Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 75

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 8
Chunk 75
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 overdrafts that were charged off.  Three Months Ended March 31, 2024 BeginningAllowanceCharge-offsRecoveriesProvision for (Release of) Credit LossesEndingAllowanceOne-to-four family$2,630 $— $— $280 $2,910 Home equity185 — — (6)179 Commercial and multifamily1,070 — — 36 1,106 Construction and land1,349 — — (20)1,329 Manufactured homes(1)971 (23)— (115)833 Floating homes2,022 — — (223)1,799 Other consumer(2)426 (39)6 (60)333 Commercial business107 — — 2 109 Total$8,760 $(62)$6 $(106)$8,598 (1)During the three months ended March 31, 2024, there was one manufactured home loan originated in 2020 that was charged off and then subsequently foreclosed upon.(2)During the three months ended March 31, 2024, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.  

12

Credit Quality Indicators.  Federal regulations provide for the classification of lower quality loans and other assets (such as OREO and repossessed assets), as well as debt and equity securities considered as "substandard," "doubtful" or "loss." An asset is considered "substandard" if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. "Substandard" assets include those characterized by the "distinct possibility" that the insured institution will sustain "some loss" if the deficiencies are not corrected. Assets classified as "doubtful" have all of the weaknesses in those classified "substandard," with the added characteristic that the weaknesses present make "collection or liquidation in full," on the basis of currently existing facts, conditions and values, "highly questionable and improbable." Assets classified as "loss" are those considered "uncollectible" and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification and grading. The grades for watch and special mention