SI Financial Group, Inc. (the “Company”) (NASDAQ:SIFI), the holding
company of Savings Institute Bank and Trust Company (the “Bank”),
reported net income of $2.0 million, or $0.17 diluted earnings per
share, for the quarter ended March 31, 2018 versus $1.7
million, or $0.14 diluted earnings per share, for the quarter ended
March 31, 2017.
Net interest income increased $427,000 to $10.9 million for the
quarter ended March 31, 2018, compared to $10.5 million for
the quarter ended March 31, 2017, primarily as a result of
increases in the average balance of loans and average yield earned
on loans and other interest-earning assets and a reduction in the
average balance of FHLB advances, partially offset by increases in
the average balance of deposits and in the average rates paid on
deposits and borrowings. The increase in yields reflects the
rising interest rate environment.
The provision for loan losses increased $565,000 for the first
quarter of 2018 compared to the same period in 2017, primarily due
to increases in nonperforming loans, reserves for impaired loans
and an increase in commercial real estate loans, which carry a
higher degree of risk than other loans held in the loan
portfolio. At March 31, 2018, nonperforming loans
increased to $7.9 million compared to $5.0 million at
March 31, 2017, resulting from increases in nonperforming
multi-family and commercial real estate of $2.7 million and
commercial business loans of $550,000, offset by a decrease
of $315,000 in nonperforming residential real estate loans.
Net loan charge-offs were $55,000 for the quarter ended
March 31, 2018 compared to net loan recoveries of $20,000 for
the quarter ended March 31, 2017.
Noninterest income decreased $115,000 to $2.4 million for the
quarter ended March 31, 2018 compared to $2.5 million for the
same period in the prior year, due to a decrease in wealth
management fees of $318,000 resulting from the sale of the
Company's trust and asset management business in May 2017.
The cash surrender value of bank owned life insurance, mortgage
banking fees and service fees increased $85,000, $59,000 and
$28,000, respectively, during the first quarter of 2018 compared to
the same quarter in 2017.
Noninterest expenses decreased $291,000 for the first quarter of
2018 compared to the same period in 2017, primarily due to
fraudulent debit card transactions of $373,000 that occurred in the
first quarter of 2017. Computer and electronic banking
expenses decreased $92,000 for the first quarter ended
March 31, 2018 versus the comparable period in 2017 as a
result of reconfiguration of the telecommunication infrastructure
and contract renegotiations with a third party provider.
Outside professional services decreased $45,000 for the quarter
ended March 31, 2018 versus the same period in 2017 due to
decreases in legal and consulting expenses. Regulatory
assessments decreased $21,000 for the first quarter ended
March 31, 2018 as a result of a lower FDIC assessment
rate. Occupancy expense increased $75,000 primarily due to
higher snow removal costs.
Total assets increased $17.4 million, or 1.1%, to $1.60 billion
at March 31, 2018, principally due to an increase of $26.0
million in net loans receivable, offset by a decrease of $8.6
million in available for sale securities. The higher balance
of net loans receivable reflects increases of $39.3 million, $1.6
million and $1.3 million in multi-family and commercial real estate
loans, residential mortgage loans and construction loans,
respectively, offset by decreases of $9.2 million, $3.1 million,
$2.5 million and $1.8 million in SBA and USDA guaranteed loans,
timeshare loans, consumer loans and other commercial business
loans, respectively. Multi-family and commercial real estate
originations increased $42.5 million for the first quarter of 2018
compared to the same period in 2017. Commercial business loan
originations and residential real estate loans decreased $8.2
million and $4.5 million, respectively, during the first quarter of
2018 compared to the same period in 2017.
Total liabilities increased $16.9 million, or 1.2%, to $1.43
billion at March 31, 2018 compared to $1.41 billion at
December 31, 2017, primarily due to increases in deposits of
$14.5 million, or 1.2%, which included increases in NOW and money
market accounts of $19.1 million and certificates of deposit of
$6.0 million, offset by decreases in noninterest-bearing deposits
of $9.2 million and savings accounts of $1.6 million.
Although market competition has intensified, deposit growth
remained strong due to marketing and promotional initiatives and
competitively-priced deposit products. Borrowings increased
$3.6 million from $178.3 million at December 31, 2017 to
$181.9 million at March 31, 2018, which were used to fund the
growth in commercial lending.
Total shareholders' equity increased $438,000 from $168.5
million at December 31, 2017 to $168.9 million at
March 31, 2018. The increase in shareholders' equity was
primarily attributable to net income of $2.0 million, partially
offset by an increase of $1.1 million in unrealized losses on
securities included in other comprehensive income and dividends
paid of $716,000. At March 31, 2018, the Bank’s
regulatory capital exceeded the amounts required for the Bank to be
considered “well-capitalized” under applicable regulatory capital
guidelines.
“We are pleased with the success we have had implementing our
business plan of growing the loan portfolio and deposits by
expanding our lending and deposit gathering resources. In
addition, we continue to focus on increasing our core noninterest
income while prudently reducing noninterest expenses," 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, 2017, 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.
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SELECTED FINANCIAL CONDITION DATA: |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
(In Thousands /
Unaudited) |
|
2018 |
|
2017 |
|
|
|
|
|
ASSETS |
|
|
|
|
Noninterest-bearing
cash and due from banks |
|
$ |
14,136 |
|
|
$ |
16,872 |
|
Interest-bearing cash
and cash equivalents |
|
70,210 |
|
|
66,614 |
|
Securities |
|
158,961 |
|
|
167,545 |
|
Loans held for
sale |
|
921 |
|
|
835 |
|
Loans receivable,
net |
|
1,263,182 |
|
|
1,237,174 |
|
Bank-owned life
insurance |
|
33,941 |
|
|
33,726 |
|
Premises and equipment,
net |
|
19,387 |
|
|
19,409 |
|
Intangible assets |
|
16,742 |
|
|
16,893 |
|
Deferred tax asset |
|
6,705 |
|
|
6,412 |
|
Other real estate
owned, net |
|
1,074 |
|
|
1,226 |
|
Other assets |
|
13,059 |
|
|
14,250 |
|
Total
assets |
|
$ |
1,598,318 |
|
|
$ |
1,580,956 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Deposits |
|
$ |
1,222,520 |
|
|
$ |
1,208,047 |
|
Borrowings |
|
181,949 |
|
|
178,342 |
|
Other
liabilities |
|
24,930 |
|
|
26,086 |
|
Total
liabilities |
|
1,429,399 |
|
|
1,412,475 |
|
|
|
|
|
|
Shareholders'
equity |
|
168,919 |
|
|
168,481 |
|
Total
liabilities and shareholders' equity |
|
$ |
1,598,318 |
|
|
$ |
1,580,956 |
|
|
|
|
SELECTED OPERATING DATA: |
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
(In Thousands /
Unaudited) |
|
2018 |
2017 |
|
|
|
|
Interest and dividend
income |
|
$ |
13,754 |
|
$ |
13,202 |
|
Interest expense |
|
2,829 |
|
2,704 |
|
Net
interest income |
|
10,925 |
|
10,498 |
|
|
|
|
|
Provision for loan
losses |
|
725 |
|
160 |
|
Net
interest income after provision for loan losses |
|
10,200 |
|
10,338 |
|
|
|
|
|
Noninterest income |
|
2,394 |
|
2,509 |
|
Noninterest
expenses |
|
10,051 |
|
10,342 |
|
Income
before income taxes |
|
2,543 |
|
2,505 |
|
|
|
|
|
Income tax
provision |
|
537 |
|
786 |
|
Net
income |
|
$ |
2,006 |
|
$ |
1,719 |
|
|
|
SELECTED OPERATING DATA - Concluded: |
|
|
|
Three Months Ended |
|
March 31, |
(Unaudited) |
2018 |
2017 |
|
|
|
Earnings per
share: |
|
|
Basic |
$ |
0.17 |
|
$ |
0.15 |
|
Diluted |
$ |
0.17 |
|
$ |
0.14 |
|
|
|
|
Weighted
average shares outstanding: |
|
|
Basic |
11,909,028 |
|
11,828,136 |
|
Diluted |
11,995,298 |
|
11,915,189 |
|
|
|
|
SELECTED FINANCIAL RATIOS: |
|
|
|
|
At or For the |
|
|
Three Months Ended |
|
|
March 31, |
|
(Dollars in Thousands,
Except per Share Data / Unaudited) |
2018 |
|
2017 |
|
|
|
|
|
|
Selected
Performance Ratios: (1) |
|
|
|
|
Return on average
assets |
0.52 |
|
% |
0.44 |
|
% |
Return on average
equity |
4.79 |
|
|
4.18 |
|
|
Interest rate
spread |
2.80 |
|
|
2.70 |
|
|
Net interest
margin |
3.00 |
|
|
2.89 |
|
|
Efficiency ratio
(2) |
75.46 |
|
|
79.51 |
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
Allowance for loan
losses |
$ |
13,004 |
|
|
$ |
12,000 |
|
|
Allowance for loan
losses as a percent of total loans (3) |
1.02 |
|
% |
0.96 |
|
% |
Allowance for loan
losses as a percent of nonperforming loans |
164.5 |
|
|
239.57 |
|
|
Nonperforming
loans |
$ |
7,905 |
|
|
$ |
5,009 |
|
|
Nonperforming loans as
a percent of total loans (3) |
0.62 |
|
% |
0.40 |
|
% |
Nonperforming assets
(4) |
$ |
8,979 |
|
|
$ |
6,329 |
|
|
Nonperforming assets as
a percent of total assets |
0.56 |
|
% |
0.40 |
|
% |
|
|
|
|
|
Per Share
Data: |
|
|
|
|
Book value per
share |
$ |
13.80 |
|
|
$ |
13.61 |
|
|
Less: Intangible assets
per share(5) |
(1.37 |
) |
|
(1.42 |
) |
|
Tangible book value per
share (5) |
12.43 |
|
|
12.19 |
|
|
Dividends declared per
share |
$ |
0.06 |
|
|
$ |
0.05 |
|
|
|
(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 $16.7 million and $17.3 million at March 31, 2018
and 2017, respectively. |
|
CONTACT:Catherine Pomerleau, Executive
Assistant/Investor Relations AdministratorEmail:
investorrelations@banksi.com(860) 456-6514
Grafico Azioni SI Financial Grp., Inc. (NASDAQ:SIFI)
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Grafico Azioni SI Financial Grp., Inc. (NASDAQ:SIFI)
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