Company: SFBC
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001541119-25-000034
Chunk: 100

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Item 8
Chunk 100
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 of the dates indicated (in thousands):  Fair Value at June 30, 2025DescriptionTotalLevel 1Level 2Level 3Municipal bonds$5,214 $— $5,214 $— Agency mortgage-backed securities2,307 — 2,307 — Mortgage servicing rights4,638 — — 4,638  Fair Value at December 31, 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: June 30, 2025Financial InstrumentValuation TechniqueUnobservable Input(s)Range(Weighted-Average)Mortgage Servicing RightsDiscounted cash flowPrepayment speed assumption125%-438% (125%)Discount rate9.0%-13.5% (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 six months ended June 30, 2025