<PAGE> 1
SEURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to section 13 OR 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000
or
[ ] Transition report pursuant to section 13 OR 15(d) of the Securities Exchange
Act of 1934 For the transition period from ____________ to ____________
Commission file number: 333-33182
BANCORP RHODE ISLAND, INC.
--------------------------
(Exact name of registrant as specified in its charter)
RHODE ISLAND 05-0509802
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Turks Head Place, Providence, Rhode Island 02903
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(401) 456-5000
--------------
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed from last Report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes . No X .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Bancorp Rhode Island, Inc. had issued and outstanding 100 shares of its
Common Stock as of May 26, 2000.
<PAGE> 2
Bancorp Rhode Island, Inc. ("Bancorp") was incorporated in the State of
Rhode Island on March 8, 2000. On April 13, 2000, the Form S-4 Registration
Statement of Bancorp was declared effective by the Securities and Exchange
Commission. Upon consummation of a Plan of Reorganization and Agreement of
Merger, dated February 15, 2000, Bank Rhode Island ("Bank RI") will become the
wholly owned subsidiary of Bancorp (the "Reorganization") and all of the
outstanding shares of Bank RI Common Stock and Non-Voting Common Stock will be
converted into and exchanged for, on a one-for-one basis, shares of Bancorp
Common Stock and Non-Voting Common Stock. Bancorp currently has no significant
assets or liabilities. Accordingly, no separate financial information regarding
Bancorp is presented. In its place is presented financial information regarding
the Bank RI as set forth in the Bank RI's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000, as filed with the Federal Deposit Insurance
Corporation.
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Incorporated herein by reference to the Bank RI Form 10-Q for the quarter ended
March 31, filed herewith as EXHIBIT 99.1.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Incorporated herein by reference to the Bank RI Form 10-Q for the quarter ended
March 31, filed herewith as EXHIBIT 99.1.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE> 3
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibit 99.1 -- Bank Rhode Island Form 10-Q for the Quarter Ended
March 31, 2000
(B) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANCORP RHODE ISLAND, INC.
(Registrant)
By: /s/ Merrill W. Sherman
-------------------------------------
Merrill W. Sherman
President and Chief Executive Officer
By: /s/ Albert R. Rietheimer
------------------------------------
Albert R. Rietheimer
Chief Financial Officer and Treasurer
May 24, 2000
<PAGE> 1
EXHIBIT 99.1
------------
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.
FORM 10-Q
Quarterly Report Under Section 13 of the Securities Exchange Act of 1934
For quarter ended: MARCH 31, 2000
FDIC Certificate Number: 34147
BANK RHODE ISLAND
------------------------------------------------
(Exact Name of Bank as Specified in Its Charter)
RHODE ISLAND 05-0488784
--------------------------------- -------------------
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
ONE TURKS HEAD PLACE, PROVIDENCE, RI 02903
------------------------------------------
(Address of Principal Executive Offices)
(401) 456-5000
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
NOT APPLICABLE
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the Bank (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Bank was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Bank's classes of
common stock, as of MAY 8, 2000:
COMMON STOCK - PAR VALUE $1.00 3,728,550 SHARES
------------------------------ ----------------
(class) (outstanding)
<PAGE> 2
BANK RHODE ISLAND
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
Cover Page 1
Index 2
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Changes in
Shareholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7 - 8
Item 2 Management's Discussion and Analysis 9 - 18
Item 3 Quantitative and Qualitative Disclosures About Market Risk 18
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 19
Item 2 Changes in Securities 19
Item 3 Default upon Senior Securities 19
Item 4 Submission of Matters to a Vote of Security Holders 19
Item 5 Other Information 19
Item 6 Exhibits and Reports on Form 8-K 19
Signature Page 20
</TABLE>
2
<PAGE> 3
BANK RHODE ISLAND
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
---------------- ----------------
(IN THOUSANDS)
ASSETS:
<S> <C> <C>
Cash and due from banks $ 21,194 $ 17,636
Federal funds sold 2,550 6,850
Investment securities available for sale (amortized cost of $47,473 and
$51,477 at March 31, 2000 and December 31, 1999, respectively) 46,322 50,503
Mortgage-backed securities available for sale (amortized cost of $82,629 and
$76,458 at March 31, 2000 and December 31, 1999, respectively) 80,498 74,793
Stock in Federal Home Loan Bank of Boston 3,704 3,704
Loans receivable:
Residential mortgage loans 245,288 237,320
Commercial loans 192,869 174,548
Consumer and other loans 46,594 47,090
---------------- ----------------
TOTAL LOANS 484,751 458,958
Less allowance for loan losses (6,023) (5,681)
---------------- ----------------
NET LOANS 478,728 453,277
Premises and equipment, net 6,298 5,857
Other real estate owned 139 49
Excess of costs over net assets acquired, net 12,803 13,094
Accrued interest receivable 5,197 4,670
Prepaid expenses and other assets 1,911 1,544
---------------- ----------------
TOTAL ASSETS $ 659,344 $ 631,977
================ ================
LIABILITIES:
Deposits:
Demand deposit accounts $ 76,336 $ 67,844
NOW accounts 31,423 27,456
Money market accounts 16,434 16,073
Savings accounts 180,199 173,692
Certificate of deposit accounts 248,432 228,351
---------------- ----------------
TOTAL DEPOSITS 552,824 513,416
Overnight and short-term borrowings 11,217 14,978
Federal Home Loan Bank of Boston borrowings 39,181 48,183
Other borrowings 4,750 4,750
Other liabilities 3,188 2,975
---------------- ----------------
TOTAL LIABILITIES 611,160 584,302
---------------- ----------------
SHAREHOLDERS' EQUITY:
Common stock, par value $1.00 per share, authorized 10,000,000 shares:
Voting: Issued and outstanding 3,448,550 shares 3,449 3,449
Non-Voting: Issued and outstanding 280,000 shares 280 280
Additional paid-in capital 35,925 35,925
Retained earnings 10,696 9,763
Accumulated other comprehensive income (loss), net (2,166) (1,742)
---------------- ----------------
TOTAL SHAREHOLDERS' EQUITY 48,184 47,675
---------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 659,344 $ 631,977
================ ================
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
BANK RHODE ISLAND
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------------------
2000 1999
------------------- --------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Interest and dividend income:
<S> <C> <C>
Residential mortgage loans $ 4,403 $ 4,261
Commercial loans 3,892 2,878
Consumer and other loans 998 775
Investment securities 769 629
Mortgage-backed securities 1,275 1,203
Federal funds sold and other 91 162
Federal Home Loan Bank of Boston stock dividends 65 53
-------------------- --------------------
TOTAL INTEREST AND DIVIDEND INCOME 11,493 9,961
-------------------- --------------------
Interest expense:
NOW accounts 44 39
Money market accounts 110 105
Savings accounts 1,218 1,111
Certificate of deposit accounts 3,036 2,975
Overnight and short-term borrowings 130 43
Federal Home Loan Bank of Boston borrowings 764 512
Other borrowings 70 69
-------------------- --------------------
TOTAL INTEREST EXPENSE 5,372 4,854
-------------------- --------------------
NET INTEREST INCOME 6,121 5,107
Provision for loan losses 340 225
-------------------- --------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,781 4,882
-------------------- --------------------
Noninterest income:
Loan related fees 43 39
Service charges on deposit accounts 605 458
Commissions on loans originated for others 5 32
Other income 123 125
-------------------- --------------------
TOTAL NONINTEREST INCOME 776 654
-------------------- --------------------
Noninterest expense:
Salaries and employee benefits 2,171 1,877
Occupancy 366 307
Equipment 209 241
Data processing 285 331
Marketing 235 105
Professional services 260 158
Loan servicing 204 223
Other real estate owned expense 3 20
Amortization of intangibles 291 291
Deposit tax and assessments 26 14
Other expenses 506 428
-------------------- --------------------
TOTAL NONINTEREST EXPENSE 4,556 3,995
-------------------- --------------------
INCOME BEFORE INCOME TAXES AND CHANGE IN ACCOUNTING PRINCIPLE 2,001 1,541
Income tax expense 695 542
-------------------- --------------------
NET INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE 1,306 999
Cumulative effect of change in accounting principle, net of taxes -- 109
-------------------- --------------------
NET INCOME 1,306 890
Dividends on preferred stock -- 44
-------------------- --------------------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 1,306 $ 846
==================== ====================
Basic and diluted earnings per common share:
Income per common share before change in accounting principle $ 0.35 $ 0.26
Cumulative effect of change in accounting principle, net of tax -- (0.03)
-------------------- --------------------
Net income per common share $ 0.35 $ 0.23
==================== ====================
Average common shares outstanding - basic 3,728,550 3,723,600
Average common shares outstanding - diluted 3,728,550 3,745,468
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
BANK RHODE ISLAND
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMPRE-
ADDITIONAL HENSIVE
PREFERRED COMMON PAID-IN RETAINED INCOME
THREE MONTHS ENDED MARCH 31, STOCK STOCK CAPITAL EARNINGS (LOSS), NET TOTAL
------------- ------------- ------------- -------------- --------------- -------------
(IN THOUSANDS)
2000
- ----
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $ -- $ 3,729 $ 35,925 $ 9,763 $ (1,742) $ 47,675
Net income -- -- -- 1,306 -- 1,306
Other comprehensive income,
net of tax:
Unrealized gain (loss) on
securities available for sale (424) (424)
-------------
Comprehensive income 882
Dividends on common stock -- -- -- (373) -- (373)
------------- ------------- ------------- -------------- --------------- -------------
Balance at March 31, 2000 $ -- $ 3,729 $ 35,925 $ 10,696 $ (2,166) $ 48,184
============= ============= ============= ============== =============== =============
1999
- ----
Balance at December 31, 1998 $ 804 $ 3,724 $ 37,087 $ 5,862 $ 210 $ 47,687
Net income -- -- -- 890 -- 890
Other comprehensive income,
net of tax:
Unrealized gain (loss) on
securities available for sale (106) (106)
-------------
Comprehensive income 784
Dividends on preferred stock -- -- -- (44) -- (44)
------------- ------------- ------------- -------------- --------------- -------------
Balance at March 31, 1999 $ 804 $ 3,724 $ 37,087 $ 6,708 $ 104 $ 48,427
============= ============= ============= ============== =============== =============
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
BANK RHODE ISLAND
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------------
2000 1999
---------------- ----------------
(IN THOUSANDS)
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,306 $ 890
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 600 950
Provision for loan losses 340 225
Loss on other real estate owned -- 12
(Increase) decrease in:
Accrued interest receivable (527) (155)
Prepaid expenses and other assets (149) 27
Increase (decrease) in:
Other liabilities 213 1,189
Other, net 12 168
---------------- ----------------
Net cash provided (used) by operating activities 1,795 3,306
---------------- ----------------
Cash flows from investing activities:
Origination of:
Residential mortgage loans (3,077) (4,320)
Commercial loans (20,996) (14,596)
Consumer loans (2,817) (3,893)
Purchase of:
Investment securities available for sale -- (14,207)
Mortgage-backed securities available for sale (9,126) (8,914)
Residential mortgage loans (15,534) (19,958)
Federal Home Loan Bank of Boston stock -- (359)
Principal payments on:
Investment securities available for sale 4,000 5,000
Mortgage-backed securities available for sale 2,927 6,191
Residential mortgage loans 10,493 32,541
Commercial loans 2,692 5,952
Consumer loans 3,285 3,459
Proceeds from disposition of other real estate owned -- 164
Capital expenditures for premises and equipment (656) (243)
---------------- ----------------
Net cash provided (used) by investing activities (28,809) (13,183)
---------------- ----------------
Cash flows from financing activities:
Net increase (decrease) in deposits 39,408 6,849
Net increase (decrease) in overnight and short-term borrowings (3,761) 150
Proceeds from Federal Home Loan Bank of Boston borrowings 12,000 300
Repayment of Federal Home Loan Bank of Boston borrowings (21,002) (1,502)
Dividends on preferred stock -- (44)
Dividends on common stock (373) --
---------------- -----------------
Net cash provided (used) by financing activities 26,272 5,753
---------------- -----------------
Net increase (decrease) in cash and cash equivalents (742) (4,124)
Cash and cash equivalents at beginning of period 24,486 22,011
---------------- -----------------
Cash and cash equivalents at end of period $ 23,744 $ 17,887
================ =================
Supplementary Disclosures:
Cash paid for interest $ 5,195 $ 4,873
Cash paid for income taxes 35 230
Non-cash transactions:
Additions to other real estate owned in settlement of loans 90 --
Change in other comprehensive income, net of taxes (424) (106)
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE> 7
BANK RHODE ISLAND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The consolidated financial statements include the accounts of Bank Rhode
Island (the "Bank") and its wholly-owned subsidiaries, BRI Investment Corp. (a
Rhode Island passive investment company) and BRI Realty Corp. (a real estate
holding company). All significant intercompany accounts and transactions have
been eliminated in consolidation.
The interim results of consolidated operations are not necessarily
indicative of the results for any future interim period or for the entire year.
These interim consolidated financial statements do not include all disclosures
associated with annual financial statements and, accordingly, should be read in
conjunction with the annual consolidated financial statements and accompanying
notes included in the Bank's Annual Report on Form 10-K filed with the Federal
Deposit Insurance Corporation ("FDIC").
In preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet and revenues and expenses for
the period. Actual results could differ from those estimates. Material estimates
that are particularly susceptible to change relate to the determination of the
allowance for loan losses and valuation of other real estate owned.
The unaudited interim consolidated financial statements of the Bank have
been prepared in accordance with Generally Accepted Accounting Principles
("GAAP") and prevailing practices within the banking industry and include all
necessary adjustments (consisting of only normal recurring adjustments), that,
in the opinion of management, are required for a fair presentation of the
results and financial condition of the Bank.
(2) Earnings Per Share
Basic earnings per share ("EPS") excludes dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding during the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised and resulted in the issuance of additional common
stock that then shared in the earnings of the entity.
(3) Recent Accounting Developments
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS 133 establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities on the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as
7
<PAGE> 8
(a) a hedge of the exposure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment, (b) a hedge of the exposure to
variable cash flows of a forecasted transaction, or (c) a hedge of the foreign
currency exposure of a net investment in a foreign operation, an unrecognized
firm commitment, an available for sale security, or a foreign currency
denominated forecasted transaction. Under SFAS 133, an entity that elects to
apply hedge accounting is required to establish at the inception of the hedge
the method it will use for assessing the effectiveness of the hedging derivative
and the measurement approach for determining the ineffective aspect of the
hedge. In June 1999, the FASB issued SFAS 137 which defers the effective date of
SFAS 133. SFAS 133 is now effective for all fiscal quarters of all fiscal years
beginning after June 15, 2000. The Bank does not expect SFAS 133 to have a
material effect on the Bank's financial position or results of operations.
8
<PAGE> 9
BANK RHODE ISLAND
MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Certain statements contained herein are "Forward Looking Statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward Looking
Statements may be identified by reference to a future period or periods or by
the use of forward looking terminology such as "may," "believes," "intends,"
"expects," and "anticipates" or similar terms or variations of these terms.
Actual results may differ materially from those set forth in Forward Looking
Statements as a result of certain risks and uncertainties, including but not
limited to, changes in political and economic conditions, interest rate
fluctuations, competitive product and pricing pressures, equity and bond market
fluctuations, credit risk, inflation, as well as other risks and uncertainties
detailed from time to time in filings with the FDIC.
GENERAL
Bank Rhode Island (the "Bank") is a commercial bank chartered as a
financial institution in the State of Rhode Island. The Bank pursues a community
banking mission and is principally engaged in providing banking products and
services to individuals and businesses in Providence and Kent counties. The Bank
is subject to competition from a variety of traditional and nontraditional
financial service providers both within and outside of Rhode Island. The Bank
offers its customers a wide range of deposit products, nondeposit investment
products, commercial, residential and consumer loans, and other traditional
banking products and services, designed to meet the needs of individuals and
small to middle market businesses. The Bank also has recently introduced both
commercial and consumer on-line banking products and can be accessed at
http://www.bankri.com.
At this year's annual meeting, to be held on May 17, 2000, the Bank's
shareholders will be considering and voting upon the proposed restructuring of
the Bank into a holding company structure. The Bank believes that this holding
company structure will provide several advantages and more flexibility over the
current structure. It is presently contemplated that, assuming shareholder
approval of the plan of reorganization, the restructuring will become effective
during fiscal 2000.
The Bank is subject to regulation by certain federal and state agencies and
undergoes periodic examinations by those regulatory authorities. The Bank's
deposits are insured by the FDIC, subject to regulatory limits, and the Bank is
also a member of the Federal Home Loan Bank of Boston ("FHLB").
NON-GAAP MEASURES OF FINANCIAL PERFORMANCE
Contained within this Form 10-Q are various measures of financial
performance that have been calculated excluding the amortization of intangibles
and any related income taxes. These measures are identified as "cash or cash
basis" and have been provided to assist the reader in evaluating the core
performance of the Bank. This presentation is not in accordance with GAAP, but
management believes it to be beneficial to gaining an understanding of the
financial performance of the Bank.
9
<PAGE> 10
The Bank's formation in 1996 resulted in the generation of $17.5 million of
goodwill which is being amortized over a 15 year period. The amortization of
this intangible asset reduces the Bank's pre-tax income $1.2 million annually.
Because of the impact of this amortization, we have presented certain
information on a cash basis.
The following table sets forth selected financial measures according to
GAAP and on a cash basis:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
--------------- --------------
<S> <C> <C>
Income per common share before change in accounting principle $ 0.35 $ 0.26
Cumulative effect of change in accounting principle, net of taxes -- (0.03)
--------------- --------------
Basic and diluted earnings per common share ("EPS") $ 0.35 $ 0.23
Basic and diluted EPS - cash basis $ 0.40 $ 0.28
Return on average assets 0.81% 0.67%
Return on average assets - cash basis 0.95% 0.82%
Return on average equity 11.11% 8.53%
Return on average equity - cash basis 12.72% 10.14%
Efficiency ratio 66.06% 69.35%
Efficiency ratio - cash basis 61.84% 64.29%
</TABLE>
OVERVIEW
Total assets increased $27.4 million, or 4.3%, to $659.3 million at March
31, 2000 from $632.0 million at December 31, 1999. The increase was
predominantly in commercial loans and was funded by growth in total deposits.
During the quarter, total loans rose to $484.8 million, from $459.0 million, an
increase of $25.8 million, or 5.6%, and total deposits rose to $552.8 million,
from $513.4 million, an increase of $39.4 million, or 7.7%. Shareholders' equity
was $48.2 million at March 31, 2000, representing a $509,000, or 1.1%, increase
over shareholders' equity at the end of 1999.
FINANCIAL CONDITION
-- Investments. Total investments (consisting of federal funds sold,
investment securities, mortgage-backed securities ("MBSs"), and stock in the
FHLB) totaled $133.1 million, or 20.2% of total assets, at March 31, 2000,
compared to $135.9 million, or 21.5% of total assets, at December 31, 1999. All
$126.8 million of investment and mortgage-backed securities at March 31, 2000
were classified as available for sale and carried a total of $3.3 million in net
unrealized losses at the end of the quarter. The decrease in total investments
of $2.8 million, or 2.0%, was centered in federal funds sold which were
maintained at higher levels at December 31, 1999 in connection with the Bank's
Year 2000 planning efforts.
-- Loans. Total loans were $484.8 million, or 73.5% of total assets, at
March 31, 2000, compared to $459.0 million, or 72.6% of total assets, at
December 31, 1999. During the first quarter of 2000, the commercial loan
portfolio (consisting of commercial & industrial, small business, commercial
real estate, multi-family real estate, and construction loans) increased $18.3
million, or 10.5%, as the Bank experienced strong demand from local commercial
customers. Particular emphasis is placed
10
<PAGE> 11
on generation of small- to medium-sized commercial relationships (those
relationships with $4.0 million or less in loan outstandings). The Bank is also
active in small business lending (loans of $250,000 or less) in which it
utilizes credit scoring in conjunction with traditional review standards and
employs streamlined documentation. The Bank is a participant in the U.S. Small
Business Administration ("SBA") Preferred Lender Program ("PLP") in Rhode Island
and the 7a Guarantee Loan Program in Massachusetts.
Also during the first quarter of 2000, the Bank's residential mortgage loan
portfolio increased $8.0 million, or 3.4%, while its consumer loan portfolio
remained relatively unchanged. While the Bank continues to concentrate its
origination efforts on commercial and consumer loan opportunities, it
anticipates continuing to originate residential mortgage loans on a limited
basis for its customers. Until such time as the Bank can originate sufficient
commercial and consumer loans to utilize available cash flow, it also intends to
continue purchasing residential mortgage loans as opportunities develop.
The following is a breakdown of loans receivable:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
------------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Residential mortgage loans:
One- to four-family adjustable rate $ 205,921 $ 196,863
One- to four-family fixed rate 38,006 39,037
------------------- -----------------
Subtotal 243,927 235,900
Premium on loans acquired 1,397 1,446
Net deferred loan origination fees (36) (26)
------------------- -----------------
Total residential mortgage loans $ 245,288 $ 237,320
=================== =================
Commercial loans:
Commercial real estate - nonowner occupied $ 63,979 $ 56,181
Commercial and industrial 47,721 40,109
Commercial real estate - owner occupied 37,473 33,968
Multi-family real estate 17,414 16,270
Small business 15,534 13,322
Construction 2,627 6,379
Leases and other 8,311 8,499
------------------- -----------------
Subtotal 193,059 174,728
Net deferred loan origination fees (190) (180)
------------------- -----------------
Total commercial loans $ 192,869 $ 174,548
=================== =================
Consumer loans:
Home equity - lines of credit $ 23,134 $ 24,166
Home equity - term loans 20,018 19,710
Installment 1,428 1,279
Savings secured 922 1,005
Unsecured and other 745 590
------------------- -----------------
Subtotal 46,247 46,750
Net deferred loan origination costs 347 340
------------------- -----------------
Total consumer loans $ 46,594 $ 47,090
=================== =================
</TABLE>
11
<PAGE> 12
-- Deposits and Borrowings. Total deposits increased by $39.4 million, or
7.7%, during the first three months of 2000, from $513.4 million, or 81.2% of
total assets, at December 31, 1999, to $552.8 million, or 83.8% of total assets,
at March 31, 2000. This increase was split roughly evenly between core accounts
(checking and savings accounts) and certificates of deposit. Core accounts
increased $19.3 million, or 6.8%, during the quarter, while certificates of
deposit increased $20.1 million, or 8.8%, during this time period. The strong
deposit growth experienced during the first quarter of 2000 resulted from
continued increase in market presence by the Bank, along with some customer
displacement caused by divestitures in connection with the Fleet
Financial/BankBoston merger.
The following table sets forth certain information regarding deposits:
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
------------------------------------------ -------------------------------------------
PERCENT WEIGHTED PERCENT WEIGHTED
OF AVERAGE OF AVERAGE
AMOUNT TOTAL RATE AMOUNT TOTAL RATE
------------- ------------- ------------- -------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
NOW accounts $ 31,423 5.7% 0.67% $ 27,456 5.4% 0.64%
Money market accounts 16,434 3.0% 2.72% 16,073 3.1% 2.70%
Savings accounts 180,199 32.6% 2.94% 173,692 33.8% 2.78%
Certificate of deposit accounts 248,432 44.9% 5.25% 228,351 44.5% 4.95%
------------- ------------- -------------- -------------
Total interest bearing deposits 476,488 86.2% 3.99% 445,572 86.8% 3.76%
Noninterest bearing accounts 76,336 13.8% -- 67,844 13.2% --
------------- ------------- -------------- -------------
Total deposits $ 552,824 100.0% 3.44% $ 513,416 100.0% 3.26%
============= ============= ============= ============== ============= =============
</TABLE>
The Bank, through its membership in the FHLB, has access to a variety of
borrowing alternatives, and management will from time to time take advantage of
these opportunities to fund asset growth. However, on a long-term basis, the
Bank intends to concentrate on increasing its core deposits.
ASSET QUALITY
The definition of nonperforming assets includes nonperforming loans and
other real estate owned ("OREO"). OREO consists of real estate acquired through
foreclosure proceedings and real estate acquired through acceptance of a deed in
lieu of foreclosure. Nonperforming loans are defined as nonaccrual loans, loans
past due 90 days or more, but still accruing and impaired loans. Under certain
circumstances the Bank may restructure the terms of a loan as a concession to a
borrower. These restructured loans are considered impaired loans.
-- Nonperforming Assets. At March 31, 2000, the Bank had nonperforming
assets of $1.7 million, which represented 0.26% of total assets. This compares
to nonperforming assets of $1.2 million, or 0.18% of total assets, at December
31, 1999. The Bank's nonperforming assets at March 31, 2000, consisted of
nonaccrual residential mortgage loans aggregating $482,000, nonaccrual
commercial loans aggregating $1.0 million, nonaccrual consumer loans aggregating
$17,000 and OREO aggregating $139,000. Included in nonaccrual loans were
$873,000 and $329,000 of impaired loans at March 31, 2000 and December 31, 1999,
respectively. The Bank maintained reserves of $49,000 against impaired loans at
March 31, 2000. No reserves were necessary against
12
<PAGE> 13
impaired loans as of December 31, 1999. The Bank evaluates the underlying
collateral of each nonperforming loan and continues to pursue the collection of
interest and principal.
Delinquencies. At March 31, 2000, loans with an aggregate balance of
$189,000 were 60 to 89 days past due, an increase of $96,000, or 103.2%, from
$93,000 reported at December 31, 1999. The majority of these loans at both dates
were residential mortgage loans and are secured.
The following table sets forth information regarding nonperforming assets
and loans 60-89 days past due as to interest at the dates indicated.
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
------------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Loans accounted for on a nonaccrual basis $ 1,549 $ 1,112
Loans past due 90 days or more, but still accruing -- --
Impaired loans (not included in nonaccrual loans) -- --
------------------- -----------------
Total nonperforming loans 1,549 1,112
Other real estate owned 139 49
------------------- -----------------
Total nonperforming assets $ 1,688 $ 1,161
=================== =================
Delinquent loans 60-89 days past due $ 189 $ 93
Nonperforming loans as a percent of total loans .32% .24%
Nonperforming assets as a percent of total assets .26% .18%
Delinquent loans 60-89 days past due as a percent of total loans .04% .02%
</TABLE>
As the Bank's loan portfolio continues to grow and mature, or if economic
conditions worsen, management believes it likely that the level of nonperforming
assets will increase, as will its level of delinquencies and charge-offs.
ALLOWANCE FOR LOAN LOSSES
During the first quarter of 2000, the Bank made provisions to the allowance
for loan losses totaling $340,000 and had $2,000 of net recoveries, bringing the
balance in the allowance to $6,023,000, compared to $5,681,000 at December 31,
1999. The allowance, expressed as a percentage of total loans, was 1.24% as of
March 31, 2000, the same as at December 31, 1999 and stood at 388.8% of
nonperforming loans at March 31, 2000, compared to 510.9% of nonperforming loans
at December 31, 1999.
Assessing the adequacy of the allowance for loan losses involves
substantial uncertainties and is based upon management's evaluation of the
amounts required to meet estimated charge-offs in the loan portfolio after
weighing various factors. Among these factors are the risk characteristics of
the loan portfolio, the quality of specific loans, the level of nonaccruing
loans, current economic conditions, trends in delinquencies and charge-offs, and
the value of underlying collateral, all of which can change frequently. Based on
this evaluation, the Bank believes that the allowance for loan losses, as of
March 31, 2000, is adequate.
While management evaluates currently available information in establishing
the allowance for loan losses, future adjustments to the allowance may be
necessary if conditions differ substantially from the assumptions used in making
the evaluations. In addition, various regulatory agencies, as an
13
<PAGE> 14
integral part of their examination process, periodically review a financial
institution's allowance for loan losses and carrying amounts of other real
estate owned. Such agencies may require the financial institution to recognize
additions to the allowance based on their judgments about information available
to them at the time of their examination.
RESULTS OF OPERATIONS
The Bank's operating results depend primarily on its "net interest income,"
or the difference between its interest income and its cost of money, and on the
quality of its assets. Interest income depends on the average amount of
interest-earning assets outstanding during the period and the interest rates
earned thereon. The Bank's cost of money is a function of the average amount of
deposits and borrowed money outstanding during the period and the interest rates
paid thereon. The quality of assets further influences the amount of interest
income lost on nonaccrual loans and the amount of additions to the allowance for
loan losses.
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
-- Overview. The Bank reported net income for the first quarter of 2000 of
$1.3 million, up $416,000, or 46.7%, from the first quarter of 1999. Net income
for the first quarter of 1999 was reduced by a one-time charge of $109,000
resulting from a change in accounting principle which required remaining
unamortized organizational costs to be charged against earnings. Operating
income, which excludes this one-time charge, was $1.3 million in 2000, compared
to $999,000 for the same quarter last year, an increase of $307,000, or 30.7%.
Basic and diluted earnings per common share were $0.35 for the first quarter of
2000, compared to $0.23 for the first quarter of 1999.
The Bank reported a return on average assets of 0.81% and a return on
average equity of 11.11% for the 2000 period, as compared to a return on average
assets of 0.67% and a return on average equity of 8.53% for the 1999 period.
Cash earnings per common share was $0.40 for the 2000 period, compared to $0.28
for the 1999 period. Cash basis return on average assets and cash basis return
on average equity were 0.95% and 12.72% for the 2000 period, and 0.82% and
10.14% for the 1999 period, respectively.
-- Net Interest Income. For the quarter ended March 31, 2000, net interest
income was $6.1 million, compared to $5.1 million for the first quarter of 1999.
The Bank's net interest margin for the first quarter of 2000 was 4.04% compared
to a net interest margin of 3.66% for the 1999 period. The increase in net
interest income of $1.0 million, or 19.9%, was attributable to the continued
growth of the Bank, along with an increase in the yield on the Bank's loan
portfolio. Average earning assets were $43.7 million, or 7.7%, higher, and
average interest-bearing liabilities were $34.6 million, or 7.1%, higher, than
the comparable period a year earlier. The increase of 38 basis points in the net
interest margin resulted from higher yields on commercial and consumer loans in
response to increases in market interest rates, and higher yields on mortgage
loans and MBSs due to a slowdown in prepayments, which were not offset by
corresponding increases in deposit costs as the Bank was able to control the
cost of its core deposit accounts.
-- Interest Income. Investments. Total investment income was $2.2 million
for the quarter ended March 31, 2000, compared to $2.0 million for the first
quarter of 1999. This increase in total
14
<PAGE> 15
investment income of $153,000, or 7.5%, was primarily attributable to an
increase in the overall yield of investments of 48 basis points, to 6.33%, as a
result of increases in market interest rates. The Bank's investments at the end
of the first quarter of 2000 were primarily comprised of Treasury, Agency or
MBSs with remaining maturities or repricing periods of less than five years. In
addition to assisting in the Bank's overall tax planning, the Bank believes that
this composition, along with a structured maturity ladder, provides more stable
earnings and predictable cash flows from the portfolio. In addition, as a result
of the rising interest rate environment present during the past year,
prepayments on MBSs have decreased. These lower prepayment levels have caused
the yield on MBSs purchased at a premium to be positively impacted.
-- Interest Income. Loans. Interest from loans was $9.3 million for the
three months ended March 31, 2000, and represented a yield on total loans of
7.92%. This compares to $7.9 million of interest, and a yield of 7.48%, for the
first quarter of 1999. Interest from commercial loans increased $1.0 million, or
35.2%, between the two quarters and represented the fastest growing segment of
the total loan portfolio. Income from residential mortgage loans increased
$142,000, or 3.3%, and consumer and other loan income increased $223,000, or
28.8%. Since its inception, the Bank has concentrated its origination efforts on
commercial and consumer loan opportunities, while purchasing residential
mortgage loans as cash flows dictated. The average balance of the various
components of the loan portfolio changed from the first quarter of 1999 as
follows: commercial loans increased $40.5 million, or 29.1%, consumer and other
loans increased $8.5 million, or 22.1%, and residential mortgage loans decreased
$4.2 million, or 1.7%, respectively. In response to rising market interest
rates, the yields on the various loan portfolio components changed as follows:
commercial loans increased 33 basis points, to 8.72%; consumer and other loans
increased 37 basis points, to 8.53%, and residential mortgage loans increased 35
basis points, to 7.22%. As with MBSs, the rising interest rate and slower
prepayment environment present since last year has positively impacted the yield
on the Bank's loan portfolio.
-- Interest Expense. Interest paid on deposits and borrowings increased
$518,000, or 10.7%, to $5.4 million for the three months ended March 31, 2000,
from $4.9 million for the same period during 1999. The overall average cost for
interest-bearing liabilities increased 10 basis points from 4.03% for the first
quarter of 1999 to 4.13% for the first quarter of 2000. Liability costs are
dependent on a number of factors including general economic conditions, national
and local interest rates, competition in the local deposit marketplace, interest
rate tiers offered and the Bank's cash flow needs. Average costs for the various
components of interest-bearing liabilities changed from the first quarter of
1999 as follows: NOW accounts remained unchanged at 0.64%; money market accounts
decreased 5 basis points, to 2.72%; savings deposits increased 7 basis points,
to 2.82%; certificate of deposit accounts increased 3 basis points, to 5.10%;
and borrowings increased 41 basis points to 5.92%. Meanwhile, the average
balance of interest-bearing liabilities increased $34.6 million, from $488.2
million in the first quarter of 1999 to $522.8 million in the first quarter of
2000, as the Bank actively sought deposits and utilized borrowings to fund its
asset growth.
-- Provision for Loan Losses. The provision for loan losses was $340,000
for the quarter ended March 31, 2000, up $115,000, or 51.1%, from the same
quarter last year as the commercial loan portfolio grew at an annualized rate of
42.0% during the first quarter. When determining the provision for the quarter,
management evaluates several factors including new loan originations, actual and
estimated charge-offs, and the risk characteristics of the loan portfolio. Also
see discussion under "Allowance for Loan Losses."
15
<PAGE> 16
-- Noninterest Income. Total noninterest income increased $122,000, or
18.7%, to $776,000 for the first quarter of 2000, from $654,000 for the first
quarter of 1999. Service Charges on Deposit Accounts, which represent the
largest source of noninterest income for the Bank, rose $147,000, or 32.1%, from
$458,000 for the three months ended March 31, 1999, to $605,000 for the same
period in 2000. Loan Related Fees and Other Income remained relatively flat
between the two periods and Commissions on Loans Originated for Others decreased
$27,000, or 84.4%, from the comparable period, as loan activity levels decreased
in response to the rising interest rate environment.
-- Noninterest Expense. Noninterest expenses for the first quarter of 2000
increased a total of $561,000, or 14.0%, to $4.6 million from $4.0 million in
1999. This increase occurred primarily in the following areas: Salaries and
Benefits (up $294,000, or 15.7%), Occupancy (up $59,000, or 19.2%), Marketing
(up $130,000, or 123.8%), Professional Services (up $102,000, or 64.6%) and
Other Expenses (up $78,000, or 18.2%) and primarily represent increased costs
associated with the overall growth of the institution and the professional costs
associated with the formation of a holding company. Partially offsetting these
increases were decreases in: Equipment (down $32,000, or 13.3%), Data Processing
(down $46,000, or 13.9%), Loan Servicing (down $19,000, or 8.5%) and OREO
Expenses (down $17,000, or 85.0%). During 2000, the Bank has incurred a number
of expenditures as a result of the growth it has experienced in both the
commercial loans and core deposit areas. The Bank's cash basis efficiency ratio
for the first quarter of 2000 was 61.84%, compared to 64.29% for the first
quarter of 1999, an improvement of 245 basis points.
-- Income Tax Expense. The Bank recorded income tax expense of $695,000 for
the three months ended March 31, 2000, compared to $542,000 for the same period
during 1999. This represented total effective tax rates of 34.7% and 35.2%,
respectively. The Bank's tax-favored income from U.S. Treasury and Agency
securities and its use of a Rhode Island passive investment company has reduced
its effective tax rate from the 39.9% combined statutory federal and state tax
rates.
-- Cumulative Effect of Change in Accounting Principle, Net of Taxes. Net
income for the first quarter of 1999 was reduced by a one-time charge of
$109,000 (net of taxes) resulting from the cumulative effect of a change in
accounting principle. As of January 1, 1999, the Bank was required to charge
earnings for any unamortized organizational costs that were still present. No
such charge was present in 2000.
LIQUIDITY AND CAPITAL RESOURCES
-- Liquidity. Liquidity is defined as the ability to meet current and
future financial obligations of a short-term nature. The Bank further defines
liquidity as the ability to respond to the needs of depositors and borrowers, as
well as to earnings enhancement opportunities, in a changing marketplace.
Primary sources of liquidity consist of deposit inflows, loan repayments,
borrowed funds, maturity of investment securities and sales of securities from
the available for sale portfolio. Secondary sources of liquidity consist of
borrowing capacity with the FHLB and with correspondent banks. These sources
fund the Bank's lending and investment activities.
Management is responsible for establishing and monitoring liquidity targets
as well as strategies and tactics to meet these targets. In general, the Bank
maintains a high degree of flexibility with a
16
<PAGE> 17
liquidity target of 10% to 25% of total assets. At March 31, 2000, cash, federal
funds sold, and investment and MBSs available for sale amounted to $150.6
million, or 22.8% of total assets. This compares to $149.8 million, or 23.7% of
total assets at December 31, 1999. The Bank is a member of the FHLB and, as
such, has access to both short- and long-term borrowings. In addition, the Bank
maintains a line of credit at the FHLB as well as lines of credit with two
correspondent banks. There have been no adverse trends in the Bank's liquidity
or capital reserves. Management believes that the Bank has adequate liquidity to
meet its commitments.
-- Capital Resources. Total shareholders' equity of the Bank at March 31,
2000 was $48.2 million, as compared to $47.7 million at December 31, 1999. This
increase of $509,000 was the result of the Bank's net income for the quarter of
$1.3 million, less dividends of $373,000 and changes in unrealized losses on
investment securities of $424,000.
The Bank is subject to FDIC regulations regarding capital requirements.
These regulations require banks to maintain minimum capital levels for capital
adequacy purposes and higher capital levels to be considered "well capitalized."
At March 31, 2000, the Bank's Tier I leverage capital ratio was 5.91%. The Bank
is also subject to risk-based capital measures. The risk-based capital
guidelines include both a definition of capital and a framework for calculating
risk-weighted assets by assigning balance sheet assets and off-balance sheet
items to broad risk categories. According to these standards, the Bank had a
Tier I risk adjusted capital ratio of 9.41% and a total risk adjusted capital
ratio of 10.67% at March 31, 2000. The minimum Tier I leverage, Tier I risk
adjusted, and total risk adjusted capital ratios necessary to be classified for
regulatory purposes as a "well capitalized" institution are 5.00%, 6.00% and
10.00%, respectively. The Bank, therefore, is considered to be "well
capitalized." The Bank's actual and required capital amounts and ratios are as
follows:
<TABLE>
<CAPTION>
MINIMUM REQUIRED MINIMUM REQUIRED
FOR CAPITAL TO BE CONSIDERED
ACTUAL ADEQUACY PURPOSES "WELL CAPITALIZED"
------------------------ ----------------------- ------------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
<S> <C> <C> <C> <C> <C> <C>
AT MARCH 31, 2000:
Tier I capital (to average assets) $ 37,547 5.91% $ 19,066 3.00% $ 31,776 5.00%
Tier I capital (to risk weighted assets) 37,547 9.41% 15,957 4.00% 23,935 6.00%
Total capital (to risk weighted assets) 42,546 10.67% 31,914 8.00% 39,892 10.00%
AT DECEMBER 31, 1999:
Tier I capital (to average assets) $ 36,323 5.88% $ 18,537 3.00% $ 30,896 5.00%
Tier I capital (to risk weighted assets) 36,323 9.70% 14,974 4.00% 22,461 6.00%
Total capital (to risk weighted assets) 41,015 10.96% 29,948 8.00% 37,435 10.00%
</TABLE>
17
<PAGE> 18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
The principal market risk facing the Bank is interest rate risk. The Bank's
objective regarding interest rate risk is to manage its assets and funding
sources to produce results which are consistent with its liquidity, capital
adequacy, growth and profitability goals, while minimizing the vulnerability of
its operations to changes in market interest rates.
Simulation modeling is the primary tool used by the Bank to measure the
interest rate risk inherent in its balance sheet at a given point of time by
showing the effect on net interest income, over a twenty-four month period, of
interest rate ramps of up to 200 basis points.
The following table presents the estimated impact of interest rate ramps on
the Bank's estimated net interest income over a twenty-four month period
beginning April 1, 2000:
<TABLE>
<CAPTION>
ESTIMATED EXPOSURE
TO NET INTEREST INCOME
------------------------------------------
DOLLAR PERCENT
CHANGE CHANGE
------------------- -------------------
(DOLLARS IN THOUSANDS)
INITIAL TWELVE MONTH PERIOD:
<S> <C> <C>
Up 200 basis points $ (301) (1.20%)
Up 100 basis points (133) (0.53%)
Down 100 basis points 86 0.34%
Down 200 basis points 151 0.60%
SUBSEQUENT TWELVE MONTH PERIOD:
Up 200 basis points $ (1,500) (5.84%)
Up 100 basis points (692) (2.69%)
Down 100 basis points 436 1.70%
Down 200 basis points 656 2.55%
</TABLE>
While the Bank reviews simulation assumptions and methodology to ensure
that they reflect historical experience, it should be noted that income
simulation may not always prove to be an accurate indicator of interest rate
risk because the actual repricing, maturity and prepayment characteristics of
individual products may differ from the estimates used in the simulations.
The Bank also uses interest rate sensitivity gap analysis to provide a more
general overview of the Bank's interest rate risk profile. The interest rate
sensitivity gap is defined as the difference between interest-earning assets and
interest-bearing liabilities maturing or repricing within a given time period.
At March 31, 2000, the Bank's one year cumulative gap was a negative $2.5
million, or 0.39% of total assets.
For additional discussion on interest rate risk see the section titled
"Asset and Liability Management" on pages 32 to 34 of the Bank's 1999 Annual
Report on Form 10-K filed with the FDIC.
18
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Bank or
its subsidiary are a party, or to which any of their property is
subject, other than ordinary routine litigation incidental to the
business of banking.
ITEM 2. CHANGE IN SECURITIES
No information to report.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
No defaults upon senior securities have taken place.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
No information to report.
ITEM 5. OTHER INFORMATION
No information to report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No information to report.
19
<PAGE> 20
BANK RHODE ISLAND
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Bank
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
BANK RHODE ISLAND
MAY 10, 2000 /s/ Merrill W. Sherman
- ------------ -------------------------------
(Date) Merrill W. Sherman
President and
Chief Executive Officer
MAY 10, 2000 /s/ Albert R. Rietheimer
- ------------ -------------------------------
(Date) Albert R. Rietheimer
Chief Financial Officer
and Treasurer
20
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 21,169
<INT-BEARING-DEPOSITS> 25
<FED-FUNDS-SOLD> 2,550
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 126,820
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 484,751
<ALLOWANCE> 6,023
<TOTAL-ASSETS> 659,344
<DEPOSITS> 552,824
<SHORT-TERM> 11,217
<LIABILITIES-OTHER> 3,188
<LONG-TERM> 43,931
0
0
<COMMON> 3,729
<OTHER-SE> 44,455
<TOTAL-LIABILITIES-AND-EQUITY> 659,344
<INTEREST-LOAN> 9,293
<INTEREST-INVEST> 2,135
<INTEREST-OTHER> 65
<INTEREST-TOTAL> 11,493
<INTEREST-DEPOSIT> 4,408
<INTEREST-EXPENSE> 5,372
<INTEREST-INCOME-NET> 6,121
<LOAN-LOSSES> 340
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,556
<INCOME-PRETAX> 2,001
<INCOME-PRE-EXTRAORDINARY> 1,306
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,306
<EPS-BASIC> 0.35
<EPS-DILUTED> 0.35
<YIELD-ACTUAL> 4.04
<LOANS-NON> 1,549
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,681
<CHARGE-OFFS> 10
<RECOVERIES> 12
<ALLOWANCE-CLOSE> 6,023
<ALLOWANCE-DOMESTIC> 6,023
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
