Business Segments

6 Months Ended

Jun. 30, 2016

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 unit include activity not related to the segments.

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, operations and other support functions.

Commercial Banking

The Commercial Banking segment includes commercial, residential and consumer lending activities; equity in losses of unconsolidated investments in real estate limited partnerships; mortgage banking activities; deposit generation; 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 investment management; financial planning; personal trust and estate services, including services as trustee, personal representative, custodian and guardian; and settlement of decedents’ estates. Institutional trust services are also provided, including fiduciary 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 operating segments 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,	2016		2015		2016			2015			2016		2015		2016		2015
Net interest income (expense)		$21,947		$21,212		($17	)		($9	)		$4,846		$4,825		$26,776		$26,028
Provision for loan losses	450		100		—			—			—		—		450		100
Net interest income (expense) after provision for loan losses	21,497		21,112		(17		)	(9		)	4,846		4,825		26,326		25,928
Noninterest income	5,290		5,588		9,481			8,912			1,143		761		15,914		15,261
Noninterest expenses:
Depreciation and amortization expense	697		638		470			299			57		51		1,224		988
Other noninterest expenses (1)	15,038		13,868		6,701			6,465			3,067		2,978		24,806		23,311
Total noninterest expenses	15,735		14,506		7,171			6,764			3,124		3,029		26,030		24,299
Income before income taxes	11,052		12,194		2,293			2,139			2,865		2,557		16,210		16,890
Income tax expense	3,767		3,993		871			838			515		556		5,153		5,387
Net income		$7,285		$8,201		$1,422			$1,301			$2,350		$2,001		$11,057		$11,503
Total assets at period end		$3,238,789		$3,058,410		$65,423			$53,236			$612,869		$532,831		$3,917,081		$3,644,477
Expenditures for long-lived assets	306		943		104			87			229		88		639		1,118

(1) Other noninterest expenses for the Wealth Management Services segment includes $433 thousand of acquisition related expenses for the three months endedJune 30, 2015.

(Dollars in thousands)	Commercial Banking				Wealth Management Services						Corporate				Consolidated Total
Six months ended June 30,	2016		2015		2016			2015			2016		2015		2016		2015
Net interest income (expense)		$44,554		$41,837		($35	)		($23	)		$9,992		$9,916		$54,511		$51,730
Provision for loan losses	950		100		—			—			—		—		950		100
Net interest income (expense) after provision for loan losses	43,604		41,737		(35		)	(23		)	9,992		9,916		53,561		51,630
Noninterest income	10,230		10,666		18,655			17,347			1,663		1,268		30,548		29,281
Noninterest expenses:
Depreciation and amortization expense	1,384		1,310		939			605			112		111		2,435		2,026
Other noninterest expenses (1)	29,029		27,454		13,500			12,380			6,516		5,970		49,045		45,804
Total noninterest expenses	30,413		28,764		14,439			12,985			6,628		6,081		51,480		47,830
Income before income taxes	23,421		23,639		4,181			4,339			5,027		5,103		32,629		33,081
Income tax expense	8,022		7,723		1,604			1,682			1,011		1,163		10,637		10,568
Net income		$15,399		$15,916		$2,577			$2,657			$4,016		$3,940		$21,992		$22,513
Total assets at period end		$3,238,789		$3,058,410		$65,423			$53,236			$612,869		$532,831		$3,917,081		$3,644,477
Expenditures for long-lived assets	1,325		2,010		188			201			303		133		1,816		2,344

(1) Other noninterest expenses for the Wealth Management Services segment includes $433 thousand of acquisition related expenses for the six months endedJune 30, 2015.