Financial Statements Consolidated statements of changes in shareholders’ equity Unamortized Accumulated Employee Other Common Paid-in Retained Restricted Comprehensive Treasury (Dollars in thousands) Stock Capital Earnings Stock Income (Loss) Stock Total Balance at January 1, 2000 $745 $9,927 $67,686 $ – $(191) $ – $78,167 Net income 13,209 13,209 Other comprehensive income, net of tax:  Unrealized gains on securities, net of $1,919 income tax expense  4,712 4,712 Reclassification adjustment (494) (494) Comprehensive income 17,427 Cash dividends declared (6,630) (6,630) Shares issued  5 217 222 Balance at December 31, 2000 $750 $10,144 $74,265 $ – $4,027 $ – $89,186 Net income 13,108 13,108 Cumulative effect of change in accounting principle, net of tax (391) (391) Other comprehensive income, net of tax:  Unrealized gains on securities,  net of $1,499 income tax expense  3,000 3,000 Reclassification adjustments (220) (220) Comprehensive income 15,497 Cash dividends declared (6,259) ( 6,259) Shares issued  4 552 17 573 Shares repurchased (1,060) (1,060) Balance at December 31, 2001 $754 $10,696 $81,114 $ – $6,416 $(1,043) $97,937 Net income 16,757 16,757 Other comprehensive income, net of tax: Unrealized gains on securities, net of $1,629 income tax expense 3,310 3,310 Reclassification adjustments (432) (432) Comprehensive income 19,635 Cash dividends declared (7,154) (7,154) Issuance of employee restricted stock 1 (25) 24 – Amortization of employee restricted stock 1 1 Shares issued (185) 704 519 Shares issued for acquisition 64 18,255 18,319 Shares repurchased (536) (536) Balance at December 31, 2002 $818 $28,767 $90,717 $(24) $ 9,294 $(851) $128,721 DISCLOSURE OF RECLASSIFICATION AMOUNT: Years ended December 31, 2002 2001 2000 Reclassification adjustment for net gains included in net income $(678) $(348) $(760) Income tax effect on net gains 237 122 266 Reclassification adjustment for amortization of unrealized  loss on interest rate floor contract included in net income 13 10 – Income tax effect on interest rate floor contract amortization (4) (4) – Net reclassification adjustments $(432) $(220) $(494) Refer to Washington Trust Bancorp, Inc.’s 2002 Annual Report on Form 10-K for a complete set of consolidated financial statements. fourteen