Sound Financial Reports Higher Third Quarter Earnings
SEATTLE--([ BUSINESS WIRE ])--Sound Financial Inc. (OTCBB:SNFL), holding company for Sound Community Bank, today announced its third consecutive quarter of improving earnings.
"While a sustained economic recovery continues to remain elusive, we are pleased with our third quarter results and the steady progress wea™ve made each quarter this year. Our focus remains on taking care of our clients, as we balance our growth with strong capital levels."
The Company reported net income of $0.14 per share, or $421,000 for the quarter ended September 30, 2010. This compares to net income of $0.10 per share, or $278,000 in the previous quarter and net income of $0.03 per share or $76,000 for the third quarter of 2009.
Highlights for the Quarter:
- Net Interest Margin increased to 4.93% for the quarter ended 9/30/10
- Efficiency Ratio decreased to 64.76% for the quarter ended 9/30/10
- Non-Performing Loans to Total Gross Loans decreased to 0.99% at 9/30/10
- The Bank remains aWell Capitalizeda with Tier 1 Capital of 7.44% and Total Risk Based Capital of 11.31% at 9/30/10.
Laurie Stewart, President and CEO said, aWhile a sustained economic recovery continues to remain elusive, we are pleased with our third quarter results and the steady progress wea™ve made each quarter this year. Our focus remains on taking care of our clients, as we balance our growth with strong capital levels.a
As of | |||||||||
9/30/2010 | 6/30/2010 | 9/30/2009 | |||||||
(In thousands) | |||||||||
Selected Consolidated Financial Condition Data: | |||||||||
Total assets | $ | 345,775 | $ | 340,926 | $ | 353,760 | |||
Loans receivable, net | 304,792 | 305,450 | 284,615 | ||||||
Loans held for sale | 1,836 | 1,096 | 2,666 | ||||||
Mortgage-backed securities available for sale (at fair value) | 4,655 | 4,328 | 35,694 | ||||||
Federal Home Loan Bank stock | 2,444 | 2,444 | 2,444 | ||||||
Bank owned life insurance | 6,663 | 6,596 | 6,399 | ||||||
Repossessed assets and real estate owned | 3,313 | 1,847 | 822 | ||||||
Deposits | 285,777 | 285,339 | 300,456 | ||||||
Federal Home Loan Bank advances | 30,210 | 26,617 | 25,000 | ||||||
Stockholdersa™ Equity | 26,175 | 25,299 | 25,480 | ||||||
Quarter Ended | ||||||||||||
9/30/2010 | 6/30/2010 | 9/30/2009 | ||||||||||
(In thousands) | ||||||||||||
Selected Consolidated Operating Data: | ||||||||||||
Total interest income | $ | 4,930 | $ | 4,924 | $ | 4,943 | ||||||
Total interest expense | 1,043 | 1,152 | 1,803 | |||||||||
Net interest income | 3,887 | 3,772 | 3,140 | |||||||||
Provision for loan losses | 950 | 775 | 950 | |||||||||
Net interest income after provision for loan losses | 2,937 | 2,997 | 2,190 | |||||||||
Fees and service charges | 558 | 550 | 545 | |||||||||
Gain (loss) on sale of loans | 343 | 58 | (20 | ) | ||||||||
Gain (loss) on sale of assets | (202 | ) | (41 | ) | (34 | ) | ||||||
Gain on sale of securities | - | (11 | ) | - | ||||||||
Other than temporary impairment on securities | (47 | ) | (51 | ) | - | |||||||
Fair value change in mortgage servicing rights | (284 | ) | (210 | ) | - | |||||||
Other non-interest income | 142 | 220 | 477 | |||||||||
Total non-interest income | 510 | 515 | 968 | |||||||||
Total non-interest expense | 2,848 | 3,134 | 3,069 | |||||||||
Income before provision (benefit) for income taxes | 599 | 378 | 89 | |||||||||
Provision (benefit) for income taxes | 178 | 100 | 13 | |||||||||
Net income | 421 | 278 | 76 | |||||||||
Selected Financial Ratios and Other Data: | ||||||||||||
Performance ratios: | ||||||||||||
Return on assets (ratio of net income to average total assets) | 0.49 | % | 0.32 | % | 0.09 | % | ||||||
Return on equity (ratio of net income to average equity) | 6.67 | % | 4.30 | % | 1.19 | % | ||||||
Net interest margin | 4.93 | % | 4.77 | % | 3.98 | % | ||||||
Non-interest income to operating revenue | 11.60 | % | 12.02 | % | 23.57 | % | ||||||
Non-interest expense to average total assets | 3.35 | % | 3.66 | % | 3.62 | % | ||||||
Average interest-earning assets to average interest-bearing liabilities | 100.91 | % | 103.34 | % | 110.19 | % | ||||||
Efficiency ratio | 64.76 | % | 73.11 | % | 74.71 | % | ||||||
Asset quality ratios: | ||||||||||||
Non-performing assets to total assets | 3.45 | % | 3.54 | % | 2.11 | % | ||||||
Non-performing loans to gross loans | 0.99 | % | 1.36 | % | 1.14 | % | ||||||
Allowance for loan losses to non-performing loans | 130.00 | % | 96.07 | % | 66.23 | % | ||||||
Allowance for loan losses to gross loans | 1.27 | % | 1.29 | % | 0.88 | % | ||||||
Net charge-offs to average loans outstanding | 1.32 | % | 1.04 | % | 0.43 | % | ||||||
Consolidated capital ratios: | ||||||||||||
Equity to total assets at end of period | 7.57 | % | 7.42 | % | 7.23 | % | ||||||
Average equity to average assets | 7.55 | % | 7.43 | % | 7.56 | % | ||||||
Nine Months Ended | |||||||||
9/30/2010 | 9/30/2009 | ||||||||
(In thousands) | |||||||||
Selected Consolidated Operating Data: | |||||||||
Total interest income | $ | 14,624 | $ | 14,219 | |||||
Total interest expense | 3,362 | 5,562 | |||||||
Net interest income | 11,262 | 8,657 | |||||||
Provision for loan losses | 3,150 | 2,325 | |||||||
Net interest income after provision for loan losses | 8,112 | 6,332 | |||||||
Fees and service charges | 1,638 | 1,535 | |||||||
Gain on sale of loans | 465 | 56 | |||||||
Loss on sale of assets | (291 | ) | (589 | ) | |||||
Gain on sale of securities | 64 | - | |||||||
Other than temporary impairment on securities | (99 | ) | - | ||||||
Fair value change in mortgage servicing rights | (197 | ) | - | ||||||
Other non-interest income | 581 | 1,070 | |||||||
Total non-interest income | 2,161 | 2,072 | |||||||
Total non-interest expense | 9,245 | 8,718 | |||||||
Income (loss) before provision (benefit) for income taxes | 1,028 | (314 | ) | ||||||
Provision (benefit) for income taxes | 272 | (162 | ) | ||||||
Net income (loss) | 756 | (152 | ) | ||||||
Selected Financial Ratios and Other Data: | |||||||||
Performance ratios: | |||||||||
Return on assets (ratio of net income to average total assets) | 0.30 | % | (0.06 | )% | |||||
Return on equity (ratio of net income to average equity) | 3.95 | % | (0.79 | )% | |||||
Net interest margin | 4.79 | % | 3.90 | % | |||||
Non-interest income to operating revenue | 16.10 | % | 19.31 | % | |||||
Non-interest expense to average total assets | 3.62 | % | 3.66 | % | |||||
Average interest-earning assets to average interest-bearing liabilities | 100.97 | % | 106.59 | % | |||||
Efficiency ratio | 68.88 | % | 81.26 | % | |||||
Sound Financial 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
This report 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 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.
Results of operations and business are subject to various factors which could cause actual results to differ materially from these estimates and most other statements that are not historical in nature. These factors 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.