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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 17, 2008
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SI FINANCIAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
United States 0-50801 84-1655232
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
803 Main Street, Willimantic, Connecticut 06226
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(Address of principal executive offices) (Zip Code)
(860) 423-4581
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.06 MATERIAL IMPAIRMENTS.
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On September 7, 2008, the U.S. Treasury announced a plan to place the
Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan
Mortgage Corporation ("Freddie Mac") under conservatorship under the authority
of the Federal Housing Finance Agency. The actions of the U.S. Government
adversely impacted the value of the perpetual preferred stock of Fannie Mae and
Freddie Mac.
At June 30, 2008, the carrying value of the security holdings in Fannie
Mae and Freddie Mac preferred stock by SI Financial Group, Inc. (the "Company")
totaled $1.5 million, with unrealized holding losses of $61,000. The fair market
value of these securities has declined significantly from June 30, 2008. As a
result, on September 17, 2008, the Company determined it expects to record a
non-cash other-than-temporary impairment charge of approximately $1.5 million
(pre-tax) in the quarter ending September 30, 2008 related to its investment in
the perpetual preferred securities of Fannie Mae and Freddie Mac. The Company
will continue to evaluate its investment portfolio and will make a final
determination of the impairment during the preparation of its financial
statements for the quarter ending September 30, 2008. At this time, the Company
does not expect to record the maximum deferred income tax benefit associated
with the other-than-temporary impairment loss. Savings Institute Bank and Trust
Company, the wholly-owned subsidiary of the Company, anticipates that it will
continue to exceed all capital levels necessary to remain "well-capitalized"
under regulatory guidelines.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SI FINANCIAL GROUP, INC.
Date: September 18, 2008 By: /s/ Brian Hull
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Brian Hull
Executive Vice President, Chief
Financial Officer and Treasurer