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))
|
●
|
|
Diluted earnings per share increased to $0.46, or 48.4%, for the current quarter from the prior quarter and 21.1% from the same period last year;
|
●
|
|
One- to four- family first mortgage production increased 4.9% to $27.5 million for the current quarter, from the prior quarter of $26.2 million and increased from $13.8 million, or 99.0%, from the same period last year;
|
●
|
|
Provision for loan losses decreased to $100,000 for the current quarter, a decrease of 50.0% compared to both the prior quarter and same period last year;
|
●
|
|
Net loans decreased 1.7% to $418.7 million at March 31, 2015, from December 31, 2014 and increased 7.2% from March 31, 2014;
|
●
|
|
Deposits increased 2.1% to $416.2 million at March 31, 2015, from December 31, 2014 and increased 14.6% from March 31, 2014;
|
●
|
|
Net charge-offs totaled $51,000 for the quarter ended March 31, 2015, compared to $43,000 for the quarter ended December 31, 2014 and $201,000 for the quarter ended March 31, 2014.
|
Nonperforming Loans:
|
At Mar 31, 2015
|
At Dec 31, 2014
|
At Mar 31, 2014
|
|||||||||||||||||||||
(in $000s, unaudited)
|
Balance
|
% of Total
|
Balance
|
% of Total
|
Balance
|
% of Total
|
||||||||||||||||||
One- to four- family
|
$
|
1,247
|
31.4
|
%
|
$
|
1,512
|
36.3
|
%
|
$
|
709
|
32.0
|
%
|
||||||||||||
Home equity loans
|
445
|
11.2
|
386
|
9.3
|
298
|
13.5
|
||||||||||||||||||
Commercial and multifamily
|
1,621
|
40.8
|
1,639
|
39.3
|
780
|
35.2
|
||||||||||||||||||
Construction and land
|
82
|
2.0
|
81
|
1.9
|
-
|
-
|
||||||||||||||||||
Manufactured
|
80
|
2.0
|
195
|
4.7
|
74
|
3.3
|
||||||||||||||||||
Other consumer
|
2
|
0.1
|
29
|
0.7
|
-
|
-
|
||||||||||||||||||
Total nonperforming loans
|
3,477
|
87.5
|
3,842
|
92.2
|
1,861
|
84.0
|
||||||||||||||||||
OREO and Other Repossessed Assets:
|
||||||||||||||||||||||||
One- to four- family
|
433
|
10.9
|
269
|
6.5
|
194
|
8.8
|
||||||||||||||||||
Manufactured
|
66
|
1.6
|
54
|
1.3
|
159
|
7.2
|
||||||||||||||||||
Total OREO and repossessed assets
|
499
|
12.5
|
323
|
7.8
|
353
|
16.0
|
||||||||||||||||||
Total nonperforming assets
|
$
|
3,976
|
100.0
|
% |
$
|
4,165
|
100.0
|
% |
$
|
2,214
|
100.0
|
% |
|
For the Quarter Ended:
|
|||||||||||
Allowance for Loan Losses
|
Mar 31,
|
Dec 31,
|
Mar 31,
|
|||||||||
(in $000s, unaudited)
|
2015
|
2014
|
2014
|
|||||||||
Balance at beginning of period
|
$
|
4,387
|
$
|
4,230
|
$
|
4,177
|
||||||
Provision for loan losses during the period
|
100
|
200
|
200
|
|||||||||
Net charge-offs during the period
|
(51
|
)
|
(43
|
)
|
(201
|
)
|
||||||
Balance at end of period
|
$
|
4,436
|
$
|
4,387
|
$
|
4,176
|
||||||
|
||||||||||||
Allowance for loan losses to total loans
|
1.05
|
%
|
1.02
|
%
|
1.06
|
%
|
||||||
Allowance for loan losses to total nonperforming loans
|
127.58
|
%
|
114.19
|
%
|
224.40
|
%
|
CONSOLIDATED INCOME STATEMENTS
|
Quarter Ended
|
Sequential Quarter
|
Year over Year
|
|||||||||||||||||
(in $000s, unaudited)
|
Mar 31, 2015
|
Dec 31, 2014
|
Mar 31, 2014
|
% Change
|
% Change
|
|||||||||||||||
Interest income
|
$
|
5,377
|
$
|
5,518
|
$
|
5,202
|
(2.6
|
)%
|
3.4
|
%
|
||||||||||
Interest expense
|
689
|
604
|
610
|
14.1
|
13.0
|
|||||||||||||||
Net interest income
|
4,688
|
4,914
|
4,592
|
(4.6
|
)
|
2.1
|
||||||||||||||
Provision for loan losses
|
100
|
200
|
200
|
(50.0
|
)
|
(50.0
|
)
|
|||||||||||||
Net interest income after provision for loan losses
|
4,588
|
4,714
|
4,392
|
(2.7
|
)
|
4.5
|
||||||||||||||
Noninterest income:
|
||||||||||||||||||||
Service charges and fee income
|
645
|
562
|
536
|
14.8
|
20.3
|
|||||||||||||||
Increase in cash surrender value of life insurance
|
84
|
87
|
80
|
(3.4
|
)
|
5.0
|
||||||||||||||
Mortgage servicing income
|
255
|
242
|
(47
|
)
|
5.4
|
(642.6
|
)
|
|||||||||||||
Fair value adjustment on mortgage servicing rights
|
(178
|
)
|
(109
|
)
|
140
|
63.3
|
nm
|
|||||||||||||
Loss on sale of securities
|
(31
|
)
|
-
|
-
|
nm
|
nm
|
||||||||||||||
Gain on sale of loans
|
396
|
254
|
76
|
55.9
|
421.1
|
|||||||||||||||
Total noninterest income
|
1,171
|
1,036
|
785
|
13.0
|
49.2
|
|||||||||||||||
Noninterest expense:
|
||||||||||||||||||||
Salaries and benefits
|
2,255
|
2,255
|
2,067
|
0.0
|
9.1
|
|||||||||||||||
Operations expense
|
903
|
989
|
892
|
(8.7
|
)
|
1.2
|
||||||||||||||
Data processing
|
403
|
492
|
344
|
(18.1
|
)
|
17.2
|
||||||||||||||
Net loss on OREO and repossessed assets
|
72
|
59
|
83
|
22.0
|
(13.3
|
)
|
||||||||||||||
Other noninterest expense
|
391
|
431
|
346
|
(9.3
|
)
|
13.0
|
||||||||||||||
Total noninterest expense
|
4,024
|
4,226
|
3,732
|
(4.8
|
)
|
7.8
|
||||||||||||||
Income before income taxes
|
1,735
|
1,524
|
1,445
|
13.8
|
20.1
|
|||||||||||||||
Income tax expense
|
527
|
722
|
458
|
(27.0
|
)
|
15.1
|
||||||||||||||
Net income
|
$
|
1,208
|
$
|
802
|
$
|
987
|
50.6
|
% |
22.4
|
% |
KEY FINANCIAL RATIOS (in $000s, unaudited)
|
||||||||||||||||||||
Return on average assets
|
0.98
|
%
|
0.67
|
%
|
0.89
|
%
|
46.3
|
%
|
10.1
|
%
|
||||||||||
Return on average equity
|
9.31
|
6.38
|
8.47
|
45.9
|
9.9
|
|||||||||||||||
Net interest margin
|
4.06
|
4.41
|
4.41
|
(7.9
|
)
|
(7.9
|
)
|
|||||||||||||
Efficiency ratio
|
67.45
|
% |
69.75
|
% |
67.29
|
% |
(3.3
|
)%
|
0.2
|
% |
PER COMMON SHARE DATA
|
Quarter Ended
|
Sequential Quarter
|
Year over Year
|
|||||||||||||||||
(in 000s, except per share data, unaudited)
|
Mar 31, 2015
|
Dec 31, 2014
|
Mar 31, 2014
|
% Change
|
% Change
|
|||||||||||||||
Basic earnings per share
|
$
|
0.48
|
$
|
0.32
|
$
|
0.39
|
50.0
|
%
|
23.1
|
% | ||||||||||
Diluted earnings per share
|
$
|
0.46
|
$
|
0.31
|
$
|
0.38
|
48.4
|
21.1
|
||||||||||||
Weighted average basic shares outstanding
|
2,525
|
2,520
|
2,507
|
0.2
|
0.7
|
|||||||||||||||
Weighted average diluted shares outstanding
|
2,602
|
2,600
|
2,604
|
0.1
|
(0.1
|
)
|
||||||||||||||
Common shares outstanding at period-end
|
2,528
|
2,525
|
2,503
|
0.1
|
1.0
|
|||||||||||||||
Book value per share
|
$
|
20.48
|
$
|
20.06
|
$
|
18.69
|
2.1
|
% |
9.6
|
% |
CONSOLIDATED BALANCE SHEET
|
Sequential Quarter
|
Year over Year
|
||||||||||||||||||
(in $000's)
|
Mar 31, 2015
|
Dec 31, 2014
|
Mar 31, 2014
|
% Change
|
% Change
|
|||||||||||||||
ASSETS
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
35,223
|
$
|
29,289
|
$
|
14,614
|
20.3
|
%
|
141.0
|
%
|
||||||||||
Securities available-for-sale, at fair value
|
8,717
|
11,524
|
14,730
|
(24.4
|
)
|
(40.8
|
)
|
|||||||||||||
Loans held-for-sale
|
1,426
|
810
|
1,436
|
76.0
|
(0.7
|
)
|
||||||||||||||
Loans:
|
||||||||||||||||||||
One- to four- family residential
|
129,512
|
132,764
|
119,880
|
(2.4
|
)
|
8.0
|
||||||||||||||
Home equity
|
33,981
|
34,675
|
34,782
|
(2.0
|
)
|
(2.3
|
)
|
|||||||||||||
Commercial and multifamily
|
169,322
|
167,798
|
154,064
|
0.9
|
9.9
|
|||||||||||||||
Construction and land
|
44,667
|
46,279
|
42,951
|
(3.5
|
)
|
4.0
|
||||||||||||||
Manufactured homes
|
12,617
|
12,444
|
13,000
|
1.4
|
(2.9
|
)
|
||||||||||||||
Other consumer
|
14,604
|
16,875
|
9,927
|
(13.5
|
)
|
47.1
|
||||||||||||||
Commercial business
|
18,397
|
19,525
|
20,266
|
(5.8
|
)
|
(9.2
|
)
|
|||||||||||||
Total loans, gross
|
423,100
|
430,360
|
394,870
|
(1.7
|
)
|
7.1
|
||||||||||||||
Allowance for loan losses
|
(4,436
|
)
|
(4,387
|
)
|
(4,176
|
)
|
1.1
|
6.2
|
||||||||||||
Loans, net
|
418,664
|
425,973
|
390,694
|
(1.7
|
)
|
7.2
|
||||||||||||||
Accrued interest receivable
|
1,448
|
1,497
|
1,378
|
(3.3
|
)
|
5.1
|
||||||||||||||
Bank-owned life insurance
|
11,492
|
11,408
|
11,148
|
0.7
|
3.1
|
|||||||||||||||
OREO and other repossessed assets, net
|
499
|
323
|
353
|
54.5
|
41.4
|
|||||||||||||||
Mortgage servicing rights, at fair value
|
2,890
|
3,028
|
2,948
|
(4.6
|
)
|
(2.0
|
)
|
|||||||||||||
FHLB stock, at cost
|
2,200
|
2,224
|
2,292
|
(1.1
|
)
|
(4.0
|
)
|
|||||||||||||
Premises and equipment, net
|
5,604
|
5,555
|
2,066
|
0.9
|
171.2
|
|||||||||||||||
Other assets
|
3,545
|
3,556
|
3,926
|
(0.3
|
)
|
(9.7
|
)
|
|||||||||||||
Total assets
|
491,708
|
495,187
|
445,585
|
(0.7
|
)
|
10.4
|
||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
Demand deposit, noninterest-bearing
|
47,788
|
47,346
|
37,407
|
0.9
|
27.8
|
|||||||||||||||
Demand deposit, interest-bearing
|
107,589
|
100,055
|
80,729
|
7.5
|
33.3
|
|||||||||||||||
Savings and money market
|
88,913
|
88,469
|
80,890
|
0.5
|
9.9
|
|||||||||||||||
Time deposits
|
171,930
|
171,939
|
164,321
|
0.0
|
4.6
|
|||||||||||||||
Total deposits
|
416,220
|
407,809
|
363,347
|
2.1
|
14.6
|
|||||||||||||||
Accrued interest payable and other liabilities
|
5,296
|
6,156
|
7,388
|
(14.0
|
)
|
(28.3
|
)
|
|||||||||||||
Borrowings
|
18,417
|
30,578
|
28,060
|
(39.8
|
)
|
(34.4
|
)
|
|||||||||||||
Total liabilities
|
439,933
|
444,543
|
398,795
|
(1.0
|
)
|
10.3
|
||||||||||||||
Shareholders' Equity:
|
||||||||||||||||||||
Common stock
|
25
|
25
|
25
|
0.0
|
0.0
|
|||||||||||||||
Paid-in capital
|
24,818
|
23,552
|
23,123
|
5.4
|
7.3
|
|||||||||||||||
Unearned shares – ESOP
|
(1,140
|
)
|
(1,140
|
)
|
(1,369
|
)
|
0.0
|
(16.7
|
)
|
|||||||||||
Retained earnings
|
27,907
|
28,024
|
25,149
|
(0.4
|
)
|
11.0
|
||||||||||||||
Accumulated other comprehensive gain (loss)
|
165
|
183
|
(138
|
)
|
(9.8
|
)
|
(219.6
|
)
|
||||||||||||
Total shareholders' equity
|
51,775
|
50,644
|
46,790
|
2.2
|
10.7
|
|||||||||||||||
Total liabilities and shareholders' equity
|
$
|
491,708
|
$
|
495,187
|
$
|
445,585
|
(0.7
|
)%
|
10.4
|
% |
CREDIT QUALITY DATA
(in $000's, unaudited)
|
Mar 31, 2015
|
Dec 31, 2014
|
Mar 31, 2014
|
Sequential Quarter
% Change
|
Year over Year
% Change
|
|||||||||||||||
Nonaccrual loans
|
$
|
1,490
|
$
|
1,464
|
$
|
758
|
1.8
|
%
|
96.6
|
%
|
||||||||||
Loans 90+ days past due and still accruing
|
-
|
114
|
-
|
(100.0
|
)
|
nm
|
||||||||||||||
Nonperforming TDRs
|
1,987
|
2,264
|
1,103
|
(12.2
|
)
|
80.1
|
||||||||||||||
Total nonperforming loans
|
3,477
|
3,842
|
1,861
|
(9.5
|
)
|
86.8
|
||||||||||||||
OREO and other repossessed assets
|
499
|
323
|
353
|
54.5
|
41.4
|
|||||||||||||||
Total nonperforming assets
|
3,976
|
4,165
|
2,214
|
(4.5
|
)
|
79.6
|
||||||||||||||
Performing TDRs on accrual
|
4,868
|
5,117
|
5,357
|
(4.9
|
)
|
(9.1
|
)
|
|||||||||||||
Net charge-offs during the quarter
|
51
|
43
|
201
|
18.6
|
(74.6
|
)
|
||||||||||||||
Provision for loan losses during the quarter
|
100
|
200
|
200
|
(50.0
|
)
|
(50.0
|
)
|
|||||||||||||
Allowance for loan losses
|
4,436
|
4,387
|
4,176
|
1.1
|
6.2
|
|||||||||||||||
Classified assets
|
4,104
|
6,067
|
8,007
|
(32.4
|
)
|
(48.7
|
)
|
|||||||||||||
Allowance for loan losses to total loans
|
1.05
|
%
|
1.02
|
%
|
1.06
|
%
|
2.9
|
(0.9
|
)
|
|||||||||||
Allowance for loan losses to total nonperforming loans
|
127.58
|
% |
114.19
|
% |
224.40
|
% |
11.7
|
(43.1
|
)
|
|||||||||||
Nonperforming loans to total loans
|
0.82
|
% |
0.89
|
% |
0.50
|
% |
(7.9
|
)
|
64.0
|
|||||||||||
Nonperforming assets to total assets
|
0.81
|
%
|
0.84
|
%
|
0.50
|
%
|
(3.6
|
)
|
62.0
|
|||||||||||
|
||||||||||||||||||||
OTHER PERIOD-END STATISTICS
|
||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||
Sound Community Bank:
|
||||||||||||||||||||
Loan to deposit ratio
|
100.59
|
%
|
104.45
|
%
|
107.53
|
%
|
(3.7
|
)%
|
(6.5
|
)%
|
||||||||||
Noninterest-bearing deposits / total deposits
|
11.48
|
11.61
|
10.30
|
(1.1
|
)
|
11.5
|
||||||||||||||
Leverage ratio
|
9.87
|
10.19
|
10.15
|
(3.1
|
)
|
(2.8
|
)
|
|||||||||||||
Common Equity Tier 1 risk-based capital ratio(1)
|
12.87
|
-
|
-
|
nm
|
nm
|
|||||||||||||||
Tier 1 risk-based capital ratio
|
12.87
|
12.44
|
12.95
|
3.5
|
(0.6
|
)
|
||||||||||||||
Total risk-based capital ratio
|
14.04
|
%
|
13.57
|
%
|
14.16
|
%
|
3.5
|
(0.8
|
)
|
|||||||||||
Total risk-weighted assets
|
376,311
|
388,498
|
346,093
|
(3.1
|
)%
|
8.7
|
% | |||||||||||||
Sound Financial Bancorp, Inc.:
|
||||||||||||||||||||
Average total assets for the quarter
|
492,472
|
476,943
|
444,320
|
3.26
|
%
|
10.84
|
%
|
|||||||||||||
Average total equity for the quarter
|
51,875
|
50,305
|
46,604
|
3.12
|
%
|
11.31
|
%
|
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
|