PROVIDENCE – Bancorp Rhode Island Inc., which has agreed to be acquired by a Massachusetts bank at the end of 2011, said on Thursday that its first-quarter profit edged upward nearly 4 percent to $2.31 million compared with the year-earlier period, helped by a reduction in the money the company set aside in anticipation of loans going bad.
BancorpRI, parent of Bank Rhode Island, missed by one cent the average first-quarter earnings estimate among the four analysts who cover the bank.
Earnings per diluted share for the quarter was 49 cents, an improvement over the 48 cents from a same quarter a year earlier, but one cent lower than analysts’ 50-cent forecast, according to Yahoo! Finance.
“We have maintained a disciplined operating approach in what continues to be a less than favorable economic environment,” Merrill W. Sherman, president and CEO, said in a statement. “We are pleased to be off to a solid start in 2011.”
Last week, Brookline Bancorp Inc. announced it will purchase BancorpRI in a $234 million deal that is expected to close in the fourth quarter. Following the acquisition announcement, BancorpRI executives canceled the quarterly conference call with analysts that was scheduled for Thursday.
The bigger bottom line for the 2011 first quarter came despite smaller revenues compared with the same period a year earlier.
The bank’s total interest and non-interest 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 BancorpRI financial statements.
BancorpRI noted in a statement that its noninterest expense for the 2011 first quarter 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that his Dollar Depot stores were forced out of business when the bank demanded repayment of funds that had been withdrawn by an employee who was later convicted of embezzlement. Lawyers for Pietrantonio say BankRI 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.
Despite that setback, some of the bank’s performance measures showed improvement.
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.
Meanwhile, 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 but still up from $16.39 million on March 31, 2010.
Two key performance measures – return on assets and return on equity – were mixed.
BankRI’s return on assets in the first quarter was 0.59 percent, up from 0.57 percent in the same period in 2010.
The bank’s return on equity sank from 7.32 percent in the first quarter of 2010 to 7.25 percent in the first three months of 2011.
