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, today (March 5) announced execution of a definitive merger agreement under which SI Financial Group will acquire Newport Bancorp.
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.
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, CT.
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 Chief Executive Officer of SI Financial Group, said, “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,” Brouillard said.
“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,” he said.
Kevin M. McCarthy, President and Chief Executive Officer of Newport Bancorp said, “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 hometown banking culture our communities value.”
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, CT. 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, RI and operates Newport Federal Savings Bank which is headquartered in Newport, RI. In addition to its main office located in Newport, it operates five full-service branch offices located in Middletown, Wakefield, Westerly and Portsmouth, Rhode Island, and Stonington, CT.
Proxy Statement – Prospectus
In connection with the proposed merger transaction, SI Financial Group will file with the Securities and Exchange Commission (SEC) a Registration Statement on Form S-4 that will include a Proxy Statement of Newport Bancorp, and a Proxy Statement and Prospectus of SI Financial Group, as well as other relevant documents concerning the proposed transaction.
Stockholders are urged to read these documents 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.
A free copy of the Proxy Statement/ Prospectus, as well as other filings containing information about SI Financial Group and Newport Bancorp, may be obtained at the SEC’s Internet site at http://www.sec.gov
You will also be able to obtain these documents, free of charge, from SI Financial Group at www.mysifi.com under the tab “Investor Relations” or from Newport Bancorp at www.newportfederal.com under the tab “Corporate.”
SI Financial Group and Newport Bancorp and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the respective stockholders of SI Financial Group and Newport Bancorp in connection with the proposed merger.
Information about the directors and executive officers of SI Financial Group is set forth in the proxy statement for SI Financial Group’s 2012 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on March 30, 2012.
Information about the directors and executive officers of Newport Bancorp is set forth in the proxy statement for Newport Bancorp’s 2012 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on April 10, 2012.
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 Proxy Statement/ Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
Posted March 5, 2013
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