Sound Financial Bancorp, Inc. (Nasdaq: SFBC), the holding company
(the "Company") for Sound Community Bank (the "Bank"), today
reported net income of $2.2 million for the quarter ended
March 31, 2023, or $0.83 diluted earnings per share, as
compared to net income of $2.9 million, or $1.12 diluted earnings
per share, for the quarter ended December 31, 2022, and $1.7
million, or $0.65 diluted earnings per share, for the quarter ended
March 31, 2022. The Company also announced today that its
Board of Directors declared a cash dividend on Company common stock
of $0.19 per share, an increase from the Company's prior quarterly
dividend of $0.17 per share, payable on May 24, 2023 to
stockholders of record as of the close of business on May 10,
2023.
Comments from the President and Chief Executive
Officer |
“Our ninth
consecutive quarter of organic loan growth helped propel our total
assets to exceed $1.00 billion. Even more significantly, in spite
of the recent industry turmoil, deposits increased and borrowings
decreased during the quarter,” remarked Ms. Stewart, President and
Chief Executive Officer. "Our ability to retain and attract
deposits is a testament to the talented bankers who work with our
clients every day. Other significant accomplishments in the quarter
included implementation of CECL and a 48% reduction in
non-performing assets. We are also pleased to announce an increase
in our quarterly dividend. This is a fine start to the year,"
concluded Stewart. |
|
Q1 2023 Financial Performance |
Total assets increased $28.0 million or 2.9% to $1.00 billion at
March 31, 2023, from $976.4 million at December 31, 2022, and
increased $45.5 million or 4.7% from $958.9 million at
March 31, 2022. |
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|
Net interest income decreased $317 thousand or 3.3% to $9.4 million
for the quarter ended March 31, 2023, from $9.7 million for
the quarter ended December 31, 2022, and increased $1.8 million or
23.0% from $7.6 million for the quarter ended March 31,
2022. |
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Net interest margin ("NIM"), annualized, was 4.01% for the quarter
ended March 31, 2023, compared to 4.05% for the quarter ended
December 31, 2022 and 3.49% for the quarter ended March 31,
2022. |
Loans held-for-portfolio increased $4.6 million or 0.5% to $870.5
million at March 31, 2023, compared to $866.0 million at
December 31, 2022, and increased $161.1 million or 22.7% from
$709.5 million at March 31, 2022. |
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A $10 thousand provision for credit losses was recorded for the
quarter ended March 31, 2023, compared to a $78 thousand
provision for credit losses for the quarter ended December 31, 2022
and a $140 thousand provision for credit losses for the quarter
ended March 31, 2022. In addition, the Company adopted the
Current Expected Credit Losses ("CECL") standard as of January 1,
2023, which resulted in a one-time upward adjustment to the
allowance for credit losses for loans of $760 thousand and an
allowance for unfunded loan commitments of $695 thousand, and an
after-tax decrease to opening retained earnings of $1.1 million. At
March 31, 2023, the allowance for credit losses to total
nonperforming loans and to total loans was 659.97% and 0.98%,
respectively. |
Total deposits increased $32.9 million or 4.1% to $841.6 million at
March 31, 2023, from $808.8 million at December 31, 2022, and
increased $5.6 million or 0.7% from $836.1 million at
March 31, 2022. Noninterest-bearing deposits decreased $117
thousand or 0.1% to $173.1 million at March 31, 2023 compared
to $173.2 million at December 31, 2022, and decreased $35.7 million
or 17.1% compared to $208.8 million at March 31, 2022. |
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Our loan-to-deposit ratio was 104% at March 31, 2023, compared
to 107% at December 31, 2022 and 85% at March 31, 2022. |
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Net gain on sale of loans was $78 thousand for the quarter ended
March 31, 2023, compared to $49 thousand for the quarter ended
December 31, 2022 and $365 thousand for the quarter ended
March 31, 2022. |
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The Bank continued to maintain capital levels in excess of
regulatory requirements and was categorized as "well-capitalized"
at March 31, 2023. |
Total nonperforming loans decreased $1.7 million or 56.3% to $1.3
million at March 31, 2023, from $3.0 million at December 31,
2022, and decreased $3.5 million or 72.8% from $4.7 million at
March 31, 2022. |
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Operating Results
Net interest income decreased $317 thousand, or 3.3%, to $9.4
million for the quarter ended March 31, 2023, compared to $9.7
million for the quarter ended December 31, 2022, and increased $1.8
million, or 23.0%, from $7.6 million for the quarter ended
March 31, 2022. The decrease in the current quarter, compared
to the prior quarter was primarily the result of certificate
accounts increasing faster than we were able to redeploy the funds
into higher earning assets. The increase compared to the first
quarter of 2022 was primarily the result of a higher average
balance of and yield earned on average interest-earning assets,
partially offset by a higher average balance of and rate paid on
average interest-bearing liabilities.
Interest income increased $355 thousand, or 3.0%, to $12.2
million for the quarter ended March 31, 2023, compared to
$11.8 million for the quarter ended December 31, 2022, and
increased $4.0 million, or 48.2%, from $8.2 million for the quarter
ended March 31, 2022. The increase from the prior quarter was
primarily due to higher average loan balances, a 22 basis point
increase in the average yield on loans and a 69 basis point
increase in the average yield on investments and interest-bearing
cash following continued increases in the targeted federal funds
rate into 2023, partially offset by lower average balances of
investments and interest-bearing cash. The increase in interest
income from the same quarter last year was due primarily to higher
average loan balances, a 61 basis point increase in the average
loan yield and a 371 basis point increase in the average yield on
investments and interest-bearing cash, partially offset by a lower
average balance of investments and interest-bearing cash.
Interest income on loans increased $303 thousand, or 2.7%, to
$11.4 million for the quarter ended March 31, 2023, compared
to $11.1 million for the quarter ended December 31, 2022, and
increased $3.3 million, or 40.9%, from $8.1 million for the quarter
ended March 31, 2022. The average balance of total loans was
$867.7 million for the quarter ended March 31, 2023, compared
to $861.4 million for the quarter ended December 31, 2022 and
$694.9 million for the quarter ended March 31, 2022. The
average yield on total loans was 5.32% for the quarter ended
March 31, 2023, compared to 5.10% for the quarter ended
December 31, 2022 and 4.71% for the quarter ended March 31,
2022. The increase in the average loan yield during the current
quarter compared to the prior quarter and first quarter of 2022 was
primarily due to variable rate loans adjusting to higher market
interest rates and new loan originations at higher interest rates.
Interest income on investments and interest-bearing cash increased
$52 thousand to $793 thousand for the quarter ended March 31,
2023, compared to $741 thousand for the quarter ended December 31,
2022, and increased $655 thousand from $138 thousand for the
quarter ended March 31, 2022, due to a higher average yield on
investments and interest-bearing cash, partially offset by a lower
average balance as excess cash liquidity was deployed into higher
yielding loans during the past year.
Interest expense increased $672 thousand, or 31.5%, to $2.8
million for the quarter ended March 31, 2023, from $2.1
million for the quarter ended December 31, 2022, and increased $2.2
million, or 371.1%, from $595 thousand for the quarter ended
March 31, 2022. The increase in interest expense during the
current quarter from the prior quarter was primarily the result of
a $60.3 million increase in the average balance of certificate
accounts, as well as higher average rates paid on all
interest-bearing deposits, partially offset by a $36.1 million
decrease in the average balance of interest-bearing deposits other
than certificate accounts and a $14.4 million decrease in the
average balance of borrowings, comprised of Federal Home Loan Bank
("FHLB") advances. The increase in interest expense during the
current quarter from the comparable period a year ago was primarily
the result of a $44.9 million increase in the average balance of
borrowings and a $144.3 million increase in the average balance of
certificate accounts, as well as higher average rates paid on all
interest-bearing deposits, partially offset by a $106.0 million
decrease in the average balance of interest-bearing deposits other
than certificate accounts. The average cost of total borrowings
increased to 4.78% for the quarter ended March 31, 2023, from
4.20% for the quarter ended December 31, 2022, and decreased from
5.85% for the quarter ended March 31, 2022, reflecting the
increased use of lower cost FHLB advances subsequent to June 2022
to supplement our liquidity needs. The average balance of our total
borrowings decreased $14.4 million to $56.6 million from $71.0
million for the quarter ended December 31, 2022, as FHLB overnight
advances decreased during the quarter as result of the increase in
deposits, and the average balance of our total borrowings increased
$45.0 million from $11.6 million for the quarter ended
March 31, 2022 as we used FHLB advances to fund loan
growth.
Net interest margin (annualized) was 4.01% for the quarter ended
March 31, 2023, compared to 4.05% for the quarter ended
December 31, 2022 and 3.49% for the quarter ended March 31,
2022. The decrease in net interest margin from the prior quarter
was primarily due to the cost of funding increasing at a faster
pace than the yield earned on interest-earning assets, driven by
the higher average balance of certificate accounts, partially
offset by the increase in the average balance of loans. The
increase from the same quarter a year ago was the result of an
increase in interest income on interest-earning assets, driven by
the higher average balance of and yield earned on loans, partially
offset by an increase in the cost of funding.
The Company recorded a provision for credit losses of $10
thousand for the quarter ended March 31, 2023, consisting of a
provision for credit losses on loans of $245 thousand and a release
of reserve for unfunded loan commitments of $235 thousand. This
compared to a provision for credit losses of $78 thousand for the
quarter ended December 31, 2022, consisting of a provision for loan
losses of $125 thousand and a release of the reserve for unfunded
loan commitments of $47 thousand, and a provision for credit losses
of $140 thousand for the quarter ended March 31, 2022,
consisting of a provision for loan losses and unfunded loan
commitments of $125 thousand and $15 thousand respectively. The
Company adopted the CECL standard as of January 1, 2023, which
resulted in a one-time upward adjustment to the allowance for
credit losses for loans of $760 thousand and an allowance for
unfunded loan commitments of $695 thousand, and an after-tax
decrease to opening retained earnings of $1.1 million. All amounts
prior to January 1, 2023 were calculated using the previous
incurred loss methodology to compute our allowance for credit
losses, which is not directly comparable to the new current
expected credit losses methodology. The decrease in the provision
for credit losses for the quarter ended March 31, 2023
compared to the quarter ended December 31, 2022 resulted primarily
from the lower growth in our loans held-for-portfolio, with most of
the growth a result of advances on our construction portfolio
ultimately resulting in a release of the reserve for unfunded
commitments. The provision for credit losses in the first quarter
of 2023 also reflects assumptions related to our forecast
concerning the economic environment as a result of local, national
and global events, including recent bank failures. In addition,
expected loss estimates consider various factors including customer
specific information, changes in risk ratings, projected
delinquencies, and the impact of economic conditions on borrowers'
ability to repay.
Noninterest income remained essentially unchanged at $1.0
million for the quarters ended March 31, 2023 and December 31,
2022, and decreased $554 thousand, or 36.4%, from $1.5 million for
the quarter ended March 31, 2022. The decrease in noninterest
income from the comparable period in 2022 was primarily due to a
$287 thousand decrease in net gain on sale of loans as a result of
a decline in both the amount of loans originated for sale and gross
margins for loans sold and a $408 thousand decrease in the fair
value adjustment on mortgage servicing rights, partially offset by
a $130 thousand increase in earnings on the cash surrender value of
bank-owned life insurance (“BOLI”). Loans sold during the quarter
ended March 31, 2023, totaled $3.9 million, compared to $3.5
million and $12.2 million during the quarters ended December 31,
2022 and March 31, 2022, respectively.
Noninterest expense increased $450 thousand, or 6.3%, to $7.6
million for the quarter ended March 31, 2023, compared to $7.2
million for the quarter ended December 31, 2022, and increased $795
thousand, or 11.7%, from $6.8 million for the quarter ended
March 31, 2022. The increase from the quarter ended December
31, 2022 was primarily a result of an increase in salaries and
benefits expense of $251 thousand resulting from annual employer
contributions to deferred compensation plans, lower deferred
compensation related to loan originations and higher stock
compensation expense, partially offset by lower medical expense and
a decrease in incentive compensation expense as a result of lower
loan growth. Data processing expense increased as a result of the
write off of one large project during the quarter that was
previously being capitalized as a result of the vendor
discontinuing the platform. Operations expense decreased $95
thousand primarily due to decreases in various expenses including
office expenses, lower loan origination costs due to lower mortgage
origination volumes, and lower audit and professional fees. The
increase in noninterest expense compared to the quarter ended
March 31, 2022 was primarily due to an increase in salaries
and benefits of $318 thousand primarily due to higher wages and
lower deferred compensation, partially offset by a decrease in
incentive compensation as a result of a lower percentage earned on
loans originated, changes to incentive compensation programs, such
as the addition of non-production performance requirements, and
lower commission expense related to a decline in mortgage
originations. Operations expense increased $142 thousand compared
to the quarter ended March 31, 2022 due to increases in
various accounts including travel expenses, debit card processing,
audit fees, fixed assets, state and local taxes, charitable
contributions and office expenses. These increases were partially
offset by lower loan origination costs due to lower mortgage
origination volume and decreases in various accounts including
marketing, legal and professional fees.
The efficiency ratio for the quarter ended March 31, 2023
was 73.65%, compared to 66.93% for the quarter ended December 31,
2022 and 74.61% for the quarter ended March 31, 2022. The
higher efficiency ratio for the current quarter compared to the
sequential quarter was primarily due to annual expenses that we
incurred during the first quarter of 2023 causing an increase in
our noninterest expense, as well as a decline in net interest
income as interest-bearing liabilities were not fully deployed into
higher interest-earning assets during the quarter. The improvement
in the efficiency ratio for the current quarter compared to the
same period in the prior year was primarily due to net interest
income rising at a faster rate than the increase in noninterest
expense and the decline in noninterest income.
Balance Sheet Review, Capital Management
and Credit Quality
Assets at March 31, 2023 totaled $1.00 billion, compared to
$976.4 million at December 31, 2022 and $958.9 million at
March 31, 2022. The increase in total assets from December 31,
2022 was primarily due to loan growth and an increase in cash and
cash equivalents. The increase from one year ago was primarily a
result of increases in loans held-for-portfolio, partially offset
by lower balances in cash and cash equivalents and investment
securities.
Cash and cash equivalents increased $23.7 million, or 41.1%, to
$81.6 million at March 31, 2023, compared to $57.8 million at
December 31, 2022, and decreased $115.5 million, or 58.6%, from
$197.1 million at March 31, 2022. The increase from the prior
quarter-end was primarily due to an increase in deposits, primarily
certificate and money market accounts, partially offset by the
repayment of FHLB overnight advances. The decrease from one year
ago was primarily due to deploying cash earning a nominal yield
into higher interest-earning loans, partially offset by an increase
in deposits, primarily certificate accounts.
Investment securities decreased $1.6 million, or 13.0%, to $10.8
million at March 31, 2023, compared to $12.4 million at
December 31, 2022, and decreased $1.7 million, or 13.3%, from $12.4
million at March 31, 2022. Held-to-maturity securities totaled
$2.2 million at March 31, 2023, December 31, 2022, and
March 31, 2022. Available-for-sale securities totaled $8.6
million at March 31, 2023, compared to $10.2 million at
December 31, 2022, and $10.2 million at March 31, 2022. The
decrease in available-for-sale securities from the prior
quarter-end was primarily due to the maturity of our treasury bills
for $1.6 million and regularly scheduled payments, partially offset
by a lower net unrealized losses resulting from an increase in
market values during the quarter. The decrease from one year ago
was primarily due to the call of one municipal bond in the fourth
quarter of 2022, regularly scheduled payments and maturities, and
net unrealized losses resulting from the increases in market
interest rates during the year. The treasury bills were purchased
and matured within the past year, representing no net impact on the
fluctuation.
Loans held-for-portfolio increased to $870.5
million at March 31, 2023, from $866.0 million at December 31,
2022 and $709.5 million at March 31, 2022. The increase in
loans held-for-portfolio at March 31, 2023, compared to
December 31, 2022, primarily resulted from increases in residential
and construction and land loans, partially offset by a decline in
commercial real estate, multifamily and consumer loans. The
increase in loans held-for-portfolio at March 31, 2023,
compared to one year ago, primarily resulted from increases across
all loan categories, excluding other consumer loans, which
decreased between the periods primarily due to the shift in lending
activity from houseboats (other consumer loans) to floating homes
as a result of more clients applying for a loan owning their slip.
The increase from December 31, 2022 in loans held-for-portfolio
primarily resulted from the funding of commercial construction
projects and a new commercial and industrial relationship. The
increase from March 31, 2022 in loans held-for-portfolio
primarily resulted from greater economic and lending activity in
our market area.
Nonperforming assets (“NPAs”), which are comprised of nonaccrual
loans, including nonperforming loan modifications, other real
estate owned (“OREO”) and other repossessed assets, decreased $1.7
million, or 48.4%, to $1.9 million at March 31, 2023, from
$3.6 million at December 31, 2022 and decreased $3.5 million, or
65.4% from $5.4 million at March 31, 2022. The decrease in
nonperforming assets from the prior quarter-end was primarily due
to the payoff of $1.5 million in nonperforming one-to-four family
loans related to a single borrower and the write off of one
residential property for $84 thousand. The decrease from one year
ago was primarily due to the payoff of a $2.3 million nonperforming
multifamily loan during 2022, the payoff of $1.5 million in
nonperforming one-to-four family loans related to a single
borrower, the payoff of a $243 thousand other consumer loan, and
the write off of one residential property for $84 thousand,
partially offset by additions during the same period.
NPAs to total assets were 0.19%, 0.37% and 0.56% at
March 31, 2023, December 31, 2022 and March 31, 2022,
respectively. The allowance for loan losses to total loans
outstanding was 0.98%, 0.88% and 0.90% at March 31, 2023,
December 31, 2022 and March 31, 2022, respectively. Net loan
charge-offs for the first quarter of 2023 totaled $72 thousand,
compared to $15 thousand for the fourth quarter of 2022, and $24
thousand for the first quarter of 2022.
The following table summarizes our NPAs at the dates indicated
(dollars in thousands):
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Nonperforming Loans: |
|
|
|
|
|
|
|
|
|
One-to-four family |
$ |
697 |
|
|
$ |
2,135 |
|
|
$ |
1,961 |
|
|
$ |
1,669 |
|
|
$ |
1,676 |
|
Home equity loans |
|
138 |
|
|
|
142 |
|
|
|
133 |
|
|
|
152 |
|
|
|
155 |
|
Commercial and
multifamily |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,307 |
|
|
|
2,336 |
|
Construction and land |
|
322 |
|
|
|
324 |
|
|
|
29 |
|
|
|
30 |
|
|
|
31 |
|
Manufactured homes |
|
134 |
|
|
|
96 |
|
|
|
99 |
|
|
|
117 |
|
|
|
135 |
|
Commercial business |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
170 |
|
Other consumer |
|
1 |
|
|
|
262 |
|
|
|
265 |
|
|
|
233 |
|
|
|
244 |
|
Total nonperforming loans |
|
1,293 |
|
|
|
2,959 |
|
|
|
2,486 |
|
|
|
4,509 |
|
|
|
4,747 |
|
OREO and Other
Repossessed Assets: |
|
|
|
|
|
|
|
|
|
One-to-four family |
|
— |
|
|
|
84 |
|
|
|
84 |
|
|
|
84 |
|
|
|
84 |
|
Commercial and
multifamily |
|
575 |
|
|
|
575 |
|
|
|
575 |
|
|
|
575 |
|
|
|
575 |
|
Total OREO and repossessed assets |
|
575 |
|
|
|
659 |
|
|
|
659 |
|
|
|
659 |
|
|
|
659 |
|
Total nonperforming assets |
$ |
1,868 |
|
|
$ |
3,618 |
|
|
$ |
3,145 |
|
|
$ |
5,168 |
|
|
$ |
5,406 |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans: |
|
|
|
|
|
|
|
|
|
One-to-four family |
|
37.3 |
% |
|
|
59.0 |
% |
|
|
62.3 |
% |
|
|
32.3 |
% |
|
|
31.0 |
% |
Home equity loans |
|
7.4 |
|
|
|
3.9 |
|
|
|
4.2 |
|
|
|
2.9 |
|
|
|
2.9 |
|
Commercial and
multifamily |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44.7 |
|
|
|
43.2 |
|
Construction and land |
|
17.3 |
|
|
|
9.0 |
|
|
|
0.9 |
|
|
|
0.6 |
|
|
|
0.6 |
|
Manufactured homes |
|
7.2 |
|
|
|
2.7 |
|
|
|
3.2 |
|
|
|
2.3 |
|
|
|
2.5 |
|
Commercial business |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
Other consumer |
|
— |
|
|
|
7.2 |
|
|
|
8.4 |
|
|
|
4.5 |
|
|
|
4.5 |
|
Total nonperforming loans |
|
69.2 |
|
|
|
81.8 |
|
|
|
79.0 |
|
|
|
87.3 |
|
|
|
87.8 |
|
OREO and Other
Repossessed Assets: |
|
|
|
|
|
|
|
|
|
One-to-four family |
|
— |
|
|
|
2.3 |
|
|
|
2.7 |
|
|
|
1.6 |
|
|
|
1.6 |
|
Commercial and
multifamily |
|
30.8 |
|
|
|
15.9 |
|
|
|
18.3 |
|
|
|
11.1 |
|
|
|
10.6 |
|
Total OREO and repossessed assets |
|
30.8 |
|
|
|
18.2 |
|
|
|
21.0 |
|
|
|
12.7 |
|
|
|
12.2 |
|
Total nonperforming assets |
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
The following table summarizes the allowance for
credit losses at the dates and for the periods indicated (dollars
in thousands, unaudited):
|
At or For the Quarter Ended: |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Allowance for Loan
Losses |
|
|
|
|
|
|
|
|
|
Balance at beginning of
period |
$ |
7,599 |
|
|
$ |
7,489 |
|
|
$ |
7,117 |
|
|
$ |
6,407 |
|
|
$ |
6,306 |
|
Adoption of ASU
2016-13(1) |
|
760 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Provision for credit losses
during the period |
|
245 |
|
|
|
125 |
|
|
|
375 |
|
|
|
600 |
|
|
|
125 |
|
Net (charge-offs)/recoveries
during the period |
|
(72 |
) |
|
|
(15 |
) |
|
|
(3 |
) |
|
|
110 |
|
|
|
(24 |
) |
Balance at end of period |
$ |
8,532 |
|
|
$ |
7,599 |
|
|
$ |
7,489 |
|
|
$ |
7,117 |
|
|
$ |
6,407 |
|
Reserve for unfunded
loan commitments |
|
|
|
|
|
|
|
|
|
Balance at beginning of
period |
$ |
335 |
|
|
$ |
382 |
|
|
$ |
411 |
|
|
$ |
419 |
|
|
$ |
404 |
|
Adoption of ASU
2016-13(1) |
|
695 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Provision for (reversal of)
credit losses |
|
(235 |
) |
|
|
(47 |
) |
|
|
(29 |
) |
|
|
(8 |
) |
|
|
15 |
|
Balance at end of period |
|
795 |
|
|
|
335 |
|
|
|
382 |
|
|
|
411 |
|
|
|
419 |
|
Allowance for credit
losses (ACL) |
$ |
9,327 |
|
|
$ |
7,934 |
|
|
$ |
7,871 |
|
|
$ |
7,528 |
|
|
$ |
6,826 |
|
Allowance for loan losses to
total loans |
|
0.98 |
% |
|
|
0.88 |
% |
|
|
0.88 |
% |
|
|
0.88 |
% |
|
|
0.90 |
% |
Allowance for credit losses to
total loans |
|
1.07 |
% |
|
|
0.92 |
% |
|
|
0.92 |
% |
|
|
0.93 |
% |
|
|
0.96 |
% |
Allowance for loan losses to
total nonperforming loans |
|
659.86 |
% |
|
|
256.81 |
% |
|
|
301.25 |
% |
|
|
157.84 |
% |
|
|
134.97 |
% |
Allowance for credit losses to
total nonperforming loans |
|
721.35 |
% |
|
|
268.16 |
% |
|
|
316.57 |
% |
|
|
166.97 |
% |
|
|
143.78 |
% |
(1) Represents the impact of adopting
ASU 2016-13, Financial Instruments — Credit Losses on January 1,
2023. As a result of adopting ASU 2016-13, our methodology to
compute our allowance for credit losses is based on a current
expected credit loss methodology, rather than the previously
applied incurred loss methodology.
Deposits increased $32.9 million, or 4.1%, to $841.6 million at
March 31, 2023, from $808.8 million at December 31, 2022 and
increased $5.6 million, or 0.7%, from $836.1 million at
March 31, 2022. The increase in deposits compared to the prior
quarter-end was primarily a result of higher balances in
certificate and money market accounts, partially offset by lower
balances in all other deposit products, largely driven by consumer
behavior to move funds from lower yielding products into higher
interest-bearing deposit products. The increase in our deposits
compared to one year ago was a result of an increase in certificate
accounts, which was primarily used to fund organic loan growth. Our
noninterest-bearing deposits decreased $117 thousand, or 0.1% to
$173.1 million at March 31, 2023, compared to $173.2 million
at December 31, 2022 and decreased $35.7 million, or 17.1% from
$208.8 million at March 31, 2022. Noninterest-bearing deposits
represented 20.6%, 21.4% and 25.0% of total deposits at
March 31, 2023, December 31, 2022 and March 31, 2022,
respectively.
There were $35.0 million of outstanding FHLB advances at
March 31, 2023, as compared to $43.0 million at December 31,
2022 and none at March 31, 2022. FHLB advances are primarily
used to support organic loan growth and to maintain liquidity
ratios in line with our asset/liability objectives. Subordinated
notes, net totaled $11.7 million at each of March 31, 2023,
December 31, 2022 and March 31, 2022.
Stockholders’ equity totaled $98.6 million at March 31,
2023, an increase of $900 thousand, or 0.9%, from $97.7 million at
December 31, 2022, and an increase of $4.8 million, or 5.1%, from
$93.9 million at March 31, 2022. The increase in stockholders’
equity from December 31, 2022 was primarily the result of $2.2
million of net income earned during the current quarter, a $83
thousand decrease in accumulated other comprehensive loss, net of
tax, and $247 thousand in proceeds from exercises of stock options,
partially offset by the payment of $442 thousand in dividends to
Company stockholders. In addition, stockholders' equity was
impacted by the adoption of CECL in the first quarter of 2023,
which as of January 1, 2023, resulted in an after-tax decrease to
opening retained earnings of $1.1 million.
Sound Financial
Bancorp, Inc., a bank holding company, is the parent
company of Sound Community Bank, and is headquartered in Seattle,
Washington with full-service branches in Seattle, Tacoma, Mountlake
Terrace, Sequim, Port Angeles, Port Ludlow and University Place.
Sound Community Bank is a Fannie Mae Approved Lender and
Seller/Servicer with one loan production office located in the
Madison Park neighborhood of Seattle, Washington. For more
information, please visit www.soundcb.com.
Forward Looking Statement
Disclaimer
When used in this press release and in documents
filed or furnished by Sound Financial Bancorp, Inc. (the "Company")
with the Securities and Exchange Commission (the "SEC"), in the
Company's other press releases or other public or stockholder
communications, and in oral statements made with the approval of an
authorized executive officer, the words or phrases "will likely
result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," "intends" or similar expressions are
intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
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 may turn out to be wrong because of inaccurate
assumptions we might make, because of the factors listed below or
because of other factors that we cannot foresee that could cause
our actual results to be materially different from historical
results or from any future results expressed or implied by such
forward-looking statements. You are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of
the date made.
Factors which could cause actual results to
differ materially, include, but are not limited to: potential
adverse impacts to economic conditions in the Company’s local
market areas, other markets where the Company has lending
relationships, or other aspects of the Company's business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation or deflation, a potential recession or slowed economic
growth caused by increasing political instability from acts of war
including Russia's invasion of Ukraine, as well as supply chain
disruptions and any governmental or societal responses to new
COVID-19 variants; changes in consumer spending, borrowing and
savings habits; fluctuations in interest rates; the risks of
lending and investing activities, including changes in the level
and direction of loan delinquencies and write-offs and changes in
estimates of the adequacy of the allowance for loan losses; the
Company's ability to access cost-effective funding; fluctuations in
real estate values and both residential and commercial real estate
market conditions; demand for loans and deposits in the Company's
market area; secondary market conditions for loans; results of
examinations of the Company or the Bank by their regulators;
increased competition; changes in management's business strategies;
legislative changes; changes in the regulatory and tax environments
in which the Company operates; and other factors described in the
Company's latest Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q and other documents filed with or furnished to the
Securities and Exchange Commission, which are available at
www.soundcb.com and on the SEC's website at www.sec.gov. The
risks inherent in these factors could cause the Company's actual
results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company
and could negatively affect the Company's operating and stock
performance.
The Company does not undertake—and specifically
disclaims any obligation—to revise any forward-looking statement to
reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statement.
CONSOLIDATED INCOME STATEMENTS(Dollars in
thousands, unaudited)
|
|
For the Quarter Ended |
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Interest income |
|
$ |
12,174 |
|
|
$ |
11,819 |
|
|
$ |
10,776 |
|
$ |
8,986 |
|
|
$ |
8,213 |
Interest expense |
|
|
2,803 |
|
|
|
2,131 |
|
|
|
1,179 |
|
|
594 |
|
|
|
595 |
Net interest income |
|
|
9,371 |
|
|
|
9,688 |
|
|
|
9,597 |
|
|
8,392 |
|
|
|
7,618 |
Provision for credit
losses(1) |
|
|
10 |
|
|
|
78 |
|
|
|
346 |
|
|
592 |
|
|
|
140 |
Net interest income after
provision for credit losses |
|
|
9,361 |
|
|
|
9,610 |
|
|
|
9,251 |
|
|
7,800 |
|
|
|
7,478 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Service charges and fee
income |
|
|
581 |
|
|
|
618 |
|
|
|
604 |
|
|
596 |
|
|
|
549 |
Earnings (loss) on cash
surrender value of bank-owned life insurance |
|
|
151 |
|
|
|
175 |
|
|
|
59 |
|
|
(35 |
) |
|
|
21 |
Mortgage servicing income |
|
|
299 |
|
|
|
303 |
|
|
|
306 |
|
|
313 |
|
|
|
320 |
Fair value adjustment on
mortgage servicing rights |
|
|
(140 |
) |
|
|
(127 |
) |
|
|
9 |
|
|
57 |
|
|
|
268 |
Net gain on sale of loans |
|
|
78 |
|
|
|
49 |
|
|
|
48 |
|
|
84 |
|
|
|
365 |
Total noninterest income |
|
|
969 |
|
|
|
1,018 |
|
|
|
1,026 |
|
|
1,015 |
|
|
|
1,523 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
4,485 |
|
|
|
4,234 |
|
|
|
4,044 |
|
|
3,969 |
|
|
|
4,167 |
Operations |
|
|
1,441 |
|
|
|
1,536 |
|
|
|
1,610 |
|
|
1,436 |
|
|
|
1,299 |
Regulatory assessments |
|
|
153 |
|
|
|
136 |
|
|
|
116 |
|
|
99 |
|
|
|
101 |
Occupancy |
|
|
459 |
|
|
|
418 |
|
|
|
447 |
|
|
439 |
|
|
|
432 |
Data processing |
|
|
993 |
|
|
|
841 |
|
|
|
848 |
|
|
849 |
|
|
|
821 |
Total noninterest expense |
|
|
7,615 |
|
|
|
7,165 |
|
|
|
7,065 |
|
|
6,792 |
|
|
|
6,820 |
Income before provision for
income taxes |
|
|
2,715 |
|
|
|
3,463 |
|
|
|
3,212 |
|
|
2,023 |
|
|
|
2,181 |
Provision for income
taxes |
|
|
547 |
|
|
|
539 |
|
|
|
666 |
|
|
409 |
|
|
|
458 |
Net income |
|
$ |
2,168 |
|
|
$ |
2,924 |
|
|
$ |
2,546 |
|
$ |
1,614 |
|
|
$ |
1,723 |
(1) Prior period amounts include the reclassification
of the provision for (release of) unfunded loan commitment expense
from operations expense for comparability purposes. However, prior
period amounts were calculated using the previously applied
incurred loss methodology, rather than the current expected credit
losses methodology as a result of the adoption of CECL on January
1, 2023, and the balances are not directly comparable.
CONSOLIDATED BALANCE SHEET(Dollars in
thousands, unaudited)
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
81,580 |
|
|
$ |
57,836 |
|
|
$ |
76,064 |
|
|
$ |
80,051 |
|
|
$ |
197,091 |
|
Available-for-sale securities, at fair value |
|
|
8,601 |
|
|
|
10,207 |
|
|
|
10,396 |
|
|
|
9,382 |
|
|
|
10,223 |
|
Held-to-maturity securities, at amortized cost |
|
|
2,190 |
|
|
|
2,199 |
|
|
|
2,207 |
|
|
|
2,215 |
|
|
|
2,223 |
|
Loans held-for-sale |
|
|
1,414 |
|
|
|
— |
|
|
|
1,908 |
|
|
|
100 |
|
|
|
1,297 |
|
Loans held-for-portfolio |
|
|
870,545 |
|
|
|
865,981 |
|
|
|
851,447 |
|
|
|
806,078 |
|
|
|
709,485 |
|
Allowance for credit losses - loans |
|
|
(8,532 |
) |
|
|
(7,599 |
) |
|
|
(7,489 |
) |
|
|
(7,117 |
) |
|
|
(6,407 |
) |
Total loans held-for-portfolio, net |
|
|
862,013 |
|
|
|
858,382 |
|
|
|
843,958 |
|
|
|
798,961 |
|
|
|
703,078 |
|
Accrued interest receivable |
|
|
3,152 |
|
|
|
3,083 |
|
|
|
2,809 |
|
|
|
2,350 |
|
|
|
2,117 |
|
Bank-owned life insurance, net |
|
|
21,465 |
|
|
|
21,314 |
|
|
|
21,140 |
|
|
|
21,081 |
|
|
|
21,116 |
|
Other real estate owned ("OREO") and other repossessed assets,
net |
|
|
575 |
|
|
|
659 |
|
|
|
659 |
|
|
|
659 |
|
|
|
659 |
|
Mortgage servicing rights, at fair value |
|
|
4,587 |
|
|
|
4,687 |
|
|
|
4,787 |
|
|
|
4,754 |
|
|
|
4,668 |
|
Federal Home Loan Bank ("FHLB") stock, at cost |
|
|
2,583 |
|
|
|
2,832 |
|
|
|
2,897 |
|
|
|
2,317 |
|
|
|
1,117 |
|
Premises and equipment, net |
|
|
5,370 |
|
|
|
5,513 |
|
|
|
5,505 |
|
|
|
5,632 |
|
|
|
5,730 |
|
Right-of-use assets |
|
|
5,200 |
|
|
|
5,102 |
|
|
|
5,319 |
|
|
|
5,548 |
|
|
|
5,777 |
|
Other assets |
|
|
5,633 |
|
|
|
4,537 |
|
|
|
4,597 |
|
|
|
3,954 |
|
|
|
3,758 |
|
TOTAL ASSETS |
|
$ |
1,004,363 |
|
|
$ |
976,351 |
|
|
$ |
982,246 |
|
|
$ |
937,004 |
|
|
$ |
958,854 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
668,568 |
|
|
$ |
635,567 |
|
|
$ |
623,122 |
|
|
$ |
599,377 |
|
|
$ |
627,323 |
|
Noninterest-bearing deposits |
|
|
173,079 |
|
|
|
173,196 |
|
|
|
192,275 |
|
|
|
186,609 |
|
|
|
208,768 |
|
Total deposits |
|
|
841,647 |
|
|
|
808,763 |
|
|
|
815,397 |
|
|
|
785,986 |
|
|
|
836,091 |
|
Borrowings |
|
|
35,000 |
|
|
|
43,000 |
|
|
|
44,500 |
|
|
|
30,000 |
|
|
|
— |
|
Accrued interest payable |
|
|
385 |
|
|
|
395 |
|
|
|
109 |
|
|
|
194 |
|
|
|
38 |
|
Lease liabilities |
|
|
5,543 |
|
|
|
5,448 |
|
|
|
5,749 |
|
|
|
5,980 |
|
|
|
6,211 |
|
Other liabilities |
|
|
9,398 |
|
|
|
8,318 |
|
|
|
8,071 |
|
|
|
9,210 |
|
|
|
9,169 |
|
Advance payments from borrowers for taxes and insurance |
|
|
2,099 |
|
|
|
1,046 |
|
|
|
1,799 |
|
|
|
922 |
|
|
|
1,851 |
|
Subordinated notes, net |
|
|
11,686 |
|
|
|
11,676 |
|
|
|
11,665 |
|
|
|
11,655 |
|
|
|
11,644 |
|
TOTAL LIABILITIES |
|
|
905,758 |
|
|
|
878,646 |
|
|
|
887,290 |
|
|
|
843,947 |
|
|
|
865,004 |
|
STOCKHOLDERS'
EQUITY: |
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
26 |
|
|
|
26 |
|
|
|
26 |
|
|
|
26 |
|
|
|
26 |
|
Additional paid-in capital |
|
|
28,251 |
|
|
|
28,004 |
|
|
|
27,886 |
|
|
|
27,777 |
|
|
|
28,154 |
|
Retained earnings |
|
|
71,362 |
|
|
|
70,792 |
|
|
|
68,309 |
|
|
|
66,203 |
|
|
|
66,139 |
|
Accumulated other comprehensive loss, net of tax |
|
|
(1,034 |
) |
|
|
(1,117 |
) |
|
|
(1,265 |
) |
|
|
(949 |
) |
|
|
(469 |
) |
TOTAL STOCKHOLDERS' EQUITY |
|
|
98,605 |
|
|
|
97,705 |
|
|
|
94,956 |
|
|
|
93,057 |
|
|
|
93,850 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
1,004,363 |
|
|
$ |
976,351 |
|
|
$ |
982,246 |
|
|
$ |
937,004 |
|
|
$ |
958,854 |
|
KEY FINANCIAL RATIOS(unaudited)
|
|
For the Quarter Ended |
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Annualized return on average assets |
|
0.88 |
% |
|
1.16 |
% |
|
1.04 |
% |
|
0.70 |
% |
|
0.75 |
% |
Annualized return on average
equity |
|
8.88 |
|
|
11.94 |
|
|
10.61 |
|
|
6.86 |
|
|
7.39 |
|
Annualized net interest
margin(1) |
|
4.01 |
|
|
4.05 |
|
|
4.13 |
|
|
3.83 |
|
|
3.49 |
|
Annualized efficiency
ratio(2) |
|
73.65 |
% |
|
66.93 |
% |
|
66.51 |
% |
|
72.20 |
% |
|
74.61 |
% |
(1) Net interest income divided by average
interest earning assets.(2) Noninterest expense
divided by total revenue (net interest income and noninterest
income).
PER COMMON SHARE DATA(unaudited)
|
|
At or For the Quarter Ended |
|
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
Basic earnings per share |
|
$ |
0.84 |
|
$ |
1.13 |
|
$ |
0.99 |
|
$ |
0.62 |
|
$ |
0.66 |
Diluted earnings per
share |
|
$ |
0.83 |
|
$ |
1.12 |
|
$ |
0.97 |
|
$ |
0.61 |
|
$ |
0.65 |
Weighted-average basic shares
outstanding |
|
|
2,578,413 |
|
|
2,565,407 |
|
|
2,562,551 |
|
|
2,584,179 |
|
|
2,602,168 |
Weighted-average diluted
shares outstanding |
|
|
2,604,043 |
|
|
2,600,905 |
|
|
2,597,690 |
|
|
2,615,299 |
|
|
2,640,359 |
Common shares outstanding at
period-end |
|
|
2,601,443 |
|
|
2,583,619 |
|
|
2,581,949 |
|
|
2,578,595 |
|
|
2,621,531 |
Book value per share |
|
$ |
37.90 |
|
$ |
37.82 |
|
$ |
36.78 |
|
$ |
36.09 |
|
$ |
35.80 |
AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE
PAID(Dollars in thousands, unaudited)
The following tables present, for the periods indicated, the
total dollar amount of interest income from average
interest-earning assets and the resultant yields, as well as the
interest expense on average interest-bearing liabilities, expressed
both in dollars and rates. Income and yields on tax-exempt
obligations have not been computed on a tax equivalent basis. All
average balances are daily average balances. Nonaccrual loans have
been included in the table as loans carrying a zero yield for the
period they have been on nonaccrual (dollars in thousands).
|
Three Months Ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
AverageOutstandingBalance |
|
InterestEarned/Paid |
|
Yield/Rate |
|
AverageOutstandingBalance |
|
InterestEarned/Paid |
|
Yield/Rate |
|
AverageOutstandingBalance |
|
InterestEarned/Paid |
|
Yield/Rate |
Interest-Earning
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable |
$ |
867,724 |
|
|
$ |
11,381 |
|
5.32 |
% |
|
$ |
861,371 |
|
|
$ |
11,078 |
|
5.10 |
% |
|
$ |
694,920 |
|
|
$ |
8,075 |
|
4.71 |
% |
Investments and
interest-bearing cash |
|
80,244 |
|
|
|
793 |
|
4.01 |
% |
|
|
88,503 |
|
|
|
741 |
|
3.32 |
% |
|
|
190,385 |
|
|
|
138 |
|
0.29 |
% |
Total interest-earning
assets |
$ |
947,968 |
|
|
$ |
12,174 |
|
5.21 |
% |
|
$ |
949,874 |
|
|
$ |
11,819 |
|
4.94 |
% |
|
$ |
885,305 |
|
|
$ |
8,213 |
|
3.76 |
% |
Interest-Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and money market
accounts |
$ |
164,270 |
|
|
$ |
93 |
|
0.23 |
% |
|
$ |
174,410 |
|
|
$ |
88 |
|
0.20 |
% |
|
$ |
196,128 |
|
|
$ |
30 |
|
0.06 |
% |
Demand and NOW accounts |
|
241,088 |
|
|
|
267 |
|
0.45 |
% |
|
|
267,043 |
|
|
|
280 |
|
0.42 |
% |
|
|
315,181 |
|
|
|
122 |
|
0.16 |
% |
Certificate accounts |
|
246,578 |
|
|
|
1,776 |
|
2.92 |
% |
|
|
186,277 |
|
|
|
1,011 |
|
2.15 |
% |
|
|
102,315 |
|
|
|
275 |
|
1.09 |
% |
Subordinated notes |
|
11,683 |
|
|
|
168 |
|
5.83 |
% |
|
|
11,669 |
|
|
|
168 |
|
5.71 |
% |
|
|
11,637 |
|
|
|
168 |
|
5.85 |
% |
Borrowings |
|
44,911 |
|
|
|
499 |
|
4.51 |
% |
|
|
59,348 |
|
|
|
584 |
|
3.90 |
% |
|
|
— |
|
|
|
— |
|
— |
% |
Total interest-bearing
liabilities |
$ |
708,530 |
|
|
|
2,803 |
|
1.60 |
% |
|
$ |
698,747 |
|
|
|
2,131 |
|
1.21 |
% |
|
$ |
625,261 |
|
|
|
595 |
|
0.39 |
% |
Net interest
income/spread |
|
|
$ |
9,371 |
|
3.60 |
% |
|
|
|
$ |
9,688 |
|
3.73 |
% |
|
|
|
$ |
7,618 |
|
3.38 |
% |
Net interest margin |
|
|
|
|
4.01 |
% |
|
|
|
|
|
4.05 |
% |
|
|
|
|
|
3.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning
assets to interest-bearing liabilities |
|
134 |
% |
|
|
|
|
|
|
136 |
% |
|
|
|
|
|
|
142 |
% |
|
|
|
|
Noninterest-bearing
deposits |
$ |
172,805 |
|
|
|
|
|
|
$ |
183,800 |
|
|
|
|
|
|
$ |
194,556 |
|
|
|
|
|
Total deposits |
|
824,741 |
|
|
$ |
2,136 |
|
1.05 |
% |
|
|
811,530 |
|
|
$ |
1,379 |
|
0.67 |
% |
|
|
808,180 |
|
|
$ |
427 |
|
0.21 |
% |
Total funding (1) |
|
881,335 |
|
|
|
2,803 |
|
1.29 |
% |
|
|
882,547 |
|
|
|
2,131 |
|
0.96 |
% |
|
|
819,817 |
|
|
|
595 |
|
0.29 |
% |
(1) Total funding is
the sum of average interest-bearing liabilities and average
noninterest-bearing deposits. The cost of total funding is
calculated as annualized total interest expense divided by average
total funding.
LOANS(Dollars in thousands, unaudited)
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
One-to-four family |
|
$ |
274,687 |
|
|
$ |
274,638 |
|
|
$ |
270,009 |
|
|
$ |
250,295 |
|
|
$ |
221,832 |
|
Home equity |
|
|
19,631 |
|
|
|
19,548 |
|
|
|
17,642 |
|
|
|
16,374 |
|
|
|
13,798 |
|
Commercial and multifamily |
|
|
307,558 |
|
|
|
313,358 |
|
|
|
315,677 |
|
|
|
307,462 |
|
|
|
279,892 |
|
Construction and land |
|
|
125,983 |
|
|
|
116,878 |
|
|
|
112,980 |
|
|
|
101,394 |
|
|
|
70,402 |
|
Total real estate loans |
|
|
727,859 |
|
|
|
724,422 |
|
|
|
716,308 |
|
|
|
675,525 |
|
|
|
585,924 |
|
Consumer Loans: |
|
|
|
|
|
|
|
|
|
|
Manufactured homes |
|
|
27,904 |
|
|
|
26,953 |
|
|
|
25,375 |
|
|
|
23,264 |
|
|
|
22,179 |
|
Floating homes |
|
|
73,579 |
|
|
|
74,443 |
|
|
|
69,968 |
|
|
|
66,573 |
|
|
|
59,784 |
|
Other consumer |
|
|
17,378 |
|
|
|
17,923 |
|
|
|
17,565 |
|
|
|
18,076 |
|
|
|
18,370 |
|
Total consumer loans |
|
|
118,861 |
|
|
|
119,319 |
|
|
|
112,908 |
|
|
|
107,913 |
|
|
|
100,333 |
|
Commercial business loans |
|
|
25,192 |
|
|
|
23,815 |
|
|
|
23,986 |
|
|
|
24,302 |
|
|
|
24,452 |
|
Total loans |
|
|
871,912 |
|
|
|
867,556 |
|
|
|
853,202 |
|
|
|
807,740 |
|
|
|
710,709 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Premiums |
|
|
946 |
|
|
|
973 |
|
|
|
984 |
|
|
|
1,010 |
|
|
|
788 |
|
Deferred fees, net |
|
|
(2,313 |
) |
|
|
(2,548 |
) |
|
|
(2,739 |
) |
|
|
(2,672 |
) |
|
|
(2,012 |
) |
Allowance for loan losses |
|
|
(8,532 |
) |
|
|
(7,599 |
) |
|
|
(7,489 |
) |
|
|
(7,117 |
) |
|
|
(6,407 |
) |
Total loans held for portfolio, net |
|
$ |
862,013 |
|
|
$ |
858,382 |
|
|
$ |
843,958 |
|
|
$ |
798,961 |
|
|
$ |
703,078 |
|
DEPOSITS(Dollars in thousands, unaudited)
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Noninterest-bearing |
|
$ |
173,079 |
|
$ |
173,196 |
|
$ |
192,275 |
|
$ |
186,609 |
|
$ |
208,768 |
Interest-bearing |
|
|
235,836 |
|
|
254,982 |
|
|
284,267 |
|
|
312,439 |
|
|
333,449 |
Savings |
|
|
83,991 |
|
|
95,641 |
|
|
99,602 |
|
|
103,311 |
|
|
106,217 |
Money market |
|
|
77,624 |
|
|
74,639 |
|
|
84,692 |
|
|
87,672 |
|
|
89,164 |
Certificates |
|
|
271,117 |
|
|
210,305 |
|
|
154,561 |
|
|
95,955 |
|
|
98,493 |
Total deposits |
|
$ |
841,647 |
|
$ |
808,763 |
|
$ |
815,397 |
|
$ |
785,986 |
|
$ |
836,091 |
CREDIT QUALITY DATA(Dollars in thousands,
unaudited)
|
|
At or For the Quarter Ended |
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
Total nonperforming loans |
|
|
1,293 |
|
|
|
2,958 |
|
|
|
2,486 |
|
|
|
4,509 |
|
|
|
4,747 |
|
OREO and other repossessed
assets |
|
|
575 |
|
|
|
659 |
|
|
|
659 |
|
|
|
659 |
|
|
|
659 |
|
Total nonperforming assets |
|
$ |
1,868 |
|
|
$ |
3,617 |
|
|
$ |
3,145 |
|
|
$ |
5,168 |
|
|
$ |
5,406 |
|
Net (charge-offs) recoveries
during the quarter |
|
|
(72 |
) |
|
|
(15 |
) |
|
|
(3 |
) |
|
|
110 |
|
|
|
(24 |
) |
Provision for credit losses
during the quarter |
|
|
10 |
|
|
|
78 |
|
|
|
346 |
|
|
|
592 |
|
|
|
140 |
|
Allowance for loan losses |
|
|
8,532 |
|
|
|
7,599 |
|
|
|
7,489 |
|
|
|
7,117 |
|
|
|
6,407 |
|
Allowance for loan losses to
total loans |
|
|
0.98 |
% |
|
|
0.88 |
% |
|
|
0.88 |
% |
|
|
0.88 |
% |
|
|
0.90 |
% |
Allowance for loan losses to
total nonperforming loans |
|
|
659.97 |
% |
|
|
256.87 |
% |
|
|
301.24 |
% |
|
|
157.84 |
% |
|
|
134.96 |
% |
Nonperforming loans to total
loans |
|
|
0.15 |
% |
|
|
0.34 |
% |
|
|
0.29 |
% |
|
|
0.56 |
% |
|
|
0.67 |
% |
Nonperforming assets to total
assets |
|
|
0.19 |
% |
|
|
0.37 |
% |
|
|
0.32 |
% |
|
|
0.55 |
% |
|
|
0.56 |
% |
OTHER STATISTICS(Dollars in thousands,
unaudited)
|
|
At or For the Quarter Ended |
|
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
|
|
|
|
|
|
|
|
|
|
|
Total loans to total deposits |
|
|
103.60 |
% |
|
|
107.27 |
% |
|
|
104.64 |
% |
|
|
102.77 |
% |
|
|
85.00 |
% |
Noninterest-bearing deposits to total deposits |
|
|
20.56 |
% |
|
|
21.41 |
% |
|
|
23.58 |
% |
|
|
23.74 |
% |
|
|
24.97 |
% |
|
|
|
|
|
|
|
|
|
|
|
Average total assets for the quarter |
|
$ |
996,516 |
|
|
$ |
996,042 |
|
|
$ |
969,254 |
|
|
$ |
920,984 |
|
|
$ |
931,094 |
|
Average total equity for the quarter |
|
$ |
99,028 |
|
|
$ |
97,119 |
|
|
$ |
95,244 |
|
|
$ |
94,397 |
|
|
$ |
94,497 |
|
Contact
Financial: |
|
|
Wes Ochs |
|
|
|
Executive Vice
President/CFO |
|
|
(206) 436-8587 |
|
|
|
|
|
|
|
Media: |
|
|
Laurie Stewart |
|
|
|
President/CEO |
|
|
(206) 436-1495 |
|
|
|
|
|
|
|
Sound Financial Bancorp (NASDAQ:SFBC)
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