Bancorp Rhode Island, Inc. Announces First Quarter Results

Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today reported net income of $1.46 million for the quarter ending March 31, 2009, a decline of 37 percent from $2.33 million in the first quarter 2008. The company’s diluted earnings per share (EPS), after payment of preferred stock dividends, were $0.22 for the first quarter 2009, down 56 percent from $0.50 in the first quarter 2008.

The first quarter ended with total assets at $1.55 billion, an increase of approximately $20.0 million from year-end 2008, and up from $1.49 billion as of March 31, 2008.

As of March 31, 2009, the Company’s Tier 1 capital ratio was 9.9 percent and its total risk-weighted capital ratio exceeded 15.0 percent.

"Our quarterly earnings reflect some of the financial stress being experienced throughout the nation and in the local Rhode Island economy,” said BancorpRI President & CEO Merrill W. Sherman. "While our performance is not immune to economic conditions, given our strong capital ratios and excellent customer relationships, we remain exceptionally well-positioned to address these challenges and capitalize on opportunities in our marketplace.”

The Company ended the first quarter with $686.7 million in its commercial loan portfolio, an increase of $28.2 million or 4.3 percent from year-end 2008, and an increase of $109.7 million or 19.0 percent from March 31, 2008. Consumer loans increased to $214.8 million at March 31, 2009, up $8.2 million or 4.0 percent from year-end 2008, and an increase of $3.4 million or 1.6 percent from March 31, 2008. Residential mortgage balances were $203.8 million at the close of the first quarter, a decrease of $8.9 million or 4.2 percent from December 31, 2008.

"The important role that banks play in the nation’s economy has been a major topic in Washington and across the country,” said Sherman. "Fortunately, at BancorpRI, our robust capital position enabled us to continue the growth of our commercial loan portfolio, and we are pleased to continue to finance creditworthy businesses.”

She added, "We also were able to grow our consumer loan portfolio due in large part to the success of our recent home equity loan program. The decline in residential mortgage balances is consistent with our strategy of shifting to a more commercially oriented balance sheet as well as our focus on internally generated assets.”

Total deposits were $1.06 billion at the close of the first quarter, up $13.7 million or 1.3 percent from year-end 2008. Transaction accounts grew to 60.3 percent of total deposits as of March 31, 2009, up from 59.4 percent at year-end 2008.

The net interest margin for the first quarter of 2009 was 3.08 percent, a decrease of 21 basis points from the fourth quarter 2008.

Noninterest expense was $9.62 million in the first quarter 2009, compared to $9.46 million from the first quarter 2008 and $9.51 million for the quarter ended December 31, 2008.

Nonperforming assets as of March 31, 2009 totaled $17.4 million, or 1.13 percent of total assets, up from $15.2 million, or 1.00 percent of total assets at year-end 2008. The provision for loan and lease losses was $1.6 million for the first quarter 2009, and net charge offs were $851,000. As a comparison, the provision for loan and lease losses was $285,000 and net charge offs were $311,000 for the first quarter 2008, and $1.8 million and $1.3 million, respectively, on a linked quarter basis. The allowance for loan and lease losses as a percent of total loans and leases was 1.40 percent as of March 31, 2009, up from 1.36 percent at December 31, 2008 and 1.23 percent at March 31, 2008.

The company’s Board of Directors approved a dividend of $0.17 per share. The dividend will be paid on June 3, 2009 to shareholders of record on May 13, 2009.

Bancorp Rhode Island, Inc. will host a conference call at 10 a.m. Eastern Daylight Time (EDT) on Thursday, April 23, to discuss its first quarter 2009 earnings. Access the conference call by dialing toll free at (800) 762-8795, 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 1 p.m. EST that can be accessed through 11:59 p.m. EST on Saturday, April 25, 2009. The replay dial-in number is (800) 406-7325; when prompted, enter conference ID number 4035652. 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 December 31, 2008, BankRI has more than $1.5 billion in assets and $1.0 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.