First Ipswich Bancorp Announces First Quarter 2008 Earnings

IPSWICH, Mass.--(BUSINESS WIRE)--First Ipswich Bancorp (OTCBB: FIWC) (the “Company”), the bank holding company for the First National Bank of Ipswich, announced earnings for the quarter ended March 31, 2008. The net loss of $167,000 for the first quarter of 2008 was mainly attributable to a decrease in the value of two financial instruments due to recent declines in the stock market. “Our core earnings for this period (which do not include the decrease in value of the two financial instruments) maintained modest profitability during a time of significant volatility and losses throughout the banking industry”, stated Russ Cole, President and CEO, “Given the Company’s strong capital position, we continue to remain focused on a disciplined growth strategy to build sustainable and consistent core earnings. Our capital level and loan portfolio quality allow us to continue to make loans at a time when many in the industry are retrenching.”

Timothy Felter, Chief Financial Officer of the Company stated “the Company owns two financial instruments whose values are derived from the performance of the stock market. While the Company has experienced significant profits from the securities since their purchases in 2003 and 2004, the results for the current quarter were attributable to stock market declines. The $370,000 decrease in fair value of the financial instruments impacted net income for the quarter ended March 31, 2008 by $219,000.”

Russ Cole, President and CEO, stated “I remain pleased with the progress the Company is making in other areas. We have not experienced losses related to sub-prime loans and other problems plaguing the financial markets over the course of the last quarter. Our disciplined and focused approach will allow us to continue to improve the profitability of the Company.”

The ongoing managed change of the Company’s balance sheet during the first quarter of 2008 resulted in a slight increase of loans to $202.6 million at March 31, 2008 from $199.4 million at December 31, 2007 and of deposits to $214.6 million at March 31, 2008 from $211.6 million at December 31, 2007. The Company’s efforts to restructure and reduce non-interest expenses have resulted in a decrease of non-interest expense.

The First National Bank of Ipswich is a commercial community bank with branch offices in Beverly, Boston, Essex, Gloucester, Ipswich, Newburyport, and Rowley, Massachusetts and Portsmouth, NH. The Bank can be found on the web at www.FNBI.com. Press releases can be viewed on the internet at our website http://www.fnbi.com/sp.cfm?pageid=619.

First Ipswich Bancorp
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
			3/31/2008				12/31/2007
Assets:
Loans, net		$	202,622			$	199,365
Investments and other earning assets			50,114				50,781
OREO & in-substance foreclosure			1,928				1,489
Other assets			32,430				31,470
Total assets		$	287,094			$	283,105
Liabilities and stockholders' equity:
Deposits		$	214,605			$	211,595
Borrowed funds			51,110				49,573
Other liabilities			1,589				2,357
Stockholders' equity			19,790				19,580
Total liabilities and stockholders' equity		$	287,094			$	283,105
First Ipswich Bancorp
Condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
(Unaudited)
		Quarter Ended
			3/31/2008				3/31/2007
Interest and fees on loans		$	3,498			$	4,176
Investment and other interest income			539				738
Total interest income			4,037				4,914
Deposit interest expense			1,183				1,745
Other interest expense			611				577
Total interest expense			1,794				2,322
Net interest income			2,243				2,592
Provision (credit) for loan losses			40				(175	)
Non-interest income			668				1,388
Non-interest expense			3,268				3,368
Pre-tax income (loss)			(397	)			787
Provision (benefit) for income taxes			(230	)			321
Net income (loss)		$	(167	)		$	466
Basic earnings (loss) per share		$	(0.07	)		$	0.20
Diluted earnings (loss) per share		$	(0.07	)		$	0.20
End of period common shares outstanding			2,332,879				2,344,630
End of period preferred shares outstanding			11,751				-
Average common shares outstanding:
Basic			2,232,879				2,309,311
Diluted			2,344,630				2,311,768

First Ipswich Bancorp
Select Financial Data
(Unaudited)
			3/31/2008				12/31/2007
Book value per share		$	8.44			$	8.34
		Bancorp								First National Bank of Ipswich
			3/31/2008				12/31/2007			3/31/2008			12/31/2007
Leverage Ratio			7.82	%			7.88	%		9.83	%		9.81	%
Tier 1 risk-based capital			10.03	%			10.31	%		12.62	%		12.84	%
Total risk-based capital			13.71	%			14.02	%		13.37	%		13.59	%