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Share-Based Compensation Arrangements (Tables)
 6 Months Ended
Jun. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Compensation Cost for Share-based Compensation Arrangements
Amounts recognized in the consolidated financial statements for share options, nonvested share units and nonvested performance shares are as follows:
(Dollars in thousands)
 
 
Three Months
 
Six Months
Periods ended June 30,
2012
 
2011
 
2012
 
2011
Share-based compensation expense

$464

 

$352

 

$876

 

$680

Related tax benefit

$166

 

$125

 

$313

 

$242
Share Options Fair Value Assumptions
The fair value of the share option awards granted were estimated on the date of grant using the Black-Scholes Option-Pricing Model based on assumptions noted in the following table.  Washington Trust uses historical data to estimate share option exercise and employee departure behavior used in the option-pricing model; groups of employees that have similar historical behavior are considered separately for valuation purposes.  The expected term of options granted was derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding.  Expected volatility was based on historical volatility of Washington Trust shares.  The risk-free rate for periods within the contractual life of the share option was based on the U.S. Treasury yield curve in effect at the date of grant.
Six months ended June 30,
2012

 
2011

Expected term (years)
9.0

 
9.0

Expected dividend yield
3.45
%
 
3.33
%
Weighted average expected volatility
42.97
%
 
41.90
%
Weighted average risk-free interest rate
1.53
%
 
3.05
%

The weighted average grant-date fair value of the share options awarded during the six months ended June 30, 2012 and 2011 was $7.44 and $7.46, respectively.
Share Options Activity
A summary of the status of Washington Trust's share option activity as of June 30, 2012, and changes during the six months ended June 30, 2012, is presented below:
 
Number of Share Options
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (Years)
 
Aggregate Intrinsic Value (000's)
Outstanding at January 1, 2012
712,061

 

$22.96

 
 
 
 
Granted
99,775

 
23.27

 
 
 
 
Exercised
(99,846
)
 
20.04

 
 
 
 
Forfeited or expired
(15,925
)
 
27.56

 
 
 
 
Outstanding at June 30, 2012
696,065

 

$23.32

 
5.1
 

$1,481

As of June 30, 2012:
 
 
 
 
 
 
 
Options exercisable
443,540

 

$24.77

 
2.9
 

$572

Options expected to vest in future periods
252,525

 

$20.78

 
8.9
 

$910
Nonvested Share Units Activity
A summary of the status of Washington Trust’s nonvested shares as of June 30, 2012, and changes during the six months ended June 30, 2012, is presented below:
 
Number of Shares
 
Weighted Average Grant Date Fair Value
Nonvested at January 1, 2012
91,250

 

$19.84

Granted
27,725

 
23.54

Vested
(4,819
)
 
19.60

Forfeited
(4,181
)
 
21.94

Nonvested at June 30, 2012
109,975

 

$20.70
Nonvested Performance Shares Activity
A summary of the status of Washington Trust’s performance share awards as of June 30, 2012, and changes during the six months ended June 30, 2012, is presented below:
 
Number of Shares
 
Weighted Average Grant Date Fair Value
Performance shares at January 1, 2012
76,341

 

$19.97

Granted
46,200

 
23.65

Vested
(2,666
)
 
21.62

Forfeited
(2,335
)
 
17.03

Performance shares at June 30, 2012
117,540

 
$21.44