8-K

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) July 28, 2015

SOUND FINANCIAL BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-35633	45-5188530
(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))

Items to be Included in this Report

Item 2.02. Results of Operations and Financial Condition

On July 28, 2015, Sound Financial Bancorp, Inc. (the “Company”) issued a press release announcing second quarter 2015 financial results.  A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

On July 31, 2015, the Company announced that its Board of Directors declared a cash dividend on Sound Financial Bancorp, Inc. common stock of $0.06 per share, payable on August 26, 2015 to stockholders of record on the close of business on August 12, 2015. A copy of the press release is attached hereto as Exhibit 99.2 to this Current Report and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated July 28, 2015

99.2 Press Release dated July 31, 2015

2

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 BANCORP, INC.
Date:	August 3, 2015	By:	/s/ Laura Lee Stewart
			Laura Lee Stewart, President and CEO

3

EX-99.1

Exhibit 99.1

Sound Financial Bancorp, Inc. Reports 2nd Quarter Net Income of $1.2 million or $0.48 per share

Seattle, Wash., July 28, 2015 -- Sound Financial Bancorp, Inc. (Nasdaq: SFBC), the holding company (the "Company") for Sound Community Bank (the "Bank"), today reported net income of $1.2 million for the quarter ended June 30, 2015, or diluted earnings per share of $0.48, as compared to net income of $1.2 million, or diluted earnings per share of $0.46, for the quarter ended March 31, 2015 and $1.2 million, or diluted earnings per share of $0.47, for the quarter ended June 30, 2014.

“For the first time in the bank’s history we exceeded $500 million in total assets at quarter end,” said Laurie Stewart, President and CEO of both Sound Financial Bancorp, Inc. and Sound Community Bank, “We are also pleased with our year to date return on assets of 1.00% and our annualized loan losses of just 5 basis points.  The economies in the markets we serve continue to prosper and allow us to further develop relationships with both businesses and consumers.”

Highlights for the quarter include:

● Total assets increased 2.4% to $503.4 million at June 30, 2015, from $491.7 million at March 31, 2015 and increased 7.4% from $468.9 million at June 30, 2014;

● Net loans increased 2.7% to $430.0 million at June 30, 2015, from $418.7 million at March 31, 2015 and increased 7.6% from $399.7 million at June 30, 2014;

● Deposits increased 0.6% to $418.6 million at June 30, 2015, from $416.2 million at March 31, 2015 and increased 12.0% from $373.9 million at June 30, 2014;

● The gain on the sale of loans was $390,000 for the three months ended June 30, 2015 compared to $396,000 for the three months ended March 31, 2015.

● The mortgage servicing asset increased in value by $381,000, or 13.2%, to $3.3 million at June 30, 2015, from $3.0 million at March 31, 2015 and increased in value by $278,000, or 9.3%, from $3.0 million at June 30, 2014;

Capital ratios exceeded regulatory requirements for a well-capitalized financial institution at June 30, 2015.

Operating Results

Net interest income increased $42,000, or 0.9%, to $4.7 million during the quarter ended June 30, 2015, compared to $4.7 million during the quarter ended March 31, 2015 and increased $86,000, or 1.9%, from $4.6 million during the quarter ended June 30, 2014.  The change from the prior quarter was primarily a result higher loan balances and lower average outstanding borrowings.  The change from the comparable period a year ago was primarily a result of higher average loan balances and lower average outstanding borrowings partially offset by higher balances of interest-bearing deposits.

Interest expense on deposits was $661,000 for both the current and prior quarter and increased $109,000, or 19.7%, from $552,000 during the quarter ended June 30, 2014.  The increase from 2014 was primarily the result of amortization of the deposit premium from deposits acquired in the third quarter of 2014. The total cost of borrowings decreased $9,000, or 32.1%, to $19,000 during the quarter ended June 30, 2015, from $28,000 during the quarter ended March 31, 2015 and decreased $25,000, or 56.8%, from $44,000 for the quarter ended June 30, 2014.  This decrease is primarily due to lower average outstanding borrowings and a larger percentage of short-term borrowings compared to prior periods.

The net interest margin was 4.11% for the quarter ended June 30, 2015, compared to 4.06% for the quarter ended March 31, 2015 and 4.40% for the quarter ended June 30, 2014.  The decline from the year ago period is primarily a result of lower loan yields.

The provision for loan losses in the quarter ended June 30, 2015 was $200,000, compared to $100,000 for the quarter ended March 31, 2015 and $200,000 for the quarter ended June 30, 2014.  The increase from the prior quarter was primarily due to an increase to the loan portfolio during the current quarter.

Noninterest income increased $535,000, or 45.7%, to $1.7 million for the quarter ended June 30, 2015, compared to $1.2 million for the quarter ended March 31, 2015.  Noninterest income increased $586,000, or 52.3%, from $1.1 for the quarter ended June 30, 2014.  This increase was primarily the result of an appreciation in the market value of mortgage servicing rights for the linked quarter and an increase in the value of mortgage servicing rights and gain on sale of loans for the year ago period.

Noninterest expense increased $376,000, or 9.3%, to $4.4 million for the quarter ended June 30, 2015, compared to $4.0 million for the quarter ended March 31, 2015.  The increase was primarily a result of increased operations, regulatory and occupancy expenses during the current period.  Noninterest expense increased $625,000, or 16.6% for the quarter ended June 30, 2015, compared to $3.8 million for the quarter ended June 30, 2014, primarily from higher salaries and benefits, regulatory, occupancy and data processing expenses.

The efficiency ratio for the quarter ended June 30, 2015 was 68.21%, compared to 67.45% for the quarter ended March 31, 2015 and 63.60% for the quarter ended June 30, 2014.  The increase in the efficiency ratio compared to the prior quarter was primarily due to higher operations, regulatory and occupancy expense, partially offset by higher noninterest income.  The increase in the efficiency ratio compared to the year ago quarter was primarily due to higher salaries and benefits, operations, regulatory and occupancy expense, partially offset by higher net interest and noninterest income.

Balance Sheet Review, Capital Management and Credit Quality

The Company's total assets as of June 30, 2015 were $503.4 million, compared to $491.7 million at March 31, 2015 and $468.9 million as of June 30, 2014.  The increase from the prior quarter was primarily a result of higher gross loan balances, partially offset by lower investment balances cash balances.  This increase from a year ago was primarily a result of higher gross loan and cash balances which increased $30.7 million and $5.2 million, respectively, from June 30, 2014.

Investment securities available-for-sale totaled $7.9 million at June 30, 2015, compared to $8.7 million at March 31, 2015 and $14.1 million at June 30, 2014.  The quarter over quarter decrease was a result of normal principal pay downs. The year over year decrease was due to normal principal paydowns and the sale of $1.7 million of non-agency mortgage-backed securities in the first quarter of 2015.

Gross loans totaled $434.6 million at June 30, 2015, compared to $423.1 million at March 31, 2015 and $403.9 million at June 30, 2014.  At June 30, 2015, commercial and multifamily real estate loans accounted for 40.2% of the gross loan portfolio and residential real estate loans accounted for 30.2% of the portfolio.  Home equity, manufactured, and other consumer loans accounted for 14.5% of the portfolio.  Construction and land loans accounted for 10.2% of the portfolio and commercial and industrial loans accounted for the remaining 4.9% of the portfolio.

The weighted average yield on the loan portfolio was 5.01% for the quarter ended June 30, 2015, compared to 4.94% for the quarter ended March 31, 2015 and 5.17% for the quarter ended June 30, 2014.

Nonperforming assets ("NPAs"), which includes non-accrual loans, accruing loans 90 days and more delinquent, nonperforming troubled debt restructurings (“TDRs”), other real estate owned (“OREO”) and other repossessed assets decreased to $2.6 million, or 0.52% of total assets, at June 30, 2015 compared to $4.0 million, or 0.81% of total assets at March 31, 2015 and increased from $2.5 million, or 0.52% of total assets at June 30, 2014.

The following table summarizes our NPAs:

Nonperforming Loans:	At June 30, 2015					At March 31, 2015					At June 30, 2014
(in $000s, unaudited)	Balance		% of Total			Balance		% of Total			Balance		% of Total
One- to four- family	$	1,294		49.5	%	$	1,247		31.4	%	$	934		38.0	%
Home equity loans		503		19.2			445		11.2			401		16.3
Commercial and multifamily		249		9.5			1,621		40.8			764		31.0
Construction and land		41		1.6			82		2.0			-		-
Manufactured homes		54		2.1			80		2.0			39		1.6
Other consumer		91		3.5			2		0.1			4		0.2
Total nonperforming loans		2,232		85.4			3,477		87.5			2,142		87.1
OREO and Other Repossessed Assets:
One- to four- family		325		12.4			433		10.9			232		9.4
Manufactured homes		57		2.2			66		1.6			87		3.5
Total OREO and repossessed assets		382		14.6			499		12.5			319		12.9
Total nonperforming assets	$	2,614		100.0	%	$	3,976		100.0	%	$	2,461		100.0	%

The following table summarizes the allowance for loan losses:

	For the Quarter Ended:
Allowance for Loan Losses	June 30,			March  31,			June 30,
(in $000s, unaudited)	2015			2015			2014
Balance at beginning of period	$	4,436		$	4,387		$	4,176
Provision for loan losses during the period		200			100			200
Net charge-offs during the period		(64	)		(51	)		(185	)
Balance at end of period	$	4,572		$	4,436		$	4,191
Allowance for loan losses to total loans		1.05	%		1.05	%		1.04	%
Allowance for loan losses to total nonperforming loans		204.75	%		138.24	%		195.66	%

The allowance for loan losses to total loans remained at 1.05% for the quarter ended June 30, 2015, compared to the prior quarter and increased from 1.04% for the quarter ended June 30, 2014.  Net charge-offs totaled $64,000 for the quarter ended June 30, 2015, compared to net charge-offs of $51,000 for the quarter ended March 31, 2015 and $185,000 for the quarter ended June 30, 2014.

Deposits increased to $418.6 million at June 30, 2015, compared to $416.2 million at March 31, 2015 and $373.9 million at June 30, 2014.  FHLB borrowings increased to $26.3 million at June 30, 2015, compared to $18.4 million at March 31, 2015 and decreased from $39.9 million at June 30, 2014.  An increase in total loans during the quarter ended June 30, 2015 led to the increase in borrowings.

Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, and is headquartered in Seattle, Washington with full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles and Port Ludlow. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with an additional Loan Production Office in the Madison Park neighborhood of Seattle, Washington. For more information, please visit www.soundcb.com.

Forward Looking Statement Disclaimer

“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 may turn out to be wrong because of inaccurate assumptions we might make, because of the factors illustrated below or because of other important factors that we cannot foresee that could cause our actual results for 2015 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 described in the Company’s latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission – which are available on our website at www.soundcb.com and on the SEC’s website at www.sec.gov.

CONSOLIDATED INCOME STATEMENTS	Quarter Ended							Sequential  Quarter % Change			Year over Year % Change
(in $000s, unaudited)	June 30, 2015		March 31, 2015			June 30, 2014
Interest income	$	5,410	$	5,377		$	5,240		0.6	%		3.2	%
Interest expense		680		689			596		(1.3	)		14.1
Net interest income		4,730		4,688			4,644		0.9			1.9
Provision for loan losses		200		100			200		100.0			0.0
Net interest income after provision for loan losses		4,530		4,588			4,444		(1.3	)		1.9
Noninterest income:
Service charges and fee income		671		645			700		4.0			(4.1	)
Increase in cash surrender value of life insurance		84		84			86		0.0			(2.3	)
Mortgage servicing income		214		255			80		(16.1	)		167.5
Fair value adjustment on mortgage servicing rights		347		(178	)		144		(294.9	)		141.0
Loss on sale of securities		-		(31	)		-		(100.0	)		nm
Gain on sale of loans		390		396			110		(1.5	)		254.5
Total noninterest income		1,706		1,171			1,120		45.7			52.3
Noninterest expense:
Salaries and benefits		2,205		2,255			1,958		(2.2	)		12.6
Operations expense		1,053		903			1,009		16.6			4.4
Data processing		454		403			328		12.7			38.4
Net loss on OREO and repossessed assets		10		72			78		(86.1	)		(87.2	)
Other noninterest expense		678		391			402		73.4			38.4
Total noninterest expense		4,400		4,024			3,775		9.3			16.6
Income before provision for income taxes		1,836		1,735			1,789		5.8			2.6
Provision for income taxes		589		527			573		11.8			2.8
Net income	$	1,247	$	1,208		$	1,216		3.2	%		2.5	%

___

Nm = not meaningful

	Quarter Ended									Sequential Quarter % Change			Year over  Year % Change
	June 30, 2015			March 31, 2015			June 30, 2014
KEY FINANCIAL RATIOS (in $000s, unaudited)
Annualized return on average assets		1.01	%		0.98	%		1.09	%		3.1	%		(7.3	)%
Annualized return on average equity		9.56			9.31			10.22			2.7			(6.5	)
Annualized net interest margin		4.11			4.06			4.40			1.2			(6.6	)
Annualized efficiency ratio		68.21	%		67.45	%		63.60	%		1.1	%		7.2	%

PER COMMON SHARE DATA	Quarter Ended						Sequential  Quarter % Change			Year over Year % Change
(in 000s, except per share data, unaudited)	June 30, 2015		March 31, 2015		June 30, 2014
Basic earnings per share	$	0.50	$	0.48	$	0.48		4.2	%		4.2	%
Diluted earnings per share	$	0.48	$	0.46	$	0.47		4.3			2.1
Weighted average basic shares outstanding		2,511		2,525		2,510		(1.5	)		(0.9	)
Weighted average diluted shares outstanding		2,602		2,602		2,601		(1.4	)		(1.4	)
Common shares outstanding at period-end		2,466		2,526		2,516		(2.4	)		(2.0	)
Book value per share	$	21.02	$	20.48	$	19.15		2.6	%		9.8	%

CONSOLIDATED BALANCE SHEET										Sequential Quarter % Change			Year over Year % Change
(in $000's, unaudited)	June 30, 2015			March 31, 2015			June 30, 2014
ASSETS
Cash and cash equivalents	$	34,087		$	35,223		$	28,866			(3.2	)%		18.1	%
Securities available-for-sale, at fair value		7,901			8,717			14,082			(9.4	)		(43.9	)
Loans held-for-sale		3,061			1,426			1,921			114.7			59.3
Total loans, gross		434,597			423,100			403,938			2.7			7.6
Allowance for loan losses		(4,572	)		(4,436	)		(4,191	)		3.1			9.1
Loans, net		430,025			418,664			399,747			2.7			7.6
Accrued interest receivable		1,494			1,448			1,391			3.2			7.4
Bank-owned life insurance, net		11,576			11,492			11,235			0.7			3.0
OREO and other repossessed assets, net		382			499			319			(23.4	)		19.7
Mortgage servicing rights, at fair value		3,271			2,890			2,993			13.2			9.3
FHLB stock, at cost		1,645			2,200			2,270			(25.2	)		(27.5	)
Premises and equipment, net		5,739			5,604			2,006			2.4			186.1
Other assets		4,266			3,545			4,110			20.3			3.8
Total assets		503,447			491,708			468,940			2.4	%		7.4	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Interest-bearing deposits		367,172			368,431			328,984			(0.3	)%		11.6	%
Noninterest-bearing deposits		51,457			47,789			44,928			7.7			14.5
Total deposits		418,629			416,220			373,912			0.6			12.0
Accrued interest payable and other liabilities		6,730			5,296			6,942			27.1			(3.1	)
Borrowings		26,256			18,417			39,899			42.6			(34.2	)
Total liabilities		451,615			439,933			420,753			2.7	%		7.3	%
Shareholders' Equity:
Common stock		25			25			25			0.0	%		0.0	%
Paid-in capital		23,715			23,618			23,169			0.4			2.4
Unearned shares – ESOP		(1,140	)		(1,140	)		(1,369	)		0.0			(16.7	)
Retained earnings		29,046			29,107			26,239			(0.2	)		10.7
Accumulated other comprehensive gain		186			165			123			12.7			51.2
Total shareholders' equity		51,832			51,775			48,187			0.1			7.6
Total liabilities and shareholders' equity	$	503,447		$	491,708		$	468,940			2.4	%		7.4	%

CREDIT QUALITY DATA (in $000's, unaudited)	June 30, 2015			March 31, 2015			June 30, 2014			Sequential Quarter % Change			Year over year % Change
Nonaccrual loans	$	1,422		$	1,223		$	678			16.3	%		109.7	%
Loans 90+ days past due and still accruing		-			-			122			nm			(100.0	)
Nonperforming TDRs		811			1,987			1,342			(59.2	)		(39.6	)
Total nonperforming loans		2,233			3,210			2,142			(30.4	)		4.2
OREO and other repossessed assets		382			499			319			(29.5	)		19.7
Total nonperforming assets		2,615			3,709			2,461			(34.2	)		6.3
Performing TDRs on accrual		5,981			4,868			4,905			22.9			21.9
Net charge-offs during the quarter		64			51			185			25.5			(65.4	)
Provision for loan losses during the quarter		200			100			200			100.0			0.0
Allowance for loan losses		4,572			4,436			4,191			3.1			9.1
Allowance for loan losses to total loans		1.05	%		1.05	%		1.04	%		0.0			1.0
Allowance for loan losses to total nonperforming loans		204.75	%		138.24	%		195.66	%		48.1			4.6
Nonperforming loans to total loans		0.51	%		0.82	%		0.53	%		(37.8	)		(3.8	)
Nonperforming assets to total assets		0.52	%		0.81	%		0.52	%		(35.8	)%		0.0	%
OTHER PERIOD-END STATISTICS
(unaudited)
Sound Community Bank:
Loan to deposit ratio		102.72	%		100.59	%		106.91	%		2.1	%		(3.9	)%
Noninterest-bearing deposits / total deposits		12.29			11.48			12.02			7.1			2.2
Leverage ratio		10.21			9.87			10.37			3.4			(1.5	)
Common Equity Tier 1 risk-based capital ratio(1)		12.41			12.87			n/a			(3.5	)		nm
Tier 1 risk-based capital ratio		12.41			12.87			12.99			(3.5	)		(4.4	)
Total risk-based capital ratio		13.54	%		14.04	%		14.17	%		(3.5	)		(4.4	)
Total risk-weighted assets		404,861			376,311			355,284			7.6	%		13.9	%
Sound Financial Bancorp, Inc.:
Average total assets for the quarter		492,846			492,472			448,034			0.1	%		10.0	%
Average total equity for the quarter		52,151			51,875			47,575			0.5	%		9.6	%

(1) The Common Equity Tier 1 (CET1) ratio is a new regulatory capital ratio required beginning for the quarter ended March 31, 2015.  Under BASEL III, the regulatory capital requirements to be considered well capitalized are 5% for Leverage-based capital, 6.5% for CET1, 8% for Tier 1 risk-based capital and 10% for total risk-based capital.

Media:	Financial:
Laurie Stewart	Matt Deines
President/CEO	EVP/CFO
(206) 448-0884 x306	(206) 448-0884 x305

EX-99.2

Exhibit 99.2

Sound Financial Bancorp Announces

Quarterly Dividend of $0.06 per Share

Seattle, WA – July 31, 2015 – Sound Financial Bancorp, Inc. (NASDAQ: SFBC) announced today that its Board of Directors has declared a cash dividend on Sound Financial Bancorp common stock of $0.06 per share, payable on August 26, 2015 to stockholders of record as of the close of business on August 12, 2015.

About Sound Financial Bancorp, Inc.

Sound Financial Bancorp, 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 six full-service banking offices in King, Pierce, Snohomish, Jefferson and Clallam Counties, and is on the web at www.soundcb.com.

Forward-Looking Statements

Statements in this press release that are not historical facts may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated in such statements, including increased competitive pressures, changes in the interest rate environment, changes in general economic conditions and conditions within the securities markets, legislative and regulatory changes and other factors described from time to time in documents filed and furnished by Sound Financial Bancorp, Inc. with the Securities and Exchange Commission.

For additional information, contact:

Media:	Financial:
Laurie Stewart	Matt Deines
President/CEO	EVP/CFO
(206) 448-0884 x306	(206) 448-0884 x305