BARI Bancorp Rhode Island, Inc. (MM)

Bancorp Rhode Island, Inc. (NASDAQ: BARI), the parent company of Bank Rhode Island, today reported net income of $1.8 million, or $0.38 diluted earnings per share (EPS), for the quarter ended June 30, 2011. These results reflect expenses of $1.5 million (after-tax), or $0.32 per share, related to the pending merger with Brookline Bancorp, which include compensation expense attributable to the accelerated vesting of restricted stock awards. Net income for the second quarter 2010 was $2.7 million, or $0.57 per share, and net income for the first quarter 2011 was $2.3 million, or $0.49 per share.

For the six month period ended June 30, 2011, the Company reported net income of $4.1 million, or $0.87 diluted EPS, compared to net income of $4.9 million, or $1.05 diluted EPS, for the same period in 2010. The six month results for the period ended June 30, 2011 included the above referenced expenses of $1.5 million (after-tax) or $0.32 per share related to the pending merger.

The Company’s commercial loan and lease portfolio grew to $786.7 million as of June 30, 2011. This represented increases of $6.4 million from year-end 2010 and $22.3 million, or 2.9 percent, from June 30, 2010. Consumer loans were $208.6 million at June 30, 2011, down $1.8 million compared to December 31, 2010 and up $1.2 million from a year ago. Residential mortgage loans were $157.4 million as of June 30, 2011, down 4.5 percent from year-end 2010.

Core deposit (demand deposits, NOW, money market and savings accounts) growth continued with a 3.8 percent increase from year-end 2010 and a 3.4 percent increase from March 31, 2011. The growth over the prior periods was driven primarily by money market and demand deposit accounts, partly offset by the continued and expected decline in higher-cost certificates of deposit. At the end of the second quarter, core deposits rose to 73.2 percent of total deposits compared to 69.0 percent at year-end 2010 and 69.3 percent a year ago. Total deposits were $1.1 billion at June 30, 2011, down from a year ago. The decline was primarily due to a temporary inflow of approximately $53.0 million in demand deposits as of June 2010, attributable to the settlement of personal injury litigation to which the Bank was not a party.

Net interest income for the second quarter 2011 increased to $14.0 million from $13.6 million in the second quarter 2010 and $13.5 million in the first quarter 2011. Net interest margin for the second quarter 2011 rose to 3.69 percent, representing an improvement of 11 basis points from the first quarter 2011 and 2 basis points from the second quarter 2010. On a year-to-date basis, net interest income was $27.5 million, an increase of $800,000, or 3.0 percent, from 2010, and the net interest margin was 3.64 percent, an increase of 5 basis points from the prior period.

Noninterest income was $2.3 million for the second quarter 2011, unchanged from the second quarter 2010 and from the first quarter 2011. On a year-to-date basis, noninterest income was $4.6 million, flat compared to 2010.

Noninterest expense was $12.6 million in the second quarter 2011, up $2.2 million compared to the second quarter 2010 and up $1.3 million from the first quarter 2011. The second quarter 2011 noninterest expense reflects $2.1 million of pre-tax merger-related expenses, which include $610,000 of compensation expense attributable to the accelerated vesting of restricted stock awards due to the increase in the market price of the Company's stock following the announcement of the Brookline merger. Excluding the pre-tax merger-related expenses, noninterest expenses were up slightly compared to the second quarter 2010 and below first quarter 2011 levels. On a year-to-date basis, noninterest expense was $23.9 million, an increase of $3.0 million over the same period in 2010. The increase in the year-to-date comparison was primarily driven by merger-related expenses and an accrual related to a judgment issued with respect to a previously disclosed jury verdict against the Bank recorded in the first quarter 2011, partially offset by a reduction in loan workout and other real estate owned related expenses.

Nonperforming assets at June 30, 2011 totaled $19.4 million or 1.20 percent of total assets. This represented an increase from $17.5 million, or 1.09 percent of total assets, at March 31, 2011. Net charge-offs were $1.0 million, or 0.34 percent of average loans and leases, for the second quarter 2011, up slightly from $779,000, or 0.28 percent of average loans and leases, in the second quarter 2010, but down from $1.6 million, or 0.55 percent of average loans and leases, in the first quarter 2011. On a year-to-date basis, net charge-offs were $2.5 million, or 0.45 percent of average loans and leases, an increase of $256,000 over the same period in 2010.

The provision for loan and lease losses was $850,000 for the second quarter 2011, compared to $1.6 million in the second quarter 2010 and $1.1 million in the first quarter 2011. On a year-to-date basis, the provision was $2.0 million, a decrease of $1.2 million from the same period in 2010.

The allowance for loan and lease losses was $18.1 million at June 30, 2011 compared to $18.7 million at December 31, 2010. The allowance for loan and lease losses as a percent of total loans and leases was 1.57 percent at June 30, 2011 compared to 1.61 percent at December 31, 2010.

Total assets at June 30, 2011 were $1.6 billion, representing slight increases from both the first quarter 2011 and from year-end 2010.

At June 30, 2011, the Company’s tier 1 capital ratio was approximately 8.20 percent and its total risk-based capital ratio was approximately 12.80 percent.

The Company’s Board of Directors approved a dividend of $0.19 per share. The dividend will be paid on August 31, 2011, to shareholders of record on August 10, 2011.

About BancorpRI

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 17 branches and more than 60 ATMs throughout Providence, Kent and Washington Counties. As of June 30, 2011, BankRI had $1.6 billion in assets and $1.1 billion in deposits. For more information, visit www.bankri.com.

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.

On April 19, 2011, the Company entered into a merger agreement with Brookline Bancorp, Inc. (“Brookline Bancorp”) pursuant to which the Company will merge with and into Brookline Bancorp, whereupon the separate corporate existence of the Company will cease and its subsidiary, Bank Rhode Island will become a wholly owned subsidiary of Brookline Bancorp. In connection with the merger, Brookline Bancorp has filed with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4, which includes a proxy statement of the Company and a prospectus of Brookline Bancorp, as well as other relevant materials concerning the merger. A definitive proxy statement/prospectus will be mailed to shareholders of the Company after the registration statement is declared effective. The registration statement has not yet become effective. Shareholders of the Company are urged to read the proxy statement/prospectus and the other relevant materials when they become available because they will contain important information about Brookline Bancorp, the Company and the proposed transaction. The proxy statement/prospectus and other relevant materials, and any and all documents filed by Brookline Bancorp or the Company with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, investors may obtain free copies of the documents filed by Brookline Bancorp with the SEC by directing a written request to Paul R. Bechet, Chief Financial Officer, Brookline Bancorp, 160 Washington Street, Brookline, MA 02445. Investors may obtain free copies of the documents filed by the Company with the SEC by directing a written request to Linda H. Simmons, Chief Financial Officer, One Turks Head Place, Providence, Rhode Island 02903. The Company and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in connection with the merger. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2011 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on April 15, 2011. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement regarding the merger.

BANCORP RHODE ISLAND, INC. Selected Financial Highlights (unaudited)                 Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010

 

(In thousands, except per share data)

  FINANCIAL DATA: Net interest income $ 13,999 $ 13,626 $ 27,514 $ 26,714 Provision for loan and lease losses 850 1,550 1,975 3,150 Noninterest income 2,272 2,285 4,604 4,600 Noninterest expense 12,618 10,430 23,887 20,918 Net income 1,819 2,681 4,126 4,900   FINANCIAL PERFORMANCE RATIOS: Return on assets (3) (6) 0.46 % 0.68 % 0.52 % 0.63 % Return on equity (4) (6) 5.54 % 8.54 % 6.38 % 7.93 % Net interest margin (2) (6) 3.69 % 3.67 % 3.64 % 3.59 % Efficiency ratio (5) (6) 77.55 % 65.55 % 74.37 % 66.80 %   PER SHARE DATA: Earnings per share - basic $ 0.39 $ 0.57 $ 0.88 $ 1.05 Earnings per share - diluted 0.38 0.57 0.87 1.05 Book value per share of common stock 28.51 27.63 28.51 27.63 Tangible book value per share of common stock 25.89 25.00 25.89 25.00 Market value (at period end) 45.32 26.20 45.32 26.20 Dividends per share 0.19 0.17 0.38 0.34   CAPITAL RATIOS: Tier 1 capital ratio (7) 8.20 % 7.91 % Total risk-based capital ratio (7) 12.80 % 12.20 % Tangible common equity ratio (1) (6) 7.55 % 7.30 %       Three Months Ended Jun 30, 2011 Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 (In thousands)   BALANCE SHEET: Total assets $ 1,618,756 $ 1,606,508 $ 1,603,759 $ 1,573,323 $ 1,613,520 Total loans and leases 1,152,677 1,154,448 1,155,489 1,135,227 1,136,524 Total deposits 1,095,845 1,101,661 1,120,166 1,115,683 1,174,020 Shareholders' equity 133,531 130,192 128,678 130,769 129,127   ASSET QUALITY: Total nonperforming assets $ 19,447 $ 17,473 $ 17,643 $ 15,152 $ 16,759 Nonperforming assets / total assets 1.20 % 1.09 % 1.10 % 0.96 % 1.04 % Allowance for loans and leases $ 18,083 $ 18,222 $ 18,654 $ 18,212 $ 17,396 Allowance to total loans and leases 1.57 % 1.58 % 1.61 % 1.60 % 1.53 % Net charge-offs $ 989 $ 1,557 $ 1,993 $ 459 $ 779 Net charge-offs to average loans and leases 0.34 % 0.55 % 0.69 % 0.16 % 0.28 %   BANCORP RHODE ISLAND, INC. Selected Financial Highlights (unaudited)           Jun 30, 2011 Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 (in thousands)   LOAN AND LEASE PORTFOLIO:   Commercial loans and leases: Commercial real estate - non-owner occupied $ 210,888 $ 196,353 $ 200,809 $ 202,342 $ 191,345 Commercial real estate - owner occupied 176,059 183,111 179,766 177,526 179,109 Commercial & industrial 159,512 161,004 157,879 156,042 163,088 Multifamily 86,387 84,772 79,934 73,375 67,588 Small business 60,141 62,233 62,841 59,756 59,833 Construction 27,071 28,273 30,349 31,035 30,675 Leases and other   70,777     72,156     73,054     76,417     77,688   Subtotal 790,835 787,902 784,632 776,493 769,326 Unearned lease income (5,828 ) (5,962 ) (6,159 ) (6,516 ) (6,777 ) Net deferred loan origination costs   1,697     1,756     1,791     1,777     1,825   Total commercial loans and leases 786,704 783,696 780,264 771,754 764,374   Residential mortgages 157,415 160,658 164,877 161,106 164,750   Consumer loans 208,558 210,094 210,348 202,367 207,400             Total loans and leases $ 1,152,677   $ 1,154,448   $ 1,155,489   $ 1,135,227   $ 1,136,524      

(1)

Calculated by dividing common shareholders’ equity less goodwill by total assets less goodwill.

(2)

Calculated by dividing annualized net interest income by average interest-earning assets.

(3)

Calculated by dividing annualized net income by average total assets.

(4)

Calculated by dividing annualized net income applicable to common shares by average common shareholders’ equity.

(5)

Calculated by dividing noninterest expense by net interest income plus noninterest income.

(6)

Non-GAAP performance measure.

(7)

Tier 1 capital and total risk-based capital ratio are estimated for June 30, 2011.   BANCORP RHODE ISLAND, INC. Consolidated Balance Sheet (unaudited)     June 30, December 31, 2011 2010 (In thousands) ASSETS: Cash and due from banks $ 29,444 $ 14,384 Overnight investments   1,296     395   Total cash and cash equivalents 30,740 14,779

Available for sale securities (amortized cost of $347,505 and $357,402, respectively)

352,695 360,025 Stock in Federal Home Loan Bank of Boston 16,274 16,274 Loans and leases receivable: Commercial loans and leases 786,704 780,264 Residential mortgage loans 157,415 164,877 Consumer and other loans   208,558     210,348   Total loans and leases receivable 1,152,677 1,155,489 Allowance for loan and lease losses   (18,083 )   (18,654 ) Net loans and leases receivable 1,134,594 1,136,835 Premises and equipment, net 11,514 11,889 Goodwill 12,262 12,262 Accrued interest receivable 4,380 4,842 Investment in bank-owned life insurance 31,886 31,277 Prepaid expenses and other assets   24,411     15,576   Total assets $ 1,618,756   $ 1,603,759     LIABILITIES: Deposits: Demand deposit accounts $ 282,068 $ 264,274 NOW accounts 66,093 70,327 Money market accounts 123,843 96,285 Savings accounts 330,054 341,667 Certificates of deposit accounts   293,787     347,613   Total deposits 1,095,845 1,120,166 Overnight and short-term borrowings 35,955 40,997 Wholesale repurchase agreements 20,000 20,000 Federal Home Loan Bank of Boston borrowings 293,277 260,889 Subordinated deferrable interest debentures 13,403 13,403 Other liabilities   26,745     19,626   Total liabilities   1,485,225     1,475,081   SHAREHOLDERS’ EQUITY: Common stock, par value $0.01 per share, authorized 11,000,000 shares: Issued: (5,080,941 shares and 5,047,942 shares, respectively) 50 50 Additional paid-in capital 75,556 73,866 Treasury stock, at cost (396,986 shares and 373,850 shares, respectively) (13,378 ) (12,527 ) Retained earnings 67,929 65,584 Accumulated other comprehensive income, net   3,374     1,705   Total shareholders’ equity   133,531     128,678   Total liabilities and shareholders’ equity $ 1,618,756   $ 1,603,759     BANCORP RHODE ISLAND, INC. Consolidated Statements of Operations (unaudited)         Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 (In thousands, except per share data) Interest and dividend income: Overnight investments $ 1 $ - $ 1 $ 5 Mortgage-backed securities 2,606 3,041 5,231 6,270 Investment securities 371 490 768 1,040 Federal Home Loan Bank of Boston stock dividends 13 - 25 - Loans and leases   14,505   15,105     29,055   29,673   Total interest and dividend income   17,496   18,636     35,080   36,988   Interest expense: Deposits 1,248 2,164 2,707 4,442 Overnight and short-term borrowings 9 19 19 37 Wholesale repurchase agreements 142 143 281 282 Federal Home Loan Bank of Boston borrowings 1,931 2,518 4,227 5,183 Subordinated deferrable interest debentures   167   166     332   330   Total interest expense   3,497   5,010     7,566   10,274   Net interest income 13,999 13,626 27,514 26,714 Provision for loan and lease losses   850   1,550     1,975   3,150   Net interest income after provision for loan and lease losses   13,149   12,076     25,539   23,564   Noninterest income:

Total other-than-temporary impairment losses on available for sale securities

- (49 ) - 49

Non-credit component of other-than-temporary impairment losses recognized in other comprehensive income

  -   5     -   (664 )

Credit component of other-than-temporary impairment losses on available for sale securities

- (44 ) - (615 ) Service charges on deposit accounts 1,215 1,348 2,355 2,612 Commissions on nondeposit investment products 356 148 550 385 Income from bank-owned life insurance 306 318 609 633 Loan related fees 131 133 351 322

Net gain on lease sales and commissions on loans originated for others

64 6 60 42 Gain on sale of available for sale securities - 103 212 578 Other income   200   273     467   643   Total noninterest income   2,272   2,285     4,604   4,600   Noninterest expense: Salaries and employee benefits 6,655 5,746 12,589 11,589 Professional services 2,132 537 2,738 1,169 Occupancy 846 829 1,753 1,690 Data processing 687 654 1,368 1,308 FDIC insurance 442 475 919 950 Operating 428 467 882 929 Marketing 378 383 731 641 Equipment 256 255 532 510 Loan workout and other real estate owned 161 337 367 673 Loan servicing 135 171 279 347 Other expenses   498   576     1,729   1,112   Total noninterest expense   12,618   10,430     23,887   20,918   Income before income taxes 2,803 3,931 6,256 7,246 Income tax expense   984   1,250     2,130   2,346   Net income $ 1,819 $ 2,681   $ 4,126 $ 4,900     Per share data: Basic earnings per common share $ 0.39 $ 0.57 $ 0.88 $ 1.05 Diluted earnings per common share $ 0.38 $ 0.57 $ 0.87 $ 1.05 Cash dividends declared per common share $ 0.19 $ 0.17 $ 0.38 $ 0.34 Weighted average common shares outstanding – basic 4,689 4,664 4,686 4,643 Weighted average common shares outstanding – diluted 4,768 4,690 4,734 4,670   BANCORP RHODE ISLAND, INC. Asset Quality Analysis (unaudited)             Three Months Ended Jun 30, 2011 Mar 31, 2011 Dec 31, 2010 Sep 30, 2010 Jun 30, 2010 (Dollars in thousands) NONPERFORMING ASSETS:   Nonperforming loans & leases: Commercial real estate $ 5,432 $ 4,792 $ 5,273 $ 5,384 $ 5,131 Commercial & industrial 2,362 2,255 2,462 1,455 1,155 Multifamily 1,568 1,050 717 - - Small business 817 1,059 1,090 1,158 986 Construction 45 232 469 469 469 Leases 1,713 591 581 1,115 2,252 Residential mortgage 5,722 4,926 5,045 3,570 3,737 Consumer   1,038     993     876     871     1,081   Total nonperforming loans & leases 18,697 15,898 16,513 14,022 14,811   Other real estate owned 750 1,575 1,130 1,130 1,948           Total nonperforming assets $ 19,447   $ 17,473   $ 17,643   $ 15,152   $ 16,759       Total nonperforming loans & leases / total loans & leases 1.62 % 1.38 % 1.43 % 1.24 % 1.30 % Total nonperforming assets / total assets 1.20 % 1.09 % 1.10 % 0.96 % 1.04 %     PROVISION AND ALLOWANCE FOR LOAN LOSSES:   Balance at beginning of period $ 18,222 $ 18,654 $ 18,212 $ 17,396 $ 16,625 Charged-off loans & leases (1,137 ) (1,686 ) (2,154 ) (487 ) (909 ) Recoveries on charged-off loans & leases   148     129     161     28     130   Net loans & leases charged-off (989 ) (1,557 ) (1,993 ) (459 ) (779 ) Provision for loan and lease losses   850     1,125     2,435     1,275     1,550   Balance at end of period $ 18,083   $ 18,222   $ 18,654   $ 18,212   $ 17,396       Allowance to nonperforming loans & leases 96.72 % 114.62 % 112.97 % 129.88 % 117.45 % Allowance to total loans & leases 1.57 % 1.58 % 1.61 % 1.60 % 1.53 %     NET CHARGE-OFFS:   Commercial real estate $ - $ 532 $ 726 $ - $ (100 ) Commercial & industrial (47 ) - 487 (5 ) (4 ) Construction 62 237 - - - Other commercial loans & leases 427 397 565 226 387 Residential mortgages 515 379 141 89 490 Consumer   32     12     74     149     6   Total net charge-offs $ 989   $ 1,557   $ 1,993   $ 459   $ 779       Net charge-offs to average loans & leases 0.34 % 0.55 % 0.69 % 0.16 % 0.28 %     DELINQUENCIES AND NON-ACCRUING LOANS AND LEASES AS % OF TOTAL LOANS:   Loans & leases 30-59 days past due 0.37 % 0.83 % 0.56 % 0.47 % 0.90 % Loans & leases 60-89 days past due 0.16 % 0.28 % 0.21 % 0.22 % 0.21 % Loans & leases 90+ days past due and still accruing   0.01 %   0.06 %   -     -     0.08 % Total accruing past due loans & leases 0.54 % 1.17 % 0.77 % 0.69 % 1.19 %   Non-accrual loans & leases   1.61 %   1.32 %   1.43 %   1.24 %   1.22 %   Total delinquent and nonaccrual loans & leases   2.15 %   2.49 %   2.20 %   1.93 %   2.41 %   BANCORP RHODE ISLAND, INC. Consolidated Average Balances, Yields and Costs (unaudited)                     Three Months Ended June 30, (Dollars in thousands) 2011 2010 Average Balance Interest Earned/Paid Average Yield Average Balance Interest Earned/Paid Average Yield   ASSETS: Earning assets: Overnight investments $ 654 $ 1 0.14 % $ 2,009 $ - 0.09 % Available for sale securities 350,396 2,977 3.40 % 346,907 3,531 4.08 % Stock in the FHLB 16,274 13 0.31 % 16,274 - 0.00 % Loans and leases receivable: Commercial loans and leases 784,284 10,552 5.39 % 757,664 10,943 5.79 % Residential mortgages loans 160,332 1,743 4.35 % 167,289 1,939 4.64 % Consumer and other loans   209,659     2,210 4.23 %   204,235     2,223 4.36 % Total earning assets   1,521,599     17,496 4.61 %   1,494,378     18,636 5.00 % Cash and due from banks 15,974 18,798 Allowance for loans and leases (18,469 ) (17,034 ) Premises and equipment 11,614 12,244 Goodwill, net 12,262 12,262 Accrued interest receivable 3,994 4,252 Bank-owned life insurance 31,686 30,435 Prepaid expenses and other assets   17,368     16,898   Total assets $ 1,596,028   $ 1,572,233       LIABILITIES AND SHAREHOLDERS' EQUITY: Interest-bearing liabilities: Deposits: NOW accounts $ 68,824 $ 9 0.05 % $ 69,378 $ 12 0.07 % Money market accounts 120,216 201 0.67 % 81,271 165 0.81 % Savings accounts 338,168 264 0.31 % 373,225 506 0.54 % Certificate of deposit accounts 313,930 774 0.99 % 374,935 1,481 1.58 % Overnight and short-term borrowings 36,138 9 0.10 % 37,011 19 0.20 % Wholesale repurchase agreements 19,560 142 2.88 % 20,000 143 2.82 % FHLB borrowings 276,173 1,931 2.76 % 247,720 2,518 4.02 % Subordinated deferrable interest debentures   13,403     167 4.94 %   13,403     166 4.93 % Total interest-bearing liabilities   1,186,412     3,497 1.17 %   1,216,943     5,010 1.65 %   Noninterest-bearing deposits 260,813 219,136 Other liabilities   17,016     10,168   Total liabilities 1,464,241 1,446,247   Shareholders' equity:   131,787     125,986   Total liabilities and shareholders' equity $ 1,596,028   $ 1,572,233         Net interest income $ 13,999 $ 13,626   Net interest spread 3.44 % 3.35 %   Net interest margin 3.69 % 3.67 %   BANCORP RHODE ISLAND, INC. Consolidated Average Balances, Yields and Costs (unaudited)                     Six Months Ended June 30, (Dollars in thousands) 2011 2010 Average Balance Interest Earned/Paid Average Yield Average Balance Interest Earned/Paid Average Yield   ASSETS: Earning assets: Overnight investments $ 731 $ 1 0.17 % $ 2,150 5 0.50 % Available for sale securities 352,886 5,999 3.40 % 359,640 7,310 4.10 % Stock in the FHLB 16,274 25 0.31 % 16,274 - 0.00 % Loans and leases receivable: Commercial loans and leases 781,001 21,208 5.47 % 744,825 21,254 5.74 % Residential mortgages loans 161,977 3,442 4.25 % 169,834 3,968 4.67 % Consumer and other loans   210,101     4,405 4.23 %   204,039     4,451 4.40 % Total earning assets   1,522,970     35,080 4.63 %   1,496,762     36,988 4.97 % Cash and due from banks 16,543 16,139 Allowance for loans and leases (18,498 ) (17,129 ) Premises and equipment 11,705 12,301 Goodwill, net 12,262 12,221 Accrued interest receivable 4,131 4,312 Bank-owned life insurance 31,538 30,277 Prepaid expenses and other assets   16,509     16,232   Total assets $ 1,597,160   $ 1,571,115       LIABILITIES AND SHAREHOLDERS' EQUITY: Interest-bearing liabilities: Deposits: NOW accounts $ 68,440 $ 55 0.16 % $ 69,025 $ 27 0.08 % Money market accounts 112,794 373 0.67 % 76,356 314 0.83 % Savings accounts 340,753 534 0.32 % 371,497 1,037 0.56 % Certificate of deposit accounts 324,524 1,745 1.08 % 380,237 3,064 1.62 % Overnight and short-term borrowings 37,916 19 0.10 % 38,080 37 0.20 % Wholesale repurchase agreements 19,801 281 2.82 % 19,116 282 2.93 % FHLB borrowings 274,722 4,227 3.06 % 259,665 5,183 3.97 % Subordinated deferrable interest debentures   13,403     332 4.94 %   13,403     330 4.95 % Total interest-bearing liabilities   1,192,353     7,566 1.27 %   1,227,379     10,274 1.69 %   Noninterest-bearing deposits 258,092 209,489 Other liabilities   16,258     9,652   Total liabilities 1,466,703 1,446,520   Shareholders' equity:   130,457     124,595   Total liabilities and shareholders' equity $ 1,597,160   $ 1,571,115         Net interest income $ 27,514 $ 26,714   Net interest spread 3.36 % 3.28 %   Net interest margin 3.64 % 3.59 %