Business Segments

6 Months Ended

Jun. 30, 2011

Business Segments [Abstract]

Business Segments

(13) Business Segments

Washington Trust segregates financial information in assessing its results among two operating segments: Commercial Banking and Wealth Management Services.  The amounts in the Corporate column include activity not related to the segments, such as the investment securities portfolio, wholesale funding activities and administrative units.  The Corporate column is not considered to be an operating segment.  The methodologies and organizational hierarchies that define the business segments are periodically reviewed and revised.  Results may be restated, when necessary, to reflect changes in organizational structure or allocation methodology.  Any changes in estimates and allocations that may affect the reported results of any business segment will not affect the consolidated financial position or results of operations of Washington Trust as a whole.  The following table presents the statement of operations and total assets for Washington Trust’s reportable segments:

(Dollars in thousands)
	Commercial Banking				Wealth Management Services						Corporate						Consolidated Total
Three months ended June 30,	2011		2010		2011			2010			2011			2010			2011		2010
Net interest income (expense)	$	18,809	$	18,116	$	(3	)	$	(18	)	$	2,258		$	735		$	21,064	$	18,833
Noninterest income		5,053		4,276		7,510			6,763			722			120			13,285		11,159
Total income		23,862		22,392		7,507			6,745			2,980			855			34,349		29,992
Provision for loan losses		1,200		1,500		–			–			–			–			1,200		1,500
Depreciation and  amortization expense		599		568		341			366			70			124			1,010		1,058
Other noninterest expenses		13,581		12,453		4,917			4,673			2,756			2,799			21,254		19,925
Total noninterest expenses		15,380		14,521		5,258			5,039			2,826			2,923			23,464		22,483
Income (loss) before income taxes		8,482		7,871		2,249			1,706			154			(2,068	)		10,885		7,509
Income tax expense (benefit)		2,835		2,680		838			602			(353	)		(1,071	)		3,320		2,211
Net income (loss)	$	5,647	$	5,191	$	1,411		$	1,104		$	507		$	(997	)	$	7,565	$	5,298
Total assets at period end		2,151,315		2,063,381		51,520			50,132			733,471			816,340			2,936,306		2,929,853
Expenditures for long-lived assets		394		395		90			58			42			192			526		645

(Dollars in thousands)
	Commercial Banking				Wealth Management Services						Corporate						Consolidated Total
Six months ended June 30,	2011		2010		2011			2010			2011			2010			2011		2010
Net interest income (expense)	$	37,213	$	36,146	$	(9	)	$	(34	)	$	4,187		$	725		$	41,391	$	36,837
Noninterest income (expense)		9,234		8,032		14,590			13,069			1,158			525			24,982		21,626
Total income		46,447		44,178		14,581			13,035			5,345			1,250			66,373		58,463
Provision for loan losses		2,700		3,000		–			–			–			–			2,700		3,000
Depreciation and  amortization expense		1,199		1,185		678			762			138			174			2,015		2,121
Other noninterest expenses		26,271		23,996		9,587			9,394			5,131			5,149			40,989		38,539
Total noninterest expenses		30,170		28,181		10,265			10,156			5,269			5,323			45,704		43,660
Income (loss) before income taxes		16,277		15,997		4,316			2,879			76			(4,073	)		20,669		14,803
Income tax expense (benefit)		5,423		5,473		1,608			1,018			(727	)		(2,158	)		6,304		4,333
Net income (loss)	$	10,854	$	10,524	$	2,708		$	1,861		$	803		$	(1,915	)	$	14,365	$	10,470
Total assets at period end		2,151,315		2,063,381		51,520			50,132			733,471			816,340			2,936,306		2,929,853
Expenditures for long-lived assets		816		721		348			106			75			439			1,239		1,266

Management uses certain methodologies to allocate income and expenses to the business lines.  A funds transfer pricing methodology is used to assign interest income and interest expense to each interest-earning asset and interest-bearing liability on a matched maturity funding basis.  Certain indirect expenses are allocated to segments.  These include support unit expenses such as technology and processing operations and other support functions.  Taxes are allocated to each segment based on the effective rate for the period shown.

Commercial Banking

The Commercial Banking segment includes commercial, commercial real estate, residential and consumer lending activities; equity in losses of unconsolidated investments in real estate limited partnerships, mortgage banking, secondary market and loan servicing activities; deposit generation; merchant credit card services; cash management activities; and direct banking activities, which include the operation of ATMs, telephone and internet banking services and customer support and sales.

Wealth Management Services

Wealth Management Services includes asset management services provided for individuals and institutions and mutual funds; personal trust services, including services as executor, trustee, administrator, custodian and guardian; institutional trust services, including services as trustee for pension and profit sharing plans; and other financial planning and advisory services.

Corporate

Corporate includes the Treasury Unit, which is responsible for managing the wholesale investment portfolio and wholesale funding needs.  It also includes income from bank-owned life insurance as well as administrative and executive expenses not allocated to the business lines and the residual impact of methodology allocations such as funds transfer pricing offsets.