Washington Trust Bancorp, Inc. and Subsidiary 2002 Annual Report Consolidated statements of income Years ended December 31, 2002 2001 2000 (Dollars in thousands, except per share amounts) Interest income: Interest and fees on loans $49,576 $50,618 $49,423 Interest on securities 35,571 33,988 32,068 Dividends on corporate stock and Federal Home Loan Bank stock 1,973 2,327 2,771 Interest on federal funds sold and other short-term investments 219 594 837 Total interest income 87,339 87,527 85,099 Interest expense: Savings deposits 5,598 5,127 4,383 Time deposits 16,776 18,866 19,841 Federal Home Loan Bank advances 20,596 24,068 22,886 Other 87 99 121 Total interest expense 43,057 48,160 47,231 Net interest income 44,282 39,367 37,868 Provision for loan losses 400 550 1,150 Net interest income after provision for loan losses 43,882 38,817 36,718 Noninterest income: Tr ust and investment management 10,171 10,408 10,544 Service charges on deposit accounts 3,787 3,514 3,297 Merchant processing fees 3,002 2,642 2,144 Net gains on loan sales 2,884 2,058 585 Income from bank-owned life insurance 1,155 1,134 1,047 Net realized gains on securities 678 348 760 Other income 1,581 1,381 1,335 Total noninterest income 23,258 21,485 19,712 Noninterest expense: Salaries and employee benefits 23,793 20,845 19,750 Net occupancy 2,694 2,632 2,601 Equipment 3,333 3,375 3,592 Merchant processing costs 2,391 2,124 1,707 Legal, audit and professional fees 1,893 1,336 1,883 Advertising and promotion 1,180 1,237 1,196 Outsourced services 1,077 975 776 Amortization of intangibles 651 129 129 Acquisition related expenses 605 – 1,035 Litigation settlement cost, net of insurance recovery – 3,625 – Other 5,373 5,375 4,879 Total noninterest expense 42,990 41,653 37,548 Income before income taxes 24,150 18,649 18,882 Income tax expense 7,393 5,541 5,673 Net income $16,757 $13,108 $13,209 Weighted average shares outstanding – basic 12,737.3 12,039.2 11,976.9 Weighted average shares outstanding – diluted 12,932.4 12,202.5 12,102.6 Per share information: Basic earnings per share  $1.32 $1.09 $1.10 Diluted earnings per share $1.30 $1.07 $1.09 Cash dividends declared per share $.56 $.52 $.48 Refer to Washington Trust Bancorp, Inc.’s 2002 Annual Report on Form 10-K for a complete set of consolidated financial statements. thirteen