Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 48

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 1
Chunk 48
---
, 2024DescriptionTotalLevel 1Level 2Level 3Municipal bonds$5,374 $— $5,374 $— Agency mortgage-backed securities2,416 — 2,416 — Mortgage servicing rights4,769 — — 4,769 The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring basis as of the dates indicated: March 31, 2025Financial InstrumentValuation TechniqueUnobservable Input(s)Range(Weighted-Average)Mortgage Servicing RightsDiscounted cash flowPrepayment speed assumption125%-364% (125%)Discount rate10.0%-10.3% (10%)December 31, 2024Financial InstrumentValuation TechniqueUnobservable Input(s)Range(Weighted-Average)Mortgage Servicing RightsDiscounted cash flowPrepayment speed assumption125%-556% (125%)Discount rate (10%)Generally, any significant increases in the prepayment speed assumption and discount rate utilized in the fair value measurement of the MSRs will result in a negative fair value adjustment (and decrease in the fair value measurement). Conversely, a significant decrease in the prepayment speed assumption and discount rate will result in a positive fair value adjustment (and increase in the fair value measurement). An increase in the weighted average life assumptions will result in a decrease in the prepayment speed assumption and conversely, a decrease in the weighted average life assumptions will result in an increase in the prepayment speed assumption. As a result of the difficulty in observing certain significant valuation inputs affecting our “Level 3” fair value assets, we are required to make judgments regarding these items’ fair values. There were no assets or liabilities (excluding MSRs) measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and nine months ended March 31, 2025 and 2024.  MSRs are measured at fair value using significant unobservable inputs (Level 3) on a recurring basis, and a reconciliation of these assets can be found in “Note 6—Mortgage Servicing Rights.

21

The following tables present the balance of assets measured at fair value on a nonrecurring basis at the dates indicated (in thousands): Fair Value at March 31, 2025 Total