July 18, 2006 at 12:11 PM EDT
Bancorp Rhode Island, Inc. Announces Second Quarter Earnings of $2.0 Million; Commercial Growth Jumps

Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today announced earnings for the second quarter of 2006 were $2.0 million, as compared to $2.5 million earned in the second quarter of last year. The company's diluted earnings per share (EPS) were $0.41 for the second quarter of 2006, down from $0.52 in the second quarter of 2005.

The FHLB of Boston amended its dividend schedule and deferred the declaration of its normal quarterly dividend. As a result, the Bank was not able to recognize income related to its investment for the second quarter of 2006. The dividend recorded in first quarter of 2006 was $211,000 before taxes.

Total commercial loans outstanding reached $486.1 million, up a strong 10.9 percent from $438.3 million as of December 31, 2005.

Consumer loans outstanding rose to $222.2 million at the end of the second quarter of 2006. This marks a 7.6 percent increase over the $206.5 million reported at December 31, 2005.

The bank's total deposits were $992.5 million for the second quarter of 2006, up $11.5 million from $981.0 million at the end of 2005.

"We are delighted our commercial lending efforts built our portfolio by better than $44 million this quarter," said Merrill W. Sherman, president and chief executive officer. "The changes we have made over the past six months are clearly being well-received in the marketplace," she added.

Sherman also noted, "Deposits rebounded nicely during the quarter, but the margin remains under significant pressure."

Bancorp Rhode Island, Inc. will host a conference call at 10:00 a.m. Eastern Time tomorrow (Wednesday, July 19) to discuss its second quarter earnings for 2006. The conference call can be accessed by dialing toll-free 800-231-5571.

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, has 16 branches located in 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.

                      BANCORP RHODE ISLAND, INC.
                     Selected Financial Highlights

                                          June 30,       December 31,
                                            2006             2005
                                       --------------  ---------------
Balance Sheet Data:                    (Dollars in thousands, except
                                               per share data)
--------------------------------------

Total Assets                          $    1,466,587   $    1,442,279
Total Loans                                  996,838          950,806
Nonperforming Loans                            3,387              415
Allowance for Loan Losses                     12,462           12,168
Allowance for Nonperforming Loans             367.94%         2932.05%
Allowance to Total Loans                        1.25%            1.28%
Total Deposits                               992,511          980,969
Total Shareholders' Equity                   104,579          104,832

Book Value Per Share                  $        21.92   $        22.21
Tangible Book Value Per Share         $        19.55   $        19.83


                                    Quarter Ended     Six Months Ended
                                      June 30,            June 30,
                                  -----------------   ----------------
                                     2006     2005       2006    2005
                                  ---------- ------   ---------- -----
                                           (Dollars in millions)
Average Balance Sheet Data:
----------------------------------

Average Total Assets              $1,447  $  1,337   $ 1,442  $ 1,296
Average Total Loans                  972       913       964      899
Average Total Interest-bearing
 Liabilities                       1,147     1,056     1,144    1,028
Average Total Equity                 105        98       105       89



                          Quarter Ended            Six Months Ended
                            June 30,                   June 30,
                      ------------------         -------------------
                        2006         2005        2006         2005
                     ---------     --------    ---------    ---------
                       (Dollars in thousands, except per share data)

Income Statement Data:
--------------------------------

Interest Income    $    19,762  $    17,068  $    39,157  $    32,813
Interest Expense         9,433        6,298       17,778       11,672
                     ----------   ----------   ----------   ----------
    Net Interest
     Income             10,329       10,770       21,379       21,141
Provision of Loan
 Losses                    440          354          740          654
Noninterest Income       2,815        2,445        5,120        4,520
Noninterest
 Expense                 9,720        9,125       20,511       17,637
                     ----------   ----------   ----------   ----------
    Income Before
     Taxes               2,984        3,736        5,248        7,370
Income Taxes               978        1,276        1,717        2,503
                     ----------   ----------   ----------   ----------
    Net Income     $     2,006  $     2,460  $     3,531  $     4,867
                     ==========   ==========   ==========   ==========


Data Per Common
 Share:
------------------

Earnings Per
 Common
 Share - Basic     $      0.42  $      0.55  $      0.74  $      1.14
Earnings Per
 Common
 Share - Diluted   $      0.41  $      0.52  $      0.72  $      1.08
Average Common
 Shares
 Outstanding -
  Basic              4,763,667    4,508,165    4,755,005    4,258,815
Average Common
 Shares
 Outstanding -
  Diluted            4,905,424    4,737,503    4,896,086    4,497,435


Selected Operating
 Ratios:
------------------

Net Interest
 Margin                   3.01%        3.40%        3.13%        3.46%
Return on Assets          0.56%        0.74%        0.50%        0.76%
Return on Equity          7.69%       10.09%        6.79%       11.09%
Efficiency
 Ratio(1)                73.95%       69.05%       77.40%       68.73%


(1) Calculated by dividing total noninterest expenses by net interest
    income plus noninterest income.


                      BANCORP RHODE ISLAND, INC.
                      Consolidated Balance Sheets

                                               June 30,   December 31,
                                                 2006         2005
                                              ----------  ------------
                                                   (In thousands)
ASSETS:
Cash and due from banks                      $   31,497  $     30,177
Overnight investments                             5,349        10,370
                                              ----------  ------------
      Total cash and cash equivalents            36,846        40,547
Investment securities available for sale
 (amortized cost of $160,243 and $153,328 at
 June 30, 2005 and December 31, 2005,
 respectively)                                  156,896       150,959
Mortgage-backed securities available for sale
 (amortized cost of $214,178 and $237,449 at
 June 30, 2006 and December 31, 2005,
 respectively)                                  206,812       234,858
                                              ----------  ------------
      Total available for sale securities       363,708       385,817
Stock in Federal Home Loan Bank of Boston        16,530        16,062
Loans and leases receivable:
    Commercial loans and leases                 486,147       438,309
    Residential mortgage loans                  288,489       306,016
    Consumer and other loans                    222,202       206,481
                                              ----------  ------------
       Total loans and leases receivable        996,838       950,806
    Less allowance for loan and lease losses    (12,462)      (12,168)
                                              ----------  ------------
       Net loans and leases receivable          984,376       938,638
Premises and equipment, net                      15,496        14,858
Goodwill                                         11,317        11,234
Accrued interest receivable                       6,871         6,965
Investment in bank-owned life insurance          20,737        18,824
Prepaid expenses and other assets                10,706         9,334
                                              ----------  ------------
       Total assets                          $1,466,587  $  1,442,279
                                              ==========  ============
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