CORRECTING and REPLACING BancorpRI Announces Record Net Income of $2.7 million

PROVIDENCE, R.I.--(BUSINESS WIRE)--In Selected Financial Highlights, LOAN AND LEASE PORTFOLIO section, in the Jun 30, 2010 (first) column: Subtotal should be 769,326; Total commercial loans and leases should be 764,374; Total loans and leases should be 1,136,524 (sted 583,889, 578,937 and 951,087 respectively).

“Our results for the first half of 2010 send a clear signal of our ability to execute on the fundamentals of the business as we continue to expand our net interest margin and maintain our credit quality”

The corrected release reads:

BANCORPRI ANNOUNCES RECORD NET INCOME OF $2.7 MILLION

Significant earnings growth over prior periods Net interest margin up sharply

Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today reported net income of $2.7 million for the quarter ended June 30, 2010, a three-fold increase over the second quarter 2009 net income of $740,000 and a 20.8 percent increase over net income of $2.2 million in the first quarter 2010. The Company’s diluted earnings per share (EPS) were $0.57 for the second quarter 2010 compared to $0.07 in the prior year period, after preferred stock dividends and discount accretion, and $0.48 for the first quarter 2010.

For the six month period ended June 30, 2010, the Company reported net income of $4.9 million, or $1.05 diluted EPS compared to net income of $2.2 million, or $0.29 diluted EPS, after preferred stock dividends and discount accretion, for the same period in 2009.

“Our results for the first half of 2010 send a clear signal of our ability to execute on the fundamentals of the business as we continue to expand our net interest margin and maintain our credit quality,” commented President and CEO, Merrill W. Sherman. “Commercial loan and core deposit generation continue to be solid. Our balance sheet remains strong with ample capital levels and manageable credit issues. From the beginning, our business strategy and focus have played a key role in differentiating ourselves from our competitors. Our efforts have put us in an attractive market niche with potential for future growth in earnings and market share.”

The Company’s commercial loan and lease portfolio continued its steady growth and totaled $764.4 million as of June 30, 2010. This represented an increase of $12.2 million or 1.6 percent from March 31, 2010 and $32.0 million or 4.4 percent from year-end 2009. Consumer loans were $207.4 million as of June 30, 2010, up from $201.4 million at March 31, 2010. Residential mortgage loans were $164.8 million, a decrease of $5.5 million from March 31, 2010.

Total deposits grew to $1.2 billion as of June 30, 2010, an increase of $66.9 million from March 31, 2010 and up $75.7 million from year-end 2009. The sharp increase in demand deposit balances from March 31, 2010 reflects a temporary inflow of approximately $53.0 million attributable to the settlement of personal injury litigation to which the Bank was not a party. Excluding the temporary inflow referenced, core deposits (demand deposits, NOW, money market and savings accounts) at June 30, 2010, have risen to 67.9 percent of total deposits, compared to 64.8 percent at year-end 2009.

Net interest income for the second quarter 2010 was $13.6 million, compared to $11.6 million in the second quarter 2009, and $13.1 million in the first quarter 2010. This increase was driven by significant improvement in the net interest margin. Net interest margin for the second quarter 2010 rose to 3.67 percent, an increase of 57 basis points from the second quarter 2009 and 15 basis points from the first quarter 2010. On a year-to-date basis, net interest income was $26.7 million, an increase of $4.1 million or 17.9 percent from 2009, and the net interest margin was 3.59 percent, an increase of 50 basis points from a year ago.

Noninterest income was $2.3 million for the second quarter 2010, compared to $2.2 million in the second quarter 2009 and flat with the first quarter 2010. The increase in noninterest income from the prior year was primarily driven by a modest gain on the sale of a mortgage-backed security.

Noninterest expense was $10.4 million in the second quarter 2010, compared to $10.1 million in the second quarter 2009, and down slightly from the first quarter 2010. On a year-to-date basis, noninterest expense was $20.9 million, an increase of $1.2 million over the same period in 2009. The increases in the quarterly and year-to-date comparisons were primarily driven by higher compensation and loan workout and other real estate owned related costs, partially offset by a reduction in FDIC insurance expense.

Nonperforming assets at June 30, 2010, totaled $16.8 million, or 1.04 percent of total assets, up slightly from $16.4 million, or 1.03 percent at March 31, 2010, and down from $20.0 million, or 1.26 percent at December 31, 2009. Net charge-offs were $779,000 or 0.28 percent of average loans and leases for the second quarter 2010, down compared to $1.1 million or 0.40 percent in the second quarter 2009 and $1.5 million or 0.55 percent in the first quarter 2010. On a year-to-date basis, the net charge-offs were $2.3 million or 0.41 percent of average loans and leases, an increase of $321,000 over the same period in 2009.

The provision for loan and lease losses was $1.6 million for the second quarter 2010, compared to $2.6 million in the second quarter 2009 and flat from the linked quarter. On a year-to-date basis, the provision was $3.2 million, a decrease of $1.1 million from the same period in 2009. The allowance for loan and lease losses as a percent of total loans and leases was 1.53 percent at June 30, 2010, up from 1.48 percent at March 31, 2010.

Total assets at June 30, 2010, were $1.6 billion, an increase of 1.7 percent from the first quarter 2010 and 1.5 percent from year-end 2009.

At June 30, 2010, the Company’s tier 1 capital ratio was approximately 7.80 percent and its total risk-based capital ratio was approximately 12.10 percent.

The Company’s Board of Directors approved a dividend of $0.17 per share. The dividend will be paid on September 1, 2010, to shareholders of record on August 11, 2010.

Company executives will host a conference call Thursday, July 22, at 11 a.m. Eastern Time (ET) to discuss the Company’s second quarter 2010 results. Access to the conference call is available by dialing toll free (877) 317-6789, or via webcast in the Investor Relations section of the website at www.bankri.com. International callers can join by dialing (412) 317-6789. 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 1:00 p.m. ET that can be accessed through 9 a.m. ET on Wednesday, July 28, 2010. The replay dial-in number is (877) 344-7529; when prompted, enter conference ID number 441776. 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 June 30, 2010, BankRI had $1.6 billion in assets and $1.2 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)



					Three Months Ended						Six Months Ended
					June 30,						June 30,
					2010			2009			2010			2009
					(In thousands, except per share data)

FINANCIAL DATA:
	Net interest income				$	13,626		$	11,573		$	26,714		$	22,655
	Provision for loan and lease losses					1,550			2,600			3,150			4,210
	Noninterest income					2,285			2,214			4,600			4,571
	Noninterest expense					10,430			10,145			20,918			19,768
	Net income					2,681			740			4,900			2,203
	Net income applicable to common shares					2,681			303			4,900			1,330

FINANCIAL PERFORMANCE RATIOS:
	Return on assets ^{(3) (6)}					0.68	%		0.19	%		0.63	%		0.29	%
	Return on equity ^{(4) (6)}					8.54	%		1.00	%		7.93	%		2.21	%
	Net interest margin ^{(2) (6)}					3.67	%		3.10	%		3.59	%		3.09	%
	Efficiency ratio ^{(5) (6)}					65.55	%		73.58	%		66.80	%		72.61	%

PER SHARE DATA:
	Earnings per share - basic				$	0.57		$	0.07		$	1.05		$	0.29
	Earnings per share - diluted					0.57			0.07			1.05			0.29
	Book value per share of common stock					27.63			26.07			27.63			26.07
	Tangible book value per share of common stock					25.00			23.45			25.00			23.45
	Market value (at period end)					26.20			19.71			26.20			19.71
	Dividends per share					0.17			0.17			0.34			0.34

CAPITAL RATIOS:
	Tier 1 capital ratio ⁽⁷⁾					7.80	%		9.74	%
	Total risk-based capital ratio⁽⁷⁾					12.10	%		14.72	%
	Tangible common equity ratio ^{(1) (6)}					7.30	%		6.86	%



			Three Months Ended
			Jun 30, 2010		Mar 31, 2010			Dec 31, 2009			Sep 30, 2009			Jun 30, 2009
			(In thousands)

BALANCE SHEET:
	Total assets	$	1,613,520		$	1,586,778		$	1,589,946		$	1,569,084		$	1,583,686
	Total loans and leases		1,136,524			1,123,838			1,111,847			1,116,627			1,117,655
	Total deposits		1,174,020			1,107,071			1,098,284			1,091,931			1,084,673
	Shareholders' equity		129,127			123,679			120,661			121,961			148,674

ASSET QUALITY:
	Total nonperforming assets	$	16,759		$	16,392		$	20,015		$	16,894		$	18,796
	Nonperforming assets / total assets		1.04	%		1.03	%		1.26	%		1.08	%		1.19	%
	Allowance for loans and leases	$	17,396		$	16,625		$	16,536		$	16,537		$	16,905
	Allowance to total loans and leases		1.53	%		1.48	%		1.49	%		1.48	%		1.51	%
	Net charge-offs	$	779		$	1,511		$	3,808		$	2,268		$	1,118
	Net charge-offs to average loans		0.28	%		0.55	%		1.35	%		0.81	%		0.40	%


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


			Jun 30, 2010			Mar 31, 2010			Dec 31, 2009			Sep 30, 2009			Jun 30, 2009
			(in thousands)
LOAN AND LEASE PORTFOLIO:

Commercial loans and leases:
	Commercial real estate - non-owner occupied	$	185,437		$	187,988		$	170,148		$	163,766		$	159,576
	Commercial real estate - owner occupied		174,267			167,603			167,853			167,222			163,461
	Commercial & industrial		173,588			174,649			178,808			183,911			188,570
	Multi-family		67,588			66,716			66,350			58,622			58,596
	Small business		59,833			57,911			56,148			55,442			53,660
	Construction		30,925			30,355			23,405			23,630			21,573
	Leases and other		77,688			72,969			75,057			78,506			72,587
	Subtotal		769,326			758,191			737,769			731,099			718,023
	Unearned lease income		(6,777	)		(7,039	)		(7,693	)		(9,218	)		(8,702	)
	Net deferred loan origination costs		1,825			1,041			2,321			2,540			2,318
	Total commercial loans and leases		764,374			752,193			732,397			724,421			711,639

Residential mortgages			164,750			170,200			173,294			182,303			191,271

Consumer loans			207,400			201,445			206,156			209,903			214,745


	Total loans and leases	$	1,136,524		$	1,123,838		$	1,111,847		$	1,116,627		$	1,117,655





















⁽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⁾Tier 1 capital and total risk-based capital ratio are estimated for June 30, 2010.


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

		June 30,			December 31,
		2010			2009
		(In thousands)
ASSETS:
Cash and due from banks	$	23,857		$	18,866
Overnight investments		30,224			1,964
Total cash and cash equivalents		54,081			20,830
Available for sale securities (amortized cost of $336,707 and
$380,108, respectively)		345,566			381,839
Stock in Federal Home Loan Bank of Boston		16,274			16,274
Loans and leases receivable:
Commercial loans and leases		764,374			732,397
Residential mortgage loans		164,750			173,294
Consumer and other loans		207,400			206,156
Total loans and leases receivable		1,136,524			1,111,847
Allowance for loan and lease losses		(17,396	)		(16,536	)
Net loans and leases receivable		1,119,128			1,095,311
Premises and equipment, net		12,127			12,378
Goodwill		12,262			12,239
Accrued interest receivable		4,704			4,964
Investment in bank-owned life insurance		30,644			30,010
Prepaid expenses and other assets		18,734			16,101
Total assets	$	1,613,520		$	1,589,946

LIABILITIES:
Deposits:
Demand deposit accounts	$	290,794		$	204,281
NOW accounts		73,501			74,558
Money market accounts		83,315			65,076
Savings accounts		366,087			367,225
Certificates of deposit accounts		360,323			387,144
Total deposits		1,174,020			1,098,284
Overnight and short-term borrowings		37,338			40,171
Wholesale repurchase agreements		20,000			20,000
Federal Home Loan Bank of Boston borrowings		223,396			277,183
Subordinated deferrable interest debentures		13,403			13,403
Other liabilities		16,236			20,244
Total liabilities		1,484,393			1,469,285
SHAREHOLDERS’ EQUITY:
Common stock, par value $0.01 per share, authorized 11,000,000 shares:
Issued: (5,047,941 shares and 4,969,444 shares, respectively)		50			50
Additional paid-in capital		73,514			72,783
Treasury stock, at cost (373,850 shares and 364,750 shares, respectively)		(12,527	)		(12,309	)
Retained earnings		62,332			59,012
Accumulated other comprehensive income, net		5,758			1,125
Total shareholders’ equity		129,127			120,661
Total liabilities and shareholders’ equity	$	1,613,520		$	1,589,946


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

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2010			2009			2010			2009
		(In thousands, except per share data)
Interest and dividend income:
Overnight investments	$	-		$	-		$	5		$	9
Mortgage-backed securities		3,041			3,360			6,270			6,763
Investment securities		490			536			1,040			987
Loans and leases		15,105			14,896			29,673			29,593
Total interest and dividend income		18,636			18,792			36,988			37,352
Interest expense:
Deposits		2,164			4,224			4,442			8,718
Overnight and short-term borrowings		19			21			37			48
Wholesale repurchase agreements		143			134			282			267
Federal Home Loan Bank of Boston borrowings		2,518			2,650			5,183			5,275
Subordinated deferrable interest debentures		166			190			330			389
Total interest expense		5,010			7,219			10,274			14,697
Net interest income		13,626			11,573			26,714			22,655
Provision for loan and lease losses		1,550			2,600			3,150			4,210
Net interest income after provision for loan and lease losses		12,076			8,973			23,564			18,445
Noninterest income:
Total other-than-temporary impairment losses on
available for sale securities		(1,069	)		-			(2,661	)		-
Non-credit component of other-than-temporary impairment losses
recognized in other comprehensive income		1,025			-			2,046			-
Credit component of other-than-temporary impairment losses on		(44	)		-			(615	)		-
available for sale securities
Service charges on deposit accounts		1,348			1,367			2,612			2,577
Income from bank-owned life insurance		318			304			633			593
Commissions on nondeposit investment products		148			111			385			267
Loan related fees		133			229			322			628
Gain on sale of available for sale securities		103			-			578			61
Net gains on lease sales and commissions on loans
originated for others		6			19			42			48
Other income		273			184			643			397
Total noninterest income		2,285			2,214			4,600			4,571
Noninterest expense:
Salaries and employee benefits		5,746			4,926			11,589			10,079
Occupancy		829			832			1,690			1,788
Data processing		654			670			1,308			1,290
Professional services		537			646			1,169			1,344
FDIC insurance		475			1,176			950			1,563
Marketing		383			332			641			647
Loan workout and other real estate owned		337			149			673			277
Equipment		255			242			510			483
Loan servicing		171			189			347			348
Other expenses		1,043			983			2,041			1,949
Total noninterest expense		10,430			10,145			20,918			19,768
Income before income taxes		3,931			1,042			7,246			3,248
Income tax expense		1,250			302			2,346			1,045
Net income		2,681			740			4,900			2,203
Preferred stock dividends		-			(375	)		-			(750	)
Prepayment charges and accretion of preferred stock discount		-			(62	)		-			(123	)
Net income applicable to common shares	$	2,681		$	303		$	4,900		$	1,330

Per share data:
Basic earnings per common share	$	0.57		$	0.07		$	1.05		$	0.29
Diluted earnings per common share	$	0.57		$	0.07		$	1.05		$	0.29
Cash dividends declared per common share	$	0.17		$	0.17		$	0.34		$	0.34
Weighted average common shares outstanding – basic		4,664			4,602			4,643			4,596
Weighted average common shares outstanding – diluted		4,690			4,620			4,670			4,615


BANCORP RHODE ISLAND, INC.
Asset Quality Analysis (unaudited)

		Three Months Ended
		Jun 30, 2010		Mar 31, 2010			Dec 31, 2009			Sep 30, 2009			Jun 30, 2009
		(Dollars in thousands)
NON-PERFORMING ASSETS:

Nonperforming loans & leases:
Commercial real estate	$	5,131		$	4,952		$	6,909		$	3,159			$	4,801
Commercial & industrial		1,155			1,544			2,919			3,263				4,360
Multifamily		-			-			205			205				-
Small business		986			957			1,147			585				542
Construction		469			710			469			469				1,000
Leases		2,252			1,415			1,878			1,059				833
Residential mortgage		3,737			4,349			4,124			5,175				5,933
Consumer		1,081			442			664			984				284
Total nonperforming loans & leases		14,811			14,369			18,315			14,899				17,753

Other real estate owned		1,948			2,023			1,700			1,995				921
Non-real estate foreclosed assets		-			-			-			-				122

Total nonperforming assets	$	16,759		$	16,392		$	20,015		$	16,894			$	18,796


Total nonperforming loans & leases / total loans & leases		1.30	%		1.28	%		1.65	%		1.33	%			1.59	%
Total nonperforming assets / total assets		1.04	%		1.03	%		1.26	%		1.08	%			1.19	%


PROVISION AND ALLOWANCE FOR LOAN LOSSES:

Balance at beginning of period	$	16,625		$	16,536		$	16,537		$	16,905			$	15,423
Charged-off loans & leases		(909	)		(1,612	)		(3,893	)		(2,285	)			(1,138	)
Recoveries on charged-off loans & leases		130			101			85			17				20
Net loans & leases charged-off		(779	)		(1,511	)		(3,808	)		(2,268	)			(1,118	)
Provision for loan and lease losses		1,550			1,600			3,807			1,900				2,600
Balance at end of period	$	17,396		$	16,625		$	16,536		$	16,537			$	16,905


Allowance to nonperforming loans & leases		117.45	%		115.70	%		90.29	%		110.99	%			95.22	%
Allowance to total loans & leases		1.53	%		1.48	%		1.49	%		1.48	%			1.51	%


NET CHARGE-OFFS:

Commercial real estate	$	(100	)	$	549		$	322		$	50			$	-
Commercial & industrial		(4	)		(11	)		1,807			1,412				249
Other commercial loans & leases		387			529			238			227				244
Residential mortgages		490			347			852			556				619
Consumer		6			97			589			23				6
Total net charge-offs	$	779		$	1,511		$	3,808		$	2,268			$	1,118


Net charge-offs to average loans & leases		0.28	%		0.55	%		1.35	%		0.81	%			0.40	%


DELINQUENCIES AND NON-ACCRUING LOANS AND LEASES AS % OF TOTAL LOANS:

Loans & leases 30-59 days past due		0.90	%		0.90	%		0.95	%		0.97	%			0.68	%
Loans & leases 60-89 days past due		0.21	%		0.22	%		0.19	%		0.16	%			0.19	%
Loans & leases 90+ days past due and still accruing		0.08	%		-			0.07	%		0.02	%			-
Total accruing past due loans & leases		1.19	%		1.12	%		1.21	%		1.15	%			0.87	%

Non-accrual loans & leases		1.22	%		1.28	%		1.57	%		1.31	%			1.59	%

Total delinquent and nonaccrual loans & leases		2.41	%		2.40	%		2.78	%		2.46	%			2.46	%


BANCORP RHODE ISLAND, INC.
Consolidated Average Balances, Yields and Costs (unaudited)


	Three Months Ended June 30,
(Dollars in thousands)	2010							2009
	Average Balance			Interest Earned/Paid		Average Yield		Average Balance			Interest Earned/Paid		Average Yield

ASSETS:
Earning assets:
Overnight investments	$	2,009		$	-	0.09	%	$	3,149		$	-	0.08	%
Available for sale securities		346,907			3,531	4.08	%		370,685			3,896	4.22	%
Stock in the FHLB		16,274			-	0.00	%		15,671			-	0.00	%
Loans and leases receivable:
Commercial loans and leases		757,664			10,943	5.79	%		694,723			10,041	5.79	%
Residential mortgages loans		167,289			1,939	4.64	%		198,144			2,460	4.97	%
Consumer and other loans		204,235			2,223	4.36	%		214,928			2,395	4.47	%
Total earning assets		1,494,378			18,636	5.00	%		1,497,300			18,792	5.03	%
Cash and due from banks		18,798							12,335
Allowance for loans and leases		(17,034	)						(15,788	)
Premises and equipment		12,244							12,425
Goodwill, net		12,262							12,051
Accrued interest receivable		4,252							4,213
Bank-owned life insurance		30,435							29,158
Prepaid expenses and other assets		16,898							9,285
Total assets	$	1,572,233						$	1,560,979


LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	69,378		$	12	0.07	%	$	67,072		$	14	0.08	%
Money market accounts		81,271			165	0.81	%		16,228			51	1.26	%
Savings accounts		373,225			506	0.54	%		385,887			930	0.97	%
Certificate of deposit accounts		374,935			1,481	1.58	%		424,699			3,229	3.05	%
Overnight and short-term borrowings		37,011			19	0.20	%		45,065			22	0.19	%
Wholesale repurchase agreements		20,000			143	2.82	%		10,000			134	5.32	%
FHLB borrowings		247,720			2,518	4.02	%		249,852			2,649	4.20	%
Subordinated deferrable interest debentures		13,403			166	4.93	%		13,403			190	5.67	%
Total interest-bearing liabilities		1,216,943			5,010	1.65	%		1,212,206			7,219	2.39	%

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CORRECTING and REPLACING BancorpRI Announces Record Net Income of $2.7 million