Financial Statements Consolidated statements of cash flows Refer to Washington Trust Bancorp, Inc.’s 2002 Annual Report on Form 10-K for a complete set of consolidated financial statements. independent auditors’ report We have audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheets of Washington Trust Bancorp, Inc. and subsidiary as of December 31, 2002 and 2001 and the related consolidated statements of income, changes in shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2002 (not presented herein); and in our report dated January 14, 2003, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. sixteen Years ended December 31, 2002 2001 2000 (Dollars in thousands) NONCASH INVESTING AND FINANCING ACTIVITIES: Net transfers from loans to other real estate owned $84 $187 $109 Loans charged off 497 433 683 Loans made to facilitate the sale of other real estate owned – – 60 Increase in unrealized gain on securities available for sale, net of tax 2,878 2,389 4,218 Increase in paid-in capital resulting from tax benefits on  stock option exercises 123 307 423 In conjunction with the April 16, 2002 acquisition of  First Financial Corp., assets were acquired and liabilities were  assumed as follows: Fair value of assets acquired $204,762 Less liabilities assumed 166,708 SUPPLEMENTAL DISCLOSURES: Interest payments $42,955 $48,859 $45,970 Income tax payments 8,607 5,632 5,838 January 14, 2003 Providence, Rhode Island