Business Segments

6 Months Ended

Jun. 30, 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 June 30,	2013		2012		2013		2012			2013			2012			2013		2012
Net interest income (expense)		$19,731		$19,552		$2		($2	)		$2,676			$2,861			$22,409		$22,411
Noninterest income	7,991		7,580		7,912		7,472			491			1,122			16,394		16,174
Total income	27,722		27,132		7,914		7,470			3,167			3,983			38,803		38,585
Provision for loan losses	700		600		—		—			—			—			700		600
Noninterest expenses:
Depreciation and amortization expense	624		602		325		331			54			54			1,003		987
Other noninterest expenses	16,268		15,858		5,022		4,827			2,712			3,556			24,002		24,241
Total noninterest expenses	16,892		16,460		5,347		5,158			2,766			3,610			25,005		25,228
Income before income taxes	10,130		10,072		2,567		2,312			401			373			13,098		12,757
Income tax expense (benefit)	3,402		3,463		949		858			(236		)	(277		)	4,115		4,044
Net income		$6,728		$6,609		$1,618		$1,454			$637			$650			$8,983		$8,713
Total assets at period end		$2,509,407		$2,331,097		$52,129		$49,869			$499,771			$660,084			$3,061,307		$3,041,050
Expenditures for long-lived assets		$367		$1,782		$28		$7			$15			$12			$410		$1,801

(Dollars in thousands)	Commercial Banking				Wealth Management Services				Corporate						Consolidated Total
Six months ended June 30,	2013		2012		2013		2012		2013			2012			2013		2012
Net interest income (expense)		$39,242		$39,180		$9		$1		$5,625			$5,615			$44,876		$44,796
Noninterest income	15,937		14,287		15,386		14,657		(1,763		)	1,462			29,560		30,406
Total income	55,179		53,467		15,395		14,658		3,862			7,077			74,436		75,202
Provision for loan losses	1,300		1,500		—		—		—			—			1,300		1,500
Noninterest expenses:
Depreciation and amortization expense	1,262		1,204		652		633		109			120			2,023		1,957
Other noninterest expenses	31,404		30,624		10,134		9,799		5,628			6,247			47,166		46,670
Total noninterest expenses	32,666		31,828		10,786		10,432		5,737			6,367			49,189		48,627
Income before income taxes	21,213		20,139		4,609		4,226		(1,875		)	710			23,947		25,075
Income tax expense (benefit)	7,898		6,914		1,815		1,577		(2,170		)	(567		)	7,543		7,924
Net income		$13,315		$13,225		$2,794		$2,649		$295			$1,277			$16,404		$17,151
Total assets at period end		$2,509,407		$2,331,097		$52,129		$49,869		$499,771			$660,084			$3,061,307		$3,041,050
Expenditures for long-lived assets		$737		$2,674		$54		$713		$46			$66			$837		$3,453