BancorpRI reports 2% gain for third quarter

Bancorp Rhode Island Inc. last week posted a 2.02 percent year-over-year increase in its earnings for the third quarter, a period in which some other banks reported smaller profits or losses.
BancorpRI, the parent of Bank Rhode Island, recorded a $2.32 million profit for the third quarter, a $46,000 increase over the year-ago period. Diluted earnings per common share rose to 50 cents, an 8.7-percent increase from the year-ago 46 cents.
Revenue for the quarter fell 9.42 percent compared with the 2007 third quarter, from $24.81 million to $22.47 million. The decline reflected a $1.81 million drop in interest income, caused mostly by shrinking residential mortgages and consumer loan balances. The bank said it has been attempting to shift to a “more commercially oriented balance sheet.”
But as in the preceding quarter, the loss of income was offset by a $3.47 million reduction in interest expenses.
An improving net-interest margin also helped. BancorpRI said the margin was 3.34 percent for the third quarter, up 10 basis points from the second quarter and 43 basis points from the third quarter 2007.
“There is no question we are operating in a difficult environment,” Bancorp-RI President and CEO Merrill W. Sherman said in a statement last week. “I am pleased we are able to report a modest earnings increase while many other institutions are reporting losses or substantial declines in year-over-year earnings. We believe these results evidence the value of a prudent, patient and long-term approach towards investing that has always formed the hallmark of our business strategy.”
The bank continued to maintain its “well-capitalized” status in the third quarter, reporting a Tier 1 capital ratio of 8.03 percent and a risk-weighted capital ratio of more than 13 percent.
The amount of nonperforming loans, however, grew to $11.7 million at Sept. 30, or 1.11 percent of total loans, compared with $6.8 million at June 30, or 0.64 percent of total loans. At the end of the third quarter in 2007, that percentage was 0.39 percent.
The bank said the increase came primarily from loans in the purchased mortgage portfolio and several commercial credits.
And BankRI substantially increased its loan-loss amount set aside for anticipated bad loans. The provision was $1.52 million, up from $290,000 a year ago and $970,000 the previous quarter.
Net charge-offs for the third quarter were $477,000 – or 0.04 percent of average loans outstanding, compared to $273,000 – or 0.04 percent of average loans outstanding – in the year-ago period.
Among liabilities, total deposits shrank to $1.02 billion on Sept. 30 from $1.04 billion at the beginning of the quarter but were even with the year-ago figure. &#8226