-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IYm9/FYW6o/F1zoSnEiN1YOWtsLGllhiTfglFrJA6P2r/acyyv4xqEuio9kTCe14 q/P37zbYxoYjLR6ZQSQPvg== 0000737468-99-000010.txt : 19990816 0000737468-99-000010.hdr.sgml : 19990816 ACCESSION NUMBER: 0000737468-99-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON TRUST BANCORP INC CENTRAL INDEX KEY: 0000737468 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 050404671 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13091 FILM NUMBER: 99688484 BUSINESS ADDRESS: STREET 1: 23 BROAD ST CITY: WESTERLY STATE: RI ZIP: 02891 BUSINESS PHONE: 4013481200 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended JUNE 30, 1999 or [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number: 000-13091 ------------------------------------- WASHINGTON TRUST BANCORP, INC. (Exact name of registrant as specified in its charter) ------------------------------------- RHODE ISLAND 05-0404671 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 23 BROAD STREET WESTERLY, RHODE ISLAND 02891 (Address of principal executive offices) (Zip Code) (401) 348-1200 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No The number of shares of common stock of the registrant outstanding as of July 31, 1999 was 10,141,290. Page 1 FORM 10-Q WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY For The Quarter Ended June 30, 1999 TABLE OF CONTENTS Page Number PART I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets June 30, 1999 and December 31, 1998 3 Consolidated Statements of Income Three Months and Six Months Ended June 30, 1999 and 1998 4 Consolidated Statements of Changes in Shareholders' Equity Six Months Ended June 30, 1999 and 1998 5 Consolidated Statements of Cash Flows Six Months Ended June 30, 1999 and 1998 6 Condensed Notes to Consolidated Financial Statements 8 Independent Auditors' Review Report 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk 18 PART II. Other Information 20 Signatures 21 This report contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Corporation's actual results could differ materially from those projected in the forward-looking statements as a result, among other factors, of changes in general national or regional economic conditions, changes in interest rates, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in the size and nature of the Corporation's competition, changes in loan default and charge-off rates, and changes in the assumptions used in making such forward-looking statements. WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY (Dollars in thousands) CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 1999 1998 - -------------------------------------------------------------------------------- Assets: Cash and due from banks $15,027 $18,475 Federal funds sold and other short-term investments 13,625 10,300 Mortgage loans held for sale 3,820 5,944 Securities: Available for sale, at fair value 344,333 315,265 Held to maturity, at cost; fair value $103,031 in 1999 and $96,548 in 1998 104,918 95,647 - -------------------------------------------------------------------------------- Total securities 449,251 410,912 Federal Home Loan Bank stock, at cost 16,444 16,444 Loans 476,185 449,502 Less allowance for loan losses 11,200 10,416 - -------------------------------------------------------------------------------- Net loans 464,985 439,086 Premises and equipment, net 23,081 22,985 Accrued interest receivable 5,911 5,540 Other assets 24,360 5,383 - -------------------------------------------------------------------------------- Total assets $1,016,504 $935,069 - -------------------------------------------------------------------------------- Liabilities: Deposits: Demand $97,192 $87,383 Savings 218,919 210,093 Time 283,860 277,847 - -------------------------------------------------------------------------------- Total deposits 599,971 575,323 Dividends payable 1,115 1,005 Short-term borrowings 19,661 15,033 Federal Home Loan Bank advances 314,894 262,106 Accrued expenses and other liabilities 6,598 8,536 - -------------------------------------------------------------------------------- Total liabilities 942,239 862,003 - -------------------------------------------------------------------------------- Shareholders' Equity: Common stock of $.0625 par value; authorized 30 million shares; issued 10,136,114 shares in 1999 and 10,010,962 shares in 1998 634 626 Paid-in capital 3,892 2,855 Retained earnings 65,280 62,196 Accumulated other comprehensive income 4,459 7,389 - -------------------------------------------------------------------------------- Total shareholders' equity 74,265 73,066 - -------------------------------------------------------------------------------- Total liabilities and shareholders' equity $1,016,504 $935,069 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY (Dollars in thousands, CONSOLIDATED STATEMENTS OF INCOME except per share data) (Unaudited) Three Months Six Months -------------------------------------------- Periods ended June 30, 1999 1998 1999 1998 - --------------------------------------------------------------------------------------------------------------------- Interest income: Interest and fees on loans $9,876 $10,022 $19,541 $20,094 Interest on securities 6,155 5,132 12,199 9,704 Dividends on corporate stock and Federal Home Loan Bank stock 515 535 1,047 1,043 Interest on federal funds sold and other short-term investments 104 115 245 284 - --------------------------------------------------------------------------------------------------------------------- Total interest income 16,650 15,804 33,032 31,125 - --------------------------------------------------------------------------------------------------------------------- Interest expense: Savings deposits 900 845 1,752 1,672 Time deposits 3,523 3,926 6,983 7,816 Federal Home Loan Bank advances 4,002 3,331 7,833 6,403 Other 254 288 474 520 - --------------------------------------------------------------------------------------------------------------------- Total interest expense 8,679 8,390 17,042 16,411 - --------------------------------------------------------------------------------------------------------------------- Net interest income 7,971 7,414 15,990 14,714 Provision for loan losses 450 450 900 900 - --------------------------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 7,521 6,964 15,090 13,814 - --------------------------------------------------------------------------------------------------------------------- Noninterest income: Trust revenue 1,475 1,361 2,894 2,585 Service charges on deposit accounts 758 742 1,483 1,375 Merchant processing fees 393 222 642 377 Net gains on sales of securities 122 351 384 392 Net gains on loan sales 231 414 558 743 Other income 661 225 1,011 507 - --------------------------------------------------------------------------------------------------------------------- Total noninterest income 3,640 3,315 6,972 5,979 - --------------------------------------------------------------------------------------------------------------------- Noninterest expense: Salaries and employee benefits 3,938 3,472 7,721 6,891 Net occupancy 543 502 1,047 961 Equipment 709 622 1,381 1,188 Merchant processing costs 295 227 436 338 Office supplies 150 178 307 336 Advertising and promotion 291 169 463 281 Other 1,392 1,620 3,145 2,985 - --------------------------------------------------------------------------------------------------------------------- Total noninterest expense 7,318 6,790 14,500 12,980 - --------------------------------------------------------------------------------------------------------------------- Income before income taxes 3,843 3,489 7,562 6,813 Income tax expense 1,144 977 2,250 1,908 - --------------------------------------------------------------------------------------------------------------------- Net income $2,699 $2,512 $5,312 $4,905 - --------------------------------------------------------------------------------------------------------------------- Per share information: Earnings per share - basic $.27 $.25 $.53 $.49 Earnings per share - diluted $.26 $.24 $.51 $.47 Cash dividends declared per share $.11 $.10 $.22 $.20
The accompanying notes are an integral part of these consolidated financial statements.
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY (Dollars in thousands) CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) Accumulated Other Common Paid-in Retained Comprehensive Treasury Stock Capital Earnings Income Stock Total - ---------------------------------------------------------------------------------------------------------------------- Balance at January 1, 1999 $626 $2,855 $62,196 $7,389 $- $73,066 Net income 5,312 5,312 Other comprehensive income net of tax: Net unrealized losses on securities, net of reclassification adjustment (2,930) (2,930) ------- Comprehensive income 2,382 Cash dividends declared (2,228) (2,228) Shares issued 8 1,037 1,045 - ---------------------------------------------------------------------------------------------------------------------- Balance at June 30, 1999 $634 $3,892 $65,280 $4,459 $- $74,265 - ---------------------------------------------------------------------------------------------------------------------- Balance at January 1, 1998 $413 $3,705 $56,360 $7,059 $(333) $67,204 Net income 4,905 4,905 Other comprehensive income net of tax: Net unrealized gains on securities, net of reclassification adjustment 1,213 1,213 -------- Comprehensive income 6,118 Cash dividends declared (2,000) (2,000) Shares issued 5 349 1,282 1,636 Shares repurchased (2,725) (2,725) - ---------------------------------------------------------------------------------------------------------------------- Balance at June 30, 1998 $418 $4,054 $59,265 $8,272 $(1,776) $70,233 - ----------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements.
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY (Dollars in thousands) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, 1999 1998 - -------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $5,312 $4,905 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 900 900 Depreciation of premises and equipment 1,427 1,171 Amortization of premium in excess of accretion of discount on debt securities 285 604 Net gains on sales of securities (384) (392) Net gains on loan sales (558) (743) Proceeds from sales of loans 33,275 45,469 Loans originated for sale (34,919) (46,182) Increase in accrued interest receivable (371) (801) Increase in other assets (3,697) (973) Increase (decrease) in accrued expenses and other liabilities 2,218 (533) Other, net (99) (124) - -------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 3,389 3,301 - -------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Securities available for sale: Purchases (84,012) (122,712) Proceeds from sales 16,175 22,544 Maturities and principal repayments 34,424 30,761 Securities held to maturity: Purchases (31,477) (6,388) Maturities and principal repayments 22,209 2,349 Principal collected on loans (under) over loan originations (22,634) 1,923 Proceeds from sales of other real estate owned 338 504 Purchases of premises and equipment (1,526) (2,301) Purchase of bank-owned life insurance (18,000) - - -------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (84,503) (73,320) - -------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Net increase in deposits 24,648 20,862 Net increase in other short-term borrowings 4,628 6,430 Proceeds from Federal Home Loan Bank advances 286,837 313,300 Repayment of Federal Home Loan Bank advances (234,049) (258,970) Purchase of treasury stock - (2,725) Proceeds from issuance of common stock 1,045 1,636 Cash dividends paid (2,118) (1,925) - -------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 80,991 78,608 - -------------------------------------------------------------------------------------------------------------------- Net (decrease) increase in cash and cash equivalents (123) 8,589 Cash and cash equivalents at beginning of year 28,775 26,128 - -------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $28,652 $34,717 - -------------------------------------------------------------------------------------------------------------------- (Continued)
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) Six months ended June 30, 1999 1998 - -------------------------------------------------------------------------------------------------------------------- Noncash Investing and Financing Activities: Net transfers from loans to other real estate owned $252 $44 Loans charged off 410 199 (Decrease) increase in net unrealized gain on securities available for sale (2,930) 1,213 Supplemental Disclosures: Interest payments $16,717 $16,385 Income tax payments 2,101 1,183
The accompanying notes are an integral part of these consolidated financial statements. WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY (Dollars in thousands) CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The accounting and reporting policies of Washington Trust Bancorp, Inc. and subsidiary (the "Corporation") are in accordance with generally accepted accounting principles and conform to general practices of the banking industry. In the opinion of management, the accompanying consolidated financial statements present fairly the Corporation's financial position as of June 30, 1999 and December 31, 1998 and the results of operations and cash flows for the interim periods presented. The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiary, The Washington Trust Company. All significant intercompany balances and transactions have been eliminated. The unaudited consolidated financial statements of Washington Trust Bancorp, Inc. presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1998, included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 1998. (2) Securities Available for Sale
Securities available for sale are summarized as follows: Amortized Unrealized Unrealized Fair Cost Gains Losses Value - --------------------------------------------------------------------------------------------------------------------- June 30, 1999 U.S. Treasury obligations and obligations of U.S. government-sponsored agencies $113,022 $745 $(952) $112,815 Mortgage-backed securities 173,803 529 (1,583) 172,749 Corporate bonds 36,681 4 (637) 36,048 Corporate stocks 13,039 10,036 (354) 22,721 - --------------------------------------------------------------------------------------------------------------------- Total 336,545 11,314 (3,526) 344,333 - --------------------------------------------------------------------------------------------------------------------- December 31, 1998 U.S. Treasury obligations and obligations of U.S. government-sponsored agencies 113,757 1,782 (12) 115,527 Mortgage-backed securities 143,906 666 (495) 144,077 Corporate bonds 27,533 179 (209) 27,503 Corporate stocks 17,842 10,408 (92) 28,158 - --------------------------------------------------------------------------------------------------------------------- Total $303,038 $13,035 $(808) $315,265 - ---------------------------------------------------------------------------------------------------------------------
Securities available for sale with a fair value of $70,686 and $27,800 were pledged to secure Treasury Tax and Loan deposits, borrowings and public deposits at June 30, 1999 and December 31, 1998, respectively. For the six months ended June 30, 1999, proceeds from sales of securities available for sale amounted to $16,175 while net realized gains on these sales amounted to $384. (3) Securities Held to Maturity
The amortized cost and fair value of securities held to maturity are summarized as follows: Amortized Unrealized Unrealized Fair Cost Gains Losses Value - --------------------------------------------------------------------------------------------------------------------- June 30, 1999 U.S. Treasury obligations and obligations of U.S. government-sponsored agencies $25,295 $25 $(417) $24,903 Mortgage-backed securities 51,938 142 (1,418) 50,662 States and political subdivisions 27,685 72 (291) 27,466 - --------------------------------------------------------------------------------------------------------------------- Total 104,918 239 (2,126) 103,031 - --------------------------------------------------------------------------------------------------------------------- December 31, 1998 U.S. Treasury obligations and obligations of U.S. government-sponsored agencies 21,987 133 (1) 22,119 Mortgage-backed securities 46,088 335 (96) 46,327 States and political subdivisions 27,572 531 (1) 28,102 - --------------------------------------------------------------------------------------------------------------------- Total $95,647 $999 $(98) $96,548 - ---------------------------------------------------------------------------------------------------------------------
There were no sales or transfers of securities held to maturity during the six months ended June 30, 1999. (4) Loan Portfolio The following is a summary of loans: June 30, December 31, 1999 1998 - -------------------------------------------------------------------------------- Commercial: Mortgages $86,409 $70,468 Construction and development 1,285 612 Other (1) 113,195 111,477 - -------------------------------------------------------------------------------- Total commercial 200,889 182,557 Residential real estate: Mortgages 184,486 179,589 Homeowner construction 10,981 10,046 - -------------------------------------------------------------------------------- Total residential real estate 195,467 189,635 Consumer (2) 79,829 77,310 - -------------------------------------------------------------------------------- Total loans $476,185 $449,502 - -------------------------------------------------------------------------------- (1) Loans to businesses and individuals, a substantial portion of which is fully or partially collateralized by real estate. (2) Includes credit card loans totaling $5.1 million and $5.4 million at June 30, 1999 and December 31,1998, respectively. (5) Allowance For Loan Losses The following is an analysis of the allowance for loan losses: Three Months Six Months ------------------------------------------------ Periods ended June 30, 1999 1998 1999 1998 - -------------------------------------------------------------------------------- Balance at beginning of period $10,768 $9,309 $10,416 $8,835 Provision charged to expense 450 450 900 900 Recoveries 250 97 294 176 Loans charged off (268) (144) (410) (199) - -------------------------------------------------------------------------------- Balance at end of period $11,200 $9,712 $11,200 $9,712 - -------------------------------------------------------------------------------- INDEPENDENT AUDITORS' REVIEW REPORT The Board of Directors and Shareholders Washington Trust Bancorp, Inc.: We have reviewed the consolidated balance sheet of Washington Trust Bancorp, Inc. and subsidiary (the "Corporation") as of June 30, 1999, the related consolidated statements of income for the three month and six-month periods ended June 30, 1999 and 1998, and changes in shareholders' equity and cash flows for the six-month periods ended June 30, 1999 and 1998. These consolidated financial statements are the responsibility of the Corporation's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of the Company as of December 31, 1998, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for the year then ended not presented herein; and in our report dated January 21, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1998, is fairly stated, in all material respects. KPMG LLP Providence, Rhode Island July 15, 1999 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net income for the three months ended June 30, 1999 amounted to $2.7 million, or $.26 per diluted share. Net income was 7.4% higher than the $2.5 million, or $.24 per diluted share, earned in the quarter ended June 30, 1998. The Corporation's rates of return on average assets and average equity for the second quarter of 1999 were 1.09% and 14.44%, respectively. Comparable amounts for the second quarter of 1998 were 1.14% and 14.31%. Net income for the six months ended June 30, 1999 amounted to $5.3 million, an increase of 8.3% from the $4.9 million reported for the comparable 1998 period. Diluted earnings per share for the six months ended June 30, 1999 amounted to $.51, up from $.47 per share earned in the six months ended June 30, 1998. The Corporation's rates of return on average assets and average equity for the six months ended June 30, 1999 were 1.09% and 14.30%, respectively. Comparable amounts for the 1998 period were 1.14% and 14.09%. For the second quarter of 1999, net interest income (the difference between interest earned on loans and investments and interest paid on deposits and other borrowings) amounted to $8.0 million, an increase of 7.5% from the $7.4 million reported for the second quarter of 1998. Net interest income for the six months ended June 30, 1999 rose 8.7% over the corresponding 1998 period. This increase was primarily attributable to net interest income generated by investment securities. (See additional discussion under the caption "Net Interest Income".) The Corporation's provision for loan losses was $450 thousand in the second quarter of 1999 and 1998, respectively. For the six months ended June 30, 1999, the provision for loan losses amounted to $900 thousand, unchanged from the comparable 1998 period. Other noninterest income (noninterest income excluding net gains on sales of securities) amounted to $3.5 million for the second quarter of 1999, up 18.7% from the corresponding 1998 quarter. The increase was primarily due to increases in other income, merchant processing fees and revenues for trust services. Included in other income was $196 thousand of earnings on bank-owned life insurance (BOLI) purchased during the quarter. Further discussion of BOLI is provided under the caption "Financial Condition and Liquidity". Other noninterest income amounted to $6.6 million for the six months ended June 30, 1999, up 17.9% from the corresponding 1998 period. For the three months ended June 30, 1999, net securities gains totaled $122 thousand, compared to $351 thousand for the quarter ended June 30, 1998. Comparable amounts for the six months ended June 30, 1999 and 1998 amounted to $384 thousand and $392 thousand, respectively. Total noninterest expense for the quarter ended June 30, 1999 amounted to $7.3 million, an increase of 7.8% from the comparable 1998 amount. Total noninterest expense for the six months ended June 30, 1999 amounted to $14.5 million, an increase of 11.7% over the comparable 1998 amount. The increases were primarily attributable to higher salaries and benefits expense and increases in equipment costs. Equipment costs for the six months ended June 30, 1999 rose 16.2% over the prior year period due primarily to depreciation expense associated with 1998 investments in technology. Included in other noninterest expense for the six months ended June 30, 1999 and 1998 were contributions of appreciated equity securities to the Corporation's charitable foundation amounting to $270 thousand and $323 thousand, respectively. These transactions resulted in realized securities gains of $262 thousand and $313 thousand, respectively, for the same periods. Net Interest Income (The accompanying schedule entitled "Average Balances / Net Interest Margin - Fully Taxable Equivalent Basis (FTE)" should be read in conjunction with this discussion.) FTE net interest income for the six months ended June 30, 1999 amounted to $16.6 million, up 8.9% over the same 1998 period due primarily to the growth in interest-earning assets. The net interest margin (FTE net interest income as a percentage of average interest-earning assets) for the six months ended June 30, 1999 and 1998 were 3.65% and 3.76%, respectively. For the six months ended June 30, 1999, average interest-earning assets amounted to $914.5 million, an increase of $105.7 million, or 13.1%, over the comparable 1998 amount. The growth in average interest-earning assets was due to growth in the securities portfolio. Total average securities rose $98.4 million or 27.8% over the comparable prior year period, mainly due to purchases of debt securities. The FTE rate of return on securities was 6.23% for the six months ended June 30, 1999, down from 6.46% for the same 1998 period. The decrease in yields reflects lower marginal rates on investment purchases. The FTE rate of return on average interest-earning assets was 7.41% for the six months ended June 30, 1999, down from 7.82% for the same 1998 period due to reductions in yields on loans and securities. The yield on average total loans amounted to 8.56% for the six months ended June 30, 1999, down from 8.87% in the comparable 1998 period due to changes in the prime rate as well as lower yields on new loan originations. Average total loans for the six months ended June 30, 1999 rose $7.3 million or 1.6% over the prior year and amounted to $461.7 million. Average consumer loans and residential real estate loans rose by 3.9% and 2.8% over the prior year, respectively, while average commercial loans declined slightly. As a result of prime rate decreases during the fourth quarter of 1998, the yields on consumer and residential real estate loans declined 48 basis points and 46 basis points to 8.60% and 7.71%, respectively. The yield on commercial loans amounted to 9.41%, down from the prior year yield of 9.48%. The Corporation's total cost of funds on interest-bearing liabilities amounted to 4.26% for the six months ended June 30, 1999, down from 4.64% for the comparable 1998 period. This decrease was due primarily to reduced rates paid on both borrowed funds and deposits. Average FHLB advances for the six months ended June 30, 1999 amounted to $295.1 million, up 34.5% from the $219.4 million average balance for the same 1998 period. The average rate paid on FHLB advances for the six months ended June 30, 1999 was 5.35%, a decrease of 49 basis points from the prior year rate. Average time deposits declined slightly to $283.6 million with a decrease of 53 basis points in the rate paid. Average savings deposits for the six months ended June 30, 1999 increased 12.2% from the comparable 1998 amount to $208.1 million. The rate paid on these deposits was 1.70% for the first six months of 1999, down from 1.80% for the same 1998 period. For the six months ended June 30, 1999, average demand deposits, an interest-free funding source, were up by $9.3 million, or 12.5%, from the same prior year period. Average Balances / Net Interest Margin - Fully Taxable Equivalent Basis The following table sets forth average balance and interest rate information. Income is presented on a fully taxable equivalent basis (FTE). For dividends on corporate stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency. Nonaccrual and renegotiated loans, as well as interest earned on these loans (to the extent recognized in the Consolidated Statements of Income) are included in amounts presented for loans.
Six months ended June 30, 1999 1998 - -------------------------------------------- ------------------------------------ ---------------------------------- Average Yield/ Average Yield/ (Dollars in thousands) Balance Interest Rate Balance Interest Rate - ---------------------------------------- ------------- ----------- ----------- -------------- ----------- ---------- Assets: Residential real estate loans $193,327 $7,394 7.71% $187,998 7,680 8.17% Commercial and other loans 191,175 8,921 9.41% 192,091 9,108 9.48% Consumer loans 77,157 3,291 8.60% 74,285 3,371 9.08% - -------------------------------------------------------------------------------------------------------------------- Total loans 461,659 19,606 8.56% 454,374 20,159 8.87% Federal funds sold and other short-term investments 10,389 245 4.76% 10,394 284 5.46% Taxable debt securities 385,194 11,592 6.07% 294,408 9,285 6.31% Nontaxable debt securities 27,122 916 6.81% 19,411 633 6.52% Corporate stocks and FHLB stock 30,139 1,236 8.27% 30,191 1,250 8.28% - -------------------------------------------------------------------------------------------------------------------- Total securities 452,844 13,989 6.23% 354,404 11,452 6.46% - -------------------------------------------------------------------------------------------------------------------- Total interest-earning assets 914,503 33,595 7.41% 808,778 31,611 7.82% - -------------------------------------------------------------------------------------------------------------------- Non interest-earning assets 56,659 50,613 - -------------------------------------------------------------------------------------------------------------------- Total assets $971,162 $859,391 - -------------------------------------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity: Savings deposits $208,066 1,752 1.70% $185,471 1,672 1.80% Time deposits 283,598 6,983 4.97% 284,222 7,816 5.50% FHLB advances 295,117 7,833 5.35% 219,364 6,403 5.84% Other 19,650 474 4.86% 18,421 520 5.65% - -------------------------------------------------------------------------------------------------------------------- Total interest-bearing liabilities 806,431 17,042 4.26% 707,478 16,411 4.64% Demand deposits 83,848 74,562 Non interest-bearing liabilities 6,605 7,743 - -------------------------------------------------------------------------------------------------------------------- Total liabilities 896,884 789,783 Total shareholders' equity 74,278 69,608 - -------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $971,162 $859,391 - -------------------------------------------------------------------------------------------------------------------- Net interest income $16,553 $15,200 - -------------------------------------------------------------------------------------------------------------------- Net interest spread 3.15% 3.18% - -------------------------------------------------------------------------------------------------------------------- Net interest margin 3.65% 3.76% - -------------------------------------------------------------------------------------------------------------------- Interest income amounts presented in the table above include the following adjustments for taxable equivalency: (Dollars in thousands) Six months ended June 30, 1999 1998 - -------------------------------------------------------------------------------- Commercial and other loans $65 $65 Nontaxable debt securities 309 214 Corporate stocks 189 207
Financial Condition and Liquidity Total assets amounted to $1.016 billion at June 30, 1999, an increase of $81.4 million, or 8.7%, from the December 31, 1998 amount of $935.1 million. Average assets totaled $971.2 million for the six months ended June 30, 1999, up by 13.0% over the comparable 1998 period. Nonperforming assets (nonaccrual loans and property acquired through foreclosure) amounted to $4.3 million or .43% of total assets at June 30, 1999, down from $5.9 million or .63% of total assets at December 31, 1998. Securities Available for Sale - The carrying value of securities available for sale at June 30, 1999 amounted to $344.3 million, an increase of 9.2% over the December 31, 1998 amount of $315.3 million. This increase was attributable to purchases of debt securities. The net unrealized gain on securities available for sale amounted to $7.8 million, down 36.3% from the December 31, 1998 balance of $12.2 million. This decrease was attributable to the effect of increases in Treasury rates that occurred in the first six months of 1999. Securities Held to Maturity - The carrying value of securities held to maturity amounted to $104.9 million at June 30, 1999, up from $95.6 million at December 31, 1998. This increase was due to purchases of mortgage-backed securities and obligations of U.S. government-sponsored agencies. The net unrealized loss on securities held to maturity amounted to approximately $1.9 million at June 30, 1999, down from an unrealized gain of $901 thousand at December 31, 1998. The decline was primarily due to the effects of increases in Treasury rates that occurred in the first six months of 1999. Loans - Total loans amounted to $476.2 million at June 30, 1999, an increase of $26.7 million, or 5.9%, from the December 31, 1998 balance of $449.5 million. Growth in the loan portfolio was led by increases in the commercial loan portfolio. Commercial loans increased $18.3 million or 10.0% to $200.9 million at June 30, 1999. Total residential real estate loans and consumer loans increased by $5.8 million and $2.5 million over the December 31, 1998 balance, respectively. The Corporation has entered into an agreement to sell its consumer credit card portfolio of approximately $5.1 million. The transaction is expected to be completed in the third quarter of 1999 and to result in a pre-tax gain, net of expenses, of approximately $500 thousand. The Corporation will continue to provide merchant credit card processing services. Other assets - Other assets totaled $24.4 million at June 30, 1999, up $19.0 million from $5.4 million at December 31, 1999. The increase was primarily due to the purchase of bank-owned life insurance (BOLI) during the second quarter of 1999. The Corporation purchased $18.0 million of BOLI as a financing tool for employee benefits. The Corporation expects to benefit from the BOLI contracts as a result of the tax-free growth in cash surrender value and death benefits which are expected to be generated over time. The purchase of the life insurance policy results in an interest sensitive asset on the Corporation's consolidated balance sheet that provides monthly tax-free income to the Corporation. The largest risk to the BOLI program is credit risk of the insurance carriers. To mitigate this risk, annual financial condition reviews are completed on all carriers. BOLI is included in other assets on the Corporation's consolidated balance sheets at its cash surrender value. Increases in BOLI's cash surrender value are reported as other income in the Corporation's consolidated statements of income. Deposits - Total deposits amounted to $600.0 million at June 30, 1999, up by 4.3% from the December 31, 1998 amount of $575.3 million. Demand and savings deposits increased by $9.8 million and $8.8 million, respectively, due to normal seasonal deposit inflow. Time deposits amounted to $283.9 million, an increase of 2.2% from the December 31, 1998 balance of $277.8 million. Brokered certificates of deposit of $9.8 million are included in time deposits at June 30, 1999. Borrowings - The Corporation utilizes advances from the Federal Home Loan Bank as well as other short-term borrowings as part of its overall funding strategy. The additional FHLB advances and short-term borrowings were used to meet short-term liquidity needs, to fund loan growth and to purchase securities. FHLB advances amounted to $314.9 million at June 30, 1999, up by $52.8 million from the December 31, 1998 amount. In addition, short-term borrowings outstanding at June 30, 1999 amounted to $19.7 million. For the six months ended June 30, 1999, net cash provided by operations amounted to $3.4 million, the majority of which was generated by net income. Net cash used in investing activities amounted to $84.5 million and was primarily used to purchase securities. Net cash provided by financing activities of $81.0 million was generated mainly by a net increase in FHLB advances of $52.8 million, and by an increase in deposits of $24.6 million. (See Consolidated Statements of Cash Flows for additional information.) Expansion In April of 1999, the Corporation announced its intention to open a trust and investment office in Providence, Rhode Island. The Corporation expects to open this office by the end of 1999. Nonperforming Assets Nonperforming assets are summarized in the following table: June 30, December 31, (Dollars in thousands) 1999 1998 - -------------------------------------------------------------------------------- Nonaccrual loans 90 days or more past due $2,120 $2,421 Nonaccrual loans less than 90 days past due 2,041 3,192 - -------------------------------------------------------------------------------- Total nonaccrual loans 4,161 5,613 Other real estate owned 169 243 - -------------------------------------------------------------------------------- Total nonperforming assets $4,330 $5,856 - -------------------------------------------------------------------------------- Nonaccrual loans as a percentage of total loans .87% 1.25% Nonperforming assets as a percentage of total assets .43% .63% Allowance for loan losses to nonaccrual loans 269.17% 185.57% Nonperforming assets continue to decline and are at the lowest level in over ten years. Total nonperforming assets decreased from $5.9 million or .63% of total assets at December 31, 1998 to $4.3 million or .43% of total assets at June 30, 1999. Not included in the analysis of nonperforming assets at June 30, 1999 and December 31, 1998 above are approximately $103 thousand and $150 thousand, respectively, of loans greater than 90 days past due and still accruing. These loans consist primarily of residential mortgages that are considered well-collateralized and in the process of collection and therefore are deemed to have no loss exposure. Impaired loans consist of all nonaccrual commercial loans. At June 30, 1999, the recorded investment in impaired loans was $2.8 million, which had a related allowance amounting to $625 thousand. The balance of impaired loans that did not require an allowance at June 30, 1999 was $8 thousand. During the six months ended June 30, 1999, the average recorded investment in impaired loans was $3.0 million. Also during this period, interest income recognized on impaired loans amounted to approximately $179 thousand. Interest income on impaired loans is recognized on a cash basis only. The following is an analysis of nonaccrual loans by loan category: June 30, December 31, (Dollars in thousands) 1999 1998 - -------------------------------------------------------------------------------- Residential mortgages $1,064 $1,417 Commercial: Mortgages 977 1,522 Other (1) 1,791 2,141 Consumer 329 533 - -------------------------------------------------------------------------------- Total nonaccrual loans $4,161 $5,613 - -------------------------------------------------------------------------------- (1) Loans to businesses and individuals, a substantial portion of which is fully or partially collateralized by real estate. Capital Resources Total equity capital amounted to $74.3 million, or 7.3% of total assets at June 30, 1999. This compares to $73.1 million, or 7.8% at December 31, 1998. The reduction in this ratio is due primarily to growth in the loan portfolio and purchases of investment securities. Total equity increased by approximately $1.2 million from December 31, 1998. The increase in equity resulting from earnings retention was reduced by a $2.9 million decline in net unrealized gains on securities. (See the Consolidated Statements of Changes in Shareholders' Equity for additional information.) At June 30, 1999, the Corporation's Tier 1 capital ratio was 12.46% and the total risk-adjusted capital ratio was 14.35%. These ratios were both above the ratios required to be categorized as well-capitalized. Dividends payable at June 30, 1999 amounted to approximately $1.1 million, representing $.11 per share payable on July 15, 1999, an increase of 10.0% over the $.10 per share declared in the fourth quarter of 1998. The source of funds for dividends paid by the Corporation is dividends received from its subsidiary bank. The subsidiary bank is a regulated enterprise, and as such its ability to pay dividends to the parent is subject to regulatory review and restriction. Book value per share as of June 30, 1999 and December 31, 1998 amounted to $7.33 and $7.30, respectively. On April 15, 1999, the Corporation announced that its Board of Directors voted to terminate the Corporation's stock repurchase program which had been previously announced on December 22, 1997. The repurchase program permitted the acquisition of up to 225,000 shares (adjusted to reflect a 3-for-2 stock split in August 1998) in the open market or in private transactions, based upon market conditions. Approximately 139,000 shares were repurchased under this program. Acquisition of PierBank On February 23, 1999, the Corporation announced that it had signed a definitive agreement to acquire PierBank, a Rhode Island-chartered community bank with assets of $59.4 million, which has its headquarters in South Kingstown, Rhode Island. Under the terms of the agreement, the Corporation will exchange shares of its common stock for shares of PierBank common stock. Each PierBank share will initially be valued at approximately $8.60, for a total transaction value of $13.8 million. The actual number and value of the Corporation's common shares to be issued to PierBank shareholders will be based on an exchange formula using the average closing price of the Corporation's common stock during the 15 trading days prior to receiving final regulatory approval. Based on the initial exchange ratio, the Corporation will exchange .452 shares of its common stock for each share of common stock held by a PierBank shareholder. In accordance with the agreement, PierBank granted the Corporation an option to acquire under certain terms and conditions up to 319,810 shares at $7.48 per share. The option was granted as an inducement to the Corporation's willingness to enter into the agreement. On June 16, 1999, the shareholders of PierBank approved the Agreement and Plan of Merger under which PierBank will be merged with and into The Washington Trust Company, the wholly-owned subsidiary of the Corporation. The purchase, which is expected to be completed in the third quarter of 1999, is subject to approval by state and federal banking regulators. The transaction is expected to be a tax-free reorganization and accounted for as a pooling of interests. On April 28, 1999, the Corporation filed with the Securities and Exchange Commission a Proxy Statement/Prospectus and Registration Statement on Form S-4 in connection with the Corporation's proposed acquisition of PierBank. On May 10, 1999, the Corporation filed an amendment to the Registration Statement. Also on May 10, 1999, the Registration Statement was declared effective by the Securities and Exchange Commission. Year 2000 The statements in the following section include "Year 2000 readiness disclosure" within the meaning of the Year 2000 Information and Readiness Disclosure Act. The following "Year 2000" discussion contains forward-looking statements which represent the Corporation's beliefs or expectations regarding future events. When used in the Year 2000 discussion, the words "believes," "expects," "estimates," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, without limitation, the Corporation's expectations as to when it will complete the phases of the Plan, its estimated costs, and its belief that its statements involve a number of risks and uncertainties that could cause the actual results to differ materially from the projected results. Factors that may cause these differences include, but are not limited to, the availability of qualified personnel and other information technology resources, the ability to identify and remediate all date sensitive lines of computer code, and the actions of governmental agencies or other third parties with respect to Year 2000 problems. The Corporation has developed a Year 2000 Project Plan (the "Plan") to address the computer-related issues concerning the century date change (the transition from the year 1999 to the year 2000). The Corporation's information technology (IT) and non-information technology (non-IT) systems have been included in the Plan. The Corporation uses internal computer systems, data communications systems and telecommunications systems as well as outside service providers (including hardware and software) to support and account for loans, deposits, fiduciary services and other purposes. Substantially all of the application software used by the Corporation is provided by outside vendors, under license or through outside service bureaus. The Corporation has distinguished between mission-critical and other, less critical, systems in assessing the needs of the Plan. The Plan includes five phases: awareness, assessment, renovation, validation and testing, and contingency planning. The validation and testing of all IT and non-IT systems were completed by June 30, 1999. The Corporation's evaluation is subject to on-going verification and review by its internal audit staff. The Corporation expects that the total costs associated with the project will amount to approximately $500 thousand. The Corporation plans to account for most of these costs as expense items. In some cases, acquired hardware and software items will be capitalized and amortized in accordance with the Corporation's existing accounting policy. Total costs incurred through June 30, 1999 amounted to approximately $350 thousand. These costs consisted primarily of system testing and modification, internal staffing and consulting, and were primarily recorded in noninterest expenses. The remaining project costs will be incurred throughout 1999. The costs of the project and the date on which the Corporation plans to complete Year 2000 testing are based on management's best estimates, which were derived utilizing numerous assumptions of future events including the continued availability of certain resources, third party modification plans and other factors. There can be no guarantee that the systems of other companies, or outside vendors on which the Corporation's systems rely, will be remedied on a timely basis. Therefore, the Corporation could possibly experience a negative impact to the extent other entities not affiliated with the Corporation are not Year 2000 compliant. The Corporation is in the process of evaluating the risk of customer failure to prepare for the century date change, any associated effect on the ability of customers to repay outstanding loans, and impact on the adequacy of the level of the allowance for loan losses. Because these efforts are now on-going, the Corporation is unable to assess the likelihood of any material adverse effect at this time. The Corporation's risk management program includes emergency backup and recovery procedures to be followed in the event of failure of a business-critical system. These procedures were expanded to include specific procedures for potential Year 2000 issues, and contingency plans to protect against Year 2000-related interruptions. These plans include backup procedures and identification of alternative suppliers. Business resumption contingency planning was completed by June 30, 1999. While the Corporation believes that it is taking reasonable steps with respect to the Year 2000 issue, if the phases of the Plan are not completed on time, the costs associated with becoming Year 2000 compliant exceed the Corporation's estimates, third party providers are not Year 2000 compliant on a timely basis, or customers with material loan obligations are unable to meet their repayment obligations due to Year 2000 problems, the Year 2000 issue could have a material impact on the Corporation's financial results. In addition, the Corporation's efforts to address the Year 2000 issue are being monitored by its federal banking regulators. Failure to be Year 2000 compliant on a timely basis could subject the Corporation to formal supervisory or enforcement actions. Recent Accounting Developments In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities". This Statement establishes accounting and reporting standards for derivative instruments and for hedging activities. SFAS No. 133 requires a corporation to recognize all derivatives as either assets or liabilities in the balance sheet and to measure those instruments at fair value. This Statement defines conditions and criteria to be used in designating a derivative as a specific type of hedging instrument. SFAS No. 133 also explains the accounting for changes in the fair value of a derivative, which depends on the intended use and the resulting designation. Under this Statement, a corporation is required to establish at the inception of the hedge the method to be used for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. Those methods must be consistent with the corporation's approach to managing risk. The Corporation has not yet determined what the effect of the adoption of this pronouncement will have on the financial position and earnings of the Corporation. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133". SFAS No. 133 is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000 and is not to be applied retroactively to financial statements of prior periods. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity and Liquidity Interest rate risk is one of the major market risks faced by the Corporation. The Corporation's objective is to manage assets and funding sources to produce results which are consistent with its liquidity, capital adequacy, growth, risk and profitability goals. The Corporation manages interest rate risk using income simulation to measure interest rate risk inherent in its on-balance sheet and off-balance sheet financial instruments at a given point in time by showing the effect of interest rate shifts on net interest income over a 60 month period. The simulation results are reviewed to determine whether the negative exposure of net interest income to changes in interest rates remains within established tolerance levels over a 24-month horizon, and to develop appropriate strategies to manage this exposure. In addition, the ALCO reviews 60-month horizon results to assess longer-term risk inherent in the balance sheet, although no 60-month horizon tolerance levels are specified. As of June 30, 1999, the Corporation's estimated exposure as a percentage of net interest income for the next 12 month period and the subsequent 12 month period thereafter (months 13 - 24), respectively, is as follows: Months 1 - 12 Months 13 - 24 - ---------------------------------------- ------------------- ------------------ 200 basis point increase in rates -2.0% -5.6% 200 basis point decrease in rates +1.2% +0.6% Since this simulation assumes the Corporation's balance sheet will remain static over the 24-month simulation horizon, the results do not reflect adjustments in strategy that the Corporation could implement in response to rate shifts, and should therefore not be relied upon as a projection of net interest income. For a complete discussion of interest rate sensitivity and liquidity, including simulation assumptions, see the Corporation's Annual Report on Form 10-K for the year ended December 31, 1998. The Corporation also monitors the potential change in market value of its available for sale debt securities using both parallel rate shifts of up to 200 basis points and "value at risk" analysis. The purpose is to determine market value exposure which may not be captured by income simulation, but which might result in changes to the Corporation's capital position. Results are calculated using industry-standard modeling analytics and securities data. The Corporation uses the results to manage the effect of market value changes on the Corporation's capital position. As of June 30, 1999, an immediate 200 basis point rise in rates would result in a 4.6% decline in the value of the Corporation's available for sale debt securities. Conversely, a 200 basis point fall in rates would result in a 2.1% increase in the value of the Corporation's available for sale debt securities. "Value at risk" analysis measures the theoretical maximum market value loss over a given time period based on recent historical price activity of different classes of securities. The anticipated maximum market value reduction for the bank's available for sale securities portfolio at June 30, 1999, including both debt and equity securities, was 4.8%, assuming a one-year time horizon and a 5% probability of occurrence for "value at risk" analysis. PART II OTHER INFORMATION Item 1. Legal Proceedings No material changes since the filing of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. Item 2. Changes in Securities and Use of Proceeds None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Shareholders was held on April 27, 1999. (c) The results of matters voted upon are presented below. i. A proposal to elect Gary Bennett, Larry Hirsch, Mary Kennard and Joseph Kirby as directors of the Corporation for three year terms expiring at the 2002 Annual Meeting of Shareholders passed as follows: Votes Votes Abstentions and Broker In Favor Withheld Non-votes ------------ ----------------- --------------- --------------------------- Gary Bennett 8,409,801 44,189 0 Larry Hirsch 8,405,557 48,432 0 Mary Kennard 8,404,179 49,810 0 Joseph Kirby 8,414,949 39,041 0 ii. A proposal for the ratification of KPMG LLP to serve as independent auditors of the Corporation for the current fiscal year ending December 31, 1999 was passed by a vote of 8,332,179 shares in favor; 87,416 shares against, with 34,394 abstentions and broker non-votes. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibit index Exhibit No. ----------------- 10 Change in Control Agreement (1) (2) 11 Statement re Computation of Per Share Earnings (b) There were no reports on Form 8-K filed during the quarter ended June 30, 1999. (1) Not filed herewith. In accordance with Rule 12b-32 promulgated pursuant to the Securities Exchange Act of 1934, as amended, reference is made to the document previously filed with the Commission, which is incorporated by reference herein. (2) Management contract or compensatory plan or arrangement. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WASHINGTON TRUST BANCORP, INC. (Registrant) August 13, 1999 By: John C. Warren ----------------------------------------------------- John C. Warren Chairman and Chief Executive Officer (principal executive officer) August 13, 1999 By: David V. Devault ----------------------------------------------------- David V. Devault Executive Vice President, Treasurer and Chief Financial Officer (principal financial and accounting officer) EX-10 2 Exhibit 10 Change in Control Agreements with Executive Officers WASHINGTON TRUST BANCORP, INC. 23 BROAD STREET WESTERLY, RHODE ISLAND 02891 In the second quarter of 1999, the Registrant entered into a Change of Control Agreement with one of its executive officers. The form of Agreement, filed as Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1999, contains blanks where the term of the Agreement and the multiple of the executive's base amount provided under the Agreement vary for certain executives. The executive officer who entered into the Agreement, the term of the Agreement and the multiple of the executive's base amount provided under the Agreement are listed in the following chart: Term of Agreement Number Times Base Amount Executive Officer (Sections 3, 4 and 13) (Section 5 a) - ----------------------------- ---------------------- --------------------------- John F. Treanor President and Chief Operating Officer 1 year 2 times EX-11 3
EXHIBIT 11 Washington Trust Bancorp, Inc. Computation of Per Share Earnings For the Periods Ended June 30, 1999 and 1998 Three months ended June 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------ (In thousands, except per share amounts) Basic Diluted Basic Diluted ----------------- --------------- ---------------- -------------- Net income $2,699 $2,699 $2,512 $2,512 Share amounts: Average outstanding 10,122.8 10,122.8 9,959.9 9,959.9 Common stock equivalents - 217.0 - 384.1 - ------------------------------------------------ ----------------- --------------- ---------------- -------------- Weighted average outstanding 10,122.8 10,339.8 9,959.9 10,344.0 - ------------------------------------------------ ----------------- --------------- ---------------- -------------- Earnings per share $.27 $.26 $.25 $.24 - ------------------------------------------------ ----------------- --------------- ---------------- -------------- Six months ended June 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------ (In thousands, except per share amounts) Basic Diluted Basic Diluted ----------------- --------------- ---------------- -------------- Net income $5,312 $5,312 $4,905 $4,905 Share amounts Average outstanding 10,090.1 10,090.1 9,966.9 9,966.9 Common stock equivalents - 246.0 - 397.8 - ------------------------------------------------ ----------------- --------------- ---------------- -------------- Weighted average outstanding 10,090.1 10,336.1 9,966.9 10,364.7 - ------------------------------------------------ ----------------- --------------- ---------------- -------------- Earnings per share $.53 $.51 $.49 $.47 - ------------------------------------------------ ----------------- --------------- ---------------- --------------
EX-27 4
9 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO OF WASHINGTON TRUST BANCORP, INC. AS OF JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1999 JUN-30-1999 15,027 0 13,625 0 344,333 104,918 103,031 476,185 11,200 1,016,504 599,971 19,661 322,607 0 0 0 634 73,631 1,016,504 19,541 13,246 245 33,032 8,735 17,042 15,990 900 384 14,500 7,562 7,562 0 0 5,312 .53 .51 3.65 0 0 0 0 10,416 410 294 11,200 0 0 0
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