Business Segments

3 Months Ended

Mar. 31, 2013

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.

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.

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, 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.

The following tables present 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 March 31,	2013		2012		2013		2012		2013			2012			2013		2012
Net interest income (expense)		$19,511		$19,628		$7		$3		$2,949			$2,754			$22,467		$22,385
Noninterest income	7,946		6,707		7,474		7,185		(2,254		)	340			13,166		14,232
Total income	27,457		26,335		7,481		7,188		695			3,094			35,633		36,617
Provision for loan losses	600		900		—		—		—			—			600		900
Noninterest expenses:
Depreciation and amortization expense	638		602		327		302		55			66			1,020		970
Other noninterest expenses	15,136		14,766		5,112		4,972		2,916			2,691			23,164		22,429
Total noninterest expenses	15,774		15,368		5,439		5,274		2,971			2,757			24,184		23,399
Income before income taxes	11,083		10,067		2,042		1,914		(2,276		)	337			10,849		12,318
Income tax expense (benefit)	3,843		3,451		763		719		(1,178		)	(290		)	3,428		3,880
Net income		$7,240		$6,616		$1,279		$1,195		($1,098	)		$627			$7,421		$8,438
Total assets at period end		$2,439,300		$2,265,850		$51,737		$51,560		$560,811			$711,280			$3,051,848		$3,028,690
Expenditures for long-lived assets		$370		$892		$26		$706		$31			$54			$427		$1,652