Company: SFBC
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001541119-25-000041
Chunk: 103

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 8
Chunk 103
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$4,540 $4,769 $4,632 Servicing rights that result from transfers and sale of financial assets39 24 87 114 Changes in fair value:Due to changes in model inputs or assumptions and other(1)(372)101 (551)(81)Ending balance, at fair value$4,305 $4,665 $4,305 $4,665 (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: September 30, 2025December 31, 2024Prepayment speed (Public Securities Association “PSA” model)125 %125 %Weighted-average life10.2 years10.6 yearsWeighted average discount rate10.0 %10.0 %Average debt service cost per residential loan$96.00 $80.00 

The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights, which are included in mortgage servicing income on the Condensed Consolidated Statements of Income, totaled $262 thousand and $794 thousand for three and nine months ended September 30, 2025, and $280 thousand and $841 thousand for the three and nine months ended September 30, 2024, respectively. 

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Note 7 – Commitments and Contingencies

In the normal course of operations, the Company engages in a variety of financial transactions that are not recorded in our financial statements. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks.  These transactions are used primarily to manage clients’ requests for funding and take the form of loan commitments and lines of credit.

Note 8 – Borrowings, FHLB Stock and Subordinated Notes

FHLB AdvancesThe following tables present advances from the FHLB as of the dates indicated (dollars in thousands):  September 30, 2025December 31, 2024FHLB advances:Short-term advances (one year or less)$15,000 $— Long-term advances (over one year)10,000 25,000 Total$25,000 $25,000 September 30, 2025December 31, 2024Fixed Rate:Outstanding balance$25,000 $25,000