Company: SFBC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001541119-25-000034
Chunk: 129

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Item 8
Chunk 129
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 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 decline in national and local economic conditions, as a result of the effects of inflation, and a potential recession or slowed economic growth, among other factors, could result in a material increase in the ACL and have a material adverse impact on our financial condition and results of operations. In addition, the determination of the amount of our ACL is subject to review by bank regulators as part of the routine examination process, which may result in the adjustment of reserves based upon their judgment of information available to them at the time of their examination.

41

Noninterest Income.  Non