Bancorp Rhode Island, Inc. Announces Third Quarter Earnings of $1.6 Million.Investment Portfolio Restructured; Commercial Loan Growth Continues PROVIDENCE, R.I. -- Bancorp Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BARI), the parent company of Bank Rhode Island, today announced earnings for the third quarter of 2006 were $1.6 million, as compared to $2.5 million earned in the third quarter of last year. The company's diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) were $0.33 for the third quarter of 2006, down from $0.50 in the third quarter of 2005. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings and GAAP EPS for the third quarter of 2006 were impacted by the company's restructuring of its investment portfolio in September 2006, as movements in the yield curve increased security valuations. The company sold $62 million in investment securities resulting in pretax losses pretax loss A loss reported before tax benefits are considered. of $859,000. The proceeds from these sales were reinvested into higher-yielding securities. As a result of this portfolio restructuring Portfolio restructuring Applies to derivative products. Recomposition of a portfolio's asset mix by selling off undesired asset types (equities, debt, or cash) or specific securities within that class, while simultaneously buying desired types or securities. , the company expects to increase interest income by approximately $900,000 over the next 12 months. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the third quarter of 2006 were $2.2 million, or $0.45 per share. (See reconciliation of non-GAAP financial information for pro forma net income and pro forma net income per diluted share.) "The prolonged flattening of the yield curve Flattening of the yield curve A change in the yield curve when the spread between the yield on long-term and short-term Treasuries has decreased. Compare steepening of the yield curve and butterfly shift. continues to compress net interest margins for most banks. We believe this portfolio restructuring addresses the current environment and will enhance our longer-term performance," said Merrill W. Sherman, president and chief executive officer. In addition, two quarterly dividends, totaling $456,000, were received from the FHLB FHLB Federal Home Loan Bank of Boston, as the amended dividend schedule deferred its normal dividend from the second quarter to the third quarter. Total commercial loans outstanding rose to $508.5 million, up 16 percent from $438.3 million as of December 31, 2005. "We are pleased with the strong, double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" commercial loan results. Coming off a record second quarter, we still were able to grow the portfolio by $22 million. These results reflect the reputation and quality of our lending team in this highly competitive market," Sherman stated. She added, "The growth has not been accomplished at the expense of credit quality. Nonperforming loans are at nominal levels." Consumer loans outstanding were $222.7 million at the end of the third quarter of 2006. This marks a 7.9 percent increase over the $206.5 million reported at December 31, 2005. The bank's total deposits were $987.6 million for the third quarter of 2006, up $6.6 million from $981.0 million at the end of 2005. In an effort to provide investors information regarding the company's results, the company has disclosed certain non-GAAP information which management believes provides useful information to the investor. This information should not be viewed as a substitute for operating results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP information, which may be presented by other companies. The company's board of directors approved a dividend of $0.15 per share. The dividend will be paid on November 28, 2006 to shareholders of record on November 7, 2006. Bancorp Rhode Island, Inc. will host a conference call at 10:00 a.m. Eastern Time tomorrow (Wednesday, October 18) to discuss its third quarter earnings for 2006. The conference call can be accessed by dialing toll-free 1-866-425-6192. 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, has 16 branches located in Providence, Kent and Washington counties. 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. -30- [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (1) Calculated by dividing total noninterest expenses by net interest income plus noninterest income. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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