PROVIDENCE – Bancorp Rhode Island Inc. (Nasdaq: BARI), one of the few banks with local connections to see gains for the period, today posted a 39-percent increase in third-quarter profit to $2.3 million.
Earnings per diluted share rose to 46 cents from 33 cents in the year-ago period, the Bank Rhode Island parent said.
The company noted that results for the quarter ended Sept. 30 include $254,000 in pre-tax gains on the sale of securities, which were partially offset by $137,000 in pre-tax interest expenses write-offs from the company’s redemption of $5 million of subordinated deferrable interest debentures.
Results for the year-ago period include $858,000 in pre-tax losses associated with the restructuring of BankRI’s investment portfolio, which were partially offset by $228,000 in additional pre-tax income realized in the period because the Federal Home Loan Bank of Boston amended its dividend schedule.
Total assets edged up slightly to $1.49 billion in the third quarter from $1.48 billion at the end of 2006. Total deposits grew 3 percent to a reported $1.02 billion while the company’s commercial loan portfolio grew 9 percent to $554.9 million.
Those increases helped offset a narrowing of the bank’s net interest margin, which shrank to 2.91 percent from the year-ago 3.08 percent.
Two key performance ratios – return on assets and return on equity – improved in the third quarter, the company said. Return on assets increased to 0.61 percent in the third quarter from 0.45 percent in the year-ago period, while return on equity improved to 7.79 percent from 6.10 percent in the third quarter of 2006.
Merrill W. Sherman, the company president and CEO, gave credit for the third consecutive quarter of earnings increases to BankRI’s efforts to grow its commercial loans and maintain its core deposit portfolio. “We’re one of the few local institutions that is posting an improvement over last year, and we’re pleased about that,” she said in a conference call this morning.
Although some local banks have cited a weak lending market and narrow interest margins in explaining their poor third-quarter results, Sherman said she is “comfortable with the credit quality” of BankRI’s loan portfolio. The company’s provision for loan losses decreased to $240,000 in the third quarter from $400,000 a year ago.
Bancorp Rhode Island Inc. (Nasdaq: BARI) is the holding company for Bank Rhode Island, a state-chartered, FDIC-insured institution with 16 branches in Providence, Kent and Washington counties. Additional information on BankRI and its parent company is available at bankri.com.
A longer version of this article will appear in the Oct. 29 print edition of Providence Business News.
