BancorpRI manages 4% profit in 2011 1Q

Bancorp Rhode Island Inc. eked out a 4 percent profit in the first quarter thanks partially to a reduction in the money it set aside in anticipation of bad loans, which helped offset the expense from a lawsuit award against the company.
The Providence-based parent of Bank Rhode Island last week posted a net income of $2.31 million for the first three months of 2011, an improvement over the $2.22 million for the 2010 first quarter.
Bancorp Rhode Island has agreed to be acquired by Massachusetts-based Brookline Bancorp Inc. in a $234 million deal, expected to be completed in the fourth quarter. It must be approved by shareholders.
The bank’s total interest and noninterest revenue for the first quarter was $19.92 million, down 3.6 percent from the $20.67 million reported in the 2010 first quarter.
But BancorpRI was able to reduce the amount of money it sets aside quarterly for loan losses to $1.13 million in the first quarter, down $470,000 from a year earlier.
The bank also avoided “other than temporary impairment losses” on securities. It took a net charge of $571,000 in the 2010 first quarter, according to financial statements.
Noninterest expense for the first quarter of 2011 was about $781,000 higher than the year-earlier period, largely because of a recent jury verdict against the bank that awarded the owner of a closed discount-store business $2 million.
The bank has started accruing that amount in its financial statements.
The store owner, Joseph Pietrantonio, claimed in a Superior Court lawsuit that his Dollar Depot stores were forced out of business when the bank demanded repayment of funds withdrawn by an employee later convicted of embezzlement. Lawyers for Pietrantonio said Bank Rhode Island permitted the employee unauthorized access to the store’s credit line, and then refused to forgive the debt despite knowing the money was withdrawn illegally.
Some of the bank’s performance measures showed improvement in the first quarter.
The bank said its net interest margin stood at 3.58 percent in the first quarter, up 9 basis points from the 2010 fourth quarter and up 6 basis points from a year earlier.
Also, the total amount of nonperforming assets on BancorpRI’s books stood at $17.47 million as of March 31, down from $17.64 million at the end of 2010.
Two key measures – return on assets and return on equity – were mixed. BankRI’s return on assets was 0.59 percent, up from 0.57 percent in the first quarter in 2010. Return on equity sank from 7.32 percent in 2010’s first quarter to 7.25 percent in the first three months of 2011. &#8226