Company: SFBC
Filing Date: 2025-03-18
Form Type: 10-K
Source: 0001541119-25-000009
Chunk: 111

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-03-18
Form: 10-K
Item: Item 7
Chunk 111
---
3 %

The increase in nonperforming assets primarily was due to the placement of an additional $9.3 million of loans on nonaccrual status, including a $3.7 million matured commercial real estate loan where the borrower is in the process of securing alternative financing, and a $2.4 million floating home loan, all of which are well secured. These additions were partially offset by payoffs totaling $4.2 million, the return of $784 thousand of loans to accrual status, charge-offs of $142 thousand, the sale of two OREO properties for $690 thousand, and regular loan payments. Our largest nonperforming loan relationship at December 31, 2024 was the $3.7 million commercial real estate loan noted above. In addition, there were eight manufactured home loans, one floating home loan, one business term, one commercial real estate, one home equity loan, one land loan, and five other consumer loans classified as nonperforming at December 31, 2024. Nonperforming loans were 0.83% of total loans at December 31, 2024, compared to 0.40% of total loans at December 31, 2023. We had no loans delinquent 90 days or more and still accruing at December 31, 2024 and 2023.

54

Allowance for Credit Losses.  The following table reflects the adjustments in our ACL during the periods indicated (dollars in thousands): Year Ended December 31, 20242023ACL — Loans:Balance at beginning of period$8,760 $7,599 Impact of adoption of ASU 2016-13— 760 Charge-offs(122)(204)Recoveries22 41 Net charge-offs(100)(163)(Release of) provision for credit losses(161)564 Balance at end of period$8,499 $8,760 ACL - Unfunded Loan Commitments:Balance at beginning of period193 335 Impact of adoption of ASU 2016-13— 695 Provision for (release of) credit losses41 (837)Balance at end of period234 193 ACL$8,733 $8,953 Ratio of net charge-offs during the period to average loans outstanding during the period(0.01)%(0.02)%

The ACL for loans decreased $261 thousand, or 3.0%, to