Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 43

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 1
Chunk 43
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,246 $891,925 $900,171 

Loan Modifications to Borrowers Experiencing Financial Difficulty. The Company has granted modifications which can generally be described in the following categories:Principal Forgiveness:  A modification in which the principal is reduced.Rate Modification:  A modification in which the interest rate is changed.Term Modification:  A modification in which the maturity date, timing of payments or frequency of payments is changed.Payment Modification:  A modification in which the dollar amount of the payment is changed.  Interest only modifications in which a loan is converted to interest only payments for a period of time are included in this category.Combination Modification:  Any other type of modification, including the use of multiple categories above.At March 31, 2025, the Company had no commitments to extend additional credit to borrowers owing loan receivables with modified terms. 

There were no loans modified within the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, we had no loan receivables that defaulted subsequent to their modification.

Troubled debt restructurings (“TDRs”). Prior to the adoption of ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, the Company had granted a variety of concessions to borrowers in the form of loan modifications that were considered TDRs. Loans classified as legacy TDRs totaled $1.3 million at both March 31, 2025 and December 31, 2024.

Collateral Dependent Loans. Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated fair value of the collateral exceeds the amortized cost of the loan, no ACL is recorded.

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The following tables summarize collateral dependent loans by collateral type as of the dates indicated (in thousands):March 31, 2025Commercial Real EstateResidential Real EstateLandOther ResidentialRVs/AutomobilesBusiness Assets TotalReal estate loans:One- to four