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Sound Financial Bancorp Reports Fourth Quarter And Annual Financial Results

SEATTLE, Jan. 30, 2013 (GLOBE NEWSWIRE) -- Sound Financial Bancorp, Inc. (the "Company") (Nasdaq:SFBC), holding company for Sound Community Bank (the "Bank"), today reported net income for the year ended December 31, 2012 of $2.6 million, or $1.01 per diluted share, as compared to net income of $1.6 million, or $0.59 per diluted share, for the year ended December 31, 2011. Return on average assets was 0.74% for the year ended December 31, 2012 compared to 0.46% for the year ended December 31, 2011. Total assets increased to $381.0 million as of December 31, 2012 compared to $339.7 million as of December 31, 2011 as net loans increased by $26.9 million or 9.1% to $322.5 million.

Net income for the quarter ended December 31, 2012 was $888,000, or $0.34 per diluted share, compared to $420,000, or $0.16 per diluted share, for the quarter ended December 31, 2011. Return on average assets was 0.95% for the quarter ended December 31, 2012 compared to 0.49% for the quarter ended December 31, 2011.

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

Highlights as of and for the quarter ended December 31, 2012 include:

  • Gain on sale of loans was $837,000 for the quarter ended December 31, 2012 compared to $237,000 for the quarter ended December 31, 2011
  • Provision for loan losses decreased to $850,000 for the quarter ended December 31, 2012 from $1.3 million for the quarter ended December 31, 2011
  • Losses and expenses related to other real estate owned decreased to $164,000 for the quarter ended December 31, 2012 from $436,000 for the quarter ended December 31, 2011
  • Non-performing loans to total loans declined to 1.17% as of December 31, 2012     compared to 2.20% as of December 31, 2011 as total non-performing loans decreased by $2.8 million or 42.3% to $3.8 million at December 31, 2012 from $6.6 million at December 31, 2011
  • Non-performing assets to total assets decreased to 1.66% as of December 31, 2012 compared to 2.78% as of December 31, 2011 as non-performing assets decreased by $3.3 million or 35.1% to $6.1 million at December 31, 2012 from $9.5 million at December 31, 2011

Highlights as of and for the year ended December 31, 2012 include:

  • The Company completed a successful stock offering during the year, raising gross proceeds of $14.2 million. Total equity to total assets increased to 11.40% as of December 31, 2012 from 8.45% as of December 31, 2011
  • Net interest margin decreased to 5.00% for the year ended December 31, 2012 from 5.20% for the year ended December 31, 2011
  • Deposit cost of funds decreased to 0.69% for the year ended December 31, 2012 compared to 0.87% for the year ended December 31, 2011
  • Provision for loan losses decreased to $4.5 million for the year ended December 31, 2012 from $4.6 million for the year ended December 31, 2011
  • Gain on sale of loans increased to $2.1 million for the year ended December 31, 2012 compared to $501,000 for the year ended December 31, 2011
  • Efficiency ratio decreased to 55.15% for the year ended December 31, 2012 compared to 55.30% for the year ended December 31, 2011

Laurie Stewart, President and CEO, said, "We are pleased with the improvement in net income generated by increased loan production and the gain on sale of loans." Stewart also commented on the Company's asset quality, "Non-performing assets decreased both in terms of total dollars and as a percentage of total assets. Economic indicators in Western Washington including home values and the rate of unemployment demonstrate positive trends."

     
  As of
  12/31/2012 12/31/2011
Selected Consolidated Financial Condition Data: (unaudited)
Total assets  $ 381,044  $ 339,740
Total loans, net 322,496 295,641
Loans held for sale 1,725 1,807
Available-for-sale securities, at fair value 22,900 2,992
Federal Home Loan Bank stock, at cost 2,401 2,444
Bank-owned life insurance, net 7,220 6,981
Other real estate owned and repossessed assets, net 2,503 2,821
Total deposits 312,083 299,997
Borrowings 21,864 8,506
Total stockholders' equity 43,457 28,713
     
  Year Ended
  12/31/2012 12/31/2011
Selected Consolidated Operating Data: (unaudited)
Total interest income $18,175 $18,519
Total interest expense 2,360 2,781
 Net interest income 15,815 15,738
Provision for loan losses 4,525 4,600
 Net interest income after provision for loan losses 11,290 11,138
Fees and service charges 2,219 2,052
Gain on sale of loans 2,063 501
Mortgage servicing income 550 418
Other than temporary impairment on securities (164) (96)
Fair value adjustment on mortgage servicing rights 53 (422)
Other non-interest income 238 139
 Total non-interest income 4,959 2,592
Salaries and benefits expense 6,011 4,997
Operations expense 2,787 2,530
Occupancy expense 1,218 1,162
Losses and expenses related to other real estate owned 921 1,394
Other non-interest expense 1,441 1,448
Total non-interest expense 12,378 11,531
 Income before provision for income taxes 3,871 2,199
Provision for income taxes 1,231 648
Net income $2,640 $1,551
     
  Year Ended
  12/31/2012 12/31/2011
Selected Financial Ratios and Other Data: (unaudited)
Performance ratios:    
Return on average assets  0.74% 0.46%
Return on average equity  7.64% 5.50%
Net interest margin (1) 5.00% 5.20%
Non-interest income to operating revenue (2) 23.87% 14.14%
Non-interest expense to average total assets 3.46% 3.45%
Average interest-earning assets to average interest-bearing liabilities 110.75% 100.38%
Efficiency ratio (3) 55.15% 55.30%
Asset quality ratios:    
Nonperforming assets to total assets 1.66% 2.78%
Nonperforming loans to gross loans 1.17% 2.20%
Allowance for loan losses to nonperforming loans 110.88% 67.12%
Allowance for loan losses to gross loans 1.30% 1.47%
Net charge-offs to average loans outstanding 1.55% 1.53%
Per Share Data:    
Diluted earnings per share $1.01 $0.59
Average number of diluted shares outstanding 2,619,131 2,608,223
     
(1) Net interest income divided by average interest earning assets.
(2) Noninterest income divided by the sum of noninterest income and net interest income.
(3) 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
  12/31/2012 12/31/2011
Selected Consolidated Operating Data: (unaudited)
Total interest income $4,472 $4,556
Total interest expense 576 665
 Net interest income 3,896 3,891
Provision for loan losses 850 1,250
 Net interest income after provision for loan losses 3,046 2,641
Fees and service charges 581 537
Gain on sale of loans 837 237
Mortgage servicing income 204 101
Other than temporary impairment on securities (9) --
Fair value adjustment on mortgage servicing rights (44) (188)
Other non-interest income 59 64
 Total non-interest income 1,628 751
Salaries and benefits expense 1,770 1,055
Operations expense 779 660
Occupancy expense 299 326
Losses and expenses related to other real estate owned 164 436
Other non-interest expense 343 310
Total non-interest expense 3,355 2,787
 Income before provision for income taxes 1,319 605
Provision for income taxes 431 185
Net income $888 $420
     
  Quarter Ended
  12/31/2012 12/31/2011
Selected Financial Ratios and Other Data: (unaudited)
Performance ratios:    
Return on average assets  0.95% 0.49%
Return on average equity  8.26% 5.84%
Net interest margin (1) 4.65% 5.11%
Non-interest income to operating revenue (2) 29.47% 16.18%
Non-interest expense to average total assets 3.60% 3.28%
Average interest-earning assets to average interest-bearing liabilities 115.89% 109.75%
Efficiency ratio (3) 57.77% 50.65%
Asset quality ratios:    
Nonperforming assets to total assets 1.66% 2.78%
Nonperforming loans to gross loans 1.17% 2.20%
Allowance for loan losses to nonperforming loans 110.88% 67.12%
Allowance for loan losses to gross loans 1.30% 1.47%
Net charge-offs to average loans outstanding 1.20% 1.06%
Per Share Data:    
Diluted earnings per share $0.34 $0.16
Average number of diluted shares outstanding 2,628,304 2,603,359
 
(1) Net interest income divided by average interest earning assets.
(2) Noninterest income divided by the sum of noninterest income and net interest income.
(3) Noninterest expense, excluding other real estate owned and repossessed property expense, as a percentage of net interest income and total 
             
Regulatory Capital Ratios of Sound Community Bank at December 31, 2012  
             
   Actual  Minimum Capital  Requirements  Minimum Required to Be Well-Capitalized Under Prompt Corrective  Action Provisions    
  Amount Ratio Amount Ratio Amount Ratio
  (Dollars in thousands)
Tier 1 leverage ratio  $38,556 10.12% $15,243 4.0% $19,054 5.0%
Tier 1 risk based capital ratio  38,556 13.35% 11,553 4.0% 17,329 6.0%
Total risked-based capital ratio  42,175 14.60% 23,106 8.0% 28,882 10.0%

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 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: For additional information, contact:
         
         Media:
         Laurie Stewart
         (206) 448-0884 x306
         
         Financial:
         Matt Deines
         (206) 448-0884 x305

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