SI Financial Group, Inc. (the “Company”) (NASDAQ:SIFI), the holding
company of Savings Institute Bank and Trust Company (the “Bank”),
reported net income of $1.5 million, or $0.13 diluted earnings per
share, for the quarter ended March 31, 2016 versus $921,000,
or $0.07 diluted earnings per share, for the quarter ended
March 31, 2015.
Net interest income increased $751,000 to $10.2 million for the
quarter ended March 31, 2016 compared to $9.4 million for the
quarter ended March 31, 2015. Net interest income
increased as a result of an increase in the average balance of
loans and securities outstanding, partially offset by an increase
in the average balance of deposits and borrowings and a reduction
on the average rate earned on loans.
The provision for loan losses decreased $24,000 for the first
quarter of 2016 compared to the same period in 2015 primarily as a
result of a decrease in commercial loans outstanding from the prior
quarter, which carry a higher degree of risk than other loans in
the portfolio, offset by an increase in nonperforming loans.
At March 31, 2016, nonperforming loans increased to $6.8
million, compared to $4.8 million at March 31, 2015, resulting
from a delinquent loan of $1.5 million guaranteed by the U.S.
government in the process of collections and increases in
nonperforming multi-family and commercial mortgage loans of
$489,000 and home equity loans of $216,000, offset by a decrease in
commercial business loans of $361,000. Net loan charge-offs
were $41,000 for the quarter ended March 31, 2016 compared to
$49,000 for the quarter ended March 31, 2015.
Noninterest income increased $365,000 to $2.7 million from $2.3
million for the quarter ended March 31, 2016, compared to the
same period in the prior year primarily due to an increase in other
noninterest income of $262,000 as a result of profit distributions
from our investment in three small business investment
companies. Mortgage banking activities increased $123,000 for
the quarter ended March 31, 2016 compared to the same period in
2015 due to increases in loans sold and derivative loan
commitments.
Noninterest expenses increased $205,000 for the first quarter of
2016 compared to the same period in 2015. Salaries and
employee benefits increased $234,000 for the first quarter ended
March 31, 2016 compared to the same period in 2015 primarily
as a result of staffing changes and equity award
compensation. Computer and electronic banking services
increased $171,000 for the quarter ended March 31, 2016
compared to the same period in 2015 resulting from data service
speed improvements and electronic banking security enhancements
related to the implementation of EMV (Europay, MasterCard and Visa)
technology. Outside professional services increased $169,000
as a result of increased legal fees for the first quarter of 2016
as compared to the same period in 2015. A reduction in
occupancy and equipment of $310,000 for the quarter ended March 31,
2016 versus the comparable period in 2015, was in large part a
result of strategic initiatives to reduce branch infrastructure
costs, reconfiguring and optimizing telephone and data services and
lower snow removal expenditures.
Total assets increased $26.4 million, or 1.8%, to $1.51 billion
at March 31, 2016, principally due to increases of $28.6
million in cash and cash equivalents and $6.0 million in available
for sale securities, offset by reductions of $6.3 million in net
loans receivable and loans held for sale of $1.3 million. The
lower balance of net loans receivable reflects decreases in time
share loans of $6.4 million, residential mortgage loans of $4.0
million and SBA and USDA guaranteed loans of $3.9 million, offset
by an increase in multi-family and commercial real estate loans of
$5.6 million. Commercial business loan and residential real
estate loan originations decreased $6.6 million and $6.5 million,
respectively, during the first quarter of 2016 compared to the same
period in 2015.
Total liabilities increased $23.9 million, or 1.8%, to $1.35
billion at March 31, 2016 compared to $1.33 billion at
December 31, 2015. Deposits increased $39.1 million, or
3.7%, which included increases in certificates of deposit of $35.4
million, NOW and money market accounts of $8.7 million and savings
accounts of $1.7 million, offset by a decrease in
noninterest-bearing demand deposits of $6.8 million. Deposit
growth remained strong due to marketing and promotional initiatives
and competitively-priced deposit products. Borrowings
decreased $16.4 million from $242.8 million at December 31,
2015 to $226.5 million at March 31, 2016, resulting from
repayments of Federal Home Loan Bank advances.
Total shareholders' equity increased $2.5 million from $154.3
million at December 31, 2015 to $156.8 million at
March 31, 2016. The increase in shareholders' equity was
attributable to net income of $1.5 million and an increase in net
unrealized gain on available for sale securities aggregating $1.0
million (net of taxes), partially offset by dividends declared of
$473,000. At March 31, 2016, the Bank’s regulatory
capital exceeded the amounts required for it to be considered
“well-capitalized” under applicable regulatory capital
guidelines.
“We are very pleased that our continuing efforts to improve the
Company's overall performance have resulted in substantial
increases in both return on assets and earnings per share during
the first three months of this year. This is especially
gratifying during a period when bank earnings are under pressure
from persistent low interest rates and increasing regulatory
compliance costs,” commented Rheo A. Brouillard, President and
Chief Executive Officer.
SI Financial Group, Inc. is the holding company for Savings
Institute Bank and Trust Company. Established in 1842,
Savings Institute Bank and Trust Company is a community-oriented
financial institution headquartered in Willimantic,
Connecticut. Through its twenty-five branch locations, the
Bank offers a full-range of financial services to individuals,
businesses and municipalities within its market area.
Forward-Looking StatementsThis release contains
“forward-looking statements” that are based on assumptions and may
describe future plans, strategies and expectations of the
Company. These forward-looking statements are generally
identified by the use of the words “believe,” “expect,” “intend,”
“anticipate,” “estimate,” “project” or similar expressions.
The Company’s ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Factors
that could have a material adverse effect on the operations of the
Company and its subsidiaries include, but are not limited to,
changes in market interest rates, regional and national economic
conditions, legislative and regulatory changes, monetary and fiscal
policies of the United States government, including policies of the
United States Treasury and the Federal Reserve Board, the quality
and composition of the loan or investment portfolios, demand for
loan products, deposit flows, competition, demand for financial
services in the Company’s market area, changes in the real estate
market values in the Company’s market area and changes in relevant
accounting principles and guidelines. For discussion of these
and other risks that may cause actual results to differ from
expectations, refer to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2015, including the section
entitled “Risk Factors,” and subsequent Quarterly Reports on Form
10-Q filed with the SEC. These risks and uncertainties should be
considered in evaluating any forward-looking statements and undue
reliance should not be placed on such statements. Except as
required by applicable law or regulation, the Company does not
undertake, and specifically disclaims any obligation, to release
publicly the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after
the date of the statements or to reflect the occurrence of
anticipated or unanticipated events.
SELECTED FINANCIAL CONDITION DATA:
|
|
March 31, |
|
December 31, |
(In Thousands /
Unaudited) |
|
2016 |
|
2015 |
|
|
|
|
|
ASSETS |
|
|
|
|
Noninterest-bearing
cash and due from banks |
|
$ |
14,991 |
|
|
$ |
14,373 |
|
Interest-bearing cash
and cash equivalents |
|
54,407 |
|
|
26,405 |
|
Securities |
|
197,642 |
|
|
191,627 |
|
Loans held for
sale |
|
494 |
|
|
1,804 |
|
Loans receivable,
net |
|
1,159,023 |
|
|
1,165,372 |
|
Bank-owned life
insurance |
|
22,065 |
|
|
21,924 |
|
Premises and equipment,
net |
|
20,766 |
|
|
21,188 |
|
Intangible assets |
|
17,945 |
|
|
18,096 |
|
Deferred tax asset |
|
8,448 |
|
|
8,961 |
|
Other real estate
owned, net |
|
1,048 |
|
|
1,088 |
|
Other assets |
|
11,378 |
|
|
10,996 |
|
Total assets |
|
$ |
1,508,207 |
|
|
$ |
1,481,834 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Deposits |
|
$ |
1,097,163 |
|
|
$ |
1,058,017 |
|
Borrowings |
|
226,493 |
|
|
242,843 |
|
Other liabilities |
|
27,703 |
|
|
26,644 |
|
Total liabilities |
|
1,351,359 |
|
|
1,327,504 |
|
|
|
|
|
|
Shareholders'
equity |
|
156,848 |
|
|
154,330 |
|
Total liabilities and shareholders'
equity |
|
$ |
1,508,207 |
|
|
$ |
1,481,834 |
|
SELECTED OPERATING DATA:
|
|
Three Months Ended |
|
|
March 31, |
(In Thousands /
Unaudited) |
|
2016 |
2015 |
|
|
|
|
Interest and dividend
income |
|
$ |
12,642 |
|
$ |
11,470 |
|
Interest expense |
|
2,468 |
|
2,047 |
|
Net interest income |
|
10,174 |
|
9,423 |
|
|
|
|
|
Provision for loan
losses |
|
311 |
|
335 |
|
Net interest income after provision
for loan losses |
|
9,863 |
|
9,088 |
|
|
|
|
|
Noninterest income |
|
2,702 |
|
2,337 |
|
Noninterest
expenses |
|
10,266 |
|
10,061 |
|
Income before income taxes |
|
2,299 |
|
1,364 |
|
|
|
|
|
Income tax
provision |
|
758 |
|
443 |
|
Net income |
|
$ |
1,541 |
|
$ |
921 |
|
SELECTED OPERATING DATA - Concluded:
|
Three Months Ended |
|
March 31, |
(Unaudited) |
2016 |
2015 |
|
|
|
Earnings per
share: |
|
|
Basic |
$ |
0.13 |
|
$ |
0.07 |
|
Diluted |
$ |
0.13 |
|
$ |
0.07 |
|
|
|
|
Weighted
average shares outstanding: |
|
|
Basic |
11,788,965 |
|
12,315,733 |
|
Diluted |
11,848,924 |
|
12,354,374 |
|
SELECTED FINANCIAL RATIOS:
|
At or For the |
|
|
Three Months Ended |
|
|
March 31, |
|
(Dollars in Thousands,
Except per Share Data / Unaudited) |
2016 |
|
2015 |
|
|
|
|
|
|
Selected
Performance Ratios: |
|
|
|
|
Return on average
assets (1) |
0.41 |
|
% |
0.28 |
|
% |
Return on average
equity (1) |
3.96 |
|
|
2.36 |
|
|
Interest rate
spread |
2.75 |
|
|
2.88 |
|
|
Net interest
margin |
2.91 |
|
|
3.03 |
|
|
Efficiency ratio
(2) |
79.73 |
|
|
85.55 |
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
Allowance for loan
losses |
$ |
10,133 |
|
|
$ |
8,083 |
|
|
Allowance for loan
losses as a percent of total loans (3) |
0.87 |
|
% |
0.77 |
|
% |
Allowance for loan
losses as a percent of nonperforming loans |
149.87 |
|
|
169.81 |
|
|
Nonperforming
loans |
$ |
6,761 |
|
|
$ |
4,760 |
|
|
Nonperforming loans as
a percent of total loans (3) |
0.58 |
|
% |
0.45 |
|
% |
Nonperforming assets
(4) |
$ |
7,809 |
|
|
$ |
6,084 |
|
|
Nonperforming assets as
a percent of total assets |
0.52 |
|
% |
45 |
|
% |
|
|
|
|
|
Per Share
Data: |
|
|
|
|
Book value per
share |
$ |
12.83 |
|
|
$ |
12.45 |
|
|
Less: Intangible assets
per share(5) |
(1.47 |
) |
|
(1.45 |
) |
|
Tangible book value per
share (5) |
11.36 |
|
|
11.00 |
|
|
Dividends declared per
share |
$ |
0.04 |
|
|
$ |
0.04 |
|
|
(1) Quarterly ratios
have been annualized. |
|
(2)
Represents noninterest expenses divided by the sum of net interest
and noninterest income, less any realized gains or losses on the
sale of securities and other-than-temporary impairment on
securities. |
(3) Total
loans exclude deferred fees and costs. |
(4)
Nonperforming assets consist of nonperforming loans and other real
estate owned. |
(5)
Tangible book value per share equals book value per share less the
effect of intangible assets, which consisted of goodwill and other
intangibles of $17.9 million and $18.5 million at March 31, 2016
and 2015, respectively. |
CONTACT:
Catherine Pomerleau, Executive Assistant/Investor Relations Administrator
Email: investorrelations@banksi.com
(860) 456-6514
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