Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 17

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 2
Chunk 17
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 of operations. A further decline in national and local economic conditions, as a result of the effects of inflation, and a potential recession or slowed economic growth, among other factors, could result in a material increase in the ACL and have a material adverse impact on our financial condition and results of operations. In addition, the determination of the amount of our ACL is subject to review by bank regulators as part of the routine examination process, which may result in the adjustment of reserves based upon their judgment of information available to them at the time of their examination.

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Noninterest Income.  Noninterest income remained relatively unchanged at $1.1 million for both the three months ended March 31, 2025 and March 31, 2024, as reflected below (dollars in thousands):

 Three Months Ended March 31,AmountChangePercentChange 20252024Service charges and fee income$684 $612 $72 11.8 %Earnings on BOLI195 177 18 10.2 Mortgage servicing income269 282 (13)(4.6)Fair value adjustment on mortgage servicing rights(99)(65)(34)52.3 Net gain on sale of loans49 90 (41)(45.6)Total noninterest income$1,098 $1,096 $2 0.2 %

The changes in noninterest income for the three months ended March 31, 2025, compared to the same period in 2024 were primarily due to:

•a $72 thousand increase in service charges and fee income, primarily due to a volume incentive paid by Mastercard in the first quarter of 2025 and higher debit card interchange income;

•an $18 thousand increase in earnings from BOLI, primarily due to the strategic decision to surrender and exchange existing policies for higher yielding policies, partially offset by market fluctuations that reduced the value of the policies;

•a $13 thousand decrease in mortgage servicing income, resulting from portfolio paydowns occurring at a faster pace than new originations; 

•a $34 thousand decrease in the fair value adjustment on mortgage servicing rights, due to a smaller servicing portfolio; and 

•a $41 thousand decrease in net gain on sale of loans, due to a lower volume of loans sold during the first quarter of 2025. 

Noninterest Expense.  Noninterest expense increased $258 thousand, or 3.4%, to $7.9 million during the