Company: SFBC
Filing Date: 2025-03-18
Form Type: 10-K
Source: 0001541119-25-000009
Chunk: 169

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-03-18
Form: 10-K
Item: Item 8
Chunk 169
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 $748 $— $2,908 $3,656 Related Parties and Regulatory Matters. In the ordinary course of business, the Company makes loans to its employees, officers and directors. Certain loans to employees, officers and directors are offered at discounted rates as compared to other clients as permitted by federal regulations. Employees, officers, and directors are eligible for mortgage loans with an adjustable rate that resets annually to 1.0% - 1.5% over the Bank's rolling cost of funds. Employees, officers and directors are also eligible for consumer loans that are 1.00% below the market loan rate at the time of origination. Director and officer loans are summarized as follows (in thousands): December 31, 20242023Balance, beginning of period$5,906 $3,328 Advances— 60 New / (reclassified) loans, net1,548 2,768 Repayments(772)(250)Balance, end of period$6,682 $5,906 Other. At December 31, 2024 and 2023, loans totaling $526 thousand and $9.4 million, respectively, represented real estate secured loans that had current loan-to-value ratios above supervisory guidelines.

Note 6—Mortgage Servicing Rights

The unpaid principal balances underlying the Company’s MSRs portfolio totaled $425.8 million and $448.9 million at December 31, 2024 and 2023, respectively. Of these total balances, the unpaid principal balance of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at December 31, 2024 and 2023 was $423.7 million and $446.8 million, respectively. The unpaid principal balances of loans serviced for other financial institutions at December 31, 2024 and 2023, totaled $2.1 million and $2.2 million, respectively. Loans serviced for Fannie Mae and others are not included in the Company’s financial statements as they are not assets of the Company. 

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A summary of the change in the balance of MSRs at December 31, 2024 and 2023 were as follows (in thousands):December 31,20242023Beginning balance, at fair value$4,632 $4,687 MSRs that result from transfers and sale of financial assets141 164 Changes in fair value:Due to changes in model inputs or