Company: SFBC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001541119-25-000023
Chunk: 5

Company: Sound Financial Bancorp, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 2
Chunk 5
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,426 5.3 Commercial and multifamily392,798 371,516 21,282 5.7 Construction and land42,492 73,077 (30,585)(41.9)Manufactured homes42,448 41,128 1,320 3.2 Floating homes86,626 86,411 215 0.2 Other consumer18,224 17,720 504 2.8 Commercial business14,690 15,605 (915)(5.9)Premiums for purchased loans688 718 (30)(4.2)Deferred loan fees(2,309)(2,374)65 (2.7)Total loans held-for-portfolio, gross886,226 900,171 (13,945)(1.5)Allowance for credit losses — loans(8,393)(8,499)106 (1.2)Total loans held-for-portfolio, net$877,833 $891,672 $(13,839)(1.6)%

The decreases in the loan portfolio were driven primarily by decreases in construction and land loans and, to a lesser extent, one-to-four family and commercial business loans. The $30.6 million, or 41.9%, decline in construction and land loans was the primarily driver of the overall decrease in the loan portfolio as of March 31, 2025, compared to December 31, 2024. This decline was largely due to project completions, a slowdown in new financing activities amid higher interest rates, and the payoff of a $17.0 million loan that had been risk rated as special mention. In addition, one-to-four-family loans and commercial business loans declined by $7.2 million, or 2.7%, and $915 thousand, or 5.9%, respectively, primarily due to loan repayments exceeding new originations. These reductions were partially offset by a $21.3 million, or 5.7%, increase in commercial and multifamily loans, driven by the conversion of construction projects to permanent financing. Home equity loans also rose by $1.4 million, or 5.3%, as homeowners likely utilized their home equity lines to access liquidity, particularly in response to 

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elevated living costs and inflationary pressures.

At March 31, 2025, our loan portfolio, net of deferred loan fees, remained well-diversified. At that