Business Segments

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Business Segments

Business Segments

Washington Trust segregates financial information in assessing its results among its Commercial Banking and Wealth Management Services operating segments.  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, net gain on sale of business line as well as administrative and executive expenses not allocated to the operating segments and the residual impact of methodology allocations such as funds transfer pricing offsets.

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 March 31,	2014		2013		2014			2013		2014		2013			2014		2013
Net interest income		$19,739		$19,511		($4	)		$7		$4,101		$2,949			$23,836		$22,467
Noninterest income	4,541		7,946		8,065			7,474		6,764		(2,254		)	19,370		13,166
Total income	24,280		27,457		8,061			7,481		10,865		695			43,206		35,633
Provision for loan losses	300		600		—			—		—		—			300		600
Depreciation and amortization expense	585		638		311			327		51		55			947		1,020
Other noninterest expenses	13,553		15,136		5,387			5,112		9,405		2,916			28,345		23,164
Total noninterest expenses	14,138		15,774		5,698			5,439		9,456		2,971			29,292		24,184
Income before income taxes	9,842		11,083		2,363			2,042		1,409		(2,276		)	13,614		10,849
Income tax expense (benefit)	3,261		3,843		876			763		179		(1,178		)	4,316		3,428
Net income (loss)		$6,581		$7,240		$1,487			$1,279		$1,230		($1,098	)		$9,298		$7,421
Total assets at period end		$2,577,350		$2,439,300		$52,475			$51,737		$564,321		$560,811			$3,194,146		$3,051,848
Expenditures for long-lived assets		$1,075		$370		$171			$26		$45		$31			$1,291		$427