Company: SFBC
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001541119-25-000041
Chunk: 9

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 2
Chunk 9
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performing modified loans), other real estate owned (“OREO”) and repossessed assets, decreased $4.4 million, or 59.1%, to $3.1 million, or 0.29% of total assets, at September 30, 2025 from $7.5 million, or 0.75% of total assets, at December 31, 2024. 

The table below sets forth the amounts and categories of NPAs at the dates indicated (dollars in thousands):

 Nonperforming Assets September 30,2025December 31,2024AmountChangePercentChangeTotal nonperforming loans$2,717 $7,491 $(4,774)(63.7)OREO and repossessed assets344 — 344 — Total nonperforming assets$3,061 $7,491 $(4,430)(59.1)%

The decrease in NPAs from December 31, 2024 was primarily due to payoffs of nonaccrual loans totaling $7.7 million, including one commercial real estate loan, one floating home loan and one mortgage loan, the return of $334 thousand of loans 

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to accrual status, loan charge-offs of $261 thousand, and regular loan payments totaling $269 thousand. These decreases were partially offset by the addition of 15 loans totaling $3.8 million to nonaccrual status and $344 thousand of other real estate owned that was not included in nonperforming assets at December 31, 2024. The percentage of nonperforming loans to total loans was 0.30% at September 30, 2025, compared to 0.83% at December 31, 2024.

Mortgage Servicing Rights.  The fair value of mortgage servicing rights decreased $464 thousand, or 9.7%, to $4.3 million at September 30, 2025 from $4.8 million at December 31, 2024. The decrease was primarily related to a decline in the size of our mortgage servicing portfolio and an increase in the estimated cost of servicing. We record mortgage servicing rights on loans sold with servicing retained and upon acquisition of a servicing portfolio. Mortgage servicing rights are carried at fair value. If the fair value of our mortgage servicing rights fluctuates significantly, our financial results could be materially impacted.  

Deposits and Borrowings. Total deposits