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Despite strong fourth quarter, SI Financial posts loss for year

By Lee Howard

Publication: The Day

Published February 28. 2014 11:55PM   Updated March 01. 2014 12:35AM

The holding company for Willimantic-based Savings Institute Bank and Trust has reported a $1 million profit in the fourth quarter but a loss for the year.

SI Financial Group said Wednesday after markets closed that profits were up about 34 percent in the final quarter of the year. In 2012, profits in the fourth quarter were $745,000.

But for the year, SI Financial lost $855,000 compared with a $1.1 million gain in the previous year. Rheo A. Brouillard, president and chief executive of the bank, said last year's losses largely reflected $2.6 million in costs associated with September's purchase of Newport Bancorp and its Newport Federal branches.

"Results for the fourth quarter, the first full quarter of operations following the merger, reflected improvement in the net interest margin, net interest income and earnings, despite the inclusion of $410,000 in merger expenses," Brouillard said in a statement.

Were it not for the merger costs, SI Financial would have reported profits of $1.3 million or 11 cents a share for the quarter, the company said. Full-year profits would have been $1.2 million or 11 cents a share, according to the bank.

Total interest income rose $3.5 million last year compared with the year before, according to the bank. Provision for loan losses on the year fell $1.6 million on the year, reflecting fewer non-performing loans.

Loan charge-offs for all of 2013 were about half what they had been the previous year.

Noninterest income fell from $8.7 million to $8.3 million year over year. The company's numbers were affected by a net loss of $1.2 million last year on the sale of substandard mortgage-backed securities.

"Lower wealth management fees for 2013 were attributable to the sale of SI Trust Servicing, a third-party provider of trust outsourcing services for community banks, in April 2012." the bank said.

l.howard@theday.com

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By the numbers

Fourth quarter figures

2012 net income: $745,000
2013 net income: $1 million

2012 earnings per share: 8 cents
2013 earnings per share: 8 cents

2012 noninterest income: $2.4 million 2013 noninterest income: $2.6 million

2012 net interest income: $10.1 million
2013 net interest income: $6.5 million

2012 provision for loan losses: $646,000
2013 provision for loan losses: $686,000

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