Company: SFBC
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001541119-25-000041
Chunk: 132

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 8
Chunk 132
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 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.

Noninterest Income.  Total noninterest income decreased $354 thousand, or 28.7%, to $881 thousand for the three months ended September 30, 2025, as compared to $1.2 million for the three months ended September 30, 2024, as reflected below (dollars in thousands):

 Three Months Ended September 30,AmountChangePercentChange 20252024Service charges and fee income$672 $628 $44 7.0 %Earnings on BOLI225 186 39 21.0 Mortgage servicing income262 280 (18)(6.4)Fair value adjustment on mortgage servicing rights(372)101 (473)(468.3)Net gain on sale of loans94 40 54 135.0Total noninterest income$881 $1,235 $(354)(28.7)%

The decrease in noninterest income was primarily due to:

•a $473 thousand decline in the fair value adjustment on mortgage servicing rights due to an overall smaller servicing portfolio, as well as a lower market valuation due to a change in one of our assumptions which assumed higher costs to service loans than previously estimated; and

•an $18 thousand decrease in mortgage servicing income as a result of the portfolio paying down at a faster rate than originations replaced repayments; 

 These decreases were partially offset by:

•a $44 thousand increase in service charges and fee income, primarily due to higher interchange income in the current quarter; 

•a $39 thousand increase in earnings on BOLI, primarily due to the strategic surrender and exchange of existing policies into higher yielding policies in the first quarter of 2025, with the benefit of improved yields continuing to the third quarter. 

•a $54 thousand increase in net gain on sale of loans due to an increase in the volume of loans sold. 

42

Total noninterest income decreased $396 thousand, or 11.3%, to $3.1 million for the nine months ended September 30, 2025, as compared to $3.5 million for the nine months ended September 30, 2024, as reflected below (doll