Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today announced net income for the second quarter 2008 of $2.24 million, an increase of two percent from $2.19 million in the second quarter 2007. The company’s diluted earnings per share (EPS) were $0.48 for the second quarter 2008, up 9 percent from $0.44 in the second quarter 2007.

Total assets ended the second quarter 2008 at $1.49 billion, unchanged from the first quarter 2008, and up from $1.47 billion a year ago. The bank’s commercial loan portfolio ended the second quarter 2008 at $630.77 million, up 9 percent from $576.95 million in the prior quarter and up 16 percent from $542.71 million in the second quarter 2007. Residential mortgage and consumer loan balances declined compared to the prior quarter and year over year as the bank continued its strategic conversion to a more commercially oriented balance sheet.

Nonperforming loans at June 30, 2008 totaled $6.98 million, compared to $8.62 million in the prior quarter and $2.29 million a year ago. As a percentage of total assets, nonperforming loans ended the second quarter 2008 at 0.47 percent, compared to 0.58 percent in the first quarter 2008 and 0.16 percent in the second quarter 2007. The second quarter’s provision for loan and lease losses increased to $970 thousand compared to $285 thousand in the prior quarter and $100 thousand a year ago. Net charge offs for the second quarter 2008 were $402 thousand, as compared to $7 thousand in the second quarter 2007. The provision for loan losses was increased in the second quarter 2008 primarily due to growth in the commercial loan portfolio.

The company continues to be well capitalized with a Tier 1 capital ratio of 7.89 percent and a total risk-weighted capital ratio in excess of 12.50 percent.

Net interest margin for the second quarter of 2008 expanded to 3.24 percent, an increase of 27 basis points from both the first quarter of 2008 and the second quarter of 2007.

Total deposits were $1.04 billion at the end of the second quarter 2008, compared to $1.04 billion at the prior quarter end and $1.03 billion a year ago. The overall cost of interest bearing deposits was reduced by 73 basis points during the second quarter.

Noninterest expense was $9.61 million in the second quarter 2008, compared to $9.46 million in the prior quarter and $9.62 million in the second quarter 2007.

“Our second quarter results reflect the continued execution of our strategic plan,” said Bancorp Rhode Island, Inc. president and chief executive officer Merrill W. Sherman. “We are pleased with our commercial loan generation, and our disciplined pricing has enabled us to maintain our deposit base while significantly increasing our net interest margin. For the six months ending June 30, year over year, we have expanded revenues five percent while keeping expenses flat. We believe that our strong capital base should allow us to take advantage of opportunities in this environment.”

As a result of the Board of Directors’ confidence in the company’s long-term growth, the Board approved a $0.01, or six percent, increase in the Company’s dividend to $0.17 per share. This reflects the second time in the past four quarters that the dividend was increased. The dividend will be paid on September 3, 2008 to shareholders of record on August 13, 2008.

Bancorp Rhode Island, Inc. will host a conference call at 10:00 a.m. Eastern Daylight Time (EDT) on Thursday, July 24, to discuss its second quarter 2008 earnings. The conference call can be accessed by dialing toll free (800) 762-8779 or via webcast at the company's website, http://www.bankri.com/investorrelations.

There will be a playback of the call available until 11:59 p.m. EDT on Saturday, July 26, 2008. The replay dial-in number is (800) 406-7325. When prompted, enter the conference ID number 3894089. The webcast will be archived on the "Investor Relations" page of the company's website at http://www.bankri.com/investorrelations.

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 throughout 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.