Washington Trust Announces Third Quarter 2010 Earnings

Washington Trust Bancorp, Inc. (NASDAQ Global Select^®; symbol: WASH), parent company of The Washington Trust Company, today announced third quarter 2010 net income of $6.4 million, or 39 cents per diluted share. This compared to second quarter 2010 net income of $5.3 million, or 33 cents per diluted share, and third quarter 2009 net income of $4.9 million, or 31 cents per diluted share.

Selected third quarter 2010 developments:

• Net interest margin continued to show improvement and amounted to 3.01% for the third quarter of 2010, an increase of 15 basis points from the second quarter.
• Due to strong residential mortgage refinancing activity, net gains on loan sales and commissions on loans originated for others for the third quarter of 2010 increased by $693 thousand from the second quarter.
• Total loans increased by $39 million, or 2%, in the third quarter of 2010, with commercial loan growth of $30 million.
• Deposits grew by $107 million, or 5.5%, in the third quarter of 2010, with increases in all categories.
• A balance sheet deleveraging transaction was consummated in the third quarter of 2010, which consisted of the sale of $63 million in mortgage-backed securities and prepayment of $65 million in Federal Home Loan Bank of Boston ("FHLBB”) advances.
• Certain asset quality indicators, such as nonperforming assets and loan delinquencies, continue to show improvement.

"Washington Trust posted very good third quarter performance, despite challenging economic conditions,” stated Joseph J. MarcAurele, Washington Trust Chairman, President and Chief Executive Officer. "We had good deposit growth, continued improvement in the net interest margin and strong mortgage banking results.”

Net Interest Income

Net interest income totaled $20.1 million for the third quarter of 2010, up by $1.3 million, or 7%, from the second quarter of 2010 and up by $3.4 million, or 20%, from the third quarter a year ago.

The net interest margin increased from 2.86% for the second quarter to 3.01% for the third quarter of 2010, reflecting a 16 basis point decline in the cost of interest-bearing deposits. The net interest margin increased by 50 basis points compared to the third quarter of 2009, with a 70 basis point decline in cost of interest-bearing liabilities.

Noninterest Income

Noninterest income totaled $13.4 million in the third quarter of 2010, up by $2.3 million, or 20%, from the second quarter of 2010 and up by $2.4 million, or 22%, from the third quarter a year ago.

Wealth management revenues for the third quarter of 2010 were down by $278 thousand, or 4%, from the second quarter of 2010 and up by $436 thousand, or 7%, from the third quarter of last year. Included in second quarter 2010 amounts were seasonal tax preparation fee revenues of $327 thousand. Assets under administration totaled $3.9 billion at September 30, 2010, up by $234 million, or 6%, from June 30, 2010 reflecting increased market value, net of income of $253 million and net client cash outflows of $19 million. Assets under administration were up by $123 million from December 31, 2009.

Merchant processing fees for the three months ended September 30, 2010 increased by $644 thousand and $431 thousand, respectively, from the second quarter of 2010 and the third quarter of 2009 primarily due to increases in the volume of transactions processed for existing and new customers. See discussion on the corresponding increase in merchant processing costs under the caption "Noninterest Expenses.”

Net gains on loan sales and commissions on loans originated for others amounted to $1.0 million for the third quarter of 2010, compared to $318 thousand in the second quarter of 2010 and $591 thousand in the third quarter a year earlier. The increase in this revenue source was due to higher levels of residential mortgage refinancing in response to declines in mortgage interest rates.

Also included in noninterest income were net realized gains on securities of $737 thousand in the third quarter of 2010. There were no other-than-temporary impairment losses on investment securities recognized in the third quarter of 2010, compared to $354 thousand in the second quarter of 2010 and $467 thousand in the third quarter a year earlier.

Noninterest Expenses

Noninterest expenses amounted to $22.9 million for the third quarter of 2010, up by $1.9 million from the second quarter 2010 and up by $3.7 million from the third quarter a year ago. Third quarter 2010 noninterest expenses included $752 thousand of debt prepayment penalty charges and $300 thousand for Washington Trust’s annual contribution to its charitable foundation. There were no debt prepayment penalties included in the second quarter of 2010 or the third quarter of 2009 and Washington Trust made its 2009 annual charitable contribution in the fourth quarter of that year. Higher commissions and incentives also contributed to the increase in noninterest expenses compared to the third quarter of 2009.

Merchant processing costs for the three months ended September 30, 2010 increased by $549 thousand and $393 thousand, respectively, from the second quarter of 2010 and the third quarter of 2009 primarily due to increases in the volume of transactions processed for existing and new customers. See discussion on the corresponding increase in merchant processing fees under the caption "Noninterest Income”.

Income tax expense amounted to $2.8 million for the third quarter of 2010 and is based on an estimated annual effective tax rate of 29.8%.

Asset Quality

Certain asset quality indicators continue to show improvement in the third quarter of 2010. Nonperforming assets (nonaccrual loans, nonaccrual investment securities and property acquired through foreclosure or repossession) amounted to $23.0 million, or 0.79% of total assets, at September 30, 2010, down from $25.9 million, or 0.89% of total assets, at June 30, 2010. Nonaccrual loans totaled $19.6 million at September 30, 2010, down by $3.2 million in the third quarter, largely due to a net decrease of $2.4 million in nonaccrual commercial loans.

At September 30, 2010, total past due loans amounted to $24.9 million, or 1.24% of total loans, down by $3.8 million in the third quarter of 2010. This decline included a $2.8 million decrease in residential mortgage and consumer loan delinquencies and a $1.0 million decrease in commercial loan delinquencies in the third quarter of 2010.

We believe that overall credit quality continues to be affected by weaknesses in national and regional economic conditions. These conditions, including high unemployment levels, may continue for the next few quarters.

Loans classified as troubled debt restructurings totaled $20.5 million at September 30, 2010, up by $7.2 million in the third quarter of 2010. The September 30, 2010 balance includes $18.0 million of loans in accruing status based on management’s assessment of the collectibility of the loan and the borrower’s ability to meet the restructured terms. The increase in troubled debt restructured loans in the third quarter of 2010 included a $5.8 million accruing commercial mortgage loan relationship. This loan restructuring included a modification in certain payment terms and a reduction in the stated interest rate for a portion of the loan.

The loan loss provision charged to earnings amounted to $1.5 million for the third quarter of 2010, unchanged from the second quarter 2010 level and down by $300 thousand compared to the third quarter of 2009. Net charge-offs amounted to $1.3 million in the third quarter of 2010, as compared to net charge-offs of $1.2 million in the second quarter of 2010 and $1.4 million in the third quarter of 2009.

The allowance for loan losses was $28.2 million, or 1.40% of total loans, at September 30, 2010, compared to $28.0 million, or 1.42% of total loans, at June 30, 2010. The allowance for loan losses was $27.4 million, or 1.43% of total loans, at December 31, 2009. Management will continue to assess the adequacy of the allowance for loan losses in accordance with its established policies.

Loans

Total loans grew by $39 million, or 2%, in the third quarter of 2010 and by $91 million, or 5%, since December 31, 2009. We continue to experience good demand for commercial loan activity. Commercial loans, excluding commercial real estate, rose by $22 million, or 5%, in the third quarter of 2010 and $49 million, or 12%, since December 31, 2009. The residential mortgage portfolio grew by $11 million, or 2%, in the third quarter of 2010 and by $28 million, or 5%, since the end of 2009. Consumer loan balances declined slightly in 2010.

Investment Securities

The investment securities portfolio amounted to $577 million at September 30, 2010, down by $99 million from the balance at June 30, 2010 and down by $114 million from the balance at December 31, 2009. A balance sheet deleveraging transaction was consummated in the third quarter of 2010, which consisted of the sale of $63 million in mortgage-backed securities and prepayment of $65 million in FHLBB advances. The decline in securities also reflected maturities and pay-downs on mortgage-backed securities.

Deposits and Borrowings

Deposits were up by $107 million, or 5.5%, from the balance at June 30, 2010 and by $134 million, or 7%, from the balance at December 31, 2009. Excluding out-of-market brokered certificates of deposit, in-market deposits grew by $132 million, or 7%, in the third quarter of 2010 and by $158 million, or 9%, in the first nine months of 2010.

Demand deposits and NOW account balances increased by $20 million, or 4%, in the third quarter of 2010 and by $83 million, or 21%, from the end of 2009. Money market and savings account balances increased by $31 million and $24 million, respectively, in the three and nine months ended September 30, 2010. Time deposits increased by $56 million from the balance at June 30, 2010 and by $27 million from the end of 2009.

At September 30, 2010, FHLBB advances totaled $480 million, down by $135 million and $127 million, respectively, from June 30, 2010 and December 31, 2009. These declines reflect the third quarter 2010 deleveraging transaction and growth in deposits. In addition, in connection with its ongoing interest rate risk management efforts, in October 2010, Washington Trust modified the terms to extend the maturity dates of certain FHLBB advances with original maturity dates in 2012. As a result, advances totaling $62.5 million with a weighted average rate and maturity of 4.78% and 24 months, respectively, were modified to a weighted average rate and maturity of 3.76% and 59 months, respectively.

Dividends Declared

The Board of Directors declared a quarterly dividend of 21 cents per share for the quarter ended September 30, 2010. The dividend was paid on October 14, 2010 to shareholders of record on September 30, 2010.

Conference Call

Washington Trust will host a conference call on Thursday, October 28, 2010 at 8:30 a.m. Eastern Time to discuss third quarter results. This call is being webcast and can be accessed through the Investor Relations section of the Washington Trust web site, www.washtrust.com. Individuals may dial in to the call at 1-877-317-6789. The international dial-in number is 1-412-317-6789 and the Canada dial-in number is 1-866-605-3852.

A replay of the call will be posted in this same location on the web site shortly after the conclusion of the call. To listen to a replay of the conference call, dial 1-877-344-7529. For international access, dial 1-412-317-0088. The Conference Number for either replay is 445155. The replay will be available until 9:00 a.m. on November 12, 2010.

Background

Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. Washington Trust offers personal banking, business banking and wealth management services through its offices in Rhode Island, eastern Massachusetts and southeastern Connecticut. Washington Trust Bancorp, Inc.’s common stock trades on the NASDAQ Global Select^® Market under the symbol "WASH.” Investor information is available on the Corporation’s web site: www.washtrust.com.

Forward-Looking Statements

This press release contains certain statements that may be considered "forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including statements regarding our strategy, effectiveness of investment programs, evaluations of future interest rate trends and liquidity, expectations as to growth in assets, deposits and results of operations, success of acquisitions, future operations, market position, financial position, and prospects, plans, goals and objectives of management are forward-looking statements. The actual results, performance or achievements of Washington Trust could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets, volatility and disruption in national and international financial markets, government intervention in the U.S. financial system, reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits, reductions in the market value of wealth management assets under administration, changes in the value of securities and other assets, reductions in loan demand, changes in loan collectibility, default and charge-off rates, changes in the size and nature of the Washington Trust’s competition, changes in legislation or regulation and accounting principles, policies and guidelines, and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under "Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission and as updated by our Quarterly Reports on Form 10-Q, may result in these differences. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this press release, and Washington Trust assumes no obligation to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information – Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Washington Trust’s management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (unaudited)
		September 30,			December 31,
(Dollars in thousands, except par value)		2010			2009
Assets:
Cash and noninterest-bearing balances due from banks		$33,251			$38,167
Interest-bearing balances due from banks		48,930			13,686
Other short-term investments		5,479			5,407
Mortgage loans held for sale		20,974			9,909
Securities available for sale, at fair value;
amortized cost $556,479 in 2010 and $677,676 in 2009		577,161			691,484
Federal Home Loan Bank stock, at cost		42,008			42,008
Loans:
Commercial and other		1,049,469			984,550
Residential real estate		633,568			605,575
Consumer		328,111			329,543
Total loans		2,011,148			1,919,668
Less allowance for loan losses		28,165			27,400
Net loans		1,982,983			1,892,268
Premises and equipment, net		26,616			27,524
Accrued interest receivable		9,296			9,137
Investment in bank-owned life insurance		51,357			44,957
Goodwill		58,114			58,114
Identifiable intangible assets, net		8,089			8,943
Property acquired through foreclosure or repossession, net		2,612			1,974
Other assets		42,133			40,895
Total assets		$2,909,003			$2,884,473
Liabilities:
Deposits:
Demand deposits		$242,455			$194,046
NOW accounts		236,775			202,367
Money market accounts		408,828			403,333
Savings accounts		210,271			191,580
Time deposits		958,425			931,684
Total deposits		2,056,754			1,923,010
Dividends payable		3,431			3,369
Federal Home Loan Bank advances		480,358			607,328
Junior subordinated debentures		32,991			32,991
Other borrowings		21,924			21,501
Accrued expenses and other liabilities		46,436			41,328
Total liabilities		2,641,894			2,629,527
Shareholders’ Equity:
Common stock of $.0625 par value; authorized 30,000,000 shares;
issued 16,136,030 shares in 2010 and 16,061,748 shares in 2009		1,009			1,004
Paid-in capital		84,157			82,592
Retained earnings		175,145			168,514
Accumulated other comprehensive income		6,810			3,337
Treasury stock, at cost; 670 shares in 2010 and 19,185 shares in 2009		(12	)		(501	)
Total shareholders’ equity		267,109			254,946
Total liabilities and shareholders’ equity		$2,909,003			$2,884,473

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands, except per share amounts)			Three Months						Nine Months
Periods ended September 30,			2010			2009			2010			2009
Interest income:
Interest and fees on loans			$25,076			$24,303			$73,224			$72,589
Interest on securities:	Taxable		5,227			7,028			17,115			23,065
	Nontaxable		769			781			2,308			2,339
Dividends on corporate stock and Federal Home Loan Bank stock			55			63			164			190
Other interest income			25			13			59			39
Total interest income			31,152			32,188			92,870			98,222
Interest expense:
Deposits			4,747			7,577			15,847			25,605
Federal Home Loan Bank advances			5,574			7,094			17,793			21,433
Junior subordinated debentures			484			545			1,561			1,503
Other interest expense			246			246			731			735
Total interest expense			11,051			15,462			35,932			49,276
Net interest income			20,101			16,726			56,938			48,946
Provision for loan losses			1,500			1,800			4,500			6,500
Net interest income after provision for loan losses			18,601			14,926			52,438			42,446
Noninterest income:
Wealth management services:
Trust and investment advisory fees			5,052			4,717			15,222			13,241
Mutual fund fees			1,084			1,089			3,299			2,997
Financial planning, commissions and other service fees			349			243			1,033			1,178
Wealth management services			6,485			6,049			19,554			17,416
Service charges on deposit accounts			1,411			1,257			3,964			3,571
Merchant processing fees			3,050			2,619			7,062			6,054
Income from bank-owned life insurance			486			451			1,399			1,342
Net gains on loan sales and commissions on loans originated for others			1,011			591			1,889			3,187
Net realized gains on securities			737			-			737			314
Net (losses) gains on interest rate swap contracts			(60	)		92			(113	)		493
Other income			319			445			905			1,329
Noninterest income, excluding other-than-temporary impairment losses			13,439			11,504			35,397			33,706
Total other-than-temporary impairment losses on securities			-			(2,293	)		(245	)		(6,537	)
Portion of loss recognized in other comprehensive income (before taxes)			-			1,826			(172	)		4,079
Net impairment losses recognized in earnings			-			(467	)		(417	)		(2,458	)
Total noninterest income			13,439			11,037			34,980			31,248
Noninterest expense:
Salaries and employee benefits			12,067			10,416			35,294			31,250
Net occupancy			1,202			1,232			3,663			3,580
Equipment			1,037			916			3,048			2,927
Merchant processing costs			2,606			2,213			6,020			5,136
Outsourced services			769			683			2,379			2,037
FDIC deposit insurance costs			861			808			2,439			3,602
Legal, audit and professional fees			438			546			1,364			1,885
Advertising and promotion			467			422			1,250			1,214
Amortization of intangibles			273			303			854			919
Debt prepayment penalties			752			-			752			-
Other expenses			2,383			1,653			6,367			5,361
Total noninterest expense			22,855			19,192			63,430			57,911
Income before income taxes			9,185			6,771			23,988			15,783
Income tax expense			2,815			1,858			7,148			4,435
Net income			$6,370			$4,913			$16,840			$11,348
Weighted average common shares outstanding – basic			16,131.4			16,016.8			16,098.2			15,981.3
Weighted average common shares outstanding – diluted			16,170.6			16,074.5			16,130.4			16,029.5
Per share information:	Basic earnings per common share		$0.39			$0.31			$1.04			$0.71
	Diluted earnings per common share		$0.39			$0.31			$1.04			$0.71
	Cash dividends declared per share		$0.21			$0.21			$0.63			$0.63

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
		At or for the Quarters Ended
		Sept. 30,			June 30,			Mar 31,			Dec. 31,			Sept. 30,
(Dollars in thousands, except per share amounts)		2010			2010			2010			2009			2009
Financial Data
Total assets		$2,909,003			$2,929,853			$2,896,425			$2,884,473			$2,888,065
Total loans		2,011,148			1,972,498			1,937,524			1,919,668			1,906,565
Total securities		577,161			675,938			716,964			691,484			732,646
Total deposits		2,056,754			1,949,905			1,961,188			1,923,010			1,894,170
Total shareholders’ equity		267,109			265,411			259,529			254,946			252,146
Net interest income		20,101			18,833			18,004			16,946			16,726
Provision for loan losses		1,500			1,500			1,500			2,000			1,800
Noninterest income, excluding other-than-temporary impairment losses		13,439			11,513			10,445			11,649			11,504
Net impairment losses recognized in earnings		-			(354	)		(63	)		(679	)		(467	)
Noninterest expenses		22,855			20,983			19,592			19,257			19,192
Income tax expense		2,815			2,211			2,122			1,911			1,858
Net income		6,370			5,298			5,172			4,748			4,913
Share Data
Basic earnings per common share		$0.39			$0.33			$0.32			$0.30			$0.31
Diluted earnings per common share		$0.39			$0.33			$0.32			$0.30			$0.31
Dividends declared per share		$0.21			$0.21			$0.21			$0.21			$0.21
Book value per share		$16.55			$16.46			$16.14			$15.89			$15.73
Tangible book value per share – Non-GAAP*		$12.45			$12.34			$11.99			$11.71			$11.53
Market value per share		$19.12			$17.04			$18.64			$15.58			$17.52
Shares outstanding at end of period		16,135.4			16,120.7			16,079.1			16,042.6			16,026.6
Weighted average common shares outstanding–basic		16,131.4			16,104.6			16,057.7			16,035.4			16,016.8
Weighted average common shares outstanding–diluted		16,170.6			16,143.1			16,101.5			16,082.0			16,074.5
Key Ratios
Return on average assets		0.87	%		0.73	%		0.71	%		0.66	%		0.68	%
Return on average tangible assets – Non-GAAP*		0.89	%		0.74	%		0.73	%		0.67	%		0.69	%
Return on average equity		9.53	%		8.05	%		8.00	%		7.47	%		7.94	%
Return on average tangible equity – Non-GAAP*		12.67	%		10.78	%		10.80	%		10.16	%		10.91	%
Capital Ratios
Tier 1 risk-based capital		11.24	% (i)		11.22	%		11.24	%		11.14	%		11.06	%
Total risk-based capital		12.50	% (i)		12.47	%		12.50	%		12.40	%		12.31	%
Tier 1 leverage ratio		8.04	% (i)		7.94	%		7.89	%		7.82	%		7.68	%
Equity to assets		9.18	%		9.06	%		8.96	%		8.84	%		8.73	%
Tangible equity to tangible assets – Non-GAAP*		7.07	%		6.95	%		6.81	%		6.67	%		6.55	%
(i) – estimated
Wealth Management Assets Under Administration
Balance at beginning of period		$3,659,383			$3,900,783			$3,770,193			$3,603,424			$3,316,308
Net investment appreciation (depreciation) & income		253,372			(249,214	)		95,855			88,690			295,257
Net customer cash flows		(19,611	)		7,814			34,735			78,079			(8,141	)
Balance at end of period		$3,893,144			$3,659,383			$3,900,783			$3,770,193			$3,603,424
* - See the section labeled "Supplemental Information – Non-GAAP Financial Measures” at the end of this document.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
		Nine Months Ended
		Sept. 30,			Sept. 30,
(Dollars in thousands, except per share amounts)		2010			2009
Financial Data
Net interest income		$56,938			$48,946
Provision for loan losses		4,500			6,500
Noninterest income, excluding other-than-temporary impairment losses		35,397			33,706
Net impairment losses recognized in earnings		(417	)		(2,458	)
Noninterest expenses		63,430			57,911
Income tax expense		7,148			4,435
Net income		16,840			11,348
Share Data
Basic earnings per common share		$1.04			$0.71
Diluted earnings per common share		$1.04			$0.71
Dividends declared per share		$0.63			$0.63
Weighted average common shares outstanding – basic		16,098.2			15,981.3
Weighted average common shares outstanding – diluted		16,130.4			16,029.5
Key Ratios
Return on average assets		0.77	%		0.52	%
Return on average tangible assets – Non-GAAP*		0.79	%		0.53	%
Return on average equity		8.54	%		6.24	%
Return on average tangible equity – Non-GAAP*		11.43	%		8.66	%
Asset Quality Data
Allowance for Loan Losses
Balance at beginning of period		$27,400			$23,725
Provision charged to earnings		4,500			6,500
Charge-offs		(4,006	)		(3,947	)
Recoveries		271			153
Balance at end of period		$28,165			$26,431
Net Loan Charge-Offs
Commercial:
Mortgages		$926			$1,245
Construction and development		-			-
Other		2,092			2,029
Residential:
Mortgages		512			360
Homeowner construction		-			-
Consumer		205			160
Total		$3,735			$3,794
Net charge-offs to average loans (annualized)		0.25	%		0.27	%
Wealth Management Assets Under Administration
Balance at beginning of period		$3,770,193			$3,147,649
Net investment appreciation (depreciation) & income		100,013			458,401
Net customer cash flows		22,938			(2,626	)
Balance at end of period		$3,893,144			$3,603,424
* - See the section labeled "Supplemental Information – Non-GAAP Financial Measures” at the end of this document.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
		For the Quarters Ended
		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
		2010		2010		2010		2009		2009
Average Yields (taxable equivalent basis)
Assets:
Commercial and other loans		5.29%		5.23%		5.31%		5.19%		5.26%
Residential real estate loans, including mortgage loans held for sale		4.94%		5.05%		5.19%		5.17%		5.22%
Consumer loans		3.99%		4.00%		3.99%		4.06%		4.15%
Total loans		4.97%		4.97%		5.05%		4.99%		5.06%
Cash, federal funds sold and other short-term investments		0.20%		0.17%		0.23%		0.19%		0.28%
FHLBB stock		–%		–%		–%		–%		–%
Taxable debt securities		3.93%		3.93%		4.10%		4.09%		4.19%
Nontaxable debt securities		5.76%		5.83%		5.89%		5.74%		5.73%
Corporate stocks		7.56%		7.55%		7.74%		7.58%		8.79%
Total securities		4.19%		4.17%		4.33%		4.30%		4.38%
Total interest-earning assets		4.63%		4.64%		4.72%		4.70%		4.76%
Liabilities:
NOW accounts		0.12%		0.12%		0.13%		0.18%		0.19%
Money market accounts		0.40%		0.56%		0.61%		0.82%		0.91%
Savings accounts		0.14%		0.17%		0.18%		0.22%		0.25%
Time deposits		1.74%		1.94%		2.13%		2.52%		2.74%
FHLBB advances		4.16%		4.08%		4.26%		4.35%		4.18%
Junior subordinated debentures		5.82%		5.44%		7.75%		5.33%		6.56%
Other		4.59%		4.63%		4.66%		4.68%		4.71%
Total interest-bearing liabilities		1.84%		2.00%		2.17%		2.40%		2.54%
Interest rate spread (taxable equivalent basis)		2.79%		2.64%		2.55%		2.30%		2.22%
Net interest margin (taxable equivalent basis)		3.01%		2.86%		2.78%		2.56%		2.51%

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
				Period End Balances At
(Dollars in thousands)				9/30/2010		6/30/2010		3/31/2010		12/31/2009		9/30/2009
Loans
Commercial:		Mortgages		$522,355		$510,315		$493,102		$496,996		$484,478
		Construction and development		62,820		67,215		77,787		72,293		68,069
		Other		464,294		441,827		427,870		415,261		423,775
		Total commercial		1,049,469		1,019,357		998,759		984,550		976,322
Residential:		Mortgages		622,975		610,245		597,481		593,981		595,270
		Homeowner construction		10,593		12,368		11,577		11,594		9,303
		Total residential real estate		633,568		622,613		609,058		605,575		604,573
Consumer:		Home equity lines		218,898		218,440		213,841		209,801		200,512
		Home equity loans		54,923		57,682		59,390		62,430		66,439
		Other		54,290		54,406		56,476		57,312		58,719
		Total consumer		328,111		330,528		329,707		329,543		325,670
		Total loans		$2,011,148		$1,972,498		$1,937,524		$1,919,668		$1,906,565

(Dollars in thousands)
		At Sept. 30, 2010
Commercial Real Estate Loans by Property Location		Balance		% of Total
Rhode Island, Connecticut, Massachusetts		$529,904		90.6	%
New York, New Jersey, Pennsylvania		41,672		7.1	%
New Hampshire		11,890		2.0	%
Other		1,709		0.3	%
Total commercial real estate loans (1)		$585,175		100.0	%
(1) Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.

(Dollars in thousands)
		At Sept. 30, 2010
Residential Mortgages by Property Location		Balance		% of Total
Rhode Island, Connecticut, Massachusetts		$594,058		93.8	%
New York, Virginia, New Jersey, Maryland, Pennsylvania, District of Columbia		14,479		2.3	%
Ohio		10,285		1.6	%
California, Washington, Oregon		6,744		1.1	%
Colorado, Texas, New Mexico, Utah		4,012		0.6	%
Georgia		2,231		0.4	%
New Hampshire		1,281		0.2	%
Other		478		0.0	%
Total residential mortgages		$633,568		100.0	%

		Period End Balances At
(Dollars in thousands)		9/30/2010		6/30/2010		3/31/2010		12/31/2009		9/30/2009
Deposits
Demand deposits		$242,455		$225,494		$204,317		$194,046		$198,712
NOW accounts		236,775		234,014		196,905		202,367		185,772
Money market accounts		408,828		378,004		397,896		403,333		376,100
Savings accounts		210,271		209,616		202,236		191,580		190,707
Time deposits		958,425		902,777		959,834		931,684		942,879
Total deposits		$2,056,754		$1,949,905		$1,961,188		$1,923,010		$1,894,170
Out-of-market brokered certificates of deposits included in time deposits		$69,385		$94,641		$88,748		$93,684		$102,383
In-market deposits, excluding out of market brokered certificates of deposit		$1,987,369		$1,855,264		$1,872,440		$1,829,326		$1,791,787

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands)		At September 30, 2010
		Amortized		Unrealized		Unrealized			Fair
Securities Available for Sale		Cost (1)		Gains		Losses			Value
Obligations of U.S. government-sponsored enterprises		$36,894		$4,619		$ -			$41,513
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises		388,664		21,007		(119	)		409,552
States and political subdivisions		79,459		4,536		(23	)		83,972
Trust preferred securities:
Individual name issuers		30,591		-		(7,761	)		22,830
Collateralized debt obligations		4,483		-		(3,642	)		841
Corporate bonds		13,876		1,583		-			15,459
Common stocks		658		168		-			826
Perpetual preferred stocks		1,854		314		-			2,168
Total securities available for sale		$556,479		$32,227		$(11,545	)		$577,161
(Dollars in thousands)		At December 31, 2009
		Amortized		Unrealized		Unrealized			Fair
Securities Available for Sale		Cost (1)		Gains		Losses			Value
Obligations of U.S. government-sponsored enterprises		$41,565		$3,675		$ -			$45,240
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises		503,115		20,808		(477	)		523,446
States and political subdivisions		80,183		2,093		(214	)		82,062
Trust preferred securities:
Individual name issuers		30,563		-		(9,977	)		20,586
Collateralized debt obligations		4,966		-		(3,901	)		1,065
Corporate bonds		13,272		1,434		-			14,706
Common stocks		658		111		-			769
Perpetual preferred stocks		3,354		396		(140	)		3,610
Total securities available for sale		$677,676		$28,517		$(14,709	)		$691,484
(1) Net of other-than-temporary impairment losses recognized in earnings.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
The following is supplemental information concerning trust preferred investment securities:
		At September 30, 2010
		Credit Rating				Amortized		Unrealized					Fair
(Dollars in thousands)		Moody’s		S&P (b)		Cost (a)		Gains		Losses			Value
Trust preferred securities:
Individual name issuers (c):
JPMorgan Chase & Co.		A2		BBB+		$9,722		$ –		$(2,480	)		$7,242
Bank of America Corporation		Baa3		BB		5,732		–		(1,600	)		4,132
Wells Fargo & Company		Baa1/Baa2		A-		5,106		–		(1,040	)		4,066
SunTrust Banks, Inc.		Baa3		BB		4,165		–		(1,063	)		3,102
Northern Trust Corporation		A3		A-		1,980		–		(359	)		1,621
State Street Corporation		A3		BBB+		1,969		–		(430	)		1,539
Huntington Bancshares Incorporated		Ba1		B		1,917		–		(789	)		1,128
Total individual name issuers						30,591		–		(7,761	)		22,830
Collateralized debt obligations (CDO):
Tropic CDO 1, tranche A4L (d)		Ca				3,200		–		(2,522	)		678
Preferred Term Securities [PreTSL] XXV, tranche C1 (e)		C				1,283		–		(1,120	)		163
Total collateralized debt obligations						4,483		–		(3,642	)		841
Total trust preferred securities						$35,074		$ –		$(11,403	)		$23,671

(a) Net of other-than-temporary impairment losses recognized in earnings
(b) Standard & Poor’s ("S&P”).
(c) Consists of various series of trust preferred securities issued by seven corporate financial institutions.
(d) This investment security is not rated by S&P. As of September 30, 2010, 17 of the 38 pooled institutions have invoked their original contractual right to defer interest payments. This investment security was placed on nonaccrual status as of March 31, 2009. During the quarter ended March 31, 2009, an adverse change occurred in the expected cash flows for this instrument indicating that, based on cash flow forecasts with regard to timing of deferrals and potential future recovery of deferred payments, default rates, and other matters, the Washington Trust would not receive all contractual amounts due under the instrument and would not recover the entire cost basis of the security. Washington Trust had concluded that these conditions warranted a conclusion of other-than-temporary impairment for this holding as of March 31, 2009 and recognized credit-related impairment losses of $1.4 million in earnings in the first quarter of 2009. In April 2010, this investment security began deferring a portion of interest payments. The analysis of the expected cash flows for this security as of June 30, 2010 resulted in an additional credit-related impairment loss of $354 thousand being recognized in earnings in the second quarter of 2010. The analysis of the expected cash flows for this security as of September 30, 2010 did not result in further credit-related impairment loss.
(e) This investment security is not rated by S&P. As of September 30, 2010, 22 of the 73 pooled institutions have invoked their original contractual right to defer interest payments. In the fourth quarter of 2008, this investment security began deferring interest payments until future periods. This investment security was placed on nonaccrual status as of December 31, 2008. During the quarter ended September 30, 2009, an adverse change occurred in the expected cash flows for this instrument indicating that, based on cash flow forecasts with regard to timing of deferrals and potential future recovery of deferred payments, default rates, and other matters, Washington Trust would not receive all contractual amounts due under the instrument and would not recover the entire cost basis of the security. Washington Trust had concluded that these conditions warrant a conclusion of other-than-temporary impairment for this holding as of September 30, 2009 and recognized credit-related impairment losses of $467 thousand in earnings in the third quarter of 2009. During the quarter ended December 31, 2009, Washington Trust recognized additional credit-related impairment losses on this security of $679 thousand. The analysis of the expected cash flows for this security as of March 31, 2010 resulted in an additional credit-related impairment loss of $63 thousand being recognized in earnings in the first quarter of 2010. The analysis of the expected cash flows for this security as of September 30, 2010 did not result in further credit-related impairment loss.

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands)		For the Quarters Ended
		Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
Asset Quality Data		2010			2010			2010			2009			2009
Allowance for Loan Losses
Balance at beginning of period		$27,985			$27,711			$27,400			$26,431			$26,051
Provision charged to earnings		1,500			1,500			1,500			2,000			1,800
Charge-offs		(1,468	)		(1,263	)		(1,275	)		(1,215	)		(1,438	)
Recoveries		148			37			86			184			18
Balance at end of period		$28,165			$27,985			$27,711			$27,400			$26,431
Net Loan Charge-Offs (Recoveries)
Commercial:
Mortgages		$(96	)		$531			$491			$333			$(10	)
Construction and development		–			–			–			–			–
Other		1,026			558			508			627			1,165
Residential:
Mortgages		301			90			121			29			201
Homeowner construction		–			–			–			–			–
Consumer		89			47			69			42			64
Total		$1,320			$1,226			$1,189			$1,031			$1,420

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands)
		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
Asset Quality Data		2010		2010		2010		2009		2009
Past Due Loans
Loans 30–59 Days Past Due
Commercial real estate		$1,685		$3,898		$2,302		$1,909		$4,699
Other commercial loans		2,632		3,284		2,362		1,831		1,496
Residential mortgages		2,828		2,680		1,549		2,409		2,164
Consumer loans		2,218		3,364		2,019		1,258		593
Loans 30–59 days past due		$9,363		$13,226		$8,232		$7,407		$8,952
Loans 60–89 Days Past Due
Commercial real estate		$ –		$19		$2,390		$1,648		$400
Other commercial loans		492		1,195		519		292		609
Residential mortgages		430		861		1,035		1,383		569
Consumer loans		420		195		202		591		39
Loans 60-89 days past due		$1,342		$2,270		$4,146		$3,914		$1,617
Loans 90 Days or more Past Due
Commercial real estate		$4,952		$3,695		$8,374		$11,227		$7,972
Other commercial loans		4,240		2,919		3,142		4,829		6,982
Residential mortgages		4,696		5,942		5,559		4,028		4,186
Consumer loans		277		634		635		164		300
Loans 90 days or more past due		$14,165		$13,190		$17,710		$20,248		$19,440
Total Past Due Loans
Commercial real estate		$6,637		$7,612		$13,066		$14,784		$13,071
Other commercial loans		7,364		7,398		6,023		6,952		9,087
Residential mortgages		7,954		9,483		8,143		7,820		6,919
Consumer loans		2,915		4,193		2,856		2,013		932
Total past due loans		$24,870		$28,686		$30,088		$31,569		$30,009

Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands)
		Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
Asset Quality Data		2010			2010			2010			2009			2009
Nonperforming Assets
Commercial mortgages		$6,426			$6,680			$8,933			$11,588			$8,147
Commercial construction and development		–			–			–			–			–
Other commercial		6,256			8,418			8,225			9,075			10,903
Residential real estate mortgages		6,080			6,850			6,395			6,038			5,313
Consumer		824			789			827			769			850
Total nonaccrual loans		$19,586			$22,737			$24,380			$27,470			$25,213
Nonaccrual investment securities		841			872			1,154			1,065			1,490
Property acquired through foreclosure or repossession		2,612			2,338			1,974			1,974			1,186
Total nonperforming assets		$23,039			$25,947			$27,508			$30,509			$27,889
Total past due loans to total loans		1.24	%		1.45	%		1.55	%		1.64	%		1.57	%
Nonperforming assets to total assets		0.79	%		0.89	%		0.95	%		1.06	%		0.97	%
Nonaccrual loans to total loans		0.97	%		1.15	%		1.26	%		1.43	%		1.32	%
Allowance for loan losses to nonaccrual loans		143.8	%		123.08	%		113.66	%		99.75	%		104.83	%
Allowance for loan losses to total loans		1.40	%		1.42	%		1.43	%		1.43	%		1.39	%
Troubled Debt Restructured Loans
Accruing troubled debt restructured loans
Commercial mortgages		$11,812			$6,176			$5,813			$5,566			$2,107
Other commercial		2,498			2,224			1,217			540			375
Residential real estate mortgages		2,870			2,234			2,622			2,736			3,520
Consumer		817			997			1,398			858			822
Accruing troubled debt restructured loans		17,997			11,631			11,050			9,700			6,824
Nonaccrual troubled debt restructured loans
Commercial mortgages		1,473			986			2,238			–			–
Other commercial		213			301			247			228			353
Residential real estate mortgages		823			381			887			336			336
Consumer		43			43			44			45			7
Nonaccrual troubled debt restructured loans		2,552			1,711			3,416			609			696
Total troubled debt restructured loans		$20,549			$13,342			$14,466			$10,309			$7,520

The following tables present average balance and interest rate information. Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes, net of the related federal tax benefit. For dividends on corporate stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency. Unrealized gains (losses) on available for sale securities are excluded from the average balance and yield calculations. 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.

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
Three months ended September 30,		2010							2009
		Average				Yield/			Average				Yield/
(Dollars in thousands)		Balance		Interest		Rate			Balance		Interest		Rate
Assets
Commercial and other loans		$1,038,146		$13,834		5.29	%		$969,215		$12,850		5.26	%
Residential real estate loans, including mortgage loans held for sale		642,829		8,009		4.94	%		616,825		8,113		5.22	%
Consumer loans		327,554		3,295		3.99	%		324,306		3,390		4.15	%
Total loans		2,008,529		25,138		4.97	%		1,910,346		24,353		5.06	%
Cash, federal funds sold and other short-term investments		49,578		25		0.20	%		18,962		13		0.28	%
FHLBB stock		42,008		–		–	%		42,008		–		–	%
Taxable debt securities		528,196		5,227		3.93	%		665,937		7,028		4.19	%
Nontaxable debt securities		79,462		1,154		5.76	%		80,667		1,166		5.73	%
Corporate stocks		3,852		75		7.56	%		4,013		89		8.79	%
Total securities		611,510		6,456		4.19	%		750,617		8,283		4.38	%
Total interest-earning assets		2,711,625		31,619		4.63	%		2,721,933		32,649		4.76	%
Non interest-earning assets		220,191							189,177
Total assets		$2,931,816							$2,911,110
Liabilities and shareholders’ equity
NOW accounts		$229,468		$68		0.12	%		$184,253		$88		0.19	%
Money market accounts		397,634		397		0.40	%		366,712		840		0.91	%
Savings accounts		208,892		75		0.14	%		194,116		122		0.25	%
Time deposits		960,521		4,207		1.74	%		944,874		6,527		2.74	%
FHLBB advances		532,053		5,574		4.16	%		672,746		7,094		4.18	%
Junior subordinated debentures		32,991		484		5.82	%		32,991		545		6.56	%
Other		21,250		246		4.59	%		20,742		246		4.71	%
Total interest-bearing liabilities		2,382,809		11,051		1.84	%		2,416,434		15,462		2.54	%
Demand deposits		238,212							201,678
Other liabilities		43,364							45,413
Shareholders’ equity		267,431							247,585
Total liabilities and shareholders’ equity		$2,931,816							$2,911,110
Net interest income (FTE)				$20,568							$17,187
Interest rate spread						2.79	%						2.22	%
Net interest margin						3.01	%						2.51	%

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
(Dollars in thousands)
Three months ended September 30,		2010		2009
Commercial and other loans		$62		$50
Nontaxable debt securities		385		385
Corporate stocks		20		26
Total		$467		$461

Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
Nine months ended September 30,		2010							2009
		Average				Yield/			Average				Yield/
(Dollars in thousands)		Balance		Interest		Rate			Balance		Interest		Rate
Assets
Commercial and other loans		$1,010,893		$39,887		5.28	%		$927,931		$37,231		5.36	%
Residential real estate loans, including mortgage loans held for sale		625,848		23,673		5.06	%		633,365		25,375		5.36	%
Consumer loans		328,803		9,823		3.99	%		322,078		10,135		4.21	%
Total loans		1,965,544		73,383		4.99	%		1,883,374		72,741		5.16	%
Cash, federal funds sold and other short-term investments		38,720		59		0.20	%		19,520		39		0.27	%
FHLBB stock		42,008		–		–	%		42,008		–		–	%
Taxable debt securities		574,037		17,115		3.99	%		720,547		23,065		4.28	%
Nontaxable debt securities		79,503		3,464		5.83	%		80,672		3,498		5.80	%
Corporate stocks		3,959		227		7.61	%		4,558		262		7.72	%
Total securities		657,499		20,806		4.23	%		805,777		26,825		4.45	%
Total interest-earning assets		2,703,771		94,248		4.66	%		2,750,679		99,605		4.84	%
Non interest-earning assets		212,629							182,160
Total assets		$2,916,400							$2,932,839
Liabilities and shareholders’ equity
NOW accounts		$212,456		$195		0.12	%		$178,470		$242		0.18	%
Money market accounts		399,804		1,561		0.52	%		369,453		3,154		1.14	%
Savings accounts		203,829		245		0.16	%		186,881		422		0.30	%
Time deposits		956,461		13,846		1.94	%		960,450		21,787		3.03	%
FHLBB advances		570,982		17,793		4.17	%		711,575		21,433		4.03	%
Junior subordinated debentures		32,991		1,561		6.33	%		32,991		1,503		6.09	%
Other		21,104		731		4.63	%		21,678		735		4.53	%
Total interest-bearing liabilities		2,397,627		35,932		2.00	%		2,461,498		49,276		2.68	%
Demand deposits		215,368							184,590
Other liabilities		40,356							44,255
Shareholders’ equity		263,049							242,496
Total liabilities and shareholders’ equity		$2,916,400							$2,932,839
Net interest income (FTE)				$58,316							$50,329
Interest rate spread						2.66	%						2.16	%
Net interest margin						2.88	%						2.45	%

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
(Dollars in thousands)
Nine months ended September 30,		2010		2009
Commercial and other loans		$159		$152
Nontaxable debt securities		1,156		1,159
Corporate stocks		63		72
Total		$1,378		$1,383

Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)
		At or for the Quarters Ended
		Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
(Dollars in thousands, except per share amounts)		2010			2010			2010			2009			2009
Calculation of tangible book value per share
Total shareholders’ equity at end of period		$267,109			$265,411			$259,529			$254,946			$252,146
Less:
Goodwill		58,114			58,114			58,114			58,114			58,114
Identifiable intangible assets, net		8,089			8,362			8,652			8,943			9,233
Total tangible shareholders’ equity at end of period		$200,906			$198,935			$192,763			$187,889			$184,799
Shares outstanding at end of period		16,135.4			16,120.7			16,079.1			16,042.6			16,026.6
Book value per share – GAAP		$16.55			$16.46			$16.14			$15.89			$15.73
Tangible book value per share – Non-GAAP		$12.45			$12.34			$11.99			$11.71			$11.53
Calculation of tangible equity to tangible assets
Total tangible shareholders’ equity at end of period		$200,906			$198,935			$192,763			$187,889			$184,799
Total assets at end of period		$2,909,003			$2,929,853			$2,896,425			$2,884,473			$2,888,065
Less:
Goodwill		58,114			58,114			58,114			58,114			58,114
Identifiable intangible assets, net		8,089			8,362			8,652			8,943			9,233
Total tangible assets at end of period		$2,842,800			$2,863,377			$2,829,659			$2,817,416			$2,820,718
Equity to assets - GAAP		9.18	%		9.06	%		8.96	%		8.84	%		8.73	%
Tangible equity to tangible assets – Non-GAAP		7.07	%		6.95	%		6.81	%		6.67	%		6.55	%
Calculation of return on average tangible assets
Net income		$6,370			$5,298			$5,172			$4,748			$4,913
Total average assets		$2,931,816			$2,920,838			$2,896,156			$2,887,041			$2,911,110
Less:
Average goodwill		58,114			58,114			58,114			58,114			58,114
Average identifiable intangible assets, net		8,216			8,503			8,794			9,084			9,379
Total average tangible assets		$2,865,486			$2,854,221			$2,829,248			$2,819,843			$2,843,617
Return on average assets - GAAP		0.87	%		0.73	%		0.71	%		0.66	%		0.68	%
Return on average tangible assets – Non-GAAP		0.89	%		0.74	%		0.73	%		0.67	%		0.69	%
Calculation of return on average tangible equity
Net income		$6,370			$5,298			$5,172			$4,748			$4,913
Total average shareholders’ equity		$267,431			$263,138			$258,478			$254,211			$247,585
Less:
Average goodwill		58,114			58,114			58,114			58,114			58,114
Average identifiable intangible assets, net		8,216			8,503			8,794			9,084			9,379
Total average tangible shareholders’ equity		$201,101			$196,521			$191,570			$187,013			$180,092
Return on average shareholders’ equity - GAAP		9.53	%		8.05	%		8.00	%		7.47	%		7.94	%
Return on average tangible shareholders’ equity – Non-GAAP		12.67	%		10.78	%		10.80	%		10.16	%		10.91	%

Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)
		Nine Months Ended
		Sept. 30,			Sept. 30,
(Dollars in thousands)		2010			2009
Calculation of return on average tangible assets
Net income		$16,840			$11,348
Total average assets		$2,916,400			$2,932,839
Less:
Average goodwill		58,114			58,114
Average identifiable intangible assets, net		8,503			9,684
Total average tangible assets		$2,849,783			$2,865,041
Return on average assets - GAAP		0.77	%		0.52	%
Return on average tangible assets – Non-GAAP		0.79	%		0.53	%
Calculation of return on average tangible equity
Net income		$16,840			$11,348
Total average shareholders’ equity		$263,049			$242,496
Less:
Average goodwill		58,114			58,114
Average identifiable intangible assets, net		8,503			9,684
Total average tangible shareholders’ equity		$196,432			$174,698
Return on average shareholders’ equity - GAAP		8.54	%		6.24	%
Return on average tangible shareholders’ equity – Non-GAAP		11.43	%		8.66	%