WESTERLY, R.I., April 24, 2017 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced net income of $11.8 million, or $0.68 per diluted share, for the first quarter of 2017, compared to net income of $12.2 million, or $0.70 per diluted share, reported for the fourth quarter of 2016.

“Washington Trust posted solid first quarter results with very good contributions from our core business lines,” stated Joseph J. MarcAurele, Washington Trust Chairman and Chief Executive Officer.  “We continue to benefit from a solid level of business activity and production throughout our market area.”

Selected highlights for the first quarter of 2017 include:

• Returns on average equity and average assets were 11.87% and 1.08%, respectively.  Comparable amounts for the fourth quarter of 2016 were 12.26% and 1.14%, respectively.
• Wealth management revenues amounted to $9.5 million for the first quarter of 2017, up by 2% on a linked quarter basis.  Wealth management assets of $6.2 billion reached an all-time high for the Corporation at March 31, 2017.
• Total loans amounted to $3.2 billion at March 31, 2017, down slightly from the preceding quarter and up by 6% from a year ago.
• Deposit balances experienced good growth, rising by 2% in the quarter and have increased by 8% from a year ago.
• In March, Washington Trust declared a quarterly dividend of 38 cents per share, a 1 cent per share increase over the preceding quarter; representing the seventh consecutive year of dividend increases.

Net Interest Income
Net interest income totaled $28.7 million for the first quarter of 2017, up modestly from the fourth quarter.  Included in net interest income was loan prepayment fee income of $135 thousand for the first quarter, compared to $816 thousand in the fourth quarter.  Excluding the impact of loan prepayment fee income in both periods, net interest income was up by $727 thousand, or 3%, on a linked quarter basis.  The net interest margin was 2.87% for the first quarter of 2017, down by 2 basis points from the preceding quarter.  Excluding the impact of the loan prepayment fee income in each period, the net interest margin was 2.86%, up by 5 basis points from the fourth quarter of 2016.  Significant linked quarter changes included:

• Average interest-earning assets increased by $112 million from the preceding quarter, due to an increase in the average balance of investment securities, which was largely due to portfolio purchases during the fourth quarter of 2016.  The yield on interest-earning assets was 3.56%, up by 3 basis points from the preceding quarter.  Excluding the impact of loan prepayment fee income in each period, the yield on interest-earning assets was 3.54% for the first quarter of 2017, compared to 3.45% in the preceding quarter, due in part to the increase in the Federal Reserve target interest rate in December 2016.
• Average interest-bearing liabilities increased by $132 million from the fourth quarter, reflecting increases of $114 million in the average balance of wholesale funding balances (FHLBB advances and wholesale brokered time deposits).  The cost of interest-bearing funds was 0.83%, up by 4 basis points from the preceding quarter.

Loans
Total loans amounted to $3.2 billion at March 31, 2017, down by $10 million from the balance at the end of the fourth quarter.  Residential loan portfolio balances increased by $8 million, or 1%.  The commercial loan portfolio decreased by $9 million, or 0.5%.  Among the reasons for the decline were a lower line of credit utilization in the commercial and industrial portfolio and payoffs in the commercial real estate portfolio.  The consumer loan portfolio decreased by $9 million, or 3%, largely due to a reduction in home equity line and home equity loan balances.

Investment Securities
The investment securities portfolio amounted to $769 million at March 31, 2017, up by $14 million, or 2%, from the balance at December 31, 2016.  During the quarter, government agency mortgage-backed securities and agency debt securities totaling $40 million and with a weighted average rate of 2.40% were purchased.  These purchases were partially offset by calls, maturities and routine principal pay-downs.  Investment securities represented 18% of total assets as of March 31, 2017.

Deposits and Borrowings
Total deposits amounted to $3.1 billion at March 31, 2017, up by $52 million, or 2%, from the balance at December 31, 2016.  Included in total deposits were wholesale brokered time deposit balances of $382 million, which decreased by $30 million from the balance at December 31, 2016.  Excluding wholesale brokered time deposits, in-market deposits increased by $82 million, or 3%, in the quarter, reflecting growth in both new and existing depositor relationships.

FHLBB advances amounted to $799 million at March 31, 2017, down by $50 million from the balance at December 31, 2016.

Noninterest Income
Noninterest income totaled $14.5 million for the first quarter of 2017, down by $2.8 million from the preceding quarter.  Significant linked quarter changes included:

• Wealth management revenues totaled $9.5 million for the first quarter, up by $186 thousand, or 2%, on a linked quarter basis, driven by an increase of $193 thousand in asset-based revenues.  Wealth management assets under administration amounted to $6.2 billion at March 31, 2017, up by $180 million on a linked quarter basis, reflecting financial market appreciation in the first quarter of 2017.  Managed assets represented 93% of total wealth management assets at March 31, 2017.
• Mortgage banking revenues totaled $2.3 million for the first quarter, down by $2.2 million, or 48%, from the very strong results in the fourth quarter of 2016.  These results reflect a decrease in the volume of residential mortgage loans sold and a lower overall yield on sales in the secondary market.  Residential mortgage loans sold to the secondary market amounted to $107 million in the first quarter, compared to $200 million in the preceding quarter.
• Loan related derivative income amounted to $148 thousand in the first quarter, down by $764 thousand from the preceding quarter.  The number of commercial borrower loan related derivative transactions occurring in the quarter were relatively modest compared to activity in recent quarters.

Noninterest Expenses
Noninterest expenses totaled $25.3 million for the first quarter of 2017, up by $313 thousand, or 1%, from the fourth quarter.  Included in the first quarter was a $310 thousand reduction in noninterest expenses, resulting from a downward adjustment in the fair value of the contingent consideration liability recognized upon the completion of a 2015 acquisition.  Excluding this adjustment, noninterest expenses were up by $623 thousand, or 2%, on a linked quarter basis, with the largest increase in salaries and benefit costs.  Salaries and benefits cost increased by $267 thousand, or 2%, from the preceding quarter.  This increase reflected an increase in payroll taxes associated with the start of the new calendar year and the impact of merit increases, net of a decline in commissions expense due to a decrease in mortgage banking activities.

Income tax expense amounted to $5.7 million for the first quarter of 2017, down by $152 thousand from the preceding quarter.  The effective tax rate for the first quarter of 2017 was 32.7%, compared to 32.6% for the fourth quarter of 2016.  During the first quarter of 2017, the Corporation recognized excess tax benefits on the settlement of share-based awards totaling $195 thousand, which were recorded as a reduction to income tax expense.  Excluding the impact of the excess tax benefits recognized, the effective tax rate for the first quarter of 2017 was 33.8%.  Effective January 1, 2017, Washington Trust adopted Accounting Standards Update No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU").  Under this ASU, excess tax benefits and tax deficiencies on the settlement of share-based awards are recognized as income tax benefit or expense in the period that they occur.  Prior to 2017, excess tax benefits on the settlement of share-based awards were recognized as additional paid in capital in shareholders' equity and did not impact income tax expense or the effective tax rate.  Average annual excess tax benefits recognized as additional paid in capital in the 3-year period from 2014 through 2016 amounted to approximately $760 thousand.

Asset Quality
Total past due loans amounted to $20.9 million, or 0.65% of total loans, at March 31, 2017, down from $24.4 million, or 0.76% of total loans, at December 31, 2016.  Total nonaccrual loans amounted to $22.1 million, or 0.69% of total loans, at March 31, 2017, compared to $22.1 million, or 0.68% of total loans, at December 31, 2016.

Based on the assessment of loss exposure, including loan loss allocations commensurate with changes in the loan portfolio during the quarter, a loan loss provision totaling $400 thousand was charged to earnings in the first quarter of 2017.  In the fourth quarter of 2016, a loan loss provision of $2.9 million was charged to earnings, a substantial portion of which was due to loss exposure recognized on one nonaccrual commercial real estate relationship.  The allowance for loan losses was $26.4 million, or 0.82% of total loans, at March 31, 2017, compared to $26.0 million, or 0.80% of total loans, at December 31, 2016.

Capital and Dividends
Total shareholders' equity was $398 million at March 31, 2017, up by $7 million from December 31, 2016.  Capital levels at March 31, 2017 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.38% at March 31, 2017, compared to 12.26% at December 31, 2016.  Book value per share amounted to $23.14 at March 31, 2017, up from $22.76 at December 31, 2016.

The Board of Directors declared a quarterly dividend of 38 cents per share for the quarter ended March 31, 2017.  The dividend was paid on April 13, 2017 to shareholders of record on April 3, 2017.

Conference Call
Washington Trust will host a conference call to discuss its first quarter results, business highlights and outlook on Monday, April 24, 2017 at 10:00 a.m. (Eastern Time).  Individuals may dial in to the call at 1-877-407-0784.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13658778; the audio replay will be available through May 5, 2017.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, www.washtrustbancorp.com, and will be available through June 30, 2017.

Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company.  Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies.  Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts.  The Corporation’s common stock trades on NASDAQ under the symbol WASH.  Investor information is available on the Corporation’s web site at www.washtrustbancorp.com.

Forward-Looking Statements
This press release contains statements that are “forward-looking statements”.  We may also make forward-looking statements in other documents we file with the SEC, in press releases and other written materials, and in oral statements made by our officers, directors or employees.  You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters.  You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Washington Trust.  These risks, uncertainties and other factors may cause the actual results, performance or achievements of Washington Trust to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of the our competition; changes in legislation or regulation and accounting principles, policies and guidelines; increasing occurrences of cyberattacks, hacking and identity theft; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures.  Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
											Mar 31,  2017				Dec 31,  2016				Sep 30,  2016				Jun 30,  2016				Mar 31,  2016
Assets:
Cash and due from banks											$	111,941			$	106,185			$	126,752			$	116,658			$	89,966
Short-term investments												2,039				1,612				2,420				3,255				4,931
Mortgage loans held for sale												25,414				29,434				45,162				38,554				22,895
Securities:
Available for sale, at fair value												754,720				739,912				564,256				401,749				411,352
Held to maturity, at amortized cost												14,721				15,633				16,848				17,917				19,040
Total securities												769,441				755,545				581,104				419,666				430,392
Federal Home Loan Bank stock, at cost												43,714				43,129				37,249				34,303				26,515
Loans:
Commercial												1,762,499				1,771,666				1,757,215				1,732,220				1,698,811
Residential real estate												1,131,210				1,122,748				1,079,887				1,005,036				1,004,349
Consumer												331,151				339,957				344,253				343,628				343,833
Total loans												3,224,860				3,234,371				3,181,355				3,080,884				3,046,993
Less allowance for loan losses												26,446				26,004				25,649				25,826				26,137
Net loans												3,198,414				3,208,367				3,155,706				3,055,058				3,020,856
Premises and equipment, net												28,853				29,020				29,433				29,590				29,882
Investment in bank-owned life insurance												71,642				71,105				70,557				65,036				66,000
Goodwill												64,059				64,059				64,059				64,059				64,059
Identifiable intangible assets, net												9,898				10,175				10,493				10,814				11,137
Other assets												63,348				62,484				81,099				80,088				71,577
Total assets											$	4,388,763			$	4,381,115			$	4,204,034			$	3,917,081			$	3,838,210
Liabilities:
Deposits:
Demand deposits											$	596,974			$	585,960			$	566,027			$	512,307			$	539,119
NOW accounts												454,344				427,707				404,827				414,532				394,873
Money market accounts												762,233				730,075				794,905				675,896				763,565
Savings accounts												362,281				358,397				357,966				342,579				331,800
Time deposits												939,739				961,613				913,649				844,036				850,294
Total deposits												3,115,571				3,063,752				3,037,374				2,789,350				2,879,651
Federal Home Loan Bank advances												798,741				848,930				671,615				640,010				487,189
Junior subordinated debentures												22,681				22,681				22,681				22,681				22,681
Other liabilities												53,985				54,948				77,037				76,708				67,409
Total liabilities												3,990,978				3,990,311				3,808,707				3,528,749				3,456,930
Shareholders’ Equity:
Common stock												1,075				1,073				1,069				1,068				1,064
Paid-in capital												116,200				115,123				113,290				112,314				111,641
Retained earnings												299,555				294,365				288,613				282,666				277,810
Accumulated other comprehensive loss												(19,045		)		(19,757		)		(7,645		)		(7,716		)		(9,235		)
Total shareholders’ equity												397,785				390,804				395,327				388,332				381,280
Total liabilities and shareholders’ equity											$	4,388,763			$	4,381,115			$	4,204,034			$	3,917,081			$	3,838,210

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars in thousands, except per share amounts)
For the Three Months Ended											Mar 31,  2017				Dec 31,  2016				Sep 30,  2016				Jun 30,  2016				Mar 31,  2016
Interest income:
Interest and fees on loans											$	30,352			$	30,738			$	29,633			$	29,122			$	29,998
Taxable interest on securities												4,709				3,703				3,024				2,487				2,370
Nontaxable interest on securities												112				157				218				280				327
Dividends on Federal Home Loan Bank stock												387				362				288				231				210
Other interest income												104				95				93				70				64
Total interest and dividend income												35,664				35,055				33,256				32,190				32,969
Interest expense:
Deposits												3,502				3,445				3,110				2,981				2,968
Federal Home Loan Bank advances												3,344				2,886				2,641				2,313				2,152
Junior subordinated debentures												138				135				125				119				112
Other interest expense												1				1				1				1				2
Total interest expense												6,985				6,467				5,877				5,414				5,234
Net interest income												28,679				28,588				27,379				26,776				27,735
Provision for loan losses												400				2,900				1,800				450				500
Net interest income after provision for loan losses												28,279				25,688				25,579				26,326				27,235
Noninterest income:
Wealth management revenues												9,477				9,291				9,623				9,481				9,174
Mortgage banking revenues												2,340				4,541				3,734				2,710				2,198
Service charges on deposit accounts												883				945				915				935				907
Card interchange fees												802				858				870				860				797
Income from bank-owned life insurance												536				549				521				1,090				499
Loan related derivative income												148				912				1,178				508				645
Equity in losses of unconsolidated subsidiaries												(88		)		(89		)		(88		)		(89		)		(88		)
Other income												412				313				508				419				502
Total noninterest income												14,510				17,320				17,261				15,914				14,634
Noninterest expense:
Salaries and employee benefits												16,795				16,528				16,908				17,405				16,380
Net occupancy												1,967				1,775				1,766				1,803				1,807
Equipment												1,467				1,556				1,648				1,503				1,501
Outsourced services												1,457				1,311				1,254				1,294				1,363
Legal, audit and professional fees												616				597				691				662				629
FDIC deposit insurance costs												481				390				504				491				493
Advertising and promotion												237				403				370				420				265
Amortization of intangibles												277				318				321				322				323
Debt prepayment penalties												—				—				—				—				431
Change in fair value of contingent consideration												(310		)		—				(939		)		16				25
Other expenses												2,299				2,095				2,127				2,114				2,233
Total noninterest expense												25,286				24,973				24,650				26,030				25,450
Income before income taxes												17,503				18,035				18,190				16,210				16,419
Income tax expense												5,721				5,873				5,863				5,153				5,484
Net income											$	11,782			$	12,162			$	12,327			$	11,057			$	10,935
Net income available to common shareholders:
Basic											$	11,755			$	12,137			$	12,302			$	11,035			$	10,910
Diluted											$	11,755			$	12,137			$	12,302			$	11,035			$	10,910
Weighted average common shares outstanding:
Basic												17,186				17,142				17,090				17,067				17,023
Diluted												17,293				17,245				17,203				17,194				17,157
Earnings per common share:
Basic											$	0.68			$	0.71			$	0.72			$	0.65			$	0.64
Diluted											$	0.68			$	0.70			$	0.72			$	0.64			$	0.64
Cash dividends declared per share											$	0.38			$	0.37			$	0.37			$	0.36			$	0.36

SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands, except per share amounts)
	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2017			2016			2016			2016			2016
Share and Equity Related Data:
Book value per share	$	23.14		$	22.76		$	23.11		$	22.73		$	22.40
Tangible book value per share - Non-GAAP (1)	$	18.83		$	18.44		$	18.75		$	18.35		$	17.98
Market value per share	$	49.30		$	56.05		$	40.22		$	37.92		$	37.32
Shares issued and outstanding at end of period		17,193			17,171			17,107			17,081			17,024
Capital Ratios:
Tier 1 risk-based capital	11.54% (i)				11.44	%		11.48	%		11.57	%		11.56	%
Total risk-based capital	12.38% (i)				12.26	%		12.31	%		12.43	%		12.45	%
Tier 1 leverage ratio	8.58% (i)				8.67	%		8.95	%		9.21	%		9.31	%
Common equity tier 1	10.86% (i)				10.75	%		10.77	%		10.84	%		10.82	%
Equity to assets		9.06	%		8.92	%		9.40	%		9.91	%		9.93	%
Tangible equity to tangible assets - Non-GAAP (1)		7.51	%		7.35	%		7.77	%		8.16	%		8.13	%
(i) - estimated
For the Three Months Ended	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2017			2016			2016			2016			2016
Performance Ratios:
Net interest margin (FTE)		2.87	%		2.89	%		2.94	%		3.05	%		3.24	%
Return on average assets		1.08	%		1.14	%		1.21	%		1.14	%		1.16	%
Return on average tangible assets - Non-GAAP (1)		1.10	%		1.16	%		1.24	%		1.17	%		1.18	%
Return on average equity		11.87	%		12.26	%		12.57	%		11.50	%		11.50	%
Return on average tangible equity - Non-GAAP (1)		14.59	%		15.09	%		15.53	%		14.28	%		14.34	%

(1)  See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.

SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
For the Three Months Ended											Mar 31,  2017				Dec 31,  2016				Sep 30,  2016				Jun 30,  2016				Mar 31,  2016
Wealth Management Results
Wealth Management Revenues:
Trust and investment management fees											$	8,518			$	8,283			$	8,358			$	8,195			$	8,065
Mutual fund fees												729				771				812				812				843
Asset-based revenues												9,247				9,054				9,170				9,007				8,908
Transaction-based revenues												230				237				453				474				266
Total wealth management revenues											$	9,477			$	9,291			$	9,623			$	9,481			$	9,174
Assets Under Administration:
Balance at beginning of period											$	6,063,293			$	6,056,859			$	5,905,019			$	5,878,967			$	5,844,636
Net investment appreciation (depreciation) & income												220,423				(8,506		)		192,518				71,447				22,389
Net client asset flows												(40,415		)		14,940				(40,678		)		(45,395		)		11,942
Balance at end of period											$	6,243,301			$	6,063,293			$	6,056,859			$	5,905,019			$	5,878,967
Mortgage Banking Results
Mortgage Banking Revenues:
Gains & commissions on loan sales, net											$	2,268			$	4,455			$	3,744			$	2,804			$	2,134
Residential mortgage servicing fee income, net												72				86				(10		)		(94		)		64
Total mortgage banking revenues											$	2,340			$	4,541			$	3,734			$	2,710			$	2,198
Residential Mortgage Loan Originations:
Originations for retention in portfolio											$	57,907			$	72,533			$	90,308			$	54,080			$	47,545
Originations for sale to secondary market (1)												102,441				185,626				170,673				154,043				90,458
Total mortgage loan originations											$	160,348			$	258,159			$	260,981			$	208,123			$	138,003
Residential Mortgage Loans Sold:
Sold with servicing rights retained											$	22,567			$	48,545			$	44,611			$	45,804			$	26,454
Sold with servicing rights released (1)												84,345				151,506				119,572				93,239				79,507
Total mortgage loans sold											$	106,912			$	200,051			$	164,183			$	139,043			$	105,961

(1)  Also includes loans originated in a broker capacity.

END OF PERIOD LOAN AND DEPOSIT COMPOSITION
(Unaudited; Dollars in thousands)
											Mar 31,  2017												Dec 31,  2016				Sep 30,  2016				Jun 30,  2016				Mar 31,  2016
Commercial:
Mortgages											$	1,076,648											$	1,074,186			$	1,086,175			$	1,074,747			$	976,931
Construction & development												123,841												121,371				98,735				81,812				123,032
Commercial & industrial												562,010												576,109				572,305				575,661				598,848
Total commercial												1,762,499												1,771,666				1,757,215				1,732,220				1,698,811
Residential real estate:
Mortgages												1,100,435												1,094,824				1,052,829				978,399				980,274
Homeowner construction												30,775												27,924				27,058				26,637				24,075
Total residential real estate												1,131,210												1,122,748				1,079,887				1,005,036				1,004,349
Consumer:
Home equity lines												258,695												264,200				265,238				260,541				258,513
Home equity loans												36,050												37,272				38,264				39,572				45,499
Other												36,406												38,485				40,751				43,515				39,821
Total consumer												331,151												339,957				344,253				343,628				343,833
Total loans											$	3,224,860											$	3,234,371			$	3,181,355			$	3,080,884			$	3,046,993

	March 31, 2017										December 31, 2016
	Balance						% of Total				Balance						% of Total
Commercial Real Estate Loans by Property Location:
Rhode Island, Connecticut, Massachusetts	$	1,110,934					92.5		%		$	1,105,539					92.5		%
New York, New Jersey, Pennsylvania		76,678					6.4		%			77,038					6.4		%
New Hampshire		12,877					1.1		%			12,980					1.1		%
Total commercial real estate loans (1)	$	1,200,489					100.0		%		$	1,195,557					100.0		%
Residential Mortgages by Property Location:
Rhode Island, Connecticut, Massachusetts	$	1,115,205					98.6		%		$	1,106,366					98.6		%
New Hampshire, Vermont, Maine		11,570					1.0		%			11,445					1.0		%
New York, Virginia, New Jersey, Maryland, Pennsylvania		2,228					0.2		%			2,648					0.2		%
Ohio		922					0.1		%			997					0.1		%
Other		1,285					0.1		%			1,292					0.1		%
Total residential mortgages	$	1,131,210					100.0		%		$	1,122,748					100.0		%

(1)  Commercial real estate loans consist of commercial mortgages and construction and development loans.  Commercial mortgages are loans secured by income producing property.

	Mar 31,  2017				Dec 31,  2016				Sep 30,  2016				Jun 30,  2016				Mar 31,  2016
Deposits:
Non-interest bearing demand deposits	$	534,792			$	521,165			$	520,860			$	476,848			$	474,477
Interest-bearing demand deposits		62,182				64,795				45,167				35,459				64,642
NOW accounts		454,344				427,707				404,827				414,532				394,873
Money market accounts		762,233				730,075				794,905				675,896				763,565
Savings accounts		362,281				358,397				357,966				342,579				331,800
Time deposits (in-market)		557,312				549,376				554,669				549,935				540,815
Wholesale brokered time deposits		382,427				412,237				358,980				294,101				309,479
Total deposits	$	3,115,571			$	3,063,752			$	3,037,374			$	2,789,350			$	2,879,651

CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2017			2016			2016			2016			2016
Asset Quality Ratios:
Nonperforming assets to total assets		0.54	%		0.53	%		0.59	%		0.48	%		0.49	%
Nonaccrual loans to total loans		0.69	%		0.68	%		0.75	%		0.56	%		0.57	%
Allowance for loan losses to nonaccrual loans		119.52	%		117.89	%		107.09	%		149.73	%		150.00	%
Allowance for loan losses to total loans		0.82	%		0.80	%		0.81	%		0.84	%		0.86	%
Nonperforming Assets:
Commercial mortgages	$	7,809		$	7,811		$	10,357		$	4,054		$	4,054
Commercial construction & development		—			—			—			—			—
Commercial & industrial		1,129			1,337			1,744			1,204			2,659
Residential real estate mortgages		12,253			11,736			10,140			10,409			9,367
Consumer		936			1,174			1,709			1,581			1,345
Total nonaccrual loans		22,127			22,058			23,950			17,248			17,425
Other real estate owned		1,410			1,075			1,045			1,515			1,326
Total nonperforming assets	$	23,537		$	23,133		$	24,995		$	18,763		$	18,751
Past Due Loans:
Commercial mortgages	$	7,806		$	8,708		$	10,352		$	4,062		$	4,564
Commercial & industrial		1,046			1,154			1,047			1,978			2,906
Residential real estate mortgages		10,533			12,226			8,291			8,893			8,703
Consumer loans		1,547			2,334			1,565			2,201			2,122
Total past due loans	$	20,932		$	24,422		$	21,255		$	17,134		$	18,295
Total past due loans to total loans		0.65	%		0.76	%		0.67	%		0.56	%		0.60	%
Accruing loans 90 days or more past due	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans included in past due loans	$	18,081		$	18,602		$	18,796		$	13,211		$	14,030
For the Three Months Ended	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2017			2016			2016			2016			2016
Nonaccrual Loan Activity:
Balance at beginning of period	$	22,058		$	23,950		$	17,248		$	17,425		$	21,047
Additions to nonaccrual status		2,138			2,105			9,750			2,072			1,352
Loans returned to accruing status		(547	)		(718	)		(592	)		—			(206	)
Loans charged-off		(79	)		(2,622	)		(2,055	)		(860	)		(1,475	)
Loans transferred to other real estate owned		(478	)		(30	)		—			(435	)		(610	)
Payments, payoffs and other changes		(965	)		(627	)		(401	)		(954	)		(2,683	)
Balance at end of period	$	22,127		$	22,058		$	23,950		$	17,248		$	17,425
Allowance for Loan Losses:
Balance at beginning of period	$	26,004		$	25,649		$	25,826		$	26,137		$	27,069
Provision charged to earnings		400			2,900			1,800			450			500
Charge-offs		(79	)		(2,622	)		(2,055	)		(860	)		(1,475	)
Recoveries		121			77			78			99			43
Balance at end of period	$	26,446		$	26,004		$	25,649		$	25,826		$	26,137
Net Loan Charge-Offs (Recoveries):
Commercial mortgages	$	—		$	2,510		$	1,936		$	65		$	1,249
Commercial & industrial		(105	)		(20	)		(43	)		684			(18	)
Residential real estate mortgages		(4	)		6			47			2			134
Consumer		67			49			37			10			67
Total	$	(42	)	$	2,545		$	1,977		$	761		$	1,432
Net charge-offs to average loans (annualized)		(0.01	%)		0.31	%		0.25	%		0.10	%		0.19	%

The following table presents average balance and interest rate information.  Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit.  Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations.  Nonaccrual and renegotiated loans, as well as interest recognized on these loans are included in amounts presented for loans.

CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited; Dollars in thousands)
For the Three Months Ended	March 31, 2017												December 31, 2016												March 31, 2016
	Average Balance				Interest				Yield/ Rate				Average Balance				Interest				Yield/ Rate				Average Balance				Interest				Yield/  Rate
Assets:
Commercial mortgages	$	1,079,171			$	9,444			3.55				$	1,086,772			$	9,520			3.48				$	933,939			$	8,215			3.54
Construction & development		127,861				1,113			3.53					110,342				927			3.34					129,217				1,108			3.45
Commercial & industrial		573,801				6,157			4.35					575,983				6,927			4.78					604,519				7,681			5.11
Total commercial loans		1,780,833			$	16,714			3.81					1,773,097			$	17,374			3.90					1,667,675			$	17,004			4.10
Residential real estate loans, including loans held for sale		1,152,468				10,868			3.82					1,140,492				10,652			3.72					1,031,260				10,155			3.96
Consumer loans		335,054				3,323			4.02					341,528				3,284			3.83					343,519				3,393			3.97
Total loans		3,268,355				30,905			3.83					3,255,117				31,310			3.83					3,042,454				30,552			4.04
Cash, federal funds sold and short-term investments		56,195				104			0.75					77,092				95			0.49					68,488				64			0.38
FHLBB stock		43,622				387			3.60					39,212				362			3.67					25,597				210			3.30
Taxable debt securities		755,955				4,709			2.53					636,277				3,703			2.32					359,060				2,370			2.65
Nontaxable debt securities		11,521				173			6.09					16,003				244			6.07					33,313				507			6.12
Total securities		767,476				4,882			2.58					652,280				3,947			2.41					392,373				2,877			2.95
Total interest-earning assets		4,135,648				36,278			3.56					4,023,701				35,714			3.53					3,528,912				33,703			3.84
Noninterest-earning assets		229,823												249,182												240,113
Total assets	$	4,365,471											$	4,272,883											$	3,769,025
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	56,782			$	15			0.11				$	46,668			$	16			0.14				$	50,704			$	13			0.10
NOW accounts		420,622				50			0.05					408,788				51			0.05					386,488				56			0.06
Money market accounts		754,501				599			0.32					761,582				574			0.30					786,633				515			0.26
Savings accounts		357,894				51			0.06					356,837				51			0.06					328,174				49			0.06
Time deposits (in-market)		554,855				1,418			1.04					552,474				1,419			1.02					538,035				1,315			0.98
Wholesale brokered time deposits		397,274				1,369			1.40					382,798				1,334			1.39					296,801				1,020			1.38
FHLBB advances		831,614				3,344			1.63					732,269				2,886			1.57					453,019				2,152			1.91
Junior subordinated debentures		22,681				138			2.47					22,681				135			2.37					22,681				112			1.99
Other		27				1			15.02					40				1			9.95					79				2			10.18
Total interest-bearing liabilities		3,396,250				6,985			0.83					3,264,137				6,467			0.79					2,862,614				5,234			0.74
Demand deposits		527,215												548,595												471,782
Other liabilities		44,889												63,410												54,287
Shareholders' equity		397,117												396,741												380,342
Total liabilities and shareholders' equity	$	4,365,471											$	4,272,883											$	3,769,025
Net interest income (FTE)					$	29,293											$	29,247											$	28,469
Interest rate spread									2.73												2.74												3.10
Net interest margin									2.87												2.89												3.24

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

For the Three Months Ended	Mar 31, 2017				Dec 31, 2016				Mar 31, 2016
Commercial loans	$	553			$	572			$	554
Nontaxable debt securities		61				87				180
Total	$	614			$	659			$	734

SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures
(Unaudited; Dollars in thousands, except per share amounts)
	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2017			2016			2016			2016			2016
Tangible Book Value per Share:
Total shareholders' equity, as reported	$	397,785		$	390,804		$	395,327		$	388,332		$	381,280
Less:
Goodwill		64,059			64,059			64,059			64,059			64,059
Identifiable intangible assets, net		9,898			10,175			10,493			10,814			11,137
Total tangible shareholders' equity	$	323,828		$	316,570		$	320,775		$	313,459		$	306,084
Shares outstanding, as reported		17,193			17,171			17,107			17,081			17,024
Book value per share - GAAP	$	23.14		$	22.76		$	23.11		$	22.73		$	22.40
Tangible book value per share - Non-GAAP	$	18.83		$	18.44		$	18.75		$	18.35		$	17.98
Tangible Equity to Tangible Assets:
Total tangible shareholders' equity	$	323,828		$	316,570		$	320,775		$	313,459		$	306,084
Total assets, as reported	$	4,388,763		$	4,381,115		$	4,204,034		$	3,917,081		$	3,838,210
Less:
Goodwill		64,059			64,059			64,059			64,059			64,059
Identifiable intangible assets, net		9,898			10,175			10,493			10,814			11,137
Total tangible assets	$	4,314,806		$	4,306,881		$	4,129,482		$	3,842,208		$	3,763,014
Equity to assets - GAAP		9.06	%		8.92	%		9.40	%		9.91	%		9.93	%
Tangible equity to tangible assets - Non-GAAP		7.51	%		7.35	%		7.77	%		8.16	%		8.13	%
For the Three Months Ended	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2017			2016			2016			2016			2016
Return on Average Tangible Assets:
Net income, as reported	$	11,782		$	12,162		$	12,327		$	11,057		$	10,935
Total average assets, as reported	$	4,365,471		$	4,272,883		$	4,062,688		$	3,869,508		$	3,769,025
Less average balances of:
Goodwill		64,059			64,059			64,059			64,059			64,059
Identifiable intangible assets, net		10,027			10,330			10,650			10,972			11,294
Total average tangible assets	$	4,291,385		$	4,198,494		$	3,987,979		$	3,794,477		$	3,693,672
Return on average assets - GAAP		1.08	%		1.14	%		1.21	%		1.14	%		1.16	%
Return on average tangible assets - Non-GAAP		1.10	%		1.16	%		1.24	%		1.17	%		1.18	%
Return on Average Tangible Equity:
Net income, as reported	$	11,782		$	12,162		$	12,327		$	11,057		$	10,935
Total average equity, as reported	$	397,117		$	396,741		$	392,233		$	384,717		$	380,342
Less average balances of:
Goodwill		64,059			64,059			64,059			64,059			64,059
Identifiable intangible assets, net		10,027			10,330			10,650			10,972			11,294
Total average tangible equity	$	323,031		$	322,352		$	317,524		$	309,686		$	304,989
Return on average equity - GAAP		11.87	%		12.26	%		12.57	%		11.50	%		11.50	%
Return on average tangible equity - Non-GAAP		14.59	%		15.09	%		15.53	%		14.28	%		14.34	%

Contact:  Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone:  (401) 348-1309
E-mail:  ebeckel@washtrust.com

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