Company: SFBC
Filing Date: 2025-03-18
Form Type: 10-K
Source: 0001541119-25-000009
Chunk: 149

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-03-18
Form: 10-K
Item: Item 8
Chunk 149
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 operates in one segment and makes management decisions based on consolidated results. The Company's operations are solely in the financial services industry and include providing to its clients traditional banking and other financial services. For additional information regarding our segments, see “Note 21 - Business Segments.” Off-balance-sheet credit-related financial instruments – In the normal course of operations, the Company engages in a variety of financial transactions that are not recorded in our financial statements. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. These transactions are used primarily to manage customers' requests for funding and take the form of loan commitments, letters of credit and lines of credit. Such financial instruments are recorded when they are funded. The Company also maintains a separate ACL for off-balance sheet credit commitments. Management estimates anticipated losses using expected loss factors consistent with those used for the ACL methodology for loans described above, and utilization assumptions based on historical experience. The ACL for off-balance sheet credit commitments totaled $234 thousand and $193 thousand at December 31, 2024 and 2023, respectively, and is included in other liabilities on the Consolidated Balance Sheets. Provision for credit losses for off-balance sheet credit commitments is included in provision for credit losses in the Consolidated Statements of Income.Advertising costs – The Company expenses advertising costs as they are incurred. Advertising costs, including other marketing expenses, were $361 thousand and $377 thousand for the years ended December 31, 2024 and 2023, respectively.Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on AFS securities, are reported as a separate component of the stockholders’ equity section of the Consolidated Balance Sheets, net of tax. Such items, along with net income, are components of comprehensive income.Intangible assets –Identifiable intangible assets are included in other assets on the Consolidated Balance Sheets and include goodwill and intangibles related to the acquisition of core deposits from other financial institutions. Typically, these assets are amortized using the straight-line method over a period of eight to ten years; however, goodwill is not amortized. Goodwill on the Company’s balance sheet is not material and resulted from the acquisition of branches in 2014 and 2017. The core deposit intangible was fully amortized as of December 31, 2024. Management reviews intangible assets for impairment on an annual basis or whenever