Slade's Ferry Bancorp Reports Earnings.

SOMERSET, Mass. -- Slade's Ferry Bancorp (the "Company") (NASDAQ Capital Market: SFBC), parent company of Slade's Ferry Trust Company (the "Bank"), announced that its net income for the quarter ended September 30, 2006 was $1.0 million or $0.25 per share (diluted), an increase of 15.9% over net income for the quarter ended September 30, 2005, which totaled $900,000 or $0.22 per share (diluted). For the nine months ended September 30, 2006, net income was $2.6 million or $0.62 per share (diluted), a decrease of 9.6% from net income for the nine months ended September 30, 2005, which totaled $2.8 million or $0.69 per share (diluted).

Net income increased by $143,000 for the three months ended September 30, 2006 as compared to the same period in 2005. This increase was primarily attributable to an $182,000 increase in net interest income and a $130,000 increase in non-interest income partially offset by an increase of $56,000 in non-interest expense. Net income decreased by $272,000 for the nine months ended September 30, 2006 when compared to the year earlier period. Increases in both net interest income and non-interest income of $268,000 and $270,000, respectively, were more than offset by an increase in non-interest expense of $821,000, or 7.7%, to $11.4 million for nine months ended September 30, 2006. A large part of this increase was attributed to the outsourcing of substantial portions of back office operations to minimize risk, increase efficiency and utilize advanced technologies which were partially offset by savings in salary expenses. Also included in the non-interest expense component were increases of $49,000 for the three month period and $185,000 for the nine month period attributable to the additional compensation expense incurred with the implementation of FAS 123R, Accounting for Stock Based Compensation.

Non-interest income increased by $130,000 and $270,000, respectively, for the three and nine month periods ended September 30, 2006. These increases were primarily attributable to an increase in fees and other service charges on deposit accounts resulting from the introduction of an overdraft protection program in October, 2005. Non-interest income for the nine month period was negatively affected by net security losses of $150,000 that were primarily the result of a reinvestment strategy in June, 2006 designed to improve the net interest margin.

Net loans totaled $426.4 million at September 30, 2006, an increase of 4.1% over $409.6 million at December 31, 2005. As a result of loan growth, total interest and dividend income increased from $7.5 million for the quarter ended September 30, 2005, to $8.7 million for the quarter ended September 30, 2006, an increase of 16.5%. For the nine months ended September 30, 2006, total interest and dividend income was $24.6 million, compared to $21.2 million for the nine months ended September 30, 2005, an increase of 15.8%. This growth in an environment with an inverted yield curve and low yielding loans and investments, combined with intense competition for deposits, has compressed our net interest margin from 3.41% for the nine months ended September 30, 2005 to 3.32% for the nine months ended September 30, 2006.

"We are pleased that our solid loan growth has allowed us to maintain our strong net interest margin in the face of ever-expanding competition for a shrinking deposit base," said President and CEO Mary Lynn Lenz.

Total consolidated assets increased from $585.9 million at December 31, 2005 to $607.8 million at September 30, 2006, an increase of 3.7%. Deposits increased from $415.8 million at December 31, 2005 to $422.7 million at September 30, 2006, an increase of 1.6%.

Total stockholders' equity at September 30, 2006 was $50.7 million compared to $48.9 million at December 31, 2005, an increase of 3.9%. Book value per share was $12.29 at September 30, 2006 as compared to $11.82 at December 31, 2005. Both the Company and the Bank maintain capital levels sufficient to be considered "well-capitalized" under applicable regulatory capital guidelines and requirements.

The Company declared a $0.09 dividend to common shareholders of record on September 19, 2006, which is payable on October 20, 2006.

Slade's Ferry Bancorp was founded to serve community-banking needs with both personal and commercial products and services. With approximately $608 million in assets and nine retail branches in Southeastern Massachusetts, Slade's Ferry is a trusted community partner to both business and personal banking customers. Traded on the NASDAQ Capital Market as SFBC, Slade's Ferry Bancorp can also be found on the web at www.sladesferry.com and in seven Massachusetts communities - Assonet, Fairhaven, Fall River, New Bedford, Seekonk, Somerset and Swansea.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the strength of the company's capital and asset quality. Other such statements may be identified by words such as "believes," "will," "expects," "project," "may," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of Slade's Ferry Bancorp's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectation expressed in our forward-looking statements: (1) enactment of adverse government regulations (2) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (3) the strength of the United States economy in general and specifically the strength of the New England economics may be different than expected, resulting in, among other things, a deterioration in overall credit quality and borrowers' ability to service and repay loans, or a reduced demand for credit, including the resultant effect on the Bank's loan portfolio, levels of charge-offs and non-performing loans and allowance for loan losses; (4) changes in the interest rate environment may reduce interest margins and adversely impact net interest income and (5) changes in assumptions used in making such forward-looking statements. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Slade's Ferry Bancorp's actual results could differ materially from those discussed. All subsequent written and oral forward-looking statements attributable to Slade's Ferry Bancorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements set forth above. Slade's Ferry Bancorp does not intend or undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statements are made.

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