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: October 30, 2007
FOR IMMEDIATE RELEASE
Washington Trust Announces Third Quarter Earnings;
Restatement Announced for Period Ended June 30, 2007
Westerly, Rhode Island…Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced third quarter 2007 net income of $6.6 million, or 48 cents per diluted share, substantially the same as the amounts reported for the third quarter of 2006. The returns on average equity and average assets for the third quarter of 2007 were 14.99% and 1.10%, respectively, compared to 15.62% and 1.09%, respectively, for the third quarter of 2006.
Highlights included:
· | Wealth management assets surpassed $4 billion for the first time at September 30, 2007. |
· | Revenues from wealth management services are up by 11 percent over the third quarter of 2006. |
· | Commercial loan growth continued, with increases of 4 percent in the third quarter of 2007 and 16 percent from the balance at September 30, 2006. |
· | Asset quality remains good, with decreases in nonperforming assets and loan delinquencies during the quarter. |
· | We announced the restatement of our financial statements as of and for the period ending June 30, 2007 to correct the accounting treatment related to the sale of certain held-to-maturity investment securities conducted in the second quarter of 2007. |
"While many institutions have been negatively affected by turmoil in the capital markets, I'm pleased to report that Washington Trust posted solid quarterly earnings," stated John C. Warren, Washington Trust Chairman and CEO. "During these difficult times, Washington Trust has benefited from our diverse business model, consistent credit policies and underwriting standards, and strong brand. Commercial lending activity has been steady throughout the year and we were recently named the leading SBA lender in dollar volume of loans in Rhode Island. Our asset quality remains good.
The momentum continued for our wealth management area, as assets under management surpassed $4.0 billion for the first time in our 207-year history. We have a superb team of wealth management professionals who have helped us become one of the premier wealth management firms for high net worth clients and institutions in the New England region.
-M O R E-
Washington Trust
Page Two, October 30, 2007
Unfortunately, a recent review of the accounting treatment of certain transactions relating to the planned early adoption of SFAS 159 has resulted in the need to restate our second quarter financial statements. We regret the error, but note that the corrected accounting treatment related to the sale of certain held-to-maturity securities had little impact on profitability in the third quarter.”
The Corporation has restated its previously reported operating results for the six-month period ended June 30, 2007 with a reduction in net income of $828 thousand, or 6 cents per diluted share. This restatement is solely related to accounting errors in connection with sales of certain held-to-maturity investment securities conducted in the second quarter of 2007. Including the effect of this restatement, net income for the nine months ended September 30, 2007 amounted to $18.0 million, down $815 thousand, or 4 percent, from the same period in 2006. The Corporation earned $1.32 per share on a diluted basis for the nine months ended September 30, 2007, compared to $1.37 per diluted share for the same period a year ago. Further information regarding this restatement is presented under the caption “Restatement of Previously Reported Results” later in this press release.
For the nine months ended September 30, 2007, the returns on average equity and average assets were 13.74% and 1.01%, respectively, compared to 15.33% and 1.04%, respectively, for the comparable period in 2006.
Net interest income totaled $15.3 million for the third quarter of 2007, up $383 thousand, or 3 percent, compared to the second quarter of 2007 and down $556 thousand, or 4 percent, from the third quarter a year ago. Net interest income for the three months ended September 30, 2006 included a catch-up for the delayed second quarter 2006 dividend on the Corporation’s investment in Federal Home Loan Bank of Boston (“FHLBB”) stock of approximately $450 thousand. Excluding the impact of the additional FHLBB dividend, net interest income for the third quarter of 2007 was down 0.7% from the same quarter in 2006. On a year to date basis, net interest income declined $1.4 million, or 3 percent, from the same period in 2006.
The net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) for the third quarter 2007 was 2.81%, up 5 basis points from the second quarter of 2007 and down 5 basis points from the third quarter of 2006. Excluding the 8 basis point impact of the additional FHLBB dividend recorded in the third quarter of 2006, net interest margin for the third quarter of 2007 was 3 basis points higher than the same period a year ago. The increase in net interest margin from the second quarter of 2007 was primarily attributable to seasonal growth in lower cost transactional account balances. For the nine months ended September 30, 2007 net interest margin was 2.79%, compared to 2.82% for the same period a year ago.
- M O R E -
Washington Trust
Page Three, October 30, 2007
Excluding net realized gains and losses on securities, noninterest income amounted to $11.9 million for the third quarter of 2007, up $702 thousand from the same quarter a year ago. On a year to date basis, noninterest income, excluding net realized securities gains and losses, increased $2.6 million, or 8 percent, from the same period in 2006. This increase was largely attributable to higher revenues from wealth management services. Wealth management revenues for the three and nine-month periods ended September 30, 2007 were up $712 thousand and $1.9 million, respectively. Wealth management assets under administration totaled $4.113 billion at September 30, 2007, up $165 million, or 4 percent, in the third quarter of 2007 and up $418 million, or 11 percent, from December 31, 2006. Financial market appreciation as well as successful business development efforts and customer cash flows have contributed to this growth.
Included in noninterest income were net realized gains on sales of securities of $336 thousand and $459 thousand, respectively, for the nine month periods ended September 30, 2007 and 2006.
Noninterest expenses amounted to $17.3 million for the third quarter of 2007, up $701 thousand, or 4 percent, from the same quarter a year ago. For the nine months ended September 30, 2007, noninterest expenses totaled $52.2 million, up $2.6 million, or 5 percent, from the same period in 2006. Included in this increase was $1.1 million in debt prepayment penalties that were incurred in the first quarter of 2007 as a result of prepayments of higher cost FHLBB advances. Excluding the debt prepayment penalty expense, noninterest expenses for the nine months ended September 30, 2007 increased $1.5 million, or 3 percent, over the same nine-month period last year.
Total assets were $2.432 billion at September 30, 2007, up $32.6 million from December 31, 2006. Total loans grew $54.5 million, or 4 percent, during the nine months ended September 30, 2007 and amounted to $1.5 billion. Commercial loans increased $62.6 million, or 11 percent, residential loans declined by $9.9 million, or 2 percent, and consumer loans increased by $1.7 million, or 1 percent, during the nine months ended September 30, 2007. The investment securities portfolio totaled $688.7 million at September 30, 2007, down $15.1 million from December 31, 2006. Included in the investment securities portfolio at September 30, 2007 were mortgage-backed securities with a fair value of $366.0 million. All of the Corporation’s mortgage-backed securities are issued by U.S. Government sponsored agencies.
Total deposits decreased by $22.1 million from December 31, 2006. Excluding brokered certificates of deposit, in-market deposits were up $21.9 million, or 3 percent, during the nine months ended September 30, 2007. Declines in demand and savings deposits were offset by increases in money market accounts and
M O R E -
Washington Trust
Page Four, October 30, 2007
consumer and commercial certificates of deposit. FHLBB advances totaled $502.3 million at September 30, 2007, up $27.7 million from December 31, 2006. Other borrowings increased $21.7 million in the nine months ended September 30, 2007, mainly due to an increase in securities sold under repurchase agreements.
During the third quarter of 2007, the Corporation recognized a liability of $5.9 million, with a corresponding increase in goodwill, related to the acquisition of Weston Financial Group, Inc. in August 2005. This amount represents the 2007 obligation under the terms of the acquisition agreement, which provides for a contingent payment earn-out in each year during the three-year period ending December 31, 2008.
Asset quality remains good, with nonperforming assets (nonaccrual loans and property acquired though foreclosure) amounting to $2.7 million, or 0.11% of total assets, at September 30, 2007, compared to $2.7 million, or 0.11% of total assets, at December 31, 2006, and $2.6 million, or 0.11% of total assets, a year ago. There are no assets acquired through foreclosure on the balance sheet at September 30, 2007.
Total 30 day+ delinquencies declined by $3.2 million during the third quarter of 2007 with a $5.0 million decrease in the commercial category, a $1.6 million increase in the residential mortgage category and a $213 thousand increase in the consumer loan category. Total 30 day+ delinquencies amounted to $5.9 million, or 0.39% of total loans, at September 30, 2007, compared to $7.2 million, or 0.49% of total loans, at December 31, 2006, and $4.0 million, or 0.28% of total loans, at September 30, 2006. The Corporation has never offered a sub-prime or Alt-A residential mortgage loan program. Total residential mortgage and consumer loan 30 day+ delinquencies amounted to $3.6 million, or 0.42% of these loans, at September 30, 2007, compared to $1.4 million, or 0.16% of these loans, at December 31, 2006. Total 90 day+ delinquencies in the residential mortgage and consumer loans portfolios amounted to $302 thousand (one loan) and $76 thousand (two loans), respectively, as of September 30, 2007. Total nonaccrual loans, which include the 90 day+ delinquencies, amounted to $731 thousand and $262 thousand in the residential mortgage and consumer loan categories, respectively, at September 30, 2007.
The allowance for loan losses was $19.5 million, or 1.29% of total loans, at September 30, 2007, compared to $18.9 million, or 1.29% of total loans, at December 31, 2006, and $18.6 million, or 1.31% of total loans, at September 30, 2006. Net charge-offs amounted to $322 thousand for the nine months ended September 30, 2007, compared to net charge-offs of $173 thousand for the same period a year ago. The Corporation’s loan loss provision charged to earnings amounted to $300 thousand and $900 thousand, respectively, for the three and nine months ended September 30, 2007, consistent with the amounts recorded in 2006.
M O R E -
Washington Trust
Page Five, October 30, 2007
Total shareholders’ equity amounted to $177.9 million at September 30, 2007, compared to $173.1 million at December 31, 2006. Under the Corporation’s 2006 Stock Repurchase Plan, 185,400 shares were repurchased at a total cost of $4.8 million during the nine months ended September 30, 2007, including 35,700 shares in the third quarter. Book value per share as of September 30, 2007 and December 31, 2006 amounted to $13.33 and $12.89, respectively.
Restatement of Previously Reported Results:
In February 2007, Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Liabilities” (“SFAS 159”), was issued. SFAS 159 generally permits the measurement of selected eligible financial instruments at fair value at specified election dates. For companies with a December 31 fiscal year, SFAS 159 permits early adoption retroactive to January 1, 2007, with the requirement that the early adoption election be made within 120 days of the beginning of the fiscal year of adoption, subject to certain other requirements. For Washington Trust, the early adoption election could have been made no later than April 30, 2007.
Based on our assessment of the provisions of SFAS 159, on April 12, 2007 we decided to implement early adoption of SFAS 159 and, in connection with this, we selected the fair value option for certain U.S. Government sponsored agency and mortgage-backed securities with lower coupons and slower prepayment characteristics in the held-to-maturity portfolio totaling approximately $61.9 million. A portfolio restructuring plan was also undertaken to reduce interest rate risk and improve net interest margin, which included the sale of these securities. On Friday April 13, 2007 we executed sale trades for these securities. At the time of the sales transactions the historical amortized cost basis of the sold securities exceeded the total sales price by $1.7 million.
On Monday April 16, 2007 additional information became available regarding clarifications of the interpretation of the application of SFAS 159 by applicable regulatory and accounting industry bodies that led us to conclude that the application of SFAS 159 to our transactions might be inconsistent with the intent and spirit of SFAS 159. Consequently, we decided not to early-adopt SFAS 159. In connection with that decision, we were able to promptly execute purchase trade transactions for the identical securities prior to the sales settlement date for approximately $49.9 million of the $61.9 million total, with the intent that, in substance, the sale transaction would be offset for these securities. The reacquired securities were retained in the held-to-maturity portfolio at the original pre-sale amortized cost and a $1.4 million loss on the sale of the reacquired securities was not recognized. The sale and reacquisition of the $49.9 million in held-to-maturity
M O R E -
Washington Trust
Page Six, October 30, 2007
securities as well as certain other transactions conducted in connection with the portfolio restructuring strategy were similarly treated in an offset manner and these transaction amounts were incorrectly omitted from the consolidated statement of cash flows for the period ended June 30, 2007; the correction for these other transactions had no effect on net income. For the reacquired securities, the reacquisition price exceeded the selling price by $153 thousand and an expense of this amount was recognized in other noninterest expense in the second quarter of 2007. Also in the second quarter of 2007, a realized securities loss in the amount of $261 thousand was recognized on the securities that were sold but not reacquired. We discussed the accounting treatment described above with our independent registered public accounting firm in connection with its quarterly review process.
Based on a recent review of these transactions, in consultation with our independent registered public accounting firm, we now have determined that the offsetting of the April 13, 2007 sales and subsequent reacquisition of identical securities was incorrect and that the sale transactions should have been recognized with a $1.4 million realized securities loss and corresponding reduction in the carrying value of the reacquired securities. For the quarter ended June 30, 2007, the accounting corrections for these transactions, including recognition of the realized loss on the sales transactions and other related changes, result in an after-tax reduction in net income of $828 thousand, or 6 cents per diluted share, from $6.3 million, or 46 cents per diluted share, to $5.5 million, or 40 cents per diluted share. For the six-month period ended June 30, 2007 the accounting corrections result in a reduction in net income from $12.3 million, or 90 cents per diluted share, to $11.5 million, or 84 cents per diluted share.
Also, we now have determined that the remaining held-to-maturity portfolio should have been reclassified to the available-for-sale category. This reclassification has been recognized as of April 13, 2007. Accordingly, the effect on the June 30, 2007 consolidated balance sheet was to reclassify the portfolio of held-to-maturity securities to the available-for-sale category, which resulted in a $1.6 million reduction in shareholders’ equity. The Corporation will not be able to classify securities in the held-to-maturity category for a period of two years from the April 13, 2007 sales date as a result of this action. The Corporation and its subsidiary bank remain well-capitalized by all regulatory capital measurements.
The correction to reduce the cost basis of the reacquired securities results in a change to the accretion of discount for these securities, which is recognized in interest income until their maturity dates. The resulting additional amount of accretion income recognized on these securities was $79 thousand in each of the quarters ended June 30, 2007 and September 30, 2007.
M O R E -
Washington Trust
Page Seven, October 30, 2007
A summary of the changes to amounts previously reported by the Corporation accompanies this press release. The Corporation will file an amended Form 10-Q for the quarter ended June 30, 2007 reflecting the necessary adjustments with the Securities and Exchange Commission as soon as practicable. The Corporation will also file an amended Form 10-Q for the quarter ended March 31, 2007 with the Securities and Exchange Commission as soon as practicable to add a subsequent event footnote to disclose the April 2007 transactions and related matters described above.
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 Wednesday, October 31, 2007 at 8:30 a.m. (Eastern Time) to discuss the Corporation’s third quarter results. This call is being webcast by VCall and can be accessed through the Investor Relations section of the Washington Trust website, www.washtrust.com. A replay of the call will be posted in this same location on the website shortly after the conclusion of the call. You may also listen to a replay by dialing (877) 660-6853, and entering Account #: 286 and Conference ID #: 254761. The replay will be available until 11:59 p.m. on November 30, 2007.
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 Global MarketÒ under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrust.com.
# # #
This press release 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. All statements, other than statements of historical facts, including statements regarding our strategy, effectiveness of investment programs, evaluations of future interest rate trends and liquidity, expectations as to growth in assets, deposits and results of operations, success of acquisitions, future operations, market position, financial position, our expected restatement of our historical financial statements, and prospects, plans, goals and objectives of management are forward-looking statements. The actual results, performance or achievements of the Corporation could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of wealth management assets under administration, 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, the finalization of the financial accounting related to the restatement; unanticipated consequences of the restatement; our ability to coordinate and complete the restatement and file our amended Quarterly Report on Form 10-Q for the period ended June 30, 2007; the review and audit by our independent auditor of our 2007 financial statements; the consequences of the reclassification of the held-to-maturity securities portfolio to the available-for-sale category; the financial impact of the foregoing; and changes in the assumptions used in making such forward-looking statements. The Corporation assumes no obligation to update forward-looking statements or update the reasons actual results, performance or achievements could differ materially from those provided in the forward-looking statements, except as required by law.
| Washington Trust Bancorp, Inc. and Subsidiaries | |
FINANCIAL SUMMARY (unaudited) | |
| | |
| | | Three Months Ended | |
| | | | | | Restated | | | | |
| | | September 30, | | | June 30, | | | September 30, | |
| (Dollars and shares in thousands, except per share amounts) | | 2007 | | | 2007 | | | 2006 | |
| | | | | | | | | | |
Operating Results | | | | | | | | | |
| Net interest income | | $ | 15,310 | | | $ | 14,927 | | | $ | 15,866 | |
| Provision for loan losses | | | 300 | | | | 300 | | | | 300 | |
| Net losses on sales of securities | | | – | | | | (700 | ) | | | (365 | ) |
| Other noninterest income | | | 11,850 | | | | 11,823 | | | | 11,148 | |
| Noninterest expenses | | | 17,312 | | | | 17,760 | | | | 16,611 | |
| Income tax expense | | | 2,992 | | | | 2,508 | | | | 3,160 | |
| Net income | | | 6,556 | | | | 5,482 | | | | 6,578 | |
| | | | | | | | | | | | | |
Per Share | | | | | | | | | | | | |
| Basic earnings | | $ | 0.49 | | | $ | 0.41 | | | $ | 0.49 | |
| Diluted earnings | | $ | 0.48 | | | $ | 0.40 | | | $ | 0.48 | |
| Dividends declared | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.19 | |
| | | | | | | | | | | | | |
Weighted Average Shares Outstanding | | | | | | | | | | | | |
| Basic | | | 13,323.6 | | | | 13,339.6 | | | | 13,436.6 | |
| Diluted | | | 13,564.1 | | | | 13,616.4 | | | | 13,726.3 | |
| | | | | | | | | | | | | |
Key Ratios | | | | | | | | | | | | |
| Return on average assets | | | 1.10 | % | | | 0.92 | % | | | 1.09 | % |
| Return on average equity | | | 14.99 | % | | | 12.57 | % | | | 15.62 | % |
| Interest rate spread (taxable equivalent basis) | | | 2.42 | % | | | 2.39 | % | | | 2.51 | % |
| Net interest margin (taxable equivalent basis) | | | 2.81 | % | | | 2.76 | % | | | 2.86 | % |
| | | | | | | | | | | | | |
Allowance for Loan Losses | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 19,327 | | | $ | 19,360 | | | $ | 18,480 | |
| Provision charged to earnings | | | 300 | | | | 300 | | | | 300 | |
| Net charge-offs | | | (155 | ) | | | (333 | ) | | | (135 | ) |
| Balance at end of period | | $ | 19,472 | | | $ | 19,327 | | | $ | 18,645 | |
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| Washington Trust Bancorp, Inc. and Subsidiaries | |
FINANCIAL SUMMARY (unaudited) | |
| | |
| | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| (Dollars and shares in thousands, except per share amounts) | | 2007 | | | 2006 | |
| | | | | | | |
Operating Results | | | | | | |
| Net interest income | | $ | 45,107 | | | $ | 46,498 | |
| Provision for loan losses | | | 900 | | | | 900 | |
| Net realized gains on securities | | | 336 | | | | 459 | |
| Other noninterest income | | | 33,885 | | | | 31,291 | |
| Noninterest expenses | | | 52,181 | | | | 49,595 | |
| Income tax expense | | | 8,234 | | | | 8,925 | |
| Net income | | | 18,013 | | | | 18,828 | |
| | | | | | | | | |
Per Share | | | | | | | | |
| Basic earnings | | $ | 1.35 | | | $ | 1.40 | |
| Diluted earnings | | $ | 1.32 | | | $ | 1.37 | |
| Dividends declared | | $ | 0.60 | | | $ | 0.57 | |
| | | | | | | | | |
Weighted Average Shares Outstanding | | | | | | | | |
| Basic | | | 13,358.1 | | | | 13,414.6 | |
| Diluted | | | 13,612.7 | | | | 13,708.2 | |
| | | | | | | | | |
Key Ratios | | | | | | | | |
| Return on average assets | | | 1.01 | % | | | 1.04 | % |
| Return on average equity | | | 13.74 | % | | | 15.33 | % |
| Interest rate spread (taxable equivalent basis) | | | 2.42 | % | | | 2.49 | % |
| Net interest margin (taxable equivalent basis) | | | 2.79 | % | | | 2.82 | % |
| | | | | | | | | |
Allowance for Loan Losses | | | | | | | | |
| Balance at beginning of period | | $ | 18,894 | | | $ | 17,918 | |
| Provision charged to earnings | | | 900 | | | | 900 | |
| Net charge-offs | | | (322 | ) | | | (173 | ) |
| Balance at end of period | | $ | 19,472 | | | $ | 18,645 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | Three Months | | | Nine Months | |
| | | Ended | | | Ended | |
| (Dollars and shares in thousands, except per share amounts) | | September 30, 2007 | | | September 30, 2007 | |
| | | | | | | | | |
Wealth Management Assets Under Administration | | | | | | | | |
| Balance at beginning of period | | $ | 3,948,390 | | | $ | 3,694,813 | |
| Net market appreciation and income | | | 122,424 | | | | 284,149 | |
| Net customer cash flows | | | 42,104 | | | | 133,956 | |
| Balance at end of period | | $ | 4,112,918 | | | $ | 4,112,918 | |
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| Washington Trust Bancorp, Inc. and Subsidiaries | |
FINANCIAL SUMMARY (unaudited) | |
| | |
| (Dollars and shares in thousands, except per share amounts) | | September 30, | | | December 31, | | | September 30, | |
Period-End Balance Sheet | | 2007 | | | 2006 | | | 2006 | |
| Assets | | $ | 2,431,762 | | | $ | 2,399,165 | | | $ | 2,403,266 | |
| Total securities | | | 688,709 | | | | 703,851 | | | | 741,350 | |
| Loans: | | | | | | | | | | | | |
| Commercial and other: | | | | | | | | | | | | |
| Mortgages | | | 276,995 | | | | 282,019 | | | | 274,635 | |
| Construction and development | | | 48,899 | | | | 32,233 | | | | 29,653 | |
| Other | | | 324,129 | | | | 273,145 | | | | 257,026 | |
| Total commercial and other | | | 650,023 | | | | 587,397 | | | | 561,314 | |
| Residential real estate: | | | | | | | | | | | | |
| Mortgages | | | 566,776 | | | | 577,522 | | | | 572,399 | |
| Homeowner construction | | | 12,040 | | | | 11,149 | | | | 14,973 | |
| Total residential real estate | | | 578,816 | | | | 588,671 | | | | 587,372 | |
| Consumer: | | | | | | | | | | | | |
| Home equity lines | | | 139,732 | | | | 145,676 | | | | 147,897 | |
| Home equity loans | | | 99,798 | | | | 93,947 | | | | 90,711 | |
| Other | | | 46,124 | | | | 44,295 | | | | 41,190 | |
| Total consumer | | | 285,654 | | | | 283,918 | | | | 279,798 | |
| Total loans | | | 1,514,493 | | | | 1,459,986 | | | | 1,428,484 | |
| Deposits: | | | | | | | | | | | | |
| Demand deposits | | | 182,830 | | | | 186,533 | | | | 189,329 | |
| NOW accounts | | | 172,378 | | | | 175,479 | | | | 172,317 | |
| Money market accounts | | | 312,257 | | | | 286,998 | | | | 295,431 | |
| Savings accounts | | | 189,157 | | | | 205,998 | | | | 193,029 | |
| Time deposits | | | 799,265 | | | | 822,989 | | | | 850,080 | |
| Total deposits | | | 1,655,887 | | | | 1,677,997 | | | | 1,700,186 | |
| Brokered deposits included in time deposits | | | 130,017 | | | | 175,618 | | | | 186,184 | |
| Federal Home Loan Bank advances | | | 502,265 | | | | 474,561 | | | | 464,148 | |
| Shareholders’ equity | | | 177,897 | | | | 173,056 | | | | 172,420 | |
| | | | | | | | | | | | | |
Capital Ratios | | | | | | | | | | | | |
| Tier 1 risk-based capital | | | 9.11 | % | | | 9.57 | % | | | 9.55 | % |
| Total risk-based capital | | | 10.43 | % | | | 10.96 | % | | | 10.96 | % |
| Tier 1 leverage ratio | | | 6.11 | % | | | 6.01 | % | | | 5.81 | % |
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Share Information | | | | | | | | | | | | |
| Shares outstanding at end of period | | | 13,350.5 | | | | 13,429.7 | | | | 13,445.1 | |
| Book value per share | | $ | 13.33 | | | $ | 12.89 | | | $ | 12.82 | |
| Tangible book value per share | | $ | 8.66 | | | $ | 8.61 | | | $ | 8.53 | |
| Market value per share | | $ | 26.97 | | | $ | 27.89 | | | $ | 26.51 | |
| | | | | | | | | | | | | |
Credit Quality | | | | | | | | | | | | |
| Nonaccrual loans: | | | | | | | | | | | | |
| Commercial: | | | | | | | | | | | | |
| Mortgages | | $ | 1,099 | | | $ | 981 | | | $ | 436 | |
| Construction and development | | | – | | | | – | | | | – | |
| Other | | | 581 | | | | 831 | | | | 608 | |
| Residential real estate | | | 731 | | | | 721 | | | | 1,004 | |
| Consumer | | | 262 | | | | 190 | | | | 132 | |
| Total nonaccrual loans | | $ | 2,673 | | | $ | 2,723 | | | $ | 2,180 | |
| Other real estate owned, net | | | - | | | | - | | | | 402 | |
| Nonperforming assets to total assets | | | 0.11 | % | | | 0.11 | % | | | 0.11 | % |
| Nonaccrual loans to total loans | | | 0.18 | % | | | 0.19 | % | | | 0.15 | % |
| Allowance for loan losses to nonaccrual loans | | | 728.47 | % | | | 693.87 | % | | | 855.28 | % |
| Allowance for loan losses to total loans | | | 1.29 | % | | | 1.29 | % | | | 1.31 | % |
| | | | | | | | | | | | | |
Assets Under Administration | | | | | | | | | | | | |
| Market value | | $ | 4,112,918 | | | $ | 3,694,813 | | | $ | 3,550,965 | |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
CONSOLIDATED BALANCE SHEETS | |
| | | (unaudited) | |
| (Dollars in thousands) | | September 30, | | | December 31, | |
| | | 2007 | | | 2006 | |
Assets: | | | | | | |
| Cash and due from banks | | $ | 31,521 | | | $ | 54,337 | |
| Federal funds sold | | | 21,975 | | | | 16,425 | |
| Other short-term investments | | | 1,516 | | | | 1,147 | |
| Mortgage loans held for sale | | | 2,095 | | | | 2,148 | |
| Securities: | | | | | | | | |
| Available for sale, at fair value; amortized cost $691,836 in 2007 and $525,966 in 2006 | | | 688,709 | | | | 526,396 | |
| Held to maturity, at cost; fair value $175,369 in 2006 | | | – | | | | 177,455 | |
| Total securities | | | 688,709 | | | | 703,851 | |
| Federal Home Loan Bank stock, at cost | | | 28,727 | | | | 28,727 | |
| Loans: | | | | | | | | |
| Commercial and other | | | 650,023 | | | | 587,397 | |
| Residential real estate | | | 578,816 | | | | 588,671 | |
| Consumer | | | 285,654 | | | | 283,918 | |
| Total loans | | | 1,514,493 | | | | 1,459,986 | |
| Less allowance for loan losses | | | 19,472 | | | | 18,894 | |
| Net loans | | | 1,495,021 | | | | 1,441,092 | |
| Premises and equipment, net | | | 25,790 | | | | 24,307 | |
| Accrued interest receivable | | | 12,030 | | | | 11,268 | |
| Investment in bank-owned life insurance | | | 40,936 | | | | 39,770 | |
| Goodwill | | | 50,479 | | | | 44,558 | |
| Identifiable intangible assets, net | | | 11,759 | | | | 12,816 | |
| Other assets | | | 21,204 | | | | 18,719 | |
| Total assets | | $ | 2,431,762 | | | $ | 2,399,165 | |
| | | | | | | | | |
Liabilities: | | | | | | | | |
| Deposits: | | | | | | | | |
| Demand deposits | | $ | 182,830 | | | $ | 186,533 | |
| NOW accounts | | | 172,378 | | | | 175,479 | |
| Money market accounts | | | 312,257 | | | | 286,998 | |
| Savings accounts | | | 189,157 | | | | 205,998 | |
| Time deposits | | | 799,265 | | | | 822,989 | |
| Total deposits | | | 1,655,887 | | | | 1,677,997 | |
| Dividends payable | | | 2,676 | | | | 2,556 | |
| Federal Home Loan Bank advances | | | 502,265 | | | | 474,561 | |
| Junior subordinated debentures | | | 22,681 | | | | 22,681 | |
| Other borrowings | | | 36,403 | | | | 14,684 | |
| Accrued expenses and other liabilities | | | 33,953 | | | | 33,630 | |
| Total liabilities | | | 2,253,865 | | | | 2,226,109 | |
| | | | | | | | | |
Shareholders’ Equity: | | | | | | | | |
| Common stock of $.0625 par value; authorized 30,000,000 shares; | | | | | | | | |
| issued 13,492,110 shares in 2007 and 2006 | | | 843 | | | | 843 | |
| Paid-in capital | | | 34,821 | | | | 35,893 | |
| Retained earnings | | | 151,537 | | | | 141,548 | |
| Accumulated other comprehensive loss | | | (5,587 | ) | | | (3,515 | ) |
| Treasury stock, at cost; 141,646 shares in 2007 and 62,432 in 2006 | | | (3,717 | ) | | | (1,713 | ) |
| Total shareholders’ equity | | | 177,897 | | | | 173,056 | |
| Total liabilities and shareholders’ equity | | $ | 2,431,762 | | | $ | 2,399,165 | |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
CONSOLIDATED STATEMENTS OF INCOME | |
| | |
| (Dollars and shares in thousands, except per share amounts) | | (unaudited) | |
| | | Three Months | | | Nine Months | |
| Periods ended September 30, | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Interest income: | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 25,032 | | | $ | 23,430 | | | $ | 73,380 | | | $ | 68,457 | |
| Interest on securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 7,565 | | | | 8,493 | | | | 23,196 | | | | 25,553 | |
| Nontaxable | | | 781 | | | | 405 | | | | 2,208 | | | | 1,104 | |
| Dividends on corporate stock and Federal Home Loan Bank stock | | | 669 | | | | 1,197 | | | | 2,072 | | | | 2,124 | |
| Interest on federal funds sold and other short-term investments | | | 275 | | | | 252 | | | | 650 | | | | 517 | |
| Total interest income | | | 34,322 | | | | 33,777 | | | | 101,506 | | | | 97,755 | |
| Interest expense: | | | | | | | | | | | | | | | | |
| Deposits | | | 13,140 | | | | 12,473 | | | | 39,332 | | | | 33,872 | |
| Federal Home Loan Bank advances | | | 5,243 | | | | 5,011 | | | | 15,323 | | | | 16,115 | |
| Junior subordinated debentures | | | 338 | | | | 338 | | | | 1,014 | | | | 1,014 | |
| Other | | | 291 | | | | 89 | | | | 730 | | | | 256 | |
| Total interest expense | | | 19,012 | | | | 17,911 | | | | 56,399 | | | | 51,257 | |
| Net interest income | | | 15,310 | | | | 15,866 | | | | 45,107 | | | | 46,498 | |
| Provision for loan losses | | | 300 | | | | 300 | | | | 900 | | | | 900 | |
| Net interest income after provision for loan losses | | | 15,010 | | | | 15,566 | | | | 44,207 | | | | 45,598 | |
| Noninterest income: | | | | | | | | | | | | | | | | |
| Wealth management services: | | | | | | | | | | | | | | | | |
| Trust and investment advisory fees | | | 5,336 | | | | 4,727 | | | | 15,626 | | | | 14,036 | |
| Mutual fund fees | | | 1,386 | | | | 1,229 | | | | 4,000 | | | | 3,573 | |
| Financial planning, commissions and other service fees | | | 456 | | | | 509 | | | | 1,915 | | | | 2,033 | |
| Wealth management services | | | 7,178 | | | | 6,465 | | | | 21,541 | | | | 19,642 | |
| Service charges on deposit accounts | | | 1,214 | | | | 1,312 | | | | 3,559 | | | | 3,667 | |
| Merchant processing fees | | | 2,252 | | | | 2,125 | | | | 5,285 | | | | 4,828 | |
| Income from bank-owned life insurance | | | 376 | | | | 389 | | | | 1,166 | | | | 1,014 | |
| Net gains on loan sales and commissions on loans originated for others | | | 431 | | | | 417 | | | | 1,205 | | | | 1,029 | |
| Net realized (losses) gains on securities | | | - | | | | (365 | ) | | | 336 | | | | 459 | |
| Other income | | | 399 | | | | 440 | | | | 1,129 | | | | 1,111 | |
| Total noninterest income | | | 11,850 | | | | 10,783 | | | | 34,221 | | | | 31,750 | |
| Noninterest expense: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 10,098 | | | | 9,651 | | | | 30,195 | | | | 29,100 | |
| Net occupancy | | | 1,021 | | | | 934 | | | | 3,076 | | | | 2,906 | |
| Equipment | | | 871 | | | | 872 | | | | 2,564 | | | | 2,552 | |
| Merchant processing costs | | | 1,916 | | | | 1,796 | | | | 4,493 | | | | 4,090 | |
| Outsourced services | | | 556 | | | | 490 | | | | 1,610 | | | | 1,504 | |
| Advertising and promotion | | | 466 | | | | 371 | | | | 1,467 | | | | 1,489 | |
| Legal, audit and professional fees | | | 444 | | | | 563 | | | | 1,298 | | | | 1,342 | |
| Amortization of intangibles | | | 341 | | | | 398 | | | | 1,057 | | | | 1,209 | |
| Debt prepayment penalties | | | - | | | | - | | | | 1,067 | | | | - | |
| Other | | | 1,599 | | | | 1,536 | | | | 5,354 | | | | 5,403 | |
| Total noninterest expense | | | 17,312 | | | | 16,611 | | | | 52,181 | | | | 49,595 | |
| Income before income taxes | | | 9,548 | | | | 9,738 | | | | 26,247 | | | | 27,753 | |
| Income tax expense | | | 2,992 | | | | 3,160 | | | | 8,234 | | | | 8,925 | |
| Net income | | $ | 6,556 | | | $ | 6,578 | | | $ | 18,013 | | | $ | 18,828 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - basic | | | 13,323.6 | | | | 13,436.6 | | | | 13,358.1 | | | | 13,414.6 | |
| Weighted average shares outstanding - diluted | | | 13,564.1 | | | | 13,726.3 | | | | 13,612.7 | | | | 13,708.2 | |
| Per share information: | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.49 | | | $ | 0.49 | | | $ | 1.35 | | | $ | 1.40 | |
| Diluted earnings per share | | $ | 0.48 | | | $ | 0.48 | | | $ | 1.32 | | | $ | 1.37 | |
| Cash dividends declared per share | | $ | 0.20 | | | $ | 0.19 | | | $ | 0.60 | | | $ | 0.57 | |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited) | |
| | |
| | | | |
| Three months ended September 30, | | 2007 | | | 2006 | |
| | | Average | | | | | | Yield/ | | | Average | | | | | | Yield/ | |
| (Dollars in thousands) | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
Assets: | | | | | | | | | | | | | | | | | | |
| Residential real estate loans | | $ | 584,223 | | | $ | 7,886 | | | | 5.35 | % | | $ | 588,488 | | | $ | 7,596 | | | | 5.12 | % |
| Commercial and other loans | | | 635,435 | | | | 12,203 | | | | 7.62 | % | | | 564,804 | | | | 10,990 | | | | 7.72 | % |
| Consumer loans | | | 282,472 | | | | 4,988 | | | | 7.01 | % | | | 278,864 | | | | 4,898 | | | | 6.97 | % |
| Total loans | | | 1,502,130 | | | | 25,077 | | | | 6.62 | % | | | 1,432,156 | | | | 23,484 | | | | 6.51 | % |
| Federal funds sold and | | | | | | | | | | | | | | | | | | | | | | | | |
| other short-term investments | | | 21,375 | | | | 275 | | | | 5.10 | % | | | 20,132 | | | | 252 | | | | 4.96 | % |
| Taxable debt securities | | | 582,152 | | | | 7,565 | | | | 5.16 | % | | | 706,319 | | | | 8,493 | | | | 4.77 | % |
| Nontaxable debt securities | | | 80,998 | | | | 1,145 | | | | 5.61 | % | | | 42,842 | | | | 622 | | | | 5.76 | % |
| Corporate stocks and FHLBB stock | | | 42,129 | | | | 748 | | | | 7.03 | % | | | 48,704 | | | | 1,289 | | | | 10.50 | % |
| Total securities | | | 726,654 | | | | 9,733 | | | | 5.31 | % | | | 817,997 | | | | 10,656 | | | | 5.17 | % |
| Total interest-earning assets | | | 2,228,784 | | | | 34,810 | | | | 6.20 | % | | | 2,250,153 | | | | 34,140 | | | | 6.02 | % |
| Non interest-earning assets | | | 161,578 | | | | | | | | | | | | 160,883 | | | | | | | | | |
| Total assets | | | 2,390,362 | | | | | | | | | | | $ | 2,411,036 | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | $ | 166,271 | | | $ | 70 | | | | 0.17 | % | | $ | 174,740 | | | $ | 78 | | | | 0.18 | % |
| Money market accounts | | | 300,329 | | | | 2,950 | | | | 3.90 | % | | | 281,559 | | | | 2,584 | | | | 3.64 | % |
| Savings accounts | | | 194,439 | | | | 646 | | | | 1.32 | % | | | 191,232 | | | | 327 | | | | 0.68 | % |
| Time deposits | | | 817,379 | | | | 9,474 | | | | 4.60 | % | | | 868,487 | | | | 9,484 | | | | 4.33 | % |
| FHLBB advances | | | 468,384 | | | | 5,243 | | | | 4.44 | % | | | 480,033 | | | | 5,011 | | | | 4.14 | % |
| Junior subordinated debentures | | | 22,681 | | | | 338 | | | | 5.91 | % | | | 22,681 | | | | 338 | | | | 5.91 | % |
| Other | | | 25,857 | | | | 291 | | | | 4.47 | % | | | 7,624 | | | | 89 | | | | 4.66 | % |
| Total interest-bearing liabilities | | | 1,995,340 | | | | 19,012 | | | | 3.78 | % | | | 2,026,356 | | | | 17,911 | | | | 3.51 | % |
| Demand deposits | | | 188,495 | | | | | | | | | | | | 192,626 | | | | | | | | | |
| Other liabilities | | | 31,640 | | | | | | | | | | | | 23,589 | | | | | | | | | |
| Shareholders’ equity | | | 174,887 | | | | | | | | | | | | 168,465 | | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 2,390,362 | | | | | | | | | | | $ | 2,411,036 | | | | | | | | | |
| Net interest income (FTE) | | | | | | $ | 15,798 | | | | | | | | | | | $ | 16,229 | | | | | |
| Interest rate spread | | | | | | | | | | | 2.42 | % | | | | | | | | | | | 2.51 | % |
| Net interest margin | | | | | | | | | | | 2.81 | % | | | | | | | | | | | 2.86 | % |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited) | |
| | |
| | | | |
| Nine months ended September 30, | | 2007 | | | 2006 | |
| | | Average | | | | | | Yield/ | | | Average | | | | | | Yield/ | |
| (Dollars in thousands) | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
Assets: | | | | | | | | | | | | | | | | | | |
| Residential real estate loans | | $ | 588,808 | | | $ | 23,471 | | | | 5.33 | % | | $ | 589,635 | | | $ | 22,505 | | | | 5.10 | % |
| Commercial and other loans | | | 612,886 | | | | 35,306 | | | | 7.70 | % | | | 563,284 | | | | 32,294 | | | | 7.67 | % |
| Consumer loans | | | 282,154 | | | | 14,724 | | | | 6.98 | % | | | 272,960 | | | | 13,819 | | | | 6.77 | % |
| Total loans | | | 1,483,848 | | | | 73,501 | | | | 6.62 | % | | | 1,425,879 | | | | 68,618 | | | | 6.43 | % |
| Federal funds sold and | | | | | | | | | | | | | | | | | | | | | | | | |
| other short-term investments | | | 17,302 | | | | 650 | | | | 5.03 | % | | | 14,416 | | | | 517 | | | | 4.79 | % |
| Taxable debt securities | | | 604,303 | | | | 23,196 | | | | 5.13 | % | | | 727,175 | | | | 25,553 | | | | 4.70 | % |
| Nontaxable debt securities | | | 76,578 | | | | 3,238 | | | | 5.65 | % | | | 39,254 | | | | 1,697 | | | | 5.78 | % |
| Corporate stocks and FHLBB stock | | | 42,796 | | | | 2,310 | | | | 7.21 | % | | | 49,723 | | | | 2,393 | | | | 6.44 | % |
| Total securities | | | 740,979 | | | | 29,394 | | | | 5.30 | % | | | 830,568 | | | | 30,160 | | | | 4.86 | % |
| Total interest-earning assets | | | 2,224,827 | | | | 102,895 | | | | 6.18 | % | | | 2,256,447 | | | | 98,778 | | | | 5.85 | % |
| Non interest-earning assets | | | 163,803 | | | | | | | | | | | | 155,006 | | | | | | | | | |
| Total assets | | $ | 2,388,630 | | | | | | | | | | | $ | 2,411,453 | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | $ | 168,217 | | | $ | 202 | | | | 0.16 | % | | $ | 174,156 | | | $ | 225 | | | | 0.17 | % |
| Money market accounts | | | 295,876 | | | | 8,630 | | | | 3.90 | % | | | 247,979 | | | | 6,026 | | | | 3.25 | % |
| Savings accounts | | | 198,845 | | | | 2,017 | | | | 1.36 | % | | | 197,035 | | | | 888 | | | | 0.60 | % |
| Time deposits | | | 828,976 | | | | 28,483 | | | | 4.59 | % | | | 863,831 | | | | 26,733 | | | | 4.14 | % |
| FHLBB advances | | | 468,956 | | | | 15,323 | | | | 4.37 | % | | | 527,108 | | | | 16,115 | | | | 4.09 | % |
| Junior subordinated debentures | | | 22,681 | | | | 1,014 | | | | 5.98 | % | | | 22,681 | | | | 1,014 | | | | 5.98 | % |
| Other | | | 21,521 | | | | 730 | | | | 4.53 | % | | | 7,331 | | | | 256 | | | | 4.67 | % |
| Total interest-bearing liabilities | | | 2,005,072 | | | | 56,399 | | | | 3.76 | % | | | 2,040,121 | | | | 51,257 | | | | 3.36 | % |
| Demand deposits | | | 177,713 | | | | | | | | | | | | 185,088 | | | | | | | | | |
| Other liabilities | | | 31,072 | | | | | | | | | | | | 22,517 | | | | | | | | | |
| Shareholders’ equity | | | 174,773 | | | | | | | | | | | | 163,727 | | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 2,388,630 | | | | | | | | | | | $ | 2,411,453 | | | | | | | | | |
| Net interest income (FTE) | | | | | | $ | 46,496 | | | | | | | | | | | $ | 47,521 | | | | | |
| Interest rate spread | | | | | | | | | | | 2.42 | % | | | | | | | | | | | 2.49 | % |
| Net interest margin | | | | | | | | | | | 2.79 | % | | | | | | | | | | | 2.82 | % |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
Restatement of Previously Reported Results (unaudited) | |
| | |
| | | June 30, 2007 | |
| (Dollars in thousands, except per share amounts) | | As Reported | | | Adjustment | | | As Adjusted | |
Period-End Balance Sheet | | | | | | | | | |
| Available for sale securities | | $ | 525,688 | | | $ | 150,516 | | | $ | 676,204 | |
| Held to maturity securities | | | 154,171 | | | | (154,171 | ) | | | – | |
| Total securities | | | 679,859 | | | | (3,655 | ) | | | 676,204 | |
| Other assets | | | 21,063 | | | | 1,237 | | | | 22,300 | |
| Total assets | | | 2,396,300 | | | | (2,418 | ) | | | 2,393,882 | |
| Retained earnings | | | 148,485 | | | | (828 | ) | | | 147,657 | |
| Accumulated other comprehensive loss | | | (6,519 | ) | | | (1,590 | ) | | | (8,109 | ) |
| Shareholders’ equity | | | 173,606 | | | | (2,418 | ) | | | 171,188 | |
| | | | | | | | | | | | | |
Share Information | | | | | | | | | | | | |
| Book value per share | | $ | 13.05 | | | $ | (0.18 | ) | | $ | 12.87 | |
| Tangible book value per share | | $ | 8.79 | | | $ | (0.18 | ) | | $ | 8.61 | |
| | | | | | | | | | | | | |
Capital Ratios | | | | | | | | | | | | |
| Tier 1 risk-based capital | | | 9.46 | % | | | (0.06 | %) | | | 9.40 | % |
| Total risk-based capital | | | 10.79 | % | | | (0.06 | %) | | | 10.73 | % |
| Tier 1 leverage ratio | | | 6.20 | % | | | (0.04 | %) | | | 6.16 | % |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
Restatement of Previously Reported Results (unaudited) | |
| | |
| | | Three Months Ended June 30, 2007 | |
| (Dollars in thousands, except per share amounts) | | As Reported | | | Adjustment | | | As Adjusted | |
Operating Results | | | | | | | | | |
| Interest income on taxable securities | | $ | 7,709 | | | $ | 130 | | | $ | 7,839 | |
| Interest expense on FHLB advances | | | 5,063 | | | | 49 | | | | 5,112 | |
| Net interest income | | | 14,846 | | | | 81 | | | | 14,927 | |
| Net realized gains (losses) on securities | | | 705 | | | | (1,405 | ) | | | (700 | ) |
| Other noninterest expense | | | 2,274 | | | | (115 | ) | | | 2,159 | |
| Income before taxes | | | 9,199 | | | | (1,209 | ) | | | 7,990 | |
| Income tax expense | | | 2,889 | | | | (381 | ) | | | 2,508 | |
| Net income | | | 6,310 | | | | (828 | ) | | | 5,482 | |
| | | | | | | | | | | | | |
Share Information | | | | | | | | | | | | |
| Basic earnings | | $ | 0.47 | | | $ | (0.06 | ) | | $ | 0.41 | |
| Diluted earnings | | $ | 0.46 | | | $ | (0.06 | ) | | $ | 0.40 | |
| | | | | | | | | | | | | |
Key Ratios | | | | | | | | | | | | |
| Return on average assets | | | 1.06 | % | | | (0.14 | %) | | | 0.92 | % |
| Return on average equity | | | 14.37 | % | | | (1.80 | %) | | | 12.57 | % |
| Interest rate spread (taxable equivalent basis) | | | 2.38 | % | | | 0.01 | % | | | 2.39 | % |
| Net interest margin (taxable equivalent basis) | | | 2.75 | % | | | 0.01 | % | | | 2.76 | % |
| | | | | | | | | | | | | |
Average Balances | | | | | | | | | | | | |
| Federal funds sold and other short-term investments | | $ | 17,028 | | | $ | (77 | ) | | $ | 16,951 | |
| Taxable debt securities | | | 605,538 | | | | 2,685 | | | | 608,223 | |
| Total securities | | | 744,336 | | | | 2,608 | | | | 746,944 | |
| Total interest-earning assets | | | 2,232,576 | | | | 2,608 | | | | 2,235,184 | |
| Non interest-earning assets | | | 159,111 | | | | (208 | ) | | | 158,903 | |
| Total assets | | | 2,391,687 | | | | 2,400 | | | | 2,394,087 | |
| FHLB advances | | | 467,411 | | | | 3,615 | | | | 471,026 | |
| Total interest-bearing liabilities | | | 2,011,713 | | | | 3,615 | | | | 2,015,328 | |
| Other liabilities | | | 30,863 | | | | (11 | ) | | | 30,852 | |
| Shareholders’ equity | | | 175,638 | | | | (1,204 | ) | | | 174,434 | |
| Total liabilities and shareholders’ equity | | | 2,391,687 | | | | 2,400 | | | | 2,394,087 | |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
Restatement of Previously Reported Results (unaudited) | |
| | |
| | | Six Months Ended June 30, 2007 | |
| (Dollars in thousands, except per share amounts) | | As Reported | | | Adjustment | | | As Adjusted | |
Operating Results | | | | | | | | | |
| Interest income on taxable securities | | $ | 15,501 | | | $ | 130 | | | $ | 15,631 | |
| Interest expense on FHLB advances | | | 10,031 | | | | 49 | | | | 10,080 | |
| Net interest income | | | 29,716 | | | | 81 | | | | 29,797 | |
| Net realized gains on securities | | | 1,741 | | | | (1,405 | ) | | | 336 | |
| Other noninterest expense | | | 3,870 | | | | (115 | ) | | | 3,755 | |
| Income before taxes | | | 17,908 | | | | (1,209 | ) | | | 16,699 | |
| Income tax expense | | | 5,623 | | | | (381 | ) | | | 5,242 | |
| Net income | | | 12,285 | | | | (828 | ) | | | 11,457 | |
| | | | | | | | | | | | | |
Share Information | | | | | | | | | | | | |
| Basic earnings | | $ | 0.92 | | | $ | (0.06 | ) | | $ | 0.86 | |
| Diluted earnings | | $ | 0.90 | | | $ | (0.06 | ) | | $ | 0.84 | |
| | | | | | | | | | | | | |
Key Ratios | | | | | | | | | | | | |
| Return on average assets | | | 1.03 | % | | | (0.07 | %) | | | 0.96 | % |
| Return on average equity | | | 14.01 | % | | | (0.89 | %) | | | 13.12 | % |
| Interest rate spread (taxable equivalent basis) | | | 2.42 | % | | | 0.01 | % | | | 2.43 | % |
| Net interest margin (taxable equivalent basis) | | | 2.78 | % | | | 0.01 | % | | | 2.79 | % |
| | | | | | | | | | | | | |
Average Balances | | | | | | | | | | | | |
| Federal funds sold and other short-term investments | | $ | 15,271 | | | $ | (40 | ) | | $ | 15,231 | |
| Taxable debt securities | | | 614,211 | | | | 1,351 | | | | 615,562 | |
| Total securities | | | 746,950 | | | | 1,311 | | | | 748,261 | |
| Total interest-earning assets | | | 2,221,505 | | | | 1,311 | | | | 2,222,816 | |
| Non interest-earning assets | | | 165,038 | | | | (104 | ) | | | 164,934 | |
| Total assets | | | 2,386,543 | | | | 1,207 | | | | 2,387,750 | |
| FHLB advances | | | 467,429 | | | | 1,817 | | | | 469,246 | |
| Total interest-bearing liabilities | | | 2,008,201 | | | | 1,817 | | | | 2,010,018 | |
| Other liabilities | | | 30,791 | | | | (5 | ) | | | 30,786 | |
| Shareholders’ equity | | | 175,319 | | | | (605 | ) | | | 174,714 | |
| Total liabilities and shareholders’ equity | | | 2,386,543 | | | | 1,207 | | | | 2,387,750 | |
| Washington Trust Bancorp, Inc. and Subsidiaries | |
Restatement of Previously Reported Results (unaudited) | |
| | |
| | | Six Months Ended June 30, 2007 | |
| (Dollars in thousands) | | As Reported | | | Adjustment | | | As Adjusted | |
Operating Results | | | | | | | | | |
| Net cash provided by operating activities | | $ | 9,434 | | | $ | 118 | | | $ | 9,552 | |
| Purchases of: | | | | | | | | | | | |
| | Mortgage-backed securities available for sale | | | (29,065 | ) | | | (84,584 | ) | | | (113,649 | ) |
| | Other investment securities available for sale | | | (18,865 | ) | | | (15,031 | ) | | | (33,896 | ) |
| | Mortgage-backed securities held to maturity | | | – | | | | – | | | | – | |
| | Other investment securities held to maturity | | | (16,011 | ) | | | 3,129 | | | | (12,882 | ) |
| Proceeds from sale of: | | | | | | | | | | | | |
| | Mortgage-backed securities available for sale | | | – | | | | 47,938 | | | | 47,938 | |
| | Other investment securities available for sale | | | 9,438 | | | | – | | | | 9,438 | |
| | Mortgage-backed securities held to maturity | | | 1,954 | | | | 36,547 | | | | 38,501 | |
| | Other investment securities held to maturity | | | 9,815 | | | | 11,883 | | | | 21,698 | |
| Maturities and principal payments of: | | | | | | | | | | | | |
| | Mortgage-backed securities available for sale | | | 29,542 | | | | 3,041 | | | | 32,583 | |
| | Other investment securities available for sale | | | 5,982 | | | | 450 | | | | 6,432 | |
| | Mortgage-backed securities held to maturity | | | 6,232 | | | | (3,041 | ) | | | 3,191 | |
| | Other investment securities held to maturity | | | 20,940 | | | | (450 | ) | | | 20,490 | |
| Net cash used in investing activities | | | (19,376 | ) | | | (118 | ) | | | (19,494 | ) |
| Proceeds from Federal Home Loan Bank advances | | | 344,719 | | | | 47,000 | | | | 391,719 | |
| Repayment of Federal Home Loan Bank advances | | | (350,433 | ) | | | (47,000 | ) | | | (397,433 | ) |
| Net cash provided by financing activities | | | (3,951 | ) | | | – | | | | (3,951 | ) |
| Net decrease in cash and cash and cash equivalents | | | (13,893 | ) | | | – | | | | (13,893 | ) |
