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) May
4, 2011
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SOUND FINANCIAL, INC. |
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(Exact name of Registrant as specified in its Charter) |
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United States |
000-52889 |
26-0776123 |
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(State or other jurisdiction of incorporation) |
(Commission File No.) |
(IRS Employer Identification |
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2005 5th Avenue, Second Floor, Seattle, Washington |
98121 |
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(Address of principal executive offices) |
(Zip Code) |
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Registrant's telephone number, including area code: (206) 448-0884 |
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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))
Item 2.02 Results of Operations and Financial Condition
On May 4, 2011, Sound Financial, Inc. issued a press release announcing financial results for the quarter ending March 31, 2011. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits
(c) The following exhibit is filed as part of this report.
Exhibit 99.1 Press Release from Sound Financial Inc. dated May 4, 2011.
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.
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SOUND FINANCIAL, INC. |
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| Date: |
May 4, 2011 |
By: |
/s/ |
Laura Lee Stewart |
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Laura Lee Stewart |
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President and Chief Executive Officer |
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EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Press Release, dated May 4, 2011 |
Exhibit 99.1
Sound Financial Reports Net Income of $496,000 for the First Quarter of 2011 on Improving Credit Quality Trends
SEATTLE--(BUSINESS WIRE)--May 4, 2011--Sound Financial Inc. (OTCBB:SNFL), holding company for Sound Community Bank, today reported net income for the quarter ended March 31, 2011 of $496,000, or $0.17 per diluted share, as compared to net income of $576,000, or $0.20 per diluted share, for the quarter ended December 31, 2010 and net income of $57,000 or $0.02 per diluted share for the quarter ended March 31, 2010.
This is the fifth consecutive quarter of positive earnings for the company.
Highlights for the Quarter ended March 31, 2011 include:
Provision for loan losses decreased $600,000 to $825,000 for the quarter ended March 31, 2011 compared to $1.4 million for the quarter ended March 31, 2010.
Nonperforming loans decreased $7.5 million, or 55.9% to $5.9 million from $13.4 million at March 31, 2010. Nonperforming loans, as a percentage of loans, decreased 251 basis points from 4.50% at March 31, 2010 to 1.99% at March 31, 2011.
Nonperforming assets decreased $6.3 million, or 41.0% to $9.0 million at March 31, 2011 from $15.3 million at March 31, 2010.
Net interest margin increased 105 basis points to 5.18% for the quarter ended March 31, 2011 compared to 4.13% for the quarter ended March 31, 2010.
Total equity increased $2.4 million, or 9.5% to $27.7 million at March 31, 2011 from $25.3 million at March 31, 2010. The bank remains “Well Capitalized” with a Tier 1 capital ratio of 8.25% and total risk-based capital ratio of 12.12% at March 31, 2011.
Laurie Stewart, President and CEO said, “We have worked diligently to reduce nonperforming assets and increase earnings and capital levels. We are pleased with our progress over the past five quarters but we remain focused on continued improvement as the general economic environment slowly improves. Our goal was to achieve an 8% Tier 1 capital ratio and a 12% total risk-based capital ratio by the end of the first quarter of 2011 and we exceeded both of these benchmarks.”
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As of | ||||||||||||||
| 3/31/2011 | 12/31/2010 | 3/31/2010 | |||||||||||||
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Selected Consolidated Financial Condition Data: |
(In thousands) | ||||||||||||||
| Total assets | $ | 326,997 | $ | 334,639 | $ | 337,801 | |||||||||
| Total loans, net | 292,919 | 294,810 | 293,323 | ||||||||||||
| Loans held for sale | 79 | 902 | 2,333 | ||||||||||||
| Available-for-sale securities, at fair value | 3,642 | 4,541 | 12,383 | ||||||||||||
| Federal Home Loan Bank stock, at cost | 2,444 | 2,444 | 2,444 | ||||||||||||
| Bank-owned life insurance, net | 6,791 | 6,729 | 6,529 | ||||||||||||
| Other real estate owned and repossessed assets | 3,113 | 2,625 | 1,904 | ||||||||||||
| Total deposits | 273,733 | 278,494 | 287,931 | ||||||||||||
| Borrowings | 21,988 | 24,849 | 20,000 | ||||||||||||
| Total stockholders’ equity | 27,674 | 26,902 | 25,268 | ||||||||||||
| Quarter Ended | |||||||||||||||
| 3/31/2011 | 12/31/2010 | 3/31/2010 | |||||||||||||
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Selected Consolidated Operating Data: |
(in thousands) | ||||||||||||||
| Total interest income | $ | 4,648 | $ | 4,690 | $ | 4,770 | |||||||||
| Total interest expense | 752 | 924 | 1,168 | ||||||||||||
| Net interest income | 3,896 | 3,766 | 3,602 | ||||||||||||
| Provision for loan losses | 825 | 1,500 | 1,425 | ||||||||||||
| Net interest income after provision for loan losses | 3,071 | 2,266 | 2,177 | ||||||||||||
| Service charges and fee income | 522 | 544 | 529 | ||||||||||||
| Fair value adjustment on mortgage servicing rights | 49 | 300 | - | ||||||||||||
| Gain (loss) on sale of securities | (34 | ) | - | 75 | |||||||||||
| Other than temporary impairment on securities | (39 | ) | - | - | |||||||||||
| Gain on sale of loans | 34 | 320 | 64 | ||||||||||||
| Other noninterest income | 147 | 309 | 516 | ||||||||||||
| Total noninterest income | 679 | 1,473 | 1,184 | ||||||||||||
| Total noninterest expense | 3,032 | 2,890 | 3,310 | ||||||||||||
| Income before provision (benefit) for income taxes | 718 | 849 | 50 | ||||||||||||
| Provision (benefit) for income taxes | 222 | 273 | (7 | ) | |||||||||||
| Net income | $ | 496 | $ | 576 | $ | 57 | |||||||||
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Selected Financial Ratios and Other Data: |
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| Performance ratios: | |||||||||||||||
| Return on assets | 0.60 | % | 0.69 | % | 0.07 | % | |||||||||
| Return on equity | 7.28 | % | 8.65 | % | 0.90 | % | |||||||||
| Net interest margin | 5.18 | % | 4.93 | % | 4.13 | % | |||||||||
| Noninterest income to operating revenue | 14.84 | % | 28.12 | % | 24.73 | % | |||||||||
| Noninterest expense to average total assets | 3.68 | % | 3.47 | % | 3.95 | % | |||||||||
| Average interest-earning assets to average interest-bearing liabilities | 101.16 | % | 100.71 | % | 114.06 | % | |||||||||
| Efficiency ratio | 66.27 | % | 55.17 | % | 69.18 | % | |||||||||
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Asset quality ratios: |
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| Nonperforming assets to total assets | 2.76 | % | 2.96 | % | 4.53 | % | |||||||||
| Nonperforming loans to gross loans | 1.99 | % | 2.44 | % | 4.50 | % | |||||||||
| Allowance for loan losses to nonperforming loans | 74.71 | % | 60.82 | % | 30.05 | % | |||||||||
| Allowance for loan losses to gross loans | 1.49 | % | 1.48 | % | 1.35 | % | |||||||||
| Net charge-offs to average loans outstanding | 1.14 | % | 1.31 | % | 1.04 | % | |||||||||
| Consolidated capital ratios: | |||||||||||||||
| Tier 1 leverage | 8.25 | % | 7.89 | % | 7.45 | % | |||||||||
| Tier 1 risk-based | 10.87 | % | 10.42 | % | 10.09 | % | |||||||||
| Total risk-based | 12.12 | % | 11.67 | % | 11.34 | % | |||||||||
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.
CONTACT:
Sound Financial Inc.
Media:
Laurie Stewart,
206-448-0884 x-306
or
Financial:
Matt Deines, 206-448-0884 x-305