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Bancorp operating results reveal push to hire for mortgage jobs in Rhode Island

Posted on March 26, 2011

Bancorp’s recent operating results reveal that the company hired for mortgage jobs in Rhode Island.

During the year, the Company added $6.9 million to its allowance for loan and lease losses. The provision exceeded net charge-offs by $2.1 million. The increased provision served to strengthen the ratio of the allowance to loans and leases to 1.61 percent at December 31, 2010, up from 1.49 percent at December 31, 2009. Nonperforming loans and leases at December 31, 2010 totaled $16.5 million, down from $18.3 million a year ago. As a percentage of total loans and leases, nonperforming loans and leases ended 2010 at 1.43%, compared to 1.65% at the end of the year in 2009. The Company believes its asset quality indicators continue to compare favorably to its peer group, reflecting a culture of prudence and diligence in its risk management practices and business approach.

Historically, the Bank has offered fixed- and variable-rate mortgages through its branch network as an accommodation to its customers. In 2010, the Bank began a modest first mortgage origination effort, hiring three originators and intending to sell or portfolio these loans as the Bank’s balance sheet and fee income needs dictate. The Bank originated $26.3 million of mortgage loans for its portfolio during 2010, compared to $3.5 million in 2009. Fees from mortgage loans originated for third parties decreased to $62,000 from $83,000 in the prior year. Overall, the Bank anticipates that its residential mortgage loan portfolio will decline long-term as it continues to focus its resources on commercial and consumer lending.

Consumer and Other Loans — The Bank originates a variety of term loans and lines of credit for consumers. At December 31, 2010, the consumer loan portfolio totaled $210.3 million, or 18.2% of the total loan and lease portfolio. Over the past five years, consumer loans have increased by $3.9 million, or 1.9%. Compared to the prior year-end, consumer loans have increased by $4.2 million, or 2.0%.

As economic conditions began to improve in 2010, nonperforming assets and net charge-offs declined compared to the prior year. At December 31, 2010, the Company had nonperforming assets of $17.6 million, or 1.10% of total assets, compared to $20.0 million, or 1.26% of total assets, at December 31, 2009.

The Bank made additions to the allowance for loan and lease losses of $6.9 million and $9.9 million during 2010 and 2009 and experienced net charge-offs of $4.7 million and $8.0 million, respectively. At December 31, 2010, the allowance for loan and lease losses was $18.7 million and represented 1.61% of total loans and leases outstanding. This compares to an allowance for loan and lease losses of $16.5 million, representing 1.49% of total loans and leases outstanding at December 31, 2009. If current economic conditions worsen, management believes that the level of nonperforming assets will increase, as will its level of charged-off loans and leases.

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