SI Financial Group, Inc. (the “Company”) (NASDAQ:SIFI), the holding
company of Savings Institute Bank and Trust Company (the “Bank”),
reported net income of $1.7 million, or $0.14 diluted earnings per
share, for the quarter ended March 31, 2017 versus $1.5
million, or $0.13 diluted earnings per share, for the quarter ended
March 31, 2016.
Net interest income increased $324,000 to $10.5 million for the
quarter ended March 31, 2017 compared to $10.2 million for the
quarter ended March 31, 2016, primarily as a result of
increases in the average balance of loans and the average yield
earned on loans and other interest-earning assets, partially offset
by increases in the average balance of deposits and the average
rate paid on deposits and borrowings. The average balance of
borrowings decreased for the three months ended March 31, 2017
compared to the same quarter in 2016. The increased yield and
rate paid reflects the higher interest rate environment.
The provision for loan losses decreased $151,000 for the first
quarter of 2017 compared to the same period in 2016, primarily due
to reductions in nonperforming loans and net loan
charge-offs. At March 31, 2017, nonperforming loans
decreased to $5.0 million compared to $6.8 million at
March 31, 2016, resulting from decreases in a nonperforming
accruing loan past due 90 days or more of $1.5 million guaranteed
by the U.S. government and nonperforming multi-family and
commercial real estate loans of $933,000, offset by increases in
nonperforming commercial business loans and residential real estate
loans of $341,000 and $270,000, respectively. Net loan
recoveries were $20,000 for the quarter ended March 31, 2017
compared to net loan charge-offs of $41,000 for the quarter ended
March 31, 2016.
Noninterest income decreased $193,000 to $2.5 million for the
quarter ended March 31, 2017 compared to $2.7 million for the
same period in the prior year, partly due to a decrease in other
noninterest income of $137,000 resulting from a profit distribution
from our investment in a small business investment company during
the same period in 2016. Fees earned from mortgage banking
activities decreased $115,000 for the quarter ended March 31,
2017 versus the comparable period in 2016 as a result of decreases
in the gains on loans sold and derivative loan contracts.
Service fees increased $40,000 for the quarter ended March 31,
2017 due to higher overdraft charges. Wealth management fees
increased $28,000 for the first quarter of 2017 compared to the
same period in 2016 as a result of fees from the sale of fixed
annuities.
Noninterest expenses increased $76,000 for the first quarter of
2017 compared to the same period in 2016, primarily due to
fraudulent debit card transactions of $372,000. Outside
professional services decreased $234,000 for the first quarter of
2017 compared to the same period in 2016 due to decreases in legal
fees and consulting expenses related to the noncompete agreements
from the merger with Newport Federal. Computer and electronic
banking expenses decreased $88,000 for the first quarter of 2017
compared to the same period in 2016 as a result of a
reconfiguration of the telecommunication infrastructure.
Regulatory assessments decreased $78,000 for the first quarter of
2017 due to a lower FDIC assessment rate.
Total assets increased $42.0 million, or 2.7%, to $1.59 billion
at March 31, 2017, principally due to increases of $19.0
million in net loans receivable, $14.1 million in cash and cash
equivalents, $6.5 million in available for sale securities and $2.2
million in loans held for sale. The higher balance of net
loans receivable reflects increases of $27.3 million in
multi-family and commercial real estate loans, $8.3 million in
other commercial business loans and $7.4 million in timeshare
loans, offset by decreases of $12.1 million in construction loans
and $9.6 million in SBA and USDA guaranteed loans. Commercial
business, residential real estate and commercial real estate loan
originations increased $10.8 million, $9.1 million and $4.2
million, respectively, during the first quarter of 2017 compared to
the same period in 2016.
Total liabilities increased $40.7 million, or 2.9%, to $1.43
billion at March 31, 2017 compared to $1.39 billion at
December 31, 2016, primarily due to an increase in
deposits. Deposits increased $45.6 million, or 4.0%, which
included increases in NOW and money market accounts of $27.9
million, certificates of deposit of $18.6 million and
noninterest-bearing deposits of $1.5 million, offset by a decrease
in savings accounts of $2.3 million. Deposit growth remained
strong due to marketing and promotional initiatives and
competitively-priced deposit products. Borrowings decreased
$3.3 million from $226.0 million at December 31, 2016 to
$222.7 million at March 31, 2017, resulting from repayments of
Federal Home Loan Bank advances with funds from excess
deposits.
Total shareholders' equity increased $1.3 million from $164.7
million at December 31, 2016 to $166.1 million at
March 31, 2017. The increase in shareholders' equity was
primarily attributable to net income of $1.7 million, partially
offset by dividends paid of $593,000. At March 31, 2017,
the Bank’s regulatory capital exceeded the amounts required for it
to be considered “well-capitalized” under applicable regulatory
capital guidelines.
“Earnings continue to trend positively as both loan and deposit
growth remain strong. Branch and loan staff are actively
involved in ongoing business development efforts as a result of
improvements in local markets and consumer confidence,” 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-four 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, 2016, 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) |
|
2017 |
|
2016 |
|
|
|
|
|
ASSETS |
|
|
|
|
Noninterest-bearing
cash and due from banks |
|
$ |
14,585 |
|
|
$ |
18,225 |
|
Interest-bearing cash
and cash equivalents |
|
72,667 |
|
|
54,961 |
|
Securities |
|
181,684 |
|
|
175,153 |
|
Loans held for
sale |
|
3,604 |
|
|
1,393 |
|
Loans receivable,
net |
|
1,239,310 |
|
|
1,220,323 |
|
Bank-owned life
insurance |
|
21,423 |
|
|
21,293 |
|
Premises and equipment,
net |
|
20,109 |
|
|
19,884 |
|
Intangible assets |
|
17,344 |
|
|
17,494 |
|
Deferred tax asset |
|
9,564 |
|
|
9,658 |
|
Other real estate
owned, net |
|
1,320 |
|
|
1,466 |
|
Other assets |
|
11,286 |
|
|
11,040 |
|
Total
assets |
|
$ |
1,592,896 |
|
|
$ |
1,550,890 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Deposits |
|
$ |
1,176,303 |
|
|
$ |
1,130,685 |
|
Borrowings |
|
222,680 |
|
|
226,007 |
|
Other
liabilities |
|
27,849 |
|
|
29,471 |
|
Total
liabilities |
|
1,426,832 |
|
|
1,386,163 |
|
|
|
|
|
|
Shareholders'
equity |
|
166,064 |
|
|
164,727 |
|
Total
liabilities and shareholders' equity |
|
$ |
1,592,896 |
|
|
$ |
1,550,890 |
|
|
|
|
|
|
|
|
|
|
SELECTED OPERATING DATA: |
|
|
|
Three Months Ended |
|
|
March 31, |
(In Thousands /
Unaudited) |
|
2017 |
2016 |
|
|
|
|
Interest and dividend
income |
|
$ |
13,202 |
|
$ |
12,642 |
|
Interest expense |
|
2,704 |
|
2,468 |
|
Net
interest income |
|
10,498 |
|
10,174 |
|
|
|
|
|
Provision for loan
losses |
|
160 |
|
311 |
|
Net
interest income after provision for loan losses |
|
10,338 |
|
9,863 |
|
|
|
|
|
Noninterest income |
|
2,509 |
|
2,702 |
|
Noninterest
expenses |
|
10,342 |
|
10,266 |
|
Income
before income taxes |
|
2,505 |
|
2,299 |
|
|
|
|
|
Income tax
provision |
|
786 |
|
758 |
|
Net
income |
|
$ |
1,719 |
|
$ |
1,541 |
|
|
|
|
|
|
|
|
|
SELECTED OPERATING DATA - Concluded: |
|
|
Three Months Ended |
|
March 31, |
(Unaudited) |
2017 |
2016 |
|
|
|
Earnings per
share: |
|
|
Basic |
$ |
0.15 |
|
$ |
0.13 |
|
Diluted |
$ |
0.14 |
|
$ |
0.13 |
|
|
|
|
Weighted
average shares outstanding: |
|
|
Basic |
11,828,136 |
|
11,788,965 |
|
Diluted |
11,915,189 |
|
11,848,924 |
|
SELECTED FINANCIAL RATIOS: |
|
|
|
|
At or For the |
|
|
Three Months Ended |
|
|
March 31, |
|
(Dollars in Thousands,
Except per Share Data / Unaudited) |
2017 |
|
2016 |
|
|
|
|
|
|
Selected
Performance Ratios: (1) |
|
|
|
|
Return on average
assets |
0.44 |
|
% |
0.41 |
|
% |
Return on average
equity |
4.18 |
|
|
3.96 |
|
|
Interest rate
spread |
2.70 |
|
|
2.75 |
|
|
Net interest
margin |
2.89 |
|
|
2.91 |
|
|
Efficiency ratio
(2) |
79.51 |
|
|
79.73 |
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
Allowance for loan
losses |
$ |
12,000 |
|
|
$ |
10,133 |
|
|
Allowance for loan
losses as a percent of total loans (3) |
0.96 |
|
% |
0.87 |
|
% |
Allowance for loan
losses as a percent of nonperforming loans |
239.57 |
|
|
149.87 |
|
|
Nonperforming
loans |
$ |
5,009 |
|
|
$ |
6,761 |
|
|
Nonperforming loans as
a percent of total loans (3) |
0.40 |
|
% |
0.58 |
|
% |
Nonperforming assets
(4) |
$ |
6,329 |
|
|
$ |
7,809 |
|
|
Nonperforming assets as
a percent of total assets |
0.40 |
|
% |
0.52 |
|
% |
|
|
|
|
|
Per Share
Data: |
|
|
|
|
Book value per
share |
$ |
13.61 |
|
|
$ |
12.83 |
|
|
Less: Intangible assets
per share(5) |
(1.42 |
) |
|
(1.47 |
) |
|
Tangible book value per
share (5) |
12.19 |
|
|
11.36 |
|
|
Dividends declared per
share |
$ |
0.05 |
|
|
$ |
0.04 |
|
|
|
|
(1)
Quarterly ratios have been annualized. |
(2)
Represents noninterest expenses divided by the sum of net interest
and noninterest income. |
(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 $17.3 million and $17.9 million at March 31, 2017
and 2016, respectively. |
CONTACT:
Catherine Pomerleau, Executive Assistant/Investor Relations Administrator
Email: investorrelations@banksi.com
(860) 456-6514
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