Company: SFBC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001541119-25-000034
Chunk: 22

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Item 2
Chunk 22
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$164 $(88)$79 $(194)Release of credit losses on unfunded loan commitments6 (21)(112)52 Provision (release of) for credit losses$170 $(109)$(33)$(142)

A provision for credit losses of $170 thousand was recorded for the quarter ended June 30, 2025, compared to a release of credit losses of $109 thousand for the quarter ended June 30, 2024. The provision for credit losses during the current quarter was primarily due to growth in the balance of the loan portfolio, an increase in the balance of unfunded commitments, and a qualitative adjustment applied to certain loan segments related to uncertainty in the market and concentrations, partially offset by a lower qualitative adjustment for improved credit quality. Expected credit loss estimates are based on a range of factors, including market conditions, borrower-specific information, projected delinquencies, and anticipated effects of economic trends on borrowers' ability to repay. Net charge-offs for the three months ended June 30, 2025 totaled $21 thousand, compared to $17 thousand for three months ended June 30, 2024. 

A release of provision for credit losses of $33 thousand was recorded for the six months ended June 30, 2025, compared to a release of provision for credit losses of $142 thousand for the six months ended June 30, 2024. The release of provision for credit losses during the current period was primarily due to a lower qualitative adjustment for improved credit quality and a decrease in the balance of unfunded commitments, partially offset by growth in the balance of the loan portfolio and a qualitative adjustment applied to certain loan segments related to uncertainty in the market and concentrations. Expected credit loss estimates are based on a range of factors, including market conditions, borrower-specific information, projected delinquencies, and anticipated effects of economic trends on borrowers' ability to repay. Net charge-offs for the six months ended June 30, 2025 totaled $42 thousand, compared to $73 thousand for six months ended June 30, 2024. 

While we believe the estimates and assumptions used in our determination of the adequacy of the ACL are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not have a material adverse impact on our financial condition and results of operations. A further