Sound Financial Bancorp, Inc. (SFBC) | Investment Case

1. Company Snapshot

1.a. Company Description

Sound Financial Bancorp, Inc.operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses.It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit.

The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts.It operates eight branch offices, including four branches in Seattle Metropolitan Statistical Area, three branches in Clallam County, and one branch in Jefferson County; and a loan production office in the Madison Park neighborhood of Seattle.The company was founded in 1953 and is headquartered in Seattle, Washington.

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1.b. Last Insights on SFBC

Sound Financial Bancorp, Inc.'s recent performance was negatively impacted by a decline in net interest income due to a decrease in interest rates. The company's net interest income decreased by 7.6% year-over-year, primarily driven by a 12.3% decline in interest income from loans. Additionally, the company's non-interest income decreased by 4.1% year-over-year, mainly due to a decline in service charges and fees. The company's provision for loan losses also increased by 25.5% year-over-year, indicating potential credit risk concerns.

1.c. Company Highlights

Last Price	44.23
Change Percentage	0.55%
Open	44.29
Previous Close	43.99
Market Cap ( Millions)	113
Volume	1992
Year High	55.85
Year Low	43.8
M A 50	45.14
M A 200	47.79

FCF Yield	4.68%
Dividend Yield	1.72%
ROE	6.49%
Debt / Equity	37.91%
Net Debt / EBIDTA	-633.16%
Price To Book	1.05
Price Earnings Ratio	16.54
Price To FCF	21.38
Price To sales	2.37
EV / EBITDA	5.5

2. Transcript Summary

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3. NewsRoom

Sound Financial Bancorp, Inc. Q3 2025 Results

Oct -28

Source: globenewswire.com

Laurie Stewart Named One of American Banker's “Most Powerful Women To Watch”

Sep -24

Source: globenewswire.com

Sound Community Bancorp, Inc. Announces Executive Leadership Transition

Sep -19

Source: globenewswire.com

Sound Financial Bancorp, Inc. Q2 2025 Results

Jul -29

Source: globenewswire.com

Sound Financial Bancorp, Inc. Q1 2025 Results

Apr -29

Source: globenewswire.com

Sound Financial Bancorp, Inc. Announces Annual Shareholders Meeting Date

Feb -14

Source: globenewswire.com

Sound Financial Bancorp, Inc. Q4 2024 Results

Jan -29

Source: globenewswire.com

Sound Financial Bancorp, Inc. Q3 2024 Results

Oct -30

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Banking and Related Activities

Expected Growth: 5.5%

Sound Financial Bancorp's Banking and Related Activities segment is poised for growth driven by increasing demand for traditional banking services, a strong loan portfolio, and a growing customer base. The segment's focus on deposit accounts, loans, and other financial services will continue to drive revenue growth.

7. Detailed Products

Commercial Loans

Sound Financial Bancorp, Inc. offers commercial loans to businesses, providing financing for various purposes such as expansion, equipment purchases, and working capital.

Residential Loans

The company offers residential loans to individuals, providing financing for home purchases, refinancing, and construction projects.

Deposit Services

Sound Financial Bancorp, Inc. offers a range of deposit services, including checking and savings accounts, certificates of deposit, and individual retirement accounts.

Treasury Management Services

The company provides treasury management services to businesses, including cash management, wire transfers, and account reconciliation.

Wealth Management Services

Sound Financial Bancorp, Inc. offers wealth management services, including investment advice, portfolio management, and retirement planning.

8. Sound Financial Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sound Financial Bancorp, Inc. is medium due to the presence of alternative financial institutions and online banking services.

Bargaining Power Of Customers

The bargaining power of customers for Sound Financial Bancorp, Inc. is low due to the lack of concentration of customers and the presence of multiple banking options.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Sound Financial Bancorp, Inc. is medium due to the presence of multiple suppliers and the moderate level of dependence on them.

Threat Of New Entrants

The threat of new entrants for Sound Financial Bancorp, Inc. is high due to the low barriers to entry and the presence of fintech companies.

Intensity Of Rivalry

The intensity of rivalry for Sound Financial Bancorp, Inc. is high due to the presence of multiple competitors and the high level of competition in the banking industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	34.42%
Debt Cost	6.97%
Equity Weight	65.58%
Equity Cost	6.97%
WACC	6.97%
Leverage	52.48%

11. Quality Control: Sound Financial Bancorp, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Northeast Bank

A-Score: 6.1/10

Value: 6.8

Growth: 8.8

Quality: 7.5

Yield: 0.0

Momentum: 7.5

Volatility: 6.0

1-Year Total Return ->

Civista Bancshares

A-Score: 6.1/10

Value: 5.7

Growth: 5.7

Quality: 5.8

Yield: 6.0

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

Old Second Bancorp

A-Score: 6.0/10

Value: 5.8

Growth: 7.6

Quality: 5.9

Yield: 2.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

NBT Bancorp

A-Score: 6.0/10

Value: 6.0

Growth: 5.0

Quality: 7.4

Yield: 6.0

Momentum: 3.5

Volatility: 8.0

1-Year Total Return ->

Lake Shore Bancorp

A-Score: 5.8/10

Value: 5.7

Growth: 4.0

Quality: 7.0

Yield: 6.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

Sound Financial Bancorp

A-Score: 5.3/10

Value: 5.6

Growth: 3.9

Quality: 6.9

Yield: 4.0

Momentum: 1.5

Volatility: 9.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.88%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.97%

Sound Financial Bancorp, Inc. - US83607A1007

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SFBC

1.c. Company Highlights

Less Volatile

Average Quality

Average Yield

Stable Momentum

Expensive

Medium Volatility

Fairly Valued

Strong Momentum

Lower Growth

Average Growth

Weak Momentum

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Banking and Related Activities

Expected Growth: 5.5%

7. Detailed Products

Commercial Loans

Residential Loans

Deposit Services

Treasury Management Services

Wealth Management Services

8. Sound Financial Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Sound Financial Bancorp, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

44.23$

Current Price

44.23$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA