Share-Based Compensation Arrangements (Tables)

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Compensation Cost for Share-based Compensation Arrangements

Amounts recognized in the consolidated financial statements for stock options, nonvested share awards and nonvested performance shares are as follows:

(Dollars in thousands)
Years ended December 31,	2013		2012		2011
Share-based compensation expense		$1,876		$1,962		$1,394
Related income tax benefit		$673		$700		$497

Share Options Fair Value Assumptions

assumptions were used in determining the grant date fair value of the stock option awards granted:

	2013		2012		2011
Expected term (years)	8		9		9
Expected dividend yield	3.77	%	3.45	%	3.33	%
Weighted average expected volatility	42.85	%	42.97	%	41.90	%
Weighted average risk-free interest rate	2.46	%	1.53	%	3.05	%
Weighted average grant-date fair value	$10.35		$7.46		$7.46

Washington Trust uses historical data to estimate stock 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 stock option was based on the U.S. Treasury yield curve in effect at the date of grant.

Share Options Activity

A summary of the status of Washington Trust’s stock options outstanding as of and the year ended December 31, 2013 is presented below:

	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (000’s)
Beginning of period	645,797			$23.58
Granted	54,600		32.77
Exercised	(258,351	)	23.97
Forfeited or expired	(13,658	)	24.46
End of period	428,388			$24.50	5.9		$5,451
At end of period;
Options exercisable	206,938			$24.20	3.4		$2,694
Options expected to vest in future periods	221,450			$24.77	8.3		$2,757

Schedule of Stock Options Outstanding and Options Exercisable

Additional information concerning options outstanding and options exercisable at December 31, 2013 is summarized as follows:

	Options Outstanding				Options Exercisable
Exercise Price Ranges	Number of Shares	Weighted Average Remaining Life (Years)	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
$16.39 to $19.66	65,282	6.0		$17.59	44,282		$17.44
$19.67 to $22.94	55,700	7.3	21.71		1,500	21.71
$22.95 to $26.22	159,192	6.6	23.70		67,542	24.12
$26.23 to $29.49	93,614	1.6	27.50		93,614	27.50
$29.50 to $32.77	54,600	9.8	32.77		—	—
	428,388	5.9		$24.50	206,938		$25.20

Nonvested Share Units Activity

A summary of the status of Washington Trust’s nonvested shares as of and for the year ended December 31, 2013 is presented below:

	Number of Shares		Weighted Average Grant Date Fair Value
Beginning of period	108,775			$20.82
Granted	24,400		29.90
Vested	(40,089	)	18.30
Forfeited	(2,561	)	22.14
End of period	90,525			$24.34

Nonvested Performance Shares Activity

A summary of the status of Washington Trust’s performance share awards as of and for the year ended December 31, 2013 is presented below:

	Number of Shares		Weighted Average Grant Date Fair Value
Beginning of period	119,020			$21.45
Granted	49,138		26.37
Vested	(17,975	)	15.11
Forfeited	(26,066	)	23.59
End of period	124,117			$23.87