FORM
10-K
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x
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Annual
report pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended DECEMBER 31, 2008
or
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o
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Transition
report pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934 for the transition period from ____________ to
____________
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WASHINGTON
TRUST BANCORP, INC.
|
RHODE
ISLAND
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05-0404671
|
|
(State
or other jurisdiction of
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(I.R.S.
Employer
|
|
incorporation
or organization)
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Identification
No.)
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|
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||
23
BROAD STREET
WESTERLY,
RHODE ISLAND
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02891
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|
(Address
of principal executive offices)
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(Zip
Code)
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Large
accelerated filer o
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Accelerated
filer x
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Non-accelerated
filer o
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Smaller
reporting company o
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(Do
not check if a smaller reporting company)
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Residential
mortgages
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Consumer
installment loans
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Merchant
credit card services
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Reverse
mortgages
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Commercial
and consumer demand deposits
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Telephone
banking services
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Commercial
loans
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Savings,
NOW and money market deposits
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Internet
banking services
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Construction
loans
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Certificates
of deposit
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Cash
management services
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Home
equity lines of credit
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Retirement
accounts
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Remote
deposit capture
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Home
equity loans
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Automated
teller machines (ATMs)
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Safe
deposit boxes
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(1) | These acquisitions have been accounted for as a purchase and, accordingly, the operations of the acquired companies are included in the Consolidated Financial Statements from their dates of acquisition. |
(2)
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These
acquisitions were accounted for as poolings of interests and, accordingly,
all financial data was restated to reflect the combined financial
condition and results of operations as if these acquisitions were in
effect for all periods presented.
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§
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“well-capitalized”
if it has a total risk based capital ratio of 10.0% or greater, has a
Tier 1 risk based capital ratio of 6.0% or more, has a leverage ratio
of 5.0% or greater and is not subject to any written agreement, order or
capital directive or prompt corrective action
directive;
|
§
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“adequately
capitalized” if it has a total risk based capital ratio of 8.0% or
greater, a Tier 1 risk based capital ratio of 4.0% or more, and a
leverage ratio of 4.0% or greater (3.0% under certain circumstances) and
does not meet the definition of a “well-capitalized
bank;”
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§
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“undercapitalized”
if it has a total risk based capital ratio that is less than 8.0%, a
Tier 1 risk based capital ratio that is less than 4.0% or a leverage
ratio that is less than 4.0% (3.0% under certain
circumstances);
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§
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“significantly
undercapitalized” if it has a total risk based capital ratio that is less
than 6.0%, a Tier 1 risk based capital ratio that is less than 3.0%
or a leverage ratio that is less than 3.0%;
and
|
§
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“critically
undercapitalized” if it has a ratio of tangible equity to total assets
that is equal to or less than 2.0%.
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§
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In
the case of one such affiliate, the aggregate amount of covered
transactions of the insured depository institution and its subsidiaries
cannot exceed 10% of the capital stock and surplus of the insured
depository institution.
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§
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In
the case of all affiliates, the aggregate amount of covered transactions
of the insured depository institution and its subsidiaries cannot exceed
20% of the capital stock and surplus of the insured depository
institution.
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·
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Regional
credit concentration - We are exposed to real estate and economic factors
in southern New England, because a significant portion of our loan
portfolio is concentrated among borrowers in this
market. Further, because a substantial portion of our loan
portfolio is secured by real estate in this area, including residential
mortgages, most consumer loans, commercial mortgages and other commercial
loans, the value of our collateral is also subject to regional real estate
market conditions and other factors that might affect the value of real
estate, including natural
disasters.
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·
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Industry
concentration - A portion of our loan portfolio consists of loans to the
hospitality, tourism and recreation industries. Loans to
companies in these industries may have a somewhat higher risk of loss than
some other industries because these businesses are seasonal, with a
substantial portion of commerce concentrated in the summer
season. Accordingly, the ability of borrowers to meet their
repayment terms is more dependent on economic, climate and other
conditions and may be subject to a higher degree of volatility from year
to year.
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·
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Volatility
in the financial markets associated with subprime mortgages, including
adverse impacts on credit quality and liquidity within the financial
markets, have been associated with a general decline in the real estate
and housing market along with significant mortgage loan related losses
reported by many other financial institutions. Global and
domestic economic conditions have been adversely affected by these
factors. No assurance can be given that these conditions will
not result in an increase in delinquencies with a negative impact on our
loan loss experience, necessitating an increase in our allowance for loan
losses.
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·
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Federal
and state regulators periodically review our allowance for loan losses and
may require us to increase our provision for loan losses or recognize
additional charge-offs. Any increase in our allowance for loan
losses or loan charge-offs required by these regulatory agencies could
have a material adverse effect on our results of operations and financial
condition.
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Page
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||
I.
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Distribution
of Assets, Liabilities and Stockholder Equity;
Interest
Rates and Interest Differentials
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31-32
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II.
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Investment
Portfolio
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40-41,
82
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III.
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Loan
Portfolio
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44-48,
83
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IV.
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Summary
of Loan Loss Experience
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50-51,
85
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V.
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Deposits
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31,
90
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VI.
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Return
on Equity and Assets
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21
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VII.
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Short-Term
Borrowings
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91
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Years
of
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|||
Name
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Title
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Age
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Service
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John
C. Warren
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Chairman
and Chief Executive Officer of the Bancorp and the Bank
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63
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13
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|||
John
F. Treanor
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President
and Chief Operating Officer of the Bancorp and the Bank
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61
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10
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|||
Galan
G. Daukas
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Executive
Vice President of Wealth Management of the Bancorp and the
Bank
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45
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3
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|||
David
V. Devault
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Executive
Vice President, Chief Financial Officer and Secretary of the
Bancorp
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54
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22
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and
the Bank
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|||
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|||
Mark
K. W. Gim
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Executive
Vice President and Treasurer of the Bancorp and the Bank
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42
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15
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|||
Stephen
M. Bessette
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Executive
Vice President – Retail Lending of the Bank
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61
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12
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B.
Michael Rauh, Jr.
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Executive
Vice President –Sales, Service and Delivery of the Bank
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49
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17
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James
M. Vesey
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Executive
Vice President and Chief Credit Officer of the Bank
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61
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10
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Dennis
L. Algiere
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Senior
Vice President – Chief Compliance Officer and Director of
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48
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14
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Community
Affairs of the Bank
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|||
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|||
Vernon
F. Bliven
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Senior
Vice President – Human Resources of the Bank
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59
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36
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Elizabeth
B. Eckel
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Senior
Vice President – Marketing of the Bank
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48
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17
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William
D. Gibson
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Senior
Vice President – Risk Management of the Bank
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62
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10
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Barbara
J. Perino, CPA
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Senior
Vice President – Operations and Technology of the Bank
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47
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20
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ITEM
5.
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Market
for the Registrant’s Common Stock, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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2008
Quarters
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1
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2
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3
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4
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||||||||||||
Stock
prices:
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||||||||||||||||
High
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$ | 26.50 | $ | 26.49 | $ | 33.34 | $ | 27.30 | ||||||||
Low
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21.84 | 19.70 | 18.43 | 16.33 | ||||||||||||
Cash
dividend declared per share
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$ | 0.20 | $ | 0.21 | $ | 0.21 | $ | 0.21 | ||||||||
2007
Quarters
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1
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2
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3
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4
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||||||||||||
Stock
prices:
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||||||||||||||||
High
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$ | 28.98 | $ | 27.69 | $ | 28.42 | $ | 28.65 | ||||||||
Low
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25.32 | 23.90 | 22.87 | 23.49 | ||||||||||||
Cash
dividend declared per share
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$ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 |
Total
number of shares purchased
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Average
price paid per share
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Total
number of shares purchased as part of publicly announced
plan(s)
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Maximum
number of shares that may yet be purchased under the
plan(s)
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|||||||||||||
Deferred
Compensation Plan (1)
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||||||||||||||||
Balance
at beginning of period
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N/A | |||||||||||||||
10/1/2008
to 10/31/2008
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– | – | – | N/A | ||||||||||||
11/1/2008
to 11/30/2008
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– | – | – | N/A | ||||||||||||
12/1/2008
to 12/31/2008
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– | – | – | N/A | ||||||||||||
Total
Deferred Compensation Plan
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– | – | – | N/A | ||||||||||||
2006
Stock Repurchase Plan (2)
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||||||||||||||||
Balance
at beginning of period
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214,600 | |||||||||||||||
10/1/2008
to 10/31/2008
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– | – | – | 214,600 | ||||||||||||
11/1/2008
to 11/30/2008
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– | – | – | 214,600 | ||||||||||||
12/1/2008
to 12/31/2008
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– | – | – | 214,600 | ||||||||||||
Total
2006 Stock Repurchase Plan
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– | – | – | 214,600 | ||||||||||||
Other
(3)
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||||||||||||||||
Balance
at beginning of period
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N/A | |||||||||||||||
10/1/2008
to 10/31/2008
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– | – | – | N/A | ||||||||||||
11/1/2008
to 11/30/2008
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– | – | – | N/A | ||||||||||||
12/1/2008
to 12/31/2008
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– | – | – | N/A | ||||||||||||
Total
Other
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– | – | – | N/A | ||||||||||||
Total
Purchases of Equity Securities
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– | – | – | – |
(1)
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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 March 14,
2009. After March 14, 2009, 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.
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(2)
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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.
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(3)
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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
share-based compensation plans (the 1997 Plan and the 2003 Plan) have
expiration dates of April 29, 2017 and February 20, 2023,
respectively.
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Selected
Financial Data
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(Dollars
in thousands, except per share amounts)
|
|||||||||||||||||||
At
or for the years ended December 31,
|
2008
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2007
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2006
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2005
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2004
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|||||||||||||||
Financial
Results:
|
||||||||||||||||||||
Interest
income
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$ | 140,662 | $ | 136,434 | $ | 131,134 | $ | 115,693 | $ | 96,853 | ||||||||||
Interest
expense
|
75,149 | 76,490 | 69,660 | 55,037 | 42,412 | |||||||||||||||
Net
interest income
|
65,513 | 59,944 | 61,474 | 60,656 | 54,441 | |||||||||||||||
Provision
for loan losses
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4,800 | 1,900 | 1,200 | 1,200 | 610 | |||||||||||||||
Net
interest income after provision for loan losses
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60,713 | 58,044 | 60,274 | 59,456 | 53,831 | |||||||||||||||
Noninterest
income:
|
||||||||||||||||||||
Net
realized gains on securities
|
2,224 | 455 | 443 | 389 | 248 | |||||||||||||||
Losses
on write-downs of investments to fair value
|
(5,937 | ) | – | – | (32 | ) | – | |||||||||||||
Other
noninterest income
|
44,233 | 45,054 | 41,740 | 30,589 | 26,657 | |||||||||||||||
Total
noninterest income
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40,520 | 45,509 | 42,183 | 30,946 | 26,905 | |||||||||||||||
Noninterest
expense
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71,742 | 68,906 | 65,335 | 56,393 | 50,373 | |||||||||||||||
Income
before income taxes
|
29,491 | 34,647 | 37,122 | 34,009 | 30,363 | |||||||||||||||
Income
tax expense
|
7,319 | 10,847 | 12,091 | 10,985 | 9,534 | |||||||||||||||
Net
income
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$ | 22,172 | $ | 23,800 | $ | 25,031 | $ | 23,024 | $ | 20,829 | ||||||||||
Per
share information ($):
|
||||||||||||||||||||
Earnings
per share:
|
||||||||||||||||||||
Basic
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1.59 | 1.78 | 1.86 | 1.73 | 1.57 | |||||||||||||||
Diluted
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1.57 | 1.75 | 1.82 | 1.69 | 1.54 | |||||||||||||||
Cash
dividends declared (1)
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0.83 | 0.80 | 0.76 | 0.72 | 0.68 | |||||||||||||||
Book
value
|
14.75 | 13.97 | 12.89 | 11.86 | 11.44 | |||||||||||||||
Tangible
book value
|
10.47 | 9.33 | 8.61 | 7.79 | 9.64 | |||||||||||||||
Market
value - closing stock price
|
19.75 | 25.23 | 27.89 | 26.18 | 29.31 | |||||||||||||||
Performance
Ratios (%):
|
||||||||||||||||||||
Return
on average assets
|
0.82 | 0.99 | 1.04 | 0.98 | 0.97 | |||||||||||||||
Return
on average shareholders’ equity
|
11.12 | 13.48 | 14.99 | 14.80 | 14.40 | |||||||||||||||
Average
equity to average total assets
|
7.35 | 7.33 | 6.93 | 6.62 | 6.73 | |||||||||||||||
Dividend
payout ratio (2)
|
52.87 | 45.71 | 41.76 | 42.60 | 44.16 | |||||||||||||||
Asset
Quality Ratios (%):
|
||||||||||||||||||||
Total
past due loans to total loans
|
0.96 | 0.45 | 0.49 | 0.27 | 0.43 | |||||||||||||||
Nonperforming
loans to total loans
|
0.42 | 0.27 | 0.19 | 0.17 | 0.38 | |||||||||||||||
Nonperforming
assets to total assets
|
0.30 | 0.17 | 0.11 | 0.10 | 0.21 | |||||||||||||||
Allowance
for loan losses to nonaccrual loans
|
305.07 | 471.12 | 693.87 | 742.25 | 354.49 | |||||||||||||||
Allowance
for loan losses to total loans
|
1.29 | 1.29 | 1.29 | 1.28 | 1.34 | |||||||||||||||
Net
charge-offs (recoveries) to average loans
|
0.08 | 0.03 | 0.02 | (0.01 | ) | (0.02 | ) | |||||||||||||
Capital
Ratios (%):
|
||||||||||||||||||||
Tier
1 leverage capital ratio
|
7.53 | 6.09 | 6.01 | 5.45 | 5.35 | |||||||||||||||
Tier
1 risk-based capital ratio
|
11.29 | 9.10 | 9.57 | 9.06 | 9.15 | |||||||||||||||
Total
risk-based capital ratio
|
12.54 | 10.39 | 10.96 | 10.51 | 10.72 | |||||||||||||||
Tangible
equity to tangible assets
|
5.76 | 5.03 | 4.94 | 4.43 | 5.60 |
(1)
|
Represents
historical per share dividends declared by the
Bancorp.
|
(2)
|
Represents
the ratio of historical per share dividends declared by the Bancorp to
diluted earnings per share.
|
Selected
Financial Data
|
(Dollars
in thousands)
|
|||||||||||||||||||
December
31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 58,190 | $ | 41,112 | $ | 71,909 | $ | 66,163 | $ | 52,081 | ||||||||||
Total
securities
|
866,219 | 751,778 | 703,851 | 783,941 | 890,058 | |||||||||||||||
FHLB
stock
|
42,008 | 31,725 | 28,727 | 34,966 | 34,373 | |||||||||||||||
Loans:
|
||||||||||||||||||||
Commercial
and other
|
880,313 | 680,266 | 587,397 | 554,734 | 507,711 | |||||||||||||||
Residential
real estate
|
642,052 | 599,671 | 588,671 | 582,708 | 513,695 | |||||||||||||||
Consumer
|
316,789 | 293,715 | 283,918 | 264,466 | 228,270 | |||||||||||||||
Total
loans
|
1,839,154 | 1,573,652 | 1,459,986 | 1,401,908 | 1,249,676 | |||||||||||||||
Less
allowance for loan losses
|
23,725 | 20,277 | 18,894 | 17,918 | 16,771 | |||||||||||||||
Net
loans
|
1,815,429 | 1,553,375 | 1,441,092 | 1,383,990 | 1,232,905 | |||||||||||||||
Investment
in bank-owned life insurance
|
43,163 | 41,363 | 39,770 | 30,360 | 29,249 | |||||||||||||||
Goodwill
and other intangibles
|
68,266 | 61,912 | 57,374 | 54,372 | 23,900 | |||||||||||||||
Other
assets
|
72,191 | 58,675 | 56,442 | 48,211 | 45,254 | |||||||||||||||
Total
assets
|
$ | 2,965,466 | $ | 2,539,940 | $ | 2,399,165 | $ | 2,402,003 | $ | 2,307,820 | ||||||||||
Liabilities:
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Demand
deposits
|
$ | 172,771 | $ | 175,542 | $ | 186,533 | $ | 196,102 | $ | 189,588 | ||||||||||
NOW
accounts
|
171,306 | 164,944 | 175,479 | 178,677 | 174,727 | |||||||||||||||
Money
market accounts
|
305,879 | 321,600 | 286,998 | 223,255 | 196,775 | |||||||||||||||
Savings
accounts
|
173,485 | 176,278 | 205,998 | 212,499 | 251,920 | |||||||||||||||
Time
deposits
|
967,427 | 807,841 | 822,989 | 828,725 | 644,875 | |||||||||||||||
Total
deposits
|
1,790,868 | 1,646,205 | 1,677,997 | 1,639,258 | 1,457,885 | |||||||||||||||
FHLB
advances
|
829,626 | 616,417 | 474,561 | 545,323 | 672,748 | |||||||||||||||
Junior
subordinated debentures
|
32,991 | 22,681 | 22,681 | 22,681 | – | |||||||||||||||
Other
borrowings
|
26,743 | 32,560 | 14,684 | 9,774 | 3,417 | |||||||||||||||
Other
liabilities
|
50,127 | 35,564 | 36,186 | 26,521 | 21,918 | |||||||||||||||
Shareholders'
equity
|
235,111 | 186,513 | 173,056 | 158,446 | 151,852 | |||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 2,965,466 | $ | 2,539,940 | $ | 2,399,165 | $ | 2,402,003 | $ | 2,307,820 | ||||||||||
Asset
Quality:
|
||||||||||||||||||||
Nonaccrual
loans
|
$ | 7,777 | $ | 4,304 | $ | 2,723 | $ | 2,414 | $ | 4,731 | ||||||||||
Nonaccrual
investment securities
|
633 | – | – | – | – | |||||||||||||||
Other
real estate owned, net
|
392 | – | – | – | 4 | |||||||||||||||
Total
nonperforming assets
|
$ | 8,802 | $ | 4,304 | $ | 2,723 | $ | 2,414 | $ | 4,735 | ||||||||||
Wealth
Management Assets:
|
||||||||||||||||||||
Market
value of assets under administration
|
$ | 3,147,649 | $ | 4,014,352 | $ | 3,609,180 | $ | 3,215,763 | $ | 1,821,718 | ||||||||||
Selected
Quarterly Financial Data
|
(Dollars
and shares in thousands, except per share amounts)
|
|||||||||||||||||||
2008
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|||||||||||||||
Interest
income:
|
||||||||||||||||||||
Interest
and fees on loans
|
$ | 24,970 | $ | 24,406 | $ | 25,520 | $ | 26,043 | $ | 100,939 | ||||||||||
Income
on securities:
|
||||||||||||||||||||
Taxable
|
8,416 | 8,302 | 8,504 | 9,160 | 34,382 | |||||||||||||||
Nontaxable
|
780 | 786 | 778 | 781 | 3,125 | |||||||||||||||
Dividends
on corporate stock and FHLB stock
|
620 | 489 | 407 | 366 | 1,882 | |||||||||||||||
Other
interest income
|
140 | 50 | 128 | 16 | 334 | |||||||||||||||
Total
interest income
|
34,926 | 34,033 | 35,337 | 36,366 | 140,662 | |||||||||||||||
Interest
expense:
|
||||||||||||||||||||
Deposits
|
11,899 | 9,248 | 9,884 | 10,164 | 41,195 | |||||||||||||||
FHLB
advances
|
7,299 | 7,794 | 8,011 | 7,790 | 30,894 | |||||||||||||||
Junior
subordinated debentures
|
338 | 509 | 524 | 508 | 1,879 | |||||||||||||||
Other
interest expense
|
314 | 275 | 274 | 318 | 1,181 | |||||||||||||||
Total
interest expense
|
19,850 | 17,826 | 18,693 | 18,780 | 75,149 | |||||||||||||||
Net
interest income
|
15,076 | 16,207 | 16,644 | 17,586 | 65,513 | |||||||||||||||
Provision
for loan losses
|
450 | 1,400 | 1,100 | 1,850 | 4,800 | |||||||||||||||
Net
interest income after provision for loan losses
|
14,626 | 14,807 | 15,544 | 15,736 | 60,713 | |||||||||||||||
Noninterest
income:
|
||||||||||||||||||||
Wealth
management services:
|
||||||||||||||||||||
Trust
and investment advisory fees
|
5,342 | 5,321 | 5,238 | 4,415 | 20,316 | |||||||||||||||
Mutual
fund fees
|
1,341 | 1,445 | 1,383 | 1,036 | 5,205 | |||||||||||||||
Financial
planning, commissions and
|
||||||||||||||||||||
other
service fees
|
575 | 884 | 570 | 723 | 2,752 | |||||||||||||||
Wealth
management services
|
7,258 | 7,650 | 7,191 | 6,174 | 28,273 | |||||||||||||||
Service
charges on deposit accounts
|
1,160 | 1,208 | 1,215 | 1,198 | 4,781 | |||||||||||||||
Merchant
processing fees
|
1,272 | 1,914 | 2,221 | 1,493 | 6,900 | |||||||||||||||
Income
from bank-owned life insurance
|
447 | 453 | 452 | 448 | 1,800 | |||||||||||||||
Net
gains on loan sales and commissions
|
||||||||||||||||||||
on
loans originated for others
|
491 | 433 | 239 | 233 | 1,396 | |||||||||||||||
Net
realized gains on securities
|
813 | 1,096 | – | 315 | 2,224 | |||||||||||||||
Losses
on write-downs of investments to fair value
|
(858 | ) | (1,149 | ) | (982 | ) | (2,948 | ) | (5,937 | ) | ||||||||||
Net
unrealized gains (losses) on interest rate
|
||||||||||||||||||||
swap
contracts
|
119 | 26 | (24 | ) | (663 | ) | (542 | ) | ||||||||||||
Other
income
|
342 | 528 | 278 | 477 | 1,625 | |||||||||||||||
Total
noninterest income
|
11,044 | 12,159 | 10,590 | 6,727 | 40,520 | |||||||||||||||
Noninterest
expense:
|
||||||||||||||||||||
Salaries
and employee benefits
|
10,343 | 10,411 | 10,580 | 9,703 | 41,037 | |||||||||||||||
Net
occupancy
|
1,138 | 1,064 | 1,123 | 1,211 | 4,536 | |||||||||||||||
Equipment
|
944 | 977 | 956 | 961 | 3,838 | |||||||||||||||
Merchant
processing costs
|
1,068 | 1,598 | 1,857 | 1,246 | 5,769 | |||||||||||||||
Outsourced
services
|
636 | 742 | 700 | 781 | 2,859 | |||||||||||||||
Advertising
and promotion
|
386 | 467 | 376 | 500 | 1,729 | |||||||||||||||
Legal,
audit and professional fees
|
543 | 430 | 626 | 726 | 2,325 | |||||||||||||||
Amortization
of intangibles
|
326 | 326 | 320 | 309 | 1,281 | |||||||||||||||
Other
expenses
|
1,758 | 2,039 | 1,933 | 2,638 | 8,368 | |||||||||||||||
Total
noninterest expense
|
17,142 | 18,054 | 18,471 | 18,075 | 71,742 | |||||||||||||||
Income
before income taxes
|
8,528 | 8,912 | 7,663 | 4,388 | 29,491 | |||||||||||||||
Income
tax expense
|
2,712 | 2,817 | 1,623 | 167 | 7,319 | |||||||||||||||
Net
income
|
$ | 5,816 | $ | 6,095 | $ | 6,040 | $ | 4,221 | $ | 22,172 | ||||||||||
Weighted
average shares outstanding - basic
|
13,358.1 | 13,381.1 | 13,409.5 | 15,765.4 | 13,981.9 | |||||||||||||||
Weighted
average shares outstanding - diluted
|
13,560.6 | 13,566.7 | 13,588.3 | 15,871.6 | 14,146.3 | |||||||||||||||
Per
share information:
|
||||||||||||||||||||
Basic
earnings per share
|
$ | 0.44 | $ | 0.45 | $ | 0.45 | $ | 0.27 | $ | 1.59 | ||||||||||
Diluted
earnings per share
|
$ | 0.43 | $ | 0.45 | $ | 0.44 | $ | 0.27 | $ | 1.57 | ||||||||||
Cash
dividends declared per share
|
$ | 0.20 | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.83 |
Selected
Quarterly Financial Data
|
(Dollars
and shares in thousands, except per share amounts)
|
|||||||||||||||||||
|
||||||||||||||||||||
2007
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|||||||||||||||
Interest
income:
|
||||||||||||||||||||
Interest
and fees on loans
|
$ | 23,934 | $ | 24,414 | $ | 25,032 | $ | 25,340 | $ | 98,720 | ||||||||||
Income
on securities:
|
||||||||||||||||||||
Taxable
|
7,792 | 7,839 | 7,565 | 7,967 | 31,163 | |||||||||||||||
Nontaxable
|
668 | 759 | 781 | 775 | 2,983 | |||||||||||||||
Dividends
on corporate stock and FHLB stock
|
718 | 685 | 669 | 665 | 2,737 | |||||||||||||||
Other
interest income
|
191 | 184 | 275 | 181 | 831 | |||||||||||||||
Total
interest income
|
33,303 | 33,881 | 34,322 | 34,928 | 136,434 | |||||||||||||||
Interest
expense:
|
||||||||||||||||||||
Deposits
|
12,977 | 13,215 | 13,140 | 13,090 | 52,422 | |||||||||||||||
FHLB
advances
|
4,968 | 5,112 | 5,243 | 6,318 | 21,641 | |||||||||||||||
Junior
subordinated debentures
|
338 | 338 | 338 | 338 | 1,352 | |||||||||||||||
Other
interest expense
|
150 | 289 | 291 | 345 | 1,075 | |||||||||||||||
Total
interest expense
|
18,433 | 18,954 | 19,012 | 20,091 | 76,490 | |||||||||||||||
Net
interest income
|
14,870 | 14,927 | 15,310 | 14,837 | 59,944 | |||||||||||||||
Provision
for loan losses
|
300 | 300 | 300 | 1,000 | 1,900 | |||||||||||||||
Net
interest income after provision for loan losses
|
14,570 | 14,627 | 15,010 | 13,837 | 58,044 | |||||||||||||||
Noninterest
income:
|
||||||||||||||||||||
Wealth
management services:
|
||||||||||||||||||||
Trust
and investment advisory fees
|
5,038 | 5,252 | 5,336 | 5,498 | 21,124 | |||||||||||||||
Mutual
fund fees
|
1,262 | 1,352 | 1,386 | 1,430 | 5,430 | |||||||||||||||
Financial
planning, commissions and
|
||||||||||||||||||||
other
service fees
|
570 | 889 | 456 | 547 | 2,462 | |||||||||||||||
Wealth
management services
|
6,870 | 7,493 | 7,178 | 7,475 | 29,016 | |||||||||||||||
Service
charges on deposit accounts
|
1,125 | 1,220 | 1,214 | 1,154 | 4,713 | |||||||||||||||
Merchant
processing fees
|
1,204 | 1,829 | 2,252 | 1,425 | 6,710 | |||||||||||||||
Income
from bank-owned life insurance
|
391 | 399 | 376 | 427 | 1,593 | |||||||||||||||
Net
gains on loan sales and commissions
|
||||||||||||||||||||
on
loans originated for others
|
264 | 510 | 431 | 288 | 1,493 | |||||||||||||||
Net
realized gains (losses) on securities
|
1,036 | (700 | ) | – | 119 | 455 | ||||||||||||||
Net
unrealized gains on interest rate swap contracts
|
– | – | – | 27 | 27 | |||||||||||||||
Other
income
|
358 | 372 | 399 | 373 | 1,502 | |||||||||||||||
Total
noninterest income
|
11,248 | 11,123 | 11,850 | 11,288 | 45,509 | |||||||||||||||
Noninterest
expense:
|
||||||||||||||||||||
Salaries
and employee benefits
|
9,812 | 10,285 | 10,098 | 9,791 | 39,986 | |||||||||||||||
Net
occupancy
|
1,017 | 1,038 | 1,021 | 1,074 | 4,150 | |||||||||||||||
Equipment
|
832 | 861 | 871 | 909 | 3,473 | |||||||||||||||
Merchant
processing costs
|
1,019 | 1,558 | 1,916 | 1,193 | 5,686 | |||||||||||||||
Outsourced
services
|
519 | 535 | 556 | 570 | 2,180 | |||||||||||||||
Advertising
and promotion
|
429 | 572 | 466 | 557 | 2,024 | |||||||||||||||
Legal,
audit and professional fees
|
450 | 404 | 444 | 463 | 1,761 | |||||||||||||||
Amortization
of intangibles
|
368 | 348 | 341 | 326 | 1,383 | |||||||||||||||
Debt
prepayment penalties
|
1,067 | – | – | – | 1,067 | |||||||||||||||
Other
expenses
|
1,596 | 2,159 | 1,599 | 1,842 | 7,196 | |||||||||||||||
Total
noninterest expense
|
17,109 | 17,760 | 17,312 | 16,725 | 68,906 | |||||||||||||||
Income
before income taxes
|
8,709 | 7,990 | 9,548 | 8,400 | 34,647 | |||||||||||||||
Income
tax expense
|
2,734 | 2,508 | 2,992 | 2,613 | 10,847 | |||||||||||||||
Net
income
|
$ | 5,975 | $ | 5,482 | $ | 6,556 | $ | 5,787 | $ | 23,800 | ||||||||||
Weighted
average shares outstanding - basic
|
13,412.1 | 13,339.6 | 13,323.6 | 13,347.5 | 13,355.5 | |||||||||||||||
Weighted
average shares outstanding - diluted
|
13,723.0 | 13,616.4 | 13,564.1 | 13,580.7 | 13,604.1 | |||||||||||||||
Per
share information:
|
||||||||||||||||||||
Basic
earnings per share
|
$ | 0.45 | $ | 0.41 | $ | 0.49 | $ | 0.43 | $ | 1.78 | ||||||||||
Diluted
earnings per share
|
$ | 0.44 | $ | 0.40 | $ | 0.48 | $ | 0.43 | $ | 1.75 | ||||||||||
Cash
dividends declared per share
|
$ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.80 |
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||||||||||||||||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Residential
real estate loans
|
$ | 613,367 | $ | 33,954 | 5.54 | $ | 589,619 | $ | 31,540 | 5.35 | $ | 590,245 | $ | 30,237 | 5.12 | |||||||||||||||||||||
Commercial
and other loans
|
782,825 | 50,589 | 6.46 | 626,309 | 47,713 | 7.62 | 564,310 | 43,409 | 7.69 | |||||||||||||||||||||||||||
Consumer
loans
|
301,653 | 16,584 | 5.50 | 283,873 | 19,634 | 6.92 | 274,764 | 18,748 | 6.82 | |||||||||||||||||||||||||||
Total
loans
|
1,697,845 | 101,127 | 5.96 | 1,499,801 | 98,887 | 6.59 | 1,429,319 | 92,394 | 6.46 | |||||||||||||||||||||||||||
Cash,
federal funds sold and
other
short-term investments
|
21,515 | 334 | 1.55 | 16,759 | 831 | 4.96 | 14,548 | 721 | 4.96 | |||||||||||||||||||||||||||
Taxable
debt securities
|
700,546 | 34,382 | 4.91 | 605,443 | 31,163 | 5.15 | 712,870 | 33,763 | 4.74 | |||||||||||||||||||||||||||
Nontaxable
debt securities
|
81,046 | 4,583 | 5.65 | 77,601 | 4,368 | 5.63 | 42,977 | 2,486 | 5.79 | |||||||||||||||||||||||||||
Corporate
stocks and FHLB stock
|
48,708 | 2,085 | 4.28 | 42,544 | 3,047 | 7.16 | 48,643 | 3,205 | 6.59 | |||||||||||||||||||||||||||
Total
securities
|
851,815 | 41,384 | 4.86 | 742,347 | 39,409 | 5.31 | 819,038 | 40,175 | 4.91 | |||||||||||||||||||||||||||
Total
interest-earning assets
|
2,549,660 | 142,511 | 5.59 | 2,242,148 | 138,296 | 6.17 | 2,248,357 | 132,569 | 5.90 | |||||||||||||||||||||||||||
Noninterest-earning
assets
|
163,730 | 165,561 | 159,115 | |||||||||||||||||||||||||||||||||
Total
assets
|
$ | 2,713,390 | $ | 2,407,709 | $ | 2,407,472 |
Liabilities
and
|
||||||||||||||||||||||||||||||||||||
shareholders’
equity:
|
||||||||||||||||||||||||||||||||||||
NOW
accounts
|
$ | 165,479 | $ | 306 | 0.18 | $ | 166,580 | $ | 285 | 0.17 | $ | 173,137 | $ | 302 | 0.17 | |||||||||||||||||||||
Money
market accounts
|
310,445 | 6,730 | 2.17 | 303,138 | 11,846 | 3.91 | 262,613 | 9,063 | 3.45 | |||||||||||||||||||||||||||
Savings
accounts
|
173,840 | 1,059 | 0.61 | 194,342 | 2,619 | 1.35 | 198,040 | 1,464 | 0.74 | |||||||||||||||||||||||||||
Time
deposits
|
861,814 | 33,100 | 3.84 | 821,951 | 37,672 | 4.58 | 856,979 | 36,153 | 4.22 | |||||||||||||||||||||||||||
FHLB
advances
|
737,830 | 30,894 | 4.19 | 489,229 | 21,641 | 4.42 | 509,611 | 20,916 | 4.10 | |||||||||||||||||||||||||||
Junior
subordinated debentures
|
30,259 | 1,879 | 6.21 | 22,681 | 1,352 | 5.96 | 22,681 | 1,352 | 5.96 | |||||||||||||||||||||||||||
Other
|
26,678 | 1,181 | 4.43 | 23,990 | 1,075 | 4.48 | 8,627 | 410 | 4.76 | |||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
2,306,345 | 75,149 | 3.26 | 2,021,911 | 76,490 | 3.78 | 2,031,688 | 69,660 | 3.43 | |||||||||||||||||||||||||||
Demand
deposits
|
177,032 | 177,342 | 185,322 | |||||||||||||||||||||||||||||||||
Other
liabilities
|
30,618 | 31,886 | 23,517 | |||||||||||||||||||||||||||||||||
Shareholders’
equity
|
199,395 | 176,570 | 166,945 | |||||||||||||||||||||||||||||||||
Total
liabilities and
|
||||||||||||||||||||||||||||||||||||
shareholders’
equity
|
$ | 2,713,390 | $ | 2,407,709 | $ | 2,407,472 | ||||||||||||||||||||||||||||||
Net
interest income
|
$ | 67,362 | $ | 61,806 | $ | 62,909 | ||||||||||||||||||||||||||||||
Interest
rate spread
|
2.33 | 2.39 | 2.47 | |||||||||||||||||||||||||||||||||
Net
interest margin
|
2.64 | 2.76 | 2.80 |
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Commercial
and other loans
|
$ | 188 | $ | 167 | $ | 204 | ||||||
Nontaxable
debt securities
|
1,458 | 1,385 | 868 | |||||||||
Corporate
stocks and FHLB stock
|
203 | 310 | 363 | |||||||||
Total
|
$ | 1,849 | $ | 1,862 | $ | 1,435 |
2008/2007 | 2007/2006 | |||||||||||||||||||||||
(Dollars
in thousands)
|
Volume
|
Rate
|
Net
Change
|
Volume
|
Rate
|
Net
Change
|
||||||||||||||||||
Interest
on interest-earning assets:
|
||||||||||||||||||||||||
Residential
real estate loans
|
$ | 1,284 | $ | 1,130 | $ | 2,414 | $ | (33 | ) | $ | 1,336 | $ | 1,303 | |||||||||||
Commercial
and other loans
|
10,817 | (7,941 | ) | 2,876 | 4,704 | (400 | ) | 4,304 | ||||||||||||||||
Consumer
loans
|
1,172 | (4,222 | ) | (3,050 | ) | 615 | 271 | 886 | ||||||||||||||||
Cash,
federal funds sold and
|
||||||||||||||||||||||||
other
short-term investments
|
189 | (686 | ) | (497 | ) | 109 | 1 | 110 | ||||||||||||||||
Taxable
debt securities
|
4,724 | (1,505 | ) | 3,219 | (5,366 | ) | 2,766 | (2,600 | ) | |||||||||||||||
Nontaxable
debt securities
|
198 | 17 | 215 | 1,953 | (71 | ) | 1,882 | |||||||||||||||||
Corporate
stocks and FHLB stock
|
393 | (1,355 | ) | (962 | ) | (421 | ) | 263 | (158 | ) | ||||||||||||||
Total
interest income
|
18,777 | (14,562 | ) | 4,215 | 1,561 | 4,166 | 5,727 | |||||||||||||||||
Interest
on interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW
accounts
|
(1 | ) | 22 | 21 | (17 | ) | – | (17 | ) | |||||||||||||||
Money
market accounts
|
279 | (5,395 | ) | (5,116 | ) | 1,493 | 1,290 | 2,783 | ||||||||||||||||
Savings
accounts
|
(252 | ) | (1,308 | ) | (1,560 | ) | (27 | ) | 1,182 | 1,155 | ||||||||||||||
Time
deposits
|
1,753 | (6,325 | ) | (4,572 | ) | (1,507 | ) | 3,026 | 1,519 | |||||||||||||||
FHLB
advances
|
10,435 | (1,182 | ) | 9,253 | (859 | ) | 1,584 | 725 | ||||||||||||||||
Junior
subordinated debentures
|
468 | 59 | 527 | – | – | – | ||||||||||||||||||
Other
|
119 | (13 | ) | 106 | 689 | (24 | ) | 665 | ||||||||||||||||
Total
interest expense
|
12,801 | (14,142 | ) | (1,341 | ) | (228 | ) | 7,058 | 6,830 | |||||||||||||||
Net
interest income
|
$ | 5,976 | $ | (420 | ) | $ | 5,556 | $ | 1,789 | $ | (2,892 | ) | $ | (1,103 | ) |
(Dollars
in thousands)
|
2008
|
2007
|
$
Change
|
%
Change
|
||||||||||||
Noninterest
income:
|
||||||||||||||||
Wealth
management services:
|
||||||||||||||||
Trust
and investment advisory fees
|
$ | 20,316 | $ | 21,124 | $ | (808 | ) | (3.8 | )% | |||||||
Mutual
fund fees
|
5,205 | 5,430 | (225 | ) | (4.1 | ) | ||||||||||
Financial
planning, commissions and other service fees
|
2,752 | 2,462 | 290 | 11.8 | ||||||||||||
Wealth
management services
|
28,273 | 29,016 | (743 | ) | (2.6 | ) | ||||||||||
Service
charges on deposit accounts
|
4,781 | 4,713 | 68 | 1.4 | ||||||||||||
Merchant
processing fees
|
6,900 | 6,710 | 190 | 2.8 | ||||||||||||
Income
from BOLI
|
1,800 | 1,593 | 207 | 13.0 | ||||||||||||
Net
gains on loan sales and commissions
|
||||||||||||||||
on
loans originated for others
|
1,396 | 1,493 | (97 | ) | (6.5 | ) | ||||||||||
Net
unrealized gains (losses) on interest rate swap contracts
|
(542 | ) | 27 | (569 | ) | (2107.4 | ) | |||||||||
Other
income
|
1,625 | 1,502 | 123 | 8.2 | ||||||||||||
Subtotal
|
44,233 | 45,054 | (821 | ) | (1.8 | ) | ||||||||||
Net
realized gains on securities
|
2,224 | 455 | 1,769 | 388.8 | ||||||||||||
Losses
on write-downs of investments to fair value
|
(5,937 | ) | – | (5,937 | ) | – | ||||||||||
Total
noninterest income
|
$ | 40,520 | $ | 45,509 | $ | (4,989 | ) | (11.0 | )% |
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Wealth
Management Assets Under Administration:
|
||||||||
Balance
at the beginning of period
|
$ | 4,014,352 | $ | 3,609,180 | ||||
Net
investment (depreciation) appreciation and income
|
(980,909 | ) | 272,398 | |||||
Net
customer cash flows
|
114,206 | 132,774 | ||||||
Balance
at the end of period
|
$ | 3,147,649 | $ | 4,014,352 |
(Dollars
in thousands)
|
2008
|
2007
|
$
Change
|
%
Change
|
||||||||||||
Noninterest
expense:
|
||||||||||||||||
Salaries
and employee benefits
|
$ | 41,037 | $ | 39,986 | $ | 1,051 | 2.6 | % | ||||||||
Net
occupancy
|
4,536 | 4,150 | 386 | 9.3 | ||||||||||||
Equipment
|
3,838 | 3,473 | 365 | 10.5 | ||||||||||||
Merchant
processing costs
|
5,769 | 5,686 | 83 | 1.5 | ||||||||||||
Outsourced
services
|
2,859 | 2,180 | 679 | 31.1 | ||||||||||||
Advertising
and promotion
|
1,729 | 2,024 | (295 | ) | (14.6 | ) | ||||||||||
Legal,
audit and professional fees
|
2,325 | 1,761 | 564 | 32.0 | ||||||||||||
Amortization
of intangibles
|
1,281 | 1,383 | (102 | ) | (7.4 | ) | ||||||||||
Debt
prepayment penalties
|
– | 1,067 | (1,067 | ) | (100.0 | ) | ||||||||||
Other
|
8,368 | 7,196 | 1,172 | 16.3 | ||||||||||||
Total
noninterest expense
|
$ | 71,742 | $ | 68,906 | $ | 2,836 | 4.1 | % |
(Dollars
in thousands)
|
2007
|
2006
|
$
Change
|
%
Change
|
||||||||||||
Noninterest
income:
|
||||||||||||||||
Wealth
management services:
|
||||||||||||||||
Trust
and investment advisory fees
|
$ | 21,124 | $ | 19,099 | $ | 2,025 | 10.6 | % | ||||||||
Mutual
fund fees
|
5,430 | 4,665 | 765 | 16.4 | ||||||||||||
Financial
planning, commissions and other service fees
|
2,462 | 2,616 | (154 | ) | (5.9 | ) | ||||||||||
Wealth
management services
|
29,016 | 26,380 | 2,636 | 10.0 | ||||||||||||
Service
charges on deposit accounts
|
4,713 | 4,915 | (202 | ) | (4.1 | ) | ||||||||||
Merchant
processing fees
|
6,710 | 6,208 | 502 | 8.1 | ||||||||||||
Income
from BOLI
|
1,593 | 1,410 | 183 | 13.0 | ||||||||||||
Net
gains on loan sales and commissions
|
||||||||||||||||
on
loans originated for others
|
1,493 | 1,423 | 70 | 4.9 | ||||||||||||
Net
unrealized gains on interest rate swap contracts
|
27 | - | 27 | - | ||||||||||||
Other
income
|
1,502 | 1,404 | 98 | 7.0 | ||||||||||||
Subtotal
|
45,054 | 41,740 | 3,314 | 7.9 | ||||||||||||
Net
realized gains on securities
|
455 | 443 | 12 | 2.7 | ||||||||||||
Total
noninterest income
|
$ | 45,509 | $ | 42,183 | $ | 3,326 | 7.9 | % |
(Dollars
in thousands)
|
2007
|
2006
|
$
Change
|
%
Change
|
||||||||||||
Noninterest
expense:
|
||||||||||||||||
Salaries
and employee benefits
|
$ | 39,986 | $ | 38,698 | $ | 1,288 | 3.3 | % | ||||||||
Net
occupancy
|
4,150 | 3,888 | 262 | 6.7 | ||||||||||||
Equipment
|
3,473 | 3,370 | 103 | 3.1 | ||||||||||||
Merchant
processing costs
|
5,686 | 5,257 | 429 | 8.2 | ||||||||||||
Outsourced
services
|
2,180 | 2,009 | 171 | 8.5 | ||||||||||||
Advertising
and promotion
|
2,024 | 1,894 | 130 | 6.9 | ||||||||||||
Legal,
audit and professional fees
|
1,761 | 1,637 | 124 | 7.6 | ||||||||||||
Amortization
of intangibles
|
1,383 | 1,593 | (210 | ) | (13.2 | ) | ||||||||||
Debt
prepayment penalties
|
1,067 | – | 1,067 | 100.0 | ||||||||||||
Other
|
7,196 | 6,989 | 207 | 3.0 | ||||||||||||
Total
noninterest expense
|
$ | 68,906 | $ | 65,335 | $ | 3,571 | 5.5 | % |
(Dollars
in thousands)
|
||||||||||||||||||||||||
December
31,
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Amount
|
%
|
|
Amount
|
%
|
Amount
|
%
|
|
|||||||||||||||||
Securities
Available for Sale:
|
||||||||||||||||||||||||
U.S.
Treasury obligations and obligations
|
||||||||||||||||||||||||
of
U.S. government-sponsored enterprises
|
$ | 64,377 | 7 | % | $ | 139,599 | 18 | % | $ | 157,285 | 30 | % | ||||||||||||
Mortgage-backed
securities issued by U.S. government
|
||||||||||||||||||||||||
agencies
and U.S. government-sponsored enterprises
|
683,619 | 80 | % | 469,388 | 62 | % | 293,787 | 56 | % | |||||||||||||||
States
and political subdivisions
|
81,213 | 9 | % | 80,894 | 11 | % | – | – | % | |||||||||||||||
Trust
preferred securities:
|
||||||||||||||||||||||||
Individual
name issuers
|
16,793 | 2 | % | 27,695 | 4 | % | 30,574 | 6 | % | |||||||||||||||
Collateralized
debt obligations
|
1,940 | – | % | 6,759 | 1 | % | – | – | % | |||||||||||||||
Corporate
bonds
|
13,576 | 2 | % | 14,101 | 2 | % | 25,034 | 5 | % | |||||||||||||||
Common
stocks
|
992 | – | % | 6,781 | 1 | % | 9,513 | 1 | % | |||||||||||||||
Perpetual
preferred stocks
|
3,709 | – | % | 6,561 | 1 | % | 10,203 | 2 | % | |||||||||||||||
Total
securities available for sale
|
$ | 866,219 | 100 | % | $ | 751,778 | 100 | % | $ | 526,396 | 100 | % |
(Dollars
in thousands)
|
||||||||||||||||||||||||
December
31,
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||
Securities
Held to Maturity:
|
||||||||||||||||||||||||
U.S.
Treasury obligations and obligations
|
||||||||||||||||||||||||
of
U.S. government-sponsored enterprises
|
$ | – | – | % | $ | – | – | % | $ | 42,000 | 24 | % | ||||||||||||
Mortgage-backed
securities issued by
|
||||||||||||||||||||||||
U.S.
government-sponsored enterprises
|
– | – | % | – | – | % | 69,340 | 39 | % | |||||||||||||||
States
and political subdivisions
|
– | – | % | – | – | % | 66,115 | 37 | % | |||||||||||||||
Total
securities held to maturity
|
$ | – | – | % | $ | – | – | % | $ | 177,455 | 100 | % |
(Dollars
in thousands)
|
Number
|
|||||||||||||||||||||||
of
|
Credit
|
Amortized
|
Unrealized
|
Fair
|
||||||||||||||||||||
At
December 31, 2008
|
Issuers
|
Rating
(1)
|
Cost
(2)
|
Gains
|
Losses
|
Value
|
||||||||||||||||||
Trust
preferred securities
|
||||||||||||||||||||||||
Individual
name issuers (3):
|
2
|
Aa
|
$ | 15,421 | $ | – | $ | (7,484 | ) | $ | 7,937 | |||||||||||||
4
|
A
|
13,195 | – | (4,880 | ) | 8,315 | ||||||||||||||||||
1
|
Baa
|
1,909 | – | (1,368 | ) | 541 | ||||||||||||||||||
Total
individual name issuers
|
7
|
30,525 | – | (13,732 | ) | 16,793 | ||||||||||||||||||
Collateralized
debt obligations (CDO):
|
||||||||||||||||||||||||
Pool
issue 1 (4)
|
Baa
|
5,000 | – | (3,693 | ) | 1,307 | ||||||||||||||||||
Pool
issue 2 (5)
|
Baa
|
633 | – | – | 633 | |||||||||||||||||||
Total
collateralized debt obligations
|
5,633 | – | (3,693 | ) | 1,940 | |||||||||||||||||||
Total
trust preferred securities
|
$ | 36,158 | $ | – | $ | (17,425 | ) | $ | 18,733 | |||||||||||||||
Corporate
bonds:
|
1
|
Aaa
|
$ | 2,784 | $ | 167 | $ | – | $ | 2,951 | ||||||||||||||
2
|
A
|
10,189 | 436 | – | 10,625 | |||||||||||||||||||
Total
corporate bonds
|
3
|
$ | 12,973 | $ | 603 | $ | – | $ | 13,576 |
(1)
|
Source:
Moody’s, as of December 31, 2008. Moody’s ratings remain at
investment grade as of the filing date of this
report.
|
(2)
|
Net
of other-than-temporary impairment write-downs recognized in
earnings.
|
(3)
|
Consists
of various series of trust preferred securities issued by seven corporate
financial institutions.
|
(4)
|
As
of December 31, 2008, 3 of the 38 pooled institutions have invoked
their original contractual right to defer interest
payments. The tranche held by Washington Trust continues to
accrue and make payments as
expected.
|
(5)
|
As
of December 31, 2008, 5 of the 73 pooled institutions have invoked
their original contractual right to defer interest
payments. The tranche held by Washington Trust began deferring
interest payments until future periods and, based on the financial
condition and operating outlook of the pooled institutions, was deemed to
be other-than-temporarily impaired at December 31, 2008 resulting in
the recognition of $1.859 million of impairment
charges. This investment security was also placed on nonaccrual
status as of December 31,
2008.
|
(Dollars
in thousands)
|
||||||||||||||||
Amortized
|
Unrealized
|
Fair
|
||||||||||||||
At
December 31, 2008
|
Cost
(1)
|
Gains
|
Losses
|
Value
|
||||||||||||
Common
and perpetual preferred stocks
|
||||||||||||||||
Common
stocks
|
$ | 942 | $ | 50 | $ | – | $ | 992 | ||||||||
Perpetual
preferred stocks:
|
||||||||||||||||
Federal
National Mortgage Association (“Fannie Mae”)
|
24 | – | – | 24 | ||||||||||||
Federal
Home Loan Mortgage Corporation (“Freddie Mac”)
|
6 | – | – | 6 | ||||||||||||
Other -
financials
|
3,469 | – | (662 | ) | 2,807 | |||||||||||
Other -
utilities
|
1,000 | 2 | (130 | ) | 872 | |||||||||||
Total
perpetual preferred stocks
|
4,499 | 2 | (792 | ) | 3,709 | |||||||||||
Total
common and perpetual preferred stocks
|
$ | 5,441 | $ | 52 | $ | (792 | ) | $ | 4,701 |
(1)
|
Net
of other-than-temporary impairment write-downs recognized in
earnings.
|
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Trust
preferred securities
|
||||||||||||
Collateralized
debt obligations
|
$ | 1,859 | $ | – | $ | – | ||||||
Common
and perpetual preferred stocks
|
||||||||||||
Fannie
Mae and Freddie Mac perpetual preferred stocks
|
$ | 1,470 | – | – | ||||||||
Other
perpetual preferred stocks
|
2,173 | – | – | |||||||||
Other
common stocks
|
435 | – | – | |||||||||
Losses
on write-downs of investments to fair value
|
$ | 5,937 | $ | – | $ | – |
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
December
31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||||||||||||||||||
Mortgages
|
$ | 407,904 | 22 | % | $ | 278,821 | 18 | % | $ | 282,019 | 19 | % | $ | 291,292 | 21 | % | $ | 266,670 | 21 | % | ||||||||||||||||||||
Construction
& development
|
49,599 | 3 | % | 60,361 | 4 | % | 32,233 | 2 | % | 37,190 | 3 | % | 29,263 | 2 | % | |||||||||||||||||||||||||
Other (1)
|
422,810 | 23 | % | 341,084 | 21 | % | 273,145 | 19 | % | 226,252 | 16 | % | 211,778 | 18 | % | |||||||||||||||||||||||||
Total
commercial
|
880,313 | 48 | % | 680,266 | 43 | % | 587,397 | 40 | % | 554,734 | 40 | % | 507,711 | 41 | % | |||||||||||||||||||||||||
Residential
real estate:
|
||||||||||||||||||||||||||||||||||||||||
Mortgages
|
626,663 | 34 | % | 588,628 | 37 | % | 577,522 | 40 | % | 565,680 | 40 | % | 494,720 | 40 | % | |||||||||||||||||||||||||
Homeowner
construction
|
15,389 | 1 | % | 11,043 | 1 | % | 11,149 | – | % | 17,028 | 2 | % | 18,975 | 1 | % | |||||||||||||||||||||||||
Total
residential real estate
|
642,052 | 35 | % | 599,671 | 38 | % | 588,671 | 40 | % | 582,708 | 42 | % | 513,695 | 41 | % | |||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||||||
Home
equity lines
|
170,662 | 9 | % | 144,429 | 9 | % | 145,676 | 10 | % | 161,100 | 11 | % | 155,001 | 12 | % | |||||||||||||||||||||||||
Home
equity loans
|
89,297 | 5 | % | 99,827 | 6 | % | 93,947 | 6 | % | 72,288 | 5 | % | 54,297 | 4 | % | |||||||||||||||||||||||||
Other (2)
|
56,830 | 3 | % | 49,459 | 4 | % | 44,295 | 4 | % | 31,078 | 2 | % | 18,972 | 2 | % | |||||||||||||||||||||||||
Total
consumer loans
|
316,789 | 17 | % | 293,715 | 19 | % | 283,918 | 20 | % | 264,466 | 18 | % | 228,270 | 18 | % | |||||||||||||||||||||||||
Total
loans
|
$ | 1,839,154 | 100 | % | $ | 1,573,652 | 100 | % | $ | 1,459,986 | 100 | % | $ | 1,401,908 | 100 | % | $ | 1,249,676 | 100 | % |
(1)
|
Loans
to businesses and individuals, a substantial portion of which are fully or
partially collateralized by real
estate.
|
(2)
|
Other
consumer loans include personal installment loans and loans to individuals
secured by general aviation aircraft and
automobiles.
|
(Dollars
in thousands)
|
|||||||||||||||||
1
Year
|
1
to 5
|
After
5
|
|||||||||||||||
Matures
in:
|
or
Less
|
Years
|
Years
|
Totals
|
|||||||||||||
Construction
and development (1)
|
$ | 15,209 | $ | 21,489 | $ | 28,290 | $ | 64,988 | |||||||||
Commercial
- other
|
162,124 | 158,055 | 102,631 | 422,810 | |||||||||||||
$ | 177,333 | $ | 179,544 | $ | 130,921 | $ | 487,798 |
(1)
|
Includes
homeowner construction and commercial construction and
development. Maturities of homeowner construction loans are
included based on their contractual conventional mortgage repayment terms
following the completion of
construction.
|
(Dollars
in thousands)
|
Floating
or
|
|||||||||||
Predetermined
|
Adjustable
|
|||||||||||
Rates
|
Rates
|
Totals
|
||||||||||
Principal
due after one year
|
$ | 221,847 | $ | 88,618 | $ | 310,465 |
(Dollars
in thousands)
|
December 31,
2008
|
|||||||
Amount
|
%
of Total
|
|||||||
Rhode
Island, Connecticut, Massachusetts
|
$ | 405,040 | 88.5 | % | ||||
New
York, New Jersey, Pennsylvania
|
37,448 | 8.2 | % | |||||
New
Hampshire, Maine
|
13,384 | 2.9 | % | |||||
Other
|
1,631 | 0.4 | % | |||||
Total
|
$ | 457,503 | 100.0 | % |
(Dollars
in thousands)
|
December 31,
2008
|
|||||||
Amount
|
%
of Total
|
|||||||
Rhode
Island, Connecticut, Massachusetts
|
$ | 566,857 | 88.3 | % | ||||
New
York, Virginia, New Jersey, Maryland, Pennsylvania, District of
Columbia
|
28,252 | 4.4 | % | |||||
Ohio,
Michigan
|
19,940 | 3.1 | % | |||||
California,
Washington, Oregon
|
12,678 | 2.0 | % | |||||
Colorado,
Texas, New Mexico, Utah
|
8,623 | 1.3 | % | |||||
Georgia
|
2,539 | 0.4 | % | |||||
New
Hampshire, Vermont
|
2,055 | 0.3 | % | |||||
Other
|
1,108 | 0.2 | % | |||||
Total
|
$ | 642,052 | 100.0 | % |
(Dollars
in thousands)
|
||||||||||||||||||||
December 31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Nonaccrual
loans:
|
||||||||||||||||||||
Commercial
mortgages
|
$ | 1,942 | $ | 1,094 | $ | 981 | $ | 394 | $ | 2,357 | ||||||||||
Commercial
construction and development
|
– | – | – | – | 390 | |||||||||||||||
Other
commercial
|
3,845 | 1,781 | 831 | 624 | 730 | |||||||||||||||
Residential
real estate
|
1,754 | 1,158 | 721 | 1,147 | 1,027 | |||||||||||||||
Consumer
|
236 | 271 | 190 | 249 | 227 | |||||||||||||||
Total
nonaccrual loans
|
7,777 | 4,304 | 2,723 | 2,414 | 4,731 | |||||||||||||||
Nonaccrual
investment securities
|
633 | – | – | – | – | |||||||||||||||
Property
acquired through foreclosure
|
||||||||||||||||||||
or
repossession, net
|
392 | – | – | – | 4 | |||||||||||||||
Total
nonperforming assets
|
$ | 8,802 | $ | 4,304 | $ | 2,723 | $ | 2,414 | $ | 4,735 | ||||||||||
Nonperforming
assets to total assets
|
0.30 | % | 0.17 | % | 0.11 | % | 0.10 | % | 0.21 | % | ||||||||||
Nonperforming
loans to total loans
|
0.42 | % | 0.27 | % | 0.19 | % | 0.17 | % | 0.38 | % | ||||||||||
Total
past due loans to total loans
|
0.96 | % | 0.45 | % | 0.49 | % | 0.27 | % | 0.43 | % | ||||||||||
Accruing
troubled debt restructured loans
|
$ | 870 | $ | 1,717 | $ | – | $ | – | $ | – | ||||||||||
Accruing
loans 90 days or more past due
|
$ | – | $ | – | $ | – | $ | – | $ | – |
(Dollars
in thousands)
|
||||||||
December 31,
|
2008
|
2007
|
||||||
Nonaccrual
loans 90 days or more past due
|
$ | 6,284 | $ | 2,490 | ||||
Nonaccrual
loans less than 90 days past due
|
1,493 | 1,814 | ||||||
Total
nonaccrual loans
|
$ | 7,777 | $ | 4,304 |
(Dollars
in thousands)
|
||||||||||||||||||||
December 31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Accruing
troubled debt restructured loans:
|
||||||||||||||||||||
Commercial
mortgages
|
$ | – | $ | 1,717 | $ | – | $ | – | $ | – | ||||||||||
Commercial
construction and development
|
– | – | – | – | – | |||||||||||||||
Other
commercial
|
– | – | – | – | – | |||||||||||||||
Residential
real estate
|
263 | – | – | – | – | |||||||||||||||
Consumer
|
607 | – | – | – | – | |||||||||||||||
Accruing
troubled debt restructured loans
|
870 | 1,717 | – | – | – | |||||||||||||||
Nonaccrual
troubled debt restructured loans
|
– | – | – | – | – | |||||||||||||||
Total
troubled debt restructured loans
|
$ | 870 | $ | 1,717 | $ | – | $ | – | $ | – |
(Dollars
in thousands)
|
||||||||||||||||
December 31,
|
2008
|
2007
|
||||||||||||||
Amount
|
% | (1) |
Amount
|
% | (1) | |||||||||||
Loans
30 – 59 days past due:
|
||||||||||||||||
Commercial
categories
|
$ | 5,490 | $ | 1,450 | ||||||||||||
Residential
real estate
|
3,113 | 1,620 | ||||||||||||||
Consumer
loans
|
76 | 73 | ||||||||||||||
Loans
30 – 59 days past due
|
$ | 8,679 | $ | 3,143 | ||||||||||||
Loans
60 – 89 days past due:
|
||||||||||||||||
Commercial
categories
|
$ | 791 | 1,313 | |||||||||||||
Residential
real estate
|
1,452 | 39 | ||||||||||||||
Consumer
loans
|
401 | 38 | ||||||||||||||
Loans
60 – 89 days past due
|
$ | 2,644 | $ | 1,390 | ||||||||||||
Loans
90 days or more past due:
|
||||||||||||||||
Commercial
categories
|
$ | 5,234 | 1,963 | |||||||||||||
Residential
real estate
|
973 | 441 | ||||||||||||||
Consumer
loans
|
77 | 86 | ||||||||||||||
Loans
90 days or more past due
|
$ | 6,284 | $ | 2,490 | ||||||||||||
Total
past due loans:
|
||||||||||||||||
Commercial
categories
|
$ | 11,515 | 1.31 | % | $ | 4,726 | 0.69 | % | ||||||||
Residential
real estate
|
5,538 | 0.86 | % | 2,100 | 0.35 | % | ||||||||||
Consumer
loans
|
554 | 0.17 | % | 197 | 0.07 | % | ||||||||||
Total
past due loans
|
$ | 17,607 | 0.96 | % | $ | 7,023 | 0.45 | % |
(1)
|
Percentage
of past due loans to the total loans outstanding within the respective
category.
|
(Dollars
in thousands)
|
||||||||||||||||||||
December
31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Balance
at beginning of year
|
$ | 20,277 | $ | 18,894 | $ | 17,918 | $ | 16,771 | $ | 15,914 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Commercial:
|
||||||||||||||||||||
Mortgages
|
185 | 26 | – | 85 | 215 | |||||||||||||||
Construction
and development
|
– | – | – | – | – | |||||||||||||||
Other
|
1,044 | 506 | 295 | 198 | 257 | |||||||||||||||
Residential:
|
||||||||||||||||||||
Mortgages
|
104 | – | – | – | – | |||||||||||||||
Homeowner
construction
|
– | – | – | – | – | |||||||||||||||
Consumer
|
260 | 246 | 133 | 86 | 95 | |||||||||||||||
Total
charge-offs
|
1,593 | 778 | 428 | 369 | 567 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial:
|
||||||||||||||||||||
Mortgages
|
68 | – | – | 71 | 36 | |||||||||||||||
Construction
and development
|
– | – | – | – | 34 | |||||||||||||||
Other
|
48 | 203 | 171 | 389 | 569 | |||||||||||||||
Residential:
|
||||||||||||||||||||
Mortgages
|
– | – | – | – | – | |||||||||||||||
Homeowner
construction
|
– | – | – | – | – | |||||||||||||||
Consumer
|
125 | 58 | 33 | 106 | 175 | |||||||||||||||
Total
recoveries
|
241 | 261 | 204 | 566 | 814 | |||||||||||||||
Net
charge-offs (recoveries)
|
1,352 | 517 | 224 | (197 | ) | (247 | ) | |||||||||||||
Reclassification
of allowance
|
||||||||||||||||||||
on
off-balance sheet exposures
|
– | – | – | (250 | ) | – | ||||||||||||||
Provision
charged to earnings
|
4,800 | 1,900 | 1,200 | 1,200 | 610 | |||||||||||||||
Balance
at end of year
|
$ | 23,725 | $ | 20,277 | $ | 18,894 | $ | 17,918 | $ | 16,771 | ||||||||||
Net
charge-offs (recoveries) to average loans
|
.08 | % | .03 | % | .02 | % | (.01 | )% | (.02 | )% |
(Dollars
in thousands)
|
||||||||||||||||||||
December
31,
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Commercial:
|
||||||||||||||||||||
Mortgages
|
$ | 4,904 | $ | 5,218 | $ | 4,408 | $ | 4,467 | $ | 4,385 | ||||||||||
%
of these loans to all loans
|
22.2 | % | 17.7 | % | 19.3 | % | 20.8 | % | 21.3 | % | ||||||||||
Construction
and development
|
784 | 1,445 | 589 | 713 | 729 | |||||||||||||||
%
of these loans to all loans
|
2.7 | % | 3.8 | % | 2.2 | % | 2.7 | % | 2.3 | % | ||||||||||
Other
|
6,889 | 4,229 | 4,200 | 3,263 | 3,633 | |||||||||||||||
%
of these loans to all loans
|
23.0 | % | 21.7 | % | 18.7 | % | 16.1 | % | 16.9 | % | ||||||||||
Residential:
|
||||||||||||||||||||
Mortgages
|
2,111 | 1,681 | 1,619 | 1,642 | 1,447 | |||||||||||||||
%
of these loans to all loans
|
34.1 | % | 37.4 | % | 39.6 | % | 40.3 | % | 39.7 | % | ||||||||||
Homeowner
construction
|
84 | 55 | 56 | 43 | 47 | |||||||||||||||
%
of these loans to all loans
|
0.8 | % | 0.7 | % | 0.8 | % | 1.2 | % | 1.5 | % | ||||||||||
Consumer
|
2,231 | 2,027 | 1,882 | 1,585 | 1,323 | |||||||||||||||
%
of these loans to all loans
|
17.2 | % | 18.7 | % | 19.4 | % | 18.9 | % | 18.3 | % | ||||||||||
Unallocated
|
6,722 | 5,622 | 6,140 | 6,205 | 5,207 | |||||||||||||||
Balance
at end of year
|
$ | 23,725 | $ | 20,277 | $ | 18,894 | $ | 17,918 | $ | 16,771 | ||||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(Dollars
in thousands)
|
Payments
Due by Period
|
|||||||||||||||||||
Total
|
Less
Than
1
Year (1)
|
1-3
Years
|
4-5
Years
|
After
5
Years
|
||||||||||||||||
Contractual
Obligations:
|
||||||||||||||||||||
FHLB
advances (2)
|
$ | 829,626 | $ | 286,232 | $ | 240,197 | $ | 195,844 | $ | 107,353 | ||||||||||
Junior
subordinated debentures
|
32,991 | – | – | – | 32,991 | |||||||||||||||
Operating
lease obligations
|
4,974 | 1,247 | 1,970 | 705 | 1,052 | |||||||||||||||
Software
licensing arrangements
|
2,037 | 1,104 | 933 | – | – | |||||||||||||||
Treasury,
tax and loan demand note
|
4,382 | 4,382 | – | – | – | |||||||||||||||
Deferred
acquisition obligations
|
2,506 | 2,506 | – | – | – | |||||||||||||||
Other
borrowings
|
19,855 | 30 | 68 | 19,579 | 178 | |||||||||||||||
Total
contractual obligations
|
$ | 896,371 | $ | 296,501 | $ | 243,168 | $ | 216,128 | $ | 141,574 |
(1)
|
Maturities
or contractual obligations are considered by management in the
administration of liquidity and are routinely refinanced in the ordinary
course of business.
|
(2)
|
All
FHLB advances are shown in the period corresponding to their scheduled
maturity. Some FHLB advances are callable at earlier
dates. See Note 11 to the Consolidated Financial
Statements for additional
information.
|
(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
|
$ | 206,515 | $ | 144,051 | $ | 48,486 | $ | 2,839 | $ | 11,139 | ||||||||||
Home
equity lines
|
178,371 | 1,804 | 6,397 | – | 170,170 | |||||||||||||||
Other
loans
|
22,979 | 22,075 | 840 | 64 | – | |||||||||||||||
Standby
letters of credit
|
7,679 | 940 | 100 | 6,639 | – | |||||||||||||||
Forward
loan commitments to:
|
||||||||||||||||||||
Originate
loans
|
25,662 | 25,662 | – | – | – | |||||||||||||||
Sell
loans
|
28,192 | 28,192 | – | – | – | |||||||||||||||
Customer
related derivative contracts:
|
||||||||||||||||||||
Interest
rate swaps with customers
|
13,981 | – | – | 10,178 | 3,803 | |||||||||||||||
Mirror
swaps with counterparties
|
13,981 | – | – | 10,178 | 3,803 | |||||||||||||||
Interest
rate risk management contract:
|
||||||||||||||||||||
Interest
rate swap
|
10,000 | – | – | 10,000 | – | |||||||||||||||
Total
commitments
|
$ | 507,360 | $ | 222,724 | $ | 55,823 | $ | 39,898 | $ | 188,915 |
December
31,
|
2008
|
2007
|
||||||||||||||
Months
|
Months
|
Months
|
Months
|
|||||||||||||
1
- 12
|
13
- 24
|
1
- 12
|
13
- 24
|
|||||||||||||
100
basis point rate decrease
|
-1.13 | % | 0.30 | % | -1.77 | % | -2.24 | % | ||||||||
100
basis point rate increase
|
0.61 | % | -1.09 | % | -1.41 | % | -3.62 | % | ||||||||
200
basis point rate increase
|
1.98 | % | -1.09 | % | -1.13 | % | -6.11 | % | ||||||||
(Dollars
in thousands)
|
Down
100
|
Up
200
|
||||||
Basis
|
Basis
|
|||||||
Security
Type
|
Points
|
Points
|
||||||
U.S.
Treasury and U.S. government-sponsored enterprise securities
(noncallable)
|
$ | 1,965 | $ | (3,646 | ) | |||
U.S.
government-sponsored enterprise securities (callable)
|
3 | (6 | ) | |||||
States
and political subdivisions
|
5,579 | (11,829 | ) | |||||
Mortgage-backed
securities issued by U.S. government sponsored agencies
|
||||||||
and
U.S. government sponsored enterprises
|
6,792 | (33,282 | ) | |||||
Trust
preferred debt and other corporate securities
|
285 | 749 | ||||||
Total
change in market value as of December 31, 2008
|
$ | 14,624 | $ | (48,014 | ) | |||
Total
change in market value as of December 31, 2007
|
$ | 15,459 | $ | (46,812 | ) |
Description
|
Page
|
Management’s
Annual Report on Internal Control Over Financial Reporting
|
59
|
Reports
of Independent Registered Public Accounting Firm
|
60
|
Consolidated
Balance Sheets December 31, 2008 and 2007
|
62
|
Consolidated
Statements of Income For the Years Ended December 31, 2008, 2007 and
2006
|
63
|
Consolidated
Statements of Changes in Shareholders’ Equity For the Years Ended December
31, 2008, 2007 and 2006
|
64
|
Consolidated
Statements of Cash Flows For the Years Ended December 31, 2008, 2007 and
2006
|
66
|
Notes
to Consolidated Financial Statements
|
68
|
/s/ John C. Warren
|
/s/ David V. Devault
|
John
C. Warren
Chairman
and
Chief
Executive Officer
|
David
V. Devault
Executive
Vice President, Chief Financial Officer
and
Secretary
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
in thousands)
|
|
CONSOLIDATED
BALANCE SHEETS
|
||
|
December
31,
|
2008
|
2007
|
||||||
Assets:
|
||||||||
Cash
and noninterest-bearing balances due from banks
|
$ | 11,644 | $ | 30,817 | ||||
Interest-bearing
balances due from banks
|
41,780 | 1,973 | ||||||
Federal
funds sold and securities purchased under resale
agreements
|
2,942 | 7,600 | ||||||
Other
short-term investments
|
1,824 | 722 | ||||||
Mortgage
loans held for sale
|
2,543 | 1,981 | ||||||
Securities
available for sale, at fair value;
|
||||||||
amortized
cost $869,433 in 2008 and $750,583 in 2007
|
866,219 | 751,778 | ||||||
Federal
Home Loan Bank stock, at cost
|
42,008 | 31,725 | ||||||
Loans:
|
||||||||
Commercial
and other
|
880,313 | 680,266 | ||||||
Residential
real estate
|
642,052 | 599,671 | ||||||
Consumer
|
316,789 | 293,715 | ||||||
Total
loans
|
1,839,154 | 1,573,652 | ||||||
Less
allowance for loan losses
|
23,725 | 20,277 | ||||||
Net
loans
|
1,815,429 | 1,553,375 | ||||||
Premises
and equipment, net
|
25,102 | 25,420 | ||||||
Accrued
interest receivable
|
11,036 | 11,427 | ||||||
Investment
in bank-owned life insurance
|
43,163 | 41,363 | ||||||
Goodwill
|
58,114 | 50,479 | ||||||
Identifiable
intangible assets, net
|
10,152 | 11,433 | ||||||
Other
assets
|
33,510 | 19,847 | ||||||
Total
assets
|
$ | 2,965,466 | $ | 2,539,940 | ||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Demand
deposits
|
$ | 172,771 | $ | 175,542 | ||||
NOW
accounts
|
171,306 | 164,944 | ||||||
Money
market accounts
|
305,879 | 321,600 | ||||||
Savings
accounts
|
173,485 | 176,278 | ||||||
Time
deposits
|
967,427 | 807,841 | ||||||
Total
deposits
|
1,790,868 | 1,646,205 | ||||||
Dividends
payable
|
3,351 | 2,677 | ||||||
Federal
Home Loan Bank advances
|
829,626 | 616,417 | ||||||
Junior
subordinated debentures
|
32,991 | 22,681 | ||||||
Other
borrowings
|
26,743 | 32,560 | ||||||
Accrued
expenses and other liabilities
|
46,776 | 32,887 | ||||||
Total
liabilities
|
2,730,355 | 2,353,427 | ||||||
Shareholders’
Equity:
|
||||||||
Common
stock of $.0625 par value; authorized 30,000,000 shares;
|
||||||||
issued
16,018,868 shares in 2008 and 13,492,110 shares in 2007
|
1,001 | 843 | ||||||
Paid-in
capital
|
82,095 | 34,874 | ||||||
Retained
earnings
|
164,679 | 154,647 | ||||||
Accumulated
other comprehensive loss
|
(10,458 | ) | (239 | ) | ||||
Treasury
stock, at cost; 84,191 shares in 2008 and 137,652 shares in
2007
|
(2,206 | ) | (3,612 | ) | ||||
Total
shareholders’ equity
|
235,111 | 186,513 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 2,965,466 | $ | 2,539,940 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
and shares in thousands,
|
CONSOLIDATED
STATEMENTS OF INCOME
|
except
per share amounts)
|
|
Years
ended December 31,
|
2008
|
2007
|
2006
|
||||||||||
Interest
income:
|
|||||||||||||
Interest
and fees on loans
|
$ | 100,939 | $ | 98,720 | $ | 92,190 | |||||||
Interest
on securities:
|
|||||||||||||
Taxable
|
34,382 | 31,163 | 33,763 | ||||||||||
Nontaxable
|
3,125 | 2,983 | 1,618 | ||||||||||
Dividends
on corporate stock and Federal Home Loan Bank stock
|
1,882 | 2,737 | 2,842 | ||||||||||
Other
interest income
|
334 | 831 | 721 | ||||||||||
Total
interest income
|
140,662 | 136,434 | 131,134 | ||||||||||
Interest
expense:
|
|||||||||||||
Deposits
|
41,195 | 52,422 | 46,982 | ||||||||||
Federal
Home Loan Bank advances
|
30,894 | 21,641 | 20,916 | ||||||||||
Junior
subordinated debentures
|
1,879 | 1,352 | 1,352 | ||||||||||
Other
interest expense
|
1,181 | 1,075 | 410 | ||||||||||
Total
interest expense
|
75,149 | 76,490 | 69,660 | ||||||||||
Net
interest income
|
65,513 | 59,944 | 61,474 | ||||||||||
Provision
for loan losses
|
4,800 | 1,900 | 1,200 | ||||||||||
Net
interest income after provision for loan losses
|
60,713 | 58,044 | 60,274 | ||||||||||
Noninterest
income:
|
|||||||||||||
Wealth
management services:
|
|||||||||||||
Trust
and investment advisory fees
|
20,316 | 21,124 | 19,099 | ||||||||||
Mutual
fund fees
|
5,205 | 5,430 | 4,665 | ||||||||||
Financial
planning, commissions and other service fees
|
2,752 | 2,462 | 2,616 | ||||||||||
Wealth
management services
|
28,273 | 29,016 | 26,380 | ||||||||||
Service
charges on deposit accounts
|
4,781 | 4,713 | 4,915 | ||||||||||
Merchant
processing fees
|
6,900 | 6,710 | 6,208 | ||||||||||
Income
from bank-owned life insurance
|
1,800 | 1,593 | 1,410 | ||||||||||
Net
gains on loan sales and commissions on loans originated for
others
|
1,396 | 1,493 | 1,423 | ||||||||||
Net
realized gains on securities
|
2,224 | 455 | 443 | ||||||||||
Losses
on write-downs of investments to fair value
|
(5,937 | ) | – | – | |||||||||
Net
unrealized gains (losses) on interest rate swaps
|
(542 | ) | 27 | – | |||||||||
Other
income
|
1,625 | 1,502 | 1,404 | ||||||||||
Total
noninterest income
|
40,520 | 45,509 | 42,183 | ||||||||||
Noninterest
expense:
|
|||||||||||||
Salaries
and employee benefits
|
41,037 | 39,986 | 38,698 | ||||||||||
Net
occupancy
|
4,536 | 4,150 | 3,888 | ||||||||||
Equipment
|
3,838 | 3,473 | 3,370 | ||||||||||
Merchant
processing costs
|
5,769 | 5,686 | 5,257 | ||||||||||
Outsourced
services
|
2,859 | 2,180 | 2,009 | ||||||||||
Advertising
and promotion
|
1,729 | 2,024 | 1,894 | ||||||||||
Legal,
audit and professional fees
|
2,325 | 1,761 | 1,637 | ||||||||||
Amortization
of intangibles
|
1,281 | 1,383 | 1,593 | ||||||||||
Debt
prepayment penalties
|
– | 1,067 | – | ||||||||||
Other
expenses
|
8,368 | 7,196 | 6,989 | ||||||||||
Total
noninterest expense
|
71,742 | 68,906 | 65,335 | ||||||||||
Income
before income taxes
|
29,491 | 34,647 | 37,122 | ||||||||||
Income
tax expense
|
7,319 | 10,847 | 12,091 | ||||||||||
Net
income
|
$ | 22,172 | $ | 23,800 | $ | 25,031 | |||||||
Weighted
average shares outstanding - basic
|
13,981.9 | 13,355.5 | 13,424.1 | ||||||||||
Weighted
average shares outstanding - diluted
|
14,146.3 | 13,604.1 | 13,723.2 | ||||||||||
Per
share information:
|
Basic
earnings per share
|
$ | 1.59 | $ | 1.78 | $ | 1.86 | ||||||
Diluted
earnings per share
|
$ | 1.57 | $ | 1.75 | $ | 1.82 | |||||||
Cash
dividends declared per share
|
$ | 0.83 | $ | 0.80 | $ | 0.76 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
and shares in thousands)
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
|
||
Accumulated
|
||||||||||||||||||||||||||||
Common
|
Other
|
|||||||||||||||||||||||||||
Shares
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
|||||||||||||||||||||||
(Dollars
and shares in thousands)
|
Outstanding
|
Stock
|
Capital
|
Earnings
|
Income
(Loss)
|
Stock
|
Total
|
|||||||||||||||||||||
Balance
at January 1, 2006
|
13,362 | $ | 836 | $ | 32,778 | $ | 126,735 | $ | (1,653 | ) | $ | (250 | ) | $ | 158,446 | |||||||||||||
Net
income for 2006
|
25,031 | 25,031 | ||||||||||||||||||||||||||
Unrealized
gains on securities, net
|
||||||||||||||||||||||||||||
of
$843 income tax expense
|
1,432 | 1,432 | ||||||||||||||||||||||||||
Reclassification
adjustments for net
|
||||||||||||||||||||||||||||
realized
gains included in net income,
|
||||||||||||||||||||||||||||
net
of $322 income tax expense
|
(121 | ) | (121 | ) | ||||||||||||||||||||||||
Minimum
pension liability adjustment,
|
||||||||||||||||||||||||||||
net
of $33 income tax expense
|
61 | 61 | ||||||||||||||||||||||||||
Comprehensive
income
|
26,403 | |||||||||||||||||||||||||||
Adjustment
to initially apply SFAS No. 158,
|
||||||||||||||||||||||||||||
net
of $1,741 income tax benefit
|
(3,234 | ) | (3,234 | ) | ||||||||||||||||||||||||
Cash
dividends declared
|
(10,218 | ) | (10,218 | ) | ||||||||||||||||||||||||
Share-based
compensation
|
694 | 694 | ||||||||||||||||||||||||||
Deferred
compensation plan
|
(5 | ) | 7 | (144 | ) | (137 | ) | |||||||||||||||||||||
Exercise
of stock options and related tax benefit
|
77 | 5 | 1,200 | 91 | 1,296 | |||||||||||||||||||||||
Shares
issued – dividend reinvestment plan
|
46 | 2 | 1,214 | 1,216 | ||||||||||||||||||||||||
Shares
repurchased
|
(50 | ) | (1,410 | ) | (1,410 | ) | ||||||||||||||||||||||
Balance
at December 31, 2006
|
13,430 | $ | 843 | $ | 35,893 | $ | 141,548 | $ | (3,515 | ) | $ | (1,713 | ) | $ | 173,056 | |||||||||||||
Net
income for 2007
|
23,800 | 23,800 | ||||||||||||||||||||||||||
Unrealized
gains on securities, net
|
||||||||||||||||||||||||||||
of
$427 income tax expense
|
793 | 793 | ||||||||||||||||||||||||||
Reclassification
adjustments for net
|
||||||||||||||||||||||||||||
realized
gains included in net income,
|
||||||||||||||||||||||||||||
net
of $190 income tax expense
|
(265 | ) | (265 | ) | ||||||||||||||||||||||||
Defined
benefit plan obligation adjustment,
|
||||||||||||||||||||||||||||
net
of $1,330 income tax expense
|
2,469 | 2,469 | ||||||||||||||||||||||||||
Reclassification
adjustments for net periodic
|
||||||||||||||||||||||||||||
pension
cost, net of $149 income tax expense
|
279 | 279 | ||||||||||||||||||||||||||
Comprehensive
income
|
27,076 | |||||||||||||||||||||||||||
Cash
dividends declared
|
(10,701 | ) | (10,701 | ) | ||||||||||||||||||||||||
Share-based
compensation
|
508 | 508 | ||||||||||||||||||||||||||
Deferred
compensation plan
|
(14 | ) | (4 | ) | (354 | ) | (358 | ) | ||||||||||||||||||||
Exercise
of stock options, issuance of other
|
||||||||||||||||||||||||||||
other
compensation-related equity instruments
|
||||||||||||||||||||||||||||
and
related tax benefit
|
123 | (1,523 | ) | 3,302 | 1,779 | |||||||||||||||||||||||
Shares
repurchased
|
(185 | ) | (4,847 | ) | (4,847 | ) | ||||||||||||||||||||||
Balance
at December 31, 2007
|
13,354 | $ | 843 | $ | 34,874 | $ | 154,647 | $ | (239 | ) | $ | (3,612 | ) | $ | 186,513 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
and shares in thousands)
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
|
||
Accumulated
|
||||||||||||||||||||||||||||
Common
|
Other
|
|||||||||||||||||||||||||||
Shares
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
|||||||||||||||||||||||
(Dollars
and shares in thousands)
|
Outstanding
|
Stock
|
Capital
|
Earnings
|
Income
(Loss)
|
Stock
|
Total
|
|||||||||||||||||||||
Balance
at January 1, 2008
|
13,354 | $ | 843 | $ | 34,874 | $ | 154,647 | $ | (239 | ) | $ | (3,612 | ) | $ | 186,513 | |||||||||||||
Net
income for 2008
|
22,172 | 22,172 | ||||||||||||||||||||||||||
Unrealized
losses on securities, net
|
||||||||||||||||||||||||||||
of
$2,899 income tax benefit
|
(5,222 | ) | (5,222 | ) | ||||||||||||||||||||||||
Reclassification
adjustments for net
|
||||||||||||||||||||||||||||
realized
losses included in net income,
|
||||||||||||||||||||||||||||
net
of $1,335 income tax benefit
|
2,377 | 2,377 | ||||||||||||||||||||||||||
Defined
benefit plan obligation adjustment,
|
||||||||||||||||||||||||||||
net
of $4,230 income tax benefit
|
(7,615 | ) | (7,615 | ) | ||||||||||||||||||||||||
Reclassification
adjustments for net periodic
|
||||||||||||||||||||||||||||
pension
cost, net of $91 income tax expense
|
169 | 169 | ||||||||||||||||||||||||||
Unrealized
gains on cash flow hedges, net
|
||||||||||||||||||||||||||||
of
$2 income tax expense
|
4 | 4 | ||||||||||||||||||||||||||
Reclassification
adjustments for net realized
|
||||||||||||||||||||||||||||
gains
on cash flow hedges included in net
|
||||||||||||||||||||||||||||
income,
net of $14 income tax expense
|
26 | 26 | ||||||||||||||||||||||||||
Comprehensive
income
|
11,911 | |||||||||||||||||||||||||||
Adjustment
to initially apply SFAS No. 158,
|
||||||||||||||||||||||||||||
net
of $229 income tax benefit
|
(468 | ) | 42 | (426 | ) | |||||||||||||||||||||||
Cash
dividends declared
|
(11,672 | ) | (11,672 | ) | ||||||||||||||||||||||||
Share-based
compensation
|
630 | 630 | ||||||||||||||||||||||||||
Deferred
compensation plan
|
2 | (7 | ) | 43 | 36 | |||||||||||||||||||||||
Exercise
of stock options, issuance of other
|
||||||||||||||||||||||||||||
other
compensation-related equity instruments
|
||||||||||||||||||||||||||||
and
related tax benefit
|
41 | (687 | ) | 1,068 | 381 | |||||||||||||||||||||||
Shares
issued
|
2,500 | 156 | 46,718 | 46,874 | ||||||||||||||||||||||||
Shares
issued – dividend reinvestment plan
|
38 | 2 | 567 | 295 | 864 | |||||||||||||||||||||||
Balance
at December 31, 2008
|
15,935 | $ | 1,001 | $ | 82,095 | $ | 164,679 | $ | (10,458 | ) | $ | (2,206 | ) | $ | 235,111 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
in thousands)
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||
Years
ended December 31,
|
2008
|
2007
|
2006
|
||||||||||
Cash
flows from operating activities:
|
|||||||||||||
Net
income
|
$ | 22,172 | $ | 23,800 | $ | 25,031 | |||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||||||||
Provision
for loan losses
|
4,800 | 1,900 | 1,200 | ||||||||||
Depreciation
of premises and equipment
|
3,043 | 2,951 | 2,995 | ||||||||||
Net
amortization of premium and discount
|
691 | 631 | 1,252 | ||||||||||
Net
amortization of intangibles
|
1,281 | 1,383 | 1,593 | ||||||||||
Non–cash
charitable contribution
|
397 | 520 | 513 | ||||||||||
Share–based
compensation
|
630 | 508 | 694 | ||||||||||
Deferred
income tax benefit
|
(5,308 | ) | (2,311 | ) | (1,969 | ) | |||||||
Earnings
from bank-owned life insurance
|
(1,800 | ) | (1,593 | ) | (1,410 | ) | |||||||
Net
gains on loan sales
|
(1,396 | ) | (1,493 | ) | (1,423 | ) | |||||||
Net
realized gains on securities
|
(2,224 | ) | (455 | ) | (443 | ) | |||||||
Losses
on write-downs of investments to fair value
|
5,937 | - | - | ||||||||||
Net
unrealized losses (gains) on interest rate swap contracts
|
542 | (27 | ) | - | |||||||||
Proceeds
from sales of loans
|
56,905 | 59,013 | 44,398 | ||||||||||
Loans
originated for sale
|
(56,588 | ) | (57,926 | ) | (45,082 | ) | |||||||
Decrease
(increase) in accrued interest receivable, excluding purchased
interest
|
649 | 43 | (513 | ) | |||||||||
(Increase)
decrease in other assets
|
(4,477 | ) | 1,472 | (2,175 | ) | ||||||||
Increase
in accrued expenses and other liabilities
|
3,797 | 1,502 | 4,689 | ||||||||||
Other,
net
|
20 | 55 | (256 | ) | |||||||||
Net
cash provided by operating activities
|
29,071 | 29,973 | 29,094 | ||||||||||
Cash
flows from investing activities:
|
|||||||||||||
Purchases
of:
|
Mortgage-backed
securities available for sale
|
(296,187 | ) | (258,737 | ) | (39,279 | ) | ||||||
Other
investment securities available for sale
|
(13,996 | ) | (39,290 | ) | (77,111 | ) | |||||||
Mortgage-backed
securities held to maturity
|
– | – | – | ||||||||||
Other
investment securities held to maturity
|
– | (12,882 | ) | (38,358 | ) | ||||||||
Proceeds
from sales of:
|
Mortgage-backed
securities available for sale
|
14,000 | 47,938 | 94,118 | |||||||||
Other
investment securities available for sale
|
67,321 | 43,015 | 12,235 | ||||||||||
Mortgage-backed
securities held to maturity
|
– | 38,501 | – | ||||||||||
Other
investment securities held to maturity
|
– | 21,698 | – | ||||||||||
Maturities
and principal payments of:
|
Mortgage-backed
securities available for sale
|
89,500 | 65,443 | 86,778 | |||||||||
Other
investment securities available for sale
|
15,680 | 22,967 | 16,999 | ||||||||||
Mortgage-backed
securities held to maturity
|
– | 3,191 | 16,019 | ||||||||||
Other
investment securities held to maturity
|
– | 20,490 | 9,360 | ||||||||||
(Purchase)
remittance of Federal Home Loan Bank stock
|
(10,283 | ) | (2,998 | ) | 6,239 | ||||||||
Net
increase in loans
|
(229,703 | ) | (23,054 | ) | (25,047 | ) | |||||||
Proceeds
from sale of loans
|
18,047 | – | – | ||||||||||
Purchases
of loans, including purchased interest
|
(54,931 | ) | (90,988 | ) | (33,238 | ) | |||||||
Proceeds
from the sale of property acquired through foreclosure or
repossession
|
– | – | 380 | ||||||||||
Proceeds
from sale of premises and equipment, net of selling costs
|
1,433 | – | – | ||||||||||
Purchases
of premises and equipment
|
(4,183 | ) | (4,122 | ) | (3,578 | ) | |||||||
Purchases
of bank-owned life insurance
|
– | – | (8,000 | ) | |||||||||
Equity
investment in capital trusts
|
(310 | ) | – | – | |||||||||
Payment
of deferred acquisition obligation
|
(15,159 | ) | (6,720 | ) | – | ||||||||
Net
cash (used in) provided by investing activities
|
(418,771 | ) | (175,548 | ) | 17,517 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
(Dollars
in thousands)
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Cash
flows from financing activities:
|
||||||||||||
Net
increase (decrease) in deposits
|
144,663 | (31,792 | ) | 38,740 | ||||||||
Net
increase in other borrowings
|
1,707 | 18,675 | 315 | |||||||||
Proceeds
from Federal Home Loan Bank advances
|
1,112,856 | 803,513 | 516,162 | |||||||||
Repayment
of Federal Home Loan Bank advances
|
(899,621 | ) | (661,617 | ) | (586,868 | ) | ||||||
Issuance
(purchase) of treasury stock, including net deferred compensation plan
activity
|
36 | (5,200 | ) | (1,547 | ) | |||||||
Proceeds
from the issuance of common stock under dividend reinvestment
plan
|
864 | – | 1,216 | |||||||||
Proceeds
from the issuance of common stock
|
46,874 | – | – | |||||||||
Net
proceeds from the exercise of stock options and issuance of
other
|
||||||||||||
compensation-related
equity instruments
|
182 | 1,052 | 803 | |||||||||
Tax
benefit from stock option exercises and issuance of other
|
||||||||||||
compensation-related
equity instruments
|
199 | 727 | 384 | |||||||||
Proceeds
from the issuance of junior subordinated debentures, net of debt issuance
costs
|
10,016 | – | – | |||||||||
Cash
dividends paid
|
(10,998 | ) | (10,580 | ) | (10,070 | ) | ||||||
Net
cash provided by (used in) financing activities
|
406,778 | 114,778 | (40,865 | ) | ||||||||
Net
increase (decrease) increase in cash and cash equivalents
|
17,078 | (30,797 | ) | 5,746 | ||||||||
Cash
and cash equivalents at beginning of year
|
41,112 | 71,909 | 66,163 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 58,190 | $ | 41,112 | $ | 71,909 | ||||||
Noncash
Investing and Financing Activities:
|
||||||||||||
Loans
charged off
|
$ | 1,593 | $ | 778 | $ | 428 | ||||||
Net
transfers from loans to property acquired through foreclosure or
repossession
|
392 | – | 385 | |||||||||
Deferred
acquisition obligation incurred
|
7,635 | 5,921 | 4,595 | |||||||||
Held
to maturity securities transferred to available for sale
|
– | 162,997 | – | |||||||||
Supplemental
Disclosures:
|
||||||||||||
Interest
payments
|
75,661 | 76,264 | 68,946 | |||||||||
Income
tax payments
|
13,587 | 11,440 | 14,054 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
December
31, 2008 and 2007
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
December
31, 2008 and 2007
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(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 | 655 | 12,456 | |||||||||
Retained
earnings
|
154,647 | (468 | ) | 154,179 | ||||||||
Accumulated
other comprehensive loss
|
(239 | ) | 42 | (197 | ) |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
December
31, 2008
|
Cost (1)
|
Gains
|
Losses
|
Value
|
||||||||||||
Securities
Available for Sale:
|
||||||||||||||||
U.S.
Treasury obligations and obligations of U.S. government-sponsored
enterprises
|
$ | 59,022 | $ | 5,355 | $ | – | $ | 64,377 | ||||||||
Mortgage-backed
securities issued by U.S. government agencies and U.S.
government-sponsored enterprises
|
675,159 | 12,543 | (4,083 | ) | 683,619 | |||||||||||
States
and political subdivisions
|
80,680 | 1,348 | (815 | ) | 81,213 | |||||||||||
Trust
preferred securities:
|
||||||||||||||||
Individual
name issuers
|
30,525 | – | (13,732 | ) | 16,793 | |||||||||||
Collateralized
debt obligations (2)
|
5,633 | – | (3,693 | ) | 1,940 | |||||||||||
Corporate
bonds
|
12,973 | 603 | – | 13,576 | ||||||||||||
Common
stocks
|
942 | 50 | – | 992 | ||||||||||||
Perpetual
preferred stocks (3)
|
4,499 | 2 | (792 | ) | 3,709 | |||||||||||
Total
securities available for sale
|
$ | 869,433 | $ | 19,901 | $ | (23,115 | ) | $ | 866,219 |
(Dollars
in thousands)
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
December
31, 2007
|
Cost
(1)
|
Gains
|
Losses
|
Value
|
||||||||||||
Securities
Available for Sale:
|
||||||||||||||||
U.S.
Treasury obligations and obligations of U.S. government-sponsored
enterprises
|
$ | 136,721 | $ | 2,888 | $ | (10 | ) | $ | 139,599 | |||||||
Mortgage-backed
securities issued by U.S. government agencies and U.S.
government-sponsored enterprises
|
469,197 | 2,899 | (2,708 | ) | 469,388 | |||||||||||
States
and political subdivisions
|
80,634 | 499 | (239 | ) | 80,894 | |||||||||||
Trust
preferred securities:
|
||||||||||||||||
Individual
name issuers
|
30,487 | – | (2,792 | ) | 27,695 | |||||||||||
Collateralized
debt obligations (2)
|
7,508 | – | (749 | ) | 6,759 | |||||||||||
Corporate
bonds
|
13,940 | 161 | – | 14,101 | ||||||||||||
Common
stocks
|
3,931 | 2,850 | – | 6,781 | ||||||||||||
Perpetual preferred stocks
(3)
|
8,165 | – | (1,604 | ) | 6,561 | |||||||||||
Total
securities available for sale
|
$ | 750,583 | $ | 9,297 | $ | (8,102 | ) | $ | 751,778 |
(1)
|
Net
of other-than-temporary impairment write-downs recognized in
earnings.
|
(2)
|
Includes
two pooled trust preferred holdings in which there are 73 issuers in one
of the holdings and 38 issuers in the other. For both of its
pooled trust preferred holdings, Washington Trust’s investment is senior
to one or more subordinated tranches that have first loss exposure. One of
the pooled trust preferred security holdings began deferring interest
payments until future periods and based on the financial condition and
operating outlook some of the issuers, was deemed to be
other-than-temporarily impaired and placed on nonaccrual status as of
December 31, 2008. After the 2008 recognition of the
$1.859 million of impairment charges, this investment security had an
amortized cost and fair value of $633 thousand at December 31,
2008.
|
(3)
|
Callable
at the discretion of the issuer. Includes 6 stocks that are
callable at any time and 3 stocks that will be callable no later than
November 2010.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Trust
preferred securities
|
||||||||||||
Collateralized
debt obligations
|
$ | 1,859 | $ | – | $ | – | ||||||
Common
and perpetual preferred stocks
|
||||||||||||
Fannie
Mae and Freddie Mac perpetual preferred stocks
|
1,470 | – | – | |||||||||
Other
perpetual preferred stocks
|
2,173 | – | – | |||||||||
Other
common stocks
|
435 | – | – | |||||||||
Losses
on write-downs of investments to fair value
|
$ | 5,937 | $ | – | $ | – |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Less
than 12 Months
|
12
Months or Longer
|
Total
|
|||||||||||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||||||
At
December 31, 2008
|
# |
Value
|
Losses
|
# |
Value
|
Losses
|
# |
Value
|
Losses
|
|||||||||||||||||||||||||||
Mortgage-backed
securities
|
||||||||||||||||||||||||||||||||||||
issued
by U.S. government agencies and U.S. government-sponsored
enterprises
|
64 | $ | 124,387 | $ | 2,140 | 22 | $ | 34,350 | $ | 1,943 | 86 | $ | 158,737 | $ | 4,083 | |||||||||||||||||||||
States
and
|
||||||||||||||||||||||||||||||||||||
political
subdivisions
|
25 | 18,846 | 523 | 7 | 7,423 | 292 | 32 | 26,269 | 815 | |||||||||||||||||||||||||||
Trust
preferred securities:
|
||||||||||||||||||||||||||||||||||||
Individual
name issuers
|
– | – | – | 11 | 16,793 | 13,732 | 11 | 16,793 | 13,732 | |||||||||||||||||||||||||||
Collateralized
debt obligations
|
– | – | – | 1 | 1,307 | 3,693 | 1 | 1,307 | 3,693 | |||||||||||||||||||||||||||
Subtotal,
debt securities
|
89 | 143,233 | 2,663 | 41 | 59,873 | 19,660 | 130 | 203,106 | 22,323 | |||||||||||||||||||||||||||
Perpetual
preferred stocks
|
– | – | – | 5 | 2,062 | 792 | 5 | 2,062 | 792 | |||||||||||||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||||||||||||||
impaired
securities
|
89 | $ | 143,233 | $ | 2,663 | 46 | $ | 61,935 | $ | 20,452 | 135 | $ | 205,168 | $ | 23,115 |
(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 enterprises
|
1 | $ | 6,996 | $ | 1 | 1 | $ | 3,990 | $ | 9 | 2 | $ | 10,986 | $ | 10 | |||||||||||||||||||||
Mortgage-backed
securities
|
||||||||||||||||||||||||||||||||||||
issued
by U.S. government agencies and U.S. government-sponsored
enterprises
|
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:
|
||||||||||||||||||||||||||||||||||||
Individual
name issuers
|
6 | 16,408 | 2,020 | 5 | 11,287 | 772 | 11 | 27,695 | 2,792 | |||||||||||||||||||||||||||
Collateralized
debt obligations
|
2 | 6,759 | 749 | - | - | - | 2 | 6,759 | 749 | |||||||||||||||||||||||||||
Subtotal,
debt securities
|
44 | 151,195 | 3,926 | 62 | 133,306 | 2,572 | 106 | 284,501 | 6,498 | |||||||||||||||||||||||||||
Perpetual
preferred stocks
|
5 | 5,257 | 1,407 | 4 | 1,304 | 197 | 9 | 6,561 | 1,604 | |||||||||||||||||||||||||||
Total
temporarily
|
||||||||||||||||||||||||||||||||||||
impaired
securities
|
49 | $ | 156,452 | $ | 5,333 | 66 | $ | 134,610 | $ | 2,769 | 115 | $ | 291,062 | $ | 8,102 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Due
in
|
After
1 Year
|
After
5 Years
|
|||||||||||||||||
1
Year
|
but
within
|
but
within
|
After
|
|||||||||||||||||
or
Less
|
5
Years
|
10
Years
|
10
Years
|
Totals
|
||||||||||||||||
Securities
Available for Sale:
|
||||||||||||||||||||
U.S.
Treasury obligations and obligations
|
||||||||||||||||||||
of
U.S. government-sponsored enterprises:
|
||||||||||||||||||||
Amortized
cost
|
$ | 16,948 | $ | 12,164 | $ | 29,910 | $ | – | $ | 59,022 | ||||||||||
Weighted
average yield
|
4.50 | % | 4.69 | % | 5.42 | % | – | % | 5.01 | % | ||||||||||
Mortgage-backed
securities issued by U.S.
|
||||||||||||||||||||
government
agencies & U.S.
|
||||||||||||||||||||
government-sponsored
enterprises:
|
||||||||||||||||||||
Amortized
cost
|
115,158 | 299,392 | 160,383 | 100,226 | 675,159 | |||||||||||||||
Weighted
average yield
|
4.56 | % | 4.41 | % | 4.24 | % | 3.39 | % | 4.24 | % | ||||||||||
State
and political subdivisions:
|
||||||||||||||||||||
Amortized
cost
|
476 | 19,476 | 60,728 | – | 80,680 | |||||||||||||||
Weighted
average yield
|
3.15 | % | 3.86 | % | 3.90 | % | – | % | 3.88 | % | ||||||||||
Trust
preferred securities:
|
||||||||||||||||||||
Amortized
cost (1)
|
– | – | – | 36,158 | 36,158 | |||||||||||||||
Weighted
average yield
|
– | % | – | % | – | % | 3.15 | % | 3.15 | % | ||||||||||
Corporate
bonds:
|
||||||||||||||||||||
Amortized
cost
|
– | 7,983 | 4,990 | – | 12,973 | |||||||||||||||
Weighted
average yield
|
– | % | 6.49 | % | 6.69 | % | – | % | 6.56 | % | ||||||||||
Total
debt securities:
|
||||||||||||||||||||
Amortized
cost
|
$ | 132,582 | $ | 339,015 | $ | 256,011 | $ | 136,384 | $ | 863,992 | ||||||||||
Weighted
average yield
|
4.55 | % | 4.44 | % | 4.35 | % | 2.49 | % | 4.12 | % | ||||||||||
Fair
value
|
$ | 135,567 | $ | 333,646 | $ | 254,665 | $ | 137,640 | $ | 861,518 |
(1)
|
Net
of other-than-temporary
impairment write-downs recognized in
earnings.
|
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Proceeds from sales
(1)
|
$ | 81,718 | $ | 151,672 | $ | 106,866 | ||||||
Gross
realized gains (1)
|
$ | 2,382 | $ | 2,181 | $ | 3,984 | ||||||
Gross
realized losses
|
(158 | ) | (1,726 | ) | (3,541 | ) | ||||||
Net
realized gains on securities
|
$ | 2,224 | $ | 455 | $ | 443 |
(1)
|
Includes
annual contributions of appreciated equity securities to the Corporation’s
charitable foundation. The cost of the annual contributions,
included in noninterest expenses, amounted to $397 thousand,
$520 thousand and $513 thousand in 2008, 2007 and 2006,
respectively. These transactions resulted in realized
securities gains of $315 thousand, $397 thousand and
$381 thousand, respectively, for the same
periods.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
December
31, 2008
|
December
31, 2007
|
||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Commercial:
|
||||||||||||||||
Mortgages
(1)
|
$ | 407,904 | 22 | % | $ | 278,821 | 18 | % | ||||||||
Construction
and development (2)
|
49,599 | 3 | % | 60,361 | 4 | % | ||||||||||
Other
(3)
|
422,810 | 23 | % | 341,084 | 21 | % | ||||||||||
Total
commercial
|
880,313 | 48 | % | 680,266 | 43 | % | ||||||||||
Residential
real estate:
|
||||||||||||||||
Mortgages
(4)
|
626,663 | 34 | % | 588,628 | 37 | % | ||||||||||
Homeowner
construction
|
15,389 | 1 | % | 11,043 | 1 | % | ||||||||||
Total
residential real estate
|
642,052 | 35 | % | 599,671 | 38 | % | ||||||||||
Consumer
|
||||||||||||||||
Home
equity lines
|
170,662 | 9 | % | 144,429 | 9 | % | ||||||||||
Home
equity loans
|
89,297 | 5 | % | 99,827 | 6 | % | ||||||||||
Other
(5)
|
56,830 | 3 | % | 49,459 | 4 | % | ||||||||||
Total
consumer
|
316,789 | 17 | % | 293,715 | 19 | % | ||||||||||
Total
loans (6)
|
$ | 1,839,154 | 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)
|
oans
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
FHLB borrowings (See Note 11 for additional discussion of FHLB
borrowings).
|
(5)
|
Fixed
rate consumer installment loans.
|
(6)
|
Net
of unamortized loan origination fees, net of costs, totaling
$2 thousand and $100 thousand at December 31, 2008 and
2007, respectively. Also includes $259 thousand of net
discounts and $297 thousand of net premiums on purchased loans at
December 31, 2008 and 2007,
respectively.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Impaired
loans requiring an allowance
|
$ | 3,492 | $ | 2,102 | ||||
Impaired
loans not requiring an allowance
|
3,165 | 2,490 | ||||||
Total
recorded investment in impaired loans
|
$ | 6,657 | $ | 4,592 |
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Average
recorded investment in impaired loans
|
$ | 6,161 | $ | 2,903 | $ | 1,105 | ||||||
Interest
income recognized on impaired loans
|
$ | 507 | $ | 457 | $ | 192 |
(Dollars
in thousands)
|
Loan
|
|||||||||||
Servicing
|
Valuation
|
|||||||||||
Rights
|
Allowance
|
Total
|
||||||||||
Balance
at December 31, 2005
|
$ | 1,346 | $ | (260 | ) | $ | 1,086 | |||||
Loan
servicing rights capitalized
|
255 | – | 255 | |||||||||
Amortization
(1)
|
(419 | ) | – | (419 | ) | |||||||
Decrease
in impairment reserve (2)
|
– | 36 | 36 | |||||||||
Balance
at December 31, 2006
|
1,182 | (224 | ) | 958 | ||||||||
Loan
servicing rights capitalized
|
246 | – | 246 | |||||||||
Amortization
(1)
|
(361 | ) | – | (361 | ) | |||||||
Decrease
in impairment reserve (2)
|
– | 40 | 40 | |||||||||
Balance
at December 31, 2007
|
1,067 | (184 | ) | 883 | ||||||||
Loan
servicing rights capitalized
|
167 | – | 167 | |||||||||
Amortization
(1)
|
(273 | ) | – | (273 | ) | |||||||
Increase
in impairment reserve (2)
|
– | (59 | ) | (59 | ) | |||||||
Balance
at December 31, 2008
|
$ | 961 | $ | (243 | ) | $ | 718 |
(1)
|
Amortization
expense is charged against loan servicing fee
income.
|
(2)
|
(Increases)
and decreases in the impairment reserve are recorded as (reductions) and
additions to loan servicing fee
income.
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
|||||
Years
ending December 31:
|
2009
|
$ | 188 | ||
2010
|
152 | ||||
2011
|
121 | ||||
2012
|
96 | ||||
2013
|
76 | ||||
Thereafter
|
328 | ||||
Total
estimated amortization expense
|
$ | 961 |
(Dollars
in thousands)
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Residential
mortgages
|
$ | 82,961 | $ | 67,942 | ||||
Commercial
loans
|
43,094 | 36,105 | ||||||
Total
|
$ | 126,055 | $ | 104,047 |
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Balance
at beginning of year
|
$ | 20,277 | $ | 18,894 | $ | 17,918 | ||||||
Provision
charged to expense
|
4,800 | 1,900 | 1,200 | |||||||||
Recoveries
of loans previously charged off
|
241 | 261 | 204 | |||||||||
Loans
charged off
|
(1,593 | ) | (778 | ) | (428 | ) | ||||||
Balance
at end of year
|
$ | 23,725 | $ | 20,277 | $ | 18,894 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Land
and improvements
|
$ | 5,021 | $ | 5,389 | ||||
Premises
and improvements
|
30,957 | 29,914 | ||||||
Furniture,
fixtures and equipment
|
20,269 | 21,375 | ||||||
56,247 | 56,678 | |||||||
Less
accumulated depreciation
|
31,145 | 31,258 | ||||||
Total
premises and equipment, net
|
$ | 25,102 | $ | 25,420 |
(Dollars
in thousands)
|
|||||
Years
ending December 31:
|
2009
|
$ | 1,247 | ||
2010
|
1,034 | ||||
2011
|
936 | ||||
2012
|
388 | ||||
2013
|
317 | ||||
2014
and thereafter
|
1,822 | ||||
Total
minimum lease payments
|
$ | 5,744 |
Wealth
|
||||||||||||
(Dollars
in thousands)
|
Commercial
|
Management
|
||||||||||
Banking
|
Service
|
|||||||||||
Segment
|
Segment
|
Total
|
||||||||||
Balance
at December 31, 2006
|
$ | 22,591 | $ | 21,967 | $ | 44,558 | ||||||
Additions
to goodwill during the period
|
- | 5,921 | 5,921 | |||||||||
Impairment
recognized
|
- | - | - | |||||||||
Balance
at December 31, 2007
|
22,591 | 27,888 | 50,479 | |||||||||
Additions
to goodwill during the period
|
- | 7,635 | 7,635 | |||||||||
Impairment
recognized
|
- | - | - | |||||||||
Balance
at December 31, 2008
|
$ | 22,591 | $ | 35,523 | $ | 58,114 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||||||||||
Core
Deposit
|
Advisory
|
Non-compete
|
||||||||||||||
Intangible
|
Contracts
|
Agreements
|
Total
|
|||||||||||||
Balance
at December 31, 2006
|
$ | 650 | $ | 11,937 | $ | 229 | $ | 12,816 | ||||||||
Amortization
|
140 | 1,194 | 49 | 1,383 | ||||||||||||
Balance
at December 31, 2007
|
510 | 10,743 | 180 | 11,433 | ||||||||||||
Amortization
|
120 | 1,112 | 49 | 1,281 | ||||||||||||
Balance
at December 31, 2008
|
$ | 390 | $ | 9,631 | $ | 131 | $ | 10,152 |
(Dollars
in thousands)
|
||||||||||||||||
Core
|
Advisory
|
Non-compete
|
||||||||||||||
Estimated
amortization expense
|
Deposits
|
Contracts
|
Agreements
|
Total
|
||||||||||||
2009
|
$ | 120 | $ | 1,040 | $ | 49 | $ | 1,209 | ||||||||
2010
|
120 | 922 | 49 | 1,091 | ||||||||||||
2011
|
120 | 768 | 33 | 921 | ||||||||||||
2012
|
30 | 727 | – | 757 | ||||||||||||
2013
|
– | 680 | – | 680 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||||||||||
Core
|
Advisory
|
Non-compete
|
||||||||||||||
Deposits
|
Contracts
|
Agreements
|
Total
|
|||||||||||||
December
31, 2008:
|
||||||||||||||||
Gross
carrying amount
|
$ | 2,997 | $ | 13,657 | $ | 1,147 | $ | 17,801 | ||||||||
Accumulated
amortization
|
2,607 | 4,026 | 1,016 | 7,649 | ||||||||||||
Net
amount
|
$ | 390 | $ | 9,631 | $ | 131 | $ | 10,152 | ||||||||
December
31, 2007:
|
||||||||||||||||
Gross
carrying amount
|
$ | 2,997 | $ | 13,657 | $ | 1,147 | $ | 17,801 | ||||||||
Accumulated
amortization
|
2,487 | 2,914 | 967 | 6,368 | ||||||||||||
Net
amount
|
$ | 510 | $ | 10,743 | $ | 180 | $ | 11,433 |
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Current
tax expense (benefit):
|
||||||||||||
Federal
|
$ | 12,900 | $ | 12,512 | $ | 13,435 | ||||||
State
|
(273 | ) | 646 | 625 | ||||||||
Total
current tax expense
|
12,627 | 13,158 | 14,060 | |||||||||
Deferred
tax benefit:
|
||||||||||||
Federal
|
(3,830 | ) | (2,179 | ) | (1,828 | ) | ||||||
State
|
(1,478 | ) | (132 | ) | (141 | ) | ||||||
Total
deferred tax benefit
|
(5,308 | ) | (2,311 | ) | (1,969 | ) | ||||||
Total
income tax expense
|
$ | 7,319 | $ | 10,847 | $ | 12,091 |
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Tax
expense at Federal statutory rate
|
$ | 10,322 | $ | 12,127 | $ | 12,993 | ||||||
(Decrease)
increase in taxes resulting from:
|
||||||||||||
Tax-exempt
income
|
(1,094 | ) | (1,014 | ) | (613 | ) | ||||||
Dividends
received deduction
|
(138 | ) | (217 | ) | (244 | ) | ||||||
BOLI
|
(630 | ) | (557 | ) | (493 | ) | ||||||
Adjustment
to net deferred tax assets for enacted changes in state
|
||||||||||||
tax
law and rates, net of Federal income tax
|
(841 | ) | – | – | ||||||||
Net
decrease related to uncertain state tax positions, net of
|
||||||||||||
Federal
income tax
|
(556 | ) | – | – | ||||||||
State
income tax expense, net of Federal income tax benefit
|
380 | 420 | 406 | |||||||||
Other
|
(124 | ) | 88 | 42 | ||||||||
Total
income tax expense
|
$ | 7,319 | $ | 10,847 | $ | 12,091 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Gross
deferred tax assets:
|
||||||||
Allowance
for loan losses
|
$ | 8,456 | $ | 7,097 | ||||
Defined
benefit pension obligations
|
8,757 | 4,130 | ||||||
Losses
on write-downs of securities to fair value
|
2,627 | – | ||||||
Net
unrealized losses on securities available for sale
|
1,146 | – | ||||||
Deferred
compensation
|
1,186 | 1,341 | ||||||
Deferred
loan origination fees
|
973 | 888 | ||||||
Other
|
1,939 | 2,048 | ||||||
Gross
deferred tax assets
|
25,084 | 15,504 | ||||||
Gross
deferred tax liabilities:
|
||||||||
Amortization
of intangibles
|
(3,522 | ) | (4,621 | ) | ||||
Deferred
loan origination costs
|
(2,135 | ) | (1,940 | ) | ||||
Net
unrealized gains on securities available for sale
|
– | (418 | ) | |||||
Other
|
(643 | ) | (820 | ) | ||||
Gross
deferred tax liabilities
|
(6,300 | ) | (7,799 | ) | ||||
Net
deferred tax asset
|
$ | 18,784 | $ | 7,705 |
(Dollars
in thousands)
|
||||||||
Years
ended December 31,
|
2008
|
2007
|
||||||
Balance
at beginning of year
|
$ | 1,358 | $ | 1,195 | ||||
Increase
related to current year tax positions
|
87 | 163 | ||||||
Reductions
relating to settlements with taxing authorities
|
(892 | ) | – | |||||
Reductions
as a result of lapse of statute of limitations
|
(8 | ) | – | |||||
Balance
at end of year
|
$ | 545 | $ | 1,358 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
|||||
Years
ending December 31:
|
2009
|
$ | 631,797 | ||
2010
|
226,490 | ||||
2011
|
42,918 | ||||
2012
|
20,084 | ||||
2013
|
46,135 | ||||
2014
and thereafter
|
3 | ||||
Balance
at December 31, 2008
|
$ | 967,427 |
(Dollars
in thousands)
|
|||||
Maturing:
|
January 1,
2009 to March 31, 2009
|
$ | 108,591 | ||
April 1,
2009 to June 30, 2009
|
40,897 | ||||
July 1,
2009 to December 31, 2009
|
58,881 | ||||
January 1,
2010 and beyond
|
86,025 | ||||
Balance
at December 31, 2008
|
$ | 294,394 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars in
thousands)
|
||||||||||||||||||||||||
December
31, 2008
|
December
31, 2007
|
|||||||||||||||||||||||
Scheduled Maturity |
Redeemed
at Call Date (1) |
Weighted Average Rate (2) |
Scheduled Maturity |
Redeemed
at Call Date (1) |
Weighted Average Rate (2) |
|||||||||||||||||||
2008
|
$ | – | $ | – | – | % | $ | 186,220 | $ | 204,220 | 4.15 | % | ||||||||||||
2009
|
286,232 | 299,232 | 2.17 | % | 115,441 | 110,441 | 4.27 | % | ||||||||||||||||
2010
|
115,638 | 115,638 | 4.29 | % | 83,569 | 83,569 | 4.72 | % | ||||||||||||||||
2011
|
124,559 | 116,559 | 4.09 | % | 69,414 | 61,414 | 4.54 | % | ||||||||||||||||
2012
|
94,372 | 94,372 | 4.76 | % | 89,842 | 89,842 | 4.83 | % | ||||||||||||||||
2013
|
101,472 | 96,472 | 4.16 | % | 23,535 | 18,535 | 4.72 | % | ||||||||||||||||
2014
and after
|
107,353 | 107,353 | 4.82 | % | 48,396 | 48,396 | 5.03 | % | ||||||||||||||||
$ | 829,626 | $ | 829,626 | $ | 616,417 | $ | 616,417 |
(1)
|
Callable
FHLB advances are shown in the respective periods assuming that the
callable debt is redeemed at the call date while all other advances are
shown in the periods corresponding to their scheduled maturity
date.
|
(2)
|
Weighted
average rate based on scheduled maturity
dates.
|
(Dollars
in thousands)
|
||||||||||||
As
of and for the years ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Average
amount outstanding during the period
|
$ | 92,915 | $ | 36,640 | $ | 44,199 | ||||||
Amount
outstanding at end of period
|
170,000 | 70,000 | 50,000 | |||||||||
Highest
month end balance during period
|
170,000 | 70,000 | 85,000 | |||||||||
Weighted-average
interest rate at end of period
|
0.73 | % | 4.70 | % | 5.36 | % | ||||||
Weighted-average
interest rate during the period
|
2.45 | % | 5.25 | % | 5.07 | % |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
December 31,
|
December 31,
|
||||||
2008
|
2007
|
|||||||
Junior
subordinated debentures
|
$ | 32,991 | $ | 22,681 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Treasury,
Tax and Loan demand note balance
|
$ | 4,382 | $ | 2,793 | ||||
Deferred
acquisition obligations
|
2,506 | 9,884 | ||||||
Securities
sold under repurchase agreements
|
19,500 | 19,500 | ||||||
Other
|
355 | 383 | ||||||
Other
borrowings
|
$ | 26,743 | $ | 32,560 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(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 December 31, 2008:
|
||||||||||||||||||||||||
Total
Capital (to Risk-Weighted Assets):
|
||||||||||||||||||||||||
Corporation
|
$ | 235,728 | 12.54 | % | $ | 150,339 | 8.00 | % | $ | 187,923 | 10.00 | % | ||||||||||||
Bank
|
$ | 237,023 | 12.62 | % | $ | 150,201 | 8.00 | % | $ | 187,751 | 10.00 | % | ||||||||||||
Tier
1 Capital (to Risk-Weighted Assets):
|
||||||||||||||||||||||||
Corporation
|
$ | 212,231 | 11.29 | % | $ | 75,169 | 4.00 | % | $ | 112,754 | 6.00 | % | ||||||||||||
Bank
|
$ | 213,547 | 11.37 | % | $ | 75,101 | 4.00 | % | $ | 112,651 | 6.00 | % | ||||||||||||
Tier
1 Capital (to Average Assets): (1)
|
||||||||||||||||||||||||
Corporation
|
$ | 212,231 | 7.53 | % | $ | 112,799 | 4.00 | % | $ | 140,999 | 5.00 | % | ||||||||||||
Bank
|
$ | 213,547 | 7.58 | % | $ | 112,724 | 4.00 | % | $ | 140,905 | 5.00 | % | ||||||||||||
As
of December 31, 2007:
|
||||||||||||||||||||||||
Total
Capital (to Risk-Weighted Assets):
|
||||||||||||||||||||||||
Corporation
|
$ | 167,061 | 10.39 | % | $ | 128,648 | 8.00 | % | $ | 160,810 | 10.00 | % | ||||||||||||
Bank
|
$ | 174,750 | 10.87 | % | $ | 128,574 | 8.00 | % | $ | 160,717 | 10.00 | % | ||||||||||||
Tier
1 Capital (to Risk-Weighted Assets):
|
||||||||||||||||||||||||
Corporation
|
$ | 146,393 | 9.10 | % | $ | 64,324 | 4.00 | % | $ | 96,486 | 6.00 | % | ||||||||||||
Bank
|
$ | 154,093 | 9.59 | % | $ | 64,287 | 4.00 | % | $ | 96,430 | 6.00 | % | ||||||||||||
Tier
1 Capital (to Average Assets): (1)
|
||||||||||||||||||||||||
Corporation
|
$ | 146,393 | 6.09 | % | $ | 96,088 | 4.00 | % | $ | 120,110 | 5.00 | % | ||||||||||||
Bank
|
$ | 154,093 | 6.42 | % | $ | 96,042 | 4.00 | % | $ | 120,053 | 5.00 | % |
(1)
|
Leverage
ratio
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Financial
instruments whose contract amounts represent credit risk:
|
||||||||
Commitments
to extend credit:
|
||||||||
Commercial
loans
|
$ | 206,515 | $ | 149,465 | ||||
Home
equity lines
|
178,371 | 176,284 | ||||||
Other
loans
|
22,979 | 20,770 | ||||||
Standby
letters of credit
|
7,679 | 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
|
25,662 | 3,495 | ||||||
Commitments
to sell fixed rate mortgage loans
|
28,192 | 5,472 | ||||||
Customer
related derivative contracts:
|
||||||||
Interest
rate swaps with customers
|
13,981 | 3,850 | ||||||
Mirror
swaps with counterparties
|
13,981 | 3,850 | ||||||
Interest
rate risk management contract:
|
||||||||
Interest
rate swap
|
10,000 | – |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
·
|
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
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Assets/
|
|||||||||||||||
Fair
Value Measurements Using
|
Liabilities
at
|
|||||||||||||||
December 31,
2008
|
Level
1
|
Level
2
|
Level
3
|
Fair
Value
|
||||||||||||
Assets:
|
||||||||||||||||
Securities
available for sale
|
$ | 4,200 | $ | 860,079 | $ | 1,940 | $ | 866,219 | ||||||||
Derivative
assets (1)
|
– | 1,413 | 158 | 1,571 | ||||||||||||
Total
assets at fair value on a recurring basis
|
$ | 4,200 | $ | 861,492 | $ | 2,098 | $ | 867,790 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative
liabilities (1)
|
$ | – | $ | 2,080 | $ | 195 | $ | 2,275 | ||||||||
Total
liabilities at fair value on a recurring basis
|
$ | – | $ | 2,080 | $ | 195 | $ | 2,275 |
(1)
|
Derivative
assets are included in other assets and derivative liabilities are
reported in accrued expenses and other liabilities in the Consolidated
Balance Sheets.
|
Securities
|
Derivative
|
|||||||||||
Available
|
Assets
/
|
|||||||||||
(Dollars
in thousands)
|
for
Sale
|
(Liabilities)
|
Total
|
|||||||||
Balance
at January 1, 2008
|
$ | – | $ | (4 | ) | $ | (4 | ) | ||||
Losses
(realized and unrealized):
|
||||||||||||
Included
in earnings
|
(1,859 | ) | (24 | ) | (1,883 | ) | ||||||
Included
in other comprehensive income
|
(1,949 | ) | – | (1,949 | ) | |||||||
Purchases,
issuances and settlements (net)
|
13 | (9 | ) | 4 | ||||||||
Transfers
in and/or out of Level 3
|
5,735 | – | 5,735 | |||||||||
Balance
at December 31, 2008
|
$ | 1,940 | $ | (37 | ) | $ | 1,903 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Carrying
Value at December 31, 2008
|
|||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Collateral
dependent impaired loans
|
$ | – | $ | 3,396 | $ | – | $ | 3,396 | ||||||||
Loan
servicing rights
|
– | – | 385 | 385 | ||||||||||||
Total
assets at fair value on a nonrecurring basis
|
$ | – | $ | 3,396 | $ | 385 | $ | 3,781 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
December
31,
|
2008
|
2007
|
||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
(Dollars
in thousands)
|
Amount
|
Fair
Value
|
Amount
|
Fair
Value
|
||||||||||||
Financial Assets: | ||||||||||||||||
Cash
and cash equivalents
|
$ | 58,190 | $ | 58,190 | $ | 41,112 | $ | 41,112 | ||||||||
Mortgage
loans held for sale
|
2,543 | 2,604 | 1,981 | 2,004 | ||||||||||||
Securities
available for sale
|
866,219 | 866,219 | 751,778 | 751,778 | ||||||||||||
FHLB
stock
|
42,008 | 42,008 | 31,725 | 31,725 | ||||||||||||
Loans,
net of allowance for loan losses
|
1,815,429 | 1,857,433 | 1,553,375 | 1,576,278 | ||||||||||||
Accrued
interest receivable
|
10,980 | 10,980 | 11,427 | 11,427 | ||||||||||||
Bank-owned
life insurance
|
43,163 | 43,163 | 41,363 | 41,363 | ||||||||||||
Customer
related interest rate swap contracts
|
1,413 | 1,413 | 60 | 60 | ||||||||||||
Forward
loan commitments (1)
|
158 | 158 | 19 | 19 | ||||||||||||
Financial Liabilities: | ||||||||||||||||
Noninterest-bearing
demand deposits
|
$ | 172,771 | $ | 172,771 | $ | 175,542 | $ | 175,542 | ||||||||
NOW
accounts
|
171,306 | 171,306 | 164,944 | 164,944 | ||||||||||||
Money
market accounts
|
305,879 | 305,879 | 321,600 | 321,600 | ||||||||||||
Savings
accounts
|
173,485 | 173,485 | 176,278 | 176,278 | ||||||||||||
Time
deposits
|
967,427 | 975,255 | 807,841 | 812,009 | ||||||||||||
FHLB
advances
|
829,626 | 863,884 | 616,417 | 625,833 | ||||||||||||
Junior
subordinated debentures
|
32,991 | 17,386 | 22,681 | 18,706 | ||||||||||||
Securities
sold under repurchase agreements
|
19,500 | 21,310 | 19,500 | 20,050 | ||||||||||||
Other
borrowings
|
7,243 | 7,243 | 13,060 | 13,060 | ||||||||||||
Accrued
interest payable
|
7,995 | 7,995 | 7,483 | 7,483 | ||||||||||||
Customer
related interest rate swap contracts
|
1,479 | 1,479 | 60 | 60 | ||||||||||||
Interest
rate risk management contract
|
601 | 601 | – | – | ||||||||||||
Forward
loan commitments (1)
|
195 | 195 | 23 | 23 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Qualified
|
Non-Qualified
|
||||||||||||||
Pension
Plan
|
Retirement
Plans
|
|||||||||||||||
At
December 31,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Change
in Benefit Obligation:
|
||||||||||||||||
Benefit
obligation at beginning of period
|
$ | 33,028 | $ | 31,763 | $ | 9,223 | $ | 8,944 | ||||||||
Service
cost
|
2,046 | 2,010 | 250 | 345 | ||||||||||||
Interest
cost
|
2,027 | 1,848 | 571 | 519 | ||||||||||||
Adjustment
for change in measurement date
|
771 | - | 121 | - | ||||||||||||
Actuarial
loss (gain)
|
2,645 | (1,644 | ) | (249 | ) | (250 | ) | |||||||||
Benefits
paid
|
(878 | ) | (842 | ) | (335 | ) | (335 | ) | ||||||||
Administrative
expenses
|
(110 | ) | (107 | ) | - | - | ||||||||||
Benefit
obligation at end of period
|
$ | 39,529 | $ | 33,028 | $ | 9,581 | $ | 9,223 | ||||||||
Change
in Plan Assets:
|
||||||||||||||||
Fair
value of plan assets at beginning of period
|
$ | 30,450 | $ | 25,661 | $ | - | $ | - | ||||||||
Actual
(loss) return on plan assets
|
(5,350 | ) | 3,888 | - | - | |||||||||||
Employer
contribution
|
2,000 | 1,850 | 335 | 335 | ||||||||||||
Benefits
paid
|
(878 | ) | (842 | ) | (335 | ) | (335 | ) | ||||||||
Administrative
expenses
|
(110 | ) | (107 | ) | - | - | ||||||||||
Adjustment
for change in measurement date
|
(1,585 | ) | - | - | - | |||||||||||
Fair
value of plan assets at end of period
|
$ | 24,527 | $ | 30,450 | $ | - | $ | - | ||||||||
Funded
status at end of period
|
$ | (15,002 | ) | $ | (2,578 | ) | $ | (9,581 | ) | $ | (9,223 | ) |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Qualified
|
Non-Qualified
|
||||||||||||||
Pension
Plan
|
Retirement
Plans
|
|||||||||||||||
At
December 31,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Net
actuarial loss (gain)
|
$ | 12,031 | $ | (129 | ) | $ | 1,280 | $ | 1,884 | |||||||
Prior
service cost (credit)
|
(353 | ) | (394 | ) | 125 | 203 | ||||||||||
Net
transition asset
|
- | (1 | ) | - | - | |||||||||||
Total
pre-tax amounts recognized in
|
||||||||||||||||
accumulated
other comprehensive loss (income)
|
$ | 11,678 | $ | (524 | ) | $ | 1,405 | $ | 2,087 |
(Dollars
in thousands)
|
Non-Qualified
|
|||||||
Retirement
Plans
|
||||||||
December
31,
|
2008
|
2007
|
||||||
Projected
benefit obligation
|
$ | 9,581 | $ | 9,223 | ||||
Accumulated
benefit obligation
|
8,361 | 7,422 | ||||||
Fair
value of plan assets
|
- | - |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Qualified
|
Non-Qualified
|
||||||||||||||||||||||
Pension
Plan
|
Retirement
Plans
|
|||||||||||||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
||||||||||||||||||
Net
Periodic Benefit Cost:
|
||||||||||||||||||||||||
Service
cost
|
$ | 2,046 | $ | 2,010 | $ | 2,067 | $ | 250 | $ | 345 | $ | 351 | ||||||||||||
Interest
cost
|
2,027 | 1,848 | 1,651 | 571 | 519 | 467 | ||||||||||||||||||
Expected
return on plan assets
|
(2,276 | ) | (1,984 | ) | (1,800 | ) | - | - | - | |||||||||||||||
Amortization
of transition asset
|
(1 | ) | (6 | ) | (6 | ) | - | - | - | |||||||||||||||
Amortization
of prior service cost
|
(33 | ) | (33 | ) | (33 | ) | 63 | 63 | 63 | |||||||||||||||
Recognized
net actuarial loss
|
15 | 187 | 317 | 217 | 218 | 215 | ||||||||||||||||||
Net
periodic benefit cost
|
$ | 1,778 | $ | 2,022 | $ | 2,196 | $ | 1,101 | $ | 1,144 | $ | 1,096 | ||||||||||||
Other
Changes in Plan Assets and
|
||||||||||||||||||||||||
Benefit
Obligations Recognized in
|
||||||||||||||||||||||||
Other
Comprehensive Income
|
||||||||||||||||||||||||
(on
a pre-tax basis):
|
||||||||||||||||||||||||
Net
loss (gain)
|
$ | 12,160 | $ | (3,735 | ) | $ | – | $ | (605 | ) | $ | (468 | ) | $ | – | |||||||||
Prior
service cost (credit)
|
41 | 33 | – | (78 | ) | (63 | ) | – | ||||||||||||||||
Net
transition asset
|
1 | 6 | – | – | – | – | ||||||||||||||||||
Recognized
in other comprehensive income
|
$ | 12,202 | $ | (3,696 | ) | $ | – | $ | (683 | ) | $ | (531 | ) | $ | – | |||||||||
Total
recognized in net periodic benefit
|
||||||||||||||||||||||||
cost
and other comprehensive income
|
$ | 13,980 | $ | (1,674 | ) | $ | 2,196 | $ | 418 | $ | 613 | $ | 1,096 |
Qualified
Pension Plan
|
Non-Qualified
Retirement Plans
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Measurement
date
|
Dec.
31, 2008
|
Sept.
30, 2007
|
Dec.
31, 2008
|
Sept.
30, 2007
|
||||||||||||
Discount
rate
|
5.875 | % | 6.25 | % | 6.25 | % | 6.25 | % | ||||||||
Rate
of compensation increase
|
4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
Qualified
Pension Plan
|
Non-Qualified
Retirement Plans
|
|||||||||||||||||||||||
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
|||||||||||||||||||
Measurement
date
|
Sept.
30, 2007
|
Sept.
30, 2006
|
Sept.
30, 2005
|
Sept.
30, 2007
|
Sept.
30, 2006
|
Sept.
30, 2005
|
||||||||||||||||||
Discount
rate
|
6.25 | % | 5.90 | % | 5.50 | % | 6.25 | % | 5.90 | % | 5.50 | % | ||||||||||||
Expected
long-term
|
||||||||||||||||||||||||
return
on plan assets
|
8.25 | % | 8.25 | % | 8.25 | % | - | - | - | |||||||||||||||
Rate
of compensation
|
||||||||||||||||||||||||
increase
|
4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % |
December
31,
|
2008
|
2007
|
||||||
Asset
Category:
|
||||||||
Equity
securities
|
52.1 | % | 66.4 | % | ||||
Debt
securities
|
36.6 | % | 30.6 | % | ||||
Other
|
11.3 | % | 3.0 | % | ||||
Total
|
100.0 | % | 100.0 | % |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Qualified
Pension
Plan
|
Non-Qualified
Plans
|
||||||
2009
|
$ | 1,074 | $ | 435 | ||||
2010
|
1,230 | 585 | ||||||
2011
|
1,363 | 658 | ||||||
2012
|
1,508 | 724 | ||||||
2013
|
1,775 | 775 | ||||||
Years
2014 - 2018
|
11,682 | 3,990 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
|
||||||||||||
Share-based
compensation expense
|
$ | 630 | $ | 508 | $ | 694 | ||||||
|
||||||||||||
Related
income tax benefit
|
$ | 225 | $ | 178 | $ | 229 |
2008
|
||||
Expected
term (years)
|
9.0 | |||
Expected
dividend yield
|
2.86 | % | ||
Weighted
average expected volatility
|
33.75 | |||
Expected
forfeiture rate
|
– | |||
Weighted
average risk-free interest rate
|
4.51 | % |
(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
|
94,382 | 23.77 | – | – | ||||||||||||
Exercised
|
56,899 | 17.94 | – | – | ||||||||||||
Forfeited
or expired
|
5,550 | 27.87 |
–
|
– | ||||||||||||
|
||||||||||||||||
Outstanding
at December 31, 2008
|
987,418 | $ | 21.60 |
4.4
years
|
$ | 823 | ||||||||||
|
||||||||||||||||
Exercisable
at December 31, 2008
|
893,036 | $ | 21.37 |
3.9
years
|
$ | 812 | ||||||||||
|
||||||||||||||||
Options
expected to vest as of December 31, 2008
|
94,382 | $ | 23.77 |
9.5
years
|
$ | 11 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
Weighted
|
||||||||
Number
|
Average
|
|||||||
of
|
Grant
Date
|
|||||||
Shares
|
Fair
Value
|
|||||||
Nonvested
at January 1, 2008
|
39,350 | $ | 26.52 | |||||
Granted
|
34,407 | 23.87 | ||||||
Vested
|
(16,200 | ) | 26.40 | |||||
Forfeited
|
– | – | ||||||
Nonvested
at December 31, 2008
|
57,557 | $ | 24.97 |
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 December 31, 2008
|
16,930 | $ | 24.12 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Wealth
|
|||||||||||||||
Commercial
|
Management
|
Consolidated
|
||||||||||||||
Year
ended December 31, 2008
|
Banking
|
Services
|
Corporate
|
Total
|
||||||||||||
Net
interest income (expense)
|
$ | 62,651 | $ | (27 | ) | $ | 2,889 | $ | 65,513 | |||||||
Noninterest
income (expense)
|
14,457 | 28,273 | (2,210 | ) | 40,520 | |||||||||||
Total
income
|
77,108 | 28,246 | 679 | 106,033 | ||||||||||||
Provision
for loan losses
|
4,800 | – | – | 4,800 | ||||||||||||
Depreciation
and amortization expense
|
2,506 | 1,640 | 178 | 4,324 | ||||||||||||
Other
noninterest expenses
|
40,340 | 18,456 | 8,622 | 67,418 | ||||||||||||
Total
noninterest expenses
|
47,646 | 20,096 | 8,800 | 76,542 | ||||||||||||
Income
before income taxes
|
29,462 | 8,150 | (8,121 | ) | 29,491 | |||||||||||
Income
tax expense (benefit)
|
10,309 | 3,237 | (6,227 | ) | 7,319 | |||||||||||
Net
income
|
$ | 19,153 | $ | 4,913 | $ | (1,894 | ) | $ | 22,172 | |||||||
Total
assets at period end
|
$ | 1,895,436 | $ | 53,096 | $ | 1,016,934 | $ | 2,965,466 | ||||||||
Expenditures
for long-lived assets
|
$ | 3,596 | $ | 389 | $ | 198 | $ | 4,183 |
(Dollars
in thousands)
|
Wealth
|
|||||||||||||||
Commercial
|
Management
|
Consolidated
|
||||||||||||||
Year
ended December 31, 2007
|
Banking
|
Services
|
Corporate
|
Total
|
||||||||||||
Net
interest income (expense)
|
$ | 53,927 | $ | (61 | ) | $ | 6,078 | $ | 59,944 | |||||||
Noninterest
income
|
14,263 | 29,016 | 2,230 | 45,509 | ||||||||||||
Total
income
|
68,190 | 28,955 | 8,308 | 105,453 | ||||||||||||
Provision
for loan losses
|
1,900 | – | – | 1,900 | ||||||||||||
Depreciation
and amortization expense
|
2,454 | 1,703 | 177 | 4,334 | ||||||||||||
Other
noninterest expenses
|
37,530 | 17,942 | 9,100 | 64,572 | ||||||||||||
Total
noninterest expenses
|
41,884 | 19,645 | 9,277 | 70,806 | ||||||||||||
Income
before income taxes
|
26,306 | 9,310 | (969 | ) | 34,647 | |||||||||||
Income
tax expense (benefit)
|
9,234 | 3,601 | (1,988 | ) | 10,847 | |||||||||||
Net
income
|
$ | 17,072 | $ | 5,709 | $ | 1,019 | $ | 23,800 | ||||||||
Total
assets at period end
|
$ | 1,643,200 | $ | 46,163 | $ | 850,577 | $ | 2,539,940 | ||||||||
Expenditures
for long-lived assets
|
$ | 3,658 | $ | 264 | $ | 200 | $ | 4,122 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands)
|
Wealth
|
|||||||||||||||
Commercial
|
Management
|
Consolidated
|
||||||||||||||
Year
ended December 31, 2006
|
Banking
|
Services
|
Corporate
|
Total
|
||||||||||||
Net
interest income (expense)
|
$ | 53,561 | $ | (106 | ) | $ | 8,019 | $ | 61,474 | |||||||
Noninterest
income
|
13,904 | 26,380 | 1,899 | 42,183 | ||||||||||||
Total
income
|
67,465 | 26,274 | 9,918 | 103,657 | ||||||||||||
Provision
for loan losses
|
1,200 | – | – | 1,200 | ||||||||||||
Depreciation
and amortization expense
|
2,184 | 1,661 | 743 | 4,588 | ||||||||||||
Other
noninterest expenses
|
35,802 | 17,337 | 7,608 | 60,747 | ||||||||||||
Total
noninterest expenses
|
39,186 | 18,998 | 8,351 | 66,535 | ||||||||||||
Income
before income taxes
|
28,279 | 7,276 | 1,567 | 37,122 | ||||||||||||
Income
tax expense (benefit)
|
9,885 | 2,827 | (621 | ) | 12,091 | |||||||||||
Net
income
|
$ | 18,394 | $ | 4,449 | $ | 2,188 | $ | 25,031 | ||||||||
Total
assets at period end
|
$ | 1,553,351 | $ | 40,125 | $ | 805,689 | $ | 2,399,165 | ||||||||
Expenditures
for long-lived assets
|
$ | 2,752 | $ | 466 | $ | 360 | $ | 3,578 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
(Dollars
in thousands, except per share amounts)
|
||||||||||||||||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||||||||
Net
income
|
$ | 22,172 | $ | 22,172 | $ | 23,800 | $ | 23,800 | $ | 25,031 | $ | 25,031 | ||||||||||||
Share
amounts, in thousands:
|
||||||||||||||||||||||||
Average
outstanding
|
13,981.9 | 13,981.9 | 13,355.5 | 13,355.5 | 13,424.1 | 13,424.1 | ||||||||||||||||||
Common
stock equivalents
|
– | 164.4 | – | 248.6 | – | 299.1 | ||||||||||||||||||
Weighted
average outstanding
|
13,981.9 | 14,146.3 | 13,355.5 | 13,604.1 | 13,424.1 | 13,723.2 | ||||||||||||||||||
Earnings
per share
|
$ | 1.59 | $ | 1.57 | $ | 1.78 | $ | 1.75 | $ | 1.86 | $ | 1.82 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
Balance
Sheets
|
(Dollars
in thousands)
|
|||||||
December
31,
|
2008
|
2007
|
||||||
Assets:
|
||||||||
Cash
on deposit with bank subsidiary
|
$ | 803 | $ | 2,101 | ||||
Investment
in subsidiaries at equity value
|
270,076 | 217,455 | ||||||
Dividends
receivable from subsidiaries
|
3,480 | 2,280 | ||||||
Other
assets
|
395 | 71 | ||||||
Total
assets
|
$ | 274,754 | $ | 221,907 | ||||
Liabilities:
|
||||||||
Junior
subordinated debentures
|
$ | 32,991 | $ | 22,681 | ||||
Deferred
acquisition obligations
|
2,506 | 9,884 | ||||||
Dividends
payable
|
3,351 | 2,677 | ||||||
Accrued
expenses and other liabilities
|
795 | 152 | ||||||
Total
liabilities
|
39,643 | 35,394 | ||||||
Shareholders’
Equity:
|
||||||||
Common
stock of $.0625 par value; authorized 30,000,000 shares;
|
||||||||
issued
16,018,868 shares in 2008 and 13,492,110 in 2007
|
1,001 | 843 | ||||||
Paid-in
capital
|
82,095 | 34,874 | ||||||
Retained
earnings
|
164,679 | 154,647 | ||||||
Accumulated
other comprehensive loss
|
(10,458 | ) | (239 | ) | ||||
Treasury
stock, at cost; 84,191 shares in 2008 and 137,652 shares in
2007
|
(2,206 | ) | (3,612 | ) | ||||
Total
shareholders’ equity
|
235,111 | 186,513 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 274,754 | $ | 221,907 |
Statements
of Income
|
(Dollars
in thousands)
|
|||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Income:
|
||||||||||||
Dividends
from subsidiaries
|
$ | 26,259 | $ | 21,093 | $ | 11,801 | ||||||
Unrealized
losses on interest rate swap contracts
|
(638 | ) | – | – | ||||||||
Other
income
|
71 | – | – | |||||||||
Total
income
|
25,692 | 21,093 | 11,801 | |||||||||
Expenses:
|
||||||||||||
Interest
on junior subordinated debentures
|
1,879 | 1,352 | 1,352 | |||||||||
Interest
on deferred acquisition obligations
|
217 | 312 | 308 | |||||||||
Legal
and professional fees
|
309 | 187 | – | |||||||||
Other
|
236 | 173 | 1 | |||||||||
Total
expenses
|
2,641 | 2,024 | 1,661 | |||||||||
Income
before income taxes
|
23,051 | 19,069 | 10,140 | |||||||||
Income
tax benefit
|
1,104 | 691 | 567 | |||||||||
Income
before equity in undistributed earnings of subsidiaries
|
24,155 | 19,760 | 10,707 | |||||||||
Equity
in (over-distributed) undistributed earnings of
subsidiaries
|
(1,983 | ) | 4,040 | 14,324 | ||||||||
Net
income
|
$ | 22,172 | $ | 23,800 | $ | 25,031 |
WASHINGTON
TRUST BANCORP, INC. AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
Statements
of Cash Flows
|
(Dollars
in thousands)
|
|||||||||||
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Cash
flow from operating activities:
|
||||||||||||
Net
income
|
$ | 22,172 | $ | 23,800 | $ | 25,031 | ||||||
Adjustments
to reconcile net income
|
||||||||||||
to
net cash provided by operating activities:
|
||||||||||||
Equity
in over-distributed (undistributed) earnings of subsidiary
|
1,983 | (4,040 | ) | (14,324 | ) | |||||||
Unrealized
losses on interest rate swap contracts
|
638 | – | – | |||||||||
(Increase)
decrease in dividend receivable
|
(1,200 | ) | 2,520 | (2,700 | ) | |||||||
Increase
in other assets
|
(37 | ) | (8 | ) | (4 | ) | ||||||
Increase
(decrease) in accrued expenses and other liabilities
|
187 | 350 | (1 | ) | ||||||||
Other,
net
|
(320 | ) | (375 | ) | 61 | |||||||
Net
cash provided by operating activities
|
23,423 | 22,247 | 8,063 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Equity
investment in subsidiary bank
|
(56,425 | ) | – | – | ||||||||
Equity
investment in capital trust
|
(310 | ) | – | – | ||||||||
Payment
of deferred acquisition obligation
|
(15,159 | ) | (6,720 | ) | – | |||||||
Net
cash used in investing activities
|
(71,894 | ) | (6,720 | ) | – | |||||||
Cash
flows from financing activities:
|
||||||||||||
Issuance
(purchase) of treasury stock, including net deferred compensation plan
activity
|
36 | (5,200 | ) | (1,547 | ) | |||||||
Proceeds
from the issuance of common stock under dividend reinvestment
plan
|
864 | – | 1,216 | |||||||||
Proceeds
from the issuance of common stock, net
|
46,874 | – | – | |||||||||
Proceeds
from the exercise of stock options and issuance of other equity
instruments
|
182 | 1,052 | 912 | |||||||||
Tax
benefit from stock option exercises and issuance of other equity
instruments
|
199 | 727 | 384 | |||||||||
Proceeds
from the issuance of junior subordinated debentures, net of issuance
costs
|
10,016 | – | – | |||||||||
Cash
dividends paid
|
(10,998 | ) | (10,580 | ) | (10,070 | ) | ||||||
Net
cash provided by (used in) financing activities
|
47,173 | (14,001 | ) | (9,105 | ) | |||||||
Net
(decrease) increase in cash
|
(1,298 | ) | 1,526 | (1,042 | ) | |||||||
Cash
at beginning of year
|
2,101 | 575 | 1,617 | |||||||||
Cash
at end of year
|
$ | 803 | $ | 2,101 | $ | 575 |
ITEM 12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Equity
Compensation Plan Information
|
||||||||||||
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights (1)
|
Weighted
average exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plan (excluding securities referenced in column
(a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
compensation plans
approved
by security holders (2)
|
1,115,880 (3) (4)
|
$ | 21.60 (5) | 69,202 (4) (6) | ||||||||
Equity
compensation plans not
approved
by security holders (7)
|
23,700 | N/A (8) | N/A | |||||||||
Total
|
1,139,580
|
$ | 21.60 (5) (8) | 69,202 |
(1)
|
Does
not include any nonvested shares as such shares are already reflected in
the Bancorp’s outstanding shares.
|
(2)
|
Consists
of the 1997 Plan and the 2003 Plan.
|
(3)
|
Includes
51,819 nonvested share units outstanding under the 1997 Plan and 52,157
nonvested share units and 24,186 performance shares outstanding under the
2003 Plan.
|
(4) | Includes the maximum amount of performance shares that could be issued under existing awards. The actual shares issued may differ based on the attainment of performance goals. |
(5)
|
Does
not include the effect of the nonvested share units awarded under the 1997
Plan and the 2003 Plan because these units do not have an exercise
price.
|
(6)
|
Includes
up to 69,202 securities that may be issued in the form of nonvested
shares.
|
(7)
|
Consists
of the Deferred Compensation Plan, which is described
below.
|
(8)
|
Does
not include information about the phantom stock units outstanding under
the Deferred Compensation Plan, as such units do not have any exercise
price.
|
(a) |
1.
|
Financial
Statements. The financial statements of the Corporation
required in response to this Item are listed in response to Part II, Item
8 of this Annual Report on Form 10-K.
|
2. | Financial Statement Schedules. All schedules normally required by Article 9 of Regulation S-X and all other schedules to the consolidated financial statements of the Corporation have been omitted because the required information is either not required, not applicable, or is included in the consolidated financial statements or notes thereto. | |
3. | Exhibits. The following exhibits are included as part of this Form 10-K. |
Exhibit
Number
|
|
2.1
|
Stock
Purchase Agreement, dated March 18, 2005, by and between Washington Trust
Bancorp, Inc., Weston Financial Group, Inc., and the shareholders of
Weston Financial Group, Inc. – Filed as Exhibit No. 10.1 to the
Registrant’s Current Report on Form 8-K (File No. 000-13091), as filed
with the Securities and Exchange Commission on March 22, 2005. (1)
|
2.2
|
Amendment
to Stock Purchase Agreement, dated December 24, 2008, by and between
Washington Trust Bancorp, Inc., Weston Financial Group, Inc., and the
shareholders of Weston Financial Group, Inc. – Filed
herewith.
|
3.1
|
Restated Articles of
Incorporation of the Registrant – Filed as Exhibit 3.a to the
Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the
fiscal year ended December 31, 2000. (1)
|
3.2
|
Amendment
to Restated Articles of Incorporation – Filed as Exhibit 3.b to the
Registrant’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2002. (1)
|
3.3
|
Amended
and Restated By-Laws of the Registrant – Filed as Exhibit 3.1 to the
Registrant’s Current Report on Form 8-K dated September 20, 2007.
(1)
|
4.1
|
Transfer
Agency and Registrar Services Agreement, between Registrant and American
Stock Transfer & Trust Company, dated February 15, 2006 – Filed
as Exhibit 4.1 on the Registrant’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2006. (1)
|
4.2
|
Agreement
of Substitution and Amendment of Amended and Restated Rights Agreement,
between Registrant and American Stock Transfer & Trust Company, dated
February 15, 2006 – Filed as Exhibit 4.2 on the Registrant’s
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2006. (1)
|
4.3
|
Shareholder
Rights Agreement, dated as of August 17, 2006, between Washington Trust
Bancorp, Inc. and American Stock Transfer & Trust Company, as Rights
Agent – Filed as Exhibit 4.1 to the Registrant’s Current Report on Form
8-K dated August 17, 2006. (1)
|
10.1
|
Vote
of the Board of Directors of the Registrant, which constitutes the 1996
Directors’ Stock Plan – Filed as Exhibit 10.e to the Registrant’s Annual
Report on Form 10-K (File No. 000-13091) for the fiscal year ended
December 31, 2002. (1) (2)
|
10.2
|
The
Registrant’s 1997 Equity Incentive Plan – Filed as Exhibit 10.f to the
Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the
fiscal year ended December 31, 2002. (1) (2)
|
10.3
|
Amendment
to the Registrant’s 1997 Equity Incentive Plan – Filed as Exhibit 10.b to
the Registrant’s Quarterly Report on Form 10-Q (File No. 000-13091)
for the quarterly period ended June 30, 2000. (1) (2)
|
10.4
|
2003
Stock Incentive Plan - Filed as Exhibit 10 to the Registrant’s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2003.
(1)
(2)
|
Exhibit
Number
|
|
10.5
|
First
Amendment to 2003 Stock Incentive Plan - Filed as Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K dated December 16, 2004.
(1)
(2)
|
10.6
|
Form
of Restricted Stock Units Certificate under the Washington Trust Bancorp,
Inc. 1997 Equity Incentive Plan, as amended (employees) – 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 June 17, 2005. (1)
|
10.7
|
Form
of Nonqualified Stock Option Certificate under the Washington Trust
Bancorp, Inc. 2003 Stock Incentive Plan, as amended (employees) - Filed as
Exhibit No. 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 June 17, 2005. (1)
|
10.8
|
Form
of Nonqualified Stock Option Certificate under the Washington Trust
Bancorp, Inc. 1997 Equity Incentive Plan, as amended (members of the Board
of Directors) - Filed as Exhibit No. 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 June 17, 2005. (1)
|
10.9
|
Form
of Nonqualified Stock Option Certificate under the Washington Trust
Bancorp, Inc. 1997 Equity Incentive Plan, as amended (employees) – Filed
as Exhibit No. 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 June 17, 2005. (1)
|
10.10
|
Form
of Incentive Stock Option Certificate under the Washington Trust Bancorp,
Inc. 1997 Equity Incentive Plan, as amended – Filed as Exhibit
No. 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 June 17, 2005. (1)
|
10.11
|
Form
of Restricted Stock Units Certificate under the Washington Trust Bancorp,
Inc. 1997 Equity Incentive Plan, as amended (members of the Board of
Directors) – Filed as Exhibit No. 10.6 to the Bancorp’s Current
Report on Form 8-K (File No. 000-13091), as filed with the Securities
and Exchange Commission on June 17, 2005. (1)
|
10.12
|
Form
of Restricted Stock Agreement under the Washington Trust Bancorp, Inc.
1997 Equity Incentive Plan, as amended – Filed as Exhibit No. 10.7 to
the Bancorp’s Current Report on Form 8-K (File No. 000-13091), as
filed with the Securities and Exchange Commission on June 17, 2005.
(1)
|
10.13
|
Form
of Nonqualified Stock Option Certificate under the Washington Trust
Bancorp, Inc. 2003 Stock Incentive Plan, as amended (members of the Board
of Directors) – Filed as Exhibit No. 10.8 to the Bancorp’s Current
Report on Form 8-K (File No. 000-13091), as filed with the Securities
and Exchange Commission on June 17, 2005. (1)
|
10.14
|
Form
of Incentive Stock Option Certificate under the Washington Trust Bancorp,
Inc. 2003 Stock Incentive Plan, as amended – Filed as Exhibit
No. 10.9 to the Bancorp’s Current Report on Form 8-K (File
No. 000-13091), as filed with the Securities and Exchange Commission
on June 17, 2005. (1)
|
10.15
|
Compensatory
agreement with Galan G. Daukas, dated July 28, 2005 – Filed as Exhibit
10.1 to the Bancorp’s Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2005. (1) (2)
|
10.16
|
Amended
and Restated Declaration of Trust of WT Capital Trust I dated
August 29, 2005, 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 September 1, 2005.
(1)
|
10.17
|
Indenture
dated as of August 29, 2005, 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 September 1, 2005. (1)
|
10.18
|
Guaranty
Agreement dated August 29, 2005, 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 September 1, 2005. (1)
|
10.19
|
Certificate
Evidencing Fixed/Floating Rate Capital Securities of WT Capital Trust I
dated August 29, 2005 – 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 September 1, 2005. (1)
|
Exhibit
Number
|
|
10.20
|
Fixed/Floating
Rate Junior Subordinated Deferrable Interest Debenture of Washington Trust
Bancorp, Inc. dated August 29, 2005 – 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 September 1, 2005.
(1)
|
10.21
|
Amended
and Restated Declaration of Trust of WT Capital Trust II dated
August 29, 2005, 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 10.6 to
the Bancorp’s Current Report on Form 8-K (File No. 000-13091), as
filed with the Securities and Exchange Commission on September 1, 2005.
(1)
|
10.22
|
Indenture
dated as of August 29, 2005, between Washington Trust Bancorp, Inc.,
as Issuer, and Wilmington Trust Company, as Trustee – Filed as exhibit
10.7 to the Bancorp’s Current Report on Form 8-K (File
No. 000-13091), as filed with the Securities and Exchange Commission
on September 1, 2005. (1)
|
10.23
|
Guaranty
Agreement dated August 29, 2005, by and between Washington Trust
Bancorp, Inc. and Wilmington Trust Company – Filed as exhibit 10.8 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed
with the Securities and Exchange Commission on September 1, 2005. (1)
|
10.24
|
Certificate
Evidencing Capital Securities of WT Capital Trust II (Number of Capital
Securities – 10,000) dated August 29, 2005 – Filed as exhibit 10.9 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed
with the Securities and Exchange Commission on September 1, 2005.
(1)
|
10.25
|
Certificate
Evidencing Capital Securities of WT Capital Trust II (Number of Capital
Securities – 4,000) dated August 29, 2005 – Filed as exhibit 10.10 to the
Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the
Securities and Exchange Commission on September 1, 2005. (1)
|
10.26
|
Fixed/Floating
Rate Junior Subordinated Debt Security due 2035 of Washington Trust
Bancorp, Inc. dated August 29, 2005 – Filed as exhibit 10.11 to the
Bancorp’s Current Report on Form 8-K (File No. 000-13091), as filed
with the Securities and Exchange Commission on September 1, 2005.
(1)
|
10.27
|
Form
of Restricted Stock Units Certificate under the Washington Trust Bancorp,
Inc. 2003 Stock Incentive Plan, as amended (employees) – Filed as Exhibit
10.2 to the Registrant’s Current Report on Form 8-K dated April 25,
2006. (1)
(2)
|
10.28
|
Form
of Restricted Stock Units Certificate under the Washington Trust Bancorp,
Inc. 2003 Stock Incentive Plan, as amended (members of the Board of
Directors) – Filed as Exhibit 10.3 to the Registrant’s Current Report on
Form 8-K dated April 25, 2006. (1) (2)
|
10.29
|
Form
of Restricted Stock Agreement under the Washington Trust Bancorp, Inc.
2003 Stock Incentive Plan, as amended (employees) – Filed as Exhibit 10.4
to the Registrant’s Current Report on Form 8-K dated April 25, 2006.
(1) (2)
|
10.30
|
Form
of Restricted Stock Agreement under the Washington Trust Bancorp, Inc.
2003 Stock Incentive Plan, as amended (members of the Board of Directors)
– Filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K
dated April 25, 2006. (1) (2)
|
10.31
|
Second
Amendment to 2003 Stock Incentive Plan – Filed as Exhibit 10.44 to the
Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the
fiscal year ended December 31, 2006. (1) (2)
|
10.32
|
Amended
and Restated Nonqualified Deferred Compensation Plan – Filed as Exhibit
10.1 to the Registrant’s Registration Statement on Form S-8 (File No.
333-146388) filed with the Securities and Exchange Commission on
September 28, 2007. (1) (2)
|
10.33
|
Wealth
Management Business Building Incentive Plan – Filed as Exhibit 10.2 to the
Registrant’s Quarterly Report on Form 10-Q (File No. 000-13091) for the
quarterly period ended March 31, 2007. (1) (2)
|
10.34
|
Amended
and Restated Supplemental Pension Benefit and Profit Sharing Plan – Filed
as Exhibit 10.36 to the Registrant’s Annual Report on Form 10-K (File
No. 000-13091) for the fiscal year ended December 31, 2008.
(1) (2)
|
10.35
|
Amended
and Restated Supplemental Executive Retirement Plan – Filed as Exhibit
10.37 to the Registrant’s Annual Report on Form 10-K (File
No. 000-13091) for the fiscal year ended December 31, 2008.
(1) (2)(2)
|
10.36
|
Form
of Executive Severance Agreement – Filed as Exhibit 10.38 to the
Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the
fiscal year ended December 31, 2008. (1) (2)
|
Exhibit
Number
|
|
10.37
|
Amended
and Restated Appendix A to The Washington Trust Company Annual Performance
Plan – Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form
10-Q (File No. 000-13091) for the quarterly period ended March 31,
2008. (1) (2)
|
10.38
|
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 Registrant’s Current Report on Form 8-K dated
April 7, 2008. (1)
|
10.39
|
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 Registrant’s Current Report on Form 8-K dated April 7,
2008. (1)
|
10.40
|
Guarantee
Agreement dated April 7, 2008, by and between Washington Trust
Bancorp, Inc. and Wilmington Trust Company – Filed as Exhibit 10.3 to
the Registrant’s Current Report on Form 8-K dated April 7, 2008.
(1)
|
10.41
|
Certificate
Evidencing Floating Rate Capital Securities of Washington Preferred
Capital Trust dated April 7, 2008 – Filed as Exhibit 10.4 to the
Registrant’s Current Report on Form 8-K dated April 7, 2008. (1)
|
10.42
|
Floating
Rate Junior Subordinated Deferrable Interest Debenture of Washington Trust
Bancorp, Inc. dated April 7, 2008 – Filed as Exhibit 10.5 to the
Registrant’s Current Report on Form 8-K dated April 7, 2008. (1)
|
10.43
|
Form
of Deferred Stock Unit Award Agreement under the Washington Trust Bancorp,
Inc. 2003 Stock Incentive Plan, as amended (employees) – Filed
as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q (File
No. 000-13091) for the quarterly period ended June 30, 2008. (1) (2)
|
10.44
|
First
Amendment to The Washington Trust Company Nonqualified Deferred
Compensation Plan As Amended and Restated– Filed as Exhibit 10.1 to the
Registrant’s Quarterly Report on Form 10-Q (File No. 000-13091) for the
quarterly period ended September 30, 2008. (1) (2)
|
10.45
|
Share
Purchase Agreement, dated October 2, 2008, by and among Washington Trust
Bancorp, Inc. and the Purchasers – Filed as Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K dated October 2, 2008. (1)
|
10.46
|
Registration
Rights Agreement, dated October 2, 2008, by and among Washington Trust
Bancorp, Inc. and the Purchasers – Filed as Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K dated October 2, 2008. (1)
|
10.49
|
Annual
Performance Plan, dated December 31, 2008 – Filed herewith. (2)
|
10.50
|
Amendment
to the Registrant’s 1997 Equity Incentive Plan, dated April 23, 2001
– Filed herewith. (2)
|
10.51
|
Amendment
to the Registrant’s Wealth Management Business Building Incentive Plan,
dated January 1, 2009 – Filed herewith. (2)
|
21.1
|
Subsidiaries
of the Registrant – Filed herewith.
|
23.1
|
Consent
of Independent Accountants – Filed herewith.
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 – Filed herewith.
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 – Filed herewith.
|
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. (3)
|
(1)
|
Not
filed herewith. In accordance with Rule 12b-32 promulgated
pursuant to the Exchange Act, reference is made to the documents
previously filed with the SEC, which are incorporated by reference
herein.
|
(2)
|
Management
contract or compensatory plan or arrangement.
|
(3)
|
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.
|
WASHINGTON
TRUST BANCORP, INC.
|
||
(Registrant)
|
||
Date:
February 27, 2009
|
By
|
/s/ John C.
Warren
|
John
C. Warren
|
||
Chairman,
Chief Executive Officer and Director
(principal
executive officer)
|
||
Date:
February 27, 2009
|
By
|
/s/ David V.
Devault
|
David
V. Devault
Executive
Vice President,
|
||
Chief
Financial Officer and Secretary
|
||
(principal
financial and principal accounting
officer)
|
Date:
February 27, 2009
|
/s/ Gary P.
Bennett
|
|
Gary
P. Bennett, Director
|
||
Date:
February 27, 2009
|
/s/ Steven
J. Crandall
|
|
Steven
J. Crandall, Director
|
||
Date:
February 27, 2009
|
/s/ Larry J.
Hirsch
|
|
Larry
J. Hirsch, Director
|
||
Date:
February 27, 2009
|
/s/ Barry G.
Hittner
|
|
Barry
G. Hittner, Director
|
||
Date:
February 27, 2009
|
/s/ Katherine
W. Hoxsie
|
|
Katherine
W. Hoxsie, Director
|
||
Date:
February 27, 2009
|
/s/ Mary E.
Kennard
|
|
Mary
E. Kennard, Director
|
||
Date:
February 27, 2009
|
/s/ Edward
M. Mazze
|
|
Edward
M. Mazze, Director
|
||
Date:
February 27, 2009
|
/s/ Kathleen
McKeough
|
|
Kathleen
McKeough, Director
|
||
Date:
February 27, 2009
|
/s/ Victor
J. Orsinger II
|
|
Victor
J. Orsinger II, Director
|
||
Date:
February 27, 2009
|
/s/ H.
Douglas Randall III
|
|
H.
Douglas Randall, III, Director
|
||
Date:
February 27, 2009
|
/s/ Patrick
J. Shanahan, Jr.
|
|
Patrick
J. Shanahan, Jr., Director
|
||
Date:
February 27, 2009
|
/s/ Neil H.
Thorp
|
|
Neil
H. Thorp, Director
|
||
Date:
February 27, 2009
|
/s/ John F.
Treanor
|
|
John
F. Treanor, Director
|
||
Date:
February 27, 2009
|
/s/ John C.
Warren
|
|
John
C. Warren, Director
|
||