8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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) November 3, 2011

SOUND FINANCIAL, INC.

(Exact name of Registrant as specified in its Charter)

United States	000-52889	26-0776123
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

2005 5th Avenue, Second Floor, Seattle, Washington	98121
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (206) 448-0884

Not Applicable

(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 November 3, 2011, Sound Financial, Inc. issued a press release announcing financial results for the quarter and nine months ending September 30, 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 November 3, 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.

		SOUND FINANCIAL, INC.
Date:	November 3, 2011	By:	/s/	Laura Lee Stewart
				Laura Lee Stewart
				President and Chief Executive Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated November 3, 2011

EX-99.1

Exhibit 99.1

Sound Financial Continues to Improve Year over Year Earnings

Sound Community Bank maintains Net Interest Margin of 5.25% year to date

SEATTLE--(BUSINESS WIRE)--November 3, 2011--Sound Financial Inc. (OTCBB: SNFL), holding company for Sound Community Bank, today reported net income for the nine months ended September 30, 2011 of $1.1 million, or $0.39 per diluted share, as compared to net income of $756,000, or $0.26 per diluted share, for the nine months ended September 30, 2010. For the quarter ended September 30, 2011 net income was $181,000 or $0.06 per diluted share, as compared to $454,000 and $0.16 per diluted share for the quarter ended June 30, 2011 and $421,000 or $0.14 per diluted share for the quarter ended September 30, 2010. Return on Average Assets was 0.45% for the nine months ended September 30, 2011 compared to 0.30% for the nine months ended September 30, 2010.

This is the seventh consecutive quarter of positive earnings for the Company.

Highlights as of and for the nine months ended September 30, 2011 include:

- Year to date Net Interest Margin improved 46 basis points to 5.25% from 4.79% for the nine months ended September 30, 2011

- Efficiency Ratio decreased to 63.87% compared to 69.54% for the nine months ended September 30, 2011

- Deposit Cost of Funds is 0.89% compared to 1.35% for the nine months ended September 30, 2011

- The Fair Value Adjustment on Mortgage Servicing Rights represented a decrease to non-interest income of $235,000 for the nine months ended September 30, 2011 compared to a decrease of $197,000 for the nine months ended September 30, 2010

- Provision for Loan losses increased from $3.15 million for the nine months ended September 30, 2010 to $3.35 million for the nine months ended September 30, 2011

- Non-Performing Loans to Gross Loans is 2.13% as of September 30, 2011 compared to 2.79% as of September 30, 2010

- Non-Performing Assets to Total Assets is 2.84% as of September 30, 2011 compared to 3.45% as of September 30, 2010

Laurie Stewart, President and CEO said, “We continue to experience positive earnings, but the trends in the economy are not all positive. While core earnings, including net interest margin, efficiency and operating expenses all have improved in 2011 compared to 2010, the mark to market on our mortgage servicing rights, holding costs and losses on sale of foreclosed assets along with provision for loan losses remain higher than anticipated at this point in the cycle.”

	As of
	9/30/2011				6/30/2011			9/30/2010
Selected Consolidated Financial Condition Data:	(In thousands)
Total assets	$	339,623			$	337,473		$	345,712
Total loans, net		298,939				294,214			304,792
Loans held for sale		1,129				392			1,836
Available-for-sale securities, at fair value		3,138				3,331			4,655
Federal Home Loan Bank stock, at cost		2,444				2,444			2,444
Bank-owned life insurance		6,918				6,857			6,663
Other real estate owned and repossessed assets		3,191				3,498			3,313
Total deposits		299,846				287,635			285,777
Borrowings		8,667				18,828			30,210
Total stockholders’ equity		28,177				27,977			26,113
	Quarter Ended
	9/30/2011				6/30/2011			9/30/2010
Selected Consolidated Operating Data:	(in thousands)
Total interest income	$	4,613			$	4,701		$	4,930
Total interest expense		681				683			1,043
Net interest income		3,932				4,018			3,887
Provision for loan losses		1,300				1,225			950
Net interest income after provision for loan losses		2,632				2,793			2,937
Service charges and fee income		516				476			559
Fair value adjustment on mortgage servicing rights		(491	)			208			(284	)
Other than temporary impairment on securities		(56	)			-			(47	)
Gain on sale of loans		126				102			342
Other noninterest income		171				109			142
Total noninterest income		266				895			712
Total noninterest expense		2,674				3,036			3,050
Income before provision for income taxes		224				652			599
Provision for income taxes		43				198			178
Net income	$	181			$	454		$	421
	Quarter Ended
	9/30/2011				6/30/2011			9/30/2010
Selected Financial Ratios and Other Data:	(in thousands)
Performance ratios:
Return on average assets		0.21		%		0.55	%		0.49		%
Return on average equity		2.53		%		6.46	%		6.55		%
Net interest margin		5.22		%		5.33	%		4.93		%
Noninterest income to operating revenue		6.34		%		18.23	%		15.49		%
Noninterest expense to average total assets		3.17		%		3.67	%		2.79		%
Average interest-earning assets to average interest-bearing liabilities		98.61		%		100.61	%		100.91		%
Efficiency ratio		63.70		%		61.80	%		66.31		%

	Quarter Ended
	9/30/2011			6/30/2011							9/30/2010
Selected Financial Ratios and Other Data:	(in thousands)
Asset Quality Ratios:
Nonperforming assets to total assets		2.84	%		2.65					%		3.45	%
Nonperforming loans to gross loans		2.13	%		1.82					%		2.79	%
Allowance for loan losses to nonperforming loans		62.10	%		80.12					%		45.56	%
Allowance for loan losses to gross loans		1.32	%		1.46					%		1.27	%
Net charge-offs to average loans outstanding		2.22	%		1.72					%		1.32	%
Bank level capital ratios:
Tier 1 leverage		8.18	%		8.16					%		7.44	%
Tier 1 risk-based		10.98	%		10.95					%		10.06	%
Total risk-based		12.23	%		12.13					%		11.31	%
			Nine months ended
			9/30/2011					9/30/2010
Selected Consolidated Operating Data:			(in thousands)
Total interest income			$ 13,963						$ 14,624
Total interest expense			2,116						3,363
Net interest income			11,847						11,261
Provision for loan losses			3,350						3,150
Net interest income after provision for loan losses			8,497						8,111
Fees and service charges			1,514						1,638
Gain on sale of loans			263						465
Gain (loss) on sale of securities			(33			)			64
Other than temporary impairment on securities			(96			)			(98					)
Fair value adjustment on mortgage servicing rights			(235			)			(197					)
Other non-interest income			427						289
Total non-interest income			1,840						2,453
Total non-interest expense			8,743						9,536
Income before provision for income taxes			1,594						1,028
Provision for income taxes			463						272
Net income			$ 1,131						$ 756
			Nine months ended
			9/30/2011					9/30/2010
Selected Financial Ratios and Other Data:			(in thousands)
Performance ratios:
Return on assets (ratio of net income to average total assets)			0.45				%		0.30						%
Return on equity (ratio of net income to average equity)			5.39				%		3.95						%
Net interest margin			5.25				%		4.79						%
Non-interest income to operating revenue			13.45				%		17.88						%
Non-interest expense to average total assets			2.63				%		2.80						%
Average interest-earning assets to average interest-bearing liabilities			100.10				%		100.97						%
Efficiency ratio			63.87				%		69.54						%

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