BancorpRI Announces Third Quarter Financial Results

http://www.businesswire.com/news/home/20091029005306/en

Net Interest Margin Improves 28 Basis Points, Nonperforming Assets Decrease by
10%
PROVIDENCE, R.I.--(Business Wire)--
Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode
Island, today reported net income of $2.2 million, or $0.17 diluted earnings per
share (EPS), after preferred stock dividends and discount accretion, for the
quarter ended September 30, 2009, compared to net income of $2.3 million, or
$0.50 diluted EPS for the third quarter 2008. For the nine month period ended
September 30, 2009, the Company reported net income of $4.4 million, or $0.46
diluted EPS, after preferred stock dividends and discount accretion, compared to
net income of $6.9 million, or $1.49 diluted EPS, for the same period in 2008.

During the third quarter, the Company repurchased both the $30.0 million of its
preferred stock and the warrant to purchase 192,967 shares of its common stock
previously issued to the U.S. Treasury Department. The warrant was repurchased
for $1.4 million. The repurchase of the preferred stock resulted in the
recognition of $1.3 million of discount accretion associated with its issuance
and had a negative impact on the Company`s EPS of $0.28 per share for the
quarter ended September 30, 2009.

"I am pleased we have fully concluded our participation in the government`s
Capital Purchase Program," said President & CEO Merrill W. Sherman. "Our
well-capitalized stature and healthy balance sheet provided us with flexibility
and speaks to our strength as a financial institution."

At September 30, 2009, the Company`s tier 1 capital ratio was approximately 7.7
percent and its total risk-based capital ratio exceeded 11.5 percent.

Net interest income for the third quarter 2009 was $12.7 million compared to
$11.9 million in the third quarter 2008 and $11.6 million in the second quarter
2009. On a year-to-date basis, net interest income was $35.3 million, an
increase of $1.7 million or 5.0 percent from 2008.

The net interest margin for the third quarter was 3.38 percent, an increase of
28 basis points from second quarter 2009, and an increase of 4 basis points from
the third quarter 2008. For the nine months ended September 30, 2009, the net
interest margin was 3.19 percent and flat compared to the same period in 2008.

"Bancorp Rhode Island`s positive third quarter earnings reflect the results of
our expanded net interest margin. That expansion is primarily attributed to
lower funding costs, as we carefully managed our deposit pricing and replaced
higher yielding certificate of deposits with lower cost funds,"Sherman stated.

Noninterest income was $2.2 million for the third quarter 2009, compared to $2.3
million in the third quarter 2008, and $2.2 million in the second quarter 2009.
For the third quarter 2009, a loss of $70,000 was charged to earnings for an
investment security deemed to be other-than-temporarily impaired.

Noninterest expense was $9.8 million in the third quarter 2009 compared to $9.3
million in the third quarter 2008, and $10.2 million in the second quarter 2009.
On a year-to-date basis, noninterest expense was $29.6 million, an increase of
$1.2 million or 4.2 percent over the same period in 2008. The expense increases,
on a quarter and year-to-date basis, were primarily driven by increases in the
FDIC insurance assessments, compensation expense due to expanding our team and
expenses related to loan workout and other real estate owned.

The provision for loan and lease losses was $1.9 million for the third quarter
2009, and net charge-offs were $2.3 million. As a comparison, in the third
quarter 2008 the provision for loan and lease losses was $1.5 million and net
charge-offs were $477,000, while on a linked-quarter basis they were $2.6
million and $1.1 million, respectively. The allowance for loan and lease losses
as a percent of total loans and leases was 1.48 percent as of September 30,
2009, slightly down from 1.51 percent as of June 30, 2009, and up from
1.36percent at December 31, 2008.

Nonperforming assets as of September 30, 2009, totaled $16.9 million, or 1.08
percent of total assets, down from $18.8 million, or 1.19 percent of total
assets, at June 30, 2009, and up from $15.2 million, or 1.00 percent of total
assets, at year-end 2008.

"Our ongoing resolution efforts, combined with net charge-offs resulted in a
reduction in our non-performing assets," said Sherman. "Given the current
economic conditions, we continue to dedicate resources to monitoring the credit
risks associated with our portfolio."

Total assets for the third quarter 2009 ended at $1.57 billion, an increase of
approximately $40.9 million from year-end 2008. The increase is primarily due to
the growth in the commercial loan portfolio and purchase of mortgage-backed
securities which was offset by a decrease in the residential mortgage portfolio.

As of September 30, 2009, the Company`s commercial loan and lease portfolio
totaled $724.4 million, an increase of $66.0 million or 10.0 percent from
year-end 2008, and up $12.8 million or 1.8 percent from June 30, 2009. Consumer
loans were $209.9 million as of September 30, 2009, an increase of $3.2 million
or 1.6 percent from year-end 2008, and a slight decrease on a linked-quarter
basis. Residential mortgage balances were $182.3 million, a decrease of $30.4
million or 14.3 percent from December 31, 2008, and a decrease of $9.0 million
or 4.7 percent from June 30, 2009.

Total deposits were $1.09 billion as of September 30, 2009, up $49.7 million or
4.8 percent from year-end 2008, and up $7.3 million or 0.7 percent from June 30,
2009. The increase was driven primarily by demand deposit and money market
accounts.

The Company`s Board of Directors approved a dividend of $0.17 per share. The
dividend will be paid on December 9, 2009, to shareholders of record on November
18, 2009.

Company executives will host a conference call Thursday, October 29, at 10 a.m.
Eastern Time (ET) to discuss the Company`s third quarter results. Access to the
conference call is available by dialing toll free (800) 860-2442, or via webcast
in the Investor Relations section of the website at www.bankri.com.
International callers can join by dialing 412-858-4600. Please dial in at least
10 minutes prior to the start of the call to ensure a timely connection.

There will be a replay of the call available the same day beginning at
approximately 12:00 p.m. ET that can be accessed through 9 a.m. ET on Tuesday,
November 3, 2009. The replay dial-in number is (877) 344-7529; when prompted,
enter conference ID number 433952. The webcast will be archived in the Investor
Relations section of the website at www.bankri.com.

About BancorpRI

Bancorp Rhode Island, Inc. is the parent company of Bank Rhode Island, a
full-service, FDIC-insured, state-chartered financial institution. The Bank,
headquartered in Providence, Rhode Island, operates 16 branches and more than 60
ATMs throughout Providence, Kent and Washington Counties. As of September 30,
2009, BankRI has $1.6 billion in assets and $1.1 billion in deposits. For more
information, visit www.bankri.com.

This release may contain "forward-looking statements" within the meaning of
section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements represent the company's present expectations or
beliefs concerning future events. The company cautions that such statements are
necessarily based on certain assumptions which are subject to risks and
uncertainties, including, but not limited to, changes in general economic
conditions and changing competition which could cause actual future results to
differ materially from those indicated herein. Further information on these risk
factors is included in the company's filings with the Securities and Exchange
Commission.

BANCORP RHODE ISLAND, INC.
Selected Financial Highlights (unaudited)

September 30, December 31,
2009 2008
Balance Sheet Data: (Dollars in thousands, except per share data)

Total Assets $ 1,569,880 $ 1,528,974
Total Loans and Leases 1,116,627 1,077,742
Total Nonperforming Assets 16,894 15,232
Allowance for Loan and Lease Losses 16,537 14,664
Allowance to Nonperforming Loans and Leases 110.99 % 102.05 %
Allowance to Total Loans and Leases 1.48 % 1.36 %
Total Deposits $ 1,091,931 $ 1,042,192
Common Shareholders` Equity 122,476 121,010
Book Value Per Share of Common Stock 26.57 26.45
Tangible Book Value Per Share of Common Stock 23.96 23.82
Tangible Common Equity Ratio (1) (6) 7.09 % 7.18 %

Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Average Balance Sheet Data: (Dollars in millions)

Average Total Assets $ 1,563 $ 1,495 $ 1,551 $ 1,481
Average Total Loans 1,117 1,060 1,105 1,046
Average Total Interest-Earning Assets 1,495 1,424 1,480 1,409
Average Total Interest-Bearing Liabilities 1,224 1,186 1,210 1,175
Average Common Shareholders` Equity 121 113 122 113

Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Income Statement Data: (Dollars in thousands, except per share data)

Interest and Dividend Income $ 19,000 $ 20,137 $ 56,352 $ 60,650
Interest Expense 6,334 8,216 21,031 26,997
Net Interest Income 12,666 11,921 35,321 33,653
Provision of Loan and Lease Losses 1,900 1,515 6,110 2,770
Noninterest Income 2,241 2,333 6,812 7,728
Noninterest Expense 9,812 9,304 29,580 28,376
Income Before Income Taxes 3,195 3,435 6,443 10,235
Income Tax Expense 992 1,111 2,037 3,344
Net Income 2,203 2,324 4,406 6,891
Preferred Stock Dividends (142 ) -- (892 ) --
Accretion of Preferred Shares Discount (1,282 ) -- (1,405 ) --
Net Income Applicable to Common Shares $ 779 $ 2,324 $ 2,109 $ 6,891

Earnings Per Common Share - Basic $ 0.17 $ 0.51 $ 0.46 $ 1.51
Earnings Per Common Share - Diluted $ 0.17 $ 0.50 $ 0.46 $ 1.49
Average Common Shares Outstanding - Basic 4,605,809 4,566,563 4,599,448 4,562,225
Average Common Shares Outstanding - Diluted 4,633,719 4,628,916 4,619,900 4,633,419

Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Selected Operating Ratios:

Net Interest Margin (2) (6) 3.38 % 3.34 % 3.19 % 3.19 %
Return on Assets (3) (6) 0.56 % 0.62 % 0.38 % 0.62 %
Return on Equity (4) (6) 2.54 % 8.20 % 2.32 % 8.12 %
Efficiency Ratio (5) (6) 65.82 % 65.27 % 70.21 % 68.57 %

Quarter Ended Quarter Ended Quarter Ended
September 30, June 30, December 31,
2009 2009 (7)(8) 2008 (8)
Nonperforming Asset Data: (Dollars in thousands)

Commercial Real Estate Nonperforming Loans $ 3,159 $ 4,801 $ 4,884
Commercial and Industrial Nonperforming Loans 3,263 4,360 2,802
Small Business Nonperforming Loans 585 542 892
Multifamily Nonperforming Loans 205 -- --
Construction Nonperforming Loans 469 1,000 1,000
Nonperforming Leases 1,059 833 428
Residential Nonperforming Loans 5,175 5,933 4,314
Consumer Nonperforming Loans 984 284 49
Total Nonperforming Loans and Leases 14,899 17,753 14,369
Other Real Estate Owned 1,995 921 863
Non-Real Estate Foreclosed Assets -- 122 --
Total Nonperforming Assets $ 16,894 $ 18,796 $ 15,232

Net Charge-Offs $ 2,268 $ 1,118 $ 1,285
Net Charge-Offs to Average Loans 0.81 % 0.40 % 0.48 %

Quarter Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Reconciliation of Non-GAAP Earnings Per Common Share - Diluted (7)(9):

Earnings per Common Share - Diluted $ 0.17 $ 0.50 $ 0.46 $ 1.49
Effect of Preferred Shares Dividend 0.03 -- 0.19 --
Effect of Preferred Shares Discount 0.28 -- 0.30 --
Non-GAAP Earnings Per Common Share - Diluted $ 0.48 $ 0.50 $ 0.95 $ 1.49

(1) Calculated by dividing Common Shareholders` Equity less Goodwill by Total Assets less Goodwill.
(2) Calculated by dividing annualized Net Interest Income by Average Interest-Earning Assets.
(3) Calculated by dividing annualized Net Income by Average Total Assets.
(4) Calculated by dividing annualized Net Income Applicable to Common Shares by Average Common Shareholders` Equity.
(5) Calculated by dividing Noninterest Expense by Net Interest Income plus Noninterest Income.
(6) Non-GAAP performance measure.
(7) Nonperforming Asset Data for June 30, 2009 included for trend analysis purposes.
(8) Certain June 30, 2009 and December 31, 2008 Nonperforming Asset Data amounts have been reclassified to conform to the September 30, 2009 presentation. The reclassifications had no effect on previously reported Net Income.
(9) Reconciliation of Non-GAAP Earnings Per Common Share - Diluted table included to provide the investor useful information in comparing the Company`s operating results to the prior year. Reconciliation excludes the effect of Preferred Stock Dividend and Discount amounts from Diluted Earnings Per Share.

BANCORP RHODE ISLAND, INC.
Consolidated Balance Sheets (unaudited)

September 30, December 31,
2009 2008
(In thousands)
ASSETS:
Cash and due from banks $ 19,020 $ 54,344
Overnight investments 523 1,113
Total cash and cash equivalents 19,543 55,457
Available for sale securities (amortized cost of $361,158 and $325,767, respectively) 365,706 326,406
Stock in Federal Home Loan Bank of Boston 16,274 15,671
Loans and leases receivable:
Commercial loans and leases 724,421 658,422
Residential mortgage loans 182,303 212,665
Consumer and other loans 209,903 206,655
Total loans and leases receivable 1,116,627 1,077,742
Allowance for loan and lease losses (16,537 ) (14,664 )
Net loans and leases receivable 1,100,090 1,063,078
Premises and equipment, net 12,518 12,641
Goodwill 12,051 12,019
Accrued interest receivable 4,826 5,240
Investment in bank-owned life insurance 29,672 28,765
Prepaid expenses and other assets 9,200 9,697
Total assets $ 1,569,880 $ 1,528,974
LIABILITIES:
Deposits:
Demand deposit accounts $ 206,534 $ 176,495
NOW accounts 62,333 56,703
Money market accounts 50,380 4,445
Savings accounts 365,857 381,106
Certificate of deposit accounts 406,827 423,443
Total deposits 1,091,931 1,042,192
Overnight and short-term borrowings 39,031 57,676
Wholesale repurchase agreements 20,000 10,000
Federal Home Loan Bank of Boston borrowings 267,647 238,936
Subordinated deferrable interest debentures 13,403 13,403
Other liabilities 15,392 17,162
Total liabilities 1,447,404 1,379,369
SHAREHOLDERS` EQUITY:
Preferred stock, par value $0.01, authorized 1,000,000 shares, liquidation preference per share $1,000:
Issued and outstanding: Issued: (0 and 30,000 shares, respectively)* -- 28,595
Common stock, par value $0.01 per share, authorized 11,000,000 shares:
Issued: (4,965,494 shares and 4,926,920 shares, respectively) 50 49
Additional paid-in capital* 72,600 73,323
Treasury stock, at cost (364,750 shares and 352,250 shares, respectively) (12,309 ) (12,055 )
Retained earnings 59,179 59,278
Accumulated other comprehensive income, net 2,956 415
Total shareholders` equity 122,476 149,605
Total liabilities and shareholders` equity $ 1,569,880 $ 1,528,974

*Preferred stock and additional paid-in capital balances at December 31, 2008 were reclassified to reflect the liquidation preference value of shares, less any preferred stock discount.

BANCORP RHODE ISLAND, INC.
Consolidated Statements of Operations (unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
(In thousands, except per share data)
Interest and dividend income:
Commercial loans and leases $ 10,437 $ 10,076 $ 30,184 $ 29,624
Residential mortgage loans 2,302 2,899 7,422 9,232
Consumer and other loans 2,384 2,776 7,110 8,613
Mortgage-backed securities 3,336 3,570 10,099 10,257
Investment securities 540 691 1,527 2,151
Federal Home Loan Bank of Boston stock dividends -- 119 -- 512
Overnight investments 1 6 10 261
Total interest and dividend income 19,000 20,137 56,352 60,650
Interest expense:
NOW accounts 13 33 45 138
Money market accounts 140 17 192 65
Savings accounts 707 1,510 2,720 5,688
Certificate of deposit accounts 2,448 3,213 9,069 10,905
Overnight and short-term borrowings 19 209 67 853
Wholesale repurchase agreements 141 136 408 404
Federal Home Loan Bank of Boston borrowings 2,691 2,864 7,966 8,234
Subordinated deferrable interest debentures 175 234 564 710
Total interest expense 6,334 8,216 21,031 26,997
Net interest income 12,666 11,921 35,321 33,653
Provision for loan and lease losses 1,900 1,515 6,110 2,770
Net interest income after provision for loan and lease losses 10,766 10,406 29,211 30,883
Noninterest income:
Total other-than-temporary impairment losses on available for sale securities (696 ) (219 ) (696 ) (219 )
Non-credit component of other-than-temporary impairment losses recognized in other comprehensive income 626 -- 626 --
Credit component of other-than-temporary impairment losses on available for sale securities (70 ) (219 ) (70 ) (219 )
Service charges on deposit accounts 1,396 1,469 3,973 4,352
Commissions on nondeposit investment products 322 174 589 629
Income from bank-owned life insurance 313 266 906 783
Loan related fees 75 136 703 443
Net gains on lease sales and commissions on loans originated for others 13 55 61 374
Gain on sale of available for sale securities -- 168 61 410
Other income 192 284 589 956
Total noninterest income 2,241 2,333 6,812 7,728
Noninterest expense:
Salaries and employee benefits 5,224 5,067 15,303 15,206
Occupancy 864 899 2,652 2,628
Data processing 659 697 1,949 2,124
Professional services 609 709 1,953 2,198
FDIC insurance 502 216 2,065 478
Marketing 327 367 974 1,100
Equipment 226 233 709 807
Loan workout and other real estate owned 219 78 496 314
Loan servicing 174 185 522 503
Other expenses 1,008 853 2,957 3,018
Total noninterest expense 9,812 9,304 29,580 28,376
Income before income taxes 3,195 3,435 6,443 10,235
Income tax expense 992 1,111 2,037 3,344
Net income 2,203 2,324 4,406 6,891
Preferred stock dividends (142 ) -- (892 ) --
Accretion of preferred shares discount (1,282 ) -- (1,405 ) --
Net income applicable to common shares $ 779 $ 2,324 $ 2,109 $ 6,891

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Per share data:
Basic earnings per common share $ 0.17 $ 0.51 $ 0.46 $ 1.51
Diluted earnings per common share $ 0.17 $ 0.50 $ 0.46 $ 1.49
Average common shares outstanding - basic 4,605,809 4,566,563 4,599,448 4,562,225
Average common shares outstanding - diluted 4,633,719 4,628,916 4,619,900 4,633,419

Bancorp Rhode Island, Inc.
Chief Financial Officer
Linda H. Simmons, 401-574-1652
simmonsl@bankri.com
or
Investor Relations Officer
Debbie Mandeville, 401-574-1547
dmandevi@bankri.com

Copyright Business Wire 2009