Beverly National Corporation Announces Increase in Net Income and Earnings Per Share for the Quarter and Six Months Ended June 30, 2008.

BEVERLY, Mass. -- Don Fournier, President and Chief Executive Officer of Beverly National Corporation (AMEX:BNV) (the "Company") and its subsidiary, Beverly National Bank (the "Bank"), announced the Company's earnings for the quarter and six months ended June 30, 2008.

The Company reported net income for the quarter ended June 30, 2008 of $1,016,000 or basic and fully diluted earnings of $0.38 per share, compared to net income of $882,000, or basic and fully diluted earnings of $0.32 per share, for the same quarter last year. The results for the quarter represent a 15.2% increase in net income and an 18.8% increase in earnings per share, compared to results for the same quarter last year. The Company also reported net income for the six months ended June 30, 2008 of $1.9 million, or basic and fully diluted earnings of $0.72 per share, compared to net income of $1.7 million, or basic and fully diluted earnings of $0.61 per share for the same period last year. These results represent a 14.0% increase in net income and an 18.0% increase in earnings per share, compared to the same period last year.

The primary reason for the increase in the Bank's net income and earnings per share for the periods presented is the increase in net interest and dividend income after the provision for loan losses, which increased $290,000, or 7.5%, and $419,000, or 5.4%, for the three and six months ended June 30, 2008, respectively, from the same periods last year. The improvement is a result of the growth in the loan and investment portfolios, the reduction in cost of funds and the replacement of maturing certificates of deposit and FHLB advances at lower interest rates. The net interest margin improved to 3.97% for the quarter ended June 30, 2008, compared to 3.78% for the same period last year and 3.79% for the quarter ended March 31, 2008.

President Fournier stated, "To say that the current environment for the banking industry is challenging would be an understatement. With all the challenges that current economic conditions are presenting for banks, we are pleased to be reporting increases in net income and earnings per share. The growth of our net interest margin, the main driver behind the improved earnings, has been helped by the dramatic drop in interest rates by the Federal Reserve and the continued growth of the Bank's loan and investment portfolios. While we are pleased to report this strong performance improvement in a very challenging and competitive environment, we remain focused on ways to continue to improve our earnings."

The Company increased its provision for loan losses to $235,000 and $363,000 for the three and six months ended June 30, 2008, respectively, compared to $100,000 and $250,000 for the same periods last year. The increase was driven by the growth in the loan portfolio, current and near term future uncertain economic conditions and concerns with respect to the potential for further reduction in real estate values. The Company's asset quality remains strong with non-performing loans of only $233,000, or 0.07% of total loans, at June 30, 2008, compared to non-performing loans of $259,000, or 0.08% of total loans, at December 31, 2007. The allowance for loan losses increased to 1.14% of total loans at June 30, 2008, from 1.12% at December 31, 2007 and 1.07% at June 30, 2007. The Bank continues to actively manage its loan portfolio and deal with problems as they arise. During the first half of 2008, the Bank charged off approximately $130,000 in small business and consumer loans. President Fournier stated, "We have been able to maintain our asset quality while many in the banking industry are facing continued write-downs and significant increases in loan loss provisions. Even though our asset quality remains strong, we feel it is best to continue to prudently build our loan loss reserve to protect against any future problems, at least until market conditions and real estate values stabilize."

Total assets as of June 30, 2008 were $493.7 million, compared to $472.8 million at December 31, 2007, an increase of $20.9 million, or 4.4%. Investments increased $6.4 million, or 5.5%, and loans, net of the allowance for loan losses, increased $15.2 million, or 4.8%. Cash and cash equivalents decreased $2.3 million, or 15.1%. Deposits increased $14.9 million, or 4.2%, and Federal Home Loan Bank advances increased $7.0 million, or 11.7%. The book value of the Bank's stock has decreased slightly as a result of the increase in unrealized losses on available-for-sale securities. President Fournier stated, "We have been able to maintain steady asset growth over the last six months, mainly using increases in our deposit levels to fund expansion of the loan and investment portfolios. We are committed to our continued focus on business development, improvement in operating efficiencies, identifying sound growth opportunities and closely monitoring our strategic focus in the ever-changing economic environment in which we operate."

*Statements contained in this news release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions, including, among others: changes in market interest rates and general and regional economic conditions; changes in government regulations; changes in accounting principles; and the quality or composition of the loan and investment portfolios and other factors that may be described in the Company's quarterly reports of Form 10-Q and its annual report on Form 10-K, each filed with the Securities and Exchange Commission, which are available at the Securities and Exchange Commission's internet website (www.sec.gov) and to which reference is hereby made. Therefore, actual future results may differ significantly from results discussed in the forward-looking statements.

Beverly National Bank, a subsidiary of Beverly National Corporation, is headquartered in Beverly, MA, and operates full-service branch offices in Downtown Beverly, Cummings Center - Beverly, North Beverly, Danvers, Hamilton, Manchester-by-the-Sea, Salem and Topsfield. The Bank offers a full array of consumer products and services including full electronic banking, financial planning, trust and investment services and business specialties. Incorporated in 1802, Beverly National Bank is the oldest community bank in the United States. The Bank's deposits are insured by the FDIC in accordance with the Federal Deposit Insurance Act.

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