Businessweek

SI Financial Group, Inc. operates as the holding company for Savings Institute Bank and Trust Company (the Bank). The company operates as a community-oriented financial institution offering a range of financial services to consumers and businesses in its market area, including insurance, trust, and investment services. Market Area The company is headquartered in Willimantic, Connecticut, which is located in eastern Connecticut approximately 30 miles east of Hartford. It operates 21 full-service offices throughout Windham, New London, Tolland, Hartford and Middlesex counties in Connecticut. Lending Activities The company’s loan portfolio consists primarily of one- to four-family residential mortgage loans, multi-family and commercial real estate loans and commercial business loans. The loan portfolio also includes construction and consumer loans. One- to Four-Family Residential Loans: The company’s primary lending activity is the origination of mortgage loans to enable borrowers to purchase or refinance existing homes or to construct new residential dwellings in its market area. It offers fixed-rate loans with terms of 10, 15, 20 or 30 years. Its adjustable-rate mortgage loans are based primarily on 30-year amortization schedules. The company offers loans insured by the Federal Housing Administration and the Veterans Administration and participates in the Connecticut Housing Finance Authority Program. It also offers Guaranteed Rural Housing Loans through the United States Department of Agriculture (USDA). The company offers fixed-rate residential mortgage loans through these programs to qualified individuals and originates the loans using modified underwriting guidelines. Multi-Family and Commercial Real Estate Loans: The company makes multi-family and commercial real estate loans throughout its market area for the purpose of acquiring, developing, improving or refinancing multi-family and commercial real estate where the property is the primary collateral securing the loan. It offers fixed-rate and adjustable-rate mortgage loans secured by multi-family and commercial real estate. The company’s multi-family and commercial real estate loans are secured by owner-occupied properties, including churches and retail facilities. It originates adjustable-rate multi-family and commercial real estate loans for amortization periods up to 25 years. Construction and Land Loans: The company originates loans to individuals, and to a lesser extent, builders, to finance the construction of residential dwellings. It also originates construction loans for commercial development projects, including condominiums, apartment buildings, single-family subdivisions as well as owner-occupied properties used for businesses. The company also originates land loans to individuals, local contractors and developers only for making improvements on approved building lots, subdivisions and condominium projects within two years of the date of the loan. It offers fixed-rate land loans and variable-rate land loans that adjust annually. Commercial Business Loans: The company originates commercial business loans to various professionals, sole proprietorships and small businesses primarily in its market area. It offers various commercial lending products, the maximum amount of which is limited by its in-house loans to one borrower limit. The company offers loans secured by business assets other than real estate, such as business equipment and inventory. Additional products such as time notes, letters of credit and equipment lease financing are offered. Additionally, the company purchases the portion of commercial business loans that are fully guaranteed by the Small Business Administration (SBA) and USDA. Consumer Loans: The company offers various consumer loans, primarily home equity lines of credit, and loans secured by marketable securities, passbook or certificate accounts, motorcycles, automobiles and recreational vehicles, as well as unsecured loans. Investment Portfolio As of December 31, 2011, the company’s investment portfolio consisted primarily of U.S. Government and agency obligations, ‘agency’ mortgage-backed