Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SI Financial Group, Inc. | d496433d8k.htm |
| EX-2.1 - EX-2.1 - SI Financial Group, Inc. | d496433dex21.htm |
| EX-99.1 - EX-99.1 - SI Financial Group, Inc. | d496433dex991.htm |
 March 5, 2013
NASDAQ: SIFI
NASDAQ: NFSB
Acquisition of
Exhibit 99.2 |
 Safe Harbor Statement
2
Certain statements contained in these materials are forward-looking
in nature. These include statements about the merger, including the expected
closing date and anticipated cost savings, and about SI Financial Group,
Inc.’s (“SIFI”) operating results or financial position and usually use words
such as “expect”, “anticipate”, “believe”,
and similar expressions. These statements represent management’s current beliefs, based upon
information available to it at the time the statements are made with
regard to the matters addressed. All
forward
looking
statements
are
subject
to
risks
and
uncertainties
that
could
cause
SIFI’s
actual
results
or
financial
condition
to
differ
materially
from
those
expressed
in
or
implied
by
such
statements.
Factors
of
particular
importance
to
SIFI
include,
but
are
not
limited
to:
(1)
delays
in
completing
the
merger;
(2)
difficulties
in
achieving
expected
cost
savings;
(3)
difficulties
in
integrating
the
two
organizations;
(4)
changes
in
general
economic
conditions,
including
interest
rates;
(5)
competition
among
providers
of
financial
services;
(6)
changes
in
the
interest
rate
environment
that
reduce
our
margins
or
reduce
the
fair
value
of
financial
instruments;
(7)
adverse
changes
in
the
securities
markets;
and
(8)
our
ability
to
enter
new
markets
successfully
and
capitalize
on
growth
opportunities.
SIFI
does
not
undertake
any
obligation
to
update
or
revise
any
forward-looking
statements,
whether
as
a
result
of
new
information,
future
events
or
otherwise.
In
connection
with
the
proposed
merger,
SIFI
will
file
with
the
SEC
a
Registration
Statement
on
Form
S-4
that
will
include
a
Proxy
Statement
of
Newport
Bancorp,
Inc.
(“NFSB”)
and
a
Proxy
Statement
and
Prospectus
of
SIFI,
as
well
as
other
relevant
documents
concerning
the
proposed
transaction.
Shareholders
are
urged
to
read
the
Registration
Statement
and
the
Joint
Proxy
Statement/Prospectus
regarding
the
merger
when
they
become
available
and
any
other
relevant
documents
filed
with
the
SEC,
as
well
as
any
amendments
or
supplements
to
those
documents,
because
they
will
contain
important
information.
You
will
be
able
to
obtain
a
free
copy
of
the
Joint
Proxy
Statement/Prospectus,
as
well
as
other
filings
containing
information
about
SIFI
and
NFSB
at
the
SEC’s
Internet
site
(http://www.sec.gov).
You
will
also
be
able
to
obtain
these
documents,
free
of
charge,
from
SIFI
at
https://www.savingsinstitute.com/
under
the
tab
“Investor
Relations”
and
then
click
on
“Documents”
and
then
“SEC
Filings”
or
from
NFSB
by
accessing
NFSB’s
website
at
http://investors.newportfederal.com/
and
then
under
the
“Investor
Relations”
menu
under
the
heading
“SEC
Filings”.
SIFI
and
NFSB
and
certain
of
their
directors
and
executive
officers
may
be
deemed
to
be
participants
in
the
solicitation
of
proxies
from
the
shareholders
of
NFSB
in
connection
with
the
proposed
merger.
Information
about
the
directors
and
executive
officers
of
SIFI
is
set
forth
in
the
proxy
statement
for
SIFI’s
2012
annual
meeting
of
shareholders,
as
filed
with
the
SEC.
Information
about
the
directors
and
executive
officers
of
NFSB
is
set
forth
in
the
proxy
statement
for
NFSB’s
2012
annual
meeting
of
shareholders,
as
filed
with
the
SEC.
Additional
information
regarding
the
interests
of
those
participants
and
other
persons
who
may
be
deemed
participants
in
the
transaction
may
be
obtained
by
reading
the
Joint
Proxy
Statement/Prospectus
regarding
the
proposed
merger
when
it
becomes
available.
You
may
obtain
free
copies
of
this
document
as
described
above. |
 3
Transaction Overview
Purchase Price Per Share:
$17.55 per share
Transaction Metrics:
Price / Tangible Book Value: 116%
Core Deposit Premium: 3.0%
Consideration Mix:
50% Stock / 50% Cash
Fixed Exchange Ratio
(1)
:
1.5129x
Diluted Transaction Value
(2)
:
$61.3 million
Board Representation:
Three NFSB directors to join SIFI board
Termination Fee:
Required Approvals:
Regulatory, SIFI & NFSB Board of Directors and SIFI & NFSB
shareholders Due Diligence:
Comprehensive due diligence completed
Anticipated Closing:
3
Quarter
2013
(1)
Based on trailing 5 day average price of SIFI ($11.60) as of
3/4/2013 (2)
Transaction value based on diluted share count of 3,355,448 (includes
impact of retirement of NFSB’s ESOP plan) rd
$2.5 million (approximately 4% of aggregate transaction value)
|
 4
Acquisition Rationale
Significant franchise enhancement
Extension of SI’s shoreline branch network
Newport is one of seven banks based in Rhode Island and is the fourth
largest Strong deposit franchise (74% non-time
deposits) Entry into attractive markets with potential for
increased commercial lending and cross- selling opportunities
in trust and wealth management businesses Clean balance sheet
with minimal credit issues Acquisition provides greater scale and
improved efficiency Similar operating cultures utilizing same
core processing systems Financially attractive terms
Acquisition
priced
below
range
for
recent
comparable
New
England
and
Mid-Atlantic
transactions
Significant earnings accretion expected based on conservative
estimates Maintain well-capitalized standards on pro forma
basis Increases liquidity in SI’s common stock
|
 5
Overview of Newport Bancorp, Inc.
Overview & History
Branch Locations
Source: SNL Financial.
Based on regulatory data. Calculated as (nonaccrual loans + TDRs) /
gross loans. Bank Subsidiary
Newport Federal
Headquarters
Newport, RI
Exchange / Ticker
NASDAQ / NFSB
Number of Branches
6
Banking History
Began in 1888
As of December 31, 2012
Total Assets (000s)
$449,413
Total Equity (000s)
$53,155
TCE / TA
11.8%
NPLs / Loans
(1)
1.60%
2012 Net Income (000s)
$1,561
Financial Summary
NFSB |
 6
Pro Forma Franchise and Deposit Market Share
Pro Forma Franchise
Pro Forma Deposit Market Share –
NFSB Markets
SIFI
NFSB
Source: SNL Financial. Deposit data as of June 30, 2012.
Newport, RI
Deposits in
Deposit
2012
Rank
Institution (ST)
Branches
Market
($000)
Market Share
(%)
1
OceanPoint Financial Ptnrs MHC (RI)
6
657,865
48.33
2
RBS
5
270,860
19.90
3
Newport Bancorp (RI)
3
164,736
12.10
4
Bank of America Corp. (NC)
2
118,421
8.70
5
Santander
3
81,343
5.98
6
Narragansett Financial Corp. (MA)
1
39,974
2.94
7
Webster Financial Corp. (CT)
1
28,050
2.06
Market Total
21
1,361,249
Washington, RI
Deposits in
Deposit
2012
Rank
Institution (ST)
Branches
Market
($000)
Market Share
(%)
1
Washington Trust Bancorp Inc. (RI)
10
1,580,435
54.28
2
RBS
10
635,938
21.84
3
Bank of America Corp. (NC)
3
270,829
9.30
4
Santander
2
142,020
4.88
5
Newport Bancorp (RI)
2
68,756
2.36
6
OceanPoint Financial Ptnrs MHC (RI)
2
61,920
2.13
7
Brookline Bancorp Inc. (MA)
1
55,384
1.90
8
Webster Financial Corp. (CT)
2
37,853
1.30
9
Centreville Savings Bank (RI)
2
31,702
1.09
10
Dime Bank (CT)
1
27,012
0.93
Market Total
35
2,911,849
New London, CT
Deposits in
Deposit
2012
Rank
Institution (ST)
Branches
Market
($000)
Market Share
(%)
1
RBS
14
812,333
19.11
2
Chelsea Groton Bank (CT)
14
691,826
16.27
3
People's United Financial Inc. (CT)
12
586,442
13.80
4
Dime Bank (CT)
10
473,420
11.14
5
Liberty Bank (CT)
9
455,862
10.72
6
Bank of America Corp. (NC)
11
430,812
10.13
7
Pro Forma Company
9
233,641
5.50
7
SI Financial Group Inc. (CT)
8
193,814
4.56
8
Jewett City Savings Bank (CT)
2
110,512
2.60
9
Eastern SB (CT)
3
108,597
2.55
10
Webster Financial Corp. (CT)
3
82,970
1.95
15
Newport Bancorp (RI)
1
39,827
0.94
Market Total
82
4,062,135 |
 7
Pro Forma Demographic Profile
Source: SNL Financial.
Projected HH Income Growth (2012 –
2017)
Median Household Income (2012)
Weighted by County Deposits
15.3%
19.4%
16.4%
19.0%
18.6%
13.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
SIFI
NFSB
Pro Forma
CT
RI
National
$61,805
$65,702
$62,872
$65,549
$53,372
$50,157
$0
$20,000
$40,000
$60,000
$80,000
SIFI
NFSB
Pro Forma
CT
RI
National |
 8
Financial Considerations
Franchise expansion on financially attractive terms well below recent
comparable regional transactions
Price/tangible book value: 116%
Core deposit premium: 3.0%
Transformational earnings accretion
EPS accretion anticipated to be in excess of 40% on a fully-phased
in basis Improved scale and efficiency
Significant, achievable synergies identified
Tangible book value per share dilution of approximately 8.4% with an
expected earn-back period of approximately five years
Clean balance sheet with minimal credit issues
$5.0 million gross credit mark estimated (1.4% of total loans)
One time after-tax transaction costs estimated at $7.9
million Strong pro forma capital position
Pro forma tangible common equity to tangible assets ratio of
approximately 9.9% |
 |