UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended September 30, 1994
----------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the transition period from ________________ to _____________
Commission file Number 0-13091
-----------------------------------------------
WASHINGTON TRUST BANCORP, INC.
- - ---------------------------------------------------------------------
RHODE ISLAND 05-0404671
- - ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23 BROAD STREET, WESTERLY, RHODE ISLAND 02891
- - ---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 348-1200
---------------
N/A
- - ---------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since
last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
[ X ] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange
ACT of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class
of common stock, as of the close of the latest practical date.
Class Outstanding at November 1, 1994
------------------------------ --------------------------
Common stock, $.0625 par value 2,819,575 Shares
<PAGE>
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1994
CONTENTS
--------
Page No.
PART I. ITEM 1. Financial Information --------
- - --------------------------------------
Consolidated Balance Sheets
September 30, 1994, September 30, 1993, and December 31, 1993 3
Consolidated Statements of Income
Three Months and Nine Months Ended September 30, 1994 and 1993 4
Consolidated Statements of Changes in Shareholders' Equity
Nine Months Ended September 30, 1994 and 1993 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1994 and 1993 6
Notes to Consolidated Financial Statements 7
PART I. ITEM 2.
- - ----------------
Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II. Other Information 20
- - ---------------------------
Signatures 21
- - ----------
<PAGE>
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, September 30, December 31,
ASSETS 1994 1993 1993
- - ------ ------------- ------------- ------------
<S> <C> <C> <C>
Cash and due from banks $ 13,960,976 $ 16,312,217 $ 14,978,427
Federal funds sold 3,812,143 5,680,000 6,671,701
Securities available for sale, at market value at
September 30, 1994; cost $35,856,443 at September 30,
1994; at lower of cost or market at September 30,
1993 and December 31, 1993; market value
$51,405,322 and $44,420,747 at September 30, 1993
and December 31, 1993, respectively 41,182,787 42,254,917 36,236,543
Mortgage loans held for sale -- 2,210,648 3,709,499
Investment securities, at cost; market value
$50,322,579, $51,242,042 and $53,333,595 at
September 30, 1994 and 1993, and December 31,
1993, respectively 51,948,657 50,111,286 52,497,832
Loans 379,328,936 348,088,482 352,510,695
Less reserve for possible loan losses 8,760,005 8,826,631 8,657,263
----------- ----------- -----------
Net loans 370,568,931 339,261,851 343,853,432
Premises and equipment, net 14,604,000 14,596,420 14,354,731
Accrued interest receivable 3,193,769 2,945,617 2,870,911
Other real estate owned, net 6,796,061 9,886,382 7,831,146
Other assets 2,588,864 4,569,020 4,324,602
----------- ----------- -----------
Total assets $ 508,656,188 $ 487,828,358 $ 487,328,824
=========== =========== ===========
LIABILITIES
Demand deposits $ 53,730,240 $ 44,924,928 $ 43,924,560
Savings deposits 194,767,198 202,679,450 200,846,347
Time deposits 191,014,875 178,819,814 178,603,713
----------- ----------- -----------
Total deposits 439,512,313 426,424,192 423,374,620
Dividends payable 563,736 410,599 411,473
Federal Home Loan Bank advances 19,532,394 19,000,000 20,500,000
Accrued expenses and other liabilities 4,241,063 4,383,476 4,579,806
----------- ----------- -----------
Total liabilities 463,849,506 450,218,267 448,865,899
----------- ----------- -----------
SHAREHOLDERS' EQUITY
Common stock of $.0625 par value; authorized
10,000,000 shares in 1994 and 3,000,000 shares
in 1993; issued 2,880,000 shares 180,000 120,000 120,000
Paid-in capital 2,839,991 2,799,344 2,822,908
Retained earnings 39,332,747 35,660,616 36,418,073
Unrealized gain on securities available for sale 3,195,806 -- --
Treasury stock, at cost; 61,568 shares in
September 30, 1994, 80,465 shares at September 30, 1993
and 74,505 shares at December 31, 1993 (741,862) (969,869) (898,056)
----------- ----------- -----------
Total shareholders' equity 44,806,682 37,610,091 38,462,925
----------- ----------- -----------
Total liabilities and shareholders' equity $ 508,656,188 $ 487,828,358 $ 487,328,824
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $7,948,985 $7,497,066 22,744,533 22,154,729
Investment securities and securities available for sale:
Interest 1,136,308 1,061,970 3,398,450 3,003,404
Dividends 172,259 242,537 543,091 657,768
Federal funds sold 99,412 117,045 192,330 240,555
--------- --------- ---------- ----------
Total interest income 9,356,964 8,918,618 26,878,404 26,056,456
--------- --------- ---------- ----------
Interest expense:
Savings deposits 1,104,627 1,200,334 3,225,449 3,804,017
Time deposits 1,974,678 2,041,009 5,779,828 6,132,620
Other 325,417 287,044 1,036,068 814,589
--------- --------- ---------- ----------
Total interest expense 3,404,722 3,528,387 10,041,345 10,751,226
--------- --------- ---------- ----------
Net interest income 5,952,242 5,390,231 16,837,059 15,305,230
Provision for loan losses 200,000 600,000 800,000 2,000,000
--------- --------- ---------- ----------
Net interest income after provision for loan losses 5,752,242 4,790,231 16,037,059 13,305,230
--------- --------- ---------- ----------
Noninterest income:
Trust income 880,659 722,648 2,482,222 2,195,325
Service charges on deposit accounts 408,265 355,101 1,203,900 1,052,942
Merchant processing fees 326,115 274,576 478,356 405,063
Gains on sales of securities available for sale -- 198,245 681,558 345,844
Gains (losses) on loan sales 13,276 167,612 (18,541) 430,783
Other income 193,424 162,134 556,110 507,987
--------- --------- ---------- ----------
Total noninterest income 1,821,739 1,880,316 5,383,605 4,937,944
--------- --------- ---------- ----------
Noninterest expense:
Salaries and employee benefits 2,557,631 2,363,261 7,415,630 6,504,024
Net occupancy 313,090 287,690 916,833 901,696
Equipment 300,599 302,300 903,496 923,995
Deposit taxes and assessments 295,726 290,782 893,649 925,276
Foreclosed property costs, net 132,808 51,961 261,640 551,880
Office supplies 177,227 120,956 507,587 384,034
Advertising and promotion 64,923 138,950 327,095 279,289
Credit and collection 106,403 222,235 397,201 452,410
Charitable contributions -- -- 699,897 3,744
Other 1,011,340 876,539 2,575,914 2,304,225
--------- --------- ---------- ----------
Total noninterest expense 4,959,747 4,654,674 14,898,942 13,230,573
--------- --------- ---------- ----------
Income before income taxes and
cumulative effect of accounting change 2,614,234 2,015,873 6,521,722 5,012,601
Applicable income taxes 844,000 701,000 2,103,000 1,705,000
--------- --------- ---------- ----------
Income before cumulative effect of accounting change 1,770,234 1,314,873 4,418,722 3,307,601
Cumulative effect of change in accounting for income taxes -- -- -- 305,000
--------- --------- ---------- ----------
Net income $1,770,234 $1,314,873 4,418,722 3,612,601
========= ========= ========== ==========
Weighted average shares outstanding - fully diluted 2,893,520 2,824,863 2,889,834 2,821,100
Earnings per share - fully diluted:
Income before cumulative effect of accounting change $ .61 $ .47 $1.53 $1.17
Cumulative effect of change in accounting for income taxes -- -- -- .11
----- ----- ----- -----
Net income $ .61 $ .47 $1.53 $1.28
===== ===== ===== =====
Cash dividends declared per share $ .20 $ .15 $ .53 $ .44
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
Unrealized
gain on
securities Total
Common Paid-in Retained available Treasury Shareholders'
Stock Capital Earnings for sale Stock Equity
------- --------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1992 $ 120,000 $ 2,784,205 $ 33,276,746 $ -- $ (1,231,156) $ 34,949,795
Net income, nine months
ended September 30, 1993 3,612,601 3,612,601
Cash dividends declared (1,228,731) (1,228,731)
Issuance of common stock
from treasury 15,139 261,287 276,426
------- --------- ---------- ---------- ----------- ----------
Balances, September 30, 1993 $ 120,000 $ 2,799,344 $ 35,660,616 $ -- $ (969,869) $ 37,610,091
======= ========= ========== ========== =========== ==========
Balances, December 31, 1993 $ 120,000 $ 2,822,908 $ 36,418,073 $ -- $ (898,056) $ 38,462,925
Net income, nine months
ended September 30, 1994 4,418,722 4,418,722
Cash dividends declared (1,504,048) (1,504,048)
Issuance of common stock
from treasury 77,083 156,194 233,277
Three-for-two stock split
in the form of a 50%
stock dividend 60,000 (60,000) --
Adoption of SFAS #115 4,910,522 4,910,522
Change in unrealized gain on
securities available for sale (1,714,716) (1,714,716)
------- --------- ---------- ---------- ----------- ----------
Balances, September 30, 1994 $ 180,000 $ 2,839,991 $ 39,332,747 $ 3,195,806 $ (741,862) $ 44,806,682
======= ========= ========== ========== =========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------------
1994 1993
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,418,722 3,612,601
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 800,000 2,000,000
Provision for valuation of other real
estate owned 319,887 756,832
Depreciation of premises and equipment 999,962 1,013,795
Amortization of net deferred loan fees and costs (589,745) (401,835)
Cumulative effect of change in accounting principle -- (305,000)
Gains on sales of securities available for sale (681,558) (345,844)
Gains on sales of other real estate owned (298,394) (589,637)
Losses (gains) on loan sales 18,541 (430,783)
Proceeds from sales of loans 12,824,764 19,833,398
Loans originated for sale (9,133,806) (12,973,690)
Increase in accrued interest receivable (322,858) (84,120)
Increase in other assets (394,800) (1,076,417)
Increase (decrease) in accrued expenses and
other liabilities (338,743) 664,778
Other, net 146,877 5,513
---------- ----------
Net cash provided by operating activities 7,768,849 11,679,591
---------- ----------
Cash flows from investing activities:
Securities available for sale:
Purchases (5,434,313) (7,652,464)
Proceeds from sales of equity securities 6,449,897 1,385,045
Investment securities:
Purchases (6,738,381) (20,018,010)
Maturities and principal repayments 7,260,281 8,986,744
Loan originations in excess of principal
collected on loans (27,344,292) (22,045,962)
Proceeds from sales and other reductions
of other real estate owned 1,358,202 2,548,612
Purchases of premises and equipment (1,248,831) (561,027)
---------- ----------
Net cash used in investing activities (25,697,437) (37,357,062)
---------- ----------
Cash flows from financing activities:
Net increase in deposits 16,137,693 21,764,187
Proceeds from Federal Home Loan Bank advances 11,051,500 6,000,000
Payments of Federal Home Loan Bank advances (12,019,106) (1,000,000)
Proceeds from issuance of commmon stock from treasury 233,277 276,426
Cash dividends paid (1,351,785) (1,188,574)
---------- ----------
Net cash provided by financing activities 14,051,579 25,852,039
---------- ----------
Net increase (decrease) in cash and cash equivalents (3,877,009) 174,568
Cash and cash equivalents at beginning of period 21,650,128 21,817,649
---------- ----------
Cash and cash equivalents at end of period $ 17,773,119 21,992,217
========== ==========
Noncash Investing Activities:
Transfers from loans to other real estate owned $ 1,507,586 1,151,706
Loans charged off 897,474 727,002
Loans made to facilitate the sale of OREO 1,089,048 2,069,750
Supplemental Disclosures:
Interest payments $ 5,548,249 6,217,136
Income tax payments 2,322,787 2,212,278
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1994 AND 1993
(1) BASIS OF PRESENTATION
- - --------------------------
The accounting and reporting policies of Washington Trust Bancorp, Inc. (the
Corporation) are in accordance with generally accepted accounting principles and
conform to general practices within the banking industry. In the opinion of
management, the accompanying unaudited consolidated financial statements contain
all adjustments (consisting only of normally recurring accruals) necessary to
present fairly the Corporation's financial position as of September 30, 1994 and
1993 and the results of operations and cash flows for the interim periods
presented.
The consolidated financial statements include the accounts of the Corporation
and its wholly-owned subsidiary, The Washington Trust Company. All significant
intercompany balances and transactions have been eliminated. Certain amounts in
the 1993 consolidated financial statements have been reclassified to conform to
the current reporting format.
(2) INVESTMENT ACCOUNTING POLICY
- - ---------------------------------
Securities Available for Sale
Effective January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standards No. 115 (SFAS #115), "Accounting for Certain Investments in
Debt and Equity Securities". The Statement requires that securities available
for sale be reported at fair value, with any unrealized gains and losses
excluded from earnings and reported as a separate component of shareholders'
equity, net of tax, until realized. The effect of adopting SFAS #115 was an
increase in shareholders' equity of $4,910,522 on January 1, 1994.
Securities available for sale are those which the Corporation intends to use as
part of its asset/liability strategy or that may be sold as a result of changes
in market conditions, changes in prepayment risk, rate fluctuations, liquidity
or capital requirements.
Prior to the adoption of SFAS #115, securities available for sale were carried
at the lower of aggregate cost, adjusted for amortization of premium or
accretion of discount, or market value. Net unrealized losses and losses on
individual securities were charged to current period earnings.
Investment Securities
Those debt securities that the Corporation has the ability and intent to hold
until maturity are classified as investment securities. Debt securities held in
the investment portfolio are carried at cost, adjusted for amortization of
premium and accretion of discount.
(3) INCOME TAXES
- - -----------------
Effective January 1, 1993, the Corporation adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS #109). Under
SFAS #109, income tax expense is determined based on the asset and liability
method, whereby deferred tax assets and liabilities are recognized for the
<PAGE>
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The
cumulative effect of adoption of SFAS #109 was an increase to income of $305,000
and was reported in the Corporation's consolidated statement of income for the
nine months ended September 30, 1993.
The Corporation's deferred tax asset amounted to $1,134,462 at September 30,
1994, $3,305,000 at December 31, 1993, and $3,178,000 at September 30, 1993.
The Corporation recorded a significant reduction in the net deferred tax asset
in connection with the adoption of SFAS #115 in the first quarter of 1994, as
discussed in Note 2.
(4) SECURITIES AVAILABLE FOR SALE
- - ---------------------------------
Securities available for sale are summarized as follows:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
September 30, 1994 Cost Gains Losses Value
------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury obligations $26,074,888 256,171 (438,839) $25,892,220
Corporate stocks 6,874,755 5,562,584 (53,572) 12,383,767
Federal Home Loan Bank stock 2,906,800 -- -- 2,906,800
---------- ---------- --------- ----------
$35,856,443 5,818,755 (492,411) $41,182,787
========== ========== ========= ==========
Amortized Unrealized Unrealized Market
September 30, 1993 Cost Gains Losses Value
------------------ ---------- ---------- ---------- ----------
U.S. Treasury obligations $25,136,554 1,374,686 -- $26,511,240
Corporate debt securities 1,000,000 -- -- 1,000,000
Corporate stocks 14,145,563 7,831,472 (55,753) 21,921,282
Federal Home Loan Bank stock 1,972,800 -- -- 1,972,800
---------- ---------- --------- ----------
$42,254,917 9,206,158 (55,753) $51,405,322
========== ========== ========= ==========
</TABLE>
Included in corporate stocks at September 30, 1994 and 1993 were $3.5 million
and $10.5 million, respectively, of auction rate preferred stocks. These are
preferred stock instruments whose dividend rate is reset by auction every 49
days to a market rate which results in a market value of par.
U.S. Treasury obligations with a carrying value of $2,991,570 and $2,996,673
were pledged to secure public deposits and for other purposes at September 30,
1994 and 1993, respectively.
Proceeds from sales of corporate stocks available for sale amounted to
$6,449,897 and $1,385,045 for the nine months ended September 30, 1994 and 1993,
respectively. Gross gains of $681,558 and $345,844 were realized on these
sales. No losses were realized on these sales. Realized gains from sales of
corporate stocks were determined using the average cost method.
<PAGE>
(5) INVESTMENT SECURITIES
- - --------------------------
The amortized cost and estimated market values of investment securities are
summarized as follows:
<TABLE>
<CAPTION>
Carrying Unrealized Unrealized Market
September 30, 1994 Value Gains Losses Value
------------------ -------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury obligations
and obligations of U.S.
government agencies $20,413,660 -- (689,776) $19,723,884
Mortgage-backed securities 22,321,715 -- (825,395) 21,496,320
States and political subdivisions 9,213,282 19,750 (130,657) 9,102,375
----------- ---------- --------- -----------
$51,948,657 19,750 (1,645,828) $50,322,579
=========== ========== ========= ===========
Carrying Unrealized Unrealized Market
September 30, 1993 Value Gains Losses Value
------------------ -------- ---------- ---------- -----------
U.S. Treasury obligations
and obligations of U.S.
government agencies $18,019,328 45,623 (61,121) $18,003,830
Mortgage-backed securities 25,056,088 1,064,474 (16,422) 26,104,140
States and political subdivisions 7,035,870 105,310 (7,108) 7,134,072
----------- ---------- --------- -----------
$50,111,286 1,215,407 (84,651) $51,242,042
=========== ========== ========= ===========
</TABLE>
Investment securities with a carrying value of $999,780 and $999,987 were
pledged to secure public deposits and for other purposes at September 30, 1994
and 1993, respectively.
There were no sales or transfers of investment securities during the nine months
ended September 30, 1994 and 1993.
<PAGE>
(6) LOAN PORTFOLIO
- - ------------------
The following is a summary of loans:
September 30,
------------------------
1994 1993
----------- -----------
Residential real estate:
Mortgages $167,467,315 151,712,256
Homeowner construction 7,113,944 5,769,940
----------- -----------
Total residential real estate 174,581,259 157,482,196
----------- -----------
Commercial and other:
Mortgages 52,111,522 48,124,862
Construction and development 10,963,790 11,172,730
Other 100,625,430 98,940,364
----------- -----------
Total commercial 163,700,742 158,237,956
----------- -----------
Installment 41,046,935 32,368,330
----------- -----------
$379,328,936 348,088,482
=========== ===========
(7) RESERVE FOR POSSIBLE LOAN LOSSES
- - ------------------------------------
The following is an analysis of the reserve for possible loan losses:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- ----------------------
1994 1993 1994 1993
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Balance at beginning of period $8,747,684 $8,468,075 $8,657,263 $7,342,276
Provision charged to expense 200,000 600,000 800,000 2,000,000
Recoveries 78,431 56,759 200,216 211,357
Loans charged off (266,110) (298,203) (897,474) (727,002)
--------- --------- --------- ---------
Balance at end of period $8,760,005 $8,826,631 $8,760,005 $8,826,631
========= ========= ========= =========
</TABLE>
<PAGE>
(8) COMMON STOCK
- - ----------------
The following is an analysis of the changes in common shares issued and
treasury shares outstanding as a result of the three-for-two stock split paid
on August 31, 1994:
<TABLE>
<CAPTION>
1994 1993
------------------------------- -------------------------------
Common Treasury Outstanding Common Treasury Outstanding
Shares Shares Shares Shares Shares Shares
------ -------- --------- ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of year 1,920,000 49,670 1,870,330 1,920,000 67,788 1,852,212
Three-for-two stock split in the
form of a 50% stock dividend 960,000 24,835 935,165 960,000 33,894 926,106
--------- ------- --------- --------- ------- ---------
Balance at beginning of year, restated 2,880,000 74,505 2,805,495 2,880,000 101,682 2,778,318
Issuance of common stock from treasury --- 12,937 12,937 --- 21,217 21,217
--------- ------- --------- --------- ------- ---------
Balance at September 30, 1994 2,880,000 61,568 2,818,432 2,880,000 80,465 2,799,535
========= ======= ========= ========= ======= =========
</TABLE>
Part I. Item 2.
----------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- - ---------------------
Net income for the three months ended September 30, 1994 amounted to $1,770,234,
up 34.6% over the $1,314,873 earned in the third quarter of 1993. Earnings per
share for the quarter ended September 30, 1994 amounted to $.61, up 29.8% from
$.47 per share for the third quarter of 1993. Net income for the nine months
ended September 30, 1994 amounted to $4,418,722, 33.6% higher than the
$3,307,601 net income before accounting change recorded for the nine months
ended September 30, 1993. Earnings per share for the nine months ended
September 30, 1994 amounted to $1.53 compared to $1.17 per share on net income
before accounting change for the comparable 1993 period.
In the first quarter of 1993, the Corporation changed its method of accounting
for income taxes. The cumulative effect of this change in accounting resulted
in a one-time benefit of $305,000 or $.11 per share. Earnings for the nine
months ended September 30, 1993, including the effect of this accounting change,
amounted to $3,612,601, or $1.28 per share.
On August 31, 1994, the Corporation effected a 3-for-2 stock split in the form
of a 50% stock dividend. All per share amounts for 1993 have been retroactively
adjusted to reflect the split. (See additional discussion of the stock split
under the caption "Capital Resources".)
Gains on sales of securities available for sale for the quarters ended September
30, 1994 and 1993 were $0 and $198,245, respectively. The corresponding amounts
for the nine months ended September 30, 1994 and 1993 were $681,558 and
$345,844. The 1994 gains were taken in connection with a nonrecurring
contribution expense of approximately $700,000 recorded in the first quarter of
1994 for the establishment of a charitable trust.
<PAGE>
The provision for loan losses for the third quarter of 1994 amounted to
$200,000, down from $600,000 for the third quarter of 1993. For the nine months
ended September 30, 1994, the provision for loan losses was $800,000, down from
the $2.0 million recorded in the same 1993 period. The reduction in the amount
of the provision for loan losses is attributable to a 32.5% decline in
nonperforming loans since December 31, 1993. (See "Asset Quality" for
additional discussion of nonperforming loans.)
Financial Condition and Liquidity
- - ---------------------------------
Total assets amounted to $508.7 million at September 30, 1994, up 4.3% from the
September 30, 1993 balance of $487.8 million. Average assets rose 6.7% to
$499.1 million for the nine months ended September 30, 1994, up from $467.9
million for the comparable 1993 period.
Securities Available for Sale - As discussed in Note 2 to the Consolidated
Financial Statements, the Corporation adopted SFAS #115 as of January 1, 1994.
The effect of the adoption of SFAS #115 was an increase in the carrying value of
the securities and a corresponding increase (net of tax) in shareholders' equity
of $4,910,522. As of September 30, 1994, net unrealized gains on securities
available for sale amounted to $5.3 million, the majority of which was
attributable to corporate stocks. The corresponding component of shareholders'
equity amounted to $3.2 million.
The market value of corporate stocks available for sale amounted to $12.4
million at September 30, 1994, $9.5 million lower than the year-earlier amount.
This decrease is primarily due to a $7.0 million reduction in the balance of
auction rate preferred stocks which the Corporation elected to liquidate.
Investment Securities - The carrying value of investment securities amounted to
$51.9 million at September 30, 1994, up 3.7% from the prior year. The market
value of investment securities amounted to $50.3 million at September 30, 1994.
The net unrealized loss of $1.6 million results from the rise in interest rates
which has occurred during 1994. (See Note 5 to the Consolidated Financial
Statements for detail of unrealized gains and losses on investment securities.)
Loans - Total loans amounted to $379.3 million at September 30, 1994, an
increase of $31.2 million, or 9.0%, from the prior year amount of $348.1
million. All categories of loans exhibited an increase over the 1993 amount
except for commercial construction loans which decreased only nominally.
Residential mortgage loan demand was strong throughout 1993 and continued
through the first quarter of 1994, but has leveled off subsequently with the
rise in rates that has occurred in 1994. Residential mortgages amounted to
$167.5 million at September 30, 1994, up from $151.7 at September 30, 1993.
Adjustable rate mortgages (ARMs) continue to increase as a percent of total
residential mortgages, as borrowers opt to take advantage of the attractive
rates that this product offers. ARMs accounted for 38.6% of total residential
mortgages outstanding at September 30, 1994 up from 31.9% of total residential
mortgages at September 30, 1993.
Commercial loans showed moderate growth during the first half of 1994, but
demand has slowed during the third quarter of 1994. Total commercial loans
amounted to $163.7 million at September 30, 1994, up 3.5% from the year-earlier
balance of $158.2 million, due primarily to an increase of $4.0 million in
commercial mortgages.
<PAGE>
The installment loan category experienced the largest percentage growth of all
loan categories, increasing 26.8%, or $8.7 million over the September 30, 1993
amount. This increase was largely due to a home equity loan promotion conducted
in 1994.
Deposits and Other Borrowings - Customer deposits and other purchased
liabilities are the primary sources of liquidity for the Corporation. Total
deposits amounted to $439.5 million at September 30, 1994, up 3.1% from the
$426.4 million reported at September 30, 1993. Time and demand deposits
increased by $12.2 million and $8.8 million, respectively, while savings
deposits decreased by $7.9 million or 3.9% from the September 30, 1993 amount.
The change in deposit composition is attributable to the rise in interest rates
that has occurred in 1994. (See discussion of cost of funds under the caption
"Net Interest Income.")
The Corporation utilizes advances from the Federal Home Loan Bank of Boston
(FHLBB) as a funding source. FHLBB advances amounted to $19.5 million at
September 30, 1994, with maturities generally less than five years. FHLBB
advances were $19.0 million at September 30, 1993.
Asset Quality
- - -------------
Nonperforming assets are summarized in the following table:
(Dollars in thousands) 09/30/94 09/30/93 12/31/93
-------- -------- --------
Nonaccrual loans 90 days or more past due $ 3,135 $ 5,949 $ 4,687
Nonaccrual loans less than 90 days past due 4,535 7,828 6,684
Accruing loans 90 days or more past due 19 60 22
-------- -------- --------
Total nonperforming loans 7,689 13,837 11,393
-------- -------- --------
Other real estate owned:
In-substance foreclosures 4,455 6,576 5,055
Properties acquired through foreclosure 3,949 5,460 4,568
Valuation allowance (1,608) (2,150) (1,792)
-------- -------- --------
Total other real estate owned 6,796 9,886 7,831
-------- -------- --------
Total nonperforming assets $14,485 $23,723 $19,224
======== ======== ========
Nonperforming loans as a % of total loans 2.0% 4.0% 3.2%
Nonperforming assets as a % of total assets 2.8% 4.9% 3.9%
Reserve for loan losses to nonperforming loans 113.9% 63.8% 76.0%
<PAGE>
The following is an analysis of nonperforming loans by loan category:
(In thousands) 09/30/94 09/30/93 12/31/93
-------- -------- --------
Residential real estate mortgages $ 3,729 $ 5,240 $ 4,775
Commercial and other:
Mortgages 510 1,424 1,319
Construction and development -- -- --
Other (1) 2,863 6,184 4,677
Installment 587 989 622
-------- -------- --------
Total nonperforming loans $ 7,689 $13,837 $11,393
======== ======== ========
(1) Loans to businesses and individuals, a substantial portion of which are
fully or partially collateralized by real estate.
Nonperforming assets amounted to 2.8% of total assets at September 30, 1994,
down from 4.9% at September 30, 1993 and 3.9% at December 31, 1993.
Nonperforming loans amounted to $7.7 million at September 30, 1994, down $6.1
million, or 44%, from the prior year due primarily to increased collection
efforts by the Corporation to reduce the level of nonperforming loans.
Approximately 59% of nonaccrual loans were less than 90 days past due at
September 30, 1994. Nonaccrual loans less than 90 days past due have declined
$2.1 million since December 31, 1993. This decrease is attributable to the
reclassification of approximately $2.3 million of nonaccrual loans to accruing
status during the nine months ended September 30, 1994. These loans had been
performing in accordance with their contractual terms and were considered fully
collectible. Payments on nonaccrual loans are recorded as a reduction of
principal if full collection of the loan is doubtful, or if impairment of the
collateral is identified.
The balance of other real estate owned, including in-substance foreclosures, is
composed of the following types of properties (in thousands):
09/30/94 09/30/93 12/31/93
Property acquired through foreclosure: -------- -------- --------
Commercial real estate $ 1,745 $ 2,200 $2,354
Residential real estate 398 783 382
Construction and development 807 696 716
Land 999 1,781 1,116
------- ------- ------
3,949 5,460 4,568
In-substance foreclosures:
Commercial real estate 1,297 2,577 1,671
Residential real estate 2,106 2,893 1,443
Construction and development -- 511 990
Land 626 268 626
Other 426 327 325
------- ------- ------
4,455 6,576 5,055
Valuation allowance (1,608) (2,150) (1,792)
------- ------- ------
Total other real estate owned $ 6,796 $ 9,886 $7,831
======= ======= ======
<PAGE>
An analysis of the activity relating to other real estate owned, including in-
substance foreclosures, follows (in thousands):
09/30/94 09/30/93
-------- --------
Balance at beginning of year $ 9,623 $15,633
Transfers from loans, net 1,499 1,152
Sales and other reductions (2,758) (4,806)
Other, net 40 57
------- -------
8,404 12,036
Valuation allowance (1,608) (2,150)
------- -------
Balance at end of period $ 6,796 $ 9,886
======= =======
During the nine months ended September 30, 1994 the Corporation sold property
with a carrying value of approximately $1,396,000.
The following is an analysis of the OREO valuation allowance (in thousands):
For the nine months ended September 30, 1994 1993
- - -------------------------------------- ------ ------
Balance at beginning of period $1,792 $2,178
Provision charged to expense 320 757
Reductions attributable to sales (221) (671)
Selling expenses incurred (34) (94)
Other, net (249) (20)
------ ------
Balance at end of period $1,608 $2,150
====== ======
Capital Resources
- - -----------------
On July 21, 1994, the Corporation's board of directors voted to approve a
3-for-2 stock split on shares of common stock. The stock split, in the form of
a stock dividend, was paid on August 31, 1994 to shareholders of record as of
August 1, 1994. The par value of the common stock remained unchanged at $.0625
per share. Cash payments were made in lieu of issuing fractional shares. The
cash payment for fractional shares was based on the average of the closing bid
and asked prices of the common stock as reported by NASDAQ on the record date,
August 1, 1994, which amounted to $34.50 per share.
Total equity capital amounted to $44.8 million or 8.8% of total assets at
September 30, 1994, compared to $37.6 million or 7.7% of total assets at
September 30, 1993. The increase in the equity-to-assets ratio in 1994 is
attributable to unrealized gains (net of income tax) on securities available for
sale of $3.2 million at September 30, 1994 and approximately $3.1 million in
undistributed earnings and capital contributions from the Corporation's dividend
reinvestment plan.
The Corporation's Tier 1 capital ratio, total risk-based capital ratio and
leverage capital ratio amounted to 12.35%, 13.62% and 8.21%, respectively at
September 30, 1994. The corresponding ratios for the subsidiary bank were
12.31%, 13.62% and 8.18%. A bank is considered well-capitalized if it maintains
a Tier 1 capital ratio of at least 6%, a total risk-based capital ratio of 10%,
and a leverage ratio of 5% or greater.
<PAGE>
The source of funds for dividends paid by the Corporation is dividends
received from its subsidiary bank. The subsidiary bank is a regulated
enterprise, and as such its ability to pay dividends to the parent is subject to
regulatory review and restriction. During the third quarter of 1994, the
Corporation declared a $.20 per share dividend, payable October 17, 1994 to
shareholders of record as of October 3, 1994. This dividend represents a 20%
increase over the dividend paid in the two previous quarters. The dividend rate
of the previous two quarters was $.167 per share, which is adjusted for the
3-for-2 stock split paid August 31, 1994.
Noninterest Income and Expense
- - ------------------------------
Total noninterest income for the nine months ended September 30, 1994 amounted
to $5.4 million, up 9.0% from the comparable 1993 amount. Included in
noninterest income for the nine months ended September 30, 1994 were gains on
sales of securities available for sale of $681,558. These securities gains were
taken in connection with a nonrecurring contribution expense associated with the
establishment of a charitable trust in the first quarter of 1994. Noninterest
income excluding securities gains and gains (losses) on loan sales rose 13.4%
over the prior year, with trust income and service charges on deposit accounts
accounting for the majority of this increase.
Total noninterest expense for the nine months ended September 30, 1994 amounted
to $14.9 million, up 12.6% over the 1993 period. Included in the 1994 amount is
a one-time charitable contribution expense of approximately $700,000 associated
with the establishment of a charitable trust.
Salaries and employee benefits rose 14.0% over the prior year due to increased
staffing levels and normal salary adjustments, as well as higher profit sharing
and incentive plan costs.
Foreclosed property costs declined by 52.6% from the prior year and amounted to
$261,640 for the nine months ended September 30, 1994. This decrease is
primarily attributable to fewer number of properties owned and a reduction in
the amount of write-downs recorded to adjust the carrying values of the
properties to fair value.
Noninterest income, excluding securities gains and gains on loan sales, rose
$294,000, or 19.4%, over the prior year quarter. Each category of noninterest
income exhibited an increase, ranging from 15% to 22%.
For the three months ended September 30, 1994, total noninterest expense was
6.6% higher than the comparable 1993 period. Salaries and employee benefits
amounted to $2.6 million, up 8.2% over the prior year quarter due to increased
staffing levels, normal salary adjustments and higher profit sharing and
incentive plan costs. Foreclosed property costs increased by approximately
$81,000 in the third quarter of 1994 due primarily to gains realized on sales of
properties in the third quarter of 1993 of $311,000 compared to realized gains
of $5,000 in the third quarter of 1994.
<PAGE>
<TABLE>
Average Balances/Net Interest Margin (Fully Taxable Equivalent Basis)
---------------------------------------------------------------------
The following table presents average balance and interest rate information. Tax exempt income is
converted to a fully taxable equivalent basis by assuming a 34% federal income tax rate adjusted for
applicable state income taxes net of the related federal tax benefit. For dividends on corporate
stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency.
Nonaccrual and renegotiated loans, as well as interest earned on these loans (to the extent recognized
in the Consolidated Statements of Income), are included in amounts presented for loans.
<CAPTION>
Nine months ended September 30, 1994 1993
---------------------------------------------------------------------------------------------------------
Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Residential real estate $168,127 9,935 7.88% $155,369 10,350 8.88%
Commercial and other 162,384 10,157 8.34% 151,251 9,368 8.26%
Installment loans 36,835 2,717 9.83% 31,884 2,510 10.50%
---------------------------------------------------------------------------------------------------------
Total loans 367,346 22,809 8.28% 338,504 22,228 8.76%
Federal funds sold 6,963 192 3.68% 11,427 240 2.81%
Taxable securities 77,378 3,837 6.61% 72,181 3,687 6.81%
Nontaxable securities 8,368 396 6.31% 6,544 328 6.67%
---------------------------------------------------------------------------------------------------------
Total interest-earning assets 460,055 27,234 7.89% 428,656 26,483 8.24%
Non interest-earning assets 39,078 39,268
---------------------------------------------------------------------------------------------------------
Total assets $499,133 $467,924
=========================================================================================================
Interest-bearing liabilities:
Savings deposits $196,481 3,225 2.19% $195,147 3,808 2.60%
Time deposits 181,896 5,780 4.24% 175,579 6,129 4.65%
Other 24,945 1,036 5.54% 18,652 814 5.82%
---------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 403,322 10,041 3.32% 389,378 10,751 3.68%
Non interest-bearing liabilities 51,811 41,979
---------------------------------------------------------------------------------------------------------
Total liabilities 455,133 431,357
Total shareholders' equity 44,000 36,567
---------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $499,133 $467,924
=========================================================================================================
Net interest income / interest rate spread $17,193 4.57% $15,732 4.56%
=========================================================================================================
Net interest margin 4.98% 4.89%
=========================================================================================================
<FN>
Interest income amounts for the nine months ended September 30, 1994 and 1993 presented in the table above
include the following adjustments for taxable equivalency (in thousands):
1994 1993
---- ----
Commercial and other loans $ 65 $ 73
Nontaxable debt securities 140 117
Corporate stocks 151 237
</TABLE>
<PAGE>
Net Interest Income
- - -------------------
(The schedule entitled "Average Balances/Net Interest Margin (Fully Taxable
Equivalent Basis)" should be read in conjunction with this discussion.)
Fully taxable equivalent (FTE) net interest income for the nine months ended
September 30, 1994 amounted to $17.2 million, an increase of 9.3% over the $15.7
million earned for the corresponding 1993 period. This increase resulted from
a rise in average interest-earning assets of 7.3% over the prior year, while
average interest-bearing liabilities rose by only 3.6%. The increase in average
loans of 8.5% over the prior year represented most of the increase in earning
assets. The net interest margin (net interest income as a percent of average
interest-earning assets) amounted to 4.98% and 4.89% at September 30, 1994 and
1993, respectively. The FTE interest rate spread amounted to 4.57% for the nine
months ended September 30, 1994, relatively unchanged from the prior year.
The FTE yield on total loans amounted to 8.28% for the nine months ended
September 30, 1994, compared to 8.76% for the comparable 1993 period. The
residential mortgage portfolio has experienced the most significant decline in
yield due to the large volume of refinancings that occurred during the latter
half of 1993 as well as an increase in the balance of adjustable rate mortgages.
The yield on total residential mortgages was 7.88% for the nine months ended
September 30, 1994, down from 8.88% for the same 1993 period.
Demand for fixed rate mortgage refinancings has slowed in 1994. However, demand
for adjustable rate mortgages (ARMs) was strong in the first half of 1994, and
ARMs continue to be popular due to the recent rise in interest rates. Average
ARMs represented 36.2% of total average residential mortgages at September 30,
1994, compared to 26.0% in the prior year. The rate of interest charged on this
product in the initial year is generally lower than that charged on fixed rate
mortgages. The yield on average ARMs amounted to 6.77% for the nine months
ended September 30, 1994 compared to 8.51% for fixed rate mortgages. For the
corresponding 1993 period, ARMs yielded 6.72% and fixed rate mortgages yielded
9.64%. The yield on ARMs has increased in each quarter of 1994 as a result of
the rise in interest rates. The yield on ARMs is expected to rise in the fourth
quarter of 1994 as well, as 23% of the balance of ARM portfolio outstandings are
scheduled to reprice during this period.
Average interest-bearing liabilities amounted to $403.3 million at September 30,
1994, up 3.6% over the prior year. The overall cost of funds on interest-
bearing liabilities amounted to 3.32% for the nine months ended September 30,
1994, down 36 basis points from the 3.68% reported for the comparable 1993
period. This compares to a cost of funds for the six months ended June 30, 1994
of 3.30%. Based on the current level of interest rates and anticipated rate
increases, the Corporation's cost of funds is expected to increase. The rates
paid on both savings and time deposits decreased 41 basis points from the prior
year, while their average balances increased slightly. Average demand deposits
for the nine months ended September 30, 1994 rose 24% over the prior year level.
This favorably affected the net interest margin because these deposits are
noninterest-bearing sources of funds that can be used to invest in interest-
earning assets.
Average Federal Home Loan Bank (FHLB) advances for the nine months ended
September 30, 1994 and 1993 amounted to $23.1 million and $18.3 million,
respectively. The additional advances in 1994 were used in part to fund loan
demand. The average rates of interest paid on FHLB advances were 5.66% and
5.86% for the nine months ended September 30, 1994 and 1993, respectively.
<PAGE>
For the quarter ended September 30, 1994, the Corporation's FTE interest rate
spread amounted to 4.71%, up from the third quarter of 1993 amount of 4.58%.
The net interest margin increased to 5.16% for the third quarter of 1994, up
from 4.94% for the prior year quarter. The FTE rate of return on interest-
earning assets amounted to 8.06% for the quarter ended September 30, 1994, down
slightly from the prior year quarter primarily due to the lower yield on fixed
rate residential mortgages. Yields on loans whose rate of interest varies with
the prime rate, i.e. commercial loans and certain consumer loans, rose in the
third quarter of 1994, reflecting increases in the prime rate earlier in 1994.
The Corporation's cost of funds for the quarter ended September 30, 1994 was
3.35%, up from 3.31% for the second quarter of 1994 and 3.30% for the first
quarter of 1994. This compares to an average cost of funds rate of 3.51% for
the third quarter of 1993.
The rate of interest paid on savings deposits amounted to 2.23%, down from 2.35%
in the prior year quarter. The cost of time deposits declined by 34 basis
points, to 4.25% for the third quarter of 1994.
Included in other interest-bearing liabilities are average advances from the
Federal Home Loan Bank of Boston amounting to $22.0 million. The rate
paid on these advances was 5.88% for the quarter ended September 30, 1994.
Corresponding amounts for the 1993 quarter were $19.3 million and 5.88%.
In May 1994, the Corporation entered into interest rate swap agreements with a
total notional principal amount of $10 million. Under the agreements, the
Corporation pays a quarterly-resetting rate on the notional balance while
receiving a fixed rate over the life of the swaps. The swaps were executed in
conjunction with a promotional term deposit program. The purpose of the swaps
is to convert the fixed rate paid on the promotional term deposits to a
quarterly-resetting rate based on 3-month LIBOR. The notional balance of these
agreements is not included in the Corporation's Consolidated Balance Sheets and
the interest differential was not significant.
Recent Accounting Developments
- - ------------------------------
In May 1993 the Financial Accounting Standards Board issued Statement No.
114, "Accounting by Creditors for Impairment of a Loan", which was amended
in October 1994 by Statement No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures." These
statements are effective for fiscal years beginning after December 15, 1994.
The statements establish accounting standards for measuring impairment on
loans for which it is probable that the creditor will be unable to collect
all amounts due according to the contractual terms of the loan agreement.
Statement No. 114 requires impairment to be measured on a discounted cash
flow method, or at the loan's observable market price, or at the fair value
of the collateral if the loan is collateral dependent. This statement also
narrows the definition of in-substance foreclosures. Accordingly, many of
the loans currently accounted for as in-substance foreclosures will be
treated as impaired loans under these new guidelines. The adoption of
Statements No. 114 and 118 is not expected to have a material impact on the
Corporation's financial condition or results of operations.
In October 1994, the Financial Accounting Standards Board issued Statement No.
119, "Disclosures about Derivative Financial Instruments and Fair Value of
Financial Instruments", which is effective for fiscal years beginning after
<PAGE>
December 15, 1994. This statement requires disclosures about derivative
financial instruments including futures, forward, swap and option contracts, as
well as other financial instruments with similar characteristics.
PART II
OTHER INFORMATION
-----------------
Item 1. Legal Proceedings
- - ------ -----------------
None
Item 2. Changes in Securities
- - ------ ---------------------
None
Item 3. Defaults upon Senior Securities
- - ------ -------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
- - ------ ---------------------------------------------------
None
Item 5. Other Information
- - ------ -----------------
None
Item 6. Exhibits and Reports on Form 8-K
- - ------ --------------------------------
(a) Exhibit index
Exhibit No.
-----------
11 Statement re Computation of Earnings
Per Share
27 Financial Data Schedules
(b) The following report on Form 8-K was filed during the quarter
ended September 30, 1994:
On July 25, 1994 a Form 8-K was filed which reported the
declaration of a 3-for-2 stock split on shares of common
stock.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WASHINGTON TRUST BANCORP, INC.
------------------------------
(Registrant)
November 14, 1994 By: Joseph J. Kirby
--------------------------------
Joseph J. Kirby
President
November 14, 1994 By: Joseph H. Potter
--------------------------------
Joseph H. Potter
Executive Vice President
November 14, 1994 By: David V. Devault
--------------------------------
David V. Devault
Vice President and Chief Financial
Officer (Principal Accounting Officer)
<PAGE>
Exhibit 11
<TABLE>
Washington Trust Bancorp, Inc.
Computation of Primary and Fully Diluted Earnings Per Share
For the Three and Nine Months Ended September 30, 1994 and 1993
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Weighted average shares 2,818,470 2,798,519 2,815,273 2,794,755
Common stock equivalents 72,359 20,843 49,577 12,638
--------- --------- --------- ---------
Primary weighted average shares 2,890,829 2,819,362 2,864,850 2,807,393
========= ========= ========= =========
Fully diluted:
Weighted average shares 2,818,470 2,798,519 2,815,273 2,794,756
Common stock equivalents 75,050 26,344 74,561 26,344
--------- --------- --------- ---------
Fully diluted weighted average shares 2,893,520 2,824,863 2,889,834 2,821,100
========= ========= ========= =========
Income before cumulative effect of
accounting change $1,770,234 $1,314,873 $4,418,722 $3,307,601
Cumulative effect of change in
accounting for income taxes -- -- -- 305,000
--------- --------- --------- ---------
Net income $1,770,234 $1,314,873 $4,418,722 $3,612,601
========= ========= ========= =========
Primary earnings per share:
Income before cumulative effect of
accounting change $ .61 $ .47 $ 1.54 $ 1.18
Cumulative effect of change in
accounting for income taxes -- -- -- .11
------ ------ ------ ------
Net income $ .61 $ .47 $ 1.54 $ 1.29
====== ====== ====== ======
Fully diluted earnings per share:
Income before cumulative effect of
accounting change $ .61 $ .47 $ 1.53 $ 1.17
Cumulative effect of change in
accounting for income taxes -- -- -- .11
------ ------ ------ ------
Net income $ .61 $ .47 $ 1.53 $ 1.28
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO OF WASHINGTON TRUST
BANCORP, INC. AS OF SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 13,960,976
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,812,143
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,182,787
<INVESTMENTS-CARRYING> 51,948,657
<INVESTMENTS-MARKET> 50,322,579
<LOANS> 379,328,936
<ALLOWANCE> 8,760,005
<TOTAL-ASSETS> 508,656,188
<DEPOSITS> 439,512,313
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,804,799
<LONG-TERM> 19,532,394
<COMMON> 180,000
0
0
<OTHER-SE> 44,626,682
<TOTAL-LIABILITIES-AND-EQUITY> 508,656,188
<INTEREST-LOAN> 22,744,533
<INTEREST-INVEST> 3,941,541
<INTEREST-OTHER> 192,330
<INTEREST-TOTAL> 26,878,404
<INTEREST-DEPOSIT> 9,005,277
<INTEREST-EXPENSE> 10,041,345
<INTEREST-INCOME-NET> 16,837,059
<LOAN-LOSSES> 800,000
<SECURITIES-GAINS> 681,558
<EXPENSE-OTHER> 14,898,942
<INCOME-PRETAX> 6,521,722
<INCOME-PRE-EXTRAORDINARY> 6,521,722
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,418,722
<EPS-PRIMARY> 1.54
<EPS-DILUTED> 1.53
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
