SI Financial Group in Willimantic booked $906,000 in net income during the first quarter this year, making up for a $77,000 net loss during the same period last year.
Last year’s loss was associated with the company’s September 2013 acquisition of Newport Bancorp, but that purchase paid off this year when higher net interest and non-interest income boosted SI Financial’s bottom line.
Net interest income increased $3.6 million year-over-year to $10 million, due to an increase in the average balance of loans outstanding and a lower cost of funds.
The holding company of Savings Institute and Trust Co. also increased its provision for loan losses to $430,000 from $295,000 last year, even though nonperforming loans declined year-over-year to $6 million from $8.9 million for the same period last year. Nonperforming residential mortgage loans declined $2 million, and nonperforming multifamily and commercial mortgages loans declined $616,000. Net loan charge-offs for the quarter totaled $94,000, down from $194,000 in the same period last year.
Noninterest income increased $332,000 to $2.8 million in the first quarter, compared with $2.4 million last year. A $502,000 increase in service fees and a $107,000 increase in other noninterest income were offset by a $419,000 decrease in mortgage banking fees, as a result of the sale of $5.4 million in fixed-rate residential mortgage loans, compared with $13.3 million in the comparable period last year.
Noninterest expenses increased $2.4 million year-over-year, largely due to additional operating costs associated with the six branches SI Financial acquired when it bought Newport Bancorp. The harsh winter also increased snow removal and utility costs during the first quarter.
Total assets increased just a little over a percent, or $16.8 million, to $1.36 billion from $1.35 billion in the same period last year, principally due to increases of $26.4 million in cash and cash equivalents, offset by a decrease of $5.4 million in net loans receivable.
Residential mortgage loans and SBA and USDA guaranteed loans declined $9.8 million and $9.1 million, respectively, offset by increases in time share and multi-family and commercial mortgage loans of $9.4 million and $5.6 million, respectively. Loan originations decreased $2.1 million during the first quarter of 2014 compared to the same period in 2013 mainly due to declines in residential mortgage and commercial business loan originations of $11.7 million and $2.6 million, respectively, offset by increases in commercial mortgage and consumer loan originations of $9.1 million and $3.1 million, respectively.
Deposits increased $19.5 million, or 2 percent, which included increases in certificates of deposit and NOW and money market accounts of $11.8 million and $11.1 million, respectively, offset by a decrease in noninterest-bearing deposits of $3.2 million.
The company’s board of directors also declared a cash dividend of about 3 cents per share to be paid on or about May 27 to shareholders of record on May 5.
