Business Segments

3 Months Ended

Mar. 31, 2017

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 March 31,	2017		2016		2017			2016			2017		2016		2017		2016
Net interest income (expense)		$23,557		$22,607		($32	)		($18	)		$5,154		$5,146		$28,679		$27,735
Provision for loan losses	400		500		—			—			—		—		400		500
Net interest income (expense) after provision for loan losses	23,157		22,107		(32		)	(18		)	5,154		5,146		28,279		27,235
Noninterest income	4,442		4,940		9,477			9,174			591		520		14,510		14,634
Noninterest expenses:
Depreciation and amortization expense	663		687		463			469			52		55		1,178		1,211
Other noninterest expenses (1)	14,607		13,991		6,448			6,799			3,053		3,449		24,108		24,239
Total noninterest expenses	15,270		14,678		6,911			7,268			3,105		3,504		25,286		25,450
Income before income taxes	12,329		12,369		2,534			1,888			2,640		2,162		17,503		16,419
Income tax expense	4,029		4,255		978			733			714		496		5,721		5,484
Net income		$8,300		$8,114		$1,556			$1,155			$1,926		$1,666		$11,782		$10,935
Total assets at period end		$3,344,773		$3,178,248		$64,984			$64,496			$979,006		$595,466		$4,388,763		$3,838,210
Expenditures for long-lived assets	373		1,019		302			84			58		74		733		1,177

(1) Other noninterest expenses for the Wealth Management Services segment includes a $310 thousand benefit resulting from the reduction of a contingent consideration liability in the three months endedMarch 31, 2017.