The move lifts some restrictions on the amount of commercial lending that Sound Community Bank can do.
The charter switch is a continuation of the bank’s transformation from a mutual holding company to a publicly traded bank. In August, the holding company of Sound Community Bank raised $14.2 million in a public stock offering.
Sound Community Bank is joining dozens of other savings and loans that have made the switch in the wake of regulatory changes brought on by the Dodd–Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank led to the shuttering of Sound Community Bank’s long-time regulator, the Office of Thrift Supervision, and moved Sound Community Bank and others under the Office of the Comptroller of the Currency.
In a regulatory filing Monday, Sound Community Bank and its holding company, Sound Financial Bancorp, said the charter conversion should not have any substantial impacts on bank services. But the bank does expect to save money related to regulatory fees. Sound Community Bank will now fall under the regulatory authority of the Washington State Department of Financial Institutions (DFI). The Federal Deposit Insurance Corporation will continue to provide deposit insurance. The Holding Company will continue to be regulated by the Federal Reserve Bank.
“In addition to the cost savings and slightly more flexibility in commercial lending, there are benefits to being regulated locally," CEO Laurie Stewart said in a statement. “As a community bank doing business in Washington, we believe the DFI has an understanding of issues facing banks in our state. If we want to talk to the regulator we simply go across the street instead of across the country.”
Sound Community Bank has assets of about $366 million and deposits of $313 million. The bank is headquartered in downtown Seattle, with branches in Mountlake Terrace, Tacoma, Port Angeles and Sequim.