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) August
2, 2012
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 |
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 August 2, 2012, Sound Financial, Inc. issued a press release announcing financial results for the quarter ending June 30, 2012. 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 August 2, 2012.
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: |
August 2, 2012 |
By: |
/s/ |
Laura Lee Stewart |
|
Laura Lee Stewart |
|||
|
President and Chief Executive Officer |
EXHIBIT INDEX
Exhibit Number |
Description |
|
99.1 |
Press Release, dated August 2, 2012 |
Exhibit 99.1
Sound Financial Earns $593,000 in the Second Quarter
Company posts earnings per share of $0.20 for the quarter
SEATTLE--(BUSINESS WIRE)--August 2, 2012--Sound Financial, Inc. (the “Company”) (OTCBB:SNFL), holding company for Sound Community Bank(the “Bank”), today reported net income for the quarter ended June 30, 2012 of $593,000, or $0.20 per diluted share, as compared to net income of $454,000, or $0.16 per diluted share, for the quarter ended June 30, 2011. Return on Average Assets was 0.68% for the quarter ended June 30, 2012 compared to 0.55% for the quarter ended June 30, 2011. Total assets increased to $355.1 million as of June 30, 2012 compared to $348.7 million as of March 31, 2012.
This is the tenth consecutive quarter of positive earnings for the Company.
Highlights as of and for the quarter ended June 30, 2012 include:
Laurie Stewart, President and CEO, said “The Bank continues to maintain a strong Net Interest Margin in spite of the continuing low rate environment. As a result of historically low rates, mortgage loan originations for the quarter exceeded $20 million which led to over $300,000 in gain on sale of loans to Fannie Mae.” Stewart also commented on the Bank’s reduction in losses and expenses related to other real estate owned, stating “The decrease in expenses related to foreclosed properties indicates that housing prices appear to be stabilizing in our markets.”
As of | ||||||||||||||||||
6/30/2012 | 3/31/2012 | 6/30/2011 | ||||||||||||||||
Selected Consolidated Financial Condition Data: |
||||||||||||||||||
Total assets | $ | 355,072 | $ | 348,697 | $ | 337,473 | ||||||||||||
Total loans, net | 301,945 | 296,393 | 294,214 | |||||||||||||||
Loans held for sale | 1,053 | 1,139 | 392 | |||||||||||||||
Available-for-sale securities, at fair value | 9,033 | 3,035 | 3,331 | |||||||||||||||
Federal Home Loan Bank stock, at cost | 2,444 | 2,444 | 2,444 | |||||||||||||||
Bank-owned life insurance | 7,099 | 7,047 | 6,857 | |||||||||||||||
Other real estate owned and repossessed assets | 2,839 | 2,065 | 3,498 | |||||||||||||||
Total deposits | 313,729 | 307,776 | 287,635 | |||||||||||||||
Borrowings | 8,185 | 8,346 | 18,828 | |||||||||||||||
Total stockholders’ equity | 30,042 | 29,466 | 27,977 | |||||||||||||||
Quarter Ended | ||||||||||||||||||
6/30/2012 | 3/31/2012 | 6/30/2011 | ||||||||||||||||
Selected Consolidated Operating Data: |
||||||||||||||||||
Total interest income | $ | 4,598 | $ | 4,563 | $ | 4,701 | ||||||||||||
Total interest expense | 588 | 601 | 683 | |||||||||||||||
Net interest income | 4,010 | 3,962 | 4,018 | |||||||||||||||
Provision for loan losses | 1,100 | 1,500 | 1,225 | |||||||||||||||
Net interest income after provision for loan losses | 2,910 | 2,462 | 2,793 | |||||||||||||||
Service charges and fee income | 513 | 550 | 476 | |||||||||||||||
Fair value adjustment on mortgage servicing rights | (76 | ) | 384 | 208 | ||||||||||||||
Other than temporary impairment on securities | (32 | ) | (91 | ) | - | |||||||||||||
Gain on sale of loans | 308 | 251 | 102 | |||||||||||||||
Other noninterest income | 73 | 243 | 109 | |||||||||||||||
Total noninterest income | 786 | 1,337 | 895 | |||||||||||||||
Total noninterest expense | 2,828 | 3,008 | 3,036 | |||||||||||||||
Income before provision for income taxes | 868 | 791 | 652 | |||||||||||||||
Provision for income taxes | 275 | 245 | 198 | |||||||||||||||
Net income | $ | 593 | $ | 546 | $ | 454 | ||||||||||||
Quarter Ended | ||||||||||||||||||
6/30/2012 | 3/31/2012 | 6/30/2011 | ||||||||||||||||
Selected Financial Ratios and Other Data: |
||||||||||||||||||
Performance ratios(1): | ||||||||||||||||||
Return on average assets | 0.68 | % | 0.64 | % | 0.55 | % | ||||||||||||
Return on average equity | 7.90 | % | 7.42 | % | 6.46 | % | ||||||||||||
Net interest margin(2) | 5.24 | % | 5.23 | % | 5.33 | % | ||||||||||||
Non-interest income to operating revenue(3) | 16.39 | % | 25.23 | % | 18.23 | % | ||||||||||||
Noninterest expense to average total assets | 3.23 | % | 3.52 | % | 3.67 | % | ||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 107.03 | % | 108.51 | % | 110.14 | % | ||||||||||||
Efficiency ratio(4) | 58.51 | % | 47.91 | % | 50.70 | % | ||||||||||||
(1) Performance ratios for the three months ended June 30, 2012 and 2011 and March 31, 2012 are annualized, as appropriate. |
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(2) Net interest income divided by average interest earning assets. |
||||||||||||||||||
(3) Noninterest income divided by the sum of noninterest income and net interest income. |
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(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 | ||||||||||||||||||
6/30/2012 | 3/31/2012 | 6/30/2011 | ||||||||||||||||
Asset quality ratios: | ||||||||||||||||||
Nonperforming assets to total assets | 2.70 | % | 2.81 | % | 2.65 | % | ||||||||||||
Nonperforming loans to gross loans | 2.20 | % | 2.57 | % | 1.82 | % | ||||||||||||
Allowance for loan losses to nonperforming loans | 65.86 | % | 56.28 | % | 80.14 | % | ||||||||||||
Allowance for loan losses to gross loans | 1.45 | % | 1.45 | % | 1.46 | % | ||||||||||||
Net charge-offs to average loans outstanding | 1.35 | % | 2.14 | % | 1.72 | % | ||||||||||||
Six Months Ended | ||||||||||||||||||
6/30/2012 | 6/30/2011 | |||||||||||||||||
Selected Consolidated Operating Data: |
||||||||||||||||||
Total interest income | $9,161 | $9,350 | ||||||||||||||||
Total interest expense | 1,189 | 1,435 | ||||||||||||||||
Net interest income | 7,972 | 7,915 | ||||||||||||||||
Provision for loan losses | 2,600 | 2,050 | ||||||||||||||||
Net interest income after provision for loan losses | 5,372 | 5,865 | ||||||||||||||||
Fees and service charges | 1,064 | 999 | ||||||||||||||||
Gain on sale of loans | 559 | 137 | ||||||||||||||||
Loss on sale of securities | - | (34 | ) | |||||||||||||||
Other than temporary impairment on securities | (124 | ) | (39 | ) | ||||||||||||||
Fair value adjustment on mortgage servicing rights | 308 | 257 | ||||||||||||||||
Other non-interest income | 317 | 255 | ||||||||||||||||
Total non-interest income | 2,124 | 1,575 | ||||||||||||||||
Total non-interest expense | 5,837 | 6,069 | ||||||||||||||||
Income before provision for income taxes | 1,659 | 1,371 | ||||||||||||||||
Provision for income taxes | 520 | 421 | ||||||||||||||||
Net income | $1,139 | $950 |
Six Months Ended | |||||||
6/30/2012 | 6/30/2011 | ||||||
Selected Financial Ratios and Other Data: |
|||||||
Performance ratios(1): | |||||||
Return on average assets | 0.66 | % | 0.58 | % | |||
Return on average equity | 7.67 | % | 6.86 | % | |||
Net interest margin(2) | 5.18 | % | 5.26 | % | |||
Non-interest income to operating revenue(3) | 21.04 | % | 16.60 | % | |||
Non-interest expense to average total assets | 3.38 | % | 3.68 | % | |||
Average interest-earning assets to average interest-bearing liabilities | 107.78 | % | 110.56 | % | |||
Efficiency ratio(4) | 52.94 | % | 56.74 | % | |||
(1) Performance ratios for the six months ended June 30, 2012 and 2011 are annualized, as appropriate. |
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(2) Net interest income divided by average interest earning assets. |
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(3) Noninterest income divided by the sum of noninterest income and net interest income. |
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(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 June 30, 2012 |
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|
Actual |
Minimum Capital
Requirements |
Minimum Required to
Be Well-Capitalized Under Prompt Corrective Action Provisions |
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Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
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(Dollars in thousands) | |||||||||||||||||
Core capital (to total adjusted assets) | $ | 29,329 | 8.28 | % | $14,168 | 4.0 | % | $ | 17,710 | 5.0 | % | ||||||
Core capital (to risk-weighted assets) | 29,329 | 10.81 | % | 10,857 | 4.0 | % | 16,286 | 6.0 | % | ||||||||
Risked-based capital (to risk-weighted assets) | 32,734 | 12.06 | % | 21,715 | 8.0 | % | 27,143 | 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.
CONTACT:
Sound Financial, Inc.
Media:
Laurie Stewart,
206-448-0884 x306
or
Financial:
Matt Deines,
206-448-0884 x305