2,000 dustbins distributed in Fraser Town

It was an awareness drive with a difference. The Fraser Town Residents’ Welfare Association continued with its distribution of dustbins.

The quarter and year-to-date decreases in net interest margin from 2008reflect the elimination of FHLBB dividend income and margin compression, ingeneral, on core deposit rates following the Federal Reserve`s actions to reduceshort-term interest rates in late 2008 and early 2009. For the six months ended June 30, 2009, the netinterest margin was 2.42%, down 23 basis points from the same period a yearearlier. On a year-to-date basis, net interest incomeincreased $937 thousand, or 3 percent, from 2008 No dividend has been receivedfrom the FHLBB in 2009. Dividend income on Washington Trust`s investment inFHLBB stock totaled $445 thousand and $344 thousand in the first and secondquarters of 2008, respectively.

The net interest margin (annualized tax-equivalent net interest income as apercentage of average earning assets) for the second quarter of 2009 was 2.45%,up 6 basis points from the first quarter of 2009 and down 26 basis points fromthe second quarter a year ago. Inthis environment we will continue to maintain our focus and discipline." RESULTS OF OPERATIONSNet interest income for the second quarter of 2009 increased $302 thousand, or 2percent, from the first quarter of 2009 and remained essentially flat comparedto the second quarter a year ago. Nonperforming assets were$8.8 million, or 0.30% of total assets, at December 31, 2008.John C. Warren, Washington Trust Bancorp, Inc.`s Chairman and Chief ExecutiveOfficer, stated "The economy remains challenged both locally and nationally. Commercial loans have increased$152.2 million, or 19 percent, from the balance at June 30, 2008. * Reflecting continued weak economic conditions, nonperforming assets amountedto $24.8 million, or 0.85% of total assets, at June 30, 2009 up from $17.5million, or 0.60% of total assets, at March 31, 2009.

Assets under administration totaled $3.316billion at June 30, 2009, down $607.3 million from the June 30, 2008 balance. * Net gains on loan sales and commissions on loans originated for others totaled$1.6 million for the second quarter of 2009, up by $1.1 million from the secondquarter of 2008, due to strong residential mortgage refinancing and salesactivity.* Commercial loan growth continued at a good pace, amounting to $39.0 million,or 4 percent, in the second quarter of 2009. * No dividend was received from the Federal Home Loan Bank of Boston (FHLBB) inthe second quarter of 2009. Dividend income on Washington Trust`s investment inFHLBB stock totaled $344 thousand in the second quarter of 2008.Selected Second Quarter 2009 developments:* Wealth management revenues for the second quarter of 2009 were down by $1.7million, or 22 percent, from the second quarter of 2008, primarily due to lowervaluations in the financial markets. * The loan loss provision charged to earnings amounted to $3.0 million for thesecond quarter of 2009, compared to $1.4 million for the second quarter of 2008.The provision was based on management`s assessment of economic and creditconditions as well as growth in the loan portfolio. ("FDIC") deposit insurance premiums for thesecond quarter of 2009 were up by $1.9 million from the second quarter a yearearlier.