Despite 4th quarter drop, BankRI’s profit up in ’07

Bank Rhode Island last week posted a 5.6-percent, year-over-year decline in its earnings for the fourth quarter, but the bank finished with a $9.05 million profit for the full year, a 17.3- percent increase from $7.71 million in 2006.
Providence-based Bancorp Rhode Island Inc., BankRI’s parent company, reported $2.4 million in net income for the fourth quarter, a $142,000 decrease from the same period in 2006. Diluted earnings per share were 50 cents for the quarter, down from 51 cents a year before.
For the year, diluted earnings per share were $1.84, up from $1.57 in 2006.
“We are pleased to report solid earnings growth in this economic environment,” said Merrill W. Sherman, president and CEO, in a statement. “We also have made significant strides in controlling operating expenses while continuing to invest in our franchise.”
Year-end earnings were boosted by $165,000 in gains on the sale of securities, as total revenue for the company increased 7.39 percent to $96.86 million. But the profit increase was also due, in part, to the company restructuring its investment portfolio in 2006, resulting in a one-time, after-tax charge of $558,000 in that year, the bank said.
The loan-loss provision for the fourth quarter was $210,000, down from the $240,000 from the previous quarter. For the year, the set-aside was $700,000, down from $1.2 million a year earlier.
BankRI saw some expansion in the bank’s net interest margin in the fourth quarter as it increased to 2.98 percent from 2.91 percent in the third quarter. For the year, however, the margin averaged 2.96 percent, down from 3.06 percent in 2006.
Two key performance ratios, return on assets and return on equity, declined in the fourth quarter, according to BankRI’s financial statements.
The return on assets – the amount of money a bank earned for each $100 in assets – decreased from 0.69 percent in December 2006 to 0.65 percent this past quarter. And the return on equity declined from 9.11 percent in the fourth quarter of 2006 to 8.21 percent in fourth quarter of 2007. &#8226