Business Segments

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Business Segments

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 September 30,	2011		2010		2011			2010			2011			2010			2011		2010
Net interest income (expense)	$	19,170	$	19,229	$	(1	)	$	(11	)	$	2,380		$	883		$	21,549	$	20,101
Noninterest income	5,879		5,693		6,791			6,485			286			1,261			12,956		13,439
Total income	25,049		24,922		6,790			6,474			2,666			2,144			34,505		33,540
Provision for loan losses	1,000		1,500		—			—			—			—			1,000		1,500
Depreciation and  amortization expense	616		591		326			362			73			96			1,015		1,049
Other noninterest expenses	14,298		13,599		4,667			4,611			2,615			3,596			21,580		21,806
Total noninterest expenses	15,914		15,690		4,993			4,973			2,688			3,692			23,595		24,355
Income (loss) before income taxes	9,135		9,232		1,797			1,501			(22		)	(1,548		)	10,910		9,185
Income tax expense (benefit)	3,072		3,156		670			530			(414		)	(871		)	3,328		2,815
Net income (loss)	$	6,063	$	6,076	$	1,127		$	971		$	392		$	(677	)	$	7,582	$	6,370
Total assets at period end	2,209,333		2,116,747		50,149			50,178			710,131			742,078			2,969,613		2,909,003
Expenditures for long-lived assets	926		126		43			8			29			21			998		155

(Dollars in thousands)	Commercial Banking				Wealth Management Services						Corporate						Consolidated Total
Nine months ended September 30,	2011		2010		2011			2010			2011			2010			2011		2010
Net interest income (expense)	$	56,383	$	55,375	$	(10	)	$	(45	)	$	6,567		$	1,608		$	62,940	$	56,938
Noninterest income	15,113		13,725		21,381			19,554			1,444			1,786			37,938		35,065
Total income	71,496		69,100		21,371			19,509			8,011			3,394			100,878		92,003
Provision for loan losses	3,700		4,500		—			—			—			—			3,700		4,500
Depreciation and  amortization expense	1,815		1,776		1,004			1,124			211			270			3,030		3,170
Other noninterest expenses	40,569		37,595		14,254			14,005			7,746			8,745			62,569		60,345
Total noninterest expenses	46,084		43,871		15,258			15,129			7,957			9,015			69,299		68,015
Income (loss) before income taxes	25,412		25,229		6,113			4,380			54			(5,621		)	31,579		23,988
Income tax expense (benefit)	8,495		8,629		2,278			1,548			(1,141		)	(3,029		)	9,632		7,148
Net income (loss)	$	16,917	$	16,600	$	3,835		$	2,832		$	1,195		$	(2,592	)	$	21,947	$	16,840
Total assets at period end	2,209,333		2,116,747		50,149			50,178			710,131			742,078			2,969,613		2,909,003
Expenditures for long-lived assets	1,742		847		391			114			104			460			2,237		1,421

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.