SI Financial Group to reorganize, convert mutual holding company 62 pct stake to common stock

SI Financial to convert majority stake to stock

WILLIMANTIC, Conn. — SI Financial Group Inc. on Thursday said it plans to reorganize by converting its mutual holding company parent to stock and combining its two separate arms.

When the bank reorganized in 2004, a two-tier mutual holding company was created with two parents: SI Bancorp MHC, which holds about 62 percent, and SI Financial Group, whose 38 percent stake is publicly traded.

Under the new plan, the two parents will combine into a new stock holding company, also named SI Financial Group Inc.

In the process, the new company will offer and sell shares of common stock in an amount equal to the mutual holding company’s 62 percent stake. Eligible account holders and the company’s employee stock ownership plan will have first opportunity to buy the shares in a subscription offering. Depositors with accounts established before June 30, 2009 will have the highest offering priority.

Any shares that remain unsold will then be offered to the public.

Current shareholders will receive stock in the new company based on an exchange ratio calculated to preserve their 38 percent stake.

The reorganization plan also calls for the bank to contributed $500,000 in cash to the SI Financial Group Foundation, a charitable foundation established in 2004.

The plan is subject to approval by depositors, shareholders and regulatory agencies. The bank said it will have no impact on normal business operations.

Lightly traded SI Financial Group shares closed Thursday unchanged at $6.22.