Company: SFBC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001541119-25-000034
Chunk: 9

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Item 2
Chunk 9
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.7 million, or 0.35% of total assets, at June 30, 2025 from $7.5 million, or 0.75% of total assets, at December 31, 2024. 

The table below sets forth the amounts and categories of NPAs at the dates indicated (dollars in thousands):

 Nonperforming Assets June 30,2025December 31,2024AmountChangePercentChangeTotal nonperforming loans$3,366 $7,491 $(4,125)(55.1)OREO and repossessed assets300 — 300 — Total nonperforming assets$3,666 $7,491 $(3,825)(51.1)%

The decrease in NPAs from December 31, 2024 was primarily due to payoffs of nonaccrual loans totaling $6.9 million, including two commercial real estate loans and one floating home loan, the return of loans to accrual status, loans charged-off, and regular loan payments. These decreases were partially offset by the addition of 11 loans totaling $3.4 million to nonaccrual 

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status and $259 thousand of other real estate owned that was not included in nonperforming assets at December 31, 2024. The percentage of nonperforming loans to total loans was 0.37% at June 30, 2025, compared to 0.83% at December 31, 2024

Mortgage Servicing Rights.  The fair value of mortgage servicing rights decreased $131 thousand, or 2.7%, to $4.6 million at June 30, 2025 from $4.8 million at December 31, 2024. We record mortgage servicing rights on loans sold with servicing retained and upon acquisition of a servicing portfolio. Mortgage servicing rights are carried at fair value. If the fair value of our mortgage servicing rights fluctuates significantly, our financial results could be materially impacted.  

Deposits and Borrowings. Total deposits increased $61.7 million, or 7.4%, to $899.5 million at June 30, 2025 from $837.8 million at December 31, 2024. This increase was primarily due to the return of reciprocal deposits that were temporarily moved off-balance sheet at year-end for liquidity and balance sheet management purposes. The reintroduction of these