Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 49

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 1
Chunk 49
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Level 1Level 2Level 3OREO and repossessed assets$41 $— $— $41 Collateral dependent loans9,789 — — 9,789  Fair Value at December 31, 2024 TotalLevel 1Level 2Level 3Collateral dependent loans7,627 — — 7,627 There were no liabilities carried at fair value, measured on a recurring or nonrecurring basis, at both March 31, 2025 and December 31, 2024.

Note 6 – Mortgage Servicing Rights

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $418.6 million at March 31, 2025 compared to $425.8 million at December 31, 2024. Of these total balances, the unpaid principal balance of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at March 31, 2025 and December 31, 2024 were $416.5 million and $423.7 million, respectively. The unpaid principal balance of loans serviced for other financial institutions totaled $2.1 million at both March 31, 2025 and December 31, 2024.  Loans serviced for Fannie Mae and others are not included in the Company’s financial statements as they are not assets of the Company.A summary of the change in the balance of mortgage servicing assets during the periods indicated were as follows (in thousands):Three Months Ended March 31,20252024Beginning balance, at fair value$4,769 $4,632 Servicing rights that result from transfers and sale of financial assets18 45 Changes in fair value:Due to changes in model inputs or assumptions and other(1)(99)(65)Ending balance, at fair value$4,688 $4,612 (1) Represents changes due to collection/realization of expected cash flows and curtailments.The key economic assumptions used in determining the fair value of mortgage servicing rights at the dates indicated are as follows: March 31, 2025December 31, 2024Prepayment speed (Public Securities Association “PSA” model)125 %125 %Weighted-average life10.8 years10.6 yearsWeighted average discount rate10.0 %10.0 %The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights are