Savings Institute parent reports strong profit gain

The SI Financial Group, parent of the Savings Institute Bank and Trust Co., said Thursday its profits rebounded strongly during the third quarter and also narrowed its losses for the first nine months of this year.

The Willimantic-based bank holding company said profits rose to $378,000, or 3 cents a share, during the July-through-September quarter, compared with a loss of $4.7 million in last year's comparable quarter.

"The results of the quarter reflect a continued commitment to maintaining both credit quality and capital," said Rheo Brouillard, SI Financial's president and chief executive officer. He said nonperforming assets and other real estate owned by the bank fell by $1.2 million by the end of the third quarter, and now represent less than a percent of total assets.

He said capital levels remain "well above regulatory requirements" for a well-capitalized institution. "We remain diligent in our efforts to steer the bank in a positive direction through this recession and as the economy begins to improve," said Brouillard.

The Savings Institute, founded in 1842, has 21 branches in Hartford, Middlesex, New London, Tolland and Windham counties. Its local branches include East Lyme, Groton, Lisbon, New London, Norwich and Stonington.

For the first nine months of this year, SI Financial reported a loss of $185,000, compared to a far-steeper loss of $3.8 million in last year's comparable period. The bank said it boosted its loan-loss provisions in both the third quarter and first nine months because of an increase in loan charge-offs. Bank officials said their loan portfolio continues to be impacted by adverse economic and real estate conditions. The bank charged off two commercial construction loans of some $2.3 million during the first nine months.

At the close of this year's third quarter, nonperforming loans stood at $6.7 million, down from $8.5 million in last year's quarter.

Bank officials also reported a gain of $587,000 this year from the sale of $46.2 million of fixed-rate, long-term residential mortgages. Total assets for SI Financial grew 2.4 percent to $873.4 million at the close of this year's third quarter. Total stockholders' equity, or net worth, also increased by $4.5 million to $77.4 million as of Sept. 30.

a.cronin@theday.com