Company: SFBC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001541119-25-000034
Chunk: 128

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Item 8
Chunk 128
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 months ended June 30, 2025, compared to 2.92% for the same period in 2024.

YTD 2025 vs. YTD 2024. Net interest income increased $2.4 million, or 16.2%, to $17.3 million for the six months ended June 30, 2025, from $14.9 million for the six months ended June 30, 2024. Net interest margin (annualized) was 3.47% and 2.94% for the six months ended June 30, 2025 and 2024, respectively. The increase in net interest income primarily resulted from a decrease in the average balances of and rate paid on deposits and borrowings and higher average balances and yield earned on loans, partially offset by a lower average balance of and yield on interest-earning cash. The increase in net interest margin primarily was due to the lower cost of funding and the increase in loan yield as a result of the reasons mentioned above.  

Through most of 2024, the Federal Open Market Committee of the Federal Reserve (“FOMC”) maintained the target range for the federal funds rate at 5.25% to 5.50%, where it remained until September 18, 2024. In light of continued progress on reducing inflation and after considering the balance of risks to the economy, the FOMC has since lowered the target range 100 basis points to 4.25% to 4.50% as June 30, 2025, with all rate cuts occurring in the latter half of 2024.

Provision for Credit Losses.  

The following table reflects the components of the provision for (release of) credit losses during the periods indicated (dollars in thousands):

Three Months Ended June 30,Six Months Ended June 30,2025202420252024Provision (release of) for credit losses on loans$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