EX-99 2 exhibit99.htm EXHIBIT 99.1 PRESS RELEASE DATED APRIL 25, 2005 Exhibit 99.1 Press Release dated April 25, 2005

Contact: Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: April 25, 2005
FOR IMMEDIATE RELEASE

Washington Trust Quarterly Earnings Up 9%

Westerly, Rhode Island…Washington Trust Bancorp, Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington Trust Company, today announced first quarter ended March 31, 2005 net income of $5.4 million, an increase of 9 percent from the $5.0 million reported for the first quarter of 2004. On a diluted earnings per share basis, the Corporation earned 40 cents for the first quarter of 2005, up 8 percent from the 37 cents earned for the same quarter in 2004. The returns on average equity and average assets for the three months ended March 31, 2005 were 14.20% and 0.94%, respectively, compared to 13.90% and 1.00%, respectively, for the same period in 2004.

John C. Warren, Washington Trust Chairman and Chief Executive Officer, noted that “During the first quarter of 2005, we increased the cash dividend for the thirteenth consecutive year; announced an agreement to purchase Weston Financial Group, a Wellesley, Mass. registered investment advisor with assets under management in excess of $1.2 billion; and posted a 9 percent increase in earnings. Growth continues to be a key ingredient to the Corporation’s success.”

On March 23, 2005, Washington Trust announced the signing of a definitive agreement to acquire Weston Financial Group. It is currently anticipated that the acquisition, which is subject to state and federal regulatory approval and other customary conditions to closing, will most likely be completed in the third quarter of 2005.

Net interest income, the primary source of Washington Trust’s operating income, amounted to $14.6 million for the first quarter of 2005, up 12 percent from the $13.1 million reported for the same period a year ago. This increase in net interest income was primarily due to a 17 percent increase in interest-earning assets. The net interest margin for the three months ended March 31, 2005 was 2.76%, up 7 basis points from the fourth quarter of 2004, but lower than the 2.87% level reported for the first quarter of 2004. The improvement in the net interest margin during the first quarter of 2005 primarily resulted from higher yields on commercial and consumer loans. The decrease in the net interest margin from the first quarter of 2004 was largely attributable to increased funding costs for deposits and borrowed funds, which were partially offset by higher yields on investment securities and loans.
- M O R E -

Washington Trust
Page Two, April 25, 2005

Noninterest income is an important source of revenue for Washington Trust. For the first quarter of 2005, noninterest income totaled $6.1 million, compared to $5.9 million reported for the same quarter a year ago. Primary sources of noninterest income are trust and investment management fees, service charges on deposit accounts, merchant credit card processing fees and net gains on sales of loans.

Revenue from trust and investment management services represented 53% of noninterest income in the first quarter of 2005. This revenue amounted to $3.2 million for the three months ended March 31, 2005, up 5 percent from the same period in 2004. Trust and investment management fee revenue is largely dependent on the value of assets under administration and is closely tied to the performance of the financial markets. Trust assets under administration amounted to $1.797 billion at March 31, 2005, compared to $1.871 billion at December 31, 2004.

For the first quarter of 2005, service charges on deposit accounts totaled $1.0 million, down 14 percent from the same period in 2004, due, in part, to the introduction of free checking.

For the quarter ended March 31, 2005, noninterest expenses amounted to $12.4 million, up 7 percent from the same period a year ago. Salaries and employee benefit expense, the largest component of noninterest expenses, totaled $7.5 million for the three months ended March 31, 2005, up 7 percent from the first quarter of 2004. Included in this amount was a 3 percent increase in salary costs as well as a 14 percent increase in benefit costs including pension and stock-based compensation.

At March 31, 2005, total assets amounted to $2.342 billion, up $34.3 million from December 31, 2004. In the first quarter of 2005, total loans increased $44.5 million to $1.294 billion, while deposits rose $71.2 million to $1.529 billion at March 31, 2005.

Residential real estate loans grew $35.1 million, or 7 percent, during the first quarter of 2005, including an increase of $20.0 million in purchased residential mortgages. Consumer loans increased $6.6 million in the first three months of 2005, primarily due to growth in home equity lines and loans. Commercial loans, including commercial real estate and construction loans, amounted to $510.5 million at March 31, 2005, up $2.8 million from $507.7 million reported at December 31, 2004.

- M O R E -


Washington Trust
Page Three, April 25, 2005

Demand deposits totaled $190.9 million at March 31, 2005, compared to $189.6 million at December 31, 2004. Savings deposits, including money market deposits, amounted to $619.0 million at March 31, 2005, down from the December 31, 2004 balance of $623.4 million. Time deposits (including brokered certificates of deposit) amounted to $719.2 million, up $74.3 million, or 12 percent, during the first quarter of 2005. Brokered certificates of deposit amounted to $207.7 million, up $38.1 million, or 22 percent, during the three months ended March 31, 2005. The Corporation utilizes brokered certificates of deposit as part of its overall funding program along with other sources. During the first quarter of 2005, the Corporation reduced its Federal Home Loan Bank advance borrowing position by $32.9 million.

Nonperforming assets (nonaccrual loans and property acquired through foreclosure) declined during the quarter and were below prior year and prior quarter levels. Nonperforming assets totaled $2.4 million, or .10% of total assets, at March 31, 2005. The allowance for loan losses was $17.1 million, or 1.32% of total loans, at March 31, 2005, compared to $16.8 million, or 1.34%, at December 31, 2004. The Corporation’s loan loss provision amounted to $300 thousand for the quarter ended March 31, 2005, up from $250 thousand for the fourth quarter of 2004 and $120 thousand for the first quarter of 2004. The increase was in response to growth in the loan portfolio.

Total shareholders’ equity amounted to $149.2 million at March 31, 2005, compared to $151.9 million at December 31, 2004. Book value per share as of March 31, 2005 and December 31, 2004 amounted to $11.23 and $11.44, respectively.

Washington Trust Chairman and Chief Executive Officer, John C. Warren, and David V. Devault, Executive Vice President, Treasurer, and Chief Financial Officer, will host a conference call on Monday, April 25, at 4:30 p.m. (Eastern Time) to discuss the Corporation’s first quarter results. Access to the call is available in a listen-only mode on Washington Trust’s web site, http://investorrelations.washtrust.com. A replay of the call will be posted in this same location on the web site shortly after the conclusion of the call.

Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. The Bank offers a full range of financial services, including trust and investment management, through its offices in Rhode Island and southeastern Connecticut. Washington Trust Bancorp, Inc.’s common stock trades on The Nasdaq Stock MarketÒ under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrust.com.

- M O R E -

Washington Trust
Page Four, April 25, 2005


# # #
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, performance or achievements 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 the market value of trust and investment assets under management, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default and charge-off rates, changes in the size and nature of the Corporation’s competition, changes in legislation or regulation and accounting principles, policies and guidelines and changes in the assumptions used in making such forward-looking statements.
Washington Trust Bancorp, Inc. and Subsidiary
  
FINANCIAL SUMMARY
  
   
   
THREE MONTHS ENDED
  
   
MAR. 31,
  
MAR. 31,
  
DEC. 31,
  
(Dollars and shares in thousands, except per share amounts)
  
2005
  
2004
  
2004
  
Operating Results
                    
Net interest income
  
$
14,621
  
$
13,083
  
$
14,384
  
Provision for loan losses
    
300
    
120
    
250
  
Net realized gains on securities
    
-
    
-
    
387
  
Other noninterest income
    
6,079
    
5,940
    
6,587
  
Noninterest expenses
    
12,444
    
11,680
    
13,094
  
Income tax expense
    
2,546
    
2,268
    
2,516
  
Net income
    
5,410
    
4,955
    
5,498
  
                     
Per Share
                    
Basic earnings
  
$
0.41
  
$
0.38
  
$
0.41
  
Diluted earnings
  
$
0.40
  
$
0.37
  
$
0.40
  
Dividends declared
  
$
0.18
  
$
0.17
  
$
0.17
  
                     
Weighted Average Shares Outstanding
                    
Basic
    
13,282.7
    
13,202.6
    
13,259.7
  
Diluted
    
13,617.3
    
13,513.3
    
13,605.1
  
                     
Average Balance Sheet
                    
Federal funds sold and other short-term investments
  
$
10,670
  
$
11,155
  
$
11,022
  
Taxable debt securities
    
830,738
    
809,505
    
845,307
  
Nontaxable debt securities
    
19,132
    
14,235
    
18,937
  
Corporate stocks and Federal Home Loan Bank stock
    
52,852
    
54,518
    
52,397
  
Loans:
                    
Commercial and other
    
512,260
    
412,642
    
498,236
  
Residential real estate
    
530,845
    
390,834
    
513,133
  
Consumer
    
230,728
    
170,589
    
222,321
  
                     
Total loans
    
1,273,833
    
974,065
    
1,233,690
  
                     
Earning assets
    
2,187,225
    
1,863,478
    
2,161,353
  
Total assets
    
2,313,405
    
1,988,142
    
2,291,735
  
                     
Deposits:
                    
Demand deposits
    
182,281
    
170,289
    
203,162
  
NOW accounts
    
171,108
    
149,060
    
172,811
  
Money market accounts
    
196,577
    
94,430
    
208,203
  
Savings accounts
    
248,957
    
253,543
    
255,647
  
Time deposits
    
688,878
    
527,531
    
628,030
  
                     
Total deposits
    
1,487,801
    
1,194,853
    
1,467,853
  
                     
Federal Home Loan Bank advances
    
655,564
    
633,195
    
653,746
  
Shareholders’ equity
    
152,420
    
142,582
    
151,291
  
                     
Key Ratios
                    
Return on average assets
    
0.94
%
  
1.00
%
  
0.96
%
Return on average equity
    
14.20
%
  
13.90
%
  
14.54
%
Interest rate spread (taxable equivalent basis)
    
2.49
%
  
2.62
%
  
2.42
%
Net interest margin (taxable equivalent basis)
    
2.76
%
  
2.87
%
  
2.69
%
                     
Allowance for Loan Losses
                    
Balance at beginning of period
  
$
16,771
  
$
15,914
  
$
16,627
  
Provision charged to earnings
    
300
    
120
    
250
  
Net (charge-offs) recoveries
    
(13
)
  
140
    
(106
)
                     
Balance at end of period
  
$
17,058
  
$
16,174
  
$
16,771
  

 
Washington Trust Bancorp, Inc. and Subsidiary
  
FINANCIAL SUMMARY
  
   
   
MAR. 31,
  
DEC. 31,
  
MAR. 31,
  
(Dollars and shares in thousands, except per share amounts)
  
2005
  
2004
  
2004
  
                     
Period-End Balance Sheet
                    
Assets
  
$
2,342,138
  
$
2,307,820
  
$
2,054,232
  
Total securities
    
866,873
    
890,058
    
884,592
  
Loans:
                    
Commercial and other:
                    
Mortgages
    
260,058
    
266,670
    
227,367
  
Construction and development
    
31,060
    
29,263
    
14,463
  
Other
    
219,346
    
211,778
    
179,610
  
Total commercial and other
    
510,464
    
507,711
    
421,440
  
                     
Residential real estate:
                    
Mortgages
    
529,177
    
494,720
    
388,843
  
Homeowner construction
    
19,663
    
18,975
    
11,721
  
Total residential real estate
    
548,840
    
513,695
    
400,564
  
                     
Consumer:
                    
Home equity lines
    
157,752
    
155,001
    
126,701
  
Other
    
77,134
    
73,269
    
55,643
  
Total consumer
    
234,886
    
228,270
    
182,344
  
                     
Total loans
    
1,294,190
    
1,249,676
    
1,004,348
  
                     
Deposits:
                    
Demand deposits
    
190,883
    
189,588
    
179,468
  
NOW accounts
    
180,240
    
174,727
    
159,738
  
Money market accounts
    
189,870
    
196,775
    
109,349
  
Savings accounts
    
248,852
    
251,920
    
253,390
  
Time deposits
    
719,202
    
644,875
    
542,814
  
                     
Total deposits
    
1,529,047
    
1,457,885
    
1,244,759
  
                     
Brokered deposits included in time deposits
    
207,652
    
169,587
    
126,243
  
Federal Home Loan Bank advances
    
639,874
    
672,748
    
644,203
  
Shareholders’ equity
    
149,225
    
151,852
    
144,571
  
                     
Capital Ratios
                    
Tier 1 risk-based capital
    
9.21
%
  
9.15
%
  
9.84
%
Total risk-based capital
    
10.75
%
  
10.72
%
  
11.42
%
Tier 1 leverage ratio
    
5.44
%
  
5.35
%
  
5.66
%
                     
Share Information
                    
Shares outstanding at end of period
    
13,291.1
    
13,269.4
    
13,206.9
  
Book value per share
  
$
11.23
  
$
11.44
  
$
10.95
  
Tangible book value per share
  
$
9.44
  
$
9.64
  
$
9.10
  
Market value per share
  
$
27.48
  
$
29.31
  
$
26.40
  
                     
Credit Quality
                    
Nonaccrual loans
  
$
2,376
  
$
4,731
  
$
2,920
  
Other real estate owned, net
    
4
    
4
    
11
  
Nonperforming assets to total assets
    
0.10
%
  
0.21
%
  
0.14
%
Nonaccrual loans to total loans
    
0.18
%
  
0.38
%
  
0.29
%
Allowance for loan losses to nonaccrual loans
    
717.93
%
  
354.49
%
  
553.90
%
Allowance for loan losses to total loans
    
1.32
%
  
1.34
%
  
1.61
%
                     
Assets Under Administration
                    
Market value
  
$
1,797,394
  
$
1,870,510
  
$
1,782,153
  

Washington Trust Bancorp, Inc. and Subsidiary
  
CONSOLIDATED BALANCE SHEETS
  
   
(Unaudited)
      
   
March 31,
  
December 31,
  
(Dollars in thousands)
  
2005
  
2004
  
Assets:
              
Cash and due from banks
  
$
40,578
  
$
34,801
  
Federal funds sold and other short-term investments
    
19,950
    
17,280
  
Mortgage loans held for sale
    
2,038
    
1,095
  
Securities:
              
Available for sale, at fair value; amortized cost $694,309 in 2005 and $724,209 in 2004
    
696,705
    
735,666
  
Held to maturity, at cost; fair value $169,459 in 2005 and $156,270 in 2004
    
170,168
    
154,392
  
               
Total securities
    
866,873
    
890,058
  
               
Federal Home Loan Bank stock, at cost
    
34,966
    
34,373
  
               
Loans:
              
Commercial and other
    
510,464
    
507,711
  
Residential real estate
    
548,840
    
513,695
  
Consumer
    
234,886
    
228,270
  
               
Total loans
    
1,294,190
    
1,249,676
  
Less allowance for loan losses
    
17,058
    
16,771
  
               
Net loans
    
1,277,132
    
1,232,905
  
               
Premises and equipment, net
    
23,801
    
24,248
  
Accrued interest receivable
    
9,805
    
9,367
  
Investment in bank-owned life insurance
    
29,522
    
29,249
  
Goodwill
    
22,591
    
22,591
  
Identifiable intangible assets
    
1,162
    
1,309
  
Other assets
    
13,720
    
10,544
  
               
Total assets
  
$
2,342,138
  
$
2,307,820
  
               
Liabilities:
              
Deposits:
              
Demand deposits
  
$
190,883
  
$
189,588
  
NOW accounts
    
180,240
    
174,727
  
Money market accounts
    
189,870
    
196,775
  
Savings accounts
    
248,852
    
251,920
  
Time deposits
    
719,202
    
644,875
  
               
Total deposits
    
1,529,047
    
1,457,885
  
               
Dividends payable
    
2,394
    
2,257
  
Federal Home Loan Bank advances
    
639,874
    
672,748
  
Other borrowings
    
2,535
    
3,417
  
Accrued expenses and other liabilities
    
19,063
    
19,661
  
               
Total liabilities
    
2,192,913
    
2,155,968
  
               
Shareholders’ Equity:
              
Common stock of $.0625 par value; authorized 30 million shares;
              
issued 13,299,455 shares in 2005 and 13,278,685 in 2004
    
831
    
830
  
Paid-in capital
    
31,857
    
31,718
  
Retained earnings
    
116,330
    
113,314
  
Unearned stock-based compensation
    
(667
)
  
(737
)
Accumulated other comprehensive income
    
1,064
    
6,937
  
Treasury stock, at cost; 8,321 shares in 2005 and 9,309 in 2004
    
(190
)
  
(210
)
               
Total shareholders’ equity
    
149,225
    
151,852
  
               
Total liabilities and shareholders’ equity
  
$
2,342,138
  
$
2,307,820
  

Washington Trust Bancorp, Inc. and Subsidiary
  
CONSOLIDATED STATEMENTS OF INCOME
  
       
(Dollars and shares in thousands, except per share amounts)
      
   
Unaudited
  
Three months ended March 31,
  
2005
  
2004
  
               
Interest income:
              
Interest and fees on loans
  
$
17,825
  
$
13,641
  
Interest on securities
    
8,619
    
8,255
  
Dividends on corporate stock and Federal Home Loan Bank stock
    
619
    
474
  
Interest on federal funds sold and other short-term investments
    
55
    
20
  
               
Total interest income
    
27,118
    
22,390
  
               
Interest expense:
              
Deposits
    
6,932
    
4,747
  
Federal Home Loan Bank advances
    
5,549
    
4,545
  
Other
   
16
    
15
  
               
Total interest expense
    
12,497
    
9,307
  
               
Net interest income
    
14,621
    
13,083
  
Provision for loan losses
    
300
    
120
  
               
Net interest income after provision for loan losses
    
14,321
    
12,963
  
               
Noninterest income:
              
Trust and investment management fees
    
3,212
    
3,055
  
Service charges on deposit accounts
    
1,011
    
1,170
  
Merchant processing fees
    
778
    
597
  
Net gains on loan sales
    
487
    
349
  
Income from bank-owned life insurance
    
272
    
299
  
Other income
    
319
    
470
  
               
Total noninterest income
    
6,079
    
5,940
  
               
Noninterest expense:
              
Salaries and employee benefits
    
7,459
    
6,977
  
Net occupancy
    
853
    
816
  
Equipment
    
882
    
770
  
Merchant processing costs
    
636
    
466
  
Advertising and promotion
    
303
    
466
  
Outsourced services
    
413
    
376
  
Legal, audit and professional fees
    
392
    
258
  
Amortization of intangibles
    
147
    
161
  
Other
    
1,359
    
1,390
  
               
Total noninterest expense
    
12,444
    
11,680
  
               
Income before income taxes
    
7,956
    
7,223
  
Income tax expense
    
2,546
    
2,268
  
               
Net income
  
$
5,410
  
$
4,955
  
               
Weighted average shares outstanding - basic
    
13,282.7
    
13,202.6
  
Weighted average shares outstanding - diluted
    
13,617.3
    
13,513.3
  
Per share information:
              
Basic earnings per share
  
$
0.41
  
$
0.38
  
Diluted earnings per share
  
$
0.40
  
$
0.37
  
Cash dividends declared per share
  
$
0.18
  
$
0.17