x
|
Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended JUNE 30, 2008
or
|
o
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the transition period from ______ to
______.
|
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)
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
Smaller
reporting company o
|
(Do
not check if a smaller reporting company)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
in thousands)
|
Unaudited
|
||||||||
June 30,
|
December 31,
|
|||||||
2008
|
2007
|
|||||||
Assets:
|
||||||||
Cash
and noninterest-bearing balances due from banks
|
$ | 39,800 | $ | 30,817 | ||||
Interest-bearing
balances due from banks
|
575 | 1,973 | ||||||
Federal
funds sold and securities purchased under resale
agreements
|
4,959 | 7,600 | ||||||
Other
short-term investments
|
1,236 | 722 | ||||||
Mortgage
loans held for sale
|
2,711 | 1,981 | ||||||
Securities
available for sale, at fair value;
|
||||||||
amortized
cost $799,938 in 2008 and $750,583 in 2007
|
790,064 | 751,778 | ||||||
Federal
Home Loan Bank stock, at cost
|
42,008 | 31,725 | ||||||
Loans:
|
||||||||
Commercial
and other
|
795,013 | 680,266 | ||||||
Residential
real estate
|
608,351 | 599,671 | ||||||
Consumer
|
302,286 | 293,715 | ||||||
Total
loans
|
1,705,650 | 1,573,652 | ||||||
Less
allowance for loan losses
|
21,963 | 20,277 | ||||||
Net
loans
|
1,683,687 | 1,553,375 | ||||||
Premises
and equipment, net
|
25,170 | 25,420 | ||||||
Accrued
interest receivable
|
10,617 | 11,427 | ||||||
Investment
in bank-owned life insurance
|
42,262 | 41,363 | ||||||
Goodwill
|
50,479 | 50,479 | ||||||
Identifiable
intangible assets, net
|
10,781 | 11,433 | ||||||
Other
assets
|
28,640 | 19,847 | ||||||
Total
assets
|
$ | 2,732,989 | $ | 2,539,940 | ||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Demand
deposits
|
$ | 187,865 | $ | 175,542 | ||||
NOW
accounts
|
170,733 | 164,944 | ||||||
Money
market accounts
|
305,860 | 321,600 | ||||||
Savings
accounts
|
177,490 | 176,278 | ||||||
Time
deposits
|
767,594 | 807,841 | ||||||
Total
deposits
|
1,609,542 | 1,646,205 | ||||||
Dividends
payable
|
2,819 | 2,677 | ||||||
Federal
Home Loan Bank advances
|
845,291 | 616,417 | ||||||
Junior
subordinated debentures
|
32,991 | 22,681 | ||||||
Other
borrowings
|
26,484 | 32,560 | ||||||
Accrued
expenses and other liabilities
|
29,440 | 32,887 | ||||||
Total
liabilities
|
2,546,567 | 2,353,427 | ||||||
Shareholders’
Equity:
|
||||||||
Common
stock of $.0625 par value; authorized 30,000,000 shares;
|
||||||||
issued
13,503,876 shares in 2008 and 13,492,110 shares in 2007
|
844 | 843 | ||||||
Paid-in
capital
|
34,852 | 34,874 | ||||||
Retained
earnings
|
160,593 | 154,647 | ||||||
Accumulated
other comprehensive loss
|
(7,098 | ) | (239 | ) | ||||
Treasury
stock, at cost; 105,677 shares in 2008 and 137,652 shares in
2007
|
(2,769 | ) | (3,612 | ) | ||||
Total
shareholders’ equity
|
186,422 | 186,513 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 2,732,989 | $ | 2,539,940 | ||||
The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
and shares in thousands,
|
|||||||||||||||
except
per share amounts)
|
||||||||||||||||
Unaudited
|
||||||||||||||||
Three
Months
|
Six
Months
|
|||||||||||||||
Periods
ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Interest
income:
|
||||||||||||||||
Interest
and fees on loans
|
$ | 24,406 | $ | 24,414 | $ | 49,376 | $ | 48,348 | ||||||||
Interest
on securities:
|
||||||||||||||||
Taxable
|
8,302 | 7,839 | 16,718 | 15,631 | ||||||||||||
Nontaxable
|
786 | 759 | 1,566 | 1,427 | ||||||||||||
Dividends
on corporate stock and Federal Home Loan Bank stock
|
489 | 685 | 1,109 | 1,403 | ||||||||||||
Other
interest income
|
50 | 184 | 190 | 375 | ||||||||||||
Total
interest income
|
34,033 | 33,881 | 68,959 | 67,184 | ||||||||||||
Interest
expense:
|
||||||||||||||||
Deposits
|
9,248 | 13,215 | 21,147 | 26,192 | ||||||||||||
Federal
Home Loan Bank advances
|
7,794 | 5,112 | 15,093 | 10,080 | ||||||||||||
Junior
subordinated debentures
|
509 | 338 | 847 | 676 | ||||||||||||
Other
interest expense
|
275 | 289 | 589 | 439 | ||||||||||||
Total
interest expense
|
17,826 | 18,954 | 37,676 | 37,387 | ||||||||||||
Net
interest income
|
16,207 | 14,927 | 31,283 | 29,797 | ||||||||||||
Provision
for loan losses
|
1,400 | 300 | 1,850 | 600 | ||||||||||||
Net
interest income after provision for loan losses
|
14,807 | 14,627 | 29,433 | 29,197 | ||||||||||||
Noninterest
income:
|
||||||||||||||||
Wealth
management services:
|
||||||||||||||||
Trust
and investment advisory fees
|
5,321 | 5,252 | 10,663 | 10,290 | ||||||||||||
Mutual
fund fees
|
1,445 | 1,352 | 2,786 | 2,614 | ||||||||||||
Financial
planning, commissions and other service fees
|
884 | 889 | 1,459 | 1,459 | ||||||||||||
Wealth
management services
|
7,650 | 7,493 | 14,908 | 14,363 | ||||||||||||
Service
charges on deposit accounts
|
1,208 | 1,220 | 2,368 | 2,345 | ||||||||||||
Merchant
processing fees
|
1,914 | 1,829 | 3,186 | 3,033 | ||||||||||||
Income
from bank-owned life insurance
|
453 | 399 | 900 | 790 | ||||||||||||
Net
gains on loan sales and commissions on loans originated for
others
|
433 | 510 | 924 | 774 | ||||||||||||
Net
(losses) gains on securities
|
(53 | ) | (700 | ) | (98 | ) | 336 | |||||||||
Other
income
|
554 | 372 | 1,015 | 730 | ||||||||||||
Total
noninterest income
|
12,159 | 11,123 | 23,203 | 22,371 | ||||||||||||
Noninterest
expense:
|
||||||||||||||||
Salaries
and employee benefits
|
10,411 | 10,285 | 20,754 | 20,097 | ||||||||||||
Net
occupancy
|
1,064 | 1,038 | 2,202 | 2,055 | ||||||||||||
Equipment
|
977 | 861 | 1,921 | 1,693 | ||||||||||||
Merchant
processing costs
|
1,598 | 1,558 | 2,666 | 2,577 | ||||||||||||
Outsourced
services
|
742 | 535 | 1,378 | 1,054 | ||||||||||||
Advertising
and promotion
|
467 | 572 | 853 | 1,001 | ||||||||||||
Legal,
audit and professional fees
|
430 | 404 | 973 | 854 | ||||||||||||
Amortization
of intangibles
|
326 | 348 | 652 | 716 | ||||||||||||
Debt
prepayment penalties
|
– | – | – | 1,067 | ||||||||||||
Other
expenses
|
2,039 | 2,159 | 3,797 | 3,755 | ||||||||||||
Total
noninterest expense
|
18,054 | 17,760 | 35,196 | 34,869 | ||||||||||||
Income
before income taxes
|
8,912 | 7,990 | 17,440 | 16,699 | ||||||||||||
Income
tax expense
|
2,817 | 2,508 | 5,529 | 5,242 | ||||||||||||
Net
income
|
$ | 6,095 | $ | 5,482 | $ | 11,911 | $ | 11,457 | ||||||||
Weighted
average shares outstanding – basic
|
13,381.1 | 13,339.6 | 13,369.6 | 13,375.7 | ||||||||||||
Weighted
average shares outstanding – diluted
|
13,567.0 | 13,616.4 | 13,550.9 | 13,667.6 | ||||||||||||
Per
share information:
|
||||||||||||||||
Basic
earnings per share
|
$ | 0.45 | $ | 0.41 | $ | 0.89 | $ | 0.86 | ||||||||
Diluted
earnings per share
|
$ | 0.45 | $ | 0.40 | $ | 0.88 | $ | 0.84 | ||||||||
Cash
dividends declared per share
|
$ | 0.21 | $ | 0.20 | $ | 0.41 | $ | 0.40 | ||||||||
The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
in thousands)
|
||||||||
Unaudited
|
|||||||||
Six
months ended June 30,
|
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
|||||||||
Net
income
|
$ | 11,911 | $ | 11,457 | |||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||||
Provision
for loan losses
|
1,850 | 600 | |||||||
Depreciation
of premises and equipment
|
1,505 | 1,464 | |||||||
Net
amortization of premium and discount
|
520 | 354 | |||||||
Amortization
of intangibles
|
652 | 716 | |||||||
Share-based
compensation
|
186 | 323 | |||||||
Non-cash
charitable contribution
|
– | 520 | |||||||
Earnings
from bank-owned life insurance
|
(900 | ) | (790 | ) | |||||
Net
gains on loan sales
|
(924 | ) | (774 | ) | |||||
Net
losses (gains) on securities
|
98 | (336 | ) | ||||||
Proceeds
from sales of loans
|
35,406 | 28,293 | |||||||
Loans
originated for sale
|
(35,563 | ) | (29,811 | ) | |||||
Increase
in accrued interest receivable, excluding purchased
interest
|
990 | 137 | |||||||
Decrease
increase in other assets
|
(682 | ) | (987 | ) | |||||
Decrease
in accrued expenses and other liabilities
|
(4,125 | ) | (1,635 | ) | |||||
Other,
net
|
(9 | ) | (2 | ) | |||||
Net
cash provided by operating activities
|
10,915 | 9,529 | |||||||
Cash
flows from investing
activities:
|
|||||||||
Purchases
of:
|
Mortgage-backed
securities available for sale
|
(170,332 | ) | (113,649 | ) | ||||
Other
investment securities available for sale
|
(1,025 | ) | (33,896 | ) | |||||
Other
investment securities held to maturity
|
– | (12,882 | ) | ||||||
Proceeds
from sale of:
|
Mortgage-backed
securities available for sale
|
– | 47,938 | ||||||
Other
investment securities available for sale
|
61,237 | 9,438 | |||||||
Mortgage-backed
securities held for sale
|
– | 38,501 | |||||||
Other
investment securities held to maturity
|
– | 21,698 | |||||||
Maturities
and principal payments of:
|
Mortgage-backed
securities available for sale
|
50,125 | 32,583 | ||||||
Other
investment securities available for sale
|
7,012 | 6,432 | |||||||
Mortgage-backed
securities held to maturity
|
– | 3,191 | |||||||
Other
investment securities held to maturity
|
– | 20,940 | |||||||
Purchase
of Federal Home Loan Bank stock
|
(10,283 | ) | – | ||||||
Net
increase in loans
|
(108,041 | ) | (24,880 | ) | |||||
Proceeds
from sale of loans
|
18,047 | – | |||||||
Purchases
of loans, including purchased interest
|
(42,086 | ) | (4,265 | ) | |||||
Purchases
of premises and equipment
|
(1,255 | ) | (3,450 | ) | |||||
Equity
investment in capital trusts
|
(310 | ) | – | ||||||
Payment
of deferred acquisition obligation
|
(8,065 | ) | (6,720 | ) | |||||
Net
cash used in investing activities
|
(204,976 | ) | (19,471 | ) | |||||
Cash
flows from financing activities:
|
|||||||||
Net
decrease in deposits
|
(36,663 | ) | (8,908 | ) | |||||
Net
increase in other borrowings
|
1,989 | 19,610 | |||||||
Proceeds
from Federal Home Loan Bank advances
|
705,421 | 391,719 | |||||||
Repayment
of Federal Home Loan Bank advances
|
(476,531 | ) | (397,433 | ) | |||||
Purchases
of treasury stock, including deferred compensation plan
activity
|
43 | (4,264 | ) | ||||||
Net
proceeds from the issuance of common stock under dividend reinvestment
plan
|
295 | – | |||||||
Net
proceeds from the exercise of stock options and issuance of other equity
instruments
|
112 | 320 | |||||||
Tax
benefit from stock option exercises and issuance of other equity
instruments
|
192 | 242 | |||||||
Proceeds
from the issuance of junior subordinated debentures, net of debt issuance
costs
|
10,016 | – | |||||||
Cash
dividends paid
|
(5,355 | ) | (5,237 | ) | |||||
Net
cash provided by (used in) financing activities
|
199,519 | (3,951 | ) | ||||||
Net
increase (decrease) in cash and cash equivalents
|
5,458 | (13,893 | ) | ||||||
Cash
and cash equivalents at beginning of period
|
41,112 | 71,909 | |||||||
Cash
and cash equivalents at end of period
|
$ | 46,570 | $ | 58,016 | |||||
The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
in thousands)
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
||||||||
Unaudited
|
||||||||
Six
months ended June 30,
|
2008
|
2007
|
||||||
Noncash
Investing and Financing Activities:
|
||||||||
Loans
charged off
|
$ | 326 | $ | 370 | ||||
Securities
proceeds due from broker
|
3,084 | – | ||||||
Supplemental
Disclosures:
|
||||||||
Interest
payments
|
36,687 | 37,588 | ||||||
Income
tax payments
|
6,868 | 6,309 | ||||||
The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
June 30,
2008
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Securities
Available for Sale:
|
||||||||||||||||
U.S.
Treasury obligations and obligations
|
||||||||||||||||
of
U.S. government-sponsored agencies
|
$ | 82,002 | $ | 2,448 | $ | − | $ | 84,450 | ||||||||
Mortgage-backed
securities issued by U.S.
|
||||||||||||||||
government
and government-sponsored agencies
|
588,967 | 2,445 | (5,298 | ) | 586,114 | |||||||||||
States
and political subdivisions
|
81,645 | 81 | (1,465 | ) | 80,261 | |||||||||||
Trust
preferred securities
|
37,985 | − | (7,627 | ) | 30,358 | |||||||||||
Corporate
bonds
|
1,746 | − | (13 | ) | 1,733 | |||||||||||
Corporate
stocks
|
7,593 | 337 | (782 | ) | 7,148 | |||||||||||
Total
securities available for sale
|
$ | 799,938 | $ | 5,311 | $ | (15,185 | ) | $ | 790,064 |
(Dollars
in thousands)
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
December 31,
2007
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Securities
Available for Sale:
|
||||||||||||||||
U.S.
Treasury obligations and obligations
|
||||||||||||||||
of
U.S. government-sponsored agencies
|
$ | 136,721 | $ | 2,888 | $ | (10 | ) | $ | 139,599 | |||||||
Mortgage-backed
securities issued by U.S.
|
||||||||||||||||
government
and government-sponsored agencies
|
469,197 | 2,899 | (2,708 | ) | 469,388 | |||||||||||
States
and political subdivisions
|
80,634 | 499 | (239 | ) | 80,894 | |||||||||||
Trust
preferred securities
|
37,995 | − | (3,541 | ) | 34,454 | |||||||||||
Corporate
bonds
|
13,940 | 161 | − | 14,101 | ||||||||||||
Corporate
stocks
|
12,096 | 2,974 | (1,728 | ) | 13,342 | |||||||||||
Total
securities available for sale
|
$ | 750,583 | $ | 9,421 | $ | (8,226 | ) | $ | 751,778 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars in
thousands)
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
At
June 30, 2008
|
# |
Value
|
Losses
|
# |
Value
|
Losses
|
# |
Value
|
Losses
|
|||||||||||||||||||||||||||
Mortgage-backed
securities
|
||||||||||||||||||||||||||||||||||||
issued
by U.S. government and government-sponsored agencies
|
75 | $ | 315,997 | $ | 3,672 | 19 | $ | 44,890 | $ | 1,626 | 94 | $ | 360,887 | $ | 5,298 | |||||||||||||||||||||
States
and
|
||||||||||||||||||||||||||||||||||||
political
subdivisions
|
83 | 62,326 | 1,192 | 4 | 5,368 | 273 | 87 | 67,694 | 1,465 | |||||||||||||||||||||||||||
Trust
preferred securities
|
5 | 8,704 | 2,037 | 8 | 21,654 | 5,590 | 13 | 30,358 | 7,627 | |||||||||||||||||||||||||||
Corporate
bonds
|
1 | 1,733 | 13 | – | – | – | 1 | 1,733 | 13 | |||||||||||||||||||||||||||
Subtotal,
debt securities
|
164 | 388,760 | 6,194 | 31 | 71,912 | 7,489 | 195 | 460,672 | 14,403 | |||||||||||||||||||||||||||
Corporate
stocks
|
3 | 2,615 | 473 | 8 | 4,115 | 309 | 11 | 6,730 | 782 | |||||||||||||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||||||||||||||
impaired
securities
|
167 | $ | 391,375 | $ | 7,387 | 39 | $ | 76,027 | $ | 7,798 | 206 | $ | 467,402 | $ | 15,185 |
(Dollars
in thousands)
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
At
December 31, 2007
|
# |
Value
|
Losses
|
# |
Value
|
Losses
|
# |
Value
|
Losses
|
|||||||||||||||||||||||||||
U.S.
Treasury obligations
|
||||||||||||||||||||||||||||||||||||
and
obligations of U.S. government-sponsored agencies
|
1 | $ | 6,996 | $ | 1 | 1 | $ | 3,990 | $ | 9 | 2 | $ | 10,986 | $ | 10 | |||||||||||||||||||||
Mortgage-backed
securities
|
||||||||||||||||||||||||||||||||||||
issued
by U.S. government and government-sponsored agencies
|
22 | 108,630 | 1,028 | 46 | 110,348 | 1,680 | 68 | 218,978 | 2,708 | |||||||||||||||||||||||||||
States
and
|
||||||||||||||||||||||||||||||||||||
political
subdivisions
|
13 | 12,402 | 128 | 10 | 7,681 | 111 | 23 | 20,083 | 239 | |||||||||||||||||||||||||||
Trust
preferred securities
|
8 | 23,167 | 2,769 | 5 | 11,287 | 772 | 13 | 34,454 | 3,541 | |||||||||||||||||||||||||||
Subtotal,
debt securities
|
44 | 151,195 | 3,926 | 62 | 133,306 | 2,572 | 106 | 284,501 | 6,498 | |||||||||||||||||||||||||||
Corporate
stocks
|
5 | 5,258 | 1,495 | 4 | 1,304 | 233 | 9 | 6,562 | 1,728 | |||||||||||||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||||||||||||||
impaired
securities
|
49 | $ | 156,453 | $ | 5,421 | 66 | $ | 134,610 | $ | 2,805 | 115 | $ | 291,063 | $ | 8,226 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
June 30,
2008
|
December 31,
2007
|
||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Commercial:
|
||||||||||||||||
Mortgages
(1)
|
$ | 361,623 | 21 | % | $ | 278,821 | 18 | % | ||||||||
Construction
and development (2)
|
60,606 | 4 | % | 60,361 | 4 | % | ||||||||||
Other
(3)
|
372,784 | 22 | % | 341,084 | 21 | % | ||||||||||
Total
commercial
|
795,013 | 47 | % | 680,266 | 43 | % | ||||||||||
Residential
real estate:
|
||||||||||||||||
Mortgages
(4)
|
593,995 | 35 | % | 588,628 | 37 | % | ||||||||||
Homeowner
construction
|
14,356 | 1 | % | 11,043 | 1 | % | ||||||||||
Total
residential real estate
|
608,351 | 36 | % | 599,671 | 38 | % | ||||||||||
Consumer:
|
||||||||||||||||
Home
equity lines
|
152,339 | 9 | % | 144,429 | 9 | % | ||||||||||
Home
equity loans
|
94,316 | 6 | % | 99,827 | 6 | % | ||||||||||
Other
|
55,631 | 2 | % | 49,459 | 4 | % | ||||||||||
Total
consumer
|
302,286 | 17 | % | 293,715 | 19 | % | ||||||||||
Total
loans (5)
|
$ | 1,705,650 | 100 | % | $ | 1,573,652 | 100 | % |
(1)
|
Amortizing
mortgages, primarily secured by income producing
property.
|
(2)
|
Loans
for construction of residential and commercial properties and for land
development.
|
(3)
|
Loans
to businesses and individuals, a substantial portion of which are fully or
partially collateralized by real
estate.
|
(4)
|
A
substantial portion of these loans is used as qualified collateral for
Federal Home Loan Bank borrowings (See Note 7 for additional
discussion of Federal Home Loan Bank
borrowings).
|
(5)
|
Includes
net deferred loan origination costs of $1 thousand and net discounts
on purchased loans of $301 thousand at June 30, 2008, compared to net
deferred fees of $100 thousand and net premiums on purchased loans of
$297 thousand at December 31,
2007.
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
||||||||||||||||
Three
months
|
Six
months
|
|||||||||||||||
Periods
ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Balance
at beginning of period
|
$ | 20,724 | 19,360 | $ | 20,277 | $ | 18,894 | |||||||||
Provision
charged to expense
|
1,400 | 300 | 1,850 | 600 | ||||||||||||
Recoveries
of loans previously charged off
|
58 | 13 | 162 | 203 | ||||||||||||
Loans
charged off
|
(219 | ) | (346 | ) | (326 | ) | (370 | ) | ||||||||
Balance
at end of period
|
$ | 21,963 | $ | 19,327 | $ | 21,963 | $ | 19,327 |
(Dollars
in thousands)
|
Wealth
|
|||||||||||
Commercial
|
Management
|
|||||||||||
Banking
|
Service
|
|||||||||||
Segment
|
Segment
|
Total
|
||||||||||
Balance
at December 31, 2007
|
$ | 22,591 | $ | 27,888 | $ | 50,479 | ||||||
Additions
to goodwill during the period
|
– | − | − | |||||||||
Impairment
recognized
|
– | – | – | |||||||||
Balance
at June 30, 2008
|
$ | 22,591 | $ | 27,888 | $ | 50,479 |
(Dollars
in thousands)
|
Core
Deposit
|
Advisory
|
Non-compete
|
|||||||||||||
Intangible
|
Contracts
|
Agreements
|
Total
|
|||||||||||||
Balance
at December 31, 2007
|
$ | 510 | $ | 10,743 | $ | 180 | $ | 11,433 | ||||||||
Amortization
|
60 | 568 | 24 | 652 | ||||||||||||
Balance
at June 30, 2008
|
$ | 450 | $ | 10,175 | $ | 156 | $ | 10,781 |
(Dollars
in thousands)
|
||||||||||||||||
Core
|
Advisory
|
Non-compete
|
||||||||||||||
Estimated
amortization expense:
|
Deposits
|
Contracts
|
Agreements
|
Total
|
||||||||||||
2008
(full year)
|
$ | 120 | $ | 1,111 | $ | 49 | $ | 1,280 | ||||||||
2009
|
120 | 1,040 | 49 | 1,209 | ||||||||||||
2010
|
120 | 922 | 49 | 1,091 | ||||||||||||
2011
|
120 | 768 | 33 | 921 | ||||||||||||
2012
|
30 | 727 | − | 757 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars in
thousands)
|
Core
|
Advisory
|
Non-compete
|
|||||||||||||
Deposits
|
Contracts
|
Agreements
|
Total
|
|||||||||||||
Gross
carrying amount
|
$ | 2,997 | $ | 13,657 | $ | 1,147 | $ | 17,801 | ||||||||
Accumulated
amortization
|
2,547 | 3,482 | 991 | 7,020 | ||||||||||||
Net
amount
|
$ | 450 | $ | 10,175 | $ | 156 | $ | 10,781 |
(Dollars
in thousands)
|
June 30,
|
December 31,
|
||||||
2008
|
2007
|
|||||||
FHLB
advances
|
$ | 845,291 | $ | 616,417 |
(Dollars
in thousands)
|
June 30,
|
December 31,
|
||||||
2008
|
2007
|
|||||||
Junior
subordinated debentures
|
$ | 32,991 | $ | 22,681 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
June 30,
|
December
31,
|
||||||
2008
|
2007
|
|||||||
Treasury,
Tax and Loan demand note balance
|
$ | 4,669 | $ | 2,793 | ||||
Deferred
acquisition obligations
|
1,946 | 9,884 | ||||||
Securities
sold under repurchase agreements
|
19,500 | 19,500 | ||||||
Other
|
369 | 383 | ||||||
Other
borrowings
|
$ | 26,484 | $ | 32,560 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars in thousands)
|
Actual
|
For
Capital Adequacy Purposes
|
To
Be Well Capitalized Under Prompt Corrective Action
Provisions
|
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
As of
June 30, 2008:
|
||||||||||||||||||||||||
Total
Capital (to Risk-Weighted Assets):
|
||||||||||||||||||||||||
Corporation
|
$ | 184,998 | 10.69 | % | $ | 138,383 | 8.00 | % | $ | 172,979 | 10.00 | % | ||||||||||||
Bank
|
$ | 185,701 | 10.75 | % | $ | 138,259 | 8.00 | % | $ | 172,824 | 10.00 | % | ||||||||||||
Tier
1 Capital (to Risk-Weighted Assets):
|
||||||||||||||||||||||||
Corporation
|
$ | 163,368 | 9.44 | % | $ | 69,191 | 4.00 | % | $ | 103,787 | 6.00 | % | ||||||||||||
Bank
|
$ | 164,090 | 9.49 | % | $ | 69,130 | 4.00 | % | $ | 103,694 | 6.00 | % | ||||||||||||
Tier
1 Capital (to Average Assets): (1)
|
||||||||||||||||||||||||
Corporation
|
$ | 163,368 | 6.32 | % | $ | 103,320 | 4.00 | % | $ | 129,150 | 5.00 | % | ||||||||||||
Bank
|
$ | 164,090 | 6.36 | % | $ | 103,249 | 4.00 | % | $ | 129,062 | 5.00 | % | ||||||||||||
As
of December 31, 2007:
|
||||||||||||||||||||||||
Total
Capital (to Risk-Weighted Assets):
|
$ | 167,061 | 10.39 | % | $ | 128,648 | 8.00 | % | $ | 160,810 | 10.00 | % | ||||||||||||
Corporation
|
$ | 174,750 | 10.87 | % | $ | 128,574 | 8.00 | % | $ | 160,717 | 10.00 | % | ||||||||||||
Bank
|
||||||||||||||||||||||||
Tier
1 Capital (to Risk-Weighted Assets):
|
$ | 146,393 | 9.10 | % | $ | 64,324 | 4.00 | % | $ | 96,486 | 6.00 | % | ||||||||||||
Corporation
|
$ | 154,093 | 9.59 | % | $ | 64,287 | 4.00 | % | $ | 96,430 | 6.00 | % | ||||||||||||
Bank
|
||||||||||||||||||||||||
Tier
1 Capital (to Average Assets): (1)
|
$ | 146,393 | 6.09 | % | $ | 96,088 | 4.00 | % | $ | 120,110 | 5.00 | % | ||||||||||||
Corporation
|
$ | 154,093 | 6.42 | % | $ | 96,042 | 4.00 | % | $ | 120,053 | 5.00 | % | ||||||||||||
Bank
|
(1)
|
Leverage
ratio
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
June 30,
2008
|
December 31,
2007
|
||||||
Financial
instruments whose contract amounts represent credit risk:
|
||||||||
Commitments
to extend credit:
|
||||||||
Commercial
loans
|
$ | 163,584 | $ | 149,465 | ||||
Home
equity lines
|
180,322 | 176,284 | ||||||
Other
loans
|
22,765 | 20,770 | ||||||
Standby
letters of credit
|
8,111 | 8,048 | ||||||
Financial
instruments whose notional amounts exceed the amount of credit
risk:
|
||||||||
Forward
loan commitments:
|
||||||||
Commitments
to originate fixed rate mortgage loans to be sold
|
3,279 | 3,495 | ||||||
Commitments
to sell fixed rate mortgage loans
|
6,012 | 5,472 | ||||||
Customer
related derivative contracts:
|
||||||||
Interest
rate swaps with customers
|
14,115 | 3,850 | ||||||
Mirror
swaps with counterparties
|
14,115 | 3,850 | ||||||
Interest
rate risk management contract:
|
||||||||
Interest
rate swap
|
10,000 | – |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
·
|
Level
1 – Quoted prices for identical assets or
liabilities in active markets.
|
·
|
Level
2 – Quoted prices for similar assets or
liabilities in active markets; quoted prices for identical or similar
assets or liabilities in inactive markets; and model-derived valuations in
which all significant inputs and significant value drivers are observable
in active markets.
|
·
|
Level
3 – Valuations derived from valuation techniques in which one or more
significant inputs or significant value drivers are unobservable in the
markets and which reflect the Corporation’s market
assumptions.
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
Assets/
|
|||||||||||||||
Fair
Value Measurements Using
|
Liabilities
at
|
|||||||||||||||
June 30,
2008
|
Level
1
|
Level
2
|
Level
3
|
Fair
Value
|
||||||||||||
Assets:
|
||||||||||||||||
Securities
available for sale
|
$ | 6,676 | $ | 777,653 | $ | 5,735 | $ | 790,064 | ||||||||
Derivative
assets (1)
|
– | 532 | – | 532 | ||||||||||||
Total
assets at fair value on a recurring basis
|
$ | 6,676 | $ | 778,185 | $ | 5,735 | $ | 790,596 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative
liabilities (1)
|
$ | – | $ | 196 | $ | 30 | $ | 226 | ||||||||
Total
liabilities at fair value on a recurring basis
|
$ | – | $ | 196 | $ | 30 | $ | 226 |
(1)
|
Derivatives
assets are included in other assets and derivative liabilities are
reported in accrued expenses and other liabilities in the Consolidated
Balance Sheets.
|
(Dollars
in thousands)
|
Carrying
Value at June 30, 2008
|
|||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Collateral
dependent impaired loans
|
$ | – | $ | 1,630 | $ | – | $ | 1,630 | ||||||||
Total
assets at fair value on a nonrecurring basis
|
$ | – | $ | 1,630 | $ | – | $ | 1,630 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
Prior
to Adoption of Measurement Date Provisions of SFAS
No. 158
|
Effect
of Adopting Measurement Date Provisions of SFAS
No. 158
|
As
of January 1, 2008
|
|||||||||
Net
deferred tax asset
|
$ | 7,705 | $ | 229 | $ | 7,934 | ||||||
Defined
benefit pension liabilities
|
11,801 | 654 | 12,455 | |||||||||
Retained
earnings
|
154,647 | (468 | ) | 154,179 | ||||||||
Accumulated
other comprehensive loss
|
(239 | ) | 42 | (197 | ) |
(Dollars
in thousands)
|
Qualified
|
Non-Qualified
|
||||||||||||||
Pension
Plan
|
Retirement
Plans
|
|||||||||||||||
Three
months ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Service
cost
|
$ | 512 | $ | 502 | $ | 63 | $ | 86 | ||||||||
Interest
cost
|
507 | 462 | 143 | 130 | ||||||||||||
Expected
return on plan assets
|
(569 | ) | (496 | ) | - | - | ||||||||||
Amortization
of transition asset
|
– | (2 | ) | - | - | |||||||||||
Amortization
of prior service cost
|
(9 | ) | (8 | ) | 15 | 15 | ||||||||||
Recognized
net actuarial loss
|
4 | 47 | 55 | 55 | ||||||||||||
Net
periodic benefit cost
|
$ | 445 | $ | 505 | $ | 276 | $ | 286 |
(Dollars
in thousands)
|
Qualified
|
Non-Qualified
|
||||||||||||||
Pension
Plan
|
Retirement
Plans
|
|||||||||||||||
Six
months ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Service
cost
|
$ | 1,023 | $ | 1,005 | $ | 125 | $ | 172 | ||||||||
Interest
cost
|
1,014 | 924 | 286 | 260 | ||||||||||||
Expected
return on plan assets
|
(1,138 | ) | (992 | ) | - | - | ||||||||||
Amortization
of transition asset
|
– | (3 | ) | - | - | |||||||||||
Amortization
of prior service cost
|
(17 | ) | (17 | ) | 31 | 31 | ||||||||||
Recognized
net actuarial loss
|
7 | 94 | 109 | 109 | ||||||||||||
Net
periodic benefit cost
|
$ | 889 | $ | 1,011 | $ | 551 | $ | 572 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
||||||||||||||||
Three
months
|
Six
months
|
|||||||||||||||
Periods
ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Share-based
compensation expense
|
$ | 103 | $ | 152 | $ | 186 | $ | 323 | ||||||||
Related
tax benefit
|
$ | 36 | $ | 53 | $ | 65 | $ | 113 |
2008
|
||||
Expected
term (years)
|
9.0 | |||
Expected
dividend yield
|
2.86 | % | ||
Expected
volatility
|
33.59 | |||
Expected
forfeiture rate
|
– | |||
Risk-free
interest rate
|
4.59 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
Number
|
Weighted
|
Weighted
Average
|
||||||||||
Of
|
Average
|
Remaining
|
Aggregate
|
||||||||||
Share
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Options
|
Price
|
Term
(Years)
|
Value
|
||||||||||
Outstanding
at January 1, 2008
|
955,485 | $ | 21.21 | ||||||||||
Granted
|
87,500 | 24.12 | |||||||||||
Exercised
|
36,351 | 18.43 | |||||||||||
Forfeited
or expired
|
5,550 | 27.87 | |||||||||||
Outstanding
at June 30, 2008
|
1,001,084 | $ | 21.52 |
4.8
years
|
$ | 851,910 | |||||||
Exercisable
at June 30, 2008
|
913,584 | $ | 21.28 |
4.3
years
|
$ | 851,910 | |||||||
Options
expected to vest as of June 30, 2008
|
87,500 | $ | 24.12 |
10.0
years
|
$ | – |
Weighted
|
||||||||
Number
|
Average
|
|||||||
of
|
Grant
Date
|
|||||||
Shares
|
Fair
Value
|
|||||||
Nonvested
at January 1, 2008
|
39,350 | $ | 26.52 | |||||
Granted
|
33,200 | 24.14 | ||||||
Vested
|
(16,200 | ) | 26.10 | |||||
Forfeited
|
– | – | ||||||
Nonvested
at June 30, 2008
|
56,350 | $ | 25.15 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
Weighted
|
||||||||
Number
|
Average
|
|||||||
of
|
Grant
Date
|
|||||||
Shares
|
Fair
Value
|
|||||||
Performance
shares at January 1, 2008
|
– | $ | – | |||||
Granted
|
16,930 | 24.12 | ||||||
Vested
|
– | – | ||||||
Forfeited
|
– | – | ||||||
Performance
shares at June 30, 2008
|
16,930 | $ | 24.12 |
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Commercial
Banking
|
Wealth
Management Services
|
Corporate
|
Consolidated
Total
|
|||||||||||||||||||||||||||||
Three
months ended June 30,
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||||||||||
Net
interest income
|
$ | 15,488 | $ | 13,239 | $ | (5 | ) | $ | (20 | ) | $ | 724 | $ | 1,708 | $ | 16,207 | $ | 14,927 | ||||||||||||||
Noninterest
income
|
3,944 | 3,874 | 7,650 | 7,493 | 565 | (244 | ) | 12,159 | 11,123 | |||||||||||||||||||||||
Total
income
|
19,432 | 17,113 | 7,645 | 7,473 | 1,289 | 1,464 | 28,366 | 26,050 | ||||||||||||||||||||||||
Provision
for loan losses
|
1,400 | 300 | – | – | – | – | 1,400 | 300 | ||||||||||||||||||||||||
Depreciation
and
amortization
expense
|
618 | 607 | 412 | 433 | 45 | 44 | 1,075 | 1,084 | ||||||||||||||||||||||||
Other
noninterest expenses
|
10,325 | 9,644 | 4,701 | 4,614 | 1,953 | 2,418 | 16,979 | 16,676 | ||||||||||||||||||||||||
Total
noninterest expenses
|
12,343 | 10,551 | 5,113 | 5,047 | 1,998 | 2,462 | 19,454 | 18,060 | ||||||||||||||||||||||||
Income
before income taxes
|
7,089 | 6,562 | 2,532 | 2,426 | (709 | ) | (998 | ) | 8,912 | 7,990 | ||||||||||||||||||||||
Income
tax expense (benefit)
|
2,484 | 2,302 | 975 | 937 | (642 | ) | (731 | ) | 2,817 | 2,508 | ||||||||||||||||||||||
Net
income (loss)
|
$ | 4,605 | $ | 4,260 | $ | 1,557 | $ | 1,489 | $ | (67 | ) | $ | (267 | ) | $ | 6,095 | $ | 5,482 | ||||||||||||||
Total
assets at period end
|
1,787,560 | 1,570,917 | 42,587 | 37,418 | 902,842 | 785,547 | 2,732,989 | 2,393,882 | ||||||||||||||||||||||||
Expenditures
for
long-lived
assets
|
758 | 2,296 | 106 | 91 | 73 | 18 | 937 | 2,405 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Commercial
Banking
|
Wealth
Management Services
|
Corporate
|
Consolidated
Total
|
|||||||||||||||||||||||||||||
Six
months ended June 30,
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||||||||||
Net
interest income
|
$ | 29,974 | $ | 26,614 | $ | (14 | ) | $ | (28 | ) | $ | 1,323 | $ | 3,211 | $ | 31,283 | $ | 29,797 | ||||||||||||||
Noninterest
income
|
7,288 | 6,763 | 14,908 | 14,363 | 1,007 | 1,245 | 23,203 | 22,371 | ||||||||||||||||||||||||
Total
income
|
37,262 | 33,377 | 14,894 | 14,335 | 2,330 | 4,456 | 54,486 | 52,168 | ||||||||||||||||||||||||
Provision
for loan losses
|
1,850 | 600 | – | – | – | – | 1,850 | 600 | ||||||||||||||||||||||||
Depreciation
and
amortization
expense
|
1,245 | 1,223 | 823 | 869 | 89 | 88 | 2,157 | 2,180 | ||||||||||||||||||||||||
Other
noninterest expenses
|
19,715 | 18,287 | 9,378 | 8,912 | 3,946 | 5,490 | 33,039 | 32,689 | ||||||||||||||||||||||||
Total
noninterest expenses
|
22,810 | 20,110 | 10,201 | 9,781 | 4,035 | 5,578 | 37,046 | 35,469 | ||||||||||||||||||||||||
Income
before income taxes
|
14,452 | 13,267 | 4,693 | 4,554 | (1,705 | ) | (1,122 | ) | 17,440 | 16,699 | ||||||||||||||||||||||
Income
tax expense (benefit)
|
5,073 | 4,663 | 1,816 | 1,763 | (1,360 | ) | (1,184 | ) | 5,529 | 5,242 | ||||||||||||||||||||||
Net
income (loss)
|
$ | 9,379 | $ | 8,604 | $ | 2,877 | $ | 2,791 | $ | (345 | ) | $ | 62 | $ | 11,911 | $ | 11,457 | |||||||||||||||
Total
assets at period end
|
1,787,560 | 1,570,917 | 42,587 | 37,418 | 902,842 | 785,547 | 2,732,989 | 2,393,882 | ||||||||||||||||||||||||
Expenditures
for
long-lived
assets
|
1,012 | 3,182 | 147 | 160 | 96 | 108 | 1,255 | 3,450 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
in thousands)
|
||||||||
Three
Months
|
||||||||
Three
months ended June 30,
|
2008
|
2007
|
||||||
Net
income
|
$ | 6,095 | $ | 5,482 | ||||
Unrealized
holding losses on securities available for sale, net of income tax benefit
of $4,936 in 2008 and $3,112 in 2007
|
(9,169 | ) | (5,779 | ) | ||||
Unrealized
gains on cash flow hedge derivative instruments, net of income tax expense
of $112 in 2008
|
207 | – | ||||||
Less
reclassification adjustments:
|
||||||||
Losses
(gains) on securities, net of income tax benefit of $18 in 2008 and $223
in 2007
|
35 | (477 | ) | |||||
Cash
flow hedge derivative instruments, net of income tax expense of
$1
|
2 | – | ||||||
Net
periodic pension cost, net of income tax expense of $23 in 2008 and $38 in
2007
|
43 | 69 | ||||||
Total
comprehensive (loss) income
|
$ | (2,787 | ) | $ | 249 |
(Dollars
in thousands)
|
||||||||
Six
Months
|
||||||||
Six
months ended June 30,
|
2008
|
2007
|
||||||
Net
income
|
$ | 11,911 | $ | 11,457 | ||||
Unrealized
holding losses on securities available for sale, net of income tax benefit
of $3,908 in 2008 and $2,448 in 2007
|
(7,259 | ) | (4,545 | ) | ||||
Unrealized
gains on cash flow hedge derivative instruments, net of income tax expense
of $112 in 2008
|
207 | – | ||||||
Less
reclassification adjustments:
|
||||||||
Losses
(gains) on securities, net of income tax benefit of $34 in 2008 and income
tax expense of $148 in 2007
|
64 | (188 | ) | |||||
Cash
flow hedge derivative instruments, net of income tax expense of
$1
|
2 | – | ||||||
Net
periodic pension cost, net of income tax expense of $46 in 2008 and $75 in
2007
|
85 | 139 | ||||||
Total
comprehensive income
|
$ | 5,010 | $ | 6,863 |
WASHINGTON
TRUST BANCORP INC. AND SUBSIDIARIES
|
(Continued)
|
|
CONDENSED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
(Dollars
and shares in thousands, except per share amounts)
|
||||||||||||||||
Three
Months
|
Six
Months
|
|||||||||||||||
Periods
ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Net
income
|
$ | 6,095 | $ | 5,482 | $ | 11,911 | $ | 11,457 | ||||||||
Weighted
average basic shares
|
13,381.1 | 13,339.6 | 13,369.6 | 13,375.7 | ||||||||||||
Dilutive
effect of:
|
||||||||||||||||
Options
|
140.8 | 200.4 | 145.0 | 221.8 | ||||||||||||
Other
|
45.1 | 76.4 | 36.3 | 70.1 | ||||||||||||
Weighted
average diluted shares
|
13,567.0 | 13,616.4 | 13,550.9 | 13,667.6 | ||||||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 0.45 | $ | 0.41 | $ | 0.89 | $ | 0.86 | ||||||||
Diluted
|
$ | 0.45 | $ | 0.40 | $ | 0.88 | $ | 0.84 |
Three
months ended June 30,
|
2008
|
2007
|
||||||||||||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||
(Dollars
in thousands)
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Residential
real estate loans
|
$ | 598,274 | $ | 8,257 | 5.55 | % | $ | 590,226 | $ | 7,812 | 5.31 | % | ||||||||||||
Commercial
and other loans
|
749,468 | 12,135 | 6.51 | % | 615,606 | 11,730 | 7.64 | % | ||||||||||||||||
Consumer
loans
|
297,802 | 4,059 | 5.48 | % | 282,408 | 4,911 | 6.98 | % | ||||||||||||||||
Total
loans
|
1,645,544 | 24,451 | 5.98 | % | 1,488,240 | 24,453 | 6.59 | % | ||||||||||||||||
Short-term
investments, federal funds
|
||||||||||||||||||||||||
sold
and other
|
12,214 | 50 | 1.64 | % | 16,951 | 184 | 4.36 | % | ||||||||||||||||
Taxable
debt securities
|
687,461 | 8,302 | 4.86 | % | 608,223 | 7,839 | 5.17 | % | ||||||||||||||||
Nontaxable
debt securities
|
81,649 | 1,152 | 5.67 | % | 78,964 | 1,112 | 5.65 | % | ||||||||||||||||
Corporate
stocks and FHLB stock
|
49,169 | 546 | 4.46 | % | 42,806 | 763 | 7.15 | % | ||||||||||||||||
Total
securities
|
830,493 | 10,050 | 4.87 | % | 746,944 | 9,898 | 5.32 | % | ||||||||||||||||
Total
interest-earning assets
|
2,476,037 | 34,501 | 5.60 | % | 2,235,184 | 34,351 | 6.16 | % | ||||||||||||||||
Non
interest-earning assets
|
165,806 | 158,903 | ||||||||||||||||||||||
Total
assets
|
$ | 2,641,843 | $ | 2,394,087 | ||||||||||||||||||||
Liabilities
and Shareholders’ Equity:
|
||||||||||||||||||||||||
NOW
accounts
|
$ | 167,755 | $ | 81 | 0.19 | % | $ | 168,742 | $ | 64 | 0.15 | % | ||||||||||||
Money
market accounts
|
315,075 | 1,399 | 1.79 | % | 293,245 | 2,869 | 3.92 | % | ||||||||||||||||
Savings
accounts
|
174,897 | 218 | 0.50 | % | 196,647 | 661 | 1.35 | % | ||||||||||||||||
Time
deposits
|
782,825 | 7,550 | 3.88 | % | 837,223 | 9,621 | 4.61 | % | ||||||||||||||||
FHLB
advances
|
755,455 | 7,794 | 4.15 | % | 471,026 | 5,112 | 4.35 | % | ||||||||||||||||
Junior
subordinated debentures
|
32,311 | 509 | 6.34 | % | 22,681 | 338 | 5.98 | % | ||||||||||||||||
Other
|
24,016 | 275 | 4.60 | % | 25,764 | 289 | 4.51 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
2,252,334 | 17,826 | 3.18 | % | 2,015,328 | 18,954 | 3.77 | % | ||||||||||||||||
Demand
deposits
|
171,613 | 173,473 | ||||||||||||||||||||||
Other
liabilities
|
28,607 | 30,852 | ||||||||||||||||||||||
Shareholders’
equity
|
189,289 | 174,434 | ||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 2,641,843 | $ | 2,394,087 | ||||||||||||||||||||
Net
interest income (FTE)
|
$ | 16,675 | $ | 15,397 | ||||||||||||||||||||
Interest
rate spread
|
2.42 | % | 2.39 | % | ||||||||||||||||||||
Net
interest margin
|
2.71 | % | 2.76 | % |
(Dollars
in thousands)
|
||||||||
Three
months ended June 30,
|
2008
|
2007
|
||||||
Commercial
and other loans
|
$ | 45 | $ | 39 | ||||
Nontaxable
debt securities
|
366 | 353 | ||||||
Corporate
stocks
|
57 | 78 | ||||||
Total
|
$ | 468 | $ | 470 |
Six
months ended June 30,
|
2008
|
2007
|
||||||||||||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||
(Dollars
in thousands)
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Residential
real estate loans
|
$ | 599,919 | $ | 16,554 | 5.55 | % | $ | 591,138 | $ | 15,585 | 5.32 | % | ||||||||||||
Commercial
and other loans
|
728,270 | 24,356 | 6.73 | % | 601,425 | 23,102 | 7.75 | % | ||||||||||||||||
Consumer
loans
|
295,301 | 8,556 | 5.83 | % | 281,992 | 9,736 | 6.96 | % | ||||||||||||||||
Total
loans
|
1,623,490 | 49,466 | 6.13 | % | 1,474,555 | 48,423 | 6.62 | % | ||||||||||||||||
Short-term
investments, federal funds
|
||||||||||||||||||||||||
sold
and other
|
16,600 | 190 | 2.30 | % | 15,231 | 375 | 4.97 | % | ||||||||||||||||
Taxable
debt securities
|
678,081 | 16,718 | 4.96 | % | 615,562 | 15,631 | 5.12 | % | ||||||||||||||||
Nontaxable
debt securities
|
81,337 | 2,295 | 5.67 | % | 74,332 | 2,090 | 5.67 | % | ||||||||||||||||
Corporate
stocks and FHLB stock
|
48,014 | 1,232 | 5.16 | % | 43,136 | 1,563 | 7.30 | % | ||||||||||||||||
Total
securities
|
824,032 | 20,435 | 4.99 | % | 748,261 | 19,659 | 5.30 | % | ||||||||||||||||
Total
interest-earning assets
|
2,447,522 | 69,901 | 5.74 | % | 2,222,816 | 68,082 | 6.18 | % | ||||||||||||||||
Non
interest-earning assets
|
167,258 | 164,934 | ||||||||||||||||||||||
Total
assets
|
$ | 2,614,780 | $ | 2,387,750 | ||||||||||||||||||||
Liabilities
and Shareholders’ Equity:
|
||||||||||||||||||||||||
NOW
accounts
|
$ | 165,132 | $ | 159 | 0.19 | % | $ | 169,206 | $ | 132 | 0.16 | % | ||||||||||||
Money
market accounts
|
321,476 | 3,951 | 2.47 | % | 293,613 | 5,680 | 3.90 | % | ||||||||||||||||
Savings
accounts
|
174,815 | 650 | 0.75 | % | 201,086 | 1,371 | 1.38 | % | ||||||||||||||||
Time
deposits
|
797,296 | 16,387 | 4.13 | % | 834,870 | 19,009 | 4.59 | % | ||||||||||||||||
FHLB
advances
|
713,786 | 15,093 | 4.25 | % | 469,246 | 10,080 | 4.33 | % | ||||||||||||||||
Junior
subordinated debentures
|
27,496 | 847 | 6.20 | % | 22,681 | 676 | 6.01 | % | ||||||||||||||||
Other
|
26,631 | 589 | 4.45 | % | 19,316 | 439 | 4.58 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
2,226,632 | 37,676 | 3.40 | % | 2,010,018 | 37,387 | 3.75 | % | ||||||||||||||||
Demand
deposits
|
168,773 | 172,232 | ||||||||||||||||||||||
Other
liabilities
|
29,571 | 30,786 | ||||||||||||||||||||||
Shareholders’
equity
|
189,804 | 174,714 | ||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 2,614,780 | $ | 2,387,750 | ||||||||||||||||||||
Net
interest income (FTE)
|
$ | 32,225 | $ | 30,695 | ||||||||||||||||||||
Interest
rate spread
|
2.34 | % | 2.43 | % | ||||||||||||||||||||
Net
interest margin
|
2.65 | % | 2.79 | % |
(Dollars
in thousands)
|
||||||||
Six
months ended June 30,
|
2008
|
2007
|
||||||
Commercial
and other loans
|
$ | 90 | $ | 75 | ||||
Nontaxable
debt securities
|
729 | 663 | ||||||
Corporate
stocks
|
123 | 160 | ||||||
Total
|
$ | 942 | $ | 898 |
Three
months ended
|
Six
months ended
|
|||||||||||||||||||||||
June 30,
2008 vs. 2007
|
June 30,
2008 vs. 2007
|
|||||||||||||||||||||||
Increase
(decrease) due to
|
Increase
(decrease) due to
|
|||||||||||||||||||||||
(Dollars
in thousands)
|
Volume
|
Rate
|
Net
Chg
|
Volume
|
Rate
|
Net
Chg
|
||||||||||||||||||
Interest
on interest-earning assets:
|
||||||||||||||||||||||||
Residential
real estate loans
|
$ | 109 | $ | 336 | $ | 445 | $ | 236 | $ | 733 | $ | 969 | ||||||||||||
Commercial
and other loans
|
2,324 | (1,919 | ) | 405 | 4,482 | (3,228 | ) | 1,254 | ||||||||||||||||
Consumer
loans
|
257 | (1,109 | ) | (852 | ) | 441 | (1,621 | ) | (1,180 | ) | ||||||||||||||
Short-term
investments, federal funds sold and other
|
(41 | ) | (93 | ) | (134 | ) | 31 | (216 | ) | (185 | ) | |||||||||||||
Taxable
debt securities
|
976 | (513 | ) | 463 | 1,546 | (460 | ) | 1,086 | ||||||||||||||||
Nontaxable
debt securities
|
38 | 2 | 40 | 199 | 6 | 205 | ||||||||||||||||||
Corporate
stocks and FHLB stock
|
100 | (317 | ) | (217 | ) | 161 | (491 | ) | (330 | ) | ||||||||||||||
Total
interest income
|
3,763 | (3,613 | ) | 150 | 7,096 | (5,277 | ) | 1,819 | ||||||||||||||||
Interest
on interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW
accounts
|
– | 17 | 17 | (3 | ) | 30 | 27 | |||||||||||||||||
Money
market accounts
|
199 | (1,669 | ) | (1,470 | ) | 499 | (2,228 | ) | (1,729 | ) | ||||||||||||||
Savings
accounts
|
(68 | ) | (375 | ) | (443 | ) | (162 | ) | (559 | ) | (721 | ) | ||||||||||||
Time
deposits
|
(596 | ) | (1,475 | ) | (2,071 | ) | (827 | ) | (1,795 | ) | (2,622 | ) | ||||||||||||
FHLB
advances
|
2,943 | (261 | ) | 2,682 | 5,175 | (162 | ) | 5,013 | ||||||||||||||||
Junior
subordinated debentures
|
151 | 20 | 171 | 147 | 24 | 171 | ||||||||||||||||||
Other
|
(20 | ) | 6 | (14 | ) | 162 | (12 | ) | 150 | |||||||||||||||
Total
interest expense
|
2,609 | (3,737 | ) | (1,128 | ) | 4,991 | (4,702 | ) | 289 | |||||||||||||||
Net
interest income
|
$ | 1,154 | $ | 124 | $ | 1,278 | $ | 2,105 | $ | (575 | ) | $ | 1,530 |
(Dollars
in thousands)
|
Three
Months
|
Six
Months
|
||||||||||||||||||||||||||||||
$
|
%
|
$
|
%
|
|||||||||||||||||||||||||||||
Periods
ended June 30
|
2008
|
2007
|
Chg
|
Chg
|
2008
|
2007
|
Chg
|
Chg
|
||||||||||||||||||||||||
Noninterest
income:
|
||||||||||||||||||||||||||||||||
Wealth
management services:
|
||||||||||||||||||||||||||||||||
Trust
and investment advisory fees
|
$ | 5,321 | $ | 5,252 | $ | 69 | 1 | % | $ | 10,663 | $ | 10,290 | $ | 373 | 4 | % | ||||||||||||||||
Mutual
fund fees
|
1,445 | 1,352 | 93 | 7 | % | 2,786 | 2,614 | 172 | 7 | % | ||||||||||||||||||||||
Financial
planning, commissions and other service fees
|
884 | 889 | (5 | ) | (1 | %) | 1,459 | 1,459 | – | – | % | |||||||||||||||||||||
Wealth
management services
|
7,650 | 7,493 | 157 | 2 | % | 14,908 | 14,363 | 545 | 4 | % | ||||||||||||||||||||||
Service
charges on deposit accounts
|
1,208 | 1,220 | (12 | ) | (1 | %) | 2,368 | 2,345 | 23 | 1 | % | |||||||||||||||||||||
Merchant
processing fees
|
1,914 | 1,829 | 85 | 5 | % | 3,186 | 3,033 | 153 | 5 | % | ||||||||||||||||||||||
Income
from bank-owned life insurance
|
453 | 399 | 54 | 14 | % | 900 | 790 | 110 | 14 | % | ||||||||||||||||||||||
Net
gains on loan sales and commissions
|
||||||||||||||||||||||||||||||||
on
loans originated for others
|
433 | 510 | (77 | ) | (15 | %) | 924 | 774 | 150 | 19 | % | |||||||||||||||||||||
Other
income
|
554 | 372 | 182 | 49 | % | 1,015 | 730 | 285 | 39 | % | ||||||||||||||||||||||
Subtotal
|
12,212 | 11,823 | 389 | 3 | % | 23,301 | 22,035 | 1,266 | 6 | % | ||||||||||||||||||||||
Net
(losses) gains on securities
|
(53 | ) | (700 | ) | 647 | 92 | % | (98 | ) | 336 | (434 | ) | (129 | %) | ||||||||||||||||||
Total
noninterest income
|
$ | 12,159 | $ | 11,123 | $ | 1,036 | 9 | % | $ | 23,203 | $ | 22,371 | $ | 832 | 4 | % |
(Dollars
in thousands)
|
||||||||||||||||
Three
Months
|
Six
Months
|
|||||||||||||||
Periods
ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Balance
at the beginning of period
|
$ | 3,878,746 | $ | 3,715,987 | $ | 4,014,352 | $ | 3,609,180 | ||||||||
Net
market appreciation (depreciation) and income
|
10,420 | 113,656 | (191,495 | ) | 161,725 | |||||||||||
Net
customer cash flows
|
34,429 | 38,031 | 100,738 | 96,769 | ||||||||||||
Balance
at the end of period
|
$ | 3,923,595 | $ | 3,867,674 | $ | 3,923,595 | $ | 3,867,674 |
(Dollars
in thousands)
|
Three
Months
|
Six
Months
|
||||||||||||||||||||||||||||||
$
|
%
|
$
|
%
|
|||||||||||||||||||||||||||||
Periods
ended June 30
|
2008
|
2007
|
Chg
|
Chg
|
2008
|
2007
|
Chg
|
Chg
|
||||||||||||||||||||||||
Noninterest
expense:
|
||||||||||||||||||||||||||||||||
Salaries
and employee benefits
|
$ | 10,411 | $ | 10,285 | $ | 126 | 1 | % | $ | 20,754 | $ | 20,097 | $ | 657 | 3 | % | ||||||||||||||||
Net
occupancy
|
1,064 | 1,038 | 26 | 3 | % | 2,202 | 2,055 | 147 | 7 | % | ||||||||||||||||||||||
Equipment
|
977 | 861 | 116 | 13 | % | 1,921 | 1,693 | 228 | 13 | % | ||||||||||||||||||||||
Merchant
processing costs
|
1,598 | 1,558 | 40 | 3 | % | 2,666 | 2,577 | 89 | 3 | % | ||||||||||||||||||||||
Outsourced
services
|
742 | 535 | 207 | 39 | % | 1,378 | 1,054 | 324 | 31 | % | ||||||||||||||||||||||
Advertising
and promotion
|
467 | 572 | (105 | ) | (18 | %) | 853 | 1,001 | (148 | ) | (15 | %) | ||||||||||||||||||||
Legal,
audit and professional fees
|
430 | 404 | 26 | 6 | % | 973 | 854 | 119 | 14 | % | ||||||||||||||||||||||
Amortization
of intangibles
|
326 | 348 | (22 | ) | (6 | %) | 652 | 716 | (64 | ) | (9 | %) | ||||||||||||||||||||
Debt
prepayment penalties
|
– | – | – | – | – | 1,067 | (1,067 | ) | (100 | %) | ||||||||||||||||||||||
Other
|
2,039 | 2,159 | (120 | ) | (6 | %) | 3,797 | 3,755 | 42 | 1 | % | |||||||||||||||||||||
Total
noninterest expense
|
$ | 18,054 | $ | 17,760 | $ | 294 | 2 | % | $ | 35,196 | $ | 34,869 | $ | 327 | 1 | % |
(Dollars
in thousands)
|
||||||||||||||||||||
Credit
|
Amortized
|
Unrealized
|
Fair
|
|||||||||||||||||
June 30,
2008
|
Rating
|
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||||
Trust
preferred securities
|
||||||||||||||||||||
Collateralized
debt obligations
|
A
|
$ | 7,479 | $ | – | $ | (1,744 | ) | $ | 5,735 | ||||||||||
Individual
name issuers (1):
|
AA
|
15,411 | – | (3,128 | ) | 12,283 | ||||||||||||||
A | 13,188 | – | (2,441 | ) | 10,747 | |||||||||||||||
BBB
|
1,907 | – | (314 | ) | 1,593 | |||||||||||||||
Total
trust preferred securities
|
$ | 37,985 | $ | – | $ | (7,627 | ) | $ | 30,358 | |||||||||||
Corporate
bonds
|
BBB
|
$ | 1,746 | $ | – | $ | (13 | ) | $ | 1,733 |
(1)
|
We
own various series of trust preferred securities issued by seven corporate
financial institutions. The following amounts represent the
percentages greater than 10% of the total estimated fair value of trust
preferred securities holdings for individual name issuers, including,
where applicable, the impact of mergers and acquisitions of issuers
subsequent to original purchase: 25%, 15%, 13% and
11%.
|
(Dollars
in thousands)
|
||||||||||||||||
Amortized
|
Unrealized
|
Fair
|
||||||||||||||
June 30,
2008
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Common
and preferred stocks
|
||||||||||||||||
Common
stock
|
$ | 1,458 | $ | 337 | $ | (270 | ) | $ | 1,525 | |||||||
Perpetual
preferred stock:
|
||||||||||||||||
FNMA
preferred stock
|
713 | – | (11 | ) | 702 | |||||||||||
FHLMC
preferred stock
|
358 | – | (23 | ) | 335 | |||||||||||
Other
preferred (financials)
|
4,064 | – | (365 | ) | 3,699 | |||||||||||
Other
preferred (utilities)
|
1,000 | – | (113 | ) | 887 | |||||||||||
Total
preferred
|
6,135 | – | (512 | ) | 5,623 | |||||||||||
Total
common and preferred stocks
|
$ | 7,593 | $ | 337 | $ | (782 | ) | $ | 7,148 |
(Dollars
in thousands)
|
||||||||
Three
|
Six
|
|||||||
Periods
ended June 30, 2008
|
Months
|
Months
|
||||||
FNMA
and FHLMC preferred stock
|
$ | 430 | $ | 430 | ||||
Other
preferred (financials)
|
719 | 1,577 | ||||||
Total
|
$ | 1,149 | $ | 2,007 |
(Dollars
in thousands)
|
Balance
|
%
of Total
|
||||||
Rhode
Island, Connecticut, Massachusetts
|
$ | 526,937 | 86.6 | % | ||||
New
York, Virginia, New Jersey, Maryland, Pennsylvania, District of
Columbia
|
30,030 | 4.9 | % | |||||
Ohio,
Michigan
|
21,615 | 3.6 | % | |||||
California,
Washington, Oregon
|
16,576 | 2.7 | % | |||||
Colorado,
Texas, New Mexico, Utah
|
8,218 | 1.4 | % | |||||
Georgia
|
2,550 | 0.4 | % | |||||
New
Hampshire, Vermont
|
1,871 | 0.3 | % | |||||
Other
|
554 | 0.1 | % | |||||
Total
|
$ | 608,351 | 100.0 | % |
(Dollars
in thousands)
|
June 30,
|
December
31,
|
||||||
2008
|
2007
|
|||||||
Nonaccrual
loans 90 days or more past due
|
$ | 4,033 | $ | 2,490 | ||||
Nonaccrual
loans less than 90 days past due
|
2,148 | 1,814 | ||||||
Total
nonaccrual loans
|
6,181 | 4,304 | ||||||
Other
real estate owned, net
|
– | – | ||||||
Total
nonperforming assets
|
$ | 6,181 | $ | 4,304 | ||||
Nonaccrual
loans as a percentage of total loans
|
0.36 | % | 0.27 | % | ||||
Nonperforming
assets as a percentage of total assets
|
0.23 | % | 0.17 | % | ||||
Allowance
for loan losses to nonaccrual loans
|
355.33 | % | 471.12 | % | ||||
Allowance
for loan losses to total loans
|
1.29 | % | 1.29 | % |
(Dollars
in thousands)
|
June 30,
|
December
31,
|
||||||
2008
|
2007
|
|||||||
Residential
real estate
|
$ | 1,072 | $ | 1,158 | ||||
Commercial:
|
||||||||
Mortgages
|
1,991 | 1,094 | ||||||
Construction
and development
|
– | – | ||||||
Other
|
2,948 | 1,781 | ||||||
Consumer
|
170 | 271 | ||||||
Total
nonaccrual loans
|
$ | 6,181 | $ | 4,304 |
(Dollars
in thousands)
|
June 30,
|
December
31,
|
||||||
2008
|
2007
|
|||||||
Loans
30–59 Days Past Due
|
||||||||
Commercial
categories
|
$ | 6,682 | $ | 1,450 | ||||
Residential
mortgages
|
1,624 | 1,620 | ||||||
Consumer
loans
|
476 | 73 | ||||||
Loans
30–59 days past due
|
$ | 8,782 | $ | 3,143 | ||||
Loans
60–89 Days Past Due
|
||||||||
Commercial
categories
|
$ | 2,091 | $ | 1,313 | ||||
Residential
mortgages
|
1 | 39 | ||||||
Consumer
loans
|
87 | 38 | ||||||
Loans
60-89 days past due
|
$ | 2,179 | $ | 1,390 | ||||
Loans
90 Days or more Past Due
|
||||||||
Commercial
categories
|
$ | 3,625 | $ | 1,963 | ||||
Residential
mortgages
|
408 | 441 | ||||||
Consumer
loans
|
– | 86 | ||||||
Loans
90 days or more past due
|
$ | 4,033 | $ | 2,490 | ||||
Total
Past Due Loans
|
||||||||
Commercial
categories
|
$ | 12,398 | $ | 4,726 | ||||
Residential
mortgages
|
2,033 | 2,100 | ||||||
Consumer
loans
|
563 | 197 | ||||||
Total
past due loans
|
$ | 14,994 | $ | 7,023 |
(Dollars
in thousands)
|
Payments
Due by Period
|
|||||||||||||||||||
Total
|
Less
Than
1
Year
|
1-3
Years
|
4-5
Years
|
After
5
Years
|
||||||||||||||||
Contractual
Obligations:
|
||||||||||||||||||||
FHLB
advances (1)
|
$ | 845,291 | $ | 264,994 | $ | 243,680 | $ | 202,937 | $ | 133,680 | ||||||||||
Junior
subordinated debentures
|
32,991 | – | – | – | 32,991 | |||||||||||||||
Operating
lease obligations
|
4,401 | 1,196 | 1,549 | 715 | 941 | |||||||||||||||
Software
licensing arrangements
|
1,688 | 765 | 844 | 79 | – | |||||||||||||||
Treasury,
tax and loan demand note
|
4,668 | 4,668 | – | – | – | |||||||||||||||
Deferred
acquisition obligations
|
1,946 | 1,946 | – | – | – | |||||||||||||||
Other
borrowed funds
|
19,870 | 30 | 65 | 19,576 | 199 | |||||||||||||||
Total
contractual obligations
|
$ | 910,855 | $ | 273,599 | $ | 246,138 | $ | 223,307 | $ | 167,811 |
(1)
|
All
FHLB advances are shown in the period corresponding to their scheduled
maturity.
|
(Dollars
in thousands)
|
Amount
of Commitment Expiration – Per Period
|
|||||||||||||||||||
Total
|
Less
Than
1
Year
|
1-3
Years
|
4-5
Years
|
After
5
Years
|
||||||||||||||||
Other
Commitments:
|
||||||||||||||||||||
Commercial
loans
|
$ | 163,584 | $ | 105,224 | $ | 30,878 | $ | 17,025 | $ | 10,457 | ||||||||||
Home
equity lines
|
180,322 | 25 | 9,620 | 334 | 170,343 | |||||||||||||||
Other
loans
|
22,765 | 21,482 | 683 | 600 | – | |||||||||||||||
Standby
letters of credit
|
8,111 | 1,472 | – | 6,639 | – | |||||||||||||||
Forward
loan commitments to:
|
||||||||||||||||||||
Originate
loans
|
3,279 | 3,279 | – | – | – | |||||||||||||||
Sell
loans
|
6,012 | 6,012 | – | – | – | |||||||||||||||
Customer
related derivative contracts:
|
||||||||||||||||||||
Interest
rate swaps with customers
|
14,115 | – | – | – | 14,115 | |||||||||||||||
Mirror
swaps with counterparties
|
14,115 | – | – | – | 14,115 | |||||||||||||||
Interest
rate risk management contract:
|
||||||||||||||||||||
Interest
rate swap
|
10,000 | – | – | 10,000 | – | |||||||||||||||
Total
commitments
|
$ | 422,303 | $ | 137,494 | $ | 41,181 | $ | 34,598 | $ | 209,030 |
June 30,
2008
|
December 31,
2007
|
|||||||||||||||
Months
1 - 12
|
Months
13 - 24
|
Months
1 - 12
|
Months
13 - 24
|
|||||||||||||
100
basis point rate decrease
|
-1.06 | % | -2.57 | % | -1.77 | % | -2.24 | % | ||||||||
100
basis point rate increase
|
0.16 | % | -0.76 | % | -1.41 | % | -3.62 | % | ||||||||
200
basis point rate increase
|
0.98 | % | -1.21 | % | -1.13 | % | -6.11 | % |
(Dollars
in thousands)
|
Down
100
|
Up
200
|
||||||
Basis
|
Basis
|
|||||||
Security
Type
|
Points
|
Points
|
||||||
U.S.
Treasury and government-sponsored agency securities
(noncallable)
|
$ | 2,078 | $ | (3,847 | ) | |||
U.S.
government-sponsored agency securities (callable)
|
81 | (159 | ) | |||||
States
and political subdivision
|
5,266 | (12,055 | ) | |||||
Mortgage-backed
securities issued by U.S. government
|
||||||||
and
government-sponsored agencies
|
13,142 | (41,247 | ) | |||||
Corporate
securities
|
(781 | ) | 1,272 | |||||
Total
change in market value as of June 30, 2008
|
$ | 19,786 | $ | (56,036 | ) | |||
Total
change in market value as of December 31, 2007
|
$ | 15,459 | $ | (46,812 | ) |
Total
number of shares purchased
|
Average
price paid per share
|
Total
number of shares purchased as part of publicly announced
plan(s)
|
Maximum
number of shares that may yet be purchased under the
plan(s)
|
|||||||||||||
Deferred
Compensation Plan (1)
|
||||||||||||||||
Balance
at beginning of period
|
N/A | |||||||||||||||
4/1/2008
to 4/30/2008
|
– | – | – | N/A | ||||||||||||
5/1/2008
to 5/31/2008
|
– | – | – | N/A | ||||||||||||
6/1/2008
to 6/30/2008
|
– | – | – | N/A | ||||||||||||
Total
Deferred Compensation Plan
|
– | – | – | N/A | ||||||||||||
2006
Stock Repurchase Plan (2)
|
||||||||||||||||
Balance
at beginning of period
|
214,600 | |||||||||||||||
4/1/2008
to 4/30/2008
|
– | – | – | 214,600 | ||||||||||||
5/1/2008
to 5/31/2008
|
– | – | – | 214,600 | ||||||||||||
6/1/2008
to 6/30/2008
|
– | – | – | 214,600 | ||||||||||||
Total
2006 Stock Repurchase Plan
|
– | – | – | 214,600 | ||||||||||||
Other
(3)
|
||||||||||||||||
Balance
at beginning of period
|
N/A | |||||||||||||||
4/1/2008
to 4/30/2008
|
– | – | – | N/A | ||||||||||||
5/1/2008
to 5/31/2008
|
– | – | – | N/A | ||||||||||||
6/1/2008
to 6/30/2008
|
820 | 15.70 | 820 | N/A | ||||||||||||
Total
Other
|
820 | $ | 15.70 | 820 | N/A | |||||||||||
Total
Purchases of Equity Securities
|
820 | $ | 15.70 | 820 |
(1)
|
The
Deferred Compensation Plan allows directors and officers to defer a
portion of their compensation. The deferred compensation is
contributed to a rabbi trust that invests the assets of the trust into
selected mutual funds as well as shares of the Bancorp’s common
stock. The plan authorizes Bancorp to acquire shares of
Bancorp’s common stock to satisfy its obligation under this
plan. All shares are purchased in the open
market. As of October 15, 2007, the Bancorp’s common stock
was no longer available as a new benchmark investment under the
plan. Further, directors and officers who currently have
selected Bancorp’s common stock as a benchmark investment (the “Bancorp
Stock Fund”) will be allowed to transfer from that fund during a
transition period that will run through September 15,
2008. After September 15, 2008, directors and officers
will not be allowed to make transfers from the Bancorp Stock Fund and any
distributions will be made in whole shares of Bancorp’s common stock to
the extent of the benchmark investment election in the Bancorp Stock
Fund.
|
(2)
|
The
2006 Stock Repurchase Plan was established in December 2006. A
maximum of 400,000 shares were authorized under the plan. The
Bancorp plans to hold the repurchased shares as treasury stock for general
corporate purposes.
|
(3)
|
Pursuant
to the Corporation’s share-based compensation plans, employees may deliver
back shares of stock previously issued in payment of the exercise price of
stock options. While required to be reported in this table,
such transactions are not reported as share repurchases in the
Corporation’s Consolidated Financial Statements. The
Corporation’s share-based compensation plans (the 1988 Plan, the 1997 Plan
and the 2003 Plan) have expiration dates of December 31, 2007,
April 29, 2017 and February 20, 2023,
respectively.
|
(a)
|
The
Annual Meeting of Shareholders was held on April 22,
2008. On the record date of February 25, 2008 there were
13,386,835 shares issued, outstanding and eligible to vote, of which
12,021,978 shares, or 89.8%, were represented at the Annual Meeting either
in person or by proxy.
|
(b)
|
The
results of matters voted upon are presented
below:
|
i.
|
Election
of Directors to Serve Until 2011 Annual Meeting: Gary P.
Bennett, Larry J. Hirsh, Esq., Mary E. Kennard, Esq., H. Douglas Randall
III, and John F. Treanor were nominated and duly elected to hold office as
Directors of Washington Trust Bancorp, Inc., each to serve a term of three
years and until their successors are duly elected and qualified, by the
number of votes set forth opposite each person’s name as
follows:
|
Term
|
Votes
In
Favor
|
Votes
Withheld
|
||
Gary
P. Bennett
|
3
years
|
10,506,306
|
1,515,670
|
|
Larry
J. Hirsh, Esq.
|
3
years
|
10,539,526
|
1,482,450
|
|
Mary
E. Kennard, Esq.
|
3
years
|
9,666,077
|
2,355,900
|
|
H.
Douglas Randall III
|
3
years
|
10,551,820
|
1,470,157
|
|
John
F. Treanor
|
3
years
|
10,541,563
|
1,480,414
|
Steven
J. Crandall
|
|
Barry
G. Hittner, Esq
|
|
Katherine
W. Hoxsie
|
|
Edward
M. Mazze, Ph.D.
|
|
Kathleen
McKeough
|
|
Vicotr
J. Orsinger II, Esq.
|
|
Patrick
J. Shanahan, Jr.
|
|
Neil
H. Thorpe
|
|
John
C. Warren
|
ii.
|
A
proposal for the ratification of KPMG LLP to serve as independent
registered public accounting firm of the Corporation for the current
fiscal year ending December 31, 2008 was passed by a vote of
11,921,754 shares in favor, 88,399 shares against, with 11,824 abstentions
and broker non-votes.
|
Exhibit
Number
|
|
10.1
|
Amended
and Restated Declaration of Trust of Washington Preferred Capital Trust
dated April 7, 2008, by and among Wilmington Trust Company, as
Delaware Trustee and Institutional Trustee, Washington Trust Bancorp,
Inc., as sponsor, and the Administrators listed therein - Filed as Exhibit
10.1 to the Bancorp’s Current Report on Form 8-K (File No. 000-13091), as
filed with the Securities and Exchange Commission on April 7,
2008.
|
10.2
|
Indenture
dated as of April 7, 2008, between Washington Trust Bancorp, Inc., as
Issuer, and Wilmington Trust Company, as Trustee - Filed as Exhibit 10.2
to the Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed
with the Securities and Exchange Commission on April 7,
2008.
|
10.3
|
Guarantee
Agreement dated April 7, 2008, by and between Washington Trust
Bancorp, Inc. and Wilmington Trust Company - Filed as Exhibit 10.3 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed with
the Securities and Exchange Commission on April 7,
2008.
|
10.4
|
Certificate
Evidencing Floating Rate Capital Securities of Washington Preferred
Capital Trust dated April 7, 2008 - Filed as Exhibit 10.4 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed with
the Securities and Exchange Commission on April 7,
2008.
|
10.5
|
Floating
Rate Junior Subordinated Deferrable Interest Debenture of Washington Trust
Bancorp, Inc. dated April 7, 2008 - Filed as Exhibit 10.5 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed with
the Securities and Exchange Commission on April 7,
2008.
|
10.6
|
Form
of Deferred Stock Unit Award Agreement — Filed herewith.
(2)
|
15.1
|
Letter
re: Unaudited Interim Financial Information - Filed
herewith.
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. – Filed herewith. (1)
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. – Filed herewith. (1)
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 – Filed herewith. (1)
|
(1)
|
These
certifications are not “filed” for purposes of Section 18 of the Exchange
Act or incorporated by reference into any filing under the Securities Act
or the Exchange Act.
|
(2)
|
Management
contract or compensatory plan or
arrangement.
|
WASHINGTON
TRUST BANCORP, INC.
|
|||
(Registrant)
|
|||
Date: August 8,
2008
|
By:
|
/s/
John C. Warren
|
|
John
C. Warren
|
|||
Chairman
and Chief Executive Officer
|
|||
(principal
executive officer)
|
|||
Date: August 8,
2008
|
By:
|
/s/
David V. Devault
|
|
David
V. Devault
|
|||
Executive
Vice President, Secretary, Treasurer and Chief Financial
Officer
|
|||
(principal
financial and accounting officer)
|
|||
Exhibit
Number
|
|
10.1
|
Amended
and Restated Declaration of Trust of Washington Preferred Capital Trust
dated April 7, 2008, by and among Wilmington Trust Company, as
Delaware Trustee and Institutional Trustee, Washington Trust Bancorp,
Inc., as sponsor, and the Administrators listed therein - Filed as Exhibit
10.1 to the Bancorp’s Current Report on Form 8-K (File No. 000-13091), as
filed with the Securities and Exchange Commission on April 7,
2008.
|
10.2
|
Indenture
dated as of April 7, 2008, between Washington Trust Bancorp, Inc., as
Issuer, and Wilmington Trust Company, as Trustee - Filed as Exhibit 10.2
to the Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed
with the Securities and Exchange Commission on April 7,
2008.
|
10.3
|
Guarantee
Agreement dated April 7, 2008, by and between Washington Trust
Bancorp, Inc. and Wilmington Trust Company - Filed as Exhibit 10.3 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed with
the Securities and Exchange Commission on April 7,
2008.
|
10.4
|
Certificate
Evidencing Floating Rate Capital Securities of Washington Preferred
Capital Trust dated April 7, 2008 - Filed as Exhibit 10.4 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed with
the Securities and Exchange Commission on April 7,
2008.
|
10.5
|
Floating
Rate Junior Subordinated Deferrable Interest Debenture of Washington Trust
Bancorp, Inc. dated April 7, 2008 - Filed as Exhibit 10.5 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed with
the Securities and Exchange Commission on April 7,
2008.
|
10.6
|
Form
of Deferred Stock Unit Award Agreement — Filed herewith.
(2)
|
15.1
|
Letter
re: Unaudited Interim Financial Information - Filed
herewith.
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. – Filed herewith. (1)
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. – Filed herewith. (1)
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 – Filed herewith. (1)
|
(1)
|
These
certifications are not “filed” for purposes of Section 18 of the Exchange
Act or incorporated by reference into any filing under the Securities Act
or the Exchange Act.
|
(2)
|
Management
contract or compensatory plan or
arrangement.
|