BancorpRI Announces Second Quarter Financial Results

Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today reported net income of $740,000 for the quarter ended June 30, 2009 compared to net income of $2.24 million in the second quarter 2008. The Company’s diluted earnings per share (EPS), after payment of preferred stock dividends, were $0.07 for the second quarter 2009 compared to $0.48 in the second quarter 2008.

Noninterest expense was $10.2 million in the second quarter 2009 compared to $9.6 million in both the first quarter 2009 and the second quarter 2008. Reflected in the Company’s noninterest expense is a $733,000 charge incurred as a result of the special assessment the Federal Deposit Insurance Corporation (FDIC) has imposed on all FDIC-insured financial institutions nationwide.

The net interest margin for the second quarter was 3.10 percent, a decrease of 14 basis points from the second quarter 2008, and an increase of 2 basis points on a linked quarter basis.

The second quarter ended with total assets at $1.58 billion, an increase of approximately $55.5 million from year-end 2008. At June 30, 2009, the Company’s tier 1 capital ratio was estimated at 9.6 percent and its total risk-weighted capital ratio was approximately 14.5 percent.

As of June 30, 2009, the Company’s commercial loan and lease portfolio grew to $711.6 million, an increase of $53.2 million or 8.1 percent from year-end 2008, and up $25.0 million or 3.6 percent from March 31, 2009. Consumer loans remained relatively flat on a linked quarter basis with $214.7 million at the close of the second quarter, up $8.1 million or 3.9 percent from year-end 2008.

BancorpRI Q2 Results

Residential mortgage balances were $191.3 million, a decrease of $21.4 million or 10.1 percent from December 31, 2008, and a decline of $12.5 million or 6.1 percent from March 31, 2009.

Total deposits were $1.08 billion at the close of the second quarter, up $42.5 million or 4.1 percent from year-end 2008. Checking, savings and other transaction accounts grew to 62.9 percent of total deposits as of June 30, 2009, up from 59.4 percent at year-end 2008.

"At Bancorp Rhode Island, we continued to grow the long-term prospects of our franchise throughout the second quarter while managing the challenges of the economic environment,” said President & CEO Merrill W. Sherman. "During the quarter, we capitalized on the competitive landscape, which presented a unique opportunity to attract new customers and build on existing relationships, as evidenced by the impressive growth of our commercial lending portfolio and transactional deposit accounts. The special assessment imposed on all FDIC insured institutions had an adverse impact on our earnings. However, we recognize and understand the important role our regulators play in continuing to provide stability and confidence to our nation’s financial system.”

Nonperforming assets as of June 30, 2009, totaled $18.8 million, or 1.19 percent of total assets, up from $15.2 million, or 1.00 percent of total assets at year-end 2008, and up from $17.4 million or 1.13 percent of total assets at March 31, 2009. The provision for loan and lease losses was $2.6 million for the second quarter 2009, and net charge offs were $1.1 million. As a comparison, the provision for loan and lease losses was $970,000 and net charge offs were $402,000 for the second quarter 2008, and $1.6 million and $851,000, respectively, on a linked quarter basis. The allowance for loan and lease losses as a percent of total loans and leases was 1.51 percent as of June 30, 2009, up from 1.36 percent at December 31, 2008.

"Our credit administration practices have served us well,” concluded Sherman. "Despite the difficult market conditions, our nonperforming assets remained at a manageable level, and we continued to build our loan loss reserves.”

The Company’s Board of Directors approved a dividend of $0.17 per share. The dividend will be paid on September 9, 2009 to shareholders of record on August 19, 2009.

BancorpRI Q2 Results

Bancorp Rhode Island also announced yesterday that it has received approval from the U.S. Treasury Department to repurchase $30.0 million in preferred stock and exit the Capital Purchase Program. Company executives will address this development, along with second quarter 2009 earnings, on a conference call Thursday, July 30, at 10 a.m. Eastern Daylight Time (EDT). Access the conference call by dialing toll free at (800) 860-2442, or via webcast at http://www.bankri.com/investorrelations. Please dial in at least 10 minutes prior to the start of the call to ensure a timely connection.

There will be a playback of the call available the same day beginning at approximately Noon EDT that can be accessed through 9 a.m. EDT on Monday, August 3, 2009. The replay dial-in number is (877) 344-7529; when prompted, enter conference ID number 431662. The webcast will be archived on the "Investor Relations” page of the Bank Rhode Island website at http://www.bankri.com/investorrelations.

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 June 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.

(1) Calculated by dividing Common Stockholders’ 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 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 March 31, 2009 included for trend analysis purposes.