Business Description
References in this document to Sound Financial Bancorp or the Company refer
to Sound Financial Bancorp, Inc. and its predecessor.
Sound Financial Bancorp, a Maryland corporation, is a bank holding company for
its wholly owned subsidiary, Sound Community Bank. Substantially all of Sound
Financial Bancorp’s business is conducted through Sound Community Bank,
a Washington state-chartered commercial bank. As a Washington commercial bank,
the Bank’s regulators are the Washington State Department of Financial
Institutions (“WDFI”) and the Federal Deposit Insurance Corporation
(“FDIC”). The Federal Reserve is the primary federal regulator for
Sound Financial Bancorp.
Our principal business consists of attracting retail and commercial deposits
from the general public and investing those funds, along with borrowed funds,
in loans secured by first and second mortgages on one- to four-family residences
(including home equity loans and lines of credit), commercial and multifamily,
construction and land, consumer and commercial business loans. We offer a variety
of secured and unsecured consumer loan products, including manufactured home
loans, floating homes, automobile loans, boat loans and recreational vehicle
loans. As part of our business, we focus on residential mortgage loan originations,
the majority of which we sell to Fannie Mae. We sell loans which conform to
the underwriting standards of Fannie Mae (“conforming”) with servicing
retained to maintain the direct customer relationship and to continue providing
strong customer service to our borrowers. We also originate loans which do not
conform to the underwriting standards of Fannie Mae (“non-conforming”)
loans to be held in our loan portfolio and for sale with servicing released.
We originate and retain a significant amount of commercial real estate loans,
including those secured by owner-occupied and nonowner-occupied commercial real
estate, multifamily property, manufactured home parks and construction and land
development loans.
State commercial banks have the authority to invest in various types of liquid
assets, including United States Treasury obligations, securities of various
federal agencies, including callable agency securities, certain certificates
of deposit of insured banks and savings institutions, certain bankers’
acceptances, repurchase agreements and federal funds. Subject to various restrictions,
state commercial banks may also invest their assets in investment grade commercial
paper and corporate debt securities and mutual funds whose assets conform to
the investments that the institution is otherwise authorized to make directly.
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