WILLIMANTIC, Conn. – Newport Bancorp Inc., parent company of Newport Federal Savings Bank, is being bought by SI Financial Group Inc., the parent of Savings Institute Bank and Trust Co., for a combination of stock and cash valued at about $61.3 million.
The deal will add five Rhode Island and one Connecticut branch to the 20 that Willimantic-based SI Financial has in Connecticut, ranging from Enfield, north of Hartford to Stonington. In addition, Newport Bancorp will contribute approximately $449.4 million in assets, $355 million in loans and $289.7 million in deposits to SI Financial’s balance sheet, which showed assets of $953.2 million at the end of 2012, along with loans of $690.2 million and deposits of $705.1 million.
“We are very pleased to announce our plans to partner with Newport Bancorp,” said SI Financial President and CEO Rheo A. Brouillard. “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.”
For his part, Newport Bancorp President and CEO Kevin M. McCarthy said that “Partnering with Savings Institute Bank and Trust Co. 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 hometown banking culture our communities value.”
Newport Bancorp reported net income of $1.6 million, or 46 cents per diluted share, in 2012, an increase of 6.7 percent, as total interest and noninterest income fell 7.6 percent to $21.8 million on the year. SI Financial posted net income of $1.1 million, or 11 cents per diluted share, in 2012, a decline of 53.7 percent, as total interest and noninterest income fell 9 percent to $44.5 million.
Stockholders of Newport Bancorp can elect to receive a payout of $17.55 per share or 1.5129 shares in the acquiring bank’s common stock in exchange for each share of Newport Bancorp common stock. The deal is expected to close in the third quarter of 2013, having already been approved by the boards of directors of both bank holding companies.
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