Click Cover to Read Digital Edition

AVAILABLE IN THE APP STORE
iPAD APP
iPHONE APP

UPCOMING EVENTS

 
PayThink (formerly ATM, Debit & Prepaid Forum)
October 20-22
JW Marriott Desert Ridge
Phoenix
 
Money20/20
November 2-6
Aria
Las Vegas
 
ABA National Agricultural Bankers Conference
November 9-12
Hilton
Omaha, Neb.
 
ABA Mutual Community Bank Conference
March 22 & 23, 2015
Marriott Marquis
Washington, D.C.
More events >  

<- Back

Share |

Print Friendly and PDF

SI Financial Group to Acquire Newport Bancorp

 

March 6 - SI Financial Group Inc. (Nasdaq:SIFI), the holding company for Savings Institute Bank and Trust Company, and Newport Bancorp Inc. (Nasdaq:NFSB), the holding company for Newport Federal Savings Bank, have announced the execution of a definitive merger agreement pursuant to which SI Financial Group will acquire Newport Bancorp. The acquisition will add to SI Financial Group approximately $449.4 million in assets, $355 million in loans and $289.7 million in deposits before acquisition accounting adjustments. The transaction will expand SI Financial Group's presence into Newport and Washington Counties in Rhode Island, where Newport Federal Savings Bank operates five full-service banking offices, and will add one branch in Stonington, Conn.

Under the terms of the merger agreement, stockholders of Newport Bancorp will have the right to elect to receive either $17.55 in cash or 1.5129 shares of SI Financial Group common stock in exchange for each share of Newport Bancorp held by them, subject to proration procedures so that 50 percent of the outstanding Newport Bancorp common shares is converted into SI Financial Group common stock and the balance is converted into the cash consideration. Based upon SI Financial Group's five-day average closing price of $11.60 on March 4, 2013, the transaction is valued at $17.55 per share, or approximately $61.3 million in the aggregate. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes. SI Financial Group expects the transaction to be immediately accretive to its earnings per share, excluding one-time transaction expenses. The transaction represents 116 percent of Newport Bancorp's tangible book value and a core deposit premium of 3 percent at Dec. 31, 2012.

Rheo A. Brouillard, president and CEO of SI Financial Group, stated, "We are very pleased to announce our plans to partner with Newport Bancorp. This combination presents a tremendous opportunity for us to expand our presence into Rhode Island and partner with such a well managed, like-minded banking company. Like us, Newport Bancorp has deep roots in the communities it serves, and we look forward to working with the staff that its customers have come to know and trust and to introduce our brand of banking to this region, including wealth management, brokerage and a broader array of commercial loan products. We believe the strategic value of this transaction will enhance our franchise and add value to our stockholders' investment. We are excited about the future of our combined company."

"We feel that this merger is an excellent opportunity for our customers and the markets we serve," said Kevin M. McCarthy, president and CEO of Newport Bancorp. "Partnering with Savings Institute Bank and Trust Company will allow us to continue providing our customers with a high level of personalized service, an expanded menu of products and continued local decision-making while preserving the home town banking culture our communities value."

The transaction, which has been unanimously approved by the board of directors of both SI Financial Group and Newport Bancorp, is expected to close in the third quarter of 2013. The transaction is subject to certain conditions, including the approval by SI Financial Group's and Newport Bancorp's stockholders and customary regulatory approvals.

Keefe, Bruyette & Woods, a Stifel Company, served as financial adviser to SI Financial Group and Kilpatrick Townsend & Stockton LLP acted as SI Financial Group's legal counsel. In addition, both Keefe, Bruyette & Woods, a Stifel Company, and Northeast Capital & Advisory Inc. rendered fairness opinions to SI Financial Group in connection with the transaction. Sandler O'Neill & Partners, L.P. acted as financial adviser to Newport Bancorp and Luse Gorman Pomerenk & Schick, P.C. acted as its legal counsel. Sandler O'Neill & Partners, L.P. rendered a fairness opinion to Newport Bancorp in connection with the transaction.

About SI Financial Group Inc. and Newport Bancorp Inc.
SI Financial Group Inc. is the holding company for Savings Institute Bank and Trust Company. Established in 1842, the Savings Institute Bank and Trust Company is a community-oriented financial institution headquartered in Willimantic, Conn. Through its 20 branch locations, the bank offers a full range of financial services to individuals, businesses and municipalities within its market area.

Newport Bancorp Inc. is headquartered in Newport, R.I., and operates Newport Federal Savings Bank. Newport Federal Savings Bank is also headquartered in Newport, R.I. In addition to its main office located in Newport, Newport Federal Savings Bank operates five full-service branch offices located in Middletown, Wakefield, Westerly and Portsmouth, R.I., and Stonington, Conn.


Back