Bancorp Rhode Island Inc. (BARI) filed Quarterly Report for the period ended 2009-09-30.
Bancorp Rhode Island Inc. is the parent company of Bank Rhode Island. Bank Rhode Island is a full service FDIC-insured state-chartered financial institution. Bancorp Rhode Island Inc. has a market cap of $118.3 million; its shares were traded at around $25.71 with a P/E ratio of 27.3 and P/S ratio of 1.3. The dividend yield of Bancorp Rhode Island Inc. stocks is 2.6%. Bancorp Rhode Island Inc. had an annual average earning growth of 5.4% over the past 5 years.
Highlight of Business Operations:
The Company’s financial position at September 30, 2009 as compared to September 30, 2008 reflects net growth of $55.9 million in total loans and leases. This increase reflects the continuing conversion of the balance sheet to a more commercial profile with increases in commercial loans and leases of $84.8 million, or 13.3%. Consumer loans increased $3.9 million, or 1.9%, from the prior year quarter-end. The residential mortgage portfolio declined $32.8 million, or 15.3%, from September 30, 2008. Also, available for sale securities at September 30, 2009 increased by $32.3 million, or 9.7%, from the same period in 2008. Core deposits have increased $70.0 million, or 11.4%, since the prior year quarter-end, with growth centered in money market accounts of $46.4 million, demand deposit accounts of $25.2 million and NOW accounts of $6.1 million. These increases were offset by a decrease in savings accounts of $7.7 million and certificate of deposit accounts of $242,000 since September 30, 2008. Borrowings have increased by $1.2 million from the same period in 2008.
Total investments consist of available for sale securities, stock in the FHLB and overnight investments. Total investments comprised $382.5 million, or 24.4% of total assets at September 30, 2009, compared to $343.2 million, or 22.4% of total assets at December 31, 2008, representing an increase of $39.3 million, or 11.5%. Available for sale securities are recorded at fair value. At September 30, 2009, the fair value of available for sale securities was $365.7 million and carried a total of $4.5 million of net unrealized gain at the end of the quarter, compared to $639,000 at December 31, 2008.
The investment portfolio provides the Company a source of short-term liquidity and acts as a counterbalance to loan and deposit flows. During the first nine months of 2009, the Company purchased $163.6 million of available for sale securities compared to $116.9 million during the same period in 2008. Maturities, calls and principal repayments totaled $126.5 million for the nine months ended September 30, 2009 compared to $91.1 million for the same period in 2008. Additionally, in the first nine months of 2009, the Company sold $1.9 million of available for sale securities generating gains of $61,000 compared to sales of $22.5 million and gains of $410,000 for the same period in 2008.
During September 2009, CDO A experienced an additional $10.0 million in defaulting collateral. Projected credit loss severity assumptions were increased in estimated future cash flow scenarios and it was determined that management does not expect to recover $70,000 of the security’s amortized cost. As a result, the Company recorded an other-than-temporary impairment totaling $696,000, representing the difference between the security’s fair value and book value. The portion deemed to be credit related of $70,000 has been recorded as a reduction to noninterest income, while the non-credit portion of $626,000 has been recorded as a reduction of other comprehensive income. Management will continue to monitor this security for further potential impairment.
Total loans and leases increased by $38.9 million since December 31, 2008 and stood at $1.12 billion at September 30, 2009. As a percentage of total assets, loans and leases increased to 71.1% at September 30, 2009, compared to 70.5% at December 31, 2008. This increase was centered in commercial loans, where the Company concentrates its origination efforts, and was partially offset by decreases in residential mortgage loans, which the Company has historically purchased. Total loans and leases as of September 30, 2009 are comprised of three broad categories: commercial loans and leases that aggregate $724.4 million, or 64.9% of the portfolio; residential mortgages that aggregate $182.3 million, or 16.3% of the portfolio; and consumer and other loans that aggregate $209.9 million, or 18.8% of the portfolio.
With the Macrolease platform, the Bank originates and purchases equipment loans and leases for its own portfolio, as well as originates loans and leases for third parties as a source of noninterest income. Macrolease-generated equipment loans of $43.0 million and $35.2 million were included in the commercial and industrial portfolio at September 30, 2009 and December 31, 2008, respectively. Since December 31, 2008, total Macrolease-generated equipment loans and leases increased $22.7 million, or 26.5%, to $108.4 million.
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