Business Segments

6 Months Ended

Jun. 30, 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 June 30,	2014		2013		2014			2013		2014		2013			2014		2013
Net interest income (expense)		$19,799		$19,731		($7	)		$2		$4,676		$2,676			$24,468		$22,409
Provision for loan losses	450		700		—			—		—		—			450		700
Net interest income (expense) after provision for loan losses	19,349		19,031		(7		)	2		4,676		2,676			24,018		21,709
Noninterest income	3,860		7,991		8,530			7,912		424		491			12,814		16,394
Noninterest expenses:
Depreciation and amortization expense	621		624		272			325		52		54			945		1,003
Other noninterest expenses	13,219		16,268		5,482			5,022		2,802		2,712			21,503		24,002
Total noninterest expenses	13,840		16,892		5,754			5,347		2,854		2,766			22,448		25,005
Income before income taxes	9,369		10,130		2,769			2,567		2,246		401			14,384		13,098
Income tax expense (benefit)	3,102		3,402		1,018			949		467		(236		)	4,587		4,115
Net income		$6,267		$6,728		$1,751			$1,618		$1,779		$637			$9,797		$8,983
Total assets at period end		$2,704,109		$2,509,407		$53,303			$52,129		$559,610		$499,771			$3,317,022		$3,061,307
Expenditures for long-lived assets		$1,308		$367		$65			$28		$17		$15			$1,390		$410

(Dollars in thousands)	Commercial Banking				Wealth Management Services					Corporate					Consolidated Total
Six months ended June 30,	2014		2013		2014			2013		2014		2013			2014		2013
Net interest income (expense)		$39,538		$39,242		($11	)		$9		$8,777		$5,625			$48,304		$44,876
Provision for loan losses	750		1,300		—			—		—		—			750		1,300
Net interest income (expense) after provision for loan losses	38,788		37,942		(11		)	9		8,777		5,625			47,554		43,576
Noninterest income (expense)	8,401		15,937		16,595			15,386		7,188		(1,763		)	32,184		29,560
Noninterest expenses:
Depreciation and amortization expense	1,206		1,262		583			652		103		109			1,892		2,023
Other noninterest expenses	26,772		31,404		10,869			10,134		12,207		5,628			49,848		47,166
Total noninterest expenses	27,978		32,666		11,452			10,786		12,310		5,737			51,740		49,189
Income (loss) before income taxes	19,211		21,213		5,132			4,609		3,655		(1,875		)	27,998		23,947
Income tax expense (benefit)	6,363		7,898		1,894			1,815		646		(2,170		)	8,903		7,543
Net income (loss)		$12,848		$13,315		$3,238			$2,794		$3,009		$295			$19,095		$16,404
Total assets at period end		$2,704,109		$2,509,407		$53,303			$52,129		$559,610		$499,771			$3,317,022		$3,061,307
Expenditures for long-lived assets		$2,383		$737		$236			$54		$62		$46			$2,681		$837