WESTERLY – Washington Trust Bancorp Inc. (Nasdaq: WASH), parent of The Washington Trust Co., yesterday posted third-quarter net income of $6.04 million, a decrease of $516,000, or 7.87 percent, from the year-ago period’s $6.56 million.

Earnings per diluted share declined to 44 cents, 4 cents less than in the 2007 third quarter.

The bank recorded $45.93 million in revenue for the period, 0.53 percent less than the $46.17 million in the same quarter last year.

The bank’s net interest margin shrank to 2.62 percent in the period ended Sept. 30, down 9 basis points from the second quarter and down 19 basis points from the 2007 third quarter.

Washington Trust’s second-quarter loan-loss provision – funds set aside for anticipated bad loans – was $1.1 million, up considerably from $300,000 a year ago, but down from $1.4 million in the second quarter.

Nonperforming assets increased to $6.82 million, or 0.25 percent of total assets, in the quarter, compared with $6.18 million, or 0.23 percent of total assets in the second quarter. Net charge-offs for the second quarter were $492,000.

“Despite the economic recession and the upheaval in the credit and financial markets, Washington Trust recorded another quarter with solid performance,” said John C. Warren, Washington Trust CEO and chairman. “These are challenging times, and we will remain focused and disciplined as we move forward."

The bank noted that commercial loans continued to grow, rising $46.7 million in the third quarter – the eighth consecutive period of quarter-to-quarter growth.

The bank’s returns on average equity and average assets for the third quarter were 12.94 percent and 0.88 percent, respectively, compared with 14.99 percent and 1.10 percent, respectively, for the same period in 2007.

A conference call featuring Chairman and CEO John C. Warren and David V. Devault, the bank’s executive vice president, secretary, treasurer and chief financial officer, is slated for this morning at 8:30 a.m. A live Webcast is planned at www.WashTrust.com, where the conference call also will be available for later replay.

Last month, the Washington Trust board of directors declared a third-quarter dividend of 21 cents per share, the same as the preceding quarter’s.

Washington Trust Bancorp Inc. (Nasdaq: WASH), based in Westerly, is the parent of The Washington Trust Co., a Rhode Island-chartered bank founded in 1800 that has offices in Rhode Island, Massachusetts and southeastern Connecticut. Additional information is available at www.washtrust.com.