UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q


(Mark One)
[X] Quarterly  report pursuant to section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the quarterly  period ended JUNE 30, 1999 or

[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange
    Act of 1934

                       Commission file number: 000-13091

                     -------------------------------------

                         WASHINGTON TRUST BANCORP, INC.
             (Exact name of registrant as specified in its charter)

                     -------------------------------------


          RHODE ISLAND                                            05-0404671
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

         23 BROAD STREET
     WESTERLY, RHODE ISLAND                                       02891
(Address of principal executive offices)                        (Zip Code)

                         (401) 348-1200
             (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
[X] Yes    [ ] No


The  number of  shares  of common  stock  of the  registrant outstanding as of
July 31, 1999 was 10,141,290.




                                     Page 1




                                    FORM 10-Q
                  WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
                       For The Quarter Ended June 30, 1999


                                TABLE OF CONTENTS


                                                                           Page
                                                                          Number
PART I.  Financial Information

Item 1.  Financial Statements

Consolidated Balance Sheets
       June 30, 1999 and December 31, 1998                                     3

Consolidated Statements of Income
       Three Months and Six Months Ended June 30, 1999 and 1998                4

Consolidated Statements of Changes in Shareholders' Equity
       Six Months Ended June 30, 1999 and 1998                                 5

Consolidated Statements of Cash Flows
       Six Months Ended June 30, 1999 and 1998                                 6

Condensed Notes to Consolidated Financial Statements                           8

Independent Auditors' Review Report                                           10

Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                        11

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           18


PART II.  Other Information                                                   20


Signatures                                                                    21


This report contains certain  statements that may be considered  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
Corporation's actual results could differ materially from those projected in the
forward-looking  statements  as a result,  among  other  factors,  of changes in
general  national or regional  economic  conditions,  changes in interest rates,
reductions in deposit levels necessitating increased borrowing to fund loans and
investments,  changes in the size and nature of the  Corporation's  competition,
changes in loan default and  charge-off  rates,  and changes in the  assumptions
used in making such forward-looking statements.





WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY         (Dollars in thousands)
CONSOLIDATED BALANCE SHEETS





                                                   (Unaudited)
                                                    June 30,        December 31,
                                                      1999              1998
- --------------------------------------------------------------------------------
Assets:
Cash and due from banks                              $15,027             $18,475
Federal funds sold and other short-term investments   13,625              10,300
Mortgage loans held for sale                           3,820               5,944
Securities:
   Available for sale, at fair value                 344,333             315,265
   Held to maturity, at cost; fair value $103,031
      in 1999 and $96,548 in 1998                    104,918              95,647
- --------------------------------------------------------------------------------
   Total securities                                  449,251             410,912

Federal Home Loan Bank stock, at cost                 16,444              16,444

Loans                                                476,185             449,502
Less allowance for loan losses                        11,200              10,416
- --------------------------------------------------------------------------------
   Net loans                                         464,985             439,086

Premises and equipment, net                           23,081              22,985
Accrued interest receivable                            5,911               5,540
Other assets                                          24,360               5,383
- --------------------------------------------------------------------------------
   Total assets                                   $1,016,504            $935,069
- --------------------------------------------------------------------------------

Liabilities:
Deposits:
   Demand                                            $97,192             $87,383
   Savings                                           218,919             210,093
   Time                                              283,860             277,847
- --------------------------------------------------------------------------------
   Total deposits                                    599,971             575,323

Dividends payable                                      1,115               1,005
Short-term borrowings                                 19,661              15,033
Federal Home Loan Bank advances                      314,894             262,106
Accrued expenses and other liabilities                 6,598               8,536
- --------------------------------------------------------------------------------
   Total liabilities                                 942,239             862,003
- --------------------------------------------------------------------------------

Shareholders' Equity:
Common stock of $.0625 par value; authorized
   30 million shares; issued 10,136,114 shares
   in 1999 and 10,010,962 shares in 1998                 634                 626
Paid-in capital                                        3,892               2,855
Retained earnings                                     65,280              62,196
Accumulated other comprehensive income                 4,459               7,389
- --------------------------------------------------------------------------------
   Total shareholders' equity                         74,265              73,066
- --------------------------------------------------------------------------------
   Total liabilities and shareholders' equity     $1,016,504            $935,069
- --------------------------------------------------------------------------------

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.






WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY                                                  (Dollars in thousands,
CONSOLIDATED STATEMENTS OF INCOME                                                              except per share data)





                                                                                            (Unaudited)
                                                                              Three Months            Six Months
                                                                         --------------------------------------------

Periods ended June 30,                                                        1999       1998        1999       1998
- ---------------------------------------------------------------------------------------------------------------------
                                                                                                 
Interest income:
   Interest and fees on loans                                                $9,876    $10,022     $19,541   $20,094
   Interest on securities                                                     6,155      5,132      12,199     9,704
   Dividends on corporate stock and Federal Home Loan Bank stock                515        535       1,047     1,043
   Interest on federal funds sold and other short-term investments              104        115         245       284
- ---------------------------------------------------------------------------------------------------------------------
   Total interest income                                                     16,650     15,804      33,032    31,125
- ---------------------------------------------------------------------------------------------------------------------
Interest expense:
   Savings deposits                                                             900        845       1,752     1,672
   Time deposits                                                              3,523      3,926       6,983     7,816
   Federal Home Loan Bank advances                                            4,002      3,331       7,833     6,403
   Other                                                                        254        288         474       520
- ---------------------------------------------------------------------------------------------------------------------
   Total interest expense                                                     8,679      8,390      17,042    16,411
- ---------------------------------------------------------------------------------------------------------------------
Net interest income                                                           7,971      7,414      15,990    14,714
Provision for loan losses                                                       450        450         900       900
- ---------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses                           7,521      6,964      15,090    13,814
- ---------------------------------------------------------------------------------------------------------------------
Noninterest income:
   Trust revenue                                                              1,475      1,361       2,894     2,585
   Service charges on deposit accounts                                          758        742       1,483     1,375
   Merchant processing fees                                                     393        222         642       377
   Net gains on sales of securities                                             122        351         384       392
   Net gains on loan sales                                                      231        414         558       743
   Other income                                                                 661        225       1,011       507
- ---------------------------------------------------------------------------------------------------------------------
   Total noninterest income                                                   3,640      3,315       6,972     5,979
- ---------------------------------------------------------------------------------------------------------------------
Noninterest expense:
   Salaries and employee benefits                                             3,938      3,472       7,721     6,891
   Net occupancy                                                                543        502       1,047       961
   Equipment                                                                    709        622       1,381     1,188
   Merchant processing costs                                                    295        227         436       338
   Office supplies                                                              150        178         307       336
   Advertising and promotion                                                    291        169         463       281
   Other                                                                      1,392      1,620       3,145     2,985
- ---------------------------------------------------------------------------------------------------------------------
   Total noninterest expense                                                  7,318      6,790      14,500    12,980
- ---------------------------------------------------------------------------------------------------------------------
Income before income taxes                                                    3,843      3,489       7,562     6,813
Income tax expense                                                            1,144        977       2,250     1,908
- ---------------------------------------------------------------------------------------------------------------------
   Net income                                                                $2,699     $2,512      $5,312    $4,905
- ---------------------------------------------------------------------------------------------------------------------

Per share information:
Earnings per share - basic                                                     $.27       $.25        $.53      $.49
Earnings per share - diluted                                                   $.26       $.24        $.51      $.47
Cash dividends declared per share                                              $.11       $.10        $.22      $.20



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.




WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY                                                      (Dollars in thousands)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)


                                                                               Accumulated
                                                                                  Other
                                         Common      Paid-in    Retained      Comprehensive     Treasury
                                         Stock       Capital    Earnings          Income          Stock      Total
- ----------------------------------------------------------------------------------------------------------------------
                                                                                            
Balance at January 1, 1999                 $626       $2,855      $62,196          $7,389             $-      $73,066
Net income                                                          5,312                                       5,312
Other comprehensive income net of tax:
   Net unrealized losses on securities,
     net of reclassification adjustment                                            (2,930)                     (2,930)
                                                                                                               -------
Comprehensive income                                                                                            2,382
Cash dividends declared                                            (2,228)                                     (2,228)
Shares issued                                 8        1,037                                                    1,045
- ----------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1999                   $634       $3,892      $65,280          $4,459             $-      $74,265
- ----------------------------------------------------------------------------------------------------------------------


Balance at January 1, 1998                 $413       $3,705      $56,360          $7,059          $(333)     $67,204
Net income                                                          4,905                                       4,905
Other comprehensive income net of tax:
   Net unrealized gains on securities,
     net of reclassification adjustment                                             1,213                       1,213
                                                                                                              --------
Comprehensive income                                                                                            6,118
Cash dividends declared                                            (2,000)                                     (2,000)
Shares issued                                 5          349                                       1,282        1,636
Shares repurchased                                                                                (2,725)      (2,725)
- ----------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1998                   $418       $4,054      $59,265          $8,272        $(1,776)     $70,233
- ----------------------------------------------------------------------------------------------------------------------




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.






WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY                                                 (Dollars in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                  (Unaudited)
Six months ended June 30,                                                                   1999             1998
- --------------------------------------------------------------------------------------------------------------------
                                                                                                     
Cash flows from operating activities:
   Net income                                                                              $5,312            $4,905
   Adjustments to reconcile net income to net cash
       provided by operating activities:
     Provision for loan losses                                                                900               900
     Depreciation of premises and equipment                                                 1,427             1,171
     Amortization of premium in excess of accretion of
       discount on debt securities                                                            285               604
     Net gains on sales of securities                                                        (384)             (392)
     Net gains on loan sales                                                                 (558)             (743)
     Proceeds from sales of loans                                                          33,275            45,469
     Loans originated for sale                                                            (34,919)          (46,182)
     Increase in accrued interest receivable                                                 (371)             (801)
     Increase in other assets                                                              (3,697)             (973)
     Increase (decrease) in accrued expenses and other liabilities                          2,218              (533)
     Other, net                                                                               (99)             (124)
- --------------------------------------------------------------------------------------------------------------------
   Net cash provided by operating activities                                                3,389             3,301
- --------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
   Securities available for sale:
     Purchases                                                                            (84,012)         (122,712)
     Proceeds from sales                                                                   16,175            22,544
     Maturities and principal repayments                                                   34,424            30,761
   Securities held to maturity:
     Purchases                                                                            (31,477)           (6,388)
     Maturities and principal repayments                                                   22,209             2,349
   Principal collected on loans (under) over loan originations                            (22,634)            1,923
   Proceeds from sales of other real estate owned                                             338               504
   Purchases of premises and equipment                                                     (1,526)           (2,301)
   Purchase of bank-owned life insurance                                                  (18,000)                -
- --------------------------------------------------------------------------------------------------------------------
   Net cash used in investing activities                                                  (84,503)          (73,320)
- --------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
   Net increase in deposits                                                                24,648            20,862
   Net increase in other short-term borrowings                                              4,628             6,430
   Proceeds from Federal Home Loan Bank advances                                          286,837           313,300
   Repayment of Federal Home Loan Bank advances                                          (234,049)         (258,970)
   Purchase of  treasury stock                                                                  -            (2,725)
   Proceeds from issuance of common stock                                                   1,045             1,636
   Cash dividends paid                                                                     (2,118)           (1,925)
- --------------------------------------------------------------------------------------------------------------------
   Net cash provided by financing activities                                               80,991            78,608
- --------------------------------------------------------------------------------------------------------------------
   Net (decrease) increase in cash and cash equivalents                                      (123)            8,589
   Cash and cash equivalents at beginning of year                                          28,775            26,128
- --------------------------------------------------------------------------------------------------------------------
   Cash and cash equivalents at end of period                                             $28,652           $34,717
- --------------------------------------------------------------------------------------------------------------------
(Continued)





WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)



Six months ended June 30,                                                                   1999             1998
- --------------------------------------------------------------------------------------------------------------------
                                                                                                      
Noncash Investing and Financing Activities:
   Net transfers from loans to other real estate owned                                       $252               $44
   Loans charged off                                                                          410               199
   (Decrease) increase in net unrealized gain on
     securities available for sale                                                         (2,930)            1,213

Supplemental Disclosures:
   Interest payments                                                                      $16,717           $16,385
   Income tax payments                                                                      2,101             1,183




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.






WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY             (Dollars in thousands)
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(1) Basis of Presentation
The accounting  and reporting  policies of Washington  Trust  Bancorp,  Inc. and
subsidiary  (the  "Corporation")  are  in  accordance  with  generally  accepted
accounting  principles and conform to general practices of the banking industry.
In the opinion of management, the accompanying consolidated financial statements
present  fairly the  Corporation's  financial  position  as of June 30, 1999 and
December 31, 1998 and the results of  operations  and cash flows for the interim
periods presented.

The consolidated  financial  statements  include the accounts of the Corporation
and its wholly-owned  subsidiary,  The Washington Trust Company. All significant
intercompany balances and transactions have been eliminated.

The unaudited  consolidated  financial  statements of Washington  Trust Bancorp,
Inc. presented herein have been prepared pursuant to the rules of the Securities
and Exchange  Commission  for quarterly  reports on Form 10-Q and do not include
all of the  information  and note  disclosures  required by  generally  accepted
accounting  principles.  These statements should be read in conjunction with the
consolidated  financial statements and notes thereto for the year ended December
31, 1998, included in the Corporation's  Annual Report on Form 10-K for the year
ended December 31, 1998.

(2) Securities Available for Sale


Securities available for sale are summarized as follows:

                                                       Amortized         Unrealized        Unrealized         Fair
                                                         Cost               Gains            Losses           Value
- ---------------------------------------------------------------------------------------------------------------------
                                                                                                
June 30, 1999
U.S. Treasury obligations and obligations
  of U.S. government-sponsored agencies                 $113,022             $745            $(952)         $112,815
Mortgage-backed securities                               173,803              529           (1,583)          172,749
Corporate bonds                                           36,681                4             (637)           36,048
Corporate stocks                                          13,039           10,036             (354)           22,721
- ---------------------------------------------------------------------------------------------------------------------
Total                                                    336,545           11,314           (3,526)          344,333
- ---------------------------------------------------------------------------------------------------------------------
December 31, 1998
U.S. Treasury obligations and obligations
  of U.S. government-sponsored agencies                  113,757            1,782              (12)          115,527
Mortgage-backed securities                               143,906              666             (495)          144,077
Corporate bonds                                           27,533              179             (209)           27,503
Corporate stocks                                          17,842           10,408              (92)           28,158
- ---------------------------------------------------------------------------------------------------------------------
Total                                                   $303,038          $13,035            $(808)         $315,265
- ---------------------------------------------------------------------------------------------------------------------


Securities  available  for sale with a fair value of $70,686  and  $27,800  were
pledged to secure Treasury Tax and Loan deposits, borrowings and public deposits
at June 30, 1999 and December 31, 1998, respectively.

For the six  months  ended June 30,  1999,  proceeds  from  sales of  securities
available for sale  amounted to $16,175 while net realized  gains on these sales
amounted to $384.






(3) Securities Held to Maturity


The amortized cost and fair value of securities  held to maturity are summarized
as follows:

                                                      Amortized           Unrealized        Unrealized        Fair
                                                         Cost                Gains            Losses          Value
- ---------------------------------------------------------------------------------------------------------------------
                                                                                                 
June 30, 1999
U.S. Treasury obligations and obligations
  of U.S. government-sponsored agencies                  $25,295              $25            $(417)          $24,903
Mortgage-backed securities                                51,938              142           (1,418)           50,662
States and political subdivisions                         27,685               72             (291)           27,466
- ---------------------------------------------------------------------------------------------------------------------
Total                                                    104,918              239           (2,126)          103,031
- ---------------------------------------------------------------------------------------------------------------------
December 31, 1998
U.S. Treasury obligations and obligations
  of U.S. government-sponsored agencies                   21,987              133               (1)           22,119
Mortgage-backed securities                                46,088              335              (96)           46,327
States and political subdivisions                         27,572              531               (1)           28,102
- ---------------------------------------------------------------------------------------------------------------------
Total                                                    $95,647             $999             $(98)          $96,548
- ---------------------------------------------------------------------------------------------------------------------


There were no sales or transfers of securities  held to maturity  during the six
months ended June 30, 1999.

(4) Loan Portfolio The following is a summary of loans:

                                                     June 30,       December 31,
                                                       1999             1998
- --------------------------------------------------------------------------------
Commercial:
    Mortgages                                         $86,409            $70,468
    Construction and development                        1,285                612
    Other (1)                                         113,195            111,477
- --------------------------------------------------------------------------------
Total commercial                                      200,889            182,557

Residential real estate:
    Mortgages                                         184,486            179,589
    Homeowner construction                             10,981             10,046
- --------------------------------------------------------------------------------
Total residential real estate                         195,467            189,635

Consumer (2)                                           79,829             77,310
- --------------------------------------------------------------------------------
    Total loans                                      $476,185           $449,502
- --------------------------------------------------------------------------------

(1) Loans to businesses and individuals, a substantial portion of which is fully
    or partially collateralized by real estate.
(2) Includes  credit  card  loans  totaling  $5.1  million  and $5.4  million at
    June 30, 1999 and December  31,1998, respectively.






(5) Allowance For Loan Losses
The following is an analysis of the allowance for loan losses:

                                      Three Months              Six Months
                                ------------------------------------------------
Periods ended June 30,             1999        1998          1999        1998
- --------------------------------------------------------------------------------
Balance at beginning of period   $10,768      $9,309       $10,416      $8,835
Provision charged to expense         450         450           900         900
Recoveries                           250          97           294         176
Loans charged off                   (268)       (144)         (410)       (199)
- --------------------------------------------------------------------------------
Balance at end of period         $11,200      $9,712       $11,200      $9,712
- --------------------------------------------------------------------------------



INDEPENDENT AUDITORS' REVIEW REPORT


The Board of Directors and Shareholders
Washington Trust Bancorp, Inc.:


We have reviewed the  consolidated  balance sheet of Washington  Trust  Bancorp,
Inc.  and  subsidiary  (the  "Corporation")  as of June 30,  1999,  the  related
consolidated  statements  of income for the three  month and  six-month  periods
ended June 30, 1999 and 1998, and changes in shareholders' equity and cash flows
for the  six-month  periods  ended June 30,  1999 and 1998.  These  consolidated
financial statements are the responsibility of the Corporation's management.

We  conducted  our  reviews in  accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the consolidated  financial  statements referred to above for them to
be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the  consolidated  balance  sheet of the Company as of December  31,
1998,   and  the  related   consolidated   statements  of  income,   changes  in
stockholders'  equity,  and cash  flows  for the year then  ended not  presented
herein;  and in our report dated January 21, 1999,  we expressed an  unqualified
opinion  on  those  consolidated  financial  statements.  In  our  opinion,  the
information  set  forth in the  accompanying  consolidated  balance  sheet as of
December 31, 1998, is fairly stated, in all material respects.



KPMG LLP

Providence, Rhode Island
July 15, 1999







MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS

Results of Operations
Net income for the three months ended June 30, 1999 amounted to $2.7 million, or
$.26 per diluted  share.  Net income was 7.4% higher than the $2.5  million,  or
$.24  per  diluted  share,  earned  in the  quarter  ended  June 30,  1998.  The
Corporation's  rates of return on  average  assets  and  average  equity for the
second quarter of 1999 were 1.09% and 14.44%,  respectively.  Comparable amounts
for the second quarter of 1998 were 1.14% and 14.31%.

Net income for the six months ended June 30, 1999 amounted to $5.3  million,  an
increase of 8.3% from the $4.9 million  reported for the comparable 1998 period.
Diluted  earnings per share for the six months  ended June 30, 1999  amounted to
$.51,  up from $.47 per share earned in the six months ended June 30, 1998.  The
Corporation's  rates of return on average  assets and average equity for the six
months  ended June 30,  1999 were  1.09% and  14.30%,  respectively.  Comparable
amounts for the 1998 period were 1.14% and 14.09%.

For the second  quarter of 1999,  net interest  income (the  difference  between
interest earned on loans and investments and interest paid on deposits and other
borrowings)  amounted to $8.0 million, an increase of 7.5% from the $7.4 million
reported for the second quarter of 1998. Net interest  income for the six months
ended June 30, 1999 rose 8.7% over the corresponding 1998 period.  This increase
was  primarily  attributable  to net interest  income  generated  by  investment
securities. (See additional discussion under the caption "Net Interest Income".)

The  Corporation's  provision  for loan  losses was $450  thousand in the second
quarter of 1999 and 1998, respectively.  For the six months ended June 30, 1999,
the  provision for loan losses  amounted to $900  thousand,  unchanged  from the
comparable 1998 period.

Other  noninterest  income  (noninterest  income excluding net gains on sales of
securities)  amounted to $3.5 million for the second  quarter of 1999,  up 18.7%
from the corresponding 1998 quarter. The increase was primarily due to increases
in other  income,  merchant  processing  fees and revenues  for trust  services.
Included  in other  income was $196  thousand of  earnings  on  bank-owned  life
insurance  (BOLI) purchased  during the quarter.  Further  discussion of BOLI is
provided  under  the  caption   "Financial   Condition  and  Liquidity".   Other
noninterest  income  amounted to $6.6  million for the six months ended June 30,
1999, up 17.9% from the corresponding 1998 period.

For the three months  ended June 30, 1999,  net  securities  gains  totaled $122
thousand,  compared  to $351  thousand  for the  quarter  ended  June 30,  1998.
Comparable  amounts for the six months ended June 30, 1999 and 1998  amounted to
$384 thousand and $392 thousand, respectively.

Total  noninterest  expense for the quarter ended June 30, 1999 amounted to $7.3
million, an increase of 7.8% from the comparable 1998 amount.  Total noninterest
expense for the six months  ended June 30, 1999  amounted to $14.5  million,  an
increase of 11.7% over the comparable 1998 amount.  The increases were primarily
attributable to higher salaries and benefits  expense and increases in equipment
costs.  Equipment  costs for the six months  ended June 30, 1999 rose 16.2% over
the prior year period due primarily to depreciation expense associated with 1998
investments in  technology.  Included in other  noninterest  expense for the six
months ended June 30, 1999 and 1998 were  contributions  of  appreciated  equity
securities to the Corporation's charitable foundation amounting to $270 thousand
and  $323  thousand,  respectively.  These  transactions  resulted  in  realized
securities gains of $262 thousand and $313 thousand,  respectively, for the same
periods.







Net Interest Income
(The  accompanying  schedule  entitled "Average Balances / Net Interest Margin -
Fully Taxable  Equivalent  Basis (FTE)" should be read in conjunction  with this
discussion.)

FTE net interest income for the six months ended June 30, 1999 amounted to $16.6
million,  up 8.9% over the same  1998  period  due  primarily  to the  growth in
interest-earning  assets.  The net interest margin (FTE net interest income as a
percentage of average interest-earning assets) for the six months ended June 30,
1999 and 1998 were 3.65% and 3.76%, respectively.

For the six months ended June 30, 1999, average interest-earning assets amounted
to $914.5 million,  an increase of $105.7 million, or 13.1%, over the comparable
1998 amount. The growth in average  interest-earning assets was due to growth in
the securities  portfolio.  Total average securities rose $98.4 million or 27.8%
over  the  comparable  prior  year  period,  mainly  due to  purchases  of  debt
securities.  The FTE rate of return on  securities  was 6.23% for the six months
ended June 30, 1999,  down from 6.46% for the same 1998 period.  The decrease in
yields  reflects lower marginal rates on investment  purchases.  The FTE rate of
return on average  interest-earning  assets  was 7.41% for the six months  ended
June 30,  1999,  down from 7.82% for the same 1998 period due to  reductions  in
yields on loans and securities.

The yield on average total loans amounted to 8.56% for the six months ended June
30, 1999,  down from 8.87% in the  comparable  1998 period due to changes in the
prime rate as well as lower yields on new loan originations. Average total loans
for the six months  ended June 30, 1999 rose $7.3 million or 1.6% over the prior
year and amounted to $461.7 million. Average consumer loans and residential real
estate  loans  rose by 3.9% and 2.8% over the prior  year,  respectively,  while
average commercial loans declined slightly.  As a result of prime rate decreases
during the fourth quarter of 1998, the yields on consumer and  residential  real
estate  loans  declined 48 basis  points and 46 basis points to 8.60% and 7.71%,
respectively.  The yield on commercial  loans  amounted to 9.41%,  down from the
prior year yield of 9.48%.

The Corporation's total cost of funds on interest-bearing  liabilities  amounted
to 4.26%  for the six  months  ended  June 30,  1999,  down  from  4.64% for the
comparable 1998 period. This decrease was due primarily to reduced rates paid on
both borrowed funds and deposits. Average FHLB advances for the six months ended
June 30,  1999  amounted  to $295.1  million,  up 34.5% from the $219.4  million
average balance for the same 1998 period. The average rate paid on FHLB advances
for the six months ended June 30, 1999 was 5.35%,  a decrease of 49 basis points
from the prior year rate.  Average  time  deposits  declined  slightly to $283.6
million  with a decrease of 53 basis  points in the rate paid.  Average  savings
deposits  for the six  months  ended  June 30,  1999  increased  12.2%  from the
comparable  1998 amount to $208.1  million.  The rate paid on these deposits was
1.70%  for the  first six  months  of 1999,  down  from  1.80% for the same 1998
period.  For the six months ended June 30, 1999,  average  demand  deposits,  an
interest-free  funding source,  were up by $9.3 million, or 12.5%, from the same
prior year period.






Average Balances / Net Interest Margin - Fully Taxable Equivalent Basis
The following  table sets forth average  balance and interest rate  information.
Income is presented on a fully taxable  equivalent basis (FTE). For dividends on
corporate stocks,  the 70% federal dividends  received deduction is also used in
the calculation of tax equivalency.  Nonaccrual and renegotiated  loans, as well
as interest earned on these loans (to the extent  recognized in the Consolidated
Statements of Income) are included in amounts presented for loans.


Six months ended June 30,                                   1999                                1998
- -------------------------------------------- ------------------------------------ ----------------------------------
                                           Average                    Yield/       Average                   Yield/
(Dollars in thousands)                     Balance      Interest       Rate        Balance      Interest      Rate
- ---------------------------------------- ------------- ----------- ----------- -------------- ----------- ----------
                                                                                            
Assets:
Residential real estate loans              $193,327       $7,394       7.71%      $187,998       7,680        8.17%
Commercial and other loans                  191,175        8,921       9.41%       192,091       9,108        9.48%
Consumer loans                               77,157        3,291       8.60%        74,285       3,371        9.08%
- --------------------------------------------------------------------------------------------------------------------
   Total loans                              461,659       19,606       8.56%       454,374      20,159        8.87%
Federal funds sold  and other
short-term investments                       10,389          245       4.76%        10,394         284        5.46%
Taxable debt securities                     385,194       11,592       6.07%       294,408       9,285        6.31%
Nontaxable debt securities                   27,122          916       6.81%        19,411         633        6.52%
Corporate stocks and FHLB stock              30,139        1,236       8.27%        30,191       1,250        8.28%
- --------------------------------------------------------------------------------------------------------------------
   Total securities                         452,844       13,989       6.23%       354,404      11,452        6.46%
- --------------------------------------------------------------------------------------------------------------------
   Total interest-earning assets            914,503       33,595       7.41%       808,778      31,611        7.82%
- --------------------------------------------------------------------------------------------------------------------
Non interest-earning assets                  56,659                                 50,613
- --------------------------------------------------------------------------------------------------------------------
   Total assets                            $971,162                               $859,391
- --------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
Savings deposits                           $208,066        1,752       1.70%      $185,471       1,672        1.80%
Time deposits                               283,598        6,983       4.97%       284,222       7,816        5.50%
FHLB advances                               295,117        7,833       5.35%       219,364       6,403        5.84%
Other                                        19,650          474       4.86%        18,421         520        5.65%
- --------------------------------------------------------------------------------------------------------------------
   Total interest-bearing liabilities       806,431       17,042       4.26%       707,478      16,411        4.64%
Demand deposits                              83,848                                 74,562
Non interest-bearing liabilities              6,605                                  7,743
- --------------------------------------------------------------------------------------------------------------------
   Total liabilities                        896,884                                789,783
Total shareholders' equity                   74,278                                 69,608
- --------------------------------------------------------------------------------------------------------------------
   Total liabilities and
     shareholders' equity                  $971,162                               $859,391
- --------------------------------------------------------------------------------------------------------------------
   Net interest income                                   $16,553                               $15,200
- --------------------------------------------------------------------------------------------------------------------
Net interest spread                                                    3.15%                                  3.18%
- --------------------------------------------------------------------------------------------------------------------
Net interest margin                                                    3.65%                                  3.76%
- --------------------------------------------------------------------------------------------------------------------
<FN>
Interest  income  amounts  presented  in the table above  include the  following
adjustments for taxable equivalency:

(Dollars in thousands)

Six months ended June 30,                                1999              1998
- --------------------------------------------------------------------------------
Commercial and other loans                                $65               $65
Nontaxable debt securities                                309               214
Corporate stocks                                          189               207
</FN>






Financial Condition and Liquidity
Total assets  amounted to $1.016  billion at June 30, 1999, an increase of $81.4
million,  or 8.7%, from the December 31, 1998 amount of $935.1 million.  Average
assets  totaled  $971.2  million for the six months ended June 30,  1999,  up by
13.0% over the comparable 1998 period.

Nonperforming   assets   (nonaccrual   loans  and  property   acquired   through
foreclosure)  amounted to $4.3 million or .43% of total assets at June 30, 1999,
down from $5.9 million or .63% of total assets at December 31, 1998.

Securities  Available for Sale - The carrying value of securities  available for
sale at June 30, 1999 amounted to $344.3  million,  an increase of 9.2% over the
December 31, 1998 amount of $315.3  million.  This increase was  attributable to
purchases of debt  securities.  The net unrealized gain on securities  available
for sale amounted to $7.8 million, down 36.3% from the December 31, 1998 balance
of $12.2 million.  This decrease was  attributable to the effect of increases in
Treasury rates that occurred in the first six months of 1999.

Securities  Held to Maturity - The carrying value of securities held to maturity
amounted to $104.9  million at June 30, 1999,  up from $95.6 million at December
31, 1998. This increase was due to purchases of  mortgage-backed  securities and
obligations of U.S.  government-sponsored  agencies.  The net unrealized loss on
securities held to maturity  amounted to approximately  $1.9 million at June 30,
1999,  down from an unrealized  gain of $901 thousand at December 31, 1998.  The
decline was  primarily  due to the effects of increases  in Treasury  rates that
occurred in the first six months of 1999.

Loans - Total loans  amounted to $476.2 million at June 30, 1999, an increase of
$26.7 million,  or 5.9%,  from the December 31, 1998 balance of $449.5  million.
Growth  in the  loan  portfolio  was led by  increases  in the  commercial  loan
portfolio.  Commercial  loans increased $18.3 million or 10.0% to $200.9 million
at June 30,  1999.  Total  residential  real  estate  loans and  consumer  loans
increased by $5.8  million and $2.5 million over the December 31, 1998  balance,
respectively.

The  Corporation  has entered into an agreement to sell its consumer credit card
portfolio of  approximately  $5.1  million.  The  transaction  is expected to be
completed in the third quarter of 1999 and to result in a pre-tax  gain,  net of
expenses,  of  approximately  $500 thousand.  The  Corporation  will continue to
provide merchant credit card processing services.

Other assets - Other assets  totaled  $24.4  million at June 30, 1999,  up $19.0
million from $5.4 million at December 31, 1999.  The increase was  primarily due
to the purchase of bank-owned life insurance (BOLI) during the second quarter of
1999. The  Corporation  purchased  $18.0 million of BOLI as a financing tool for
employee  benefits.  The Corporation expects to benefit from the  BOLI contracts
as a result of the tax-free growth  in  cash  surrender value and death benefits
which are expected to be generated over time. The purchase of the life insurance
policy results in an interest sensitive asset on the  Corporation's consolidated
balance sheet that provides  monthly tax-free  income  to  the  Corporation. The
largest  risk  to the  BOLI program  is credit risk of the  insurance  carriers.
To mitigate this risk,  annual financial  condition reviews are completed on all
carriers. BOLI is included in  other  assets on  the  Corporation's consolidated
balance sheets at its cash surrender  value.  Increases in BOLI's cash surrender
value  are   reported  as   other   income  in  the  Corporation's  consolidated
statements of income.

Deposits - Total  deposits  amounted to $600.0  million at June 30, 1999,  up by
4.3% from the  December  31, 1998 amount of $575.3  million.  Demand and savings
deposits increased by $9.8 million and $8.8 million, respectively, due to normal
seasonal deposit inflow.  Time deposits amounted to $283.9 million,  an increase
of 2.2%  from  the  December  31,  1998  balance  of  $277.8  million.  Brokered
certificates  of deposit of $9.8 million are  included in time  deposits at June
30, 1999.

Borrowings - The Corporation  utilizes  advances from the Federal Home Loan Bank
as well as other short-term  borrowings as part of its overall funding strategy.
The  additional  FHLB  advances  and  short-term  borrowings  were  used to meet
short-term liquidity needs, to fund loan growth and to purchase securities. FHLB
advances  amounted to $314.9  million at June 30, 1999, up by $52.8 million from
the December 31, 1998 amount. In addition,  short-term borrowings outstanding at
June 30, 1999 amounted to $19.7 million.

For the six months ended June 30, 1999, net cash provided by operations amounted
to $3.4  million,  the majority of which was  generated by net income.  Net cash
used in investing activities amounted to $84.5 million and was primarily used to
purchase securities.  Net cash provided by financing activities of $81.0 million
was generated mainly by a net increase in FHLB advances of $52.8 million, and by
an increase in deposits of $24.6 million.  (See Consolidated  Statements of Cash
Flows for additional information.)

Expansion
In April of 1999,  the  Corporation  announced its intention to open a trust and
investment  office  in  Providence,  Rhode  Island.  The  Corporation expects to
open this office by the end of 1999.


Nonperforming Assets
Nonperforming assets are summarized in the following table:

                                                     June 30,       December 31,
 (Dollars in thousands)                                1999            1998
- --------------------------------------------------------------------------------
Nonaccrual loans 90 days or more past due            $2,120           $2,421
Nonaccrual loans less than 90 days past due           2,041            3,192
- --------------------------------------------------------------------------------
Total nonaccrual loans                                4,161            5,613
Other real estate owned                                 169              243
- --------------------------------------------------------------------------------
Total nonperforming assets                           $4,330           $5,856
- --------------------------------------------------------------------------------
Nonaccrual loans as a percentage of total loans         .87%            1.25%
Nonperforming assets as a percentage of total assets    .43%             .63%
Allowance for loan losses to nonaccrual loans        269.17%          185.57%

Nonperforming assets continue to decline and are at the lowest level in over ten
years. Total  nonperforming  assets decreased from $5.9 million or .63% of total
assets at December  31, 1998 to $4.3 million or .43% of total assets at June 30,
1999. Not included in the analysis of nonperforming  assets at June 30, 1999 and
December  31, 1998 above are  approximately  $103  thousand  and $150  thousand,
respectively,  of loans greater than 90 days past due and still accruing.  These
loans  consist   primarily  of   residential   mortgages   that  are  considered
well-collateralized and in the process of collection and therefore are deemed to
have no loss exposure.

Impaired loans consist of all nonaccrual commercial loans. At June 30, 1999, the
recorded  investment  in impaired  loans was $2.8  million,  which had a related
allowance amounting to $625 thousand. The balance of impaired loans that did not
require an  allowance  at June 30, 1999 was $8  thousand.  During the six months
ended June 30, 1999, the average recorded  investment in impaired loans was $3.0
million.  Also during this period,  interest income recognized on impaired loans
amounted  to  approximately $179 thousand. Interest income  on impaired loans is
recognized on a cash basis only.






The following is an analysis of nonaccrual loans by loan category:

                                                  June 30,          December 31,
(Dollars in thousands)                              1999                1998
- --------------------------------------------------------------------------------
Residential mortgages                             $1,064              $1,417
Commercial:
   Mortgages                                         977               1,522
   Other (1)                                       1,791               2,141
Consumer                                             329                 533
- --------------------------------------------------------------------------------
Total nonaccrual loans                            $4,161              $5,613
- --------------------------------------------------------------------------------
(1) Loans to businesses and individuals, a substantial portion of which is fully
or partially collateralized by real estate.

Capital Resources
Total equity capital amounted to $74.3 million,  or 7.3% of total assets at June
30, 1999.  This  compares to $73.1  million,  or 7.8% at December 31, 1998.  The
reduction  in this ratio is due  primarily to growth in the loan  portfolio  and
purchases of investment securities. Total equity increased by approximately $1.2
million from December 31, 1998.  The increase in equity  resulting from earnings
retention  was  reduced by a $2.9  million  decline in net  unrealized  gains on
securities.  (See the Consolidated Statements of Changes in Shareholders' Equity
for additional information.)

At June 30,  1999,  the  Corporation's  Tier 1 capital  ratio was 12.46% and the
total risk-adjusted  capital ratio was 14.35%.  These ratios were both above the
ratios required to be categorized as well-capitalized.

Dividends  payable at June 30, 1999  amounted  to  approximately  $1.1  million,
representing  $.11 per share payable on July 15, 1999, an increase of 10.0% over
the $.10 per share  declared in the fourth  quarter of 1998. The source of funds
for dividends paid by the Corporation is dividends  received from its subsidiary
bank. The subsidiary bank is a regulated enterprise,  and as such its ability to
pay dividends to the parent is subject to regulatory review and restriction.

Book value per share as of June 30, 1999 and December 31, 1998 amounted to $7.33
and $7.30, respectively.

On April 15, 1999, the  Corporation  announced that its Board of Directors voted
to  terminate  the  Corporation's   stock  repurchase  program  which  had  been
previously  announced on December 22, 1997. The repurchase program permitted the
acquisition of up to 225,000  shares  (adjusted to reflect a 3-for-2 stock split
in August 1998) in the open market or in private transactions, based upon market
conditions. Approximately 139,000 shares were repurchased under this program.

Acquisition of PierBank
On February 23, 1999, the Corporation  announced that it had signed a definitive
agreement to acquire  PierBank,  a Rhode  Island-chartered  community  bank with
assets of $59.4 million,  which has its headquarters in South  Kingstown,  Rhode
Island.  Under the terms of the agreement,  the Corporation will exchange shares
of its common stock for shares of PierBank  common stock.  Each  PierBank  share
will initially be valued at approximately  $8.60, for a total  transaction value
of $13.8 million. The actual number and value of the Corporation's common shares
to be issued to PierBank shareholders will be based on an exchange formula using
the  average  closing  price of the  Corporation's  common  stock  during the 15
trading days prior to receiving final regulatory approval.  Based on the initial
exchange ratio,  the  Corporation  will exchange .452 shares of its common stock
for each share of common  stock held by a PierBank  shareholder.  In  accordance
with the agreement,  PierBank granted the Corporation an option to acquire under
certain terms and conditions up to 319,810 shares at $7.48 per share. The option
was granted as an inducement to the Corporation's  willingness to enter into the
agreement. On June 16, 1999, the shareholders of PierBank approved the Agreement
and  Plan of  Merger  under  which  PierBank  will be  merged  with and into The
Washington Trust Company,  the wholly-owned  subsidiary of the Corporation.  The
purchase,  which is expected to be  completed in the third  quarter of 1999,  is
subject to approval by state and federal banking regulators.  The transaction is
expected  to be a  tax-free  reorganization  and  accounted  for as a pooling of
interests.  On April 28, 1999,  the  Corporation  filed with the  Securities and
Exchange Commission a Proxy  Statement/Prospectus  and Registration Statement on
Form S-4 in connection with the Corporation's  proposed acquisition of PierBank.
On May  10,  1999,  the  Corporation  filed  an  amendment  to the  Registration
Statement.  Also  on May 10,  1999,  the  Registration  Statement  was  declared
effective by the Securities and Exchange Commission.

Year 2000
The statements in the following section include "Year 2000 readiness disclosure"
within the meaning of the Year 2000  Information  and Readiness  Disclosure Act.
The following "Year 2000" discussion contains  forward-looking  statements which
represent the  Corporation's  beliefs or expectations  regarding  future events.
When  used  in the  Year  2000  discussion,  the  words  "believes,"  "expects,"
"estimates,"  and similar  expressions are intended to identify  forward-looking
statements.   Forward-looking   statements  include,  without  limitation,   the
Corporation's  expectations  as to when it will complete the phases of the Plan,
its  estimated  costs,  and its belief that its  statements  involve a number of
risks and uncertainties that could cause the actual results to differ materially
from the projected  results.  Factors that may cause these differences  include,
but are not  limited  to, the  availability  of  qualified  personnel  and other
information technology resources, the ability to identify and remediate all date
sensitive  lines of computer code, and the actions of  governmental  agencies or
other third parties with respect to Year 2000 problems.

The  Corporation  has developed a Year 2000 Project Plan (the "Plan") to address
the  computer-related  issues concerning the century date change (the transition
from the year 1999 to the year 2000). The Corporation's  information  technology
(IT) and  non-information  technology (non-IT) systems have been included in the
Plan.  The  Corporation  uses internal  computer  systems,  data  communications
systems  and  telecommunications  systems as well as outside  service  providers
(including  hardware and  software) to support and account for loans,  deposits,
fiduciary  services and other  purposes.  Substantially  all of the  application
software used by the Corporation is provided by outside  vendors,  under license
or through outside service bureaus.  The Corporation has  distinguished  between
mission-critical and other, less critical, systems in assessing the needs of the
Plan.

The Plan includes five phases: awareness, assessment, renovation, validation and
testing,  and  contingency  planning.  The  validation and testing of all IT and
non-IT systems were completed by June 30, 1999. The Corporation's  evaluation is
subject to on-going verification and review by its internal audit staff.

The  Corporation  expects that the total costs  associated with the project will
amount to approximately $500 thousand. The Corporation plans to account for most
of these costs as expense items. In some cases,  acquired  hardware and software
items will be  capitalized  and amortized in accordance  with the  Corporation's
existing accounting policy.  Total costs incurred through June 30, 1999 amounted
to  approximately  $350  thousand.  These costs  consisted  primarily  of system
testing and modification,  internal staffing and consulting,  and were primarily
recorded in noninterest  expenses.  The remaining project costs will be incurred
throughout  1999. The costs of the project and the date on which the Corporation
plans to complete Year 2000 testing are based on  management's  best  estimates,
which were derived utilizing numerous assumptions of future events including the
continued availability of certain resources,  third party modification plans and
other factors.

There can be no  guarantee  that the  systems  of other  companies,  or  outside
vendors on which the  Corporation's  systems rely,  will be remedied on a timely
basis. Therefore, the Corporation could possibly experience a negative impact to
the extent other entities not affiliated  with the Corporation are not Year 2000
compliant.

The Corporation is in the process of evaluating the risk of customer  failure to
prepare for the century date  change,  any  associated  effect on the ability of
customers to repay outstanding loans, and impact on the adequacy of the level of
the  allowance for loan losses.  Because  these  efforts are now  on-going,  the
Corporation is unable to assess the likelihood of any material adverse effect at
this time.

The Corporation's risk management program includes emergency backup and recovery
procedures to be followed in the event of failure of a business-critical system.
These procedures were expanded to include specific procedures for potential Year
2000  issues,  and  contingency  plans  to  protect  against  Year  2000-related
interruptions.  These plans include  backup  procedures  and  identification  of
alternative suppliers. Business resumption contingency planning was completed by
June 30, 1999.

While the Corporation  believes that it is taking  reasonable steps with respect
to the Year 2000 issue, if the phases of the Plan are not completed on time, the
costs  associated  with becoming Year 2000  compliant  exceed the  Corporation's
estimates,  third party providers are not Year 2000 compliant on a timely basis,
or customers with material loan  obligations  are unable to meet their repayment
obligations due to Year 2000 problems, the Year 2000 issue could have a material
impact on the Corporation's  financial results.  In addition,  the Corporation's
efforts  to  address  the Year 2000  issue are being  monitored  by its  federal
banking  regulators.  Failure to be Year 2000  compliant on a timely basis could
subject the Corporation to formal supervisory or enforcement actions.

Recent Accounting Developments
In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting for Derivative
Instruments and Hedging Activities".  This Statement establishes  accounting and
reporting standards for derivative instruments and for hedging activities.  SFAS
No. 133 requires a corporation to recognize all  derivatives as either assets or
liabilities in the balance sheet and to measure those instruments at fair value.
This  Statement  defines  conditions  and criteria to be used in  designating  a
derivative as a specific type of hedging instrument.  SFAS No. 133 also explains
the accounting  for changes in the fair value of a derivative,  which depends on
the  intended  use  and the  resulting  designation.  Under  this  Statement,  a
corporation is required to establish at the inception of the hedge the method to
be used for  assessing  the  effectiveness  of the  hedging  derivative  and the
measurement  approach for determining the ineffective aspect of the hedge. Those
methods must be consistent with the corporation's approach to managing risk. The
Corporation  has not yet  determined  what the  effect of the  adoption  of this
pronouncement   will  have  on  the  financial  position  and  earnings  of  the
Corporation.  In June  1999,  the FASB  issued  SFAS No.  137,  "Accounting  for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of FASB Statement No. 133". SFAS No. 133 is effective for all fiscal quarters of
all  fiscal  years  beginning  after  June  15,  2000  and is not to be  applied
retroactively to financial statements of prior periods.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity and Liquidity
Interest  rate risk is one of the major market  risks faced by the  Corporation.
The  Corporation's  objective is to manage assets and funding sources to produce
results which are consistent with its liquidity,  capital adequacy, growth, risk
and profitability goals.

The Corporation  manages  interest rate risk using income  simulation to measure
interest  rate risk  inherent  in its  on-balance  sheet and  off-balance  sheet
financial instruments at a given point in time by showing the effect of interest
rate  shifts on net  interest  income  over a 60 month  period.  The  simulation
results are reviewed to determine  whether the negative exposure of net interest
income to changes in interest rates remains within established  tolerance levels
over a 24-month horizon,  and to develop  appropriate  strategies to manage this
exposure.  In addition,  the ALCO  reviews  60-month  horizon  results to assess
longer-term  risk inherent in the balance  sheet,  although no 60-month  horizon
tolerance levels are specified. As of June 30, 1999, the Corporation's estimated
exposure as a percentage of net interest income for the next 12 month period and
the subsequent 12 month period thereafter (months 13 - 24), respectively,  is as
follows:

                                            Months 1 - 12       Months 13 - 24
- ---------------------------------------- ------------------- ------------------

200 basis point increase in rates               -2.0%               -5.6%
200 basis point decrease in rates               +1.2%               +0.6%

Since this simulation assumes the Corporation's balance sheet will remain static
over the 24-month simulation horizon,  the results do not reflect adjustments in
strategy that the Corporation  could  implement in response to rate shifts,  and
should therefore not be relied upon as a projection of net interest income.

For a complete discussion of interest rate sensitivity and liquidity,  including
simulation assumptions, see the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1998.

The  Corporation  also  monitors  the  potential  change in market  value of its
available for sale debt securities  using both parallel rate shifts of up to 200
basis points and "value at risk"  analysis.  The purpose is to determine  market
value exposure which may not be captured by income  simulation,  but which might
result in changes to the Corporation's capital position.  Results are calculated
using industry-standard  modeling analytics and securities data. The Corporation
uses  the  results  to  manage  the  effect  of  market  value  changes  on  the
Corporation's  capital  position.  As of June 30, 1999,  an immediate  200 basis
point  rise  in  rates  would  result  in a 4.6%  decline  in the  value  of the
Corporation's available for sale debt securities.  Conversely, a 200 basis point
fall in rates would result in a 2.1% increase in the value of the  Corporation's
available  for sale debt  securities.  "Value  at risk"  analysis  measures  the
theoretical  maximum  market value loss over a given time period based on recent
historical  price activity of different  classes of securities.  The anticipated
maximum  market value  reduction for the bank's  available  for sale  securities
portfolio at June 30, 1999, including both debt and equity securities, was 4.8%,
assuming a one-year time horizon and a 5%  probability  of occurrence for "value
at risk" analysis.






PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings
             No material  changes  since the filing of the  Registrant's  Annual
             Report on Form 10-K for the fiscal year ended December 31, 1998.

Item 2.  Changes in Securities and Use of Proceeds
             None

Item 3.  Defaults upon Senior Securities
             None

Item 4.  Submission of Matters to a Vote of Security Holders
             (a) The Annual Meeting of  Shareholders was held on April 27, 1999.

             (c) The results of matters voted upon are presented below.
              i.  A proposal to elect Gary Bennett,  Larry Hirsch,  Mary
                  Kennard  and  Joseph   Kirby  as   directors   of  the
                  Corporation  for three year terms expiring at the 2002
                  Annual Meeting of Shareholders passed as follows:

                        Votes           Votes          Abstentions and Broker
                       In Favor        Withheld               Non-votes
     ------------ ----------------- --------------- ---------------------------

     Gary Bennett     8,409,801         44,189                     0
     Larry Hirsch     8,405,557         48,432                     0
     Mary Kennard     8,404,179         49,810                     0
     Joseph Kirby     8,414,949         39,041                     0


             ii.  A proposal for the  ratification  of KPMG LLP to serve
                  as  independent  auditors of the  Corporation  for the
                  current  fiscal  year  ending  December  31,  1999 was
                  passed  by  a  vote  of  8,332,179  shares  in  favor;
                  87,416  shares  against, with 34,394  abstentions  and
                  broker non-votes.


Item 5.  Other Information
             None

Item 6.  Exhibits and Reports on Form 8-K
         (a)  Exhibit index

              Exhibit No.
          -----------------
                 10         Change in Control Agreement  (1) (2)
                 11         Statement re Computation of Per Share Earnings

         (b) There were no reports on Form 8-K filed  during the  quarter  ended
             June 30, 1999.


          (1)  Not filed herewith.   In accordance with Rule  12b-32 promulgated
               pursuant to  the  Securities  Exchange  Act  of 1934, as amended,
               reference  is  made to  the  document  previously  filed with the
               Commission, which is incorporated by reference herein.

          (2)  Management contract or compensatory plan or arrangement.






                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                         WASHINGTON TRUST BANCORP, INC.
                                 (Registrant)



August 13, 1999           By: John C. Warren
                          -----------------------------------------------------
                          John C. Warren
                          Chairman and Chief Executive Officer
                          (principal executive officer)





August 13, 1999           By:  David V. Devault
                          -----------------------------------------------------
                          David V. Devault
                          Executive Vice President, Treasurer
                           and Chief Financial Officer
                          (principal financial and accounting officer)