Seattle, WA – January 30, 2013 – 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: | | (Dollars in thousands) (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: | | (Dollars in thousands) (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: | | (Dollars in thousands) (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: | | (Dollars in thousands) (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: | | (Dollars in thousands) (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 noninterest income, excluding net securities transactions. |
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 | |
| Tier 1 leverage ratio | | $ | 38,556 | | | | 10.12 | % | | $ | 15,243 | | ≥ | | | 4.00 | % | | $ | 19,054 | | ≥ | | | 5.00 | % |
| Tier 1 risk-based capital ratio | | $ | 38,556 | | | | 13.35 | % | | $ | 11,553 | | ≥ | | | 4.00 | % | | $ | 17,329 | | ≥ | | | 6.00 | % |
| Total risk-based capital ratio | | $ | 42,174 | | | | 14.60 | % | | $ | 23,106 | | ≥ | | | 8.00 | % | | $ | 28,882 | | ≥ | | | 10.00 | % |
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.
For additional information, contact:
| Media: | | Financial: |
| Laurie Stewart | | Matt Deines |
| (206) 448-0884 x306 | | (206) 448-0884 x305 |
