shares outstanding at end of period		16,171.6			16,135.4			16,120.7			16,079.1			16,042.6

Book value per share – GAAP	$	16.63		$	16.55		$	16.46		$	16.14		$	15.89
Tangible book value per share – Non-GAAP	$	12.55		$	12.45		$	12.34		$	11.99		$	11.71


Calculation of tangible equity to tangible assets
Total tangible shareholders’ equity at end of period	$	202,898		$	200,906		$	198,935		$	192,763		$	187,889

Total assets at end of period	$	2,909,525		$	2,909,003		$	2,929,853		$	2,896,425		$	2,884,473
Less:
Goodwill		58,114			58,114			58,114			58,114			58,114
Identifiable intangible assets, net		7,852			8,089			8,362			8,652			8,943
Total tangible assets at end of period	$	2,843,559		$	2,842,800		$	2,863,377		$	2,829,659		$	2,817,416

Equity to assets - GAAP		9.24	%		9.18	%		9.06	%		8.96	%		8.84	%
Tangible equity to tangible assets – Non-GAAP		7.14	%		7.07	%		6.95	%		6.81	%		6.67	%


Calculation of return on average tangible assets
Net income	$	7,211		$	6,370		$	5,298		$	5,172		$	4,748

Total average assets	$	2,912,770		$	2,931,816		$	2,920,838		$	2,896,156		$	2,887,041
Less:
Average goodwill		58,114			58,114			58,114			58,114			58,114
Average identifiable intangible assets, net		7,967			8,216			8,503			8,794			9,084
Total average tangible assets	$	2,846,689		$	2,865,486		$	2,854,221		$	2,829,248		$	2,819,843

Return on average assets - GAAP		0.99	%		0.87	%		0.73	%		0.71	%		0.66	%
Return on average tangible assets – Non-GAAP		1.01	%		0.89	%		0.74	%		0.73	%		0.67	%


Calculation of return on average tangible equity
Net income	$	7,211		$	6,370		$	5,298		$	5,172		$	4,748

Total average shareholders’ equity	$	269,570		$	267,431		$	263,138		$	258,478		$	254,211
Less:
Average goodwill		58,114			58,114			58,114			58,114			58,114
Average identifiable intangible assets, net		7,967			8,216			8,503			8,794			9,084
Total average tangible shareholders’ equity	$	203,489		$	201,101		$	196,521		$	191,570		$	187,013

Return on average shareholders’ equity - GAAP		10.70	%		9.53	%		8.05	%		8.00	%		7.47	%
Return on average tangible shareholders’ equity – Non-GAAP		14.17	%		12.67	%		10.78	%		10.80	%		10.16	%

Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)

	For the Years Ended
	Dec. 31,			Dec. 31,
(Dollars in thousands)	2010			2009
Calculation of return on average tangible assets
Net income	$	24,051		$	16,096

Total average assets	$	2,915,485		$	2,921,295
Less:
Average goodwill		58,114			58,114
Average identifiable intangible assets, net		8,368			9,533
Total average tangible assets	$	2,849,003		$	2,853,648

Return on average assets - GAAP		0.82	%		0.55	%
Return on average tangible assets – Non-GAAP		0.84	%		0.56	%


Calculation of return on average tangible equity
Net income	$	24,051		$	16,096

Total average shareholders’ equity	$	264,692		$	245,449
Less:
Average goodwill		58,114			58,114
Average identifiable intangible assets, net		8,368			9,533
Total average tangible shareholders’ equity	$	198,210		$	177,802

Return on average shareholders’ equity - GAAP		9.09	%		6.56	%
Return on average tangible shareholders’ equity – Non-GAAP		12.13	%		9.05	%

Rhode Island	001-32991	05-0404671
--------------------	--------------------	---------------------
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

(c)	Exhibits.

	Exhibit No.	Exhibit

	99.1	Press Release dated January 26, 2011*


	*Filed herewith

	WASHINGTON TRUST BANCORP, INC.
Date: January 26, 2011	By:	/s/ David V. Devault
		David V. Devault
		Senior Executive Vice President, Secretary and Chief Financial Officer

Exhibit No.		Exhibit
99.1		Press Release dated January 26, 2011*

* Filed herewith