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)
|
☐ | 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 |
Item 9.01.
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits
|
|
Press Release dated January 28, 2016
|
||
Press Release dated January 29, 2016
|
SOUND FINANCIAL BANCORP, INC.
|
|||
Date:
|
February 4, 2016
|
By:
|
/s/ Laura Lee Stewart
|
Laura Lee Stewart, President and CEO
|
● | Net interest income was $19.7 million for the year, an increase of 3.8%, compared to $18.9 million for the year ended December 31, 2014. |
● | Gain on sale of loans was $1.3 million for the year ended December 31, 2015, an increase of 108.5%, compared to $624,000 for the year ended December 31, 2014. |
● | Provision for loan losses was $400,000 for the year, compared to $800,000 in for the year ended 2014. The ratio of charge-offs to average loans was 0.03% for 2015 compared to 0.14% in 2014. |
● | Net loans increased 6.8% to $454.8 million at December 31, 2015, compared to $426.0 as of December 31, 2014. |
● | Deposits increased 7.9% to $440.0 million at December 31, 2015, compared to $407.8 at December 31, 2014. |
● | Return on average assets was 0.94% for the year ended December 31, 2015, compared to 0.93% for the year ended December 31, 2014. |
● | Return on average equity was 8.85% for the year ended December 31, 2015, compared to 8.76% for the year ended December 31, 2014. |
● | Net interest income was $5.3 million for the quarter ended December 31, 2015, an increase of 8.8%, compared to $4.9 million for the quarter ended December 31, 2014. |
● | Net loans increased 5.5% to $454.8 million at December 31, 2015, compared to $431.1 as of September 30, 2015. |
● | Deposits increased 4.9% to $440.0 million at December 31, 2015, compared to $419.6 at September 30, 2015. |
● | Return on average assets was 0.90% for the quarter ended December 31, 2015, compared to 0.67% for the quarter ended December 31, 2014. |
Nonperforming Loans:
|
At Dec 31, 2015
|
At Dec 31, 2014
|
||||||||||||||
(in $thousands, unaudited)
|
Balance
|
% of
Total
|
Balance
|
% of Total
|
||||||||||||
One- to four- family
|
$
|
1,316
|
51.1
|
%
|
$
|
1,512
|
36.3
|
%
|
||||||||
Home equity loans
|
428
|
16.6
|
386
|
9.3
|
||||||||||||
Commercial and multifamily
|
-
|
0.0
|
1,639
|
39.3
|
||||||||||||
Construction and land
|
-
|
0.0
|
81
|
1.9
|
||||||||||||
Manufactured
|
62
|
2.4
|
195
|
4.7
|
||||||||||||
Other consumer
|
-
|
0.0
|
29
|
0.7
|
||||||||||||
Total nonperforming loans
|
1,806
|
70.1
|
3,842
|
92.2
|
||||||||||||
OREO and Other Repossessed Assets:
|
||||||||||||||||
One- to four- family
|
159
|
6.2
|
269
|
6.5
|
||||||||||||
Commercial and Multifamily
|
600
|
23.3
|
-
|
0.0
|
||||||||||||
Manufactured
|
-
|
-
|
54
|
1.3
|
||||||||||||
Total OREO and repossessed assets
|
769
|
29.9
|
323
|
7.8
|
||||||||||||
Total nonperforming assets
|
$
|
2,575
|
100.0
|
%
|
$
|
4,165
|
100.0
|
%
|
For the Year Ended:
|
||||||||
Allowance for Loan Losses
|
Dec 31,
|
Dec 31,
|
||||||
(in $thousands, unaudited)
|
2015
|
2014
|
||||||
Balance at beginning of period
|
$
|
4,387
|
$
|
4,177
|
||||
Provision for loan losses during the period
|
400
|
800
|
||||||
Net charge-offs during the period
|
(151
|
)
|
(590
|
)
|
||||
Balance at end of period
|
$
|
4,636
|
$
|
4,387
|
||||
Allowance for loan losses to total loans
|
1.01
|
%
|
1.02
|
%
|
||||
Allowance for loan losses to total nonperforming loans
|
256.66
|
%
|
114.19
|
%
|
CONSOLIDATED INCOME STATEMENTS
|
Quarter Ended
|
Sequential
|
Year over
|
|||||||||||||||||
(in $thousands, unaudited)
|
Dec 31,
2015
|
Sep 30,
2015
|
Dec 31,
2014
|
Quarter
% Change |
Year
% Change |
|||||||||||||||
Interest income
|
$
|
6,046
|
$
|
5,576
|
$
|
5,518
|
8.4
|
%
|
9.6
|
%
|
||||||||||
Interest expense
|
698
|
685
|
604
|
1.9
|
15.6
|
|||||||||||||||
Net interest income
|
5,348
|
4,891
|
4,914
|
9.3
|
8.8
|
|||||||||||||||
Provision for loan losses
|
-
|
100
|
200
|
nm
|
nm
|
|||||||||||||||
Net interest income after provision for loan losses
|
5,348
|
4,791
|
4,714
|
11.6
|
13.4
|
|||||||||||||||
Noninterest income:
|
||||||||||||||||||||
Service charges and fee income
|
647
|
641
|
562
|
0.9
|
15.1
|
|||||||||||||||
Increase in cash surrender value of life insurance
|
85
|
85
|
87
|
0.0
|
(2.3
|
)
|
||||||||||||||
Mortgage servicing income
|
169
|
202
|
242
|
(16.3
|
)
|
(30.2
|
)
|
|||||||||||||
Fair value adjustment on mortgage servicing rights
|
63
|
(22
|
)
|
(109
|
)
|
(386.4
|
)
|
(157.8
|
)
|
|||||||||||
Gain on sale of loans
|
155
|
360
|
254
|
(56.9
|
)
|
(39.0
|
)
|
|||||||||||||
Total noninterest income
|
1,119
|
1,266
|
1,036
|
(11.6
|
)
|
8.0
|
||||||||||||||
Noninterest expense:
|
||||||||||||||||||||
Salaries and benefits
|
2,511
|
2,251
|
2,255
|
11.6
|
11.4
|
|||||||||||||||
Operations expense
|
974
|
1,064
|
989
|
(8.5
|
)
|
(1.5
|
)
|
|||||||||||||
Data processing
|
483
|
378
|
492
|
27.8
|
(1.8
|
)
|
||||||||||||||
Net (gain) loss on OREO and repossessed assets
|
133
|
96
|
59
|
38.5
|
125.4
|
|||||||||||||||
Other noninterest expense
|
577
|
593
|
431
|
(2.7
|
)
|
33.9
|
||||||||||||||
Total noninterest expense
|
4,678
|
4,382
|
4,226
|
6.8
|
10.7
|
|||||||||||||||
Income before income taxes
|
1,789
|
1,675
|
1,524
|
6.8
|
17.4
|
|||||||||||||||
Income tax expense
|
613
|
560
|
722
|
9.5
|
(15.1
|
)
|
||||||||||||||
Net income
|
$
|
1,176
|
$
|
1,115
|
$
|
802
|
5.5
|
%
|
46.6
|
%
|
KEY FINANCIAL RATIOS
|
Quarter Ended
|
Sequential
|
Year over
|
|||||||||||||||||
(in $thousands, unaudited)
|
Dec 31,
2015
|
Sep 30,
2015
|
Dec 31,
2014
|
Quarter
% Change |
Year
% Change |
|||||||||||||||
Return on average assets
|
0.90
|
%
|
0.89
|
%
|
0.67
|
%
|
1.1
|
%
|
34.3
|
%
|
||||||||||
Return on average equity
|
8.75
|
8.58
|
6.38
|
2.0
|
37.1
|
|||||||||||||||
Net interest margin
|
4.37
|
4.12
|
4.41
|
6.1
|
(0.9
|
)
|
||||||||||||||
Efficiency ratio
|
69.77
|
%
|
69.32
|
%
|
69.75
|
%
|
0.6
|
%
|
0.0
|
%
|
PER COMMON SHARE DATA
|
Quarter Ended
|
Sequential
|
Year over
|
|||||||||||||||||
(in $thousands, except per share data, unaudited)
|
Dec 31,
2015
|
Sep 30,
2015
|
Dec 31,
2014
|
Quarter
% Change |
Year
% Change |
|||||||||||||||
Basic earnings per share
|
$
|
0.48
|
$
|
0.45
|
$
|
0.32
|
6.7
|
%
|
50.0
|
%
|
||||||||||
Diluted earnings per share
|
$
|
0.46
|
$
|
0.44
|
$
|
0.31
|
4.5
|
48.4
|
||||||||||||
Weighted average basic shares outstanding
|
2,467
|
2,465
|
2,520
|
0.1
|
(2.1
|
)
|
||||||||||||||
Weighted average diluted shares outstanding
|
2,561
|
2,552
|
2,601
|
0.4
|
(1.5
|
)
|
||||||||||||||
Common shares outstanding at period-end
|
2,469
|
2,466
|
2,525
|
0.1
|
(2.2
|
)
|
||||||||||||||
Book value per share
|
$
|
22.08
|
$
|
21.45
|
$
|
20.06
|
2.9
|
%
|
10.1
|
%
|
CONSOLIDATED INCOME STATEMENT
|
Year Ended
|
Year over
|
||||||||||
(in $000s, unaudited)
|
Dec 31,
2015
|
Dec 31,
2014
|
Year
% Change |
|||||||||
Interest income
|
$
|
22,409
|
$
|
21,356
|
4.9
|
%
|
||||||
Interest expense
|
2,752
|
2,423
|
13.6
|
|||||||||
Net interest income
|
19,657
|
18,933
|
3.8
|
|||||||||
Provision for loan losses
|
400
|
800
|
(50.0
|
)
|
||||||||
Net interest income after provision for loan losses
|
19,257
|
18,133
|
6.2
|
|||||||||
Noninterest income:
|
||||||||||||
Service charges and fee income
|
2,605
|
2,570
|
1.3
|
|||||||||
Increase in cash surrender value of life insurance
|
337
|
341
|
(0.9
|
)
|
||||||||
Mortgage servicing income
|
840
|
509
|
65.0
|
|||||||||
Fair value adjustment on mortgage servicing rights
|
210
|
328
|
(36.0
|
)
|
||||||||
Loss on sale of securities
|
(31
|
)
|
-
|
nm
|
||||||||
Gain on sale of loans
|
1,301
|
624
|
108.5
|
|||||||||
Total noninterest income
|
5,262
|
4,372
|
20.4
|
|||||||||
Noninterest expense:
|
||||||||||||
Salaries and benefits
|
9,222
|
8,278
|
11.4
|
|||||||||
Operations expense
|
3,995
|
4,045
|
(1.2
|
)
|
||||||||
Data processing
|
1,717
|
1,770
|
(3.0
|
)
|
||||||||
Net loss on OREO and repossessed assets
|
311
|
208
|
49.5
|
|||||||||
Other noninterest expense
|
2,239
|
1,626
|
37.7
|
|||||||||
Total noninterest expense
|
17,484
|
15,927
|
9.8
|
|||||||||
Income before income taxes
|
7,035
|
6,578
|
6.9
|
|||||||||
Income tax expense
|
2,289
|
2,338
|
(2.1
|
)
|
||||||||
Net income
|
$
|
4,746
|
$
|
4,240
|
11.9
|
%
|
KEY FINANCIAL RATIOS
|
Year Ended
|
|||||||||||
(in $000s, unaudited)
|
Dec 31,
2015
|
Dec 31,
2014
|
% Change
|
|||||||||
Return on average assets
|
0.94
|
%
|
0.93
|
%
|
1.4
|
%
|
||||||
Return on average equity
|
8.85
|
8.76
|
1.0
|
|||||||||
Net interest margin
|
4.16
|
4.49
|
(7.3
|
)
|
||||||||
Efficiency ratio
|
68.39
|
%
|
66.97
|
%
|
2.1
|
%
|
PER COMMON SHARE DATA
|
Year Ended
|
|||||||||||
(in $thousands, except per share data, unaudited)
|
Dec 31,
2015
|
Dec 31,
2014
|
% Change
|
|||||||||
Basic earnings per share
|
$
|
1.91
|
$
|
1.69
|
13.3
|
%
|
||||||
Diluted earnings per share
|
$
|
1.86
|
$
|
1.63
|
14.4
|
|||||||
Weighted average basic shares outstanding
|
2,482
|
2,513
|
(1.2
|
)
|
||||||||
Weighted average diluted shares outstanding
|
2,545
|
2,602
|
(2.2
|
)
|
||||||||
Common shares outstanding at period-end
|
2,469
|
2,525
|
(2.2
|
)
|
||||||||
Book value per share
|
$
|
22.08
|
$
|
20.06
|
10.0
|
%
|
CONSOLIDATED BALANCE SHEET
|
Year over
|
|||||||||||
(in $000's, unaudited)
|
Dec 31,
2015
|
Dec 31,
2014
|
Year
% Change |
|||||||||
ASSETS
|
||||||||||||
Cash and cash equivalents
|
$
|
48,264
|
$
|
29,289
|
64.8
|
%
|
||||||
Securities available-for-sale, at fair value
|
6,696
|
11,524
|
(41.9
|
)
|
||||||||
Loans held-for-sale
|
2,091
|
810
|
158.1
|
|||||||||
Loans:
|
||||||||||||
One- to four- family residential
|
138,164
|
132,764
|
4.1
|
|||||||||
Home equity
|
31,573
|
34,675
|
(8.9
|
)
|
||||||||
Commercial and multifamily
|
176,737
|
167,798
|
5.3
|
|||||||||
Construction and land
|
57,043
|
46,279
|
23.3
|
|||||||||
Manufactured homes
|
13,798
|
12,444
|
10.9
|
|||||||||
Other consumer
|
22,859
|
16,875
|
35.5
|
|||||||||
Commercial business
|
19,295
|
19,525
|
(1.2
|
)
|
||||||||
Total loans, gross
|
459,469
|
430,360
|
6.8
|
|||||||||
Allowance for loan losses
|
(4,636
|
)
|
(4,387
|
)
|
5.7
|
|||||||
Loans, net
|
454,833
|
425,973
|
6.8
|
|||||||||
Accrued interest receivable
|
1,608
|
1,497
|
7.4
|
|||||||||
Bank-owned life insurance
|
11,746
|
11,408
|
3.0
|
|||||||||
OREO and other repossessed assets, net
|
769
|
323
|
138.1
|
|||||||||
Mortgage servicing rights, at fair value
|
3,249
|
3,028
|
7.3
|
|||||||||
FHLB stock, at cost
|
2,212
|
2,224
|
(0.5
|
)
|
||||||||
Premises and equipment, net
|
5,335
|
5,555
|
(4.0
|
)
|
||||||||
Other assets
|
3,957
|
3,556
|
11.3
|
|||||||||
Total assets
|
$
|
540,760
|
$
|
495,187
|
9.2
|
%
|
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||
Liabilities:
|
||||||||||||
Demand deposit, noninterest-bearing
|
$
|
51,370
|
$
|
44,353
|
15.8
|
%
|
||||||
Demand deposit, interest-bearing
|
127,392
|
103,048
|
23.6
|
|||||||||
Savings and money market
|
92,878
|
88,469
|
5.0
|
|||||||||
Time deposits
|
168,384
|
171,939
|
(2.1
|
)
|
||||||||
Total deposits
|
440,024
|
407,809
|
7.9
|
|||||||||
Accrued interest payable and other liabilities
|
5,781
|
6,156
|
(6.1
|
)
|
||||||||
Borrowings
|
40,435
|
30,578
|
32.2
|
|||||||||
Total liabilities
|
486,240
|
444,543
|
9.4
|
|||||||||
Shareholders' Equity:
|
||||||||||||
Common stock
|
25
|
25
|
0.0
|
|||||||||
Paid-in capital
|
24,304
|
23,552
|
3.2
|
|||||||||
Unearned shared – ESOP
|
(912
|
)
|
(1,140
|
)
|
(20.0
|
)
|
||||||
Retained earnings
|
30,939
|
28,024
|
10.4
|
|||||||||
Accumulated other comprehensive loss
|
164
|
183
|
(10.4
|
)
|
||||||||
Total shareholders' equity
|
54,520
|
50,644
|
7.7
|
|||||||||
Total liabilities and shareholders' equity
|
$
|
540,760
|
$
|
495,187
|
9.2
|
%
|
CREDIT QUALITY DATA
(in $000's, unaudited)
|
Dec 31,
2015
|
Dec 31,
2014
|
Year over
year
% Change
|
|||||||||
Nonaccrual loans
|
$
|
1,203
|
$
|
1,464
|
(17.8
|
)%
|
||||||
Nonperforming TDRs and loans over 90 days past due and on accrual
|
603
|
2,378
|
(74.6
|
)
|
||||||||
Total nonperforming loans
|
1,806
|
3,842
|
(53.0
|
)
|
||||||||
OREO and other repossessed assets
|
769
|
323
|
138.1
|
|||||||||
Total nonperforming assets
|
2,575
|
4,165
|
(38.2
|
)
|
||||||||
Performing TDRs on accrual
|
5,073
|
5,117
|
(0.9
|
)
|
||||||||
Net charge-offs during the year
|
151
|
590
|
(74.4
|
)
|
||||||||
Provision for loan losses during the year
|
400
|
800
|
(50.0
|
)
|
||||||||
Allowance for loan losses
|
4,636
|
4,387
|
5.7
|
|||||||||
Allowance for loan losses to total loans
|
1.01
|
%
|
1.02
|
%
|
(1.0
|
)
|
||||||
Allowance for loan losses to total nonperforming loans
|
256.66
|
%
|
114.19
|
%
|
124.8
|
|||||||
Nonperforming loans to total loans
|
0.40
|
%
|
0.89
|
%
|
(55.1
|
)
|
||||||
Nonperforming assets to total assets
|
0.48
|
%
|
0.84
|
%
|
(42.9
|
)
|
||||||
OTHER PERIOD-END STATISTICS
|
||||||||||||
(unaudited)
|
||||||||||||
Sound Community Bank:
|
||||||||||||
Loan to deposit ratio
|
103.37
|
%
|
104.93
|
%
|
(1.5
|
)%
|
||||||
Noninterest-bearing deposits / total deposits
|
11.78
|
10.88
|
8.3
|
|||||||||
Leverage ratio
|
10.19
|
10.19
|
0.0
|
|||||||||
Tier 1 risk-based capital ratio
|
13.19
|
12.44
|
6.0
|
|||||||||
Total risk-based capital ratio
|
14.34
|
13.57
|
5.7
|
|||||||||
Total risk-weighted assets
|
403,334
|
388,498
|
3.8
|
|||||||||
Average total assets for the year
|
502,189
|
457,748
|
9.7
|
%
|
Media:
|
Financial:
|
Laurie Stewart
|
Matt Deines
|
President/CEO
|
EVP/CFO
|
(206) 448-0884 x306
|
(206) 448-0884 x305
|
Media:
|
Financial:
|
Laurie Stewart
|
Matt Deines
|
President/CEO
|
EVP/CFO
|
(206) 448-0884 x306
|
(206) 448-0884 x305
|