Beverly National Corporation Announces Increase in Net Income and Earnings Per Share...

Beverly National Corporation Announces Increase in Net Income and Earnings Per Share for the Quarter and Six Months Ended June 30, 2008

BEVERLY, Mass.--(Business Wire)--
Don Fournier, President and Chief Executive Officer of Beverly
National Corporation (AMEX:BNV) (the "Company") and its subsidiary,
Beverly National Bank (the "Bank"), announced the Company's earnings
for the quarter and six months ended June 30, 2008.

The Company reported net income for the quarter ended June 30,
2008 of $1,016,000 or basic and fully diluted earnings of $0.38 per
share, compared to net income of $882,000, or basic and fully diluted
earnings of $0.32 per share, for the same quarter last year. The
results for the quarter represent a 15.2% increase in net income and
an 18.8% increase in earnings per share, compared to results for the
same quarter last year. The Company also reported net income for the
six months ended June 30, 2008 of $1.9 million, or basic and fully
diluted earnings of $0.72 per share, compared to net income of $1.7
million, or basic and fully diluted earnings of $0.61 per share for
the same period last year. These results represent a 14.0% increase in
net income and an 18.0% increase in earnings per share, compared to
the same period last year.

The primary reason for the increase in the Bank's net income and
earnings per share for the periods presented is the increase in net
interest and dividend income after the provision for loan losses,
which increased $290,000, or 7.5%, and $419,000, or 5.4%, for the
three and six months ended June 30, 2008, respectively, from the same
periods last year. The improvement is a result of the growth in the
loan and investment portfolios, the reduction in cost of funds and the
replacement of maturing certificates of deposit and FHLB advances at
lower interest rates. The net interest margin improved to 3.97% for
the quarter ended June 30, 2008, compared to 3.78% for the same period
last year and 3.79% for the quarter ended March 31, 2008.

President Fournier stated, "To say that the current environment
for the banking industry is challenging would be an understatement.
With all the challenges that current economic conditions are
presenting for banks, we are pleased to be reporting increases in net
income and earnings per share. The growth of our net interest margin,
the main driver behind the improved earnings, has been helped by the
dramatic drop in interest rates by the Federal Reserve and the
continued growth of the Bank's loan and investment portfolios. While
we are pleased to report this strong performance improvement in a very
challenging and competitive environment, we remain focused on ways to
continue to improve our earnings."

The Company increased its provision for loan losses to $235,000
and $363,000 for the three and six months ended June 30, 2008,
respectively, compared to $100,000 and $250,000 for the same periods
last year. The increase was driven by the growth in the loan
portfolio, current and near term future uncertain economic conditions
and concerns with respect to the potential for further reduction in
real estate values. The Company's asset quality remains strong with
non-performing loans of only $233,000, or 0.07% of total loans, at
June 30, 2008, compared to non-performing loans of $259,000, or 0.08%
of total loans, at December 31, 2007. The allowance for loan losses
increased to 1.14% of total loans at June 30, 2008, from 1.12% at
December 31, 2007 and 1.07% at June 30, 2007. The Bank continues to
actively manage its loan portfolio and deal with problems as they
arise. During the first half of 2008, the Bank charged off
approximately $130,000 in small business and consumer loans. President
Fournier stated, "We have been able to maintain our asset quality
while many in the banking industry are facing continued write-downs
and significant increases in loan loss provisions. Even though our
asset quality remains strong, we feel it is best to continue to
prudently build our loan loss reserve to protect against any future
problems, at least until market conditions and real estate values
stabilize."

Total assets as of June 30, 2008 were $493.7 million, compared to
$472.8 million at December 31, 2007, an increase of $20.9 million, or
4.4%. Investments increased $6.4 million, or 5.5%, and loans, net of
the allowance for loan losses, increased $15.2 million, or 4.8%. Cash
and cash equivalents decreased $2.3 million, or 15.1%. Deposits
increased $14.9 million, or 4.2%, and Federal Home Loan Bank advances
increased $7.0 million, or 11.7%. The book value of the Bank's stock
has decreased slightly as a result of the increase in unrealized
losses on available-for-sale securities. President Fournier stated,
"We have been able to maintain steady asset growth over the last six
months, mainly using increases in our deposit levels to fund expansion
of the loan and investment portfolios. We are committed to our
continued focus on business development, improvement in operating
efficiencies, identifying sound growth opportunities and closely
monitoring our strategic focus in the ever-changing economic
environment in which we operate."

*Statements contained in this news release contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on the beliefs and
expectations of management as well as the assumptions made using
information currently available to management. Since these statements
reflect the views of management concerning future events, these
statements involve risks, uncertainties and assumptions, including,
among others: changes in market interest rates and general and
regional economic conditions; changes in government regulations;
changes in accounting principles; and the quality or composition of
the loan and investment portfolios and other factors that may be
described in the Company's quarterly reports of Form 10-Q and its
annual report on Form 10-K, each filed with the Securities and
Exchange Commission, which are available at the Securities and
Exchange Commission's internet website (www.sec.gov) and to which
reference is hereby made. Therefore, actual future results may differ
significantly from results discussed in the forward-looking
statements.

Beverly National Bank, a subsidiary of Beverly National
Corporation, is headquartered in Beverly, MA, and operates
full-service branch offices in Downtown Beverly, Cummings Center -
Beverly, North Beverly, Danvers, Hamilton, Manchester-by-the-Sea,
Salem and Topsfield. The Bank offers a full array of consumer products
and services including full electronic banking, financial planning,
trust and investment services and business specialties. Incorporated
in 1802, Beverly National Bank is the oldest community bank in the
United States. The Bank's deposits are insured by the FDIC in
accordance with the Federal Deposit Insurance Act.

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*T
BEVERLY NATIONAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

June 30, 2008 December 31, 2007
------------- -----------------
(unaudited)
ASSETS
--------------------------------------
Cash and due from banks $ 11,107 $ 10,752
Federal funds sold 33 3,706
Interest-bearing demand deposits with
other banks 1,648 115
Short-term investments 363 922
------------- -----------------
Cash and cash
equivalents 13,151 15,495
Investments in available-for-sale
securities (at fair value) 121,149 114,793
Federal Home Loan Bank stock, at cost 4,086 3,452
Federal Reserve Bank stock, at cost 553 553
Loans, net of the allowance for loan
losses of $3,830 and $3,614,
respectively 333,588 318,356
Premises and equipment 7,370 7,321
Bank owned life insurance 6,802 6,661
Accrued interest receivable 1,836 1,805
Other assets 5,125 4,355
------------- -----------------
Total assets $493,660 $472,791
============= =================

LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
Deposits:
Noninterest-bearing $ 74,179 $ 72,425
Interest-bearing 291,003 277,885
------------- -----------------
Total deposits 365,182 350,310
Federal Home Loan Bank advances 66,569 59,616
Securities sold under agreements to
repurchase 11,350 11,638
Other liabilities 5,174 5,462
------------- -----------------
Total liabilities 448,275 427,026
------------- -----------------
Stockholders' equity:
Preferred stock, $1.00 par value
per share; 300,000 shares
authorized;
issued and outstanding none - -
Common stock, $2.50 par value per
share; 5,000,000 shares
authorized;
issued 2,912,437 shares as
of June 30, 2008 and
2,890,690 shares as of
December 31, 2007;
outstanding, 2,663,545
shares as of June 30, 2008
and 2,641,798 shares as of
December 31, 2007 7,281 7,227
Paid-in capital 22,910 22,586
Retained earnings 21,618 21,050
Treasury stock, at cost (248,892
shares as of June 30, 2008 and
December 31, 2007) (4,370) (4,370)
Unearned shares, Restricted Stock
Plan (15,755 shares as of June
30, 2008 (323) (197)
and 9,005 shares as of
December 31, 2007)
Accumulated other comprehensive
loss (1,731) (531)
------------- -----------------
Total stockholders'
equity 45,385 45,765
------------- -----------------
Total liabilities and
stockholders' equity $493,660 $472,791
============= =================

Book value per share $ 17.04 $ 17.32
============= =================
*T

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*T
BEVERLY NATIONAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(unaudited)

Three Months Ended
June 30, 2008 June 30, 2007
------------- -------------

Interest and dividend income:
Interest and fees on loans $ 5,064 $ 5,232
Interest on debt securities:
Taxable 1,173 1,145
Tax-exempt 120 115
Dividends on marketable equity
securities 344 153
Other interest 51 85
------------- -------------
Total interest and
dividend income 6,752 6,730
------------- -------------
Interest expense:
Interest on deposits 1,606 1,916
Interest on other borrowed funds 732 825
------------- -------------
Total interest
expense 2,338 2,741
------------- -------------
Net interest and
dividend income 4,414 3,989
Provision for loan losses 235 100
------------- -------------
Net interest and
dividend income
after provision for
loan losses 4,179 3,889
------------- -------------
Noninterest income:
Income from fiduciary activities 467 479
Fees from sale of non-deposit
products 90 66
Service charges on deposit accounts 159 153
Other deposit fees 212 258
Gain on sales of loans, net - -
Income on cash surrender value of
life insurance 75 59
Other income 190 256
------------- -------------
Total noninterest
income 1,193 1,271
------------- -------------
Noninterest expense:
Salaries and employee benefits 2,246 2,099
Director fees 66 87
Occupancy expense 466 392
Equipment expense 231 214
Data processing fees 311 298
Marketing and public relations 115 134
Professional fees 164 322
Other expense 410 417
------------- -------------
Total noninterest
expense 4,009 3,963
------------- -------------
Income before income
taxes 1,363 1,197
Income taxes 347 315
------------- -------------
Net income $ 1,016 $ 882
============= =============

Comprehensive (loss) income $ (287) $ (224)
============= =============

Earnings per share:
Weighted average shares outstanding 2,663,448 2,733,071
============= =============
Weighted average diluted shares
outstanding 2,667,014 2,741,078
============= =============

Earnings per common share $ 0.38 $ 0.32
Earnings per common share, assuming
dilution $ 0.38 $ 0.32
Dividends per share $ 0.20 $ 0.20

Six Months Ended
June 30, 2008 June 30, 2007
------------- -------------

Interest and dividend income:
Interest and fees on loans $ 10,192 $ 10,169
Interest on debt securities:
Taxable 2,295 2,266
Tax-exempt 241 218
Dividends on marketable equity
securities 593 315
Other interest 139 218
------------- -------------
Total interest and
dividend income 13,460 13,186
------------- -------------
Interest expense:
Interest on deposits 3,538 3,678
Interest on other borrowed funds 1,427 1,545
------------- -------------
Total interest expense 4,965 5,223
------------- -------------
Net interest and
dividend income 8,495 7,963
Provision for loan losses 363 250
------------- -------------
Net interest and
dividend income after
provision for loan
losses 8,132 7,713
------------- -------------
Noninterest income:
Income from fiduciary activities 941 941
Fees from sale of non-deposit products 140 129
Service charges on deposit accounts 318 295
Other deposit fees 438 503
Gain on sales of loans, net - 6
Income on cash surrender value of life
insurance 148 111
Other income 390 456
------------- -------------
Total noninterest
income 2,375 2,441
------------- -------------
Noninterest expense:
Salaries and employee benefits 4,461 4,275
Director fees 143 165
Occupancy expense 931 775
Equipment expense 477 421
Data processing fees 600 565
Marketing and public relations 220 242
Professional fees 330 566
Other expense 789 837
------------- -------------
Total noninterest
expense 7,951 7,846
------------- -------------
Income before income
taxes 2,556 2,308
Income taxes 630 619
------------- -------------
Net income $ 1,926 $ 1,689
============= =============

Comprehensive (loss) income $ 726 $ 753
============= =============

Earnings per share:
Weighted average shares outstanding 2,658,261 2,761,842
============= =============
Weighted average diluted shares
outstanding 2,662,035 2,774,263
============= =============

Earnings per common share $ 0.72 $ 0.61
Earnings per common share, assuming
dilution $ 0.72 $ 0.61
Dividends per share $ 0.40 $ 0.40
*T

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BEVERLY NATIONAL CORPORATION AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION
(In thousands, except share and per share data)

June 30, December June 30,
2008 31, 2007 2007
----------- ----------- -----------
(unaudited) (unaudited)

Balance sheet data:
Total assets $ 493,660 $ 472,791 $ 472,963
Total loans, net of
allowance 333,588 318,356 320,503
Allowance for loan
losses 3,830 3,614 3,477
Investments (1) 125,788 118,798 120,098
Deposits 365,182 350,310 356,178
Stockholders' equity 45,385 45,765 46,470
Book value (at end of
period) $ 17.04 $ 17.32 $ 16.78

Asset quality ratios:
Non-performing loans
(2) $ 233 $ 259 $ 26
Non-performing loans
to total loans 0.07% 0.08% 0.01%
Non-performing assets
to total assets(3) 0.05% 0.05% 0.01%
Allowance for loan
losses as a
percentage of:
Non-performing loans 1,644% 1,395% 13,373%
Total loans (at end of
period) 1.14% 1.12% 1.07%

Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)

Earnings data:
Interest and dividend
income $ 6,752 $ 6,730 $ 13,460 $ 13,186
Interest expense 2,338 2,741 4,965 5,223
----------- ----------- ----------- -----------
Net interest and
dividend income 4,414 3,989 8,495 7,963
Provision for loan
losses 235 100 363 250
Noninterest income 1,193 1,271 2,375 2,441
Noninterest expense 4,009 3,963 7,951 7,846
----------- ----------- ----------- -----------
Income before income
taxes 1,363 1,197 2,556 2,308
Income taxes 347 315 630 619
----------- ----------- ----------- -----------
Net income $ 1,016 $ 882 $ 1,926 $ 1,689
=========== =========== =========== ===========

Per share data:
Net income-basic $ 0.38 $ 0.32 $ 0.72 $ 0.61
Net income-diluted 0.38 0.32 0.72 0.61
Cash dividends $ 0.20 $ 0.20 $ 0.40 $ 0.40
Weighted average
shares:
Basic 2,663,448 2,733,071 2,658,261 2,761,842
Diluted 2,667,014 2,741,078 2,662,035 2,774,263

Financial ratios:
Return on average
assets 0.83% 0.76% 0.80% 0.74%
Return on average
equity 8.86% 7.47% 8.39% 7.24%
Net interest margin 3.97% 3.78% 3.88% 3.84%

(1) Includes available-for-sale securities and stock in the Federal
Reserve Bank and the Federal Home Loan Bank of Boston.
(2) Non-performing loans are defined as nonaccrual loans and loans
that are past due ninety days or more but still accruing interest.
(3) Non-performing assets are defined as non-performing loans and
other real estate owned.
*T

Beverly National Corporation
Michael O. Gilles, 978-720-1226

Copyright Business Wire 2008