SI Financial Group, Inc. Reports Results for the Quarter Ended March 31, 2006.WILLIMANTIC
in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on National Market: SIFI SIFI Science Fiction (less common than SciFi) SIFI Seismic Induced Frame Instability ), the holding company of Savings Institute Bank and Trust Company (the "Bank"), reported net income of $795,000, or $0.07 basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings per common share, for the quarter ended March 31, 2006 versus net income of $902,000, or $0.07 basic and diluted earnings per common share, for the quarter ended March 31, 2005. Net income decreased for the quarter ended March 31, 2006 compared to the same quarter in 2005 due to an increase in noninterest expenses, primarily related to branch expansion, and an increase in the provision for loan losses, offset by higher noninterest income and net interest and dividend income and a decrease in the provision for income taxes. Net interest and dividend income increased 6.3% to $5.6 million for the quarter ended March 31, 2006 from $5.3 million for the quarter ended March 31, 2005. Net interest and dividend income rose principally due to an increase in the average balance of interest-earning assets, offset by an increase in the cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . The provision for loan losses totaled $285,000 for the first quarter of 2006, representing an increase of $180,000 over the same period in 2005. The higher provision reflects greater loan volume, primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to commercial mortgage and business loans which increased 7.2% from the prior year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . Nonperforming loans decreased to $90,000 and net loan charge-offs were $2,000 for the first quarter of 2006 compared to nonperforming loans of $568,000 and net loan recoveries of $71,000 for the first quarter of 2005. Noninterest income was $2.1 million for the quarter ended March 31, 2006 compared to $1.3 million for the quarter ended March 31, 2005. For the first quarter of 2006, wealth management fees increased $596,000 due primarily to fee income from SI Trust Servicing. Also contributing to the rise in noninterest income for 2006 were increased service fees due to branch expansion and additional deposit-related products. The net gain on the sale of loans of $24,000 for 2006 resulted from the sale of $3.3 million of fixed-rate residential mortgage loans versus a net gain of $99,000 on the sale of $28.8 million in loans in the first quarter of 2005. The sale of loans reflects the Company's initiative to reduce its sensitivity to increases in interest rates. Noninterest expenses were $6.3 million for the first quarter of 2006 compared to $5.2 million for the first quarter of 2005. The increase in noninterest expenses reflected higher compensation costs, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc additional salaries, benefits and taxes for increased staffing levels in response to the Bank's expansion as well as the amortization of share-based compensation awards. Share-based compensation expense totaled $191,000 for the quarter ended March 31, 2006. Occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and equipment expense increased primarily due to additional operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. payments, depreciation expense and other occupancy-related expenses associated with branch expansion. Computer and electronic banking services increased $166,000 compared to the same period of the prior year mainly due to three additional branch locations and the acquisition of SI Trust Servicing. Marketing and advertising costs rose $22,000 in response to various promotional initiatives. Outside professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. expense was lower in 2006 versus 2005 as a result of reduced auditing expenditures. Total assets grew $31.9 million, or 4.6%, to $723.8 million at March 31, 2006 from $691.9 million at December December: see month. 31, 2005. Contributing to the increase in assets were increases of $29.6 million in net loans receivable, available for sale securities of $1.4 million, other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. of $635,000 and Federal Home Loan Bank stock of $569,000, offset by the sale of other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most of $325,000 and a decrease in cash and cash equivalents of $206,000. The increase in net loans receivable reflects strong loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , representing an increase of 28.4% over the same period of the prior year, with commercial loans contributing the largest increase. Additionally, the Bank purchased $10.3 million of indirect auto loans for investment which yield above market rates of return. Available for sale securities increased as a result of mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. purchases, offset by higher unrealized holding losses. Increases in other assets were primarily due to additional prepaid expenses Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future. and other investments. Federal Home Loan Bank stock rose in response to an increase in Federal Home Loan Bank borrowings. Total liabilities were $643.9 million at March 31, 2006 compared to $611.8 million at December 31, 2005. Deposits increased $18.1 million, or 3.6%, primarily related to a rise in short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. certificates of deposit as a result of attractive promotional rates. Borrowings increased from $95.1 million at December 31, 2005 to $110.0 million at March 31, 2006, resulting from an increase in FHLB FHLB Federal Home Loan Bank advances utilized to fund loan growth. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. decreased $151,000 from $80.0 million at December 31, 2005 to $79.9 million at March 31, 2006. The decrease in equity related to stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. of 51,600 shares at a cost of $586,000, an increase in net unrealized holding losses on available for sale securities aggregating $464,000 million (net of taxes), the amortization of unearned equity awards of $280,000 and dividends declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. of $176,000, offset by earnings of $795,000. The Company's investment securities portfolio, which includes primarily government-sponsored enterprises and mortgage-backed securities, was unfavorably affected by market rates and reported higher unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on available for sale securities for the period. As previously announced, the Company declared a cash dividend of $0.04 per outstanding common share on March 15, 2006 to be paid on April 28, 2006 to shareholders of record as of April 7, 2006. The total amount of the dividend reflects SI Bancorp, MHC's, the Company's mutual holding company parent, waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. of receipt of its dividend. "We continue to be very pleased with the progress we are making and the success we have achieved with the implementation of our current business plan. The Company continues to grow its commercial lending portfolio, while maintaining very high loan quality; increase core deposits; expand its branch network and seek additional opportunities to enhance shareholder value," said President and Chief Executive Officer, Rheo A. Brouillard. "The Bank recently opened its 18th location in East Lyme, Connecticut East Lyme is a town in New London County, Connecticut, United States. The population was 18,118 at the 2000 census. The latitude of East Lyme is 41.353N. The longitude is -72.23W. Geography According to the United States Census Bureau, the town has a total area of 108. in March and anticipates the opening of its 19th branch office in Gales Ferry Gales Ferry refers both to a village within the town of Ledyard, Connecticut and to a complex of buildings within that village at the site of the ferry which gave the community its name. , Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). in the latter half of this year." Savings Institute Bank and Trust Company is headquartered in Willimantic, Connecticut, with eighteen offices in eastern Connecticut. The Bank is a full service community-oriented financial institution dedicated to servicing the financial service needs of consumers and businesses within its market area. This release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " which may describe future plans and strategies, including the Company's expectations of future financial results. Management's ability to predict results or the effect of future plans or strategies is inherently uncertain. Among the factors that could affect the Company's actual results include market interest rate trends, the general regional and national economic market, ability to control costs and expenses, ability to operate new branch offices profitably, actions by the Bank's competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. and their pricing, loan delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates and changes in federal and state regulation. As the Company has no control over any of these factors, they 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, SI Financial Group, Inc. disclaims any obligation to update such forward-looking statements.
SELECTED FINANCIAL CONDITION DATA:
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(Dollars in Thousands / Unaudited) March 31, Dec. 31,
2006 2005
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ASSETS
Noninterest-bearing cash and due from banks $ 15,857 $ 16,317
Interest-bearing cash and cash equivalents 9,883 9,629
Investment securities 127,617 125,657
Loans held for sale - 107
Loans receivable, net 543,339 513,775
Cash surrender value of life insurance 7,906 7,837
Other assets 19,185 18,546
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Total assets $ 723,787 $ 691,868
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $ 527,419 $ 509,297
Borrowings 110,014 95,146
Other liabilities 6,462 7,382
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Total liabilities 643,895 611,825
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Stockholders' equity 79,892 80,043
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Total liabilities and stockholders'
equity $ 723,787 $ 691,868
======================
SELECTED OPERATING DATA:
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Three Months Ended
March 31,
(Dollars in Thousands / Unaudited) ------------------------
2006 2005
------------------------
Interest and dividend income $ 9,530 $ 7,892
Interest expense 3,896 2,592
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Net interest and dividend income 5,634 5,300
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Provision for loan losses 285 105
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Net interest and dividend income after
provision for loan losses 5,349 5,195
Noninterest income 2,124 1,327
Noninterest expenses 6,280 5,194
------------------------
Income before provision for income taxes 1,193 1,328
Provision for income taxes 398 426
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Net income $ 795 $ 902
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SELECTED OPERATING DATA - Concluded:
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Three Months Ended
March 31,
(Unaudited) ------------------------
2006 2005
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Earnings per common share:
Basic $ 0.07 $ 0.07
Diluted $ 0.07 $ 0.07
Weighted-average common shares
outstanding:
Basic 11,821,981 12,079,320
Diluted 11,876,492 12,079,320
SELECTED FINANCIAL RATIOS:
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At or For the
Three Months Ended
March 31,
(Dollars in Thousands) -----------------
2006 2005
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Selected Performance Ratios: (1)
Return on average assets 0.46% 0.59%
Return on average equity 4.02 4.51
Interest rate spread 3.04 3.34
Net interest margin 3.44 3.67
Efficiency ratio (2) 80.95 78.61
Asset Quality Ratios:
Allowance for loan losses $3,954 $3,376
Allowance for loan losses as a percent of total
loans 0.72% 0.77%
Allowance for loan losses as a percent of
nonperforming loans 4393.33% 594.37%
Nonperforming loans $90 $568
Nonperforming loans as a percent of total
loans 0.02% 0.13%
Nonperforming assets (3) $90 $568
Nonperforming assets as a percent of total
assets 0.01% 0.09%
(1) Quarterly ratios have been annualized.
(2) Represents noninterest expenses divided by the sum of net interest
and dividend income and noninterest income, less any realized
gains or losses on the sale of securities.
(3) Nonperforming assets consist of nonperforming loans and other real
estate owned.
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