Sound Financial Bancorp, Inc. (NASDAQ:SFBC) has a ROIC to WACC ratio of 0.26, indicating it is not generating returns above its cost of capital.SB Financial Group, Inc. (SBFG) leads with a ROIC to WACC ratio of 1.39, showcasing high capital efficiency.FS Bancorp, Inc. (FSBW) also demonstrates better capital utilization with a ROIC to WACC ratio of 0.48.Sound Financial Bancorp, Inc. (NASDAQ:SFBC) is a financial institution that provides a range of banking services. It operates in a competitive landscape alon ...

Sound Financial Bancorp, Inc. Q4 2025 Results Seattle, WA, January 27, 2026 — Sound Financial Bancorp, Inc. (the "Company") (Nasdaq: SFBC), the holding company for Sound Community Bank (the "Bank"), today reported net income of $2.2 million for the quarter ended December 31, 2025, or $0.87 diluted earnings per share, compared to net income of $1.7 million, or $0.66 diluted earnings per share, for the quarter ended September 30, 2025, and $1.9 million, or $0.74 diluted earnings per share, for the quarter end ...

Core Viewpoint - Sound Financial Bancorp, Inc. reported a net income of $2.2 million for Q4 2025, reflecting a year-over-year increase in earnings and a cash dividend declaration of $0.21 per share [1][2]. Financial Performance - Total assets increased by $32.0 million, or 3.0%, to $1.09 billion at December 31, 2025, compared to $1.06 billion at September 30, 2025, and increased by $98.5 million, or 9.9%, from $993.6 million at December 31, 2024 [6]. - Loans held-for-portfolio decreased by $4.2 million, or 0.5%, to $905.5 million at December 31, 2025, compared to $909.7 million at September 30, 2025, but increased by $5.4 million, or 0.6%, from $900.2 million at December 31, 2024 [6]. - Total deposits increased by $49.9 million, or 5.6%, to $948.9 million at December 31, 2025, from $898.9 million at September 30, 2025, and increased by $111.1 million, or 13.3%, from $837.8 million at December 31, 2024 [7]. - Net interest income decreased by $278 thousand, or 3.1%, to $8.7 million for Q4 2025, compared to $8.9 million for Q3 2025, but increased by $442 thousand, or 5.4%, from $8.2 million for Q4 2024 [8]. - Net interest margin (NIM) was 3.36% for Q4 2025, down from 3.48% for Q3 2025, but up from 3.13% for Q4 2024 [18][24]. Credit Quality - Credit quality trends remained stable, with nonperforming loans increasing by $3.1 million, or 112.8%, to $5.8 million at December 31, 2025, from $2.7 million at September 30, 2025 [11][42]. - The allowance for credit losses on loans to total loans outstanding was 0.95% at December 31, 2025, compared to 0.94% at both September 30, 2025, and December 31, 2024 [43]. Noninterest Income and Expense - Total noninterest income decreased by $14 thousand, or 1.6%, to $867 thousand for Q4 2025, compared to $881 thousand for Q3 2025, and decreased by $293 thousand, or 25.3%, compared to $1.16 million for Q4 2024 [10][30]. - Total noninterest expense decreased by $836 thousand, or 10.9%, to $6.8 million for Q4 2025, compared to $7.5 million for Q4 2024 [11][35]. Balance Sheet and Capital Management - Cash and cash equivalents increased by $37.3 million, or 36.9%, to $138.5 million at December 31, 2025, compared to $101.2 million at September 30, 2025 [37]. - The company maintained capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at December 31, 2025 [15].

Core Viewpoint - Sound Financial Bancorp, Inc. reported a net income of $2.2 million for Q4 2025, reflecting a year-over-year increase in earnings and a cash dividend declaration of $0.21 per share [1][2]. Financial Performance - Net income for Q4 2025 was $2.2 million, or $0.87 diluted earnings per share, compared to $1.7 million, or $0.66 per share in Q3 2025, and $1.9 million, or $0.74 per share in Q4 2024 [1]. - Total assets increased by $32.0 million, or 3.0%, to $1.09 billion at December 31, 2025, from $1.06 billion at September 30, 2025, and increased by $98.5 million, or 9.9%, from $993.6 million at December 31, 2024 [5][30]. - Total deposits rose by $49.9 million, or 5.6%, to $948.9 million at December 31, 2025, compared to $898.9 million at September 30, 2025, and increased by $111.1 million, or 13.3%, from $837.8 million at December 31, 2024 [6][30]. Loan and Deposit Trends - Loans held-for-portfolio decreased by $4.2 million, or 0.5%, to $905.5 million at December 31, 2025, compared to $909.7 million at September 30, 2025, but increased by $5.4 million, or 0.6%, from $900.2 million at December 31, 2024 [5][35]. - The loans-to-deposits ratio was 96% at December 31, 2025, down from 101.45% at September 30, 2025, and 108% at December 31, 2024 [7]. Credit Quality - Nonperforming loans increased by $3.1 million, or 112.8%, to $5.8 million at December 31, 2025, from $2.7 million at September 30, 2025, but decreased by $1.7 million, or 22.8%, from $7.5 million at December 31, 2024 [7][36]. - The allowance for credit losses on loans to total loans outstanding was 0.95% at December 31, 2025, compared to 0.94% at both September 30, 2025, and December 31, 2024 [38]. Income and Expenses - Net interest income decreased by $278 thousand, or 3.1%, to $8.7 million for Q4 2025, compared to $8.9 million for Q3 2025, but increased by $442 thousand, or 5.4%, from $8.2 million for Q4 2024 [8][11]. - Total noninterest income decreased by $14 thousand, or 1.6%, to $867 thousand for Q4 2025, compared to Q3 2025, and decreased by $293 thousand, or 25.3%, compared to Q4 2024 [10][26]. - Total noninterest expense decreased by $836 thousand, or 10.9%, to $6.8 million for Q4 2025, compared to Q3 2025, and decreased by $218 thousand, or 3.1%, compared to Q4 2024 [10][30]. Operational Insights - The company emphasized consistent expense control and operational improvements, positioning itself for future recovery despite challenges in the mortgage market [2][3]. - The CEO noted that every employee contributed to the results, demonstrating an ability to do more with less [2].

Core Viewpoint - Columbia Banking System is positioned as a superior investment compared to Sound Financial Bancorp based on various financial metrics and analyst recommendations [1]. Dividends - Columbia Banking System offers an annual dividend of $1.48 per share with a yield of 5.1%, while Sound Financial Bancorp pays $0.76 per share with a yield of 1.8% [2]. - Columbia Banking System has a payout ratio of 66.7% of its earnings, compared to 28.8% for Sound Financial Bancorp, indicating a stronger dividend growth potential [2]. - Columbia Banking System has increased its dividend for 4 consecutive years, whereas Sound Financial Bancorp has done so for 2 years [2]. Analyst Recommendations - Columbia Banking System has a consensus rating score of 2.33, with 11 hold ratings, 3 buy ratings, and 1 strong buy rating [4]. - Sound Financial Bancorp has a lower consensus rating score of 2.00, with only 1 hold rating and no buy or strong buy ratings [4]. - Analysts suggest a target price of $29.58 for Columbia Banking System, indicating a potential upside of 2.54% [5]. Earnings & Valuation - Columbia Banking System reported gross revenue of $2.97 billion and net income of $533.67 million, with an earnings per share (EPS) of $2.22 and a price-to-earnings (P/E) ratio of 13.00 [7]. - In contrast, Sound Financial Bancorp has gross revenue of $62.03 million, net income of $4.64 million, an EPS of $2.64, and a P/E ratio of 16.37 [7]. - Columbia Banking System is trading at a lower P/E ratio, suggesting it is more affordable compared to Sound Financial Bancorp [7]. Profitability - Columbia Banking System has a net margin of 15.98%, return on equity of 11.13%, and return on assets of 1.18% [9]. - Sound Financial Bancorp shows lower profitability metrics with a net margin of 10.97%, return on equity of 6.48%, and return on assets of 0.65% [9]. Institutional and Insider Ownership - Institutional investors hold 92.5% of Columbia Banking System shares, while 68.9% of Sound Financial Bancorp shares are held by institutional investors [10]. - Insider ownership is 0.7% for Columbia Banking System and 12.4% for Sound Financial Bancorp, indicating stronger institutional confidence in Columbia Banking System [10]. Summary - Columbia Banking System outperforms Sound Financial Bancorp in 14 out of 18 comparative factors, highlighting its overall stronger financial position and investment potential [11].

Financial Position - Total assets increased by $66.5 million, or 6.7%, to $1.06 billion at September 30, 2025, from $993.6 million at December 31, 2024[102] - Stockholders' equity stood at $107.5 million as of September 30, 2025[98] - Total stockholders' equity increased by $3.8 million, or 3.7%, to $107.5 million at September 30, 2025, from $103.7 million at December 31, 2024[121] - Total deposits rose by $61.1 million, or 7.3%, to $898.9 million at September 30, 2025, compared to $837.8 million at December 31, 2024[117] - Uninsured deposits totaled $168.6 million at September 30, 2025, representing 18.8% of total deposits, compared to $167.3 million, or 20.0% of total deposits as of December 31, 2024[119] Loan Portfolio - Loans held-for-portfolio increased by $9.5 million, or 1.1%, to $901.2 million at September 30, 2025, with commercial and multifamily loans up by $37.3 million, or 10.0%[105] - Home equity loans increased by $3.2 million, or 12.1%, reflecting high demand for liquidity among homeowners[105] - Construction and land loans declined by $20.3 million, or 27.8%, due to project completions and a slowdown in new financing activities[106] - At September 30, 2025, commercial and multifamily real estate loans accounted for 44.8% of total loans, while one-to-four family loans accounted for 31.5%[107] - Loans held-for-sale decreased to $271 thousand at September 30, 2025, from $487 thousand at December 31, 2024, due to timing of mortgage originations and sales[108] Income and Expenses - Net income for Q3 2025 increased by $541 thousand, or 46.9%, to $1.7 million, compared to $1.2 million in Q3 2024, driven by strong growth in net interest income[128] - For the nine months ended September 30, 2025, net income rose by $2.2 million, or 80.7%, to $4.9 million, primarily due to higher net interest income[129] - Total interest income for Q3 2025 decreased by $186 thousand, or 1.3%, to $14.7 million, primarily due to a decline in cash and cash equivalents[130] - Total interest income increased by $635 thousand, or 1.5%, to $43.3 million for the nine months ended September 30, 2025, driven by a higher average loan balance and a 33 basis points increase in average yield on loans[134] - Total noninterest income decreased by $354 thousand, or 28.7%, to $881 thousand for the three months ended September 30, 2025, compared to $1.2 million for the same period in 2024[150] Interest and Yield - Interest income from loans increased by $636 thousand, or 4.9%, to $13.5 million in Q3 2025, with an average yield on loans rising to 5.89%[131] - The average yield on investments increased to 3.92% in Q3 2025, despite a decrease in the average balance of investments[132] - The net interest rate spread improved to 2.91% in Q3 2025, compared to 2.34% in Q3 2024[127] - Interest income on loans increased by $2.4 million, or 6.3%, to $39.8 million for the nine months ended September 30, 2025, primarily due to a 33 basis point increase in average yield on loans[135] Credit Quality - Nonperforming assets decreased by $4.4 million, or 59.1%, to $3.1 million, representing 0.29% of total assets at September 30, 2025, down from $7.5 million, or 0.75% of total assets at December 31, 2024[113] - The allowance for credit losses on loans increased slightly by $65 thousand, or 0.8%, to $8.564 million[105] - The ratio of net charge-offs during the period to average loans outstanding was (0.02)% for the three months ended September 30, 2025[112] - Total nonaccrual loans decreased by $4.8 million, or 63.7%, to $2.7 million at September 30, 2025, from $7.5 million at December 31, 2024[114] Operational Efficiency - The efficiency ratio improved to 78.16% for the quarter ended September 30, 2025, compared to 84.31% for the same quarter in 2024, primarily due to higher net interest income[156] - Noninterest expenses remained relatively flat, contributing positively to the overall increase in net income[128] - Total noninterest expense remained relatively unchanged at $7.676 million for the three months ended September 30, 2025, compared to $7.679 million for the same period in 2024[153] Dividends and Shareholder Returns - Cash dividends of $0.57 per common share were paid during the nine months ended September 30, 2025, resulting in a dividend payout ratio of 29.75%[162] - The company expects to continue paying quarterly cash dividends, subject to the Board of Directors' discretion[162] Liquidity and Capital Resources - As of September 30, 2025, the company had $108.8 million in cash and cash equivalents, with an additional $271 thousand in loans held-for-sale[169] - The company had the ability to borrow $158.9 million in FHLB advances and $19.5 million through the Federal Reserve's discount window, with $25.0 million in outstanding advances from the FHLB[169] - The company is not aware of any events likely to materially affect its liquidity, capital resources, or operations as of September 30, 2025[169] - The company has commitments to extend credit totaling $54.381 million, which may not represent future cash requirements as many are expected to expire without being drawn upon[173] Regulatory Compliance - The company implemented the CECL model starting January 1, 2023, and is phasing in the full effect of CECL on regulatory capital over a three-year transition period[178] - The company's Community Bank Leverage Ratios (CBLR) were 10.71% for the Bank and 10.14% for the Company, exceeding the minimum requirement of 9%[177] - There have been no material changes in the company's market risk since the 2024 Form 10-K[180]

Financial Performance - Net income for Q3 2025 was $1.7 million, or $0.66 diluted earnings per share, down from $2.1 million, or $0.79 per share in Q2 2025, and up from $1.2 million, or $0.45 per share in Q3 2024[1] - For the nine months ended September 30, 2025, net income increased to $4,914,000, up 80.5% from $2,719,000 in the same period of 2024[39] - Basic earnings per share for Q3 2025 were $0.66, compared to $0.45 in Q3 2024[44] - The annualized return on average assets for Q3 2025 was 0.63%, compared to 0.42% in Q3 2024[42] - The efficiency ratio for Q3 2025 was 78.16%, compared to 84.31% in Q3 2024, indicating improved cost management[42] Income and Expenses - Net interest income decreased by $315 thousand, or 3.4%, to $8.9 million in Q3 2025 compared to $9.3 million in Q2 2025, but increased by $1.1 million, or 13.6%, from $7.9 million in Q3 2024[4] - Noninterest income decreased by $239 thousand, or 21.3%, to $881 thousand for Q3 2025 compared to Q2 2025, and decreased by $354 thousand, or 28.7%, compared to Q3 2024[4] - Salaries and benefits decreased by $210 thousand, or 4.7%, compared to Q3 2024, due to higher deferred salaries from increased loan originations[23] - Data processing expenses increased by $207 thousand, reflecting new software technology deployment in 2025[30] Assets and Liabilities - Total assets increased by $1.9 million, or 0.2%, to $1.06 billion at September 30, 2025, compared to $1.06 billion at June 30, 2025, and decreased by $40.8 million, or 3.7%, from $1.10 billion at September 30, 2024[4] - Total deposits decreased by $516 thousand, or 0.1%, to $898.9 million at September 30, 2025, from $899.5 million at June 30, 2025, and decreased by $31.3 million, or 3.4%, from $930.2 million at September 30, 2024[4] - Cash and cash equivalents decreased by $1.4 million, or 1.4%, from Q2 2025, and by $47.8 million, or 32.1%, from Q3 2024, totaling $101.2 million[25] - Stockholders' equity increased by $1.4 million, or 1.4%, to $107.5 million at September 30, 2025, driven by $1.7 million of net income earned during the quarter[34] Loans and Credit Quality - Loans held-for-portfolio increased by $5.4 million, or 0.6%, to $909.7 million at September 30, 2025, compared to $904.3 million at June 30, 2025, and increased by $8.0 million, or 0.9%, from $901.7 million at September 30, 2024[4] - Nonperforming loans decreased by $649 thousand, or 19.3%, to $2.7 million at September 30, 2025, from $3.4 million at June 30, 2025, and decreased by $5.8 million, or 68.0%, from $8.5 million at September 30, 2024[4] - The provision for credit losses was $55 thousand for Q3 2025, down from $170 thousand in Q2 2025, and up from $8 thousand in Q3 2024[11] - The allowance for credit losses on loans was $8,564 thousand at September 30, 2025, reflecting a provision of $65 thousand during the quarter[32] Market Conditions and Future Outlook - The company anticipates potential impacts from economic conditions, interest rate changes, and regulatory developments on future performance[37] - The average yield on total loans was 5.89% for Q3 2025, down from 6.14% in Q2 2025, and up from 5.70% in Q3 2024[8] - The average cost of deposits was 2.32% for Q3 2025, down from 2.34% in Q2 2025, and down from 2.74% in Q3 2024[10]

Core Insights - Sound Financial Bancorp reported a net income of $1.7 million for Q3 2025, a decrease from $2.1 million in Q2 2025 and an increase from $1.2 million in Q3 2024, with diluted earnings per share of $0.66 [1] - The Board of Directors declared a cash dividend of $0.19 per share, payable on November 21, 2025 [1] Financial Performance - Total assets increased by $1.9 million or 0.2% to $1.06 billion at September 30, 2025, but decreased by $40.8 million or 3.7% from $1.10 billion at September 30, 2024 [5] - Loans held-for-portfolio increased by $5.4 million or 0.6% to $909.7 million at September 30, 2025, compared to $901.7 million at September 30, 2024 [5][35] - Total deposits decreased by $516 thousand or 0.1% to $898.9 million at September 30, 2025, and decreased by $31.3 million or 3.4% from $930.2 million at September 30, 2024 [6][40] Interest Income and Expenses - Net interest income decreased by $315 thousand or 3.4% to $8.9 million for Q3 2025, but increased by $1.1 million or 13.6% from $7.9 million in Q3 2024 [7][12] - The net interest margin was 3.48% for Q3 2025, down from 3.67% in Q2 2025 and up from 2.98% in Q3 2024 [8] - Interest expense increased by $52 thousand or 0.9% to $5.7 million for Q3 2025, compared to Q2 2025 [16] Credit Quality - Total nonperforming loans decreased by $649 thousand or 19.3% to $2.7 million at September 30, 2025, compared to the previous quarter [7] - A provision for credit losses of $55 thousand was recorded for Q3 2025, down from $170 thousand in Q2 2025 [9][17] - The allowance for credit losses on loans to total loans outstanding was 0.94% at September 30, 2025, compared to 0.95% at September 30, 2024 [9][37] Noninterest Income and Expenses - Total noninterest income decreased by $239 thousand or 21.3% to $881 thousand for Q3 2025, compared to Q2 2025 [10][24] - Noninterest expense remained stable at $7.7 million for Q3 2025, with slight fluctuations in specific categories [28][30] Capital Management - Stockholders' equity totaled $107.5 million at September 30, 2025, an increase of $1.4 million or 1.4% from the previous quarter [42] - The company maintained capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at September 30, 2025 [11]

Core Insights - Laurie Stewart, President and CEO of Sound Community Bank, has been recognized as one of The Most Powerful Women to Watch in 2025 by American Banker [1][2] - The Most Powerful Women in Banking program celebrates exceptional leadership, business performance, and commitment to diversity, equity, and inclusion in the financial services sector [2] Company Overview - Sound Community Bank, established in 1953, is a full-service bank offering personal and business banking services in the greater Puget Sound region [6] - The bank operates in King, Pierce, Snohomish, Jefferson, and Clallam counties, and has an online presence [6] Leadership Achievements - Laurie Stewart has been instrumental in transforming Sound Community Bank from a $38 million credit union to a $1 billion publicly traded commercial bank [5] - She has served in various leadership roles, including Chairperson of the American Bankers Association Board of Directors, becoming only the third woman to hold this position in nearly 150 years [5] - Stewart is also active in trade associations and has served on the FDIC Community Bank Advisory Board [5] Recognition Event - The honorees of The Most Powerful Women in Banking will be celebrated at a gala on October 23, 2025, in New York City [4]

Core Viewpoint - The Board of Directors of Sound Financial Bancorp, Inc. has appointed Wesley Ochs as President, effective October 1, 2025, while Laurie Stewart continues as Chief Executive Officer, reflecting a strategic succession plan to ensure continuity in leadership and the advancement of the Bank's mission [1][2]. Leadership Transition - Wesley Ochs has over 23 years of banking experience, including roles in retail banking, mortgage banking, and commercial lending, and has been the Chief Financial Officer since 2021 [2][3]. - Ochs has focused on enhancing operational efficiencies, financial reporting, and client experience, with recent efforts in asset/liability management and credit loss modeling [3]. - Laurie Stewart, celebrating her 35th anniversary with the organization, has overseen its transformation from a credit union to a state-chartered, FDIC-insured commercial bank and will ensure a smooth transition of the President's duties [4]. Company Overview - Sound Financial Bancorp, Inc. is the parent company of Sound Community Bank, headquartered in Seattle, Washington, with full-service branches in multiple locations [5]. - The Bank is a Fannie Mae Approved Lender and Seller/Servicer, with a loan production office in Seattle [5].