pressrelease128.htm

Exhibit 99.1

Contacts: Linda H. Simmons Debbie Mandeville

Chief Financial Officer Investor Relations Officer

(401) 574-1652 (401) 574-1547

lsimmons@bankri.com dmandeville@bankri.com

BancorpRI Announces Fourth Quarter and Full Year 2009 Financial Results

Strong Commercial Loan and Core Deposit Growth Continues

Providence, R.I. – January 28, 2010 – Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today reported net income of $2.1 million, or $0.44 diluted earnings per share (EPS), for the quarter ended December 31, 2009, compared to net income of $2.3 million, or $0.48 diluted EPS, after preferred stock dividends and discount accretion, for the fourth quarter 2008.

Net income for 2009 was $6.5 million, or $0.90 diluted EPS, after preferred stock dividends and discount accretion, compared to net income of $9.1 million, or $1.96 diluted EPS, after preferred stock dividends and discount accretion for 2008. The Company noted that during the third quarter 2009, it repurchased its preferred stock and the warrant to purchase its common stock previously issued to the U.S. Treasury Department. The repurchase of the preferred stock and the discount accretion associated with its issuance had a negative impact on the Company’s EPS of $0.49 per share for 2009 and $0.01 per share for 2008.

The net interest margin for the fourth quarter 2009 was 3.42 percent, an increase of 13 basis points from the fourth quarter 2008 and an increase of 4 basis points from third quarter 2009. For 2009, the net interest margin was 3.25 percent, an increase of 4 basis points compared to 2008.

At December 31, 2009, the Company’s tier 1 capital ratio was approximately 7.6 percent and its total risk-based capital ratio exceeded 12.0 percent.

“Despite a difficult environment in 2009, we remained profitable with improvement in key fundamentals, continued to maintain a strong capital position and concluded our participation in the government’s Capital Purchase Program,” commented President and CEO, Merrill W. Sherman. “Although we see some signs for a potential economic recovery, we continue to believe that 2010 will be another challenging year in the banking industry. However, BancorpRI remains well-positioned for the long term.”

BancorpRI Q4 Results

Page Two

Net interest income for the fourth quarter 2009 was $13.0 million compared to $11.7 million in the fourth quarter 2008, and $12.7 million in the third quarter 2009. Net interest income for 2009 was $48.3 million, an increase of $2.9 million or 6.5 percent from $45.4 million in 2008.

Noninterest income was $2.4 million for the fourth quarter 2009, compared to $2.9 million in the fourth quarter 2008, and $2.2 million in the third quarter 2009. Noninterest income for the fourth quarter 2009 reflects a charge of $314,000 incurred as the result of an investment security deemed to be other-than-temporarily impaired, offset by a $300,000 gain on sale of leases. Noninterest income was $9.2 million for 2009, a decrease of $1.4 million or 13.6 percent compared to 2008.

Noninterest expense was $9.9 million in the fourth quarter 2009 compared to $9.5 million in the fourth quarter 2008, and $9.8 million in the third quarter 2009. For 2009, noninterest expense was $39.5 million, an increase of $1.6 million or 4.3 percent compared to 2008. The expense increases, for the quarter and full year, were primarily driven by increases in the FDIC insurance assessments and compensation expense in connection with the addition of new professionals to key positions within the organization.

The provision for loan and lease losses was $2.4 million for the fourth quarter 2009 and net charge-offs were $2.4 million. As a comparison, in the fourth quarter 2008 the provision for loan and lease losses was $1.8 million and net charge-offs were $1.3 million, while on a linked-quarter basis they were $1.9 million and $2.3 million, respectively. For 2009, the provision for loan and lease losses was $8.5 million and net charge-offs were $6.6 million compared to $4.5 million and $2.5 million, respectively, for 2008. The allowance for loan and lease losses as a percent of total loans and leases was 1.49 percent at December 31, 2009, up slightly from 1.48 percent at September 30, 2009, and up from 1.36 percent at December 31, 2008.

Nonperforming assets at December 31, 2009, totaled $16.1 million, or 1.01 percent of total assets, down from $16.9 million, or 1.08 percent of total assets, at September 30, 2009, and up from $15.2 million, or 1.00 percent of total assets, at year-end 2008.

As of December 31, 2009, the Company’s commercial loan and lease portfolio totaled $733.9 million, an increase of $75.4 million or 11.5 percent from year-end 2008, and up $9.4 million or 1.3 percent from September 30, 2009. Consumer loans were $206.2 million as of December 31, 2009, down slightly from year-end 2008 and September 30, 2009. Residential mortgage balances were $173.3 million, a decrease of $39.4 million or 18.5 percent from December 31, 2008, and a decrease of $9.0 million or 4.9 percent from September 30, 2009.

BancorpRI Q4 Results

Page Three

Total deposits were $1.1 billion as of December 31, 2009, up $56.1 million or 5.4 percent from year-end 2008, and up $6.4 million or 0.6 percent from September 30, 2009. The increase from year-end 2008 reflects an overall increase of $ 92.4 million in core deposits (demand deposits, NOW, money markets and savings accounts) and a decrease of $36.3 million in certificate of deposits. The 14.9 percent increase from year-end 2008 in core deposits was primarily driven by money market, DDA and NOW accounts. Core deposits at December 31, 2009 represented 64.8 percent of total deposits compared to 59.4 percent at year-end 2008.

“During 2009, because our balance sheet was strong and nonperforming assets remained at a manageable level, we were able to focus on a number of strategic initiatives, including converting to a more commercially-oriented bank and growing our core deposit base,” said Sherman. “The commercial loan and core deposit growth reflect that focus,” she added.

Total assets at December 31, 2009, were $1.6 billion, an increase of $63.1 million or 4.1 percent from year-end 2008. The increase is primarily due to the growth in the commercial loan portfolio and purchase of mortgage-backed securities.

The Company’s Board of Directors approved a dividend of $0.17 per share. The dividend will be paid on March 10, 2010, to shareholders of record on February 17, 2010.

Company executives will host a conference call Thursday, January 28, at 10 a.m. Eastern Time (ET) to discuss the Company’s fourth quarter and full year 2009 results and the Company’s outlook for 2010. Access to the conference call is available by dialing toll free (800) 860-2442, or via webcast in the Investor Relations section of the website at www.bankri.com. International callers can join by dialing 412-858-4600. Please dial in at least 10 minutes prior to the start of the call to ensure a timely connection.

There will be a replay of the call available the same day beginning at approximately 12:00 p.m. ET that can be accessed through 9 a.m. ET on Tuesday, February 2, 2010. The replay dial-in number is (877) 344-7529; when prompted, enter conference ID number 436653. The webcast will be archived in the Investor Relations section of the website at www.bankri.com.

BancorpRI Q4 Results

Page Four

About BancorpRI

Bancorp Rhode Island, Inc. is the parent company of Bank Rhode Island, a full-service, FDIC-insured, state-chartered financial institution. The Bank, headquartered in Providence, Rhode Island, operates 16 branches and more than 60 ATMs throughout Providence, Kent and Washington Counties. As of December 31, 2009, BankRI has $1.6 billion in assets and $1.1 billion in deposits. For more information, visit www.bankri.com.

This release may contain “forward-looking statements” within the meaning of section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent the company's present expectations or beliefs concerning future events. The company cautions that such statements are necessarily based on certain assumptions which are subject to risks and uncertainties, including, but not limited to, changes in general economic conditions and changing competition which could cause actual future results to differ materially from those indicated herein. Further information on these risk factors is included in the company's filings with the Securities and Exchange Commission.

###

BANCORP RHODE ISLAND, INC.

Selected Financial Highlights (unaudited)

	December 31, 2009			December 31, 2008
Balance Sheet Data:	(Dollars in thousands, except per share data)

Total Assets	$	1,591,265		$	1,528,178
Total Loans and Leases		1,113,304			1,077,742
Total Nonperforming Assets		16,060			15,232
Allowance for Loan and Lease Losses		16,536			14,664
Allowance to Nonperforming Loans and Leases		115.15	%		102.05	%
Allowance to Total Loans and Leases		1.49	%		1.36	%
Total Deposits	$	1,098,284		$	1,042,192
Common Shareholders’ Equity		121,584			120,495
Book Value Per Share of Common Stock		26.36			26.34
Tangible Book Value Per Share of Common Stock		23.70			23.71
Tangible Common Equity Ratio (1) (6)		6.92	%		7.15	%

	Quarter Ended December 31,						Year Ended December 31,
	2009			2008			2009		2008
Average Balance Sheet Data:	(Dollars in millions)

Average Total Assets	$	1,579	$		1,513	$	1,559	$	1,484
Average Total Loans		1,117			1,073		1,108		1,053
Average Total Interest-Earning Assets		1,510			1,420		1,488		1,412
Average Total Interest-Bearing Liabilities		1,241			1,176		1,218		1,175
Average Common Shareholders’ Equity		123			116		122		114

	Quarter Ended December 31,					Twelve Months Ended December 31,
		2009		2008		2009		2008
Income Statement Data:	(Dollars in thousands, except per share data)

Interest and Dividend Income	$	18,925	$	19,648	$	75,277	$		80,298
Interest Expense		5,924		7,933		26,955			34,930
Net Interest Income		13,001		11,715		48,322			45,368
Provision of Loan and Lease Losses		2,350		1,750		8,460			4,520
Noninterest Income		2,353		2,881		9,165			10,609
Noninterest Expense		9,949		9,510		39,529			37,886
Income Before Income Taxes		3,055		3,336		9,498			13,571
Income Tax Expense		999		1,083		3,036			4,427
Net Income		2,056		2,253		6,462			9,144
Preferred Stock Dividends		--		(50)		(892)			(50)
Prepayment Charges and Accretion of PreferredStock Discount		--		(8)		(1,405)			(8)
Net Income Applicable to Common Shares	$	2,056	$	2,195	$	4,165	$		9,086

Earnings Per Common Share – Basic	$	0.45	$	0.48	$	0.91	$		1.99
Earnings Per Common Share – Diluted	$	0.44	$	0.48	$	0.90	$		1.96
Average Common Shares Outstanding - Basic		4,618,791		4,569,338		4,604,308			4,560,858
Average Common Shares Outstanding - Diluted		4,650,051		4,614,697		4,626,434			4,631,208

	Quarter Ended December 31,				Twelve Months Ended December 31,
	2009		2008		2009		2008
Selected Operating Ratios:

Net Interest Margin (2) (6)	3.42	%	3.29	%	3.25	%	3.21	%
Return on Assets (3) (6)	0.52	%	0.59	%	0.41	%	0.62	%
Return on Equity (4) (6)	6.64	%	7.55	%	3.41	%	7.99	%
Efficiency Ratio (5) (6)	64.80	%	65.15	%	68.76	%	67.68	%

	Quarter Ended December 31, 2009	Quarter Ended September 30, 2009	Quarter Ended December 31, 2008 (8)
Nonperforming Asset Data:	(Dollars in thousands)

Commercial Real Estate Nonperforming Loans	$4,512	$3,159		$4,884
Commercial and Industrial Nonperforming Loans	1,361	3,263		2,802
Small Business Nonperforming Loans	1,147	585		892
Multifamily Nonperforming Loans	205	205		--
Construction Nonperforming Loans	469	469		1,000
Nonperforming Leases	1,878	1,059		428
Residential Nonperforming Loans	4,124	5,175		4,314
Consumer Nonperforming Loans	664	984		49
Total Nonperforming Loans and Leases	14,360	14,899		14,369
Other Real Estate Owned	1,700	1,995		863
Total Nonperforming Assets	$6,060	$6,894		$15,232

Net Charge-Offs	$2,351	$2,268		$1,285
Net Charge-Offs to Average Loans	0.84%	0.81%		0.48%

	Quarter Ended December 31,				Twelve Months Ended December 31,
	2009		2008		2009		2008
Reconciliation of Non-GAAP EarningsPer Common Share – Diluted (7)(9):

Earnings per Common Share – Diluted	$	0.44	$	0.48	$	0.90	$	1.96
Effect of Preferred Shares Dividend		--		0.01		0.19		0.01
Effect of Preferred Shares Discount		--		--		0.30		--
Non-GAAP Earnings Per Common Share - Diluted	$	0.44	$	0.49	$	1.39	$	1.97

(1) Calculated by dividing Common Shareholders’ Equity less Goodwill by Total Assets less Goodwill.

(2) Calculated by dividing annualized Net Interest Income by Average Interest-Earning Assets.

(3) Calculated by dividing annualized Net Income by Average Total Assets.

(4) Calculated by dividing annualized Net Income Applicable to Common Shares by Average Common Shareholders’ Equity.

(5) Calculated by dividing Noninterest Expense by Net Interest Income plus Noninterest Income.

(6) Non-GAAP performance measure.

(7) Nonperforming Asset Data for September 30, 2009 included for trend analysis purposes.

(8) Certain December 31, 2008 Nonperforming Asset Data amounts have been reclassified to conform to the December 31, 2009 presentation. The reclassifications had no effect on previously reported Total Nonperforming Assets or Net Income.

(9) Reconciliation of Non-GAAP Earnings Per Common Share – Diluted table included to provide the investor useful information in comparing the Company’s operating results to the prior year. Reconciliation excludes the effect of Preferred Stock Dividend and Discount amounts from Diluted Earnings Per Share.

BANCORP RHODE ISLAND, INC.

Consolidated Balance Sheets (unaudited)

	December 31, 2009			December 31, 2008
	(In thousands)
ASSETS:
Cash and due from banks	$	18,866		$	54,344
Overnight investments		1,964			1,113
Total cash and cash equivalents		20,830			55,457
Available for sale securities (amortized cost of $380,108 and $325,767, respectively)		381,839			326,406
Stock in Federal Home Loan Bank of Boston		16,274			15,671
Loans and leases receivable:
Commercial loans and leases		733,854			658,422
Residential mortgage loans		173,294			212,665
Consumer and other loans		206,156			206,655
Total loans and leases receivable		1,113,304			1,077,742
Allowance for loan and lease losses		(16,536	)		(14,664	)
Net loans and leases receivable		1,096,768			1,063,078
Premises and equipment, net		12,378			12,641
Goodwill		12,239			12,019
Accrued interest receivable		4,964			5,240
Investment in bank-owned life insurance		30,010			28,765
Prepaid expenses and other assets**		15,963			8,901
Total assets	$	1,591,265		$	1,528,178
LIABILITIES:
Deposits:
Demand deposit accounts	$	204,281		$	176,495
NOW accounts		74,558			56,703
Money market accounts		65,076			4,445
Savings accounts		367,225			381,106
Certificate of deposit accounts		387,144			423,443
Total deposits		1,098,284			1,042,192
Overnight and short-term borrowings		40,171			57,676
Wholesale repurchase agreements		20,000			10,000
Federal Home Loan Bank of Boston borrowings		277,183			238,936
Subordinated deferrable interest debentures		13,403			13,403
Other liabilities**		20,640			16,881
Total liabilities		1,469,681			1,379,088
SHAREHOLDERS’ EQUITY:
Preferred stock, par value $0.01, authorized 1,000,000 shares, liquidationpreference per share $1,000:
Issued and outstanding: Issued: (0 and 30,000 shares, respectively)*		--			28,595
Common stock, par value $0.01 per share, authorized 11,000,000 shares:
Issued: (4,969,444 shares and 4,926,920 shares, respectively)		50			49
Additional paid-in capital*		72,783			73,323
Treasury stock, at cost (364,750 shares and 352,250 shares, respectively)		(12,309	)		(12,055	)
Retained earnings**		59,935			58,763
Accumulated other comprehensive income, net		1,125			415
Total shareholders’ equity		121,584			149,090
Total liabilities and shareholders’ equity	$	1,591,265		$	1,528,178

* Preferred stock and additional paid-in capital balances at December 31, 2008 were reclassified to reflect the liquidation preference value of shares, less any preferred stock discount.

** December 31, 2008 balances reflect an immaterial adjustment to balances as of January 1, 2005 related to income taxes. Adjustment reduced retained earnings by $515,000, prepaid expenses and other assets by $796,000 and other liabilities by $281,000.

BANCORP RHODE ISLAND, INC.

Consolidated Statements of Operations (unaudited)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2009			2008		2009		2008
	(In thousands, except per share data)
Interest and dividend income:
Commercial loans and leases	$	10,639	$		10,085	$ 40,823	$		39,709
Residential mortgage loans		2,064			2,863	9,486			12,095
Consumer and other loans		2,334			2,585	9,444			11,198
Mortgage-backed securities		3,258			3,398	13,357			13,655
Investment securities		630			616	2,157			2,767
Federal Home Loan Bank of Boston stock dividends		--			98	--			610
Overnight investments		--			3	10			264
Total interest and dividend income		18,925			19,648	75,277			80,298
Interest expense:
NOW accounts		15			24	60			162
Money market accounts		175			4	367			69
Savings accounts		660			1,354	3,380			7,042
Certificate of deposit accounts		1,992			3,401	11,061			14,306
Overnight and short-term borrowings		19			49	86			902
Wholesale repurchase agreements		143			136	551			540
Federal Home Loan Bank of Boston borrowings		2,754			2,726	10,720			10,960
Subordinated deferrable interest debentures		166			239	730			949
Total interest expense		5,924			7,933	26,955			34,930
Net interest income		13,001			11,715	48,322			45,368
Provision for loan and lease losses		2,350			1,750	8,460			4,520
Net interest income after provision for loan and lease losses		10,651			9,965	39,862			40,848
Noninterest income:
Total other-than-temporary impairment losses on available for sale securities		(1,773)			--	(2,469)			(219)
Non-credit component of other-than-temporary impairment losses recognized in other comprehensive income		1,459			--	2,085			--
Credit component of other-than-temporary impairment losses on available for sale securities		(314)			--	(384)			(219)
Service charges on deposit accounts		1,404			1,359	5,377			5,711
Net gains on lease sales and commissions on loans originated for others		347			80	408			454
Income from bank-owned life insurance		339			297	1,245			1,080
Commissions on nondeposit investment products		187			116	776			745
Loan related fees		166			360	869			803
Gain on sale of available for sale securities		--			315	61			725
Other income		224			354	813			1,310
Total noninterest income		2,353			2,881	9,165			10,609
Noninterest expense:
Salaries and employee benefits		5,270			4,885	20,573			20,091
Occupancy		900			902	3,552			3,530
Data processing		691			692	2,640			2,816
Professional services		659			770	2,612			2,968
FDIC insurance		462			216	2,527			694
Marketing		344			507	1,318			1,607
Equipment		292			241	1,001			1,048
Loan workout and other real estate owned		192			229	688			543
Loan servicing		143			140	665			643
Other expenses		996			928	3,953			3,946
Total noninterest expense		9,949			9,510	39,529			37,886
Income before income taxes		3,055			3,336	9,498			13,571
Income tax expense		999			1,083	3,036			4,427
Net income		2,056			2,253	6,462			9,144
Preferred stock dividends		--			(50)	(892)			(50)
Prepayment charges and accretion of preferred stock discount		--			(8)	(1,405)			(8)
Net income applicable to common shares	$	2,056	$		2,195	$ 4,165	$		9,086

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2009		2008			2009		2008

Per share data:
Basic earnings per common share	$	0.45	$	0.48	$	0.91	$		1.99
Diluted earnings per common share	$	0.44	$	0.48	$	0.90	$		1.96
Average common shares outstanding – basic		4,618,791		4,569,338		4,604,308			4,560,858
Average common shares outstanding – diluted		4,650,051		4,614,697		4,626,434			4,631,208