Company: SFBC
Filing Date: 2025-03-18
Form Type: 10-K
Source: 0001541119-25-000009
Chunk: 16

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-03-18
Form: 10-K
Item: Item 1
Chunk 16
---
 than one-to-four family properties. These loans typically involve larger balances to single borrowers or groups of related borrowers. Because payments on loans secured by commercial and multifamily properties are often dependent on the successful operation or management of the properties, repayment of these loans may be subject to adverse conditions in the real estate market or the economy. Repayments of loans secured by nonowner-occupied properties depend primarily on the tenant’s continuing ability to pay rent to the property owner, who is our borrower, or, if the property owner is unable to find a tenant, the property owner’s ability to repay the loan without the benefit of a rental income stream. If the cash flow from the project is reduced, or if leases are not obtained or not renewed, the borrower's ability to repay the loan may be impaired. Commercial and multifamily real estate loans also expose a lender to greater credit risk than loans secured by one-to-four family properties because the collateral securing commercial and multifamily real estate loans typically cannot be sold as easily as one-to-four family collateral. In addition, most of our commercial and multifamily real estate loans are not fully amortizing and include balloon payments upon maturity. Balloon payments may require the borrower to either sell or refinance the underlying property in order to make the payment, which may increase the risk of default or non-payment. The largest single commercial and multifamily real estate loan at December 31, 2024, totaled $16.7 million and was collateralized by multifamily real estate. At December 31, 2024, this loan was performing in accordance with its repayment terms.

12

The following table provides information on commercial and multifamily real estate loans by type at December 31, 2024 and 2023 (dollars in thousands):

December 31,20242023AmountPercentAmountPercentMultifamily residential$164,404 44.3 %$107,486 34.1 %Owner-occupied commercial real estate retail9,279 2.5 9,905 3.1 Owner-occupied commercial real estate office buildings37,530 10.1 33,583 10.7 Owner-occupied commercial real estate other (1)6,331 1.7 6,557 2.1 Non-owner occupied commercial real estate retail26,184 7.0 19,366 6.1 Non-owner occupied commercial real estate office buildings— — 4,775 1.5 Non-owner occupied