| [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|-----|-----------------------------------------------------------------------------------------|

| United States                                             | 26-0776123                   |
|----------------------------------------------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation of organization) | (IRS Employer Identification No.) |

|                                                                                                                                                               | Page Number |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
| PART I  INFORMATION                                                                                                                                      |        |
| Item 1.  Financial Statements                                                                                                                            |        |
| Consolidated Balance Sheets as of September 30, 2010 (unaudited) and December 31, 2009                                                                        | 3           |
| Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Three and Nine Month Periods Ended September 30, 2010 and 2009 (unaudited)`  | 4           |
| Consolidated Statement of Stockholders’ Equity for the Nine Month Period Ended September 30, 2010 (unaudited)                                                | 5           |
|  Consolidated Statements of Cash Flows For the Nine Month Periods Ended September 30, 2010 and 2009 (unaudited)                                               |  6     |
|  Selected Notes to Consolidated Financial Statements                                                                                                     |  8     |
| Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations                                                           | 23          |
| Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                                                                      | 32          |
| Item 4.  Controls and Procedures                                                                                                                         | 32          |
| PART II  OTHER INFORMATION                                                                                                                               |        |
| Item 1.  Legal Proceedings                                                                                                                               | 33          |
| Item 1A   Risk Factors                                                                                                                              | 33          |
| Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                                                                     | 33          |
| Item 3.  Defaults Upon Senior Securities                                                                                                                 | 33          |
| Item 4.  (Removed and Reserved)                                                                                                                          | 33          |
| Item 5.  Other Information                                                                                                                               | 33          |
| Item 6.  Exhibits                                                                                                                                        | 34          |
| SIGNATURES                                                                                                                                                    |        |
| EXHIBITS                                                                                                                                                           |        |

| SOUND FINANCIAL, INC AND SUBSIDIARY                |   |
|----------------------------------------------------|--------|
| Consolidated Balance Sheets                        |   |
| (unaudited)                                        |   |
|                                               |   | SEPTEMBER 30, |   |   | DECEMBER 31, |   |
|                                               |   | 2010 |   |   | 2009 |   |
| ASSETS                                             |   |   |   |   |   |   |
| Cash and cash equivalents                          |   | $ | 9,589,103 |   |   | $ | 15,678,766 |   |
| Available-for-sale securities (AFS), at fair value |   |   | 4,655,148 |   |   |   | 9,899,092 |   |
| Federal Home Loan Bank stock, at cost              |   |   | 2,444,000 |   |   |   | 2,444,000 |   |
| Loans held for sale                                |   |   | 1,836,246 |   |   |   | 2,857,700 |   |
| Loans                                              |   |   | 308,713,087 |   |   |   | 289,824,133 |   |
| Less allowance for loan losses                     |   |   | (3,920,649 | ) |   |   | (3,467,567 | ) |
| Total loans, net                                   |   |   | 304,792,438 |   |   |   | 286,356,566 |   |
|                                               |   |   |   |   |   |   |   |   |
| Accrued interest receivable                        |   |   | 1,312,750 |   |   |   | 1,305,590 |   |
| Premises and equipment, net                        |   |   | 3,365,807 |   |   |   | 3,523,753 |   |
| Bank-owned life insurance                          |   |   | 6,662,766 |   |   |   | 6,462,892 |   |
| Mortgage servicing rights, at fair value           |   |   | 2,878,261 |   |   |   | 2,017,489 |   |
| Mortgage servicing rights, at cost                 |   |   | - |   |   |   | 1,309,809 |   |
| Other real estate owned and repossessed assets     |   |   | 3,313,005 |   |   |   | 1,383,638 |   |
| Other assets                                       |   |   | 4,863,240 |   |   |   | 4,566,464 |   |
| Total assets                                       |   | $ | 345,712,764 |   |   | $ | 337,805,759 |   |

|                                                                                                                                                                            |   |   |        |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|
| LIABILITIES                                                                                                                                                                     |   |   |        |   |   |
| Deposits                                                                                                                                                                        |   |   |        |   |   |
| Interest-bearing                                                                                                                                                                |   | $      | 257,524,623 |   |   | $ | 266,337,202 |   |
| Noninterest-bearing demand                                                                                                                                                      |   |   | 28,252,172  |   |   |   | 21,226,575 |   |
| Total deposits                                                                                                                                                                  |   |   | 285,776,795 |   |   |   | 287,563,777 |   |
| Borrowings                                                                                                                                                                      |   |   | 30,209,908  |   |   |   | 20,000,000 |   |
| Accrued interest payable                                                                                                                                                        |   |   | 133,179     |   |   |   | 166,043 |   |
| Other liabilities                                                                                                                                                               |   |   | 2,953,212   |   |   |   | 4,668,216 |   |
| Advance payments from borrowers for taxes and insurance                                                                                                                         |   |   | 526,939     |   |   |   | 339,566 |   |
| Total liabilities                                                                                                                                                               |   |   | 319,600,033 |   |   |   | 312,737,602 |   |
| COMMITMENTS AND CONTINGENCIES (NOTE 4)                                                                                                                                          |   |   |        |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Preferred stock, $0.01 par value, 1,000,000 shares authorized, none outstanding                                                                                                 |   |   | -           |   |   |   | - |   |
| Common stock, $0.01 par value, 24,000,000 shares authorized, 3,000,095 issued and      3,000,095 outstanding as of September 30, 2010 and December 31, 2009 |   |   | 30,001      |   |   |   | 30,001 |   |
| Additional paid-in capital                                                                                                                                                      |   |   | 11,786,641  |   |   |   | 11,687,641 |   |
| Unearned shares - Employee Stock Ownership Plan (“ESOP”)                                                                                                            |   |   | (924,480    | )      |   |   | (924,480 | ) |
| Retained earnings                                                                                                                                                               |   |   | 15,968,961  |   |   |   | 15,214,549 |   |
| Accumulated other comprehensive loss, net of tax                                                                                                                                |   |   | (748,392    | )      |   |   | (939,554 | ) |
| Total stockholders’ equity                                                                                                                                                |   |   | 26,112,731  |   |   |   | 25,068,157 |   |
| Total liabilities and stockholders’ equity                                                                                                                                |   | $      | 345,712,764 |   |   | $ | 337,805,759 |   |

|                                                                                         |   | THREE MONTHS ENDED |      |   | NINE MONTHS ENDED |   |
|----------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                                                         |   | SEPTEMBER 30,      |      |   | SEPTEMBER 30,     |   |
|                                                                                         |   | 2010               |      |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| INTEREST INCOME                                                                              |   |               |      |   |              |   |   |   |   |   |   |   |
| Loans, including fees                                                                        |   | $                  | 4,851,941 |   |              | $      | 4,631,043 |   |   | $ | 14,228,674 |   |   | $ | 13,478,731 |   |
| Interest and dividends on investments,                                                       |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| cash and cash equivalents                                                                    |   |               | 77,619    |   |              |   | 311,757 |   |   |   | 395,374 |   |   |   | 740,103 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total interest income                                                                        |   |               | 4,929,560 |   |              |   | 4,942,800 |   |   |   | 14,624,048 |   |   |   | 14,218,834 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST EXPENSE                                                                             |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                     |   |               | 889,306   |   |              |   | 1,547,045 |   |   |   | 2,892,339 |   |   |   | 4,802,659 |   |
| FHLB advances and other borrowings                                                           |   |               | 153,391   |   |              |   | 256,407 |   |   |   | 471,026 |   |   |   | 758,500 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total interest expense                                                                       |   |               | 1,042,697 |   |              |   | 1,803,452 |   |   |   | 3,363,365 |   |   |   | 5,561,159 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| NET INTEREST INCOME                                                                          |   |               | 3,886,863 |   |              |   | 3,139,348 |   |   |   | 11,260,683 |   |   |   | 8,657,675 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                                                    |   |               | 950,000   |   |              |   | 950,000 |   |   |   | 3,150,000 |   |   |   | 2,325,000 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| NET INTEREST INCOME                                                                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| AFTER PROVISION FOR LOAN LOSSES                                                              |   |               | 2,936,863 |   |              |   | 2,189,348 |   |   |   | 8,110,683 |   |   |   | 6,332,675 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| NONINTEREST INCOME                                                                           |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Service charges and fee income                                                               |   |               | 559,269   |   |              |   | 544,848 |   |   |   | 1,637,695 |   |   |   | 1,534,522 |   |
| Earnings on cash surrender value                                                             |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    of bank-owned life insurance                                               |   |               | 66,274    |   |              |   | 71,541 |   |   |   | 199,874 |   |   |   | 203,541 |   |
| Mortgage servicing income                                                                    |   |               | 75,343    |   |              |   | 179,501 |   |   |   | 381,531 |   |   |   | 639,405 |   |
| Fair value adjustment on mortgage servicing rights                                           |   |               | (284,067  | )      |              |   | - |   |   |   | (197,254 | ) |   |   | - |   |
| Gain on sale of securities                                                                   |   |               | -         |   |              |   | - |   |   |   | 64,070 |   |   |   | - |   |
| Total other-than-temporary impairment losses                                                 |   |               | (47,416   | )      |              |   | - |   |   |   | (98,671 | ) |   |   | - |   |
| Loss on sale of assets                                                                       |   |               | (202,204  | )      |              |   | (34,294 | ) |   |   | (291,080 | ) |   |   | (588,870 | ) |
| Gain on bargain purchase                                                                     |   |               | -         |   |              |   | 226,816 |   |   |   | - |   |   |   | 226,816 |   |
| Gain (loss) on sale of loans                                                                 |   |               | 342,903   |   |              |   | (20,143 | ) |   |   | 465,164 |   |   |   | 56,030 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total noninterest income                                                                     |   |               | 510,102   |   |              |   | 968,269 |   |   |   | 2,161,329 |   |   |   | 2,071,444 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| NONINTEREST EXPENSE                                                                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and benefits                                                                        |   |               | 1,352,134 |   |              |   | 1,421,141 |   |   |   | 4,513,256 |   |   |   | 4,129,336 |   |
| Operations                                                                                   |   |               | 749,864   |   |              |   | 974,839 |   |   |   | 2,396,732 |   |   |   | 2,598,406 |   |
| Regulatory assessments                                                                       |   |               | 205,244   |   |              |   | 125,857 |   |   |   | 643,683 |   |   |   | 511,095 |   |
| Occupancy                                                                                    |   |               | 328,435   |   |              |   | 307,070 |   |   |   | 1,017,613 |   |   |   | 841,832 |   |
| Data processing                                                                              |   |               | 211,993   |   |              |   | 239,922 |   |   |   | 673,268 |   |   |   | 637,362 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total noninterest expense                                                                    |   |               | 2,847,670 |   |              |   | 3,068,829 |   |   |   | 9,244,552 |   |   |   | 8,718,031 |   |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) BEFORE PROVISION      (BENEFIT) FOR INCOME TAXES |   |               | 599,295   |   |              |   | 88,788 |   |   |   | 1,027,460 |   |   |   | (313,912 | ) |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| PROVISION (BENEFIT) FOR INCOME TAXES                                                         |   |               | 178,338   |   |              |   | 12,550 |   |   |   | 271,834 |   |   |   | (162,289 | ) |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                                                            |   | $                  | 420,957   |   |              | $      | 76,238 |   |   | $ | 755,626 |   |   | $ | (151,623 | ) |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| UNREALIZED GAIN (LOSS) ON AFS SECURITIES,       NET OF TAX     |   | $                  | 359,615   |   |              | $      | (124,233 | ) |   | $ | 191,162 |   |   | $ | (138,342 | ) |
| OTHER COMPREHENSIVE INCOME (LOSS),        NET OF TAX           |   | $                  | 780,572   |   |              | $      | (47,995 | ) |   | $ | 946,788 |   |   | $ | (289,965 | ) |
| BASIC EARNINGS (LOSS) PER SHARE                                                              |   | $                  | 0.14      |   |              | $      | 0.03 |   |   | $ | 0.26 |   |   | $ | (0.05 | ) |
| DILUTED EARNINGS (LOSS) PER SHARE                                                            |   | $                  | 0.14      |   |              | $      | 0.03 |   |   | $ | 0.26 |   |   | $ | (0.05 | ) |
|                                                                                         |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                            |   | Shares |      |   | CommonStock |   |   | AdditionalPaid-inCapital |   |   | UnearnedESOP Shares |   |   | Retained Earnings |     |   | AccumulatedOtherComprehensiveLoss, net of tax |   |       | TotalStockholders’Equity |   |
|------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|-------------|--------|--------|--------------------------|--------|--------|---------------------|--------|--------|-------------------|----------|--------|-----------------------------------------------|--------|------------|--------------------------------|--------|
| BALANCE, December 31, 2009                                                                           |   |   | 3,000,095 |   |        | $      | 30,001 |                     |   | $      | 11,687,641          |   |   | $                 | (924,480 | )      |                                          | $      | 15,214,549 |                           |   | $ | (939,554 | ) |   | $ | 25,068,157 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Adoption of fair value option on mortgage servicing rights, net of tax of $13,150                    |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   | 25,527     |                           |   |   |   |   |   |   | 25,527 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Other comprehensive income:                                                                          |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Net income                                                                                           |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   | 755,626    |                           |   |   |   |   |   |   | 755,626 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Net unrealized gain in fair value of available for sale securities, net of tax  of $98,477 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   | 191,162 |   |   |   | 191,162 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Total comprehensive income                                                                           |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   | 946,788 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Cash dividend declared and paid    ($0.02 per share)                                  |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   | (26,741    | )                              |   |   |   |   |   |   | (26,741 | ) |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| Compensation related to stock options      and restricted stock                  |   |   |      |   |        |   |   |                     |   |   | 99,000              |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   | 99,000 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |
| BALANCE, September 30, 2010                                                                          |   |   | 3,000,095 |   |        | $      | 30,001 |                     |   | $      | 11,786,641          |   |   | $                 | (924,480 | )      |                                          | $      | 15,968,961 |                           |   | $ | (748,392 | ) |   | $ | 26,112,731 |   |
|                                                                                                 |   |   |      |   |        |   |   |                     |   |   |                |   |   |              |     |   |                                          |   |       |                           |   |   |   |   |   |   |   |   |

|                                                                             |   | Nine Months Ended September 30, |        |
|----------------------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                             |   | 2010                            |        |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                             |   |                            |        |   |   |   |
| Net income (loss)                                                                |   | $                               | 755,627     |   |   | $ | (151,623 | ) |
| Adjustments to reconcile net income (loss) to net cash from operating activities |   |                            |        |   |   |   |   |   |
| Accretion of net premium on investments                                          |   |                            | (231,363    | ) |   |   | (28,062 | ) |
| Gain on sale of available for sale securities                                    |   |                            | 64,070      |   |   |   | - |   |
| Other-than-temporary impairment on available for sale securities                 |   |                            | (98,671     | ) |   |   | - |   |
| Provision for loan losses                                                        |   |                            | 3,150,000   |   |   |   | 2,325,000 |   |
| Depreciation and amortization                                                    |   |                            | 374,265     |   |   |   | 366,178 |   |
| Compensation expense related to stock options and restricted stock               |   |                            | 99,000      |   |   |   | 90,000 |   |
| Fair value loss on mortgage servicing rights                                     |   |                            | 170,385     |   |   |   |   |   |
| Additions to mortgage servicing rights                                           |   |                            | (392,182    | ) |   |   | (689,219 | ) |
| Amortization of mortgage servicing rights                                        |   |                            | 670,834     |   |   |   | 337,938 |   |
| Increase in cash surrender value of bank owned life insurance                    |   |                            | (199,874    | ) |   |   | (203,541 | ) |
| Proceeds from sale of loans                                                      |   |                            | 39,709,740  |   |   |   | 68,755,636 |   |
| Originations of loans held for sale                                              |   |                            | (39,153,450 | ) |   |   | (74,246,826 | ) |
| Loss on sale of other real estate owned and repossessed assets                   |   |                            | 291,080     |   |   |   | 588,870 |   |
| Gain on sale of loans                                                            |   |                            | 465,164     |   |   |   | (56,030 | ) |
| Gain on bargain purchase                                                         |   |                            | -           |   |   |   | (226,816 | ) |
| (Decrease) increase in operating assets and liabilities                          |   |                            |        |   |   |   |   |   |
| Accrued interest receivable                                                      |   |                            | (7,160      | ) |   |   | (311,171 | ) |
| Other assets                                                                     |   |                            | (456,476    | ) |   |   | 1,590,953 |   |
| Accrued interest payable                                                         |   |                            | (32,864     | ) |   |   | (31,740 | ) |
| Other liabilities                                                                |   |                            | (1,715,004  | ) |   |   | 110,426 |   |
|                                                                             |   |                            |        |   |   |   |   |   |
| Net cash provided (used) by from operating activities                            |   |                            | 3,488,648   |   |   |   | (1,780,027 | ) |
|                                                                             |   |                            |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                             |   |                            |        |   |   |   |   |   |
| Proceeds from maturities and sales of available for sale securities              |   |                            | 11,692,543  |   |   |   | 2,929,534 |   |
| Purchase of available for sale investments                                       |   |                            | (5,831,773  | ) |   |   | (29,875,345 | ) |
| Cash proceeds from branch acquisitions                                           |   |                            | -           |   |   |   | 31,729,000 |   |
| Net increase in loans                                                            |   |                            | (24,857,663 | ) |   |   | (22,107,977 | ) |
| Improvements to OREO and other repossessed assets                                |   |                            | -           |   |   |   | (81,047 | ) |
| Proceeds from sale of OREO and other repossessed assets                          |   |                            | 1,051,344   |   |   |   | 2,046,904 |   |
| Purchases of premises and equipment                                              |   |                            | (216,319    | ) |   |   | (1,633,935 | ) |
|                                                                             |   |                            |        |   |   |   |   |   |
| Net cash used by investing activities                                            |   |                            | (18,161,868 | ) |   |   | (16,992,866 | ) |
|                                                                             |   |                            |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                             |   |                            |        |   |   |   |   |   |
| Net increase in deposits, net of acquired deposits                               |   |                            | (1,786,982  | ) |   |   | 44,010,597 |   |
| Proceeds from borrowings                                                         |   |                            | 65,700,000  |   |   |   | 98,530,000 |   |
| Repayment of borrowings                                                          |   |                            | (55,490,090 | ) |   |   | (115,749,355 | ) |
| Repurchase of common stock                                                       |   |                            | -           |   |   |   | (226,516 | ) |
| Cash dividends paid                                                              |   |                            | (26,741     | ) |   |   | (106,131 | ) |
| Net change in advances from borrowers for taxes and insurance                    |   |                            | 187,373     |   |   |   | 239,889 |   |
|                                                                             |   |                            |        |   |   |   |   |   |
| Net cash provided by financing activities                                        |   |                            | 8,583,557   |   |   |   | 26,698,484 |   |
|                                                                             |   |                            |        |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 |   |                            | (6,089,662  | ) |   |   | 7,925,591 |   |
|                                                                             |   |                            |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, beginning of period                                   |   |                            | 15,678,766  |   |   |   | 5,607,800 |   |
|                                                                             |   |                            |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, end of period                                         |   |                            | 9,589,103   |   |   |   | 13,533,391 |   |

| SUPPLEMENTAL CASH FLOW INFORMATION                       |   |   |      |   |   |   |
|----------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Cash paid for income taxes                               |   |   | 625,000   |   |   |   | - |   |
| Interest paid on deposits and borrowings                 |   |   | 3,396,229 |   |   |   | 5,592,899 |   |
| Net transfer of loans to other real estate owned         |   |   | 3,271,791 |   |   |   | 1,652,654 |   |
| Net assets acquired from 1st Security Bank of Washington |   |   |      |   |   |   |   |   |
| Assets acquired                                          |   |   | -         |   |   |   | 33,912,000 |   |
| Assets assumed                                           |   |   | -         |   |   |   | 33,685,000 |   |

|   |
|--------|

|                                  |  Fair Value at September 30, 2010 |                            |
|---------------------------------------|----------------------------------------|---------------------------------|
| Description                           |                                   | Total                           |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| Mortgage Servicing Rights             |                                   | $                               | 2,878,261 |   |   | $ | - |   |   | $ | - |   |   | $ | 2,878,261 |   |
| Agency Mortgage-backed Securities     |                                   |                            | 60,544 |   |   |   |   |   |   |   | 60,544 |   |   |   |   |   |
| Non-agency Mortgage-backed Securities |                                   |                            | 4,594,604 |   |   |   | - |   |   |   | 4,594,604 |   |   |   | - |   |
|      Total   |                                   | $                               | 7,533,409 |   |   | $ | - |   |   | $ | 4,655,148 |   |   | $ | 2,878,261 |   |
|                                  |                                   |                            |   |
|                                  |                                   | Fair Value at December 31, 2009 |   |
| Description                           |                                   | Total                           |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| Mortgage Servicing Rights             |                                   | $                               | 2,017,489 |   |   | $ | - |   |   | $ | - |   |   | $ | 2,017,489 |   |
| Agency Mortgage-backed Securities     |                                   |                            | 3,369,731 |   |   |   | - |   |   |   | 3,369,731 |   |   |   | - |   |
| Non-agency Mortgage-backed Securities |                                   |                            | 6,529,361 |   |   |   | - |   |   |   | 6,529,361 |   |   |   | - |   |
|      Total   |                                   | $                               | 11,916,581 |   |   | $ | - |   |   | $ | 9,899,092 |   |   | $ | 2,017,489 |   |

|                                |   | Fair Value at September 30, 2010 |       |   | Nine MonthsEndedSeptember 30,2010 |   |
|-------------------------------------|--------|----------------------------------|------------|--------|-----------------------------------|--------|
| Description                         |   | Total                            |       |   | Level 1                           |   |   | Level 2 |   |   | Level 3 |   |   | Total Losses |   |
| Loans Held for Sale                 |   | $                                | 1,836,246  |   |                              | $      | - |   |   | $ | 1,836,246 |   |   | $ | - |   |   | $ | - |   |
| OREO and Repossessed Assets         |   |                             | 3,313,005  |   |                              |   | - |   |   |   | - |   |   |   | 3,313,005 |   |   |   | 291,080 |   |
| Impaired Loans                      |   |                             | 14,460,829 |   |                              |   | - |   |   |   | - |   |   |   | 14,460,829 |   |   |   | 2,893,507 |   |
|      Total |   | $                                | 19,610,080 |   |                              | $      | - |   |   | $ | 1,836,246 |   |   | $ | 17,773,834 |   |   | $ | 3,184,587 |   |

|                                |   | Fair Value at December 31, 2009 |       |   | Twelve MonthsEndedDecember 31,2009 |   |
|-------------------------------------|--------|---------------------------------|------------|--------|------------------------------------|--------|
| Description                         |   | Total                           |       |   | Level 1                            |   |   | Level 2 |   |   | Level 3 |   |   | Total Losses |   |
| Loans Held for Sale                 |   | $                               | 2,857,700  |   |                               | $      | - |   |   | $ | 2,857,700 |   |   | $ | - |   |   | $ | - |   |
| Mortgage Servicing Rights, at cost  |   |                            | 1,309,809  |   |                               |   | - |   |   |   | - |   |   |   | 1,309,809 |   |   |   | 38,677 |   |
| OREO and Repossessed Assets         |   |                            | 1,383,638  |   |                               |   | - |   |   |   | - |   |   |   | 1,383,638 |   |   |   | 627,089 |   |
| Impaired Loans                      |   |                            | 11,719,926 |   |                               |   | - |   |   |   | - |   |   |   | 11,719,926 |   |   |   | 1,424,270 |   |
|      Total |   | $                               | 17,271,073 |   |                               | $      | - |   |   | $ | 2,857,700 |   |   | $ | 14,413,373 |   |   | $ | 2,090,036 |   |

|                                  |   | September 30, 2010 |        |   | December 31, 2009 |   |
|---------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                  |   | Carrying           |        |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                                  |   | Amount             |        |   | Value             |   |   | Amount |   |   | Value |   |
| Financial assets:                     |   |               |        |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents             |   | $                  | 9,589,103   |   |              | $      | 9,589,103 |   |   | $ | 15,678,766 |   |   | $ | 15,678,766 |   |
| AFS securities                        |   |               | 4,655,148   |   |              |   | 4,655,148 |   |   |   | 9,899,092 |   |   |   | 9,899,092 |   |
|  FHLB stock                      |   |               | 2,444,000   |   |              |   | 2,444,000 |   |   |   | 2,444,000 |   |   |   | 2,444,000 |   |
| Loans held for sale                   |   |               | 1,836,246   |   |              |   | 1,836,246 |   |   |   | 2,857,700 |   |   |   | 2,857,700 |   |
| Loans, net                            |   |               | 304,792,438 |   |              |   | 305,577,512 |   |   |   | 286,356,566 |   |   |   | 286,430,669 |   |
| Accrued interest receivable           |   |               | 1,312,750   |   |              |   | 1,312,750 |   |   |   | 1,305,590 |   |   |   | 1,305,590 |   |
| Bank-owned life insurance             |   |               | 6,662,766   |   |              |   | 6,662,766 |   |   |   | 6,462,892 |   |   |   | 6,462,892 |   |
| Mortgage servicing rights, fair value |   |               | 2,878,261   |   |              |   | 2,878,261 |   |   |   | 2,017,489 |   |   |   | 2,017,489 |   |
| Mortgage servicing rights, at cost    |   |               | -           |   |              |   | - |   |   |   | 1,309,809 |   |   |   | 1,360,417 |   |
|                                  |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                       |   |               | 150,237,552 |   |              |   | 150,237,552 |   |   | $ | 151,675,433 |   |   | $ | 151,675,433 |   |
| Time deposits                         |   |               | 135,539,243 |   |              |   | 133,551,895 |   |   |   | 135,888,344 |   |   |   | 137,833,241 |   |
| Borrowings                            |   |               | 30,209,908  |   |              |   | 29,883,669 |   |   |   | 20,000,000 |   |   |   | 19,735,005 |   |
| Accrued interest payable              |   |               | 133,179     |   |              |   | 133,179 |   |   |   | 166,043 |   |   |   | 166,043 |   |
| Advance payments from                 |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| borrowers for taxes and insurance     |   |               | 526,939     |   |              |   | 526,939 |   |   |   | 339,566 |   |   |   | 339,566 |   |

|                                    |   | September 30,2010 |        |   | December 31,2009 |   |        | PercentageIncrease/(Decrease) |   |
|-----------------------------------------|--------|-------------------|-------------|--------|------------------|--------|-------------|-------------------------------|--------|
| One-to-four family loans                |   |              |        |   |             |   |        |                          |   |
| First mortgages                         |   | $                 | 106,109,449 |   |             | $      | 104,460,367 |                          |   |   | 1.6 | % |
| Home equity                             |   |              | 45,889,458  |   |             |   | 50,444,530  |                          |   |   | (9.0 | %) |
| Land and construction              |   |              | 8,462,143   |   |             |   | 6,803,173   |                          |   |   | 24.4 | % |
|                                    |   |              | 160,461,050 |   |             |   | 161,708,070 |                          |   |   | (0.8 | %) |
| Commercial loans                        |   |              |        |   |             |   |        |                          |   |   |   |   |
| Commercial real estate                  |   |              | 63,078,189  |   |             |   | 52,375,032  |                          |   |   | 20.4 | % |
| Multifamily residential                 |   |              | 29,544,843  |   |             |   | 19,660,234  |                          |   |   | 50.3 | % |
| Construction and development            |   |              | 3,053,876   |   |             |   | 3,197,116   |                          |   |   | (4.5 | %) |
| Business term loans and lines of credit |   |              | 20,293,999  |   |             |   | 17,799,946  |                          |   |   | 14.0 | % |
|                                    |   |              | 115,970,907 |   |             |   | 93,032,328  |                          |   |   | 24.7 | % |
| Consumer Loans                          |   |              |        |   |             |   |        |                          |   |   |   |   |
| Manufactured housing                    |   |              | 20,305,490  |   |             |   | 21,472,799  |                          |   |   | (5.4 | %) |
| Automobile                              |   |              | 4,431,117   |   |             |   | 6,445,829   |                          |   |   | (31.3 | %) |
| Other                                   |   |              | 8,021,218   |   |             |   | 7,499,180   |                          |   |   | 7.0 | % |
|                                    |   |              | 32,757,825  |   |             |   | 35,417,808  |                          |   |   | (7.5 | %) |
|                                    |   |              |        |   |             |   |        |                          |   |   |   |   |
| Total loans                             |   |              | 309,189,782 |   |             |   | 290,158,206 |                          |   |   | 6.6 | % |
|                                    |   |              |        |   |             |   |        |                          |   |   |   |   |
| Deferred loan origination fees          |   |              | (476,695    | )      |             |   | (334,073    | )                             |   |   | 42.7 | % |
| Allowance for loan losses               |   |              | (3,920,649  | )      |             |   | (3,467,567  | )                             |   |   | 13.1 | % |
| Total loans, net                        |   | $                 | 304,792,438 |   |             | $      | 286,356,566 |                          |   |   | 6.4 | % |

|                         |   | Nine Months Ended September 30, |       |
|------------------------------|--------|---------------------------------|------------|
|                         |   | 2010                            |       |   | 2009 |   |
| Balance, beginning of period |   | $                               | 3,467,567  |   |   | $ | 1,305,950 |   |
| Provision for loan losses    |   |                            | 3,150,000  |   |   |   | 2,325,000 |   |
| Recoveries                   |   |                            | 196,589    |   |   |   | 97,482 |   |
| Charge-offs                  |   |                            | (2,893,507 | ) |   |   | (1,202,182 | ) |
| Balance, end of period       |   | $                               | 3,920,649  |   |   | $ | 2,526,250 |   |

|                                                                |   | September 30, |       |   | December 31, |   |
|---------------------------------------------------------------------|--------|---------------|------------|--------|--------------|--------|
|                                                                |   | 2010          |       |   | 2009         |   |
| Impaired loans with a valuation allowance                           |   | $             | 9,951,133  |   |         | $      | 4,125,169 |   |
| Valuation allowance related to impaired loans                       |   |          | (880,810   | )      |         |   | (1,424,270 | ) |
| Impaired loans without a valuation allowance                        |   |          | 5,390,506  |   |         |   | 9,019,027 |   |
| Total impaired loans, net of valuation allowance for impaired loans |   | $             | 14,460,829 |   |         | $      | 11,719,926 |   |
|                                                                |   |          |       |   |         |   |   |   |
| Total non-accrual loans                                             |   |          | 3,016,000  |   |         |   | 3,607,000 |   |
| Loans past due 90+ days and still accruing interest                 |   |          | -          |   |         |   | - |   |
| Average investment in impaired loans                                |   |          | 13,938,000 |   |         |   | 11,385,000 |   |
| Forgone interest on non-accrual loans                               |   |          | 214,000    |   |         |   | 203,000 |   |
| Interest income recognized on impaired loans                        |   |          | 305,000    |   |         |   | - |   |
| Troubled debt restructured loans still on accrual                   |   |          | 4,905,000  |   |         |   | 7,424,000 |   |
| Troubled debt restructured loans on non-accrual                     |   |          | 684,000    |   |         |   | - |   |
| Troubled debt restructured loans included in impaired loans         |   |          | 5,589,000  |   |         |   | 7,424,000 |   |

|                                  |   |          |       |   | Gross Unrealized |   |    |                 |   |
|---------------------------------------|--------|---------------|------------|--------|------------------|--------|---------|----------------------|--------|
|                                  |   | AmortizedCost |       |   | Gains            |   |    | Losses 1 Yearor Less |   |   | Losses GreaterThan 1 Year |   |   | Estimated FairValue |   |
|                                  |
|                                  |
| September 30, 2010                    |   |          |       |   |             |   |    |                 |   |   |   |   |   |   |   |
| Agency mortgage-backed securities     |   | $             | 54,487     |   |             | $      | 6,057   |                 |   | $ | - |   |   | $ | - |   |   | $ | 60,544 |   |
| Non-agency mortgage-backed securities |   | $             | 5,734,588  |   |             |   |    |                 |   |   | - |   |   | $ | (1,139,984 | ) |   | $ | 4,594,604 |   |
|      Total   |   | $             | 5,789,075  |   |             | $      | 6,057   |                 |   | $ | - |   |   | $ | (1,139,984 | ) |   | $ | 4,655,148 |   |
|                                  |   |          |       |   |             |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                     |   |          |       |   |             |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Agency mortgage-backed securities     |   | $             | 3,421,392  |   |             | $      | 5,415   |                 |   | $ | (57,076 | ) |   | $ | - |   |   | $ | 3,369,731 |   |
| Non-agency mortgage-backed securities |   |          | 7,901,268  |   |             |   | 120,866 |                 |   |   | - |   |   |   | (1,492,773 | ) |   |   | 6,529,361 |   |
|      Total   |   | $             | 11,322,660 |   |             | $      | 126,281 |                 |   | $ | (57,076 | ) |   | $ | (1,492,773 | ) |   | $ | 9,899,092 |   |
|                                  |   |          |       |   |             |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |

|                                   |   | September 30, 2010 |      |
|----------------------------------------|--------|--------------------|-----------|
|                                   |   | Amortized Cost     |      |   | Fair Value |   |
| Due within one year                    |   | $                  | -         |   |   | $ | - |   |
| Due after one year through five years  |   |               | -         |   |   |   | - |   |
| Due after five years through ten years |   |               | -         |   |   |   | - |   |
| Due after ten years                    |   |               | 5,789,075 |   |   |   | 4,655,148 |   |
|                                   |   | $                  | 5,789,075 |   |   | $ | 4,655,148 |   |

|                                                                                                      |   | Three Months Ended |   |   | Nine Months Ended |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                                      |   | September 30,      |   |   | September 30,     |   |
|                                                                                                      |   | 2010               |   |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| Total other-than-temporary impairment losses                                                              |   | $                  | 47,416 |   |              | $      | - |   |   | $ | 98,671 |   |   | $ | - |   |
| Portion of other-than-temporary impairment losses recognized in other comprehensive income (before taxes) |   |               | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Net impairment losses recognized in earnings                                                              |   | $                  | 47,416 |   |              | $      | - |   |   | $ | 98,671 |   |   | $ | - |   |
|                                                                                                      |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |

| Beginning balance as of January 1, 2010                              |   | $      | 3,327,298 |   |
|----------------------------------------------------------------------|--------|--------|-----------|--------|
| Adoption of fair value option on mortgage servicing rights           |   |   | 38,677    |   |
| Fair Value as of January 1, 2010                                     |   |   | 3,365,975 |   |
| Additions:                                                           |   |   |      |   |
| Servicing obligations that result from transfers of financial assets |   |   | 392,182   |   |
| Other changes in Fair Value                                          |   |   | (209,062  | )      |
| Subtractions:                                                        |   |   |      |   |
| Net disposals of servicing obligations                               |   |   | (670,834  | )      |
| Fair Value as of September 30, 2010                                  |   | $      | 2,878,261 |   |

|                                                   |   | Nine months ended September 30, |      |
|--------------------------------------------------------|--------|---------------------------------|-----------|
|                                                   |   | 2010                            |      |   | 2009 |   |
| Net income (loss)                                      |   | $                               | 755,626   |   |   | $ | (151,623 | ) |
|                                                   |   |                            |      |   |   |   |   |   |
| Weighted average number of shares outstanding, basic   |   |                            | 2,916,314 |   |   |   | 2,899,588 |   |
| Effect of dilutive stock options                       |   |                            | -         |   |   |   | - |   |
| Weighted average number of shares outstanding, diluted |   |                            | 2,911,969 |   |   |   | 2,899,588 |   |
| Earnings per share, basic                              |   | $                               | 0.26      |   |   | $ | (0.05 | ) |
| Earnings per share, diluted                            |   | $                               | 0.26      |   |   | $ | (0.05 | ) |

|                                                                  |   | Shares |    |   | Weighted-AverageExercise Price |   |   | Weighted-AverageRemainingContractualTerm InYears |   |   | AggregateIntrinsicValue |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|--------------------------------|--------|--------|--------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding at the beginning of the year                              |   |   | 108,398 |   |                           | $      | 7.93   |                                             |   |   | 8.58                    |   |   | $ | - |   |
| Granted                                                               |   |   |    |   |                           |   | -      |                                             |   |   |                    |   |   |   |   |   |
| Exercised                                                             |   |   | -       |   |                           |   | -      |                                             |   |   |                    |   |   |   |   |   |
| Forfeited or expired                                                  |   |   | -       |   |                           |   | -      |                                             |   |   |                    |   |   |   |   |   |
| Outstanding at September 30, 2010                                     |   |   | 108,398 |   |                           | $      | 7.93   |                                             |   |   | 8.58                    |   |   | $ | - |   |
| Expected to vest, assuming a 0% forfeiture rate over the vesting term |   |   | 108,398 |   |                           | $      | 7.93   |                                             |   |   | 8.58                    |   |   | $ | - |   |

|    Nonvested Shares                                   |   |   Shares |   |   | Weighted-Average Grant-Date Fair Value |   |   | AggregateIntrinsic Value |   |
|----------------------------------------------------------------------|--------|--------------------|--------|--------|----------------------------------------|--------|--------|--------------------------|--------|
|                                                                 |   |               |   |   |                                   |   |   |                     |   |
| Nonvested at January 1, 2010                                         |   |               | 52,032 |   |                                   | $      | 7.35   |                     |   | $ | 5.00 |   |
| Granted                                                              |   |               | -      |   |                                   |   | -      |                     |   |   | - |   |
| Vested                                                               |   |               | 10,406 |   |                                   |   | 7.35   |                     |   |   | 5.00 |   |
| Forfeited                                                            |   |               | -      |   |                                   |   | -      |                     |   |   |   |   |
| Nonvested at September 30, 2010                                      |   |               | 41,626 |   |                                   | $      | 7.35   |                     |   | $ | 5.00 |   |
|                                                                 |   |               |   |   |                                   |   |   |                     |   |   |   |   |
| Expected to vest assuming a 0% forfeiture rate over the vesting term |   |               | 41,626 |   |                                   | $      | 7.35   |                     |   | $ | 5.00 |   |

| Off-balance sheet loan commitments:                                                                                                                                                                                                                                                                                                                                                             |   |   |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|
| Commitments to make loans                                                                |   | $      | 8,890,000  |   |
| Undisbursed portion of loans closed                                                                                                                                                                                                                                                                                                                                                             |   |   | 4,011,000  |   |
| Unused lines of credit                                                                   |   |   | 27,947,000 |   |
| Irrevocable letters of credit                                                            |   |   | 265,000    |   |
| Total loan commitments                                                                   |   | $      | 41,113,000 |   |

|                                                         |   | Actual                 |   |   | Minimum CapitalRequirements |   |   | Minimum Required toBe Well-CapitalizedUnder PromptCorrective Action Provisions |   |
|--------------------------------------------------------------|--------|------------------------|--------|--------|----------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------|--------|
|                                                         |   | Amount                 |   |   | Ratio                            |   |   | Amount                                                                                                  |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                                         |   | (Dollars in thousands) |   |
|                                                         |   |                   |   |   |                             |   |   |                                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital to total adjusted assets (1)   |   | $                      | 25,746 |   |                             |   | 7.44   | %                                                                                                       |   | $ | 13,833 |   |   |   | 4.00 | % |   | $ | 17,292 |   |   |   | 5.00 | % |
| Tier 1 Capital to risk-weighted assets (2)         |   | $                      | 25,746 |   |                             |   | 10.06  | %                                                                                                       |   | $ | 10,237 |   |   |   | 4.00 | % |   | $ | 15,356 |   |   |   | 6.00 | % |
| Total Capital to risk-weighted assets (2)     |   | $                      | 28,945 |   |                             |   | 11.31  | %                                                                                                       |   | $ | 20,474 |   |   |   | 8.00 | % |   | $ | 25,593 |   |   |   | 10.00 | % |
|                                                         |   |                   |   |   |                             |   |   |                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                   |   |   |                             |   |   |                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (a)   | Evaluation of Disclosure Controls and Procedures. |
|-----------------|---------------------------------------------------|

| (b)   | Changes in Internal Controls over Financial Reporting. |
|-----------------|--------------------------------------------------------|

| Exhibit Number | Document                                                                                                                                                                                                                    | Reference toPrior Filingor Exhibit NumberAttached Hereto |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------|
|           |                                                                                                                                                                                                                        |                                                     |
| 3.1            | Charter for Sound Financial, Inc.                                                                                                                                                                                           | *                                                        |
| 3.2            | Bylaws of Sound Financial, Inc.                                                                                                                                                                                             | **                                                       |
| 4              | Form of Stock Certificate of Sound Financial, Inc.                                                                                                                                                                          | **                                                       |
| 10.1           | Employment Agreement with Laura Lee Stewart                                                                                                                                                                                 | *                                                        |
| 10.2           | Executive Long Term Compensation Agreement with Laura Lee Stewart                                                                                                                                                           | *                                                        |
| 10.3           | Executive Long Term Compensation Agreement with Patricia Floyd                                                                                                                                                              | *                                                        |
| 10.4           | Sound Community Incentive Compensation Achievement Plan                                                                                                                                                                     | *                                                        |
| 10.5           | Summary of Annual Bonus Plan                                                                                                                                                                                                | *                                                        |
| 10.6           | Summary of Quarterly Bonus Plan                                                                                                                                                                                             | *                                                        |
| 10.7           | Director Fee Arrangements for 2009                                                                                                                                                                                          | ***                                                      |
| 10.8           | Sound Financial, Inc. 2008 Equity Incentive Plan                                                                                                                                                                            | ***                                                      |
| 10.9           | Form of Incentive Stock Option Agreement under the 2008 Equity Incentive Plan                                                                                                                                               | +                                                        |
| 10.10          | Form of Non-Qualified Stock Option Agreement under the 2008 Equity Incentive Plan                                                                                                                                           | +                                                        |
| 10.11          | Form of Restricted Stock Agreement under the 2008 Equity Incentive Plan                                                                                                                                                     | +                                                        |
| 10.12          | Employment Agreements with executive officers Matthew Denies,Matthew Moran, Scott Boyer and Marlene Price                                                                                                                   | ++                                                       |
| 11             | Statement re computation of per share earnings                                                                                                                                                                              | None                                                     |
| 15             | Letter re unaudited interim financial information                                                                                                                                                                           | None                                                     |
| 18.1           | Letter re change in accounting principles                                                                                                                                                                                   | +++                                                      |
| 19             | Reports furnished to security holders                                                                                                                                                                                       | None                                                     |
| 22             | Published report regarding matters submitted to vote of security holders                                                                                                                                                    | None                                                     |
| 23             | Consents                                                                                                                                                                                                                    | None                                                     |
| 24             | Power of Attorney                                                                                                                                                                                                           | None                                                     |
| 31.1           | Rule 13a–14(a) Certification of Chief Executive Officer                                                                                                                                                               | 31.1                                                     |
| 31.2           | Rule 13a–14(a) Certification of Chief Financial Officer                                                                                                                                                               | 31.2                                                     |
| 32             | Section 1350 Certification                                                                                                                                                                                                  | 32                                                       |
| *              | Filed as an exhibit to the Company's Form SB–2 registration statement filed on September 20, 2007 (File No.333–146196) pursuant to Section 5 of the Securities Act of 1933.                                |
| **             | Filed as an exhibit to Pre-effective Amendment No. 1 to the Company's Form SB–2 registration statement filed on November 2, 2007 (File No.333–146196) pursuant to Section 5 of the Securities Act of 1933. |
| ***            | Filed as an exhibit to the Company’s Form 10-K filed on March 31, 2009.                                                                                                                                               |
| +              | Filed as an exhibit to the Company’s Form 8-K filed on January 29. 2009.                                                                                                                                              |
| ++             | Filed as an exhibit to the Company’s Form 8-K filed on November 5, 2009.                                                                                                                                              |
| +++            | Filed as an exhibit to the Company’s Form 10-Q filed on May 17, 2010.                                                                                                                                                 |

|              |   | SOUND FINANICAL, INC. |
|-------------------|--------|-----------------------|
|              |   |                  |   |
|              |   |                  |   |
|              |   |                  |   |
| November 15, 2010 |   | By:                   |    /s/  Laura Lee Stewart |
|              |   |                  | Laura Lee Stewart |
|              |   |                  | President and Chief Executive Officer |
|              |   |                  |   |
|              |   |                  |   |
|              |   |                  |   |
|              |   |                  |   |
| November 15, 2010 |   | By:                   |    /s/  Matthew P. Deines |
|              |   |                  | Matthew P. Deines |
|              |   |                  | Executive Vice President |
|              |   |                  | Chief Financial Officer |
|              |   |                  | Principal Financial and Accounting Officer |

| 31.1 | Rule 13a–14(a) Certification of Chief Executive Officer                                               | 31.1 |
|------|-------------------------------------------------------------------------------------------------------------|------|
| 31.2 | Rule 13a–14(a) Certification of Chief Financial Officer, Principal Financial and Accounting Principal | 31.2 |
| 32   | Section 1350 Certification                                                                                  | 32   |