Sound Financial, Inc. Memorandum of Understanding is terminated
following quarter-end
SEATTLE--(BUSINESS WIRE)--
Sound Financial Inc. (OTCBB: SNFL), holding company for Sound Community
Bank, today reported net income for the six months ended June 30, 2011
of $950,000, or $0.33 per diluted share, as compared to net income of
$335,000, or $0.11 per diluted share, for the six months ended June 30,
2010. For the quarter ended June 30, 2011 net income was $454,000 or
$0.16 per diluted share, as compared to $496,000 and $0.17 per diluted
share for the quarter ended March 31, 2011 and $278,000 or $0.10 per
diluted share for the quarter ended June 30, 2010. Return on Average
Assets was 0.58% for the six months ended June 30, 2011 compared to
0.20% for the six months ended June 30, 2010.
This is the sixth consecutive quarter of positive earnings for the
company.
Highlights as of and for the six months ended June 30, 2011 include:
- Year to date Net Interest Margin improved 61 basis points to 5.26%
from 4.65% for the six months ended June 30, 2010
- Efficiency Ratio decreased to 63.95% compared to 71.03% for the six
months ended June 30, 2010
- Deposit Cost of Funds is 0.91% compared to 1.40% for the six months
ended June 30, 2010
- Provision for Loan losses decreased from $2.20 million for the six
months ended June 30, 2011 to $2.05 million for the six months ended
June 30, 2011
- Non-Performing Loans to Gross Loans is 1.82% as of June 30, 2011
compared to 3.31% as of June 30, 2010
- Non-Performing Assets to Total Assets is 2.65% as of June 30, 2011
compared to 3.54% as of June 30, 2010.
Effective July 15, 2011, the Memorandum of Understanding (MOU) between
the Board of Directors of Sound Financial, Inc. and the Office of Thrift
Supervision (OTS) was terminated. Effective July 11, 2011 the Memorandum
of Understanding between the Board of Directors of Sound Community Bank
and the OTS was amended to terminate Paragraph 10 of the Memorandum
headed Capital Distributions. This paragraph pertains to the bank’s
ability to declare or pay dividends or to make any capital
distributions. The terminated paragraph required the bank to submit in
writing for written approval from the Regional Director of the OTS at
least 30 days prior to the anticipated date of the proposed declaration,
dividend payment or distribution of capital. The Board of Directors has
not declared dividends since the First Quarter of 2010.
Laurie Stewart, President and CEO said, “We are pleased that our efforts
to improve both earnings and our capital ratios have led to the
termination of the MOU at the holding company level and the dividend
restriction at the bank level. Our emphasis on improving our efficiency
ratio and reducing non-performing assets positions Sound Community Bank
well.”
|
|
| As of |
| | | 6/30/2011 |
|
| 3/31/2011 |
|
| 6/30/2010 |
| Selected Consolidated Financial Condition Data: | | |
(In thousands)
|
|
Total assets
| | |
$
|
337,473
|
| |
$
|
326,997
|
| |
$
|
340,926
|
|
Total loans, net
| | | |
294,214
| | | |
292,919
| | | |
305,450
|
|
Loans held for sale
| | | |
392
| | | |
79
| | | |
1,096
|
|
Available-for-sale securities, at fair value
| | | |
3,331
| | | |
3,642
| | | |
4,328
|
|
Federal Home Loan Bank stock, at cost
| | | |
2,444
| | | |
2,444
| | | |
2,444
|
|
Bank-owned life insurance
| | | |
6,857
| | | |
6,791
| | | |
6,596
|
|
Other real estate owned and repossessed assets
| | | |
3,498
| | | |
3,113
| | | |
1,847
|
|
Total deposits
| | | |
287,635
| | | |
273,733
| | | |
285,339
|
|
Borrowings
| | | |
18,828
| | | |
21,988
| | | |
26,617
|
|
Total stockholders’ equity
| | | |
28,084
| | | |
27,674
| | | |
25,299
|
|
|
|
| Quarter Ended |
| | | | 6/30/2011 |
|
| 3/31/2011 |
|
| 6/30/2010 |
|
Selected Consolidated Operating Data: | | | | (in thousands) |
|
Total interest income
| | | |
$
|
4,701
| | |
$
|
4,648
| |
| |
$
|
4,924
| |
|
Total interest expense
| | | | |
683
| | | |
752
|
| | | |
1,152
|
|
|
Net interest income
| | | | |
4,018
| | | |
3,896
| | | | |
3,772
| |
|
Provision for loan losses
| | | | |
1,225
| | | |
825
|
| | | |
775
|
|
|
Net interest income after provision for loan losses
| | | | |
2,793
| | | |
3,071
| | | | |
2,997
| |
|
Service charges and fee income
| | | | |
476
| | | |
522
| | | | |
549
| |
|
Fair value adjustment on mortgage servicing rights
| | | | |
208
| | | |
(1
|
)
| | | |
(210
|
)
|
|
Loss on sale of securities
| | | | |
-
| | | |
(34
|
)
| | | |
(11
|
)
|
|
Other than temporary impairment on securities
| | | | |
-
| | | |
(39
|
)
| | | |
(51
|
)
|
|
Gain on sale of loans
| | | | |
102
| | | |
34
| | | | |
58
| |
|
Other noninterest income
| | | | |
109
| | | |
197
|
| | | |
21
|
|
|
Total noninterest income
| | | | |
895
| | | |
679
| | | | |
556
| |
|
Total noninterest expense
| | | | |
3,036
| | | |
3,032
|
| | | |
3,175
|
|
|
Income before provision for income taxes
| | | | |
652
| | | |
718
| | | | |
378
| |
|
Provision for income taxes
| | | | |
198
| | | |
222
|
| | | |
100
|
|
|
Net income
| | | |
$
|
454
| | |
$
|
496
|
| | |
$
|
278
|
|
Selected Financial Ratios and Other Data: |
|
|
|
|
|
| | |
|
|
| | |
|
|
| | |
| Performance ratios:
| | | | | | | | | | | | | | | | | | |
|
Return on assets
| | | | | | |
0.55
|
%
| | | |
0.60
|
%
| | | |
0.32
|
%
|
|
Return on equity
| | | | | | |
6.46
|
%
| | | |
7.28
|
%
| | | |
4.40
|
%
|
|
Net interest margin
| | | | | | |
5.33
|
%
| | | |
5.18
|
%
| | | |
4.77
|
%
|
|
Noninterest income to operating revenue
| | | | | | |
18.23
|
%
| | | |
14.84
|
%
| | | |
12.85
|
%
|
|
Noninterest expense to average total assets
| | | | | | |
3.67
|
%
| | | |
3.68
|
%
| | | |
3.70
|
%
|
Average interest-earning assets to average
interest-bearing liabilities
| | | | | | |
100.61
|
%
| | | |
101.16
|
%
| | | |
100.87
|
%
|
|
Efficiency ratio
| | | | | | |
61.80
|
%
| | | |
66.27
|
%
| | | |
73.36
|
%
|
| | | | | | | | | | | | | | | | | |
|
Asset quality ratios:
| | | | | | | | | | | | | | | | | | |
|
Nonperforming assets to total assets
| | | | | | |
2.65
|
%
| | | |
2.76
|
%
| | | |
3.54
|
%
|
|
Nonperforming loans to gross loans
| | | | | | |
1.82
|
%
| | | |
1.99
|
%
| | | |
1.36
|
%
|
|
Allowance for loan losses to nonperforming loans
| | | | | | |
80.12
|
%
| | | |
74.71
|
%
| | | |
96.07
|
%
|
|
Allowance for loan losses to gross loans
| | | | | | |
1.46
|
%
| | | |
1.49
|
%
| | | |
1.29
|
%
|
|
Net charge-offs to average loans outstanding
| | | | | | |
1.78
|
%
| | | |
1.16
|
%
| | | |
1.04
|
%
|
| | | | | | | | | | | | | | | | | |
|
| Bank level capital ratios:
| | | | | | | | | | | | | | | | | | |
|
Tier 1 leverage
| | | | | | |
8.16
|
%
| | | |
8.25
|
%
| | | |
7.40
|
%
|
|
Tier 1 risk-based
| | | | | | |
10.95
|
%
| | | |
10.87
|
%
| | | |
9.83
|
%
|
|
Total risk-based
| | | | | | |
12.13
|
%
| | | |
12.12
|
%
| | | |
11.08
|
%
|
|
| |
|
| |
| | |
| Six months ended |
| | |
| 6/30/2011 |
| |
| 6/30/2010 |
|
| | | | (In thousands) |
Selected Consolidated Operating Data: | | |
|
| |
Total interest income
| |
$
|
9,350
| | |
|
$
|
9,695
| |
|
Total interest expense
| | |
1,435
|
| | | |
2,321
|
|
|
Net interest income
| | |
7,915
| | | | |
7,374
| |
|
Provision for loan losses
| | |
2,050
|
| | | |
2,200
|
|
|
Net interest income after provision for loan losses
| | |
5,865
| | | | |
5,174
| |
|
Fees and service charges
| | |
999
| | | | |
1,078
| |
|
Gain on sale of loans
| | |
137
| | | | |
122
| |
|
Gain (loss) on sale of securities
| | |
(34
|
)
| | | |
64
| |
|
Impairment on securities
| | |
(39
|
)
| | | |
(51
|
)
|
|
Fair value adjustment on mortgage servicing rights
| | |
257
| | | | |
75
| |
|
Other non-interest income
| | |
255
|
| | | |
452
|
|
|
Total non-interest income
| | |
1,575
| | | | |
1,740
| |
|
Total non-interest expense
| | |
6,069
|
| | | |
6,486
|
|
|
Income before provision for income taxes
| | |
1,371
| | | | |
428
| |
|
Provision for income taxes
| | |
421
|
| | | |
93
|
|
|
Net income
| | |
950
|
| | | |
335
|
|
Selected Financial Ratios and Other Data: |
| |
| |
| Performance ratios:
| | | | |
|
Return on assets (ratio of net income to average total assets)
| |
0.58
|
%
| |
|
0.20
|
%
|
|
Return on equity (ratio of net income to average equity)
| |
6.86
|
%
| | |
2.66
|
%
|
|
Net interest margin
| |
5.26
|
%
| | |
4.72
|
%
|
|
Non-interest income to operating revenue
| |
16.59
|
%
| | |
18.73
|
%
|
|
Non-interest expense to average total assets
| |
3.68
|
%
| | |
3.80
|
%
|
Average interest-earning assets
to average interest-bearing liabilities
| |
100.88
|
%
| | |
101.00
|
%
|
|
Efficiency ratio
| |
63.95
|
%
| | |
71.03
|
%
|
| | | | | | |
|
Sound Financial Inc. is the holding company for Sound Community Bank, a
full-service bank, providing personal and business banking services in
communities across the greater Puget Sound region. The Seattle-based
company operates five full-service banking offices in King, Pierce,
Snohomish and Clallam Counties, and is on the web at www.soundcb.com.
Forward-Looking Statements
This report contains statements that are not historical or current
fact and constitute forward-looking statements.In some cases,
you can identify these statements by words such as "may", "might",
"will", "should", "expect", "plan", "intend", "anticipate", "believe",
"estimate", "predict", "potential", or "continue", the negative of these
terms and other comparable terminology.Such forward-looking
statements, which are based on various underlying assumptions and
expectations and are subject to risks, uncertainties and other unknown
factors, may include projections of our future financial performance
based on our growth strategies and anticipated trends in our business.These statements are only predictions based on our current
expectations and projections about future events, and there are or may
be important factors that could cause our actual results to be
materially different from the historical results or from any future
results expressed or implied by such forward-looking statements.Unless
required by law, we undertake no obligation to publicly update or revise
any forward-looking statement to reflect circumstances or events after
the date of this press release.
Results of operations and business are subject to various factors
which could cause actual results to differ materially from these
estimates and most other statements that are not historical in nature.These factors include, but are not limited to, general and local
economic conditions, changes in interest rates, deposit flows, demand
for mortgage, consumer and other loans, real estate values, competition,
changes in accounting principles, policies or guidelines, changes in
legislation or regulation, and other economic, competitive,
governmental, regulatory and technological factors affecting our
operations, pricing, products and services.
Source: Sound Financial Inc.
Contact:
Sound Financial Inc.
Media:
Laurie Stewart,
206-448-0884 x-306
Financial:
Matt Deines,
206-448-0884 x-305