Slade's Ferry Bancorp Reports Earnings and Announces Stock Repurchase Plan

Business Wire, July 18, 2006

SOMERSET, Mass. -- Slade's Ferry Bancorp (the "Company"), (NASDAQ Capital Market: SFBC) parent company of Slade's Ferry Trust Company (the "Bank"), announced that its net income for the quarter ended June 30, 2006 was $626,000 or $0.15 per share (diluted), a decrease of 26.2% over net income for the quarter ended June 30, 2005, which totaled $848,000 or $0.21 per share (diluted). For the six months ended June 30, 2006, net income was $1.5 million or $0.37 per share (diluted), a decrease of 21.3% over net income for the six months ended June 30, 2005, which totaled $1.9 million or $0.47 per share (diluted).

The Company also announced that its Board of Directors has authorized a stock repurchase plan pursuant to which the Company may repurchase up to 5%, or 208,036 shares, of its outstanding common stock, as a means of further enhancing stockholder value. The repurchases will be made in the open market at prevailing market prices or in privately negotiated transactions in accordance with all applicable securities laws and regulations. Such repurchases will be made from time to time, subject to market conditions, at the discretion of Company management.

"We believe strongly in the fundamental strength of Slade's Ferry Bancorp," said President and CEO Mary Lynn Lenz. "Buying back our shares is a vote of confidence in our business, our employees and our shareholders."

The decline in net income for the three and six month periods ended June 30, 2006 was primarily attributable to an increase in non-interest expense. Non-interest expense increased $330,000 or 9.1%, to $4.0 million for the three months ended June 30, 2006, and $765,000, or 11.0%, to $7.7 million for the six months then ended. These increases were attributable to the additional compensation expenses incurred with the implementation of FAS 123R, Accounting for Stock Based Compensation, and the settlement accounting employed for retired employees under FAS 88, Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits. Additionally, non-interest expense for the six month period includes costs related to the Assonet Branch which opened in March 2005.

Non-interest income increased by $6,000 and $140,000, respectively, for the three and six month periods ended June 30, 2006. Included in non-interest income are net losses on the sale of securities amounting to $172,000 and $169,000, respectively, for the three and six month periods ended June 30, 2006. In June 2006, the Company recognized losses on the sale of certain low-yielding investments in order to acquire higher yielding assets.

As a result of loan growth, total interest and dividend income increased from $7.1 million for the quarter ended June 30, 2005, to $8.0 million for the quarter ended June 30, 2006, an increase of 13%. For the six months ended June 30, 2006, total interest and dividend income was $15.9 million, compared to $13.8 million for the six months ended June 30, 2006, an increase of 15.4%.

Total consolidated assets increased from $585.9 million at December 31, 2005 to $605.2 million at June 30, 2006, an increase of 3.3%. Deposits increased from $415.8 million at December 31, 2005 to $430.1 million at June 30, 2006, an increase of 3.4%. During the same time period, net loans increased by $17.1 million, or 4.2%, to $426.7 million.

Total stockholders' equity at June 30, 2006 was $49.8 million compared to $48.9 million at December 31, 2005, an increase of 2.0%. Book value per share was $11.97 at June 30, 2006 as compared to $11.82 at December 31, 2005. Both the Company and the Bank maintain capital levels sufficient to be considered "well-capitalized" under applicable regulatory capital guidelines and requirements.

The Company declared a $0.09 dividend to common shareholders of record on June 20, 2006, which is payable on July 21, 2006.

Slade's Ferry Bancorp was founded to serve community-banking needs with both personal and commercial products and services. With approximately $605 million in assets and nine retail branches in Southeastern Massachusetts, Slade's Ferry is a trusted community partner to both business and personal banking customers. Traded on the NASDAQ Capital Market as SFBC, Slade's Ferry Bancorp can also be found on the web at www.sladesferry.com and in seven Massachusetts communities - Assonet, Fairhaven, Fall River, New Bedford, Seekonk, Somerset and Swansea.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the strength of the company's capital and asset quality. Other such statements may be identified by words such as "believes," "will," "expects," "project," "may," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of Slade's Ferry Bancorp's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors.