Washington Trust Bancorp (WASH) 8-K Washington Trust Posts Record Earnings

Exhibit 99.1

[Graphic Omitted]

NASDAQ: WASH

Contact:Elizabeth B. Eckel

Senior Vice President, Marketing

Telephone: (401) 348-1309

E-mail: ebeckel@washtrust.com

Date: January 26, 2006

FOR IMMEDIATE RELEASE

Washington Trust Posts Record Earnings

Up 12% for Fourth Quarter and 11% for the Year

Westerly, Rhode Island…Washington Trust Bancorp, Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington Trust Company, today announced fourth quarter 2005 net income of $6.2 million, an increase of 12 percent from the $5.5 million reported for the fourth quarter of 2004. On a per diluted share basis, the Corporation earned 45 cents for the fourth quarter of 2005, up 5 cents, or 12.5 percent, from the 40 cents earned for the same quarter in 2004. Other highlights include:

·   Fourth quarter 2005 return on average equity and average assets were 15.63% and 1.03%, respectively, compared to 14.54% and 0.96%, respectively, in 2004.

·   Total loans increased 12 percent from December 31, 2004.

·   Total deposits up 12 percent from December 31, 2004.

·   Asset quality remained strong as nonperforming assets to total assets declined from 0.21% a year ago to 0.10% at December 31, 2005.

Net income for the year ended December 31, 2005 amounted to $23.0 million, an increase of 11 percent from the $20.8 million reported for the same period a year ago. On a per diluted share basis, earnings for the year ended December 31, 2005 were $1.69, up 15 cents from the $1.54 for 2004.

As previously reported, Washington Trust completed its acquisition of Weston Financial Group, Inc. (“Weston Financial”) on August 31, 2005. Financial results for the fourth quarter of 2005 include a full quarter of Weston Financial operations for the first time. Results for the year ended December 31, 2005 include the operations of Weston Financial for the period subsequent to August 31, 2005. In addition, one-time expenses associated with the acquisition equivalent to 3 cents per share were recognized in the third quarter of 2005.

-M O R E-

Washington Trust

Page Two, January 26, 2006

“We had an outstanding quarter and an exceptional year, with record earnings and earnings per share,” stated John C. Warren, Washington Trust Chairman and Chief Executive Officer. He continued, “These results illustrate our success at managing our key lines of business and are gratifying considering the highly competitive and challenging interest rate environment in which we operate.”

Net interest income for the fourth quarter of 2005 increased $1.3 million, or 9 percent, compared to the fourth quarter a year ago. This increase in net interest income was attributable to the higher amount of loans as a percentage of interest-earning assets and to changes in loan and deposit rates. The net interest margin for the three months ended December 31, 2005 amounted to 2.84%, compared to 2.78% in the third quarter of 2005, and 2.69% in the fourth quarter of 2004.

For the year 2005, net interest income increased $6.2 million, or 11 percent, which reflects a $191.1 million increase in the balance of average interest-earning assets and a 5 basis point increase in the net interest margin.

Excluding net realized gains on securities, noninterest income for the fourth quarter of 2005 amounted to $9.2 million, or 37% of total revenues, compared to $6.6 million, or 31%, for the fourth quarter a year ago. Noninterest income (excluding net realized gains on securities) increased 39 percent over the same quarter a year ago, mainly due to higher revenues from wealth management and trust services. Primarily due to the acquisition of Weston Financial, fourth quarter 2005 revenue from wealth management and trust services increased $2.2 million, or 63.5 percent, over the fourth quarter of 2004. Revenue from wealth management and trust services is largely dependent on the value of assets under administration and is closely tied to the performance of the financial markets. Assets under administration totaled $3.272 billion at December 31, 2005 and included $1.376 billion attributable to Weston Financial. Assets under administration were $1.871 billion at December 31, 2004.

Noninterest income (excluding net realized gains on securities) for the year ended December 31, 2005 increased $3.9 million, or 15 percent, primarily due to the $3.4 million increase in revenues from wealth management and trust services.

- M O R E -

Washington Trust

Page Three, January 26, 2006

The Corporation recognized net realized gains on securities of $337 thousand and $387 thousand in the fourth quarter of 2005 and 2004, respectively, resulting principally from the Corporation’s annual contributions of appreciated equity securities to the Corporation’s charitable foundation. The cost of the contributions, included in noninterest expenses, amounted to $522 thousand and $454 thousand in the fourth quarter of 2005 and 2004, respectively.

Noninterest expenses for the fourth quarter of 2005 increased $2.7 million, or 20 percent, over the fourth quarter a year ago. Approximately $1.9 million, or 70 percent, of this increase was attributable to the operating expenses of Weston Financial.

For the year ended December 31, 2005, noninterest expenses totaled $56.4 million, up $6.0 million, or 12 percent, from 2004. Excluding one-time acquisition charges and the operating expenses of Weston Financial, noninterest expenses for year 2005 were up $2.9 million, or 6 percent, over last year, with the largest increase in salaries and employee benefits.

Washington Trust’s loan portfolio amounted to $1.402 billion at December 31, 2005, up $152.2 million, or 12 percent, in 2005. Residential real estate loans grew $69.0 million, or 13 percent, during the twelve months of 2005, including an increase of $13.3 million in purchased residential mortgages. Commercial loans, including commercial real estate and construction loans, grew $47.0 million, or 9 percent, from the balance at December 31, 2004. Consumer loans increased $36.2 million, or 16 percent, in 2005, primarily due to growth in home equity lines and loans.

Total securities declined $106.1 million in 2005. The flattening of the yield curve has made reinvestment of maturing balances relatively unattractive during this period. The funds provided by this deleveraging were primarily used to reduce the Federal Home Loan Bank advance borrowing position by $127.4 million. Total deposits amounted to $1.639 billion at December 31, 2005, up $181.4 million, or 12 percent, from the balance at December 31, 2004 with the largest increase in time deposits.

- M O R E -

Washington Trust

Page Four, January 26, 2006

Asset quality, as measured by the level of nonperforming assets, continued to be strong in 2005. Nonperforming assets (nonaccrual loans and property acquired through foreclosure) totaled $2.4 million, or 0.10% of total assets, at December 31, 2005, compared to $4.7 million, or 0.21%, a year ago. Loan recoveries, net of charge-offs, amounted to $197 thousand in 2005 and $247 thousand in 2004.

The allowance for loan losses was $17.9 million, or 1.28% of total loans, at December 31, 2005, compared to $16.8 million, or 1.34% of total loans, at December 31, 2004. The Corporation’s loan loss provision charged to earnings amounted to $300 thousand for the fourth quarter of 2005 and $1.2 million for the year 2005. Comparable amounts for the prior year were $250 thousand for the fourth quarter of 2004 and $610 thousand for the year 2004. The increase in the Corporation’s loan loss provision was in response to growth in the loan portfolio.

Total shareholders’ equity amounted to $158.4 million at December 31, 2005, compared to $151.9 million at December 31, 2004. Book value per share as of December 31, 2005 and 2004 amounted to $11.86 and $11.44, respectively.

Washington Trust Chairman and Chief Executive Officer, John C. Warren, and David V. Devault, Executive Vice President, Secretary, Treasurer, and Chief Financial Officer, will host a conference call on Thursday, January 26, at 4:30 p.m. (Eastern Time) to discuss the Corporation’s fourth 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. Washington Trust offers personal banking, business banking and wealth management services through its offices in Rhode Island, Massachusetts and southeastern Connecticut. Washington Trust Bancorp, Inc.’s common stock trades on The Nasdaq Stock Market^Ò under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrust.com.

# # #

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 Subsidiaries
FINANCIAL SUMMARY
	Three Months Ended
	Dec. 31,			Dec. 31,			Sep. 30,
(Dollars and shares in thousands, except per share amounts)	2005			2004			2005
Operating Results
Net interest income	$	15,703		$	14,384		$	15,360
Provision for loan losses		300			250			300
Net realized gains on securities		337			387			17
Other noninterest income		9,162			6,587			8,357
Noninterest expenses		15,766			13,094			14,810
Income tax expense		2,983			2,516			2,802
Net income		6,153			5,498			5,822
Per Share
Basic earnings	$	0.46		$	0.41		$	0.44
Diluted earnings	$	0.45		$	0.40		$	0.43
Dividends declared	$	0.18		$	0.17		$	0.18
Weighted Average Shares Outstanding
Basic		13,362.9			13,259.7			13,330.3
Diluted		13,670.1			13,605.1			13,641.9
Key Ratios
Return on average assets		1.03	%		0.96	%		0.98	%
Return on average equity		15.63	%		14.54	%		14.75	%
Interest rate spread (taxable equivalent basis)		2.53	%		2.42	%		2.46	%
Net interest margin (taxable equivalent basis)		2.84	%		2.69	%		2.78	%
Allowance for Loan Losses
Balance at beginning of period	$	17,614		$	16,627		$	17,442
Provision charged to earnings		300			250			300
Reclassification of allowance on off-balance sheet exposures		-			-			(250	)
Net (charge-offs) recoveries		4			(106	)		122
Balance at end of period	$	17,918		$	16,771		$	17,614

Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
	Twelve Months Ended
	Dec. 31,			Dec. 31,
(Dollars and shares in thousands, except per share amounts)	2005			2004
Operating Results
Net interest income	$	60,656		$	54,441
Provision for loan losses		1,200			610
Net realized gains on securities		357			248
Other noninterest income		30,589			26,657
Noninterest expenses		56,393			50,373
Income tax expense		10,985			9,534
Net income		23,024			20,829
Per Share
Basic earnings	$	1.73		$	1.57
Diluted earnings	$	1.69		$	1.54
Dividends declared	$	0.72		$	0.68
Weighted Average Shares Outstanding
Basic		13,319.7			13,227.8
Diluted		13,631.2			13,542.7
Key Ratios
Return on average assets		0.98	%		0.97	%
Return on average equity		14.80	%		14.40	%
Interest rate spread (taxable equivalent basis)		2.49	%		2.48	%
Net interest margin (taxable equivalent basis)		2.79	%		2.74	%
Allowance for Loan Losses
Balance at beginning of period	$	16,771		$	15,914
Provision charged to earnings		1,200			610
Reclassification of allowance on off-balance sheet exposures		(250	)		-
Loan recoveries, net of charge-offs		197			247
Balance at end of period	$	17,918		$	16,771

Washington Trust Bancorp, Inc. and Subsidiaries
FINANCIAL SUMMARY
	Dec. 31,			Sep. 30,			Dec. 31,
(Dollars and shares in thousands, except per share amounts)	2005			2005			2004
Period-End Balance Sheet
Assets	$	2,402,003		$	2,403,161		$	2,307,820
Total securities		783,941			782,207			890,058
Loans:
Commercial and other:
Mortgages		291,292			285,450			266,670
Construction and development		37,190			33,862			29,263
Other		226,252			235,457			211,778
Total commercial and other		554,734			554,769			507,711
Residential real estate:
Mortgages		565,680			568,675			494,720
Homeowner construction		17,028			16,302			18,975
Total residential real estate		582,708			584,977			513,695
Consumer:
Home equity lines		161,100			163,727			155,001
Other		103,366			92,639			73,269
Total consumer		264,466			256,366			228,270
Total loans		1,401,908			1,396,112			1,249,676
Deposits:
Demand deposits		196,102			216,061			189,588
NOW accounts		178,677			186,615			174,727
Money market accounts		223,255			219,982			196,775
Savings accounts		212,499			227,834			251,920
Time deposits		828,725			759,746			644,875
Total deposits		1,639,258			1,610,238			1,457,885
Brokered deposits included in time deposits		200,115			172,598			169,587
Federal Home Loan Bank advances		545,323			577,936			672,748
Shareholders’ equity		158,446			157,251			151,852
Capital Ratios
Tier 1 risk-based capital		9.06	%		8.82	%		9.15	%
Total risk-based capital		10.51	%		10.31	%		10.72	%
Tier 1 leverage ratio		5.45	%		5.32	%		5.35	%
Share Information
Shares outstanding at end of period		13,361.8			13,347.0			13,269.4
Book value per share	$	11.86		$	11.78		$	11.44
Tangible book value per share	$	7.79		$	7.68		$	9.64
Market value per share	$	26.18		$	27.19		$	29.31
Credit Quality
Nonaccrual loans	$	2,414		$	1,873		$	4,731
Other real estate owned, net		-			-			4
Nonperforming assets to total assets		0.10	%		0.08	%		0.21	%
Nonaccrual loans to total loans		0.17	%		0.13	%		0.38	%
Allowance for loan losses to nonaccrual loans		742.25	%		940.42	%		354.49	%
Allowance for loan losses to total loans		1.28	%		1.26	%		1.34	%
Assets Under Administration
Market value	$	3,271,756		$	3,219,011		$	1,870,510

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
	(Unaudited)
(Dollars in thousands)	December 31,			December 31,
	2005			2004
Assets:
Cash and due from banks	$	48,997		$	34,801
Federal funds sold and other short-term investments		17,166			17,280
Mortgage loans held for sale		439			1,095
Securities:
Available for sale, at fair value; amortized cost $620,638 in 2005 and $724,209 in 2004		619,234			735,666
Held to maturity, at cost; fair value $162,756 in 2005 and $156,270 in 2004		164,707			154,392
Total securities		783,941			890,058
Federal Home Loan Bank stock, at cost		34,966			34,373
Loans:
Commercial and other		554,734			507,711
Residential real estate		582,708			513,695
Consumer		264,466			228,270
Total loans		1,401,908			1,249,676
Less allowance for loan losses		17,918			16,771
Net loans		1,383,990			1,232,905
Premises and equipment, net		23,737			24,248
Accrued interest receivable		10,594			9,367
Investment in bank-owned life insurance		30,360			29,249
Goodwill and identifiable intangible assets		54,372			23,900
Other assets		13,441			10,544
Total assets	$	2,402,003		$	2,307,820
Liabilities:
Deposits:
Demand deposits	$	196,102		$	189,588
NOW accounts		178,677			174,727
Money market accounts		223,255			196,775
Savings accounts		212,499			251,920
Time deposits		828,725			644,875
Total deposits		1,639,258			1,457,885
Dividends payable		2,408			2,257
Federal Home Loan Bank advances		545,323			672,748
Junior subordinated debentures		22,681			-
Other borrowings		9,774			3,417
Accrued expenses and other liabilities		24,113			19,661
Total liabilities		2,243,557			2,155,968
Shareholders’ Equity:
Common stock of $.0625 par value; authorized 30 million shares;
issued 13,372,295 shares in 2005 and 13,278,685 in 2004		836			830
Paid-in capital		33,676			31,718
Retained earnings		126,735			113,314
Unearned stock-based compensation		(898	)		(737	)
Accumulated other comprehensive (loss) income		(1,653	)		6,937
Treasury stock, at cost; 10,519 shares in 2005 and 9,309 in 2004		(250	)		(210	)
Total shareholders’ equity		158,446			151,852
Total liabilities and shareholders’ equity	$	2,402,003		$	2,307,820

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share amounts)	(Unaudited)
	Three Months				Twelve Months
Periods ended December 31,	2005		2004		2005		2004
Interest income:
Interest and fees on loans	$	21,592	$	17,138	$	78,931	$	60,828
Interest on securities		8,406		8,683		33,820		33,787
Dividends on corporate stock and Federal Home Loan Bank stock		653		563		2,491		2,105
Interest on federal funds sold and other short-term investments		130		46		451		133
Total interest income		30,781		26,430		115,693		96,853
Interest expense:
Deposits		9,386		6,490		32,186		22,197
Federal Home Loan Bank advances		5,273		5,538		22,233		20,153
Junior subordinated debentures		334		-		458		-
Other		85		18		160		62
Total interest expense		15,078		12,046		55,037		42,412
Net interest income		15,703		14,384		60,656		54,441
Provision for loan losses		300		250		1,200		610
Net interest income after provision for loan losses		15,403		14,134		59,456		53,831
Noninterest income:
Wealth management and trust services		5,649		3,455		16,421		13,048
Service charges on deposit accounts		1,165		1,055		4,502		4,483
Merchant processing fees		1,156		924		5,203		4,259
Net gains on loan sales		359		644		1,679		1,901
Net realized gains on securities		337		387		357		248
Income from bank-owned life insurance		277		288		1,110		1,175
Other income		556		221		1,674		1,791
Total noninterest income		9,499		6,974		30,946		26,905
Noninterest expense:
Salaries and employee benefits		9,030		7,182		32,133		28,816
Net occupancy		977		819		3,460		3,201
Equipment		873		872		3,456		3,267
Merchant processing costs		962		788		4,319		3,534
Advertising and promotion		481		315		1,977		1,748
Outsourced services		460		416		1,723		1,616
Legal, audit and professional fees		475		653		1,900		1,535
Amortization of intangibles		410		161		852		644
Other		2,098		1,888		6,573		6,012
Total noninterest expense		15,766		13,094		56,393		50,373
Income before income taxes		9,136		8,014		34,009		30,363
Income tax expense		2,983		2,516		10,985		9,534
Net income	$	6,153	$	5,498	$	23,024	$	20,829
Weighted average shares outstanding - basic		13,362.9		13,259.7		13,319.7		13,227.8
Weighted average shares outstanding - diluted		13,670.1		13,605.1		13,631.2		13,542.7
Per share information:
Basic earnings per share	$	0.46	$	0.41	$	1.73	$	1.57
Diluted earnings per share	$	0.45	$	0.40	$	1.69	$	1.54
Cash dividends declared per share	$	0.18	$	0.17	$	0.72	$	0.68

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS
	(Unaudited)
Three months ended December 31,	2005							2004
	Average				Yield/			Average				Yield/
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Residential real estate loans	$	586,775	$	7,391		5.00	%	$	513,133	$	6,359		4.93	%
Commercial and other loans		555,746		10,212		7.29	%		498,236		8,140		6.50	%
Consumer loans		261,424		4,039		6.13	%		222,321		2,678		4.79	%
Total loans		1,403,945		21,642		6.12	%		1,233,690		17,177		5.54	%
Federal funds sold and
other short-term investments		13,444		130		3.86	%		11,022		46		1.70	%
Taxable debt securities		736,309		8,131		4.38	%		845,307		8,499		4.00	%
Nontaxable debt securities		29,235		423		5.75	%		18,937		284		5.96	%
Corporate stocks and FHLB stock		48,914		738		5.98	%		52,397		661		5.02	%
Total securities		827,902		9,422		4.52	%		927,663		9,490		4.07	%
Total interest-earning assets		2,231,847		31,065		5.52	%		2,161,353		26,667		4.91	%
Non interest-earning assets		153,043							130,382
Total assets	$	2,384,890						$	2,291,735
Liabilities and Shareholders’ Equity:
NOW accounts	$	175,235	$	64		0.15	%	$	172,811	$	83		0.19	%
Money market accounts		228,173		1,485		2.58	%		208,203		847		1.62	%
Savings deposits		218,043		312		0.57	%		255,647		394		0.61	%
Time deposits		800,668		7,524		3.73	%		628,030		5,167		3.27	%
FHLB advances		549,888		5,274		3.80	%		653,746		5,538		3.37	%
Junior subordinated debentures		22,681		334		5.85	%		-		-		-	%
Other		7,346		85		4.59	%		2,024		17		3.41	%
Total interest-bearing liabilities		2,002,034		15,078		2.99	%		1,920,461		12,046		2.50	%
Demand deposits		202,570							203,162
Other liabilities		22,857							16,821
Shareholders’ equity		157,429							151,291
Total liabilities and shareholders’ equity	$	2,384,890						$	2,291,735
Net interest income (FTE)			$	15,987						$	14,621
Interest rate spread						2.53	%						2.41	%
Net interest margin						2.84	%						2.69	%

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS
	(Unaudited)
Twelve months ended December 31,	2005							2004
	Average				Yield/			Average				Yield/
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Residential real estate loans	$	562,838	$	27,890		4.96	%	$	450,898	$	22,737		5.04	%
Commercial and other loans		531,434		37,244		7.01	%		454,251		29,266		6.44	%
Consumer loans		246,959		13,983		5.66	%		198,857		8,984		4.52	%
Total loans		1,341,231		79,117		5.90	%		1,104,006		60,987		5.52	%
Federal funds sold and
other short-term investments		14,703		451		3.07	%		12,371		133		1.08	%
Taxable debt securities		783,662		32,934		4.20	%		835,091		33,125		3.97	%
Nontaxable debt securities		23,329		1,362		5.84	%		16,430		1,018		6.20	%
Corporate stocks and FHLB stock		50,763		2,858		5.63	%		54,706		2,543		4.65	%
Total securities		872,457		37,605		4.31	%		918,598		36,819		4.01	%
Total interest-earning assets		2,213,688		116,722		5.27	%		2,022,604		97,806		4.84	%
Non interest-earning assets		137,460							126,302
Total assets	$	2,351,148						$	2,148,906
Liabilities and Shareholders’ Equity:
NOW accounts	$	176,706	$	295		0.17	%	$	162,714	$	341		0.21	%
Money market accounts		203,799		4,386		2.15	%		152,664		2,205		1.44	%
Savings deposits		234,311		1,392		0.59	%		257,274		1,581		0.61	%
Time deposits		741,456		26,113		3.52	%		575,877		18,070		3.14	%
FHLB advances		611,177		22,233		3.64	%		644,520		20,153		3.13	%
Junior subordinated debentures		7,767		458		5.90	%		-		-		-	%
Other		3,581		160		4.48	%		2,014		62		3.10	%
Total interest-bearing liabilities		1,978,797		55,037		2.78	%		1,795,063		42,412		2.36	%
Demand deposits		197,245							193,905
Other liabilities		19,498							15,281
Shareholders’ equity		155,608							144,657
Total liabilities and shareholders’ equity	$	2,351,148						$	2,148,906
Net interest income (FTE)			$	61,685						$	55,394
Interest rate spread						2.49	%						2.48	%
Net interest margin						2.79	%						2.74	%