WESTERLY, R.I., Oct. 22, 2018 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced third quarter 2018 net income of $17.5 million, or $1.01 per diluted share, compared to net income of $17.7 million, or $1.01 per diluted share, reported for the second quarter of 2018.

“Washington Trust’s third quarter results reflect another solid operating performance, led by good deposit growth, healthy loan production, and increased wealth management asset generation,” stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer.

Selected highlights for third quarter 2018 include:

• Profitability ratios remained strong, with returns on average equity and average assets of 16.26% and 1.47%, respectively.
  
  
• Total loans were up by $66 million, or 2%, from the end of the prior quarter and up by $233 million, or 7%, from a year ago.
  
  
• Total deposits were up by $93 million, or 3%, from the end of the preceding quarter and up by $257 million, or 8%, from a year ago.
  
  
• In September, Washington Trust declared a quarterly dividend of 43 cents per share.  Year-to-date dividends declared amounted to $1.29 per share, an increase of 14 cents per share, or 12%, from the same period a year ago.

Net Interest Income
Net interest income was $33.4 million for the third quarter of 2018, up by $338 thousand, or 1%, from the second quarter of 2018.  Income associated with loan payoffs and prepayment penalties in the third quarter of 2018 was $173 thousand, compared to $483 thousand in the prior quarter.  The net interest margin was 2.99% for the third quarter, down by 6 basis points from the preceding quarter.  Excluding income associated with loan payoffs and prepayment penalties, the net interest margin was 2.98% for the third quarter, down by 3 basis points from the preceding quarter.

Significant linked quarter changes included:

• Average interest-earning assets increased by $86 million, largely due to loan growth.  The yield on interest-earning assets for the third quarter was 4.03%, up by 5 basis points from the preceding quarter.  Excluding the impact of income associated with loan payoffs and prepayment penalties, the yield on interest-earning assets was 4.02%, up by 8 basis points from the preceding quarter.  The yield benefited from increased market rates of interest.
  
  
• Average non-interest bearing demand deposits increased by $38 million, largely due to the recapture of second quarter seasonal outflows.  Average interest-bearing liabilities increased by $44 million, reflecting an increase of $57 million in average in-market deposits, partially offset by a decline of $13 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances).  The cost of interest-bearing liabilities for the third quarter was 1.28%, up by 14 basis points from the preceding quarter, largely due to higher rates paid on promotional time certificates of deposit and interest-bearing demand deposits.  The increase in the rate paid on interest-bearing demand deposits was primarily attributable to a program implemented in June 2018 that transitioned wealth management client assets, previously held in outside accounts, into insured deposits on Washington Trust's balance sheet.

Noninterest Income
Noninterest income totaled $15.2 million for the third quarter of 2018, down by $778 thousand, or 5%, from the second quarter of 2018.  Significant linked quarter changes included:

• Wealth management revenues were $9.5 million for the third quarter of 2018, down by $148 thousand, or 2%, on a linked quarter basis.  This included a decrease of $334 thousand in transaction-based revenues, partially offset by an increase of $186 thousand, or 2%, in asset-based revenues.  The linked quarter decrease in transaction-based revenues was largely attributable to tax preparation fee revenue, which is generally recognized in the second quarter.
  
  Wealth management assets under administration were $6.5 billion at September 30, 2018, up by $242 million, or 4%, from the balance at June 30, 2018, with $232 million of net investment appreciation and income and $10 million of net client inflows.

• Mortgage banking revenues were $2.6 million for the third quarter of 2018, down by $317 thousand, or 11%, from the preceding quarter.  While third quarter results benefited from relatively higher volume of loans sold and sales yield, this was offset by a decrease in fair value adjustments on mortgage loan commitments and loans held for sale.  The decrease in fair value adjustments reflected a decline in the mortgage pipeline and corresponding loan commitment balances as of September 30, 2018.
  
  
• Loan related derivative income was $278 thousand for the third quarter of 2018, down by $390 thousand from the preceding quarter, due to lower transaction volume of commercial borrower loan related derivatives.

Noninterest Expenses
Noninterest expenses totaled $26.1 million for the third quarter of 2018, down by $226 thousand, or 1%, from the second quarter of 2018.  The linked quarter comparison of noninterest expenses was impacted by the following:

• Included in other expenses in the second quarter of 2018 were software system implementation expenses of $114 thousand primarily related to the conversion of our wealth management accounting system, which was completed in April 2018.
  
  
• In the third quarter of 2018, a one-time third-party vendor credit of $300 thousand was recognized as a reduction to outsourced services expense in the third quarter.

Excluding the impact of the aforementioned items, noninterest expenses for the third quarter of 2018 were up by $188 thousand or 1%, largely due to an increase in foreclosed property costs.

Income tax expense totaled $4.7 million for the third quarter of 2018, essentially unchanged from the preceding quarter.  The effective tax rate for the third quarter of 2018 was 21.3%, compared to 21.2% for the preceding quarter.

Investment Securities
The securities portfolio totaled $824 million at September 30, 2018, up by $35 million from the balance at June 30, 2018.  The increase reflected purchases of debt securities in the third quarter totaling $65 million, with a weighted average yield of 3.46%. These purchases were partially offset by routine principal pay-downs on mortgage-backed securities and a temporary decline in the fair value of available for sale securities.  Investment securities represented 17% of total assets at September 30, 2018.

Loans
Total loans amounted to $3.6 billion at September 30, 2018, up by $66 million, or 2%, from the end of the second quarter.  Total commercial loans increased by $47 million, or 3%, reflecting an increase of $25 million in the commercial and industrial ("C&I") portfolio and an increase of $22 million in the commercial real estate portfolio.  The residential real estate loan portfolio increased by $22 million, or 2%, from the balance at June 30, 2018, while total consumer loans declined by $3 million, or 1%, from the end of the second quarter.

Deposits and Borrowings
Total deposits amounted to $3.4 billion at September 30, 2018, up by $93 million, or 3%, from the end of the preceding quarter.  The increases reflected seasonal inflows of various institutional and governmental depositors based on their underlying business cycles, as well as growth in time certificates of deposit resulting from a promotional campaign that began in April 2018.

Federal Home Loan Bank advances amounted to $828 million at September 30, 2018, down by $73 million from the balance at June 30, 2018, due to growth in deposits.

Asset Quality
Total nonaccrual loans amounted to $10.8 million, or 0.30% of total loans, at September 30, 2018, down from $11.7 million, or 0.34% of total loans, at June 30, 2018.  Total past due loans amounted to $13.5 million, or 0.38% of total loans, at September 30, 2018, down from $16.7 million, or 0.48% of total loans, at June 30, 2018.

Based on management's assessment of loan and credit quality metrics, loss exposures and changes in the loan portfolio during the quarter, a loan loss provision totaling $350 thousand was recognized in the third quarter of 2018, compared to a loan loss provision of $400 thousand recognized in the preceding quarter.  Net charge-offs were nominal in both the third and second quarter of 2018, totaling $15 thousand and $90 thousand, respectively.  The allowance for loan losses amounted to $26.5 million, or 0.75% of total loans, at September 30, 2018, compared to $26.2 million, or 0.75% of total loans, at June 30, 2018.

Capital and Dividends
Total shareholders' equity was $428 million at September 30, 2018, up by $6.3 million from June 30, 2018, reflecting net income of $17.5 million, partially offset by $7.5 million in dividends declared and a $4.0 million reduction in the accumulated comprehensive income component of shareholders' equity primarily due to a temporary decline in the fair value of available for sale securities.

Capital levels at September 30, 2018 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.77% at September 30, 2018, compared to 12.61% at June 30, 2018.  Book value per share amounted to $24.75 at September 30, 2018, compared to $24.40 at June 30, 2018.

The Board of Directors declared a quarterly dividend of 43 cents per share for the quarter ended September 30, 2018.  The dividend was paid on October 12, 2018 to shareholders of record on October 1, 2018.

Conference Call
Washington Trust will host a conference call to discuss its third quarter results, business highlights and outlook on Tuesday, October 23, 2018 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-877-407-9208.  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 13683640; the audio replay will be available through October 30, 2018.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through December 31, 2018.

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 http://ir.washtrust.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 our annual reports to shareholders, 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 our control.  These risks, uncertainties and other factors may cause our actual results, performance or achievements 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 or outflows 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 our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; 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, 2017, 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017
Assets:
Cash and due from banks	$	72,934		$	132,068		$	85,680		$	79,853		$	128,580
Short-term investments		2,917			2,624			2,322			3,070			2,600
Mortgage loans held for sale		22,571			35,207			19,269			26,943			28,484
Securities:
Available for sale, at fair value		812,647			776,693			787,842			780,954			714,355
Held to maturity, at amortized cost		10,863			11,412			11,973			12,541			13,241
Total securities		823,510			788,105			799,815			793,495			727,596
Federal Home Loan Bank stock, at cost		44,525			46,281			41,127			40,517			42,173
Loans:
Total loans		3,556,203			3,490,230			3,387,406			3,374,071			3,323,078
Less allowance for loan losses		26,509			26,174			25,864			26,488			27,308
Net loans		3,529,694			3,464,056			3,361,542			3,347,583			3,295,770
Premises and equipment, net		28,195			28,377			28,316			28,333			28,591
Investment in bank-owned life insurance		79,891			79,319			73,782			73,267			72,729
Goodwill		63,909			63,909			63,909			63,909			63,909
Identifiable intangible assets, net		8,400			8,645			8,893			9,140			9,388
Other assets		94,126			88,651			81,671			63,740			69,410
Total assets	$	4,770,672		$	4,737,242		$	4,566,326		$	4,529,850		$	4,469,230
Liabilities:
Deposits:
Noninterest-bearing deposits	$	611,829		$	577,656		$	601,478		$	578,410		$	575,866
Interest-bearing deposits		2,802,519			2,743,955			2,654,956			2,664,297			2,581,215
Total deposits		3,414,348			3,321,611			3,256,434			3,242,707			3,157,081
Federal Home Loan Bank advances		828,392			901,053			808,677			791,356			814,045
Junior subordinated debentures		22,681			22,681			22,681			22,681			22,681
Other liabilities		77,342			70,326			65,453			59,822			61,195
Total liabilities		4,342,763			4,315,671			4,153,245			4,116,566			4,055,002
Shareholders’ Equity:
Common stock		1,081			1,080			1,079			1,077			1,076
Paid-in capital		119,220			118,883			118,172			117,961			117,189
Retained earnings		346,685			336,670			326,505			317,756			312,334
Accumulated other comprehensive loss		(39,077	)		(35,062	)		(32,675	)		(23,510	)		(16,371	)
Total shareholders’ equity		427,909			421,571			413,081			413,284			414,228
Total liabilities and shareholders’ equity	$	4,770,672		$	4,737,242		$	4,566,326		$	4,529,850		$	4,469,230

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars in thousands, except per share amounts)
	For the Three Months Ended																For the Nine Months Ended
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017				Sep 30, 2018			Sep 30, 2017
Interest income:
Interest and fees on loans	$	38,877		$	37,101		$	34,578		$	33,459		$	32,509			$	110,556		$	94,503
Taxable interest on securities		5,383			5,358			5,118			4,719			4,655				15,859			14,208
Nontaxable interest on securities		9			20			23			24			41				52			225
Dividends on Federal Home Loan Bank stock		634			550			516			481			467				1,700			1,293
Other interest income		261			257			205			217			197				723			457
Total interest and dividend income		45,164			43,286			40,440			38,900			37,869				128,890			110,686
Interest expense:
Deposits		6,546			5,254			4,422			4,136			3,835				16,222			10,928
Federal Home Loan Bank advances		4,937			4,707			3,983			3,708			3,816				13,627			10,669
Junior subordinated debentures		232			214			183			167			159				629			446
Other interest expense		—			—			—			—			—				—			1
Total interest expense		11,715			10,175			8,588			8,011			7,810				30,478			22,044
Net interest income		33,449			33,111			31,852			30,889			30,059				98,412			88,642
Provision for loan losses		350			400			—			200			1,300				750			2,400
Net interest income after provision for loan losses		33,099			32,711			31,852			30,689			28,759				97,662			86,242
Noninterest income:
Wealth management revenues		9,454			9,602			10,273			9,914			10,013				29,329			29,432
Mortgage banking revenues		2,624			2,941			2,838			3,097			3,036				8,403			8,295
Service charges on deposit accounts		885			903			863			946			942				2,651			2,726
Card interchange fees		983			961			847			904			894				2,791			2,598
Income from bank-owned life insurance		572			537			515			537			546				1,624			1,624
Loan related derivative income		278			668			141			470			1,452				1,087			2,744
Other income		419			381			266			342			400				1,066			1,180
Total noninterest income		15,215			15,993			15,743			16,210			17,283				46,951			48,599
Noninterest expense:
Salaries and employee benefits		17,283			17,304			17,772			17,194			17,362				52,359			51,697
Net occupancy		2,013			1,930			2,002			1,859			1,928				5,945			5,662
Outsourced services		1,951			2,350			1,873			1,960			1,793				6,174			4,960
Equipment		1,080			1,069			1,180			1,198			1,380				3,329			4,160
Legal, audit and professional fees		559			555			726			562			534				1,840			1,732
FDIC deposit insurance costs		410			422			404			389			308				1,236			1,258
Advertising and promotion		440			329			177			466			416				946			1,015
Amortization of intangibles		245			247			248			248			253				740			787
Change in fair value of contingent consideration		—			—			—			(333	)		—				—			(310	)
Other expenses		2,081			2,082			2,748			2,211			2,780				6,911			7,385
Total noninterest expense		26,062			26,288			27,130			25,754			26,754				79,480			78,346
Income before income taxes		22,252			22,416			20,465			21,145			19,288				65,133			56,495
Income tax expense		4,741			4,742			4,254			13,163			6,326				13,737			18,552
Net income	$	17,511		$	17,674		$	16,211		$	7,982		$	12,962			$	51,396		$	37,943
Net income available to common shareholders	$	17,475		$	17,636		$	16,173		$	7,958		$	12,934			$	51,284		$	37,859
Weighted average common shares outstanding:
Basic		17,283			17,272			17,234			17,223			17,212				17,263			17,201
Diluted		17,382			17,387			17,345			17,349			17,318				17,392			17,320
Earnings per common share:
Basic	$	1.01		$	1.02		$	0.94		$	0.46		$	0.75			$	2.97		$	2.20
Diluted	$	1.01		$	1.01		$	0.93		$	0.46		$	0.75			$	2.95		$	2.19
Cash dividends declared per share	$	0.43		$	0.43		$	0.43		$	0.39		$	0.39			$	1.29		$	1.15

SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands, except per share amounts)
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017
Share and Equity Related Data:
Book value per share	$	24.75		$	24.40		$	23.93		$	23.99		$	24.06
Tangible book value per share - Non-GAAP (1)	$	20.57		$	20.20		$	19.71		$	19.75		$	19.81
Market value per share	$	55.30		$	58.10		$	53.75		$	53.25		$	57.25
Shares issued and outstanding at end of period		17,290			17,278			17,262			17,227			17,214
Capital Ratios (2):
Tier 1 risk-based capital		12.00	%		11.84	%		11.78	%		11.65	%		11.69	%
Total risk-based capital		12.77	%		12.61	%		12.56	%		12.45	%		12.53	%
Tier 1 leverage ratio		8.91	%		8.87	%		8.84	%		8.79	%		8.83	%
Common equity tier 1		11.37	%		11.20	%		11.13	%		10.99	%		11.02	%
Balance Sheet Ratios:
Equity to assets		8.97	%		8.90	%		9.05	%		9.12	%		9.27	%
Tangible equity to tangible assets - Non-GAAP (1)		7.57	%		7.48	%		7.57	%		7.63	%		7.76	%
Loans to deposits (3)		104.0	%		105.3	%		103.8	%		104.1	%		105.3	%

												For the Nine Months Ended
	For the Three Months Ended
	Sep 30, 2018		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Sep 30, 2017			Sep 30, 2018		Sep 30, 2017
Performance Ratios (4):
Net interest margin (5)	2.99	%	3.05	%	3.03	%	2.95	%	2.93	%		3.03	%	2.92	%
Return on average assets (net income divided by average assets)	1.47	%	1.53	%	1.45	%	0.71	%	1.17	%		1.48	%	1.16	%
Return on average tangible assets - Non-GAAP (1)	1.49	%	1.56	%	1.48	%	0.72	%	1.19	%		1.51	%	1.18	%
Return on average equity (net income available for common shareholders divided by average equity)	16.26	%	16.99	%	15.96	%	7.56	%	12.43	%		16.41	%	12.50	%
Return on average tangible equity - Non-GAAP (1)	19.59	%	20.58	%	19.40	%	9.17	%	15.12	%		19.86	%	15.29	%
Efficiency ratio (6)	53.6	%	53.5	%	57.0	%	54.7	%	56.5	%		54.7	%	57.1	%

1. See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.
2. Estimated for September 30, 2018 and actuals for the remaining periods.
3. Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits.
4. Annualized based on the actual number of days in the period.
5. Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets.
6. Total noninterest expense as percentage of total revenues (net interest income and noninterest income).

SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
	For the Three Months Ended																For the Nine Months Ended
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017				Sep 30, 2018			Sep 30, 2017
Wealth Management Results
Wealth Management Revenues:
Asset-based revenues	$	9,322		$	9,136		$	9,955		$	9,686		$	9,791			$	28,413		$	28,439
Transaction-based revenues		132			466			318			228			222				916			993
Total wealth management revenues	$	9,454		$	9,602		$	10,273		$	9,914		$	10,013			$	29,329		$	29,432
Assets Under Administration (AUA):
Balance at beginning of period	$	6,220,155		$	6,343,720		$	6,714,637		$	6,587,899		$	6,403,501			$	6,714,637		$	6,063,293
Net investment appreciation (depreciation) & income		232,245			133,450			(32,024	)		163,681			270,549				333,671			653,896
Net client asset flows		9,940			(257,015	)		(338,893	)		(36,943	)		(86,151	)			(585,968	)		(129,290	)
Balance at end of period	$	6,462,340		$	6,220,155		$	6,343,720		$	6,714,637		$	6,587,899			$	6,462,340		$	6,587,899
Percentage of AUA that are managed assets		91	%		92	%		92	%		93	%		92	%			91	%		92	%
Mortgage Banking Results
Mortgage Banking Revenues:
Gains & commissions on loan sales, net (1)	$	2,485		$	2,786		$	2,679		$	2,987		$	2,952			$	7,950		$	8,004
Residential mortgage servicing fee income, net		139			155			159			110			84				453			291
Total mortgage banking revenues	$	2,624		$	2,941		$	2,838		$	3,097		$	3,036			$	8,403		$	8,295
Residential Mortgage Loan Originations:
Originations for retention in portfolio	$	94,866		$	128,479		$	67,840		$	75,595		$	90,378			$	291,185		$	243,079
Originations for sale to secondary market (2)		119,832			122,693			87,720			143,834			143,112				330,245			390,044
Total mortgage loan originations	$	214,698		$	251,172		$	155,560		$	219,429		$	233,490			$	621,430		$	633,123
Residential Mortgage Loans Sold:
Sold with servicing rights retained	$	24,422		$	24,367		$	33,575		$	39,769		$	37,823			$	82,634		$	89,589
Sold with servicing rights released (2)		107,724			81,054			63,265			105,416			109,508				252,043			302,098
Total mortgage loans sold	$	132,146		$	105,421		$	96,840		$	145,185		$	147,331			$	334,677		$	391,687

1. Includes gains on loan sales, commissions on loans originated for others, servicing right gains, fair value adjustments on loans held for sale, and fair value adjustments and gains on forward loan commitments.
2. Also includes loans originated in a broker capacity.

END OF PERIOD LOAN AND DEPOSIT COMPOSITION
(Unaudited; Dollars in thousands)
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017
Loans:
Commercial real estate (1)	$	1,240,350		$	1,218,643		$	1,217,278		$	1,210,495		$	1,211,792
Commercial & industrial		656,882			632,029			603,830			612,334			588,324
Total commercial		1,897,232			1,850,672			1,821,108			1,822,829			1,800,116
Residential real estate (2)		1,349,340			1,327,418			1,249,890			1,227,248			1,195,537
Home equity		282,331			283,744			285,723			292,467			294,657
Other		27,300			28,396			30,685			31,527			32,768
Total consumer		309,631			312,140			316,408			323,994			327,425
Total loans	$	3,556,203		$	3,490,230		$	3,387,406		$	3,374,071		$	3,323,078

1. Commercial real estate loans consist of commercial mortgages and construction and development loans.  Commercial mortgages are loans secured by income producing property.
2. Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four-family residential properties.

		September 30, 2018					December 31, 2017
		Balance		% of Total				Balance		% of Total
Commercial Real Estate Loans by Property Location:
Rhode Island	$	352,297		28.4	%		$	360,834		29.8	%
Connecticut		499,996		40.3				461,230		38.1
Massachusetts		299,082		24.1				309,013		25.5
Subtotal		1,151,375		92.8				1,131,077		93.4
All other states		88,975		7.2				79,418		6.6
Total commercial real estate loans	$	1,240,350		100.0	%		$	1,210,495		100.0	%
Residential Real Estate Loans by Property Location:
Rhode Island	$	347,657		25.8	%		$	343,340		28.0	%
Connecticut		145,962		10.8				140,843		11.5
Massachusetts		838,628		62.1				726,712		59.2
Subtotal		1,332,247		98.7				1,210,895		98.7
All other states		17,093		1.3				16,353		1.3
Total residential real estate loans	$	1,349,340		100.0	%		$	1,227,248		100.0	%

		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017
Deposits:
Noninterest-bearing demand deposits	$	611,829		$	577,656		$	601,478		$	578,410		$	575,866
Interest-bearing demand deposits		151,322			136,640			83,249			82,728			45,407
NOW accounts		468,578			481,905			470,112			466,605			448,128
Money market accounts		650,976			604,954			693,748			731,345			716,827
Savings accounts		372,425			375,983			376,608			368,524			367,912
Time deposits (in-market)		715,635			698,286			625,965			617,368			587,166
In-market deposits		2,970,765			2,875,424			2,851,160			2,844,980			2,741,306
Wholesale brokered time deposits		443,583			446,187			405,274			397,727			415,775
Total deposits	$	3,414,348		$	3,321,611		$	3,256,434		$	3,242,707		$	3,157,081

CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017
Asset Quality Ratios:
Nonperforming assets to total assets		0.29	%		0.32	%		0.30	%		0.34	%		0.44	%
Nonaccrual loans to total loans		0.30	%		0.34	%		0.31	%		0.45	%		0.56	%
Total past due loans to total loans		0.38	%		0.48	%		0.57	%		0.59	%		0.49	%
Allowance for loan losses to nonaccrual loans		245.25	%		222.85	%		245.83	%		174.14	%		147.52	%
Allowance for loan losses to total loans		0.75	%		0.75	%		0.76	%		0.79	%		0.82	%
Nonperforming Assets:
Commercial real estate	$	—		$	—		$	—		$	4,954		$	5,887
Commercial & industrial		122			397			397			283			429
Total commercial		122			397			397			5,237			6,316
Residential real estate		9,063			10,206			9,340			9,414			11,699
Home equity		1,624			1,133			771			544			480
Other consumer		—			9			13			16			16
Total consumer		1,624			1,142			784			560			496
Total nonaccrual loans		10,809			11,745			10,521			15,211			18,511
Other real estate owned		2,974			3,206			3,206			131			1,038
Total nonperforming assets	$	13,783		$	14,951		$	13,727		$	15,342		$	19,549
Past Due Loans (30 days or more past due):
Commercial real estate	$	931		$	—		$	—		$	4,960		$	5,887
Commercial & industrial		142			2,851			3,295			4,076			455
Total commercial		1,073			2,851			3,295			9,036			6,342
Residential real estate		9,398			11,243			11,806			7,855			7,802
Home equity		2,939			2,585			4,235			3,141			2,268
Other consumer		109			16			22			43			35
Total consumer		3,048			2,601			4,257			3,184			2,303
Total past due loans	$	13,519		$	16,695		$	19,358		$	20,075		$	16,447
Accruing loans 90 days or more past due	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans included in past due loans	$	6,425		$	8,575		$	7,066		$	11,788		$	13,216

CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
	For the Three Months Ended																For the Nine Months Ended
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017				Sep 30, 2018			Sep 30, 2017
Nonaccrual Loan Activity:
Balance at beginning of period	$	11,745		$	10,521		$	15,211		$	18,511		$	20,198			$	15,211		$	22,058
Additions to nonaccrual status		2,179			2,457			1,210			462			1,969				5,846			6,053
Loans returned to accruing status		(361	)		(475	)		(344	)		(1,316	)		(1,411	)			(1,180	)		(2,736	)
Loans charged-off		(96	)		(103	)		(690	)		(1,047	)		(694	)			(889	)		(1,415	)
Loans transferred to other real estate owned		—			—			(3,074	)		—			—				(3,074	)		(576	)
Payments, payoffs and other changes		(2,658	)		(655	)		(1,792	)		(1,399	)		(1,551	)			(5,105	)		(4,873	)
Balance at end of period	$	10,809		$	11,745		$	10,521		$	15,211		$	18,511			$	10,809		$	18,511
Allowance for Loan Losses:
Balance at beginning of period	$	26,174		$	25,864		$	26,488		$	27,308		$	26,662			$	26,488		$	26,004
Provision charged to earnings		350			400			—			200			1,300				750			2,400
Charge-offs		(96	)		(103	)		(690	)		(1,047	)		(694	)			(889	)		(1,415	)
Recoveries		81			13			66			27			40				160			319
Balance at end of period	$	26,509		$	26,174		$	25,864		$	26,488		$	27,308			$	26,509		$	27,308
Net Loan Charge-Offs (Recoveries):
Commercial real estate	$	—		$	—		$	602		$	932		$	535			$	602		$	853
Commercial & industrial		(70	)		(3	)		(23	)		43			114				(96	)		124
Total commercial		(70	)		(3	)		579			975			649				506			977
Residential real estate		68			5			—			32			(1	)			73			3
Home equity		(2	)		73			28			(2	)		(7	)			99			48
Other consumer		19			15			17			15			13				51			68
Total consumer		17			88			45			13			6				150			116
Total	$	15		$	90		$	624		$	1,020		$	654			$	729		$	1,096
Net charge-offs to average loans (annualized)		—	%		0.01	%		0.07	%		0.12	%		0.08	%			0.03	%		0.04	%

The following table presents average balance and interest rate information.  Tax-exempt income is converted to a FTE 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.  Certain previously reported amounts have been reclassified to conform to current year's presentation.

CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
For the Three Months Ended	September 30, 2018								June 30, 2018								Quarter Change
	Average Balance		Interest		Yield/ Rate				Average Balance		Interest		Yield/ Rate				Average Balance			Interest		Yield/ Rate
Assets:
Cash, federal funds sold and short-term investments	$52,218		$261		1.98	%			$56,142		$257		1.84	%			($3,924	)		$4		0.14	%
Mortgage loans held for sale	34,571		384		4.41				30,203		313		4.16				4,368			71		0.25
Taxable debt securities	825,302		5,383		2.59				821,772		5,358		2.62				3,530			25		(0.03	)
Nontaxable debt securities	935		11		4.67				1,956		26		5.33				(1,021	)		(15	)	(0.66	)
Total securities	826,237		5,394		2.59				823,728		5,384		2.62				2,509			10		(0.03	)
FHLB stock	45,181		634		5.57				43,331		550		5.09				1,850			84		0.48
Commercial real estate	1,233,230		13,931		4.48				1,225,926		13,463		4.40				7,304			468		0.08
Commercial & industrial	642,005		7,720		4.77				622,141		7,569		4.88				19,864			151		(0.11	)
Total commercial	1,875,235		$21,651		4.58				1,848,067		$21,032		4.56				27,168			$619		0.02
Residential real estate	1,331,304		13,362		3.98				1,275,171		12,426		3.91				56,133			936		0.07
Home equity	284,080		3,469		4.84				284,188		3,278		4.63				(108	)		191		0.21
Other	27,635		344		4.94				29,696		360		4.86				(2,061	)		(16	)	0.08
Total consumer	311,715		3,813		4.85				313,884		3,638		4.65				(2,169	)		175		0.20
Total loans	3,518,254		38,826		4.38				3,437,122		37,096		4.33				81,132			1,730		0.05
Total interest-earning assets	4,476,461		45,499		4.03				4,390,526		43,600		3.98				85,935			1,899		0.05
Noninterest-earning assets	248,437								238,290								10,147
Total assets	$4,724,898								$4,628,816								$96,082
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$134,632		$465		1.37	%			$86,204		$101		0.47	%			$48,428			$364		0.90	%
NOW accounts	458,143		104		0.09				460,712		57		0.05				(2,569	)		47		0.04
Money market accounts	631,570		1,104		0.69				664,127		960		0.58				(32,557	)		144		0.11
Savings accounts	375,528		60		0.06				375,690		57		0.06				(162	)		3		—
Time deposits (in-market)	706,726		2,806		1.58				662,969		2,265		1.37				43,757			541		0.21
Total interest-bearing in-market deposits	2,306,599		4,539		0.78				2,249,702		3,440		0.61				56,897			1,099		0.17
Wholesale brokered time deposits	438,604		2,007		1.82				430,118		1,814		1.69				8,486			193		0.13
Total interest-bearing deposits	2,745,203		6,546		0.95				2,679,820		5,254		0.79				65,383			1,292		0.16
FHLB advances	852,904		4,937		2.30				874,746		4,707		2.16				(21,842	)		230		0.14
Junior subordinated debentures	22,681		232		4.06				22,681		214		3.78				—			18		0.28
Total interest-bearing liabilities	3,620,788		11,715		1.28				3,577,247		10,175		1.14				43,541			1,540		0.14
Noninterest-bearing demand deposits	612,597								574,258								38,339
Other liabilities	65,207								60,878								4,329
Shareholders' equity	426,306								416,433								9,873
Total liabilities and shareholders' equity	$4,724,898								$4,628,816								$96,082
Net interest income (FTE)			$33,784								$33,425									$359
Interest rate spread					2.75	%							2.84	%								(0.09	)%
Net interest margin					2.99	%							3.05	%								(0.06	)%

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

For the Three Months Ended					Sep 30, 2018			Jun 30, 2018			Quarter Change
Commercial loans				$	333		$	308		$	25
Nontaxable debt securities					2			6			(4	)
Total				$	335		$	314		$	21

CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
For the Nine Months Ended	September 30, 2018							September 30, 2017							Change
	Average Balance		Interest		Yield/ Rate			Average Balance		Interest		Yield/  Rate			Average Balance		Interest		Yield/  Rate
Assets:
Cash, federal funds sold and short-term investments	$53,828		$723		1.80	%		$59,357		$457		1.03	%		($5,529	)	$266		0.77	%
Mortgage loans for sale	29,770		923		4.15			25,090		734		3.91			4,680		189		0.24
Taxable debt securities	817,274		15,859		2.59			760,308		14,208		2.50			56,966		1,651		0.09
Nontaxable debt securities	1,743		65		4.99			7,602		347		6.10			(5,859	)	(282	)	(1.11	)
Total securities	819,017		15,924		2.60			767,910		14,555		2.53			51,107		1,369		0.07
FHLB stock	43,149		1,700		5.27			44,015		1,293		3.93			(866	)	407		1.34
Commercial real estate	1,225,875		39,740		4.33			1,175,302		32,824		3.73			50,573		6,916		0.60
Commercial & industrial	624,563		22,113		4.73			581,514		19,448		4.47			43,049		2,665		0.26
Total commercial	1,850,438		61,853		4.47			1,756,816		52,272		3.98			93,622		9,581		0.49
Residential real estate	1,278,662		37,717		3.94			1,150,473		32,763		3.81			128,189		4,954		0.13
Home equity	285,143		9,908		4.65			297,079		9,120		4.10			(11,936	)	788		0.55
Other	29,328		1,073		4.89			35,166		1,271		4.83			(5,838	)	(198	)	0.06
Total consumer	314,471		10,981		4.67			332,245		10,391		4.18			(17,774	)	590		0.49
Total loans	3,443,571		110,551		4.29			3,239,534		95,426		3.94			204,037		15,125		0.35
Total interest-earning assets	4,389,335		129,821		3.95			4,135,906		112,465		3.64			253,429		17,356		0.31
Noninterest-earning assets	239,187							238,050							1,137
Total assets	$4,628,522							$4,373,956							$254,566
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$100,644		$595		0.79	%		$52,564		$37		0.09	%		$48,080		$558		0.70	%
NOW accounts	456,083		215		0.06			433,435		176		0.05			22,648		39		0.01
Money market accounts	671,135		2,944		0.59			715,386		1,881		0.35			(44,251	)	1,063		0.24
Savings accounts	373,105		173		0.06			361,904		158		0.06			11,201		15		—
Time deposits (in-market)	662,850		6,890		1.39			559,938		4,443		1.06			102,912		2,447		0.33
Total interest-bearing in-market deposits	2,263,817		10,817		0.64			2,123,227		6,695		0.42			140,590		4,122		0.22
Wholesale brokered time deposits	426,096		5,405		1.70			398,349		4,233		1.42			27,747		1,172		0.28
Total interest-bearing deposits	2,689,913		16,222		0.81			2,521,576		10,928		0.58			168,337		5,294		0.23
FHLB advances	846,359		13,627		2.15			828,775		10,669		1.72			17,584		2,958		0.43
Junior subordinated debentures	22,681		629		3.71			22,681		446		2.63			—		183		1.08
Other	—		—		—			13		1		10.28			(13	)	(1	)	(10.28	)
Total interest-bearing liabilities	3,558,953		30,478		1.14			3,373,045		22,044		0.87			185,908		8,434		0.27
Noninterest-bearing demand deposits	590,573							546,393							44,180
Other liabilities	61,042							49,721							11,321
Shareholders' equity	417,954							404,797							13,157
Total liabilities and shareholders' equity	$4,628,522							$4,373,956							$254,566
Net interest income (FTE)			$99,343							$90,421							$8,922
Interest rate spread					2.81	%						2.77	%						0.04	%
Net interest margin					3.03	%						2.92	%						0.11	%

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

For the Nine Months Ended			Sep 30, 2018		Sep 30, 2017		Change
Commercial loans			$918		$1,657		($739	)
Nontaxable debt securities			13		122		(109	)
Total			$931		$1,779		($848	)

SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures
(Unaudited; Dollars in thousands, except per share amounts)
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017
Tangible Book Value per Share:
Total shareholders' equity, as reported	$	427,909		$	421,571		$	413,081		$	413,284		$	414,228
Less:
Goodwill		63,909			63,909			63,909			63,909			63,909
Identifiable intangible assets, net		8,400			8,645			8,893			9,140			9,388
Total tangible shareholders' equity	$	355,600		$	349,017		$	340,279		$	340,235		$	340,931
Shares outstanding, as reported		17,290			17,278			17,262			17,227			17,214
Book value per share - GAAP	$	24.75		$	24.40		$	23.93		$	23.99		$	24.06
Tangible book value per share - Non-GAAP	$	20.57		$	20.20		$	19.71		$	19.75		$	19.81
Tangible Equity to Tangible Assets:
Total tangible shareholders' equity	$	355,600		$	349,017		$	340,279		$	340,235		$	340,931
Total assets, as reported	$	4,770,672		$	4,737,242		$	4,566,326		$	4,529,850		$	4,469,230
Less:
Goodwill		63,909			63,909			63,909			63,909			63,909
Identifiable intangible assets, net		8,400			8,645			8,893			9,140			9,388
Total tangible assets	$	4,698,363		$	4,664,688		$	4,493,524		$	4,456,801		$	4,395,933
Equity to assets - GAAP		8.97	%		8.90	%		9.05	%		9.12	%		9.27	%
Tangible equity to tangible assets - Non-GAAP		7.57	%		7.48	%		7.57	%		7.63	%		7.76	%

	For the Three Months Ended																For the Nine Months Ended
		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Sep 30, 2017				Sep 30, 2018			Sep 30, 2017
Return on Average Tangible Assets:
Net income, as reported	$	17,511		$	17,674		$	16,211		$	7,982		$	12,962			$	51,396		$	37,943
Total average assets, as reported	$	4,724,898		$	4,628,816		$	4,529,708		$	4,473,340		$	4,401,536			$	4,628,522		$	4,373,956
Less average balances of:
Goodwill		63,909			63,909			63,909			63,909			63,909				63,909			64,008
Identifiable intangible assets, net		8,519			8,766			9,014			9,261			9,511				8,764			9,766
Total average tangible assets	$	4,652,470		$	4,556,141		$	4,456,785		$	4,400,170		$	4,328,116			$	4,555,849		$	4,300,182
Return on average assets - GAAP		1.47	%		1.53	%		1.45	%		0.71	%		1.17	%			1.48	%		1.16	%
Return on average tangible assets - Non-GAAP		1.49	%		1.56	%		1.48	%		0.72	%		1.19	%			1.51	%		1.18	%
Return on Average Tangible Equity:
Net income available to common shareholders, as reported	$	17,475		$	17,636		$	16,173		$	7,958		$	12,934			$	51,284		$	37,859
Total average equity, as reported	$	426,306		$	416,433		$	410,955		$	417,568		$	412,862			$	417,954		$	404,797
Less average balances of:
Goodwill		63,909			63,909			63,909			63,909			63,909				63,909			64,008
Identifiable intangible assets, net		8,519			8,766			9,014			9,261			9,511				8,764			9,766
Total average tangible equity	$	353,878		$	343,758		$	338,032		$	344,398		$	339,442			$	345,281		$	331,023
Return on average equity - GAAP		16.26	%		16.99	%		15.96	%		7.56	%		12.43	%			16.41	%		12.50	%
Return on average tangible equity - Non-GAAP		19.59	%		20.58	%		19.40	%		9.17	%		15.12	%			19.86	%		15.29	%

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

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