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Washington Trust Bancorp, Inc. 2002 Annual Report Washington Trust Bancorp, Inc. 2002 Annual Report Our Vision: To Be The Best Community Bank And Trust Company In New England Our Mission: Contents As an independent financial 2002 Financial Highlights...................................inside cover services company, we will provide the Corporate Highlights............................................inside cover highest value to our shareholders by: Letter to Shareholders .................................................one Acquisition of Phoenix New Markets ................................................................two Investment Management – 2000 Delivering superior service Business Banking .......................................................four to our customers, Phoenix Investment Management ............................eight Acquisition of First Bank and Trust Company – 2002 Providing financial and Trust & Investment Services..................................nine public service leadership in Personal Banking ........................................................ten Warwick Branch Opening – 2003 our communities, Consolidated Balance Sheets ....................................twelve Washington Trust Fostering a well-trained and Consolidated Statements of Income .......................thirteen Founded – 1800 highly motivated staff. Consolidated Statements of Changes in Shareholders’ Equity ..........................................fourteen Consolidated Statements of Cash Flows...................fifteen Independent Auditors’ Report ..................................sixteen Management’s Responsibility for Acquisition of Financial Statements .............................................seventeen Pier Bank – 1999 This report contains certain statements that may be considered “forward-looking statements” within the Corporate Directory .................................................eighteen meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Shareholder Overview...............................................twenty Exchange Act of 1934, as amended. The Corporation’s actual results, performance or achievements could differ materially from those projected in the forward- Washington Trust Locations ...........................inside back cover 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 trust and investment assets under Embracing Opportunities management, reductions in deposit levels necessitating increased borrowing to fund loans and investments, 23 Broad Street, Westerly, Rhode Island 02891 changes in the size and nature of the Corporation’s competition, changes in loan default and chargeoff www.washtrust.com rates and changes in the assumptions used in making such forward-looking statements. Washington Trust Bancorp, Inc. 2002 Annual Report Washington Trust Bancorp, Inc. 2002 Annual Report Our Vision: To Be The Best Community Bank And Trust Company In New England Our Mission: Contents As an independent financial 2002 Financial Highlights...................................inside cover services company, we will provide the Corporate Highlights............................................inside cover highest value to our shareholders by: Letter to Shareholders .................................................one Acquisition of Phoenix New Markets ................................................................two Investment Management – 2000 Delivering superior service Business Banking .......................................................four to our customers, Phoenix Investment Management ............................eight Acquisition of First Bank and Trust Company – 2002 Providing financial and Trust & Investment Services..................................nine public service leadership in Personal Banking ........................................................ten Warwick Branch Opening – 2003 our communities, Consolidated Balance Sheets ....................................twelve Washington Trust Fostering a well-trained and Consolidated Statements of Income .......................thirteen Founded – 1800 highly motivated staff. Consolidated Statements of Changes in Shareholders’ Equity ..........................................fourteen Consolidated Statements of Cash Flows...................fifteen Independent Auditors’ Report ..................................sixteen Management’s Responsibility for Acquisition of Financial Statements .............................................seventeen Pier Bank – 1999 This report contains certain statements that may be considered “forward-looking statements” within the Corporate Directory .................................................eighteen meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Shareholder Overview...............................................twenty Exchange Act of 1934, as amended. The Corporation’s actual results, performance or achievements could differ materially from those projected in the forward- Washington Trust Locations ...........................inside back cover 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 trust and investment assets under Embracing Opportunities management, reductions in deposit levels necessitating increased borrowing to fund loans and investments, 23 Broad Street, Westerly, Rhode Island 02891 changes in the size and nature of the Corporation’s competition, changes in loan default and chargeoff www.washtrust.com rates and changes in the assumptions used in making such forward-looking statements. Financial Highlights Corporate Highlights 2002 Annual Report Washington Trust Bancorp, Inc. 2002 Annual Report Corporate Profile Strong Track Record 2002 Accomplishments As of or for the years ended December 31, Washington Trust Bancorp, Inc. (the Washington Trust is committed to enhancing • Completed Acquisition of First Bank washington trust locations (Dollars in millions, except per share amounts) 2002 2001 2000 1999 1998 Corporation) is the publicly-owned holding shareholder value. We do this by meeting and Trust FINANCIAL RESULTS company of The Washington Trust Company the needs of our customers, employees, • Set Record Mortgage Volume Net interest income $ 44.3 $ 39.4 $ 37.9 $ 35.6 $ 32.6 (the Bank), a Rhode Island-chartered bank shareholders and the communities we serve. • Achieved Record Deposit Growth Rhode Island Offices Provision for loan losses .4 .6 1.2 1.8 1.9 • Increased Commercial Loan Activity founded in 1800. The Bank offers a broad Core Lines of Business WESTERLY SOUTH KINGSTOWN Noninterest income 23.3 21.5 19.7 18.8 16.5 • Supported Hundreds of Local Nonprofits Net income 16.8 13.1 13.2 12.5 12.2 range of services, including trust and • Business Banking Main Office Wakefield Office (1) with Financial and Volunteer Support Net income – operating basis 17.2 15.6 13.9 12.8 11.5 investment management, through its • Asset Management 23 Broad Street, Westerly, RI 02891 730 Kingstown Road, Wakefield, RI 02879 • Commenced Construction of Warwick branch offices in Rhode Island and • Trust Services 401-348-1200 401-782-4200 PER SHARE INFORMATION southeastern Connecticut. Branch Location Diluted earnings per share $ 1.30 $ 1.07 $ 1.09 $ 1.03 $ 1.01 • Personal Banking Franklin Street Office NORTH KINGSTOWN (1) Diluted earnings per share – operating basis 1.33 1.28 1.15 1.06 .95 • Mortgage Banking 126 Franklin Street, Westerly, RI 02891 North Kingstown Office Cash dividends declared .56 .52 .48 .44 .40 At December 31, 2002, Washington Trust had 401-348-1367 7625 Post Road, North Kingstown, RI 02852 Book value 9.87 8.15 7.43 6.55 6.66 443 employees. Washington Trust has adopted Market value – closing stock price 19.53 19.00 14.00 17.75 21.50 401-295-4700 an Affirmative Action Plan and is an Equal McQuade’s Marketplace FINANCIAL CONDITION Opportunity Employer. The Bank is a member Market and Dividend Information 106 Main Street, Westerly, RI 02891 PROVIDENCE Net loans $ 779.6 $ 592.1 $ 584.0 $ 536.7 $ 486.0 401-348-1201 Providence Office Securities 795.8 629.1 511.5 446.8 415.5 of the FDIC and an Equal Housing Lender. Washington Trust Bancorp, Inc.’s common stock trades on the Nasdaq National Market tier ® 180 Washington Street, Providence, RI 02903 Total assets 1,745.7 1,362.2 1,218.1 1,105.6 995.2 Corporate Offices of the Nasdaq Stock Market under the symbol WASH. As of December 31, 2002, there were 2,214 RICHMOND Total deposits 1,110.5 816.9 735.7 660.8 627.8 shareholders of record. 401-421-3600 Shareholders’ equity 128.7 97.9 89.2 78.2 78.4 Washington Trust Bancorp, Inc. Richmond Office 23 Broad Street 1200 Main Street, Wyoming, RI 02898 Providence Trust and Investment Services Office RATIOS (%) 2002 Quarters 1 2 3 4 401-539-2427 66 South Main Street, Providence, RI 02903 Return on average assets 1.07 1.01 1.14 1.19 1.31 Westerly, Rhode Island 02891-1868 Stock prices: (1) 401-861-8440 Return on average assets – operating basis 1.09 1.20 1.20 1.21 1.24 401-348-1200 1-800-475-2265 High $19.72 $24.11 $23.83 $21.20 BLOCK ISLAND Return on average equity 14.25 13.86 16.14 15.73 16.09 Website: www.washtrust.com Return on average equity – operating basis(1) 14.60 16.54 16.98 16.04 15.21 Low 18.00 19.05 19.12 19.10 Block Island Office Phoenix Investment Management Nonperforming assets