R elationships matter at Washington Trust. Our success is rooted in the
strong and enduring relationships that exist among the people we touch
every day. We believe in the principle that if you treat people well and with
respect, they will return the favor. When we provide excellent service, it
creates a lasting, positive impression. It also helps drive more relationships,
as our customers pass our name along to friends and associates. And as their
needs grow, so does their relationship with us.
2
3
TABLE OF
CONTENTS
Washington Trust Profile
Market and Dividend
Information
Annual Meeting of
Shareholders
As of December 31, 2005
$2.4 billion in assets
$350 million in market capitalization
Washington Trust Bancorp, Inc. is
the publicly-owned holding company
of The Washington Trust Company
(the Bank), a Rhode Island-chartered
commercial bank founded in 1800.
Through the Bank and its other
subsidiaries, Washington Trust offers
a broad range of financial services,
including wealth management, by way
of its branch offices in Rhode Island,
Massachusetts and southeastern
Connecticut.
At December 31, 2005, Washington
Trust had 478 employees. The
Corporation has an Affirmative Action
Plan and is an Equal Opportunity
Employer. Washington Trust is also a
member of the FDIC and an Equal
Housing Lender.
Washington Trust’s common stock
trades on the Nasdaq National market
tier of the Nasdaq Stock Market® under
the symbol WASH. As of December 31,
2005, there were 2,170 shareholders
of record.
Tuesday, April 25, 2006, 11:00 a.m.
Westerly Public Library
44 Broad Street
Westerly, Rhode Island 02891
Vote Your Proxy Online
Or By Phone
For your convenience, you can vote
your shares online or by phone. Have
your proxy card ready and go to the
website http://www.voteproxy.com or
call 800-PROXIES (800-776-9437).
You will be prompted to enter your
control number located on your card.
Then, follow the instructions to create
and submit an electronic ballot.
2005 Quarters
Stock prices:
High
Low
Close
Dividend declared
2004 Quarters
Stock prices:
High
Low
Close
Dividend declared
1
$29.99
27.00
27.48
.18
1
$27.60
23.80
26.40
.17
2
3
4
$28.81
23.94
27.67
.18
$30.38
26.08
27.19
.18
$29.98
25.77
26.18
.18
2
3
4
$27.56
24.28
25.99
.17
$26.81
23.20
26.15
.17
$30.50
25.82
29.31
.17
Auditors: KPMG LLP, Providence, Rhode Island
Counsel: Goodwin Procter LLP, Boston, Massachusetts
This report 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. The
Corporation’s actual results, performance or achievements could differ materially from those projected in the forward-looking
statements as a result, among other factors, of changes in general national or regional economic conditions, changes in
interest rates, reductions in the market value of wealth management and trust assets under administration, reductions in loan
demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default
and charge-off rates, changes in the size and nature of the Corporation’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.
Corporate Profile .....................................................2
Letter to Shareholders ............................................4
2005 Financial Highlights........................................6
The Year In Highlights.............................................8
Consolidated Balance Sheets ................................18
Consolidated Statements of Income ....................19
Consolidated Statements of Changes
in Shareholders’ Equity .........................................20
Report of Independent Registered
Public Accounting Firm .........................................21
Shareholder Information ......................................21
Corporate Directory...............................................22
Washington Trust Locations..................................24
4
LETTER TO
SHAREHOLDERS
When you consider the 2005 economic
environment, Washington Trust’s achieve-
ments are even more impressive. Increases
in short-term interest rates and a flat yield
curve put considerable pressure on margins.
However, by successfully managing our
core lines of business – wealth manage-
ment, commercial lending and business
banking, and personal banking – we
were able to generate a balanced stream
of earnings at record levels.
In 2005, we continued to grow our
capabilities and geographic franchise with
the acquisition of Weston Financial Group
of Wellesley, Massachusetts. We expect
to open two new branches in the greater
Providence market by the first half of 2007.
In addition, we brought new talent and
leadership to our wealth management
and commercial lending teams.
We recognize that wealth management
is a discipline unto itself, requiring its
own expertise. Our strategic acquisition
of Weston Financial Group sent a clear
message to the investment community:
Washington Trust is a major player in
wealth management. The Weston Financial
acquisition significantly bolstered our
position as a unique resource for investors,
combining world-class expertise and
consistent results with local, personalized
service.
Our wealth management group continued
to provide important noninterest income
in 2005. With revenues up 26%, wealth
management and trust services accounted
for 18% of our total revenues. Moving
forward, we are confident that our wealth
management group’s contributions to the
Corporation’s success will only grow.
B
y every measure, 2005 was an
outstanding year for your Corporation,
with both record earnings and earnings
per share. Net income was up 11% from
2004, reaching $23 million. We declared
cash dividends totaling 72 cents per
share, and we were pleased to increase
our dividend for the thirteenth
consecutive year.
Taking a longer view, in 2005 we
continued the significant momentum
that has been built over the last ten
years. Since 1995, Washington Trust’s
assets have grown almost fivefold, from
$576 million to $2.4 billion. Wealth
management assets under administration
have increased dramatically, from $467
million in 1995 to more than $3 billion.
We are truly a company on the move.
5
Washington Trust Bancorp, Inc.
2005 Annual Report
The story behind Washington Trust’s
impressive accomplishments and key
strategic initiatives in 2005 is a very
human one. As this year’s annual report
theme states, relationships matter at
Washington Trust. In the last 205 years,
we have earned a reputation for providing
exceptional service, and that reflects the
genuine commitment that our people
have to helping others. At the center
of our business are relationships, not
transactions. Our success is the result
of the countless interactions that our
people take part in every day. Whether
it is with a customer, a fellow employee,
a professional associate, or any member
of the community, treating others with
respect, courtesy, and a willingness to
assist is the culture at Washington Trust.
Moving forward, we will remain focused
on continuing our earnings momentum,
capitalizing on growth opportunities and
maintaining strong asset quality. We
appreciate the relationship that we enjoy
with our shareholders. From all of us at
Washington Trust, thank you for your
ongoing support.
Sincerely,
John C. Warren
Chairman and Chief Executive Officer
John F. Treanor
President and Chief Operating Officer
The hiring of Galan G. Daukas as
Executive Vice President, Wealth
Management, further underscored our
commitment. Galan’s career has been
devoted to investment management.
As our wealth management capabilities
grow, we look forward to his leadership
in this important part of our business.
In commercial lending, the recognition
of Washington Trust as a significant
resource, capable of making multi-million
dollar loans and facilitating complex
financial deals, continued to grow in
2005. As a result, we were involved in
major commercial real estate projects
throughout New England, providing loans
By striving to be the best in everything we do,
we enrich the lives of those we serve while
infusing our work with a strong sense of
purpose and accomplishment.
The year 2005 was terrific for all of
our lines of business. In an increasingly
competitive marketplace, Washington
Trust grew deposit market share in Rhode
Island – no small achievement, especially
with no new branch openings. We were
well served by the exceptional job that
our employees did at our branches every
day, nurturing existing relationships and
establishing new ones.
We had another very good year in retail
lending. Although mortgage volume
slowed as interest rates rose, mortgage
activity was stronger than anticipated.
Part of our strong performance in this
line of business can be attributed to the
long-term relationships that we have
established with customers and centers
of influence. In a very competitive rate
environment, it is often the relationship
that makes the difference in retaining
business.
for multi-use urban renewal developments
in Providence and Boston, as well as
being the key lender in a New Hampshire
development. We are committed to
pursuing growth in our commercial lending
business while maintaining excellent asset
quality. At the end of the fourth quarter,
total nonperforming assets were $2.4
million or 0.10% of total assets, the
lowest year-end level that we have
reported in several years.
Washington Trust earned national
recognition in 2005, receiving the Award
for Excellence in Workplace Volunteer
Programs from the Points of Light
Foundation. Other recipients included
Aetna, Cisco Systems, The Home Depot,
and Federated Department Stores. We
also were named one of the 10 Best
Companies for Employee Financial
Security by The Principal Financial Group.
6
FINANCIAL
HIGHLIGHTS
7
Washington Trust Bancorp, Inc.
2005 Annual Report
(Dollars in millions, except per share amounts)
Results as of or for the years ended December 31,
Financial Results
Net interest income
Provision for loan losses
Net realized gains on securities
Noninterest income, excluding securities gains
Noninterest expense
Net income
Per Share Information
Diluted earnings per share
Cash dividends declared
Book value
Tangible book value
Closing stock price
Financial Condition
Securities
Loans:
Commercial and other
Residential real estate
Consumer
Total loans
Allowance for loan losses
Total assets
Deposits
Federal Home Loan Bank advances
Shareholders’ equity
Ratios (%)
Return on average assets
Return on average equity
Net interest margin (taxable equivalent basis)
Nonperforming assets to total assets
Nonaccrual loans to total loans
Allowance for loan losses to total loans
Earnings and Ratios Excluding Special Items
(Non-GAAP Financial Information)
Net income
Diluted earnings per share
Return on average assets (%)
Return on average equity (%)
2005
2004
2003
2002
2001
$
$
60.7
1.2
.4
30.6
56.4
23.0
1.69
.72
11.86
7.79
26.18
$
$
54.4
.6
.2
26.7
50.4
20.8
1.54
.68
11.44
9.64
29.31
$
$
48.8
.5
.6
26.1
47.6
18.9
1.41
.62
10.46
8.60
26.20
$
$
44.3
.4
.7
22.6
43.0
16.8
1.30
.56
9.87
7.93
19.53
$
$
39.4
.6
.3
21.1
41.7
13.1
1.07
.52
8.15
8.10
19.00
$
783.9
$ 890.1
$ 839.4
$ 795.8
$ 629.1
554.7
582.7
264.5
1,401.9
17.9
2,402.0
1,639.3
545.3
158.4
0.98
14.80
2.79
.10
.17
1.28
507.7
513.7
228.3
1,249.7
16.8
2,307.8
1,457.9
672.7
151.9
0.97
14.40
2.74
.21
.38
1.34
408.5
389.9
162.6
961.0
15.9
1,973.8
1,206.1
607.1
138.1
1.03
14.15
2.89
.14
.29
1.66
382.1
280.9
132.1
795.1
15.5
1,745.7
1,110.5
480.1
128.7
1.07
14.25
3.10
.24
.53
1.95
260.6
235.4
109.6
605.6
13.6
1,362.2
816.9
431.5
97.9
1.01
13.86
3.30
.28
.63
2.24
$
$
23.5
1.72
1.00
15.08
$
$
20.8
1.54
0.97
14.40
$
$
19.6
1.46
1.06
14.64
$
$
17.2
1.33
1.09
14.60
$
$
15.6
1.28
1.20
16.54
(Dollars in millions, except per share amounts)
Results as of or for the years ended December 31,
Reconciliation Table –
Non-GAAP Financial Information
Net income, including special items
Add back (deduct) special items, net of tax:
Acquisition related
Debt prepayment penalties
Litigation settlement, net of insurance recovery
Net income, excluding special items
Diluted earnings per share
Effect of special items, net of tax
Diluted earnings per share, excluding special items
Ratios (%)
Return on average assets
Effect of special items, net of tax
Return on average assets, excluding special items
2005
2004
2003
2002
2001
$
23.0
$
20.8
$
18.9
$
16.8
$
13.1
$
$
$
.5
–
–
23.5
1.69
.03
1.72
0.98
.02
1.00
$
$
$
–
–
–
20.8
1.54
–
1.54
0.97
–
0.97
$
$
$
–
.7
–
19.6
1.41
.05
1.46
1.03
.03
1.06
$
$
$
.4
–
–
17.2
1.30
.03
1.33
1.07
.02
1.09
$
$
$
–
–
2.5
15.6
1.07
.21
1.28
1.01
.19
1.20
Return on average equity
Effect of special items, net of tax
Return on average equity, excluding special items
14.80
.28
15.08
14.40
–
14.40
14.15
.49
14.64
14.25
.35
14.60
13.86
2.68
16.54
Non-GAAP Financial Information Disclosure:
This annual report contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Washington Trust’s (the Corporation’s) management uses these non-GAAP measures in its analysis of the Corporation’s performance. These measures typically adjust GAAP performance
measures to exclude the effects of charges and expenses related to the consummation of acquisitions and costs related to the integration of merged entities. These non-GAAP measures
also may exclude other significant gains or losses that are unusual in nature. Because these items and their impact on the Corporation’s performance are difficult to predict, management
believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating
results of the Corporation’s core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures that may be presented by other corporations. A quantitative reconciliation of the differences between the non-GAAP financial
information discussed herein and the most directly comparable financial information calculated and presented in accordance with GAAP is contained in the 2005 Financial Highlights
section of this annual report.
$ 0$ 300$ 600 $ 900$1,200$1,500$1,249.7$1,401.9$961.0$795.1$605.6Total Loans2001 2002 2003 2004 2005In Millions$1,800$1,500$1,200 $ 900$ 600$ 300 $ 0$1,457.9$1,639.3$1,206.1$1,110.5$816.9Total Deposits2001 2002 2003 2004 2005In Millions$ 0$ 5$10 $15$20$25$20.8$23.0$18.9$16.8$13.1Net Income2001 2002 2003 2004 2005In Millions$0.00$0.40$0.80 $1.20$1.60$2.00$1.54$1.69$1.41$1.30$1.07Diluted Earnings Per Share2001 2002 2003 2004 200580¢70¢60¢50¢40¢30¢20¢10¢0¢68¢72¢62¢56¢52¢Cash Dividends Declared Per Share2001 2002 2003 2004 2005$3.5$3.0$2.5$2.0$1.5$1.0$0.5$0.0$1.871$3.272$1.742$1.524$1.578Assets Under AdministrationIn Billions2001 2002 2003 2004 2005 8
9
ENHANCING OUR WEALTH
MANAGEMENT CAPABILITIES
Wealth
Management
Washington Trust Bancorp, Inc.
2005 Annual Report
INTEGRATING WESTON FINANCIAL GROUP’S PLANNING EXPERTISE
INTO WASHINGTON TRUST’S WEALTH MANAGEMENT GROUP HAS
STRENGTHENED OUR POSITION AS A PREMIER AND COMPREHENSIVE
RESOURCE FOR INVESTORS. SHOWN BELOW LEFT TO RIGHT,
COUNSELORS SUSAN K. ARNOLD AND MARIA A. STAFFIERE,
WESTON FINANCIAL, EXECUTIVE VICE PRESIDENT GALAN G. DAUKAS,
WASHINGTON TRUST WEALTH MANAGEMENT, AND COUNSELOR
KERRY FALCO, WESTON FINANCIAL.
and nurture client relationships has been
a key to their success.
Comprehensive investment
options
The acquisition of Weston Financial
Group provided a natural complement
to Washington Trust’s existing wealth
management groups: 1800 Asset
Management, Washington Trust Investors
(formerly Phoenix Investment
Management), and Trust and Estate
Services.
We now offer clients three distinct asset
management solutions. Weston Financial
gives us sophisticated financial planning
capabilities, as well as an open architec-
ture investment platform, featuring
separately managed accounts, custom-
designed portfolios, and mutual funds.
This approach enables clients to access
The Weston Financial acquisition boosted our assets
under administration to more than $3 billion.
Wealth Management is a key line of
business for us, and a major source of
revenues. It is also an area in which we
have a reputation for expertise and
consistent investment performance.
We are one of the premier wealth
management providers in New
England. This is a significant growth
area for our company and in 2005
we expanded our presence with
several key strategic initiatives.
Financial planning expertise
In August, we acquired Weston Financial
Group, a registered investment advisor
with assets under management in excess
of $1.2 billion. Located in Wellesley,
Massachusetts, the firm specializes in
helping high net worth clients address
complex financial planning issues. These
include individuals with many forms of
assets, executives at companies undergoing
change due to a merger or acquisition, and
those planning for retirement. Founded in
1979, Weston Financial serves clients in
the Boston metropolitan area, New
England, and throughout the country.
The Weston Financial acquisition boosted
our assets under administration to more
than $3 billion. As part of the acquisition,
Washington Trust retained all of Weston
Financial’s employees, including the six
senior principals who have worked
together for 20 years. Like Washington
Trust, Weston Financial’s ability to build
Weston Financial’s Managing Directors: front, left to right, Ronald A. Sugameli,
Joseph Robbat, Jr., and Douglas A. Biggar; back, left to right, Wayne M. Grzecki,
Robert I. Stock, and I. Richard Horowitz.
10
11
DEVELOPING INTEGRATED SOLUTIONS
FOR CLIENTS
Wealth
Management
Washington Trust Bancorp, Inc.
2005 Annual Report
Client relationships are enhanced by the natural
synergies that exist within our expanded wealth
management group.
the best money managers in the world.
Our 1800 Asset Management group,
located in Westerly, is client-driven,
providing custom investment solutions to
meet each individual client’s needs and
tax situation. Washington Trust Investors,
located in Providence, uses a thematic
approach with multi-cap portfolios. The
group employs a proprietary investment
discipline, which has a proven track
record of maximizing returns for clients.
Trust and Estate Services provides essen-
tial trust management services, including
estate planning and executor services.
An increasing number of high net worth
individuals understand the benefits of
having a single “quarterback” with
access to a broad array of top managers
and services to provide a more coordinated
wealth management plan. In 2005, with
the acquisition of Weston Financial
Group, we put ourselves in a stronger
position to be that resource. We can now
develop integrated solutions for clients,
encompassing all aspects of their financial
health. What’s more, these client relation-
ships are enhanced and strengthened by
the natural synergies that exist within our
expanded wealth management group.
Custom solutions, localized
service
In investment management, clients do
not know the returns in advance. All they
can know is what level of service their
advisors provide and what kind of rapport
they have with them. In other words, it is
the relationship that matters. In this area,
Washington Trust’s wealth management
group has a significant competitive
advantage. Our size, structure, and business
philosophy allow our advisors to get to
know clients personally and to truly under-
stand what they are trying to achieve.
We know that one investment style does
not fit all. With our range of options, we
are able to respond to a client’s investment
preferences with a custom approach that
will deliver the results he or she desires.
By combining world-class investment
vehicles with a top-notch advisor who
will meet with you at your convenience,
we are giving investors a very compelling
reason to do business with us.
Gary J. Friedmann, Vice President, Investment Officer, advises students at a local school
where Washington Trust sponsored The Stock Market Game™ as part of its Financial
Literacy Program.
WITH FINANCIAL PLANNING EXPERTISE, THREE DISTINCT ASSET
MANAGEMENT STYLES, AND TRUST MANAGEMENT SERVICES,
WASHINGTON TRUST IS WELL POSITIONED TO BE A SINGLE,
LONG-TERM RESOURCE FOR CLIENTS. SHOWN ABOVE LEFT TO RIGHT,
ROGEAN MAKOWSKI, SENIOR VICE PRESIDENT AND TRUST OFFICER;
MARIE LANGLOIS, MANAGING DIRECTOR, WASHINGTON TRUST
INVESTORS; AND MARY MCGOLDRICK, SENIOR VICE PRESIDENT
AND CHIEF INVESTMENT OFFICER, 1800 ASSET MANAGEMENT.
12
13
TEAMING UP TO FIND
THE BEST SOLUTIONS
Banking
Washington Trust Bancorp, Inc.
2005 Annual Report
EXCELLENT WORKING RELATIONSHIPS ACROSS ALL LINES OF
BUSINESS ENABLE US TO PROVIDE CUSTOMERS WITH THE RIGHT
SOLUTIONS FOR BOTH THEIR BUSINESS AND PERSONAL FINANCES.
SHOWN BELOW LEFT TO RIGHT AT PEARL STREET LOFTS, AN $8.5
MILLION RESIDENTIAL AND COMMERCIAL RESTORATION PROJECT
IN PROVIDENCE, B. MICHAEL RAUH, JR., EXECUTIVE VICE PRESIDENT,
CORPORATE SALES, PLANNING, AND DELIVERY; STEPHEN M. BESSETTE,
EXECUTIVE VICE PRESIDENT, RETAIL LENDING; AND JAMES M. VESEY,
SENIOR VICE PRESIDENT, COMMERCIAL LENDING AND CHIEF
CREDIT OFFICER.
Good customer relationships are
critical to retaining and growing our
business. In 2005, our outstanding
service helped nurture relationships
with customers, strengthening our
competitive position and ultimately
contributing to our profitability.
Cultivating long-term banking
relationships
We have seen a direct correlation
between service quality and increased
business and profitability in our banking
lines. With the implementation of
comprehensive service quality programs in
recent years, all of the following metrics
have risen: accounts per household,
services per household, referrals, retention
rates, households from new market
areas, and customer satisfaction ratings.
In a survey of our customers, 97.6% said
they were very satisfied or satisfied with
Washington Trust’s service. This compares
with a 90.5% rating for peer banks.
The combination of outstanding service
and great products enabled us to grow
customer deposits by 12% in 2005.
What’s more, Washington Trust increased
deposit market share in Rhode Island –
no small feat, especially with no new
branch openings.
On the personal banking side of our
business, Washington Trust remained the
dominant player in Washington County,
Rhode Island, with more than a 50%
deposit market share. Much of our recent
expansion and future growth has been in
Kent and Providence Counties, where
both the population and the number of
businesses far exceed those in
Washington County.
In recent years, we have added three
branches in these key markets, with plans
for two more to be opened by early 2007.
Our consumer loan portfolio, comprised
of primarily home equity loans and lines
of credit, continued to grow. In 2005, we
had an increase of $36 million, or 16%.
With attractive rates and flexible terms,
our home equity products are very popular,
increasing over 600% in the last ten
years, from $33 million in 1995 to
$233 million in 2005.
Mortgage volume slowed during the
year as interest rates rose, but we still
garnered a good share of mortgage
loan originations.
In 2005, we made renovations to several
Washington Trust branch offices for added
convenience and accessibility.
Washington Trust increased deposit market share
in Rhode Island in 2005.
Enhancing relationships
in person and online
Taking care of existing customers is as
important as attracting new ones. That
means responding to their ongoing needs
and finding faster, easier, and better ways
for them to manage their finances.
We made extensive renovations at several
branches in 2005. Branches are still the
most popular channel for doing business
with Washington Trust, visited at least
once a month by 77% of our customers.
The renovations reflected our commitment
to the communities where we are located
while enhancing the banking experience
for our customers.
Online banking continues to grow at an
accelerated pace, as more and more
people enjoy the convenience of being
able to bank anytime, anywhere. In 2005,
we enhanced our online banking service
so customers can now go online for up-
to-the-second, real-time reporting of all
transactions. They can also view images
of cancelled checks, request debit cards,
reorder checks, apply for loans, and open
deposit accounts. Maintaining state-of-
the-art technology is a priority at
Washington Trust. By offering customers
the latest conveniences in banking, we are
strengthening our relationship with them.
14
15
HANDLING COMPLEX DEALS
TO HELP COMPANIES GROW
WASHINGTON TRUST PROVIDED EXPANSION CAPITAL TO IRA GREEN, INC.,
THE LARGEST MANUFACTURER AND DISTRIBUTOR OF UNITED STATES
MILITARY INSIGNIA. THE COMPANY EMPLOYS 270 PEOPLE AT ITS STATE-
OF-THE-ART, 120,000 SQUARE FOOT MANUFACTURING AND DISTRIBUTION
FACILITY IN PROVIDENCE, RHODE ISLAND. ABOVE LEFT TO RIGHT,
MICHAEL W. MCALLISTER, PRESIDENT OF IRA GREEN, INC., AND TIMOTHY
CADIGAN, VICE PRESIDENT AND COMMERCIAL LENDING TEAM LEADER.
Banking
Expanding our presence in
commercial lending
Washington Trust is a major player in
the commercial lending arena, and we
strengthened our position in 2005. We
worked closely with decision-makers on
new financings and explored future
opportunities in commercial lending and
commercial real estate. We continued to
generate an awareness of our capabilities
among the business community and to
build relationships with those who are
key referral sources for new business.
Closing activity remained solid throughout
the year, with a healthy mix of existing
and new customers. For example, we
provided $6.8 million in acquisition
Scott Lajoie, Vice President, Commercial
Real Estate Group, visits Joyce R. Gifford,
DVM, owner of Abbott Valley Veterinary
Center in Cumberland, Rhode Island and
SBA 2005 Rhode Island Small Business
Person of the Year.
We continued to build awareness of our commercial
lending capabilities with business leaders and key
referral sources.
financing for a communications systems
integrator in Peace Dale, Rhode Island, and
provided expansion capital to the country’s
leading manufacturer and distributor of
United States military insignia. We also
financed quality projects throughout
New England, including a shopping plaza
on Cape Cod, a CVS on Beacon Street in
Boston, and a Walgreen’s in Bedford,
New Hampshire.
We have an experienced and talented
team of lenders who are able to handle
complex and sophisticated deals. In 2005,
we added several new lenders to bolster
our team of representatives in the
Providence, Rhode Island, Connecticut,
and Massachusetts markets.
Relationships play a key role in all of our
commercial loans. In many cases, new
dollar originations come from companies
that are already doing business with us or
were referred to us by someone who
already has a relationship with
Washington Trust.
Washington Trust Bancorp, Inc.
2005 Annual Report
A commitment to small business
Small businesses depend on their local
branch to satisfy both personal and
business banking needs. In 2005,
Washington Trust worked on nurturing
the relationship between these businesses
and our branches by making it easier for
them to do their banking with us. Our
Freedom Business Partners™ Account,
which features a free business checking
account, preferred loan rates, and special
discounts, continued to be a popular
product for small businesses. We also put
an expanded team in place to cater to
small business owners.
We had a successful year in our merchant
services area, as sales volume grew by
21%. While this line of business is
extremely price-sensitive, Washington
Trust has been successful because our
excellent customer service gives us a
competitive advantage. Merchant
relationships are a key source of fee
income and provide new checking
account relationships, as well. Our ability
to establish multi-product, multi-service
relationships with these customers is a
key retention strategy.
Washington Trust’s commitment to
helping small businesses start up, prosper,
and grow is reflected in our designation
as a Small Business Administration (SBA)
preferred lender. In fact, three of the
2005 SBA award winners were
Washington Trust customers, including the
SBA Rhode Island Business Person of the
Year. In addition, the SBA honored us for
supporting minority business develop-
ment, as we ranked second among the
Rhode Island banks that provided SBA
loans to minority-owned small businesses.
16
17
REACHING OUT TO THE COMMUNITIES
WHERE WE WORK AND LIVE
Community
Washington Trust Bancorp, Inc.
2005 Annual Report
At Washington Trust, community
involvement is instrumental to our
success. Our achievements as an
institution are part and parcel of the
achievements of our communities as
a whole. We support organizations
that are committed to ensuring that
our communities thrive. We are part
of the economic engine that makes
their vital work possible. Our outreach
goes well beyond funding. Every day,
our people make a difference on both
a professional and personal level.
Washington Trust truly touches the
lives of those around us through the
relationships we have with people
and organizations in the community.
Promoting financial literacy
and volunteerism
Washington Trust’s 2005 community
outreach included a Financial Literacy
Program. Through the American Bankers
Association’s Teach Kids to Save program,
Washington Trust bankers visited schools
throughout Rhode Island and Connecticut
to teach students about the importance
and value of saving. In addition,
Washington Trust sponsored the Stock
Market Game™, an education program
that provides students the opportunity
to learn first-hand about the investment
world by reading The Providence Journal,
investing a simulated $100,000 in the
New York, American, and NASDAQ
exchanges over a 10-week period, and
tracking their trades in an online portfolio.
Members of our wealth management
team participated in the program, which
reached more than 900 students.
Throughout Washington Trust’s 205-year
history, our employees have consistently
demonstrated a willingness and eagerness
to lend a hand. In 2005, that commitment
to volunteerism earned us the Award
for Excellence in Workplace Volunteer
Programs from the Points of Light
Foundation, the nation’s leading volunteer
resource. The international award honors
businesses of all sizes and from all indus-
tries that have made a commitment to
effectively engage employees in volun-
teering. Washington Trust was the only
bank to receive the award in 2005. Other
honorees included Aetna, Cisco Systems,
The Home Depot, and Federated
Department Stores. Washington
Trust also received the Outstanding
Commitment to Volunteerism Award
from the Volunteer Center of Rhode Island.
The employees at Washington Trust take
great pride in serving the communities
where we live and work. In 2005, we were
once again grateful for the opportunity
to experience the rewards of helping
those in need.
In 2005, we were once again grateful for the
opportunity to experience the rewards of helping
those in need.
Washington Trust’s star mascots appear at community events throughout the year.
WASHINGTON TRUST ENJOYS RELATIONSHIPS WITH ORGANIZATIONS WHOSE WORK
MEANS SO MUCH TO OUR CUSTOMERS, EMPLOYEES, AND NEIGHBORS. IN WESTERLY,
WE ARE A MAJOR SUPPORTER OF THE WESTERLY PUBLIC LIBRARY. ABOVE LEFT TO RIGHT,
KATHRYN TAYLOR, EXECUTIVE DIRECTOR, WESTERLY PUBLIC LIBRARY; ELIZABETH B. ECKEL,
SENIOR VICE PRESIDENT, MARKETING; AND DENNIS L. ALGIERE, SENIOR VICE PRESIDENT,
CHIEF COMPLIANCE OFFICER AND DIRECTOR OF COMMUNITY AFFAIRS.
18
FINANCIAL
STATEMENTS
19
Washington Trust Bancorp, Inc.
2005 Annual Report
Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets
Washington Trust Bancorp, Inc. and Subsidiaries Consolidated Statements of Income
December 31,
(Dollars in thousands)
Assets:
Cash and due from banks
Federal funds sold and other short-term investments
Mortgage loans held for sale
Securities:
Available for sale, at fair value; amortized cost $620,638 in 2005
and $724,209 in 2004
Held to maturity, at cost; fair value $162,756 in 2005 and $156,270 in 2004
Total securities
Federal Home Loan Bank stock, at cost
Loans:
Commercial and other
Residential real estate
Consumer
Total loans
Less allowance for loan losses
Net loans
Premises and equipment, net
Accrued interest receivable
Investment in bank-owned life insurance
Goodwill
Identifiable intangible assets
Other assets
Total assets
Liabilities:
Deposits:
Demand deposits
NOW accounts
Money market accounts
Savings accounts
Time deposits
Total deposits
Dividends payable
Federal Home Loan Bank advances
Junior subordinated debentures
Other borrowings
Accrued expenses and other liabilities
Total liabilities
Commitments and contingencies
2005
2004
$ 48,997
17,166
439
$ 34,801
17,280
1,095
619,234
164,707
783,941
34,966
554,734
582,708
264,466
1,401,908
17,918
1,383,990
23,737
10,594
30,360
39,963
14,409
13,441
735,666
154,392
890,058
34,373
507,711
513,695
228,270
1,249,676
16,771
1,232,905
24,248
9,367
29,249
22,591
1,309
10,544
$2,402,003
$2,307,820
$196,102
178,677
223,255
212,499
828,725
1,639,258
2,408
545,323
22,681
9,774
24,113
$189,588
174,727
196,775
251,920
644,875
1,457,885
2,257
672,748
–
3,417
19,661
2,243,557
2,155,968
Shareholders’ Equity:
Common stock of $.0625 par value; authorized 30 million shares in 2005
and 2004; issued 13,372,295 shares in 2005 and 13,278,685 in 2004
Paid-in capital
Retained earnings
Unearned stock-based compensation
Accumulated other comprehensive (loss) income
Treasury stock, at cost; 10,519 shares in 2005 and 9,309 shares in 2004
Total shareholders’ equity
Total liabilities and shareholders’ equity
836
33,676
126,735
(898)
(1,653)
(250)
158,446
830
31,718
113,314
(737)
6,937
(210)
151,852
$2,402,003
$2,307,820
Refer to Washington Trust Bancorp, Inc.’s 2005 Annual Report on Form 10-K for a complete set of consolidated financial statements.
Years ended December 31,
(Dollars and shares in thousands, except per share amounts)
2005
2004
2003
Interest income:
Interest and fees on loans
Interest on securities
Dividends on corporate stock and Federal Home Loan Bank stock
Interest on federal funds sold and other short-term investments
Total interest income
Interest expense:
Deposits
Federal Home Loan Bank advances
Junior subordinated debentures
Other
Total interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Noninterest income:
Wealth management and trust services
Service charges on deposit accounts
Merchant processing fees
Net gains on loan sales
Income from bank-owned life insurance
Net realized gains on securities
Other income
Total noninterest income
Noninterest expense:
Salaries and employee benefits
Net occupancy
Equipment
Merchant processing costs
Advertising and promotion
Legal, audit and professional fees
Outsourced services
Amortization of intangibles
Debt prepayment penalties
Other
Total noninterest expense
Income before income taxes
Income tax expense
Net income
Weighted average shares outstanding – basic
Weighted average shares outstanding – diluted
Per share information:
Basic earnings per share
Diluted earnings per share
Cash dividends declared per share
$78,931
33,820
2,491
451
115,693
$60,828
33,787
2,105
133
96,853
$51,603
32,430
2,081
131
86,245
32,186
22,233
458
160
55,037
60,656
1,200
59,456
16,421
4,502
5,203
1,679
1,110
357
1,674
30,946
32,133
3,460
3,456
4,319
1,977
1,900
1,723
852
–
6,573
56,393
34,009
10,985
$23,024
13,315.2
13,626.7
$1.73
$1.69
$.72
22,197
20,153
–
62
42,412
54,441
610
53,831
13,048
4,483
4,259
1,901
1,175
248
1,791
26,905
28,816
3,201
3,267
3,534
1,748
1,535
1,616
644
–
6,012
50,373
30,363
9,534
$20,829
13,227.8
13,542.7
$1.57
$1.54
$.68
18,554
18,819
–
73
37,446
48,799
460
48,339
10,769
4,920
3,410
4,690
1,161
630
1,155
26,735
26,945
2,979
3,380
2,716
1,440
1,242
1,333
719
941
5,937
47,632
27,442
8,519
$18,923
13,114.1
13,393.6
$1.44
$1.41
$.62
Refer to Washington Trust Bancorp, Inc.’s 2005 Annual Report on Form 10-K for a complete set of consolidated financial statements.
20
FINANCIAL
STATEMENTS
21
Washington Trust Bancorp, Inc.
2005 Annual Report
Washington Trust Bancorp, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
Report of Independent Registered Public Accounting Firm
(Dollars in thousands)
Common
Stock
Paid-in
Capital
Retained
Earnings
Unearned
Stock-Based
Compensation
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Total
The Board of Directors and Shareholders
Washington Trust Bancorp, Inc.:
$818
$28,767
$90,717
18,923
$(24)
$9,294
$(851)
Balance at January 1, 2003
Net income
Unrealized losses on securities,
net of $1,002 income tax benefit
Reclassification adjustment for net
realized gains included in net income,
net of $220 income tax expense
Minimum pension liability adjustment,
net of $153 income tax benefit
Comprehensive income
Cash dividends declared
Restricted stock award
Amortization of restricted stock
Shares issued
Shares repurchased
Balance at December 31, 2003
Net income
Unrealized gains on securities,
net of $383 income tax expense
Reclassification adjustment for net
realized gains included in net income,
net of $87 income tax expense
Minimum pension liability adjustment,
net of $5 income tax benefit
Comprehensive income
Cash dividends declared
Restricted stock unit award
Amortization of restricted stock
Shares issued
Shares repurchased
Balance at December 31, 2004
Net income
Unrealized losses on securities, net
of $4,443 income tax benefit
Reclassification adjustment for net
realized gains included in net income,
net of $125 income tax expense
Minimum pension liability adjustment,
net of $160 income tax benefit
(2,499)
(410)
(284)
(8,148)
29
(29)
31
7
1,072
$825
$29,868
$101,492
$(22)
$6,101
20,829
1,006
(161)
(9)
850
5
1,000
(9,007)
(850)
135
$830
$31,718
$113,314
$(737)
$6,937
23,024
(8,061)
(232)
(297)
Comprehensive income
Cash dividends declared
Restricted stock and stock
unit awards, net
Amortization of restricted stock
Shares issued
Shares repurchased
Balance at December 31, 2005
(9,603)
(533)
372
533
6
1,425
$836 $33,676 $126,735
$(898)
$(1,653)
$128,721
18,923
(2,499)
(410)
(284)
15,730
(8,148)
–
31
1,930
(209)
$138,055
20,829
1,006
(161)
(9)
21,665
(9,007)
–
135
1,159
(155)
$151,852
23,024
( 8,061)
851
(209)
$(209)
154
(155)
$(210)
(232)
(297)
14,434
(9,603)
–
372
1,460
(69)
$(250) $158,446
29
(69)
Refer to Washington Trust Bancorp, Inc.’s 2005 Annual Report on Form 10-K for a complete set of consolidated financial statements.
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Washington Trust Bancorp, Inc. and Subsidiaries as of December 31, 2005
and 2004, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows
(not presented herein) for each of the years in the three-year period ended December 31, 2005; and in our report
dated March 15, 2006, we expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated financial statements is fairly stated, in all
material respects, in relation to the consolidated financial statements from which it has been derived.
Providence, Rhode Island
March 15, 2006
SHAREHOLDER
INFORMATION
Stock Transfer and Dividend Disbursing Agent
American Stock Transfer & Trust Company (AST), our stock transfer and dividend disbursing agent, is responsible for
our shareholder records, issuance of stock certificates, distribution of dividend checks, and IRS Form 1099. AST is also
responsible for the Corporation’s Dividend Reinvestment (DRIP) and Stock Purchase Plan, which enables shareholders
to reinvest their quarterly dividends in Washington Trust shares.
For information, contact AST on the toll-free Shareholder Information Line, 800-852-0354, via the secure AST
Shareholder Services website, http://www.amstock.com, or by writing to: Washington Trust Bancorp, Inc.,
c/o American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, NY 11219.
To receive a duplicate copy of your 2005 IRS Form 1099, please contact Mellon Investor Services at 800-580-0073
or Elizabeth B. Eckel, Senior Vice President, at Washington Trust at 401-348-1566.
Copies of our most recent annual and quarterly reports and a copy of our 2005 Annual Report on Form 10-K are
available at no charge by contacting Elizabeth B. Eckel, Senior Vice President, Marketing, at 401-348-1566 or
800-475-2265. You may write to Ms. Eckel at the Washington Trust Corporate Office, 23 Broad Street, Westerly,
RI 02891. The annual report is also available on our website, www.washtrust.com.
22
CORPORATE
DIRECTORY
Washington Trust Bancorp, Inc.
Board of Directors
Gary P. Bennett, Retired Chairman and Chief Executive Officer, Analysis and Technology, Inc.
Steven J. Crandall, Vice President, Ashaway Line & Twine Mfg. Co.
Larry J. Hirsch, Esq., Retired President, Westerly Jewelry Co.
Barry G. Hittner, Esq., Of Counsel, Cameron & Mittleman, LLP
Katherine W. Hoxsie, Vice President, Hoxsie Buick-Pontiac-GMC Truck, Inc.
Mary E. Kennard, Esq., Vice President and University Counsel, The American University
Edward M. Mazze, Ph.D., Dean, College of Business Administration, University of Rhode Island
Kathleen McKeough, Retired Senior Vice President of Human Resources, GTECH Holdings Corporation
Victor J. Orsinger, II, Esq., Partner, Orsinger and Nardone, Attorneys at Law
H. Douglas Randall, III, President, H.D. Randall, Realtors
Joyce Olson Resnikoff, Chief Executive Officer, Olde Mistick Village
Patrick J. Shanahan, Jr., Retired Chairman, President and Chief Executive Officer, First Financial Corp.
James P. Sullivan, CPA, Retired Finance Officer, Roman Catholic Diocese of Providence
Neil H. Thorp, President, Thorp & Trainer, Inc.
John F. Treanor, President and Chief Operating Officer, Washington Trust Bancorp, Inc.
John C. Warren, Chairman and Chief Executive Officer, Washington Trust Bancorp, Inc.
Officers of the Corporation
John C. Warren, Chairman and Chief Executive Officer
John. F. Treanor, President and Chief Operating Officer
Galan G. Daukas, Executive Vice President, Wealth Management
David V. Devault, Executive Vice President, Secretary, Treasurer and Chief Financial Officer
The Washington Trust Company Directors’ Advisory Council
Alcino G. Almeida, Charles M. Baker, Jr., Charles C. Buffum, David Curtis, Richard A. Grills, Joseph J. Kirby,
Jacques de Laporte, James W. McCormick, Jr., Thomas F. Moore, Brendan P. O’Donnell, Joseph H. Potter,
Joseph E. Pucci, Anthony J. Rose, Jr., William Blunt White
23
Washington Trust Bancorp, Inc.
2005 Annual Report
The Washington Trust Company
Senior Management
John C. Warren, Chairman and Chief Executive Officer
John F. Treanor, President and Chief Operating Officer
Dennis L. Algiere, Senior Vice President, Chief Compliance Officer and Director of Community Affairs
Carl M. Amaral, Senior Vice President, Branch Sales and Service
Stephen M. Bessette, Executive Vice President, Retail Lending
Vernon F. Bliven, Senior Vice President, Human Resources
Galan G. Daukas, Executive Vice President, Wealth Management
David V. Devault, Executive Vice President, Secretary, Treasurer and Chief Financial Officer
Elizabeth B. Eckel, Senior Vice President, Marketing
Gerald J. Fogarty, Jr., Managing Director, Washington Trust Investors
Philip L. Friend, Senior Vice President, Retail Lending
William D. Gibson, Senior Vice President, Credit Administration
Mark K.W. Gim, Senior Vice President, Financial Planning and Asset Liability Management
Russell W. Hahn, Senior Vice President, Commercial Lending
Marie J. Langlois, Managing Director, Washington Trust Investors
Rogean B. Makowski, Senior Vice President, Trust Officer
Mary M. McGoldrick, Senior Vice President and Chief Investment Officer
Barbara J. Perino, CPA, Senior Vice President, Operations and Technology
Harvey C. Perry, II, Senior Vice President, Director of Office for Non-Profit Resources
B. Michael Rauh, Jr., Executive Vice President, Corporate Sales, Planning and Delivery
Julia Anne M. Slom, Senior Vice President, Commercial Real Estate Group
James M. Vesey, Senior Vice President and Chief Credit Officer
James J. Walther, Senior Vice President, Director of Internal Audit
Weston Financial Group, Inc.
Galan G. Daukas, Executive Managing Director
Douglas A. Biggar, Managing Director
Wayne M. Grzecki, Managing Director
I. Richard Horowitz, Managing Director
Joseph Robbat, Jr., Managing Director
Robert I. Stock, Managing Director
Ronald A. Sugameli, Managing Director
25
Washington Trust Bancorp, Inc.
2005 Annual Report
Notes:
24
WASHINGTON TRUST
LOCATIONS
Rhode Island Offices
CORPORATE OFFICE
23 Broad Street
Westerly, RI 02891
401-348-1200
BLOCK ISLAND
Block Island Office
Ocean Avenue
Block Island, RI 02807
401-466-7710
CHARLESTOWN
Charlestown Office
4137 Old Post Road
Charlestown, RI 02813
401-364-4000
CRANSTON
Cranston Office
645 Reservoir Avenue
Cranston, RI 02910
401-946-1004
NARRAGANSETT
Bonnet Shores Office
885 Boston Neck Road
Narragansett, RI 02882
401-782-4800
Sweet Meadows Office
20 Point Judith Road
Narragansett, RI 02882
401-782-1000
NORTH KINGSTOWN
North Kingstown Office
7625 Post Road
North Kingstown, RI 02852
401-295-4700
PROVIDENCE
Providence Office
180 Washington Street
Providence, RI 02903
401-421-3600
Providence Wealth
Management Offices
66-70 South Main Street
Providence, RI 02903
401-861-8440
401-331-6650
RICHMOND
Richmond Office
1200 Main Street
Wyoming, RI 02898
401-539-2427
SOUTH KINGSTOWN
Wakefield Office
730 Kingstown Road
Wakefield, RI 02879
401-782-4200
WARWICK
Warwick Office
236 Centerville Road
Warwick, RI 02886
401-739-2353
WESTERLY
Main Office
23 Broad Street
Westerly, RI 02891
401-348-1200
Franklin Street Office
126 Franklin Street
Westerly, RI 02891
401-348-1367
McQuade’s Marketplace
106 Main Street
Westerly, RI 02891
401-348-1201
Connecticut Offices
MYSTIC
A&P Super Foodmart
179 Stonington Road
Mystic, CT 06355
860-572-7100
McQuade’s Marketplace
14 Clara Drive
Mystic, CT 06355
860-572-2058
Mystic Office
Olde Mistick Village
Mystic, CT 06355
860-536-1200
Massachusetts Office
WELLESLEY
Weston Financial Group
Wellesley Office Park
40 William Street
Wellesley, MA 02481
781-235-7055
Account
Information Center
To speak with a customer service
representative, call 401-348-1200
or toll-free 800-475-2265.
In Connecticut, call 860-443-1508.
Online Banking
Bank and pay bills via the Internet
24 hours a day, 7 days a week at
www.washtrust.com.
XPress Banking
Automated banking by phone
24 hours a day, 7 days a week
at 401-348-1399 or toll-free
800-226-5877.
Website
Current company and shareholder
information available at
www.washtrust.com.
23 Broad Street, Westerly, RI 02891
www.washtrust.com