Non-performing assets decrease to less than 2% of total assets
SEATTLE--(BUSINESS WIRE)--
Sound Financial Bancorp, Inc. (the “Company”) (NASDAQ:SFBC), holding
company for Sound Community Bank (the “Bank”), today reported net income
for the quarter ended September 30, 2012 of $612,000, or $0.23 per
diluted share, as compared to net income of $181,000, or $0.07 per
diluted share, for the quarter ended September 30, 2011. Return on
average assets was 0.67% for the quarter ended September 30, 2012
compared to 0.21% for the quarter ended September 30, 2011. Total assets
increased to $366.5 million as of September 30, 2012 compared to $355.1
million as of June 30, 2012.
This is the eleventh consecutive quarter of positive earnings for the
Company.
Highlights as of and for the quarter ended September 30, 2012 include:
- The Company completed a successful stock offering during the quarter,
which raised $14.2 million and increased equity to total assets to
11.54% as of September 30, 2012
- Net interest margin decreased to 4.91% for the quarter ended September
30, 2012 from 5.22% for the quarter ended September 30, 2011
- Efficiency ratio decreased to 56.67% for the quarter ended September
30, 2012 compared to 63.70% for the quarter ended September 30, 2011
- Deposit cost of funds was 0.68% for the quarter ended September 30,
2012 compared to 0.89% for the quarter ended September 30, 2011
- Provision for loan losses decreased to $1.1 million for the quarter
ended September 30, 2012 from $1.3 million for the quarter ended
September 30, 2011
- Non-performing loans to gross loans was 1.41% as of September 30, 2012
compared to 2.13% as of September 30, 2011
- Non-performing assets to total assets was 1.88% as of September 30,
2012 compared to 2.84% as of September 30, 2011
Laurie Stewart, President and CEO, said “This was a breakthrough quarter
in terms of reducing non-performing assets. In particular the reduction
of non-performing loans is an indication of improving asset quality for
the Bank and for the industry as a whole.” Stewart also commented on the
Company’s successful stock offering, “We are pleased to have become a
fully public company and in the meantime generate additional capital
which will allow us to further increase lending in the communities where
we do business.”
During October 2012, Sound Community Bank filed an application to
convert from a federally chartered savings bank to a Washington
state-chartered commercial bank. As a federally chartered savings bank,
the Bank’s regulators are the Office of the Comptroller of the Currency
(OCC) and the Federal Deposit Insurance Corp. (FDIC). As a Washington
commercial bank, the Bank’s regulators would be the Washington State
Department of Financial Institutions (WDFI) and the FDIC. The Fed would
remain as the primary federal regulator for the Company. While the
proposed conversion requires regulatory approval, the Bank expects the
new charter to become effective in December 2012. The change is intended
to reduce regulatory examination costs and to move oversight of the Bank
to the WDFI which is focused on the local community banks and financial
institutions. The charter conversion will not affect customers in any
way, and they will continue to receive the same protection on deposits
through the FDIC.
|
| As of |
| | 9/30/2012 |
| 6/30/2012 |
| 9/30/2011 |
Selected Consolidated Financial Condition
Data: | | | | | | | | |
|
Total assets
| |
$
|
366,498
| |
|
$
|
355,072
| | |
$
|
339,623
| |
|
Total loans, net
| | |
304,665
| | | |
301,945
| | | |
298,939
| |
|
Loans held for sale
| | |
2,089
| | | |
1,053
| | | |
1,129
| |
|
Available-for-sale securities, at fair value
| | |
20,891
| | | |
9,033
| | | |
3,138
| |
| Federal Home Loan Bank stock, at cost
| | |
2,422
| | | |
2,444
| | | |
2,444
| |
|
Bank-owned life insurance
| | |
7,160
| | | |
7,099
| | | |
6,918
| |
|
Other real estate owned and repossessed assets
| | |
2,548
| | | |
2,839
| | | |
3,191
| |
|
Total deposits
| | |
313,043
| | | |
313,729
| | | |
299,846
| |
|
Borrowings
| | |
8,024
| | | |
8,185
| | | |
8,667
| |
|
Total stockholders’ equity
| | |
42,296
| | | |
30,042
| | | |
28,177
| |
| | | | | | | |
|
| | Quarter Ended |
| | 9/30/2012 | | 6/30/2012 | | 9/30/2011 |
Selected Consolidated Operating Data: | | | | | | | | |
|
Total interest income
| |
$
|
4,542
| |
|
$
|
4,598
| | |
$
|
4,613
| |
|
Total interest expense
| |
|
596
|
| | |
588
|
| |
|
681
|
|
|
Net interest income
| | |
3,946
| | | |
4,010
| | | |
3,932
| |
|
Provision for loan losses
| |
|
1,075
|
| | |
1,100
|
| |
|
1,300
|
|
|
Net interest income after provision for loan losses
| | |
2,871
| | | |
2,910
| | | |
2,632
| |
|
Service charges and fee income
| | |
574
| | | |
513
| | | |
516
| |
|
Mortgage servicing income
| | |
148
| | | |
21
| | | |
127
| |
|
Fair value adjustment on mortgage servicing rights
| | |
(211
|
)
| | |
(76
|
)
| | |
(491
|
)
|
|
Other than temporary impairment on securities
| | |
(32
|
)
| | |
(32
|
)
| | |
(56
|
)
|
|
Gain on sale of loans
| | |
668
| | | |
308
| | | |
126
| |
|
Other noninterest income
| |
|
60
|
| | |
52
|
| |
|
44
|
|
|
Total noninterest income
| | |
1,207
| | | |
786
| | | |
266
| |
|
Total noninterest expense
| |
|
3,185
|
| | |
2,828
|
| |
|
2,674
|
|
|
Income before provision for income taxes
| | |
893
| | | |
868
| | | |
224
| |
|
Provision for income taxes
| |
|
281
|
| | |
275
|
| |
|
43
|
|
|
Net income
| |
$
|
612
|
|
|
$
|
593
|
| |
$
|
181
|
|
| | | | | | | |
|
| | Quarter Ended |
| | 9/30/2012 | | 6/30/2012 | | 9/30/2011 |
Selected Financial Ratios and Other Data: | | | | | | | | |
| Performance ratios(1):
| | | | | | | | |
|
Return on average assets
| | |
0.67
|
%
| | |
0.68
|
%
| | |
0.21
|
%
|
|
Return on average equity
| | |
6.86
|
%
| | |
7.90
|
%
| | |
2.53
|
%
|
|
Net interest margin(2) | | |
4.91
|
%
| | |
5.24
|
%
| | |
5.22
|
%
|
|
Noninterest income to operating revenue(3) | | |
23.42
|
%
| | |
16.39
|
%
| | |
6.34
|
%
|
|
Noninterest expense to average total assets
| | |
3.48
|
%
| | |
3.23
|
%
| | |
3.17
|
%
|
|
Average interest-earning assets to average interest-bearing
liabilities
| | |
111.48
|
%
| | |
107.03
|
%
| | |
98.61
|
%
|
|
Efficiency ratio(4) | | |
57.67
|
%
| | |
58.51
|
%
| | |
63.70
|
%
|
(1) Performance ratios for the three months ended
September 30, 2012 and 2011 and June 30, 2012 are annualized, as
appropriate.
|
(2) Net interest income divided by average interest
earning assets.
|
(3) Noninterest income divided by the sum of
noninterest income and net interest income.
|
(4) Noninterest expense, excluding other real estate
owned and repossessed property expense, as a percentage of net
interest income and total noninterest income, excluding net
securities transactions.
|
| |
|
|
| Quarter Ended |
|
| 9/30/2012 | | 6/30/2012 | | 9/30/2011 |
| Asset quality ratios:
| | | | | | | | |
|
Nonperforming assets to total assets
| | |
1.88
|
%
| | |
2.70
|
%
| | |
2.84
|
%
|
|
Nonperforming loans to gross loans
| | |
1.41
|
%
| | |
2.20
|
%
| | |
2.13
|
%
|
|
Allowance for loan losses to nonperforming loans
| | |
99.75
|
%
| | |
65.86
|
%
| | |
62.10
|
%
|
|
Allowance for loan losses to gross loans
| | |
1.40
|
%
| | |
1.45
|
%
| | |
1.32
|
%
|
|
Net charge-offs to average loans outstanding
| | |
1.55
|
%
| | |
1.35
|
%
| | |
2.22
|
%
|
|
| Nine Months Ended |
| | 9/30/2012 |
| 9/30/2011 |
Selected Consolidated Operating Data: | | |
|
Total interest income
| |
$
|
13,703
| | |
$
|
13,963
| |
|
Total interest expense
| |
|
1,784
|
| |
|
2,116
|
|
|
Net interest income
| | |
11,919
| | | |
11,847
| |
|
Provision for loan losses
| |
|
3,675
|
| |
|
3,350
|
|
|
Net interest income after provision for loan losses
| | |
8,244
| | | |
8,497
| |
|
Fees and service charges
| | |
1,638
| | | |
1,514
| |
|
Gain on sale of loans
| | |
1,226
| | | |
263
| |
|
Loss on sale of securities
| | |
-
| | | |
(33
|
)
|
|
Mortgage servicing income
| | |
346
| | | |
318
| |
|
Other than temporary impairment on securities
| | |
(156
|
)
| | |
(96
|
)
|
|
Fair value adjustment on mortgage servicing rights
| | |
97
| | | |
(235
|
)
|
|
Other non-interest income
| |
|
179
|
| |
|
109
|
|
|
Total non-interest income
| | |
3,330
| | | |
1,840
| |
|
Total non-interest expense
| |
|
9,022
|
| |
|
8,743
|
|
|
Income before provision for income taxes
| | |
2,552
| | | |
1,594
| |
|
Provision for income taxes
| |
|
800
|
| |
|
463
|
|
|
Net income
| |
$
|
1,752
|
| |
$
|
1,131
|
|
| |
|
| |
|
| | Nine Months Ended |
| | 9/30/2012 | | 9/30/2011 |
Selected Financial Ratios and Other Data: | | |
| Performance ratios(1):
| | | |
|
Return on average assets
| | |
0.66
|
%
| | |
0.45
|
%
|
|
Return on average equity
| | |
7.36
|
%
| | |
5.39
|
%
|
|
Net interest margin(2) | | |
5.12
|
%
| | |
5.25
|
%
|
|
Non-interest income to operating revenue(3) | | |
21.84
|
%
| | |
13.45
|
%
|
|
Non-interest expense to average total assets
| | |
3.41
|
%
| | |
2.63
|
%
|
|
Average interest-earning assets to average interest-bearing
liabilities
| | |
109.00
|
%
| | |
100.10
|
%
|
|
Efficiency ratio(4) | | |
54.20
|
%
| | |
63.87
|
%
|
(1) Performance ratios for the nine months ended
September 30, 2012 and 2011 are annualized, as appropriate.
|
(2) Net interest income divided by average interest
earning assets.
|
(3) Noninterest income divided by the sum of
noninterest income and net interest income.
|
(4) Noninterest expense, excluding other real estate
owned and repossessed property expense, as a percentage of net
interest income and total noninterest income, excluding net
securities transactions.
|
Regulatory Capital Ratios of Sound Community Bank at September
30, 2012 |
|
| |
| |
| |
| | Actual | | Minimum Capital Requirements | |
Minimum Required to
Be Well-Capitalized
Under Prompt
Corrective
Action Provisions |
| | Amount |
| Ratio | | Amount |
| Ratio | | Amount |
| Ratio |
| |
(Dollars in thousands)
|
| | | | | | |
| | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
|
Core capital (to total adjusted assets)
| |
$
|
37,568
| |
10.27
|
%
| | $14,636 | |
4.0
|
%
| |
$
|
18,295
| |
5.0
|
%
|
|
Core capital (to risk-weighted assets)
| | |
37,568
| |
13.76
|
%
| |
10,921
| |
4.0
|
%
| | |
16,382
| |
6.0
|
%
|
|
Risked-based capital (to risk-weighted assets)
| | |
40,992
| |
15.01
|
%
| |
21,842
| |
8.0
|
%
| | |
27,303
| |
10.0
|
%
|
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
“Safe Harbor” statement under the Private Securities Litigation
Reform Act of 1995: This press release 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 for 2012 and
beyond 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.
There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors which could cause actual results to
differ materially, 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.
Sound Financial Bancorp, Inc.
Media:
Laurie Stewart,
206-448-0884 x306
or
Financial:
Matt Deines,
206-448-0884 x305
Source: Sound Financial Bancorp, Inc.