Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 102

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 8
Chunk 102
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41 thousand of other real estate owned properties. These additions were partially offset by $207 thousand in regular loan payments. Subsequent to quarter-end, 

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the $988 thousand commercial real estate loan added to NPAs during the quarter was paid-off. The percentage of nonperforming loans to total loans was 1.09% at March 31, 2025, compared to 0.83% at December 31, 2024. 

Mortgage Servicing Rights.  The fair value of mortgage servicing rights decreased $81 thousand or 1.7%, to $4.7 million at March 31, 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 $72.5 million, or 8.7%, to $910.3 million at March 31, 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 deposits in the first quarter of 2025 contributed significantly to the overall growth. In contrast, noninterest-bearing deposits decreased $5.8 million, or 4.4%, to $126.7 million at March 31, 2025, compared to $132.5 million at December 31, 2024. This decline may reflect continued migration into higher-yielding interest-bearing products as customers seek better returns in a competitive rate environment. Noninterest-bearing deposits represented 13.9% of total deposits at March 31, 2025, compared to 15.8% at December 31, 2024. 

A summary of deposit accounts with the corresponding weighted-average cost of funds at the dates indicated is presented below (dollars in thousands):

 March 31, 2025December 31, 2024 AmountWtd. Avg. RateAmountWtd. Avg. RateNoninterest-bearing demand$121,977 — %$130,095 — %Interest-bearing demand143,595 0.28 142,126 0.34