Columbia Banking System (NASDAQ:COLB – Get Free Report) and Sound Financial Bancorp (NASDAQ:SFBC – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk. Get Columbia Banking System alerts: Volatility & RiskColumbia Banking System has a beta of 0.62, meaning that its share price is 38% less volatile than the S ...

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].

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides general information about the Form 10-Q filing, including the registrant's name, the quarterly period covered, and the number of common shares outstanding as of the latest practicable date - Registrant: **Sound Financial Bancorp, Inc.**[2](index=2&type=chunk) - Quarterly period ended: **June 30, 2025**[2](index=2&type=chunk) Common Stock Outstanding | As of Date | Shares Outstanding | | :--- | :--- | | August 8, 2025 | 2,566,069 | [PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the Company's unaudited condensed consolidated financial statements, including the balance sheets, income statements, comprehensive income statements, stockholders' equity statements, and cash flow statements for the periods ended June 30, 2025, and December 31, 2024, or for the three and six months ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024%20(unaudited)) Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $102,542 | $43,641 | | Available-for-sale securities | $7,521 | $7,790 | | Held-to-maturity securities | $2,113 | $2,130 | | Loans held-for-portfolio, net | $895,750 | $891,672 | | Total assets | $1,058,242 | $993,633 | | **LIABILITIES** | | | | Total deposits | $899,459 | $837,799 | | Borrowings | $25,000 | $25,000 | | Total liabilities | $952,238 | $889,967 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity | $106,004 | $103,666 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(unaudited)) Condensed Consolidated Statements of Income (in thousands, except per share) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total interest income | $14,915 | $14,039 | $28,622 | $27,799 | | Total interest expense | $5,660 | $6,591 | $11,295 | $12,891 | | Net interest income | $9,255 | $7,448 | $17,327 | $14,908 | | Provision for (release of) credit losses | $170 | $(109) | $(33) | $(142) | | Total noninterest income | $1,120 | $1,162 | $2,216 | $2,258 | | Total noninterest expense | $7,665 | $7,737 | $15,578 | $15,394 | | Net income | $2,052 | $795 | $3,219 | $1,564 | | Basic EPS | $0.80 | $0.31 | $1.25 | $0.61 | | Diluted EPS | $0.79 | $0.31 | $1.24 | $0.61 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(unaudited)) Condensed Consolidated Statements of Comprehensive Income (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $2,052 | $795 | $3,219 | $1,564 | | Other comprehensive (loss) gain, net of tax | $(67) | $1 | $(84) | $(61) | | Comprehensive income | $1,985 | $796 | $3,135 | $1,503 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(unaudited)) Stockholders' Equity Changes (in thousands) | Item | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | | Balance, at December 31, prior year | $103,666 | $100,654 | | Net income | $3,219 | $1,564 | | Other comprehensive loss, net of tax | $(84) | $(61) | | Share-based compensation | $156 | $193 | | Cash dividends paid on common stock | $(974) | $(972) | | Common stock options exercised | $21 | $33 | | Common stock repurchased | $0 | $(64) | | Balance, at June 30, current year | $106,004 | $101,347 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(unaudited)) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,358 | $(496) | | Net cash (used in) provided by investing activities | $(3,160) | $6,700 | | Net cash provided by financing activities | $60,703 | $79,217 | | Net change in cash and cash equivalents | $58,901 | $85,421 | | Cash and cash equivalents, end of period | $102,542 | $135,111 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering accounting policies, recent pronouncements, investments, loans, fair value measurements, mortgage servicing rights, commitments, borrowings, earnings per share, leases, and subsequent events [Note 1 – Basis of Presentation](index=10&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation) - Financial statements are unaudited and prepared in accordance with U.S. GAAP for interim information and SEC regulations[23](index=23&type=chunk) - No changes in significant accounting policies from the **2024 Form 10-K**[24](index=24&type=chunk) [Note 2 – Accounting Pronouncements Recently Issued or Adopted](index=10&type=section&id=Note%202%20%E2%80%93%20Accounting%20Pronouncements%20Recently%20Issued%20or%20Adopted) - Adopted **ASU 2023-09** (Improvements to Income Tax Disclosures) on **January 1, 2025**, with no material impact expected[25](index=25&type=chunk) - **ASU 2024-03** (Expense Disaggregation Disclosures) effective for annual periods beginning after **December 15, 2026**[26](index=26&type=chunk) [Note 3 – Investments](index=11&type=section&id=Note%203%20%E2%80%93%20Investments) Investment Securities (in thousands) | Security Type | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :--- | :--- | :--- | | Available-for-sale securities | $7,521 | $7,790 | | Held-to-maturity securities | $1,687 | $1,712 | Unrealized Losses on Investment Securities (in thousands) | Security Type | June 30, 2025 Gross Unrealized Losses | December 31, 2024 Gross Unrealized Losses | | :--- | :--- | :--- | | Available-for-sale securities | $(1,449) | $(1,340) | | Held-to-maturity securities | $(426) | $(418) | - Unrealized losses are due to changes in market interest rates, not credit quality; no allowance for credit losses on securities[32](index=32&type=chunk) [Note 4 – Loans](index=13&type=section&id=Note%204%20%E2%80%93%20Loans) Loans Held-for-Portfolio (in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | One-to-four family | $262,672 | $269,684 | | Commercial and multifamily | $398,429 | $371,516 | | Construction and land | $49,926 | $73,077 | | Total loans held-for-portfolio, gross | $904,286 | $900,171 | | Allowance for credit losses — loans | $(8,536) | $(8,499) | | Total loans held-for-portfolio, net | $895,750 | $891,672 | Allowance for Credit Losses (ACL) Activity (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | ACL - Loans, beginning balance | $8,393 | $8,598 | $8,499 | $8,760 | | Provision for (release of) credit losses | $164 | $(88) | $79 | $(194) | | Net charge-offs | $(21) | $(17) | $(42) | $(73) | | ACL - Loans, ending balance | $8,536 | $8,493 | $8,536 | $8,493 | Nonaccrual Loans (in thousands) | Loan Type | June 30, 2025 Total Nonaccrual Loans | December 31, 2024 Total Nonaccrual Loans | | :--- | :--- | :--- | | One-to-four family | $1,423 | $537 | | Commercial and multifamily | $1,065 | $3,734 | | Floating homes | $0 | $2,363 | | Total nonaccrual loans | $3,366 | $7,491 | [Note 5 – Fair Value Measurements](index=21&type=section&id=Note%205%20%E2%80%93%20Fair%20Value%20Measurements) - Fair value measurements are based on **ASC 820**, maximizing observable inputs (Level 1, 2) and minimizing unobservable inputs (Level 3)[59](index=59&type=chunk) Financial Assets Measured at Fair Value (in thousands) | Asset Type | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :--- | :--- | :--- | | Available-for-sale securities | $7,521 | $7,790 | | Loans held-for-sale | $2,025 | $487 | | Mortgage servicing rights | $4,638 | $4,769 | | OREO and repossessed assets (nonrecurring) | $300 | $0 | | Collateral dependent loans (nonrecurring) | $3,501 | $7,627 | - Mortgage Servicing Rights (MSRs) are classified as **Level 3**, using unobservable inputs like prepayment speed (**125%-438%**) and discount rate (**9.0%-13.5%**)[70](index=70&type=chunk) [Note 6 – Mortgage Servicing Rights](index=25&type=section&id=Note%206%20%E2%80%93%20Mortgage%20Servicing%20Rights) Mortgage Servicing Rights (MSRs) Activity (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Beginning balance, at fair value | $4,688 | $4,612 | $4,769 | $4,632 | | Changes in fair value | $(80) | $(116) | $(179) | $(181) | | Ending balance, at fair value | $4,638 | $4,540 | $4,638 | $4,540 | Key MSR Economic Assumptions | Assumption | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayment speed (PSA model) | 125% | 125% | | Weighted-average life | 10.4 years | 10.6 years | | Weighted average discount rate | 10.0% | 10.0% | [Note 7 – Commitments and Contingencies](index=26&type=section&id=Note%207%20%E2%80%93%20Commitments%20and%20Contingencies) - Company engages in off-balance sheet financial transactions, primarily loan commitments and lines of credit, involving credit and interest rate risks[76](index=76&type=chunk)[167](index=167&type=chunk) - Total loan commitments were **$52.5 million** at June 30, 2025, down from **$55.8 million** at December 31, 2024[170](index=170&type=chunk) [Note 8 – Borrowings, FHLB Stock and Subordinated Notes](index=26&type=section&id=Note%208%20%E2%80%93%20Borrowings%2C%20FHLB%20Stock%20and%20Subordinated%20Notes) FHLB Advances (in thousands) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-term advances | $15,000 | $0 | | Long-term advances | $10,000 | $25,000 | | Total FHLB advances | $25,000 | $25,000 | FHLB Borrowing Capacity (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Amount available to borrow | $374,270 | $385,366 | | Remaining FHLB borrowing capacity | $161,155 | $172,327 | - Subordinated notes totaled **$11.8 million** at June 30, 2025, with a fixed interest rate of **5.25%** until October 1, 2025, then resetting to SOFR plus **513 basis points**[82](index=82&type=chunk) [Note 9 – Earnings Per Common Share](index=27&type=section&id=Note%209%20%E2%80%93%20Earnings%20Per%20Common%20Share) Earnings Per Common Share | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income available to common stockholders - basic | $2,044 | $790 | $3,206 | $1,554 | | Basic EPS | $0.80 | $0.31 | $1.25 | $0.61 | | Diluted EPS | $0.79 | $0.31 | $1.24 | $0.61 | | Weighted average shares outstanding, basic | 2,556,562 | 2,540,538 | 2,555,413 | 2,539,872 | | Weighted average shares outstanding, diluted | 2,577,990 | 2,559,015 | 2,578,287 | 2,557,993 | [Note 10 – Leases](index=28&type=section&id=Note%2010%20%E2%80%93%20Leases) Lease Right-of-Use Assets and Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $3,816 | $3,725 | | Finance lease right-of-use assets | $117 | $0 | | Operating lease liabilities | $4,095 | $4,013 | | Finance lease liabilities | $118 | $0 | Net Lease Expense (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net lease expense | $291 | $269 | $564 | $536 | Weighted-Average Lease Terms and Discount Rates | Lease Type | June 30, 2025 Term | June 30, 2025 Discount Rate | | :--- | :--- | :--- | | Operating leases | 3.9 years | 3.09% | | Finance leases | 4.5 years | 4.41% | [Note 11 – Subsequent Events](index=29&type=section&id=Note%2011%20%E2%80%93%20Subsequent%20Events) - On **July 29, 2025**, the Board of Directors declared a quarterly cash dividend of **$0.19 per common share**, payable on **August 25, 2025**[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including forward-looking statements, critical accounting estimates, and detailed comparisons of financial performance and key metrics for the periods presented [Special Note Regarding Forward-Looking Statements](index=30&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) - Forward-looking statements involve risks and uncertainties, including adverse economic conditions, changes in interest rates, inflation, and regulatory policies[89](index=89&type=chunk) - Company does not undertake to publicly release revisions to forward-looking statements[91](index=91&type=chunk) [General Business Overview](index=31&type=section&id=General) - Sound Financial Bancorp is a bank holding company for Sound Community Bank, a Washington state-chartered commercial bank[92](index=92&type=chunk) - Primary business: attracting retail/commercial deposits and investing in various loan types (residential, commercial, construction, consumer, business)[94](index=94&type=chunk) Consolidated Financial Position (in millions) | Item | June 30, 2025 | | :--- | :--- | | Total assets | $1,060 | | Net loans held-for-portfolio | $895.8 | | Deposits | $899.5 | | Stockholders' equity | $106.0 | [Critical Accounting Estimates](index=31&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include the allowance for credit losses (ACL) and accounting for mortgage servicing rights (MSRs)[97](index=97&type=chunk) - Estimates are susceptible to material changes due to interest rates, economic conditions, and borrower performance[97](index=97&type=chunk) [Financial Condition Analysis](index=32&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202025%20and%20December%2031%2C%202024) [Total Assets](index=32&type=section&id=Total%20Assets) - Total assets increased by **$64.6 million**, or **6.5%**, to **$1.06 billion** at June 30, 2025, from **$993.6 million** at December 31, 2024[98](index=98&type=chunk) [Cash and Cash Equivalents, and Investment Securities](index=32&type=section&id=Cash%20and%20Cash%20Equivalents%2C%20and%20Investment%20Securities) - Cash and cash equivalents increased **$58.9 million (135.0%)** to **$102.5 million**, primarily due to the return of reciprocal deposits[99](index=99&type=chunk) - Investment securities decreased **$286 thousand (2.9%)** to **$9.6 million**, mainly due to scheduled payments and higher net unrealized losses on AFS securities[100](index=100&type=chunk) [Loans](index=32&type=section&id=Loans) - Loans held-for-portfolio, net, increased **$4.1 million (0.5%)** to **$895.8 million**[101](index=101&type=chunk) Changes in Loans Held-for-Portfolio (in thousands) | Loan Type | Amount Change | Percent Change | | :--- | :--- | :--- | | Commercial and multifamily | $26,913 | 7.2% | | Home equity | $1,896 | 7.1% | | Construction and land | $(23,151) | (31.7)% | | One-to-four family | $(7,012) | (2.6)% | - Loans held-for-sale increased to **$2.03 million** at June 30, 2025, from **$487 thousand** at December 31, 2024, due to timing of mortgage originations and sales[103](index=103&type=chunk) [Allowance for Credit Losses (ACL)](index=33&type=section&id=Allowance%20for%20Credit%20Losses) - ACL on loans increased **$37 thousand (0.4%)** to **$8.5 million**, driven by loan portfolio growth and qualitative adjustments for market uncertainty[104](index=104&type=chunk) Credit Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | ACL - loans as % of total loans outstanding | 0.94% | 0.94% | | Nonaccrual loans as % of total loans outstanding | 0.37% | 0.83% | | ACL - loans as % of nonaccrual loans | 253.59% | 113.46% | [Nonperforming Assets (NPAs)](index=35&type=section&id=Nonperforming%20Assets) - NPAs decreased **$3.8 million (51.1%)** to **$3.7 million**, or **0.35% of total assets**, at June 30, 2025[108](index=108&type=chunk) - Decrease primarily due to **$6.9 million** in payoffs of nonaccrual loans, including commercial real estate and floating home loans[109](index=109&type=chunk) - Percentage of nonperforming loans to total loans decreased to **0.37%** from **0.83%**[110](index=110&type=chunk) [Mortgage Servicing Rights (MSRs)](index=37&type=section&id=Mortgage%20Servicing%20Rights) - Fair value of MSRs decreased **$131 thousand (2.7%)** to **$4.6 million**[110](index=110&type=chunk) - Fluctuations in MSR fair value can materially impact financial results[110](index=110&type=chunk) [Deposits and Borrowings](index=37&type=section&id=Deposits%20and%20Borrowings) - Total deposits increased **$61.7 million (7.4%)** to **$899.5 million**, mainly due to the return of reciprocal deposits[111](index=111&type=chunk) - Noninterest-bearing deposits decreased **$8.3 million (6.3%)** to **$124.2 million**, representing **13.8%** of total deposits[111](index=111&type=chunk) Deposit Balances and Weighted-Average Rates (in thousands) | Deposit Type | June 30, 2025 Amount | June 30, 2025 Wtd. Avg. Rate | December 31, 2024 Amount | December 31, 2024 Wtd. Avg. Rate | | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing demand | $120,979 | —% | $130,095 | —% | | Money market | $282,346 | 3.14% | $206,067 | 3.60% | | Time deposits | $293,881 | 4.05% | $295,822 | 4.57% | | Total deposits | $899,459 | 2.34% | $837,799 | 2.63% | - Uninsured deposits totaled **$171.2 million (19.0% of total deposits)** at June 30, 2025, up from **$167.3 million (20.0%)** at December 31, 2024[113](index=113&type=chunk) [Stockholders' Equity](index=38&type=section&id=Stockholders'%20Equity) - Total stockholders' equity increased **$2.3 million (2.3%)** to **$106.0 million**[116](index=116&type=chunk) - Increase reflects **$3.2 million** net income, **$156 thousand** share-based compensation, and **$21 thousand** from stock options, partially offset by **$974 thousand** in cash dividends and **$84 thousand** other comprehensive loss[116](index=116&type=chunk) [Net Interest Income and Yield Analysis](index=38&type=section&id=Average%20Balances%2C%20Net%20Interest%20Income%2C%20Yields%20Earned%20and%20Rates%20Paid) [Average Balances, Net Interest Income, Yields Earned and Rates Paid](index=38&type=section&id=Average%20Balances%2C%20Net%20Interest%20Income%2C%20Yields%20Earned%20and%20Rates%20Paid) Key Interest Rate Metrics (Annualized) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Average loan yield | 6.14% | 5.56% | 5.92% | 5.53% | | Average cost of total interest-bearing liabilities | 2.80% | 3.22% | 2.82% | 3.17% | | Net interest rate spread | 3.12% | 2.28% | 2.91% | 2.31% | | Net interest margin | 3.67% | 2.92% | 3.47% | 2.94% | [Rate/Volume Analysis](index=39&type=section&id=Rate%2FVolume%20Analysis) Change in Net Interest Income (in thousands) | Item | 3 Months Ended June 30, 2025 vs. 2024 | 6 Months Ended June 30, 2025 vs. 2024 | | :--- | :--- | :--- | | Total Increase (Decrease) in Net Interest Income | $1,807 | $2,419 | - For the three months, interest income increased by **$876 thousand** (rate-driven), and interest expense decreased by **$931 thousand** (rate-driven)[122](index=122&type=chunk) - For the six months, interest income increased by **$823 thousand** (rate-driven), and interest expense decreased by **$1,596 thousand** (rate-driven)[122](index=122&type=chunk) [Results of Operations Analysis](index=40&type=section&id=Comparison%20of%20Results%20of%20Operation%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) [General Results](index=40&type=section&id=General_Results) - Q2 2025 net income increased **$1.3 million (158.1%)** to **$2.1 million**, or **$0.79 diluted EPS**, driven by higher net interest income[123](index=123&type=chunk) - YTD 2025 net income increased **$1.7 million (105.8%)** to **$3.2 million**, or **$1.24 diluted EPS**, also primarily due to increased net interest income[124](index=124&type=chunk) [Interest Income](index=40&type=section&id=Interest%20Income) - Q2 2025 total interest income increased **$876 thousand (6.2%)** to **$14.9 million**, mainly from a **58 basis point** increase in average loan yield[125](index=125&type=chunk) - YTD 2025 total interest income increased **$823 thousand (3.0%)** to **$28.6 million**, driven by a **39 basis point** increase in average loan yield[130](index=130&type=chunk)[131](index=131&type=chunk) - Interest income on cash and cash equivalents decreased by **$489 thousand (30.8%)** in Q2 and **$895 thousand (29.8%)** YTD due to lower average balances and yields[129](index=129&type=chunk)[131](index=131&type=chunk) [Interest Expense](index=41&type=section&id=Interest%20Expense) - Q2 2025 total interest expense decreased **$931 thousand (14.1%)** to **$5.7 million**, primarily due to lower interest rates across most interest-bearing liabilities[133](index=133&type=chunk) - YTD 2025 total interest expense decreased **$1.6 million (12.4%)** to **$11.3 million**, mainly from lower average rates paid on deposits and borrowings[136](index=136&type=chunk) - Interest expense on certificate accounts declined **$871 thousand** in Q2, with average rate decreasing to **3.98%** from **4.73%**[134](index=134&type=chunk) [Net Interest Income](index=42&type=section&id=Net%20Interest%20Income) - Q2 2025 net interest income increased **$1.8 million (24.3%)** to **$9.3 million**, with net interest margin rising to **3.67%** from **2.92%**[138](index=138&type=chunk)[139](index=139&type=chunk) - YTD 2025 net interest income increased **$2.4 million (16.2%)** to **$17.3 million**, with net interest margin rising to **3.47%** from **2.94%**[140](index=140&type=chunk) - FOMC lowered federal funds rate target range by **100 basis points** to **4.25%-4.50%** by June 30, 2025, with all cuts in H2 2024[141](index=141&type=chunk) [Provision for Credit Losses](index=43&type=section&id=Provision%20for%20Credit%20Losses) - Q2 2025 provision for credit losses was **$170 thousand**, compared to a **$109 thousand** release in Q2 2024, due to loan growth and market uncertainty[142](index=142&type=chunk) - YTD 2025 saw a **$33 thousand** release of credit losses, compared to a **$142 thousand** release in YTD 2024, due to improved credit quality and lower unfunded commitments[143](index=143&type=chunk) - Net charge-offs were **$21 thousand** for Q2 2025 and **$42 thousand** for YTD 2025[142](index=142&type=chunk)[143](index=143&type=chunk) [Noninterest Income](index=44&type=section&id=Noninterest%20Income) - Q2 2025 noninterest income decreased **$42 thousand (3.6%)** to **$1.1 million**, primarily due to lower service charges and net gain on loan sales[145](index=145&type=chunk)[147](index=147&type=chunk) - YTD 2025 noninterest income decreased **$42 thousand (1.9%)** to **$2.2 million**, also due to lower service charges and net gain on loan sales[146](index=146&type=chunk)[150](index=150&type=chunk) - Earnings on BOLI increased by **$95 thousand** in Q2 and **$112 thousand** YTD due to strategic policy exchanges into higher yielding policies[147](index=147&type=chunk)[148](index=148&type=chunk) [Noninterest Expense](index=45&type=section&id=Noninterest%20Expense) - Q2 2025 noninterest expense decreased **$72 thousand (0.9%)** to **$7.7 million**, driven by lower salaries and benefits (**$337 thousand** decrease) and operations expense (**$126 thousand** decrease)[149](index=149&type=chunk)[151](index=151&type=chunk) - YTD 2025 noninterest expense increased **$184 thousand (1.2%)** to **$15.6 million**, primarily due to a **$619 thousand** increase in data processing expenses[153](index=153&type=chunk)[156](index=156&type=chunk) - Efficiency ratio improved to **73.88%** for Q2 2025 from **89.86%** in Q2 2024[152](index=152&type=chunk) [Income Tax Expense](index=46&type=section&id=Income%20Tax%20Expense) - Q2 2025 income tax expense was **$488 thousand (19.21% effective rate)**, up from **$187 thousand (19.04%)** in Q2 2024[153](index=153&type=chunk) - YTD 2025 income tax expense was **$779 thousand (19.48% effective rate)**, up from **$350 thousand (18.29%)** in YTD 2024[153](index=153&type=chunk) - Increase in effective tax rate due to taxable earnings on BOLI from policy exchanges[153](index=153&type=chunk) [Capital and Liquidity Management](index=46&type=section&id=Capital%20and%20Liquidity) [Capital](index=47&type=section&id=Capital) - Stockholders' equity increased **$2.3 million** to **$106.0 million** at June 30, 2025[157](index=157&type=chunk) - Dividend payout ratio was **30.26%** for the six months ended June 30, 2025, compared to **62.15%** for the same period in 2024[158](index=158&type=chunk) [Stock Repurchase Programs](index=47&type=section&id=Stock%20Repurchase%20Programs) - A **$1.5 million** stock repurchase program authorized in January 2024 expired on **January 26, 2025**, and was not renewed[160](index=160&type=chunk) - No shares were repurchased during the three months ended June 30, 2025[183](index=183&type=chunk) [Liquidity](index=47&type=section&id=Liquidity) - As of June 30, 2025, liquid assets included **$110.1 million** in cash and cash equivalents and available-for-sale investment securities, and **$2.0 million** in loans held-for-sale[164](index=164&type=chunk) - Available borrowing capacity: **$161.2 million** from FHLB and **$19.4 million** from Federal Reserve's discount window[164](index=164&type=chunk) - Sound Financial Bancorp (unconsolidated) had **$6.8 million** in cash, noninterest-bearing deposits, and liquid investments[171](index=171&type=chunk) [Regulatory Capital](index=48&type=section&id=Regulatory%20Capital) Community Bank Leverage Ratios (CBLR) | Entity | June 30, 2025 CBLR | | :--- | :--- | | Bank | 10.60% | | Company | 10.09% | | Minimum Requirement | 9% | - Company elected to phase in the full effect of CECL on regulatory capital over a **three-year transition period**, commencing **January 1, 2023**[174](index=174&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the Company's market risk profile since the filing of its 2024 Form 10-K - No material changes in market risk since the **2024 Form 10-K**[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=49&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures were effective as of **June 30, 2025**, as concluded by principal executive and financial officers[177](index=177&type=chunk) - Acknowledges inherent limitations in control procedures, meaning they can provide only reasonable, not absolute, assurance[179](index=179&type=chunk) [Changes in Internal Control over Financial Reporting](index=49&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No material changes in internal control over financial reporting during the three months ended **June 30, 2025**[180](index=180&type=chunk) [PART II OTHER INFORMATION](index=50&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various legal proceedings in the normal course of business, but no currently pending proceedings are expected to have a material adverse effect on its financial condition - Any liability from currently pending legal proceedings is not expected to have a material adverse effect on the Company's business or financial condition[181](index=181&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the Company's 2024 Form 10-K - No material changes in the Risk Factors previously disclosed in **Item 1A of the 2024 Form 10-K**[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the Company's equity security sales and use of proceeds, specifically noting no common share repurchases during the three months ended June 30, 2025 - No common shares were repurchased during the three months ended **June 30, 2025**[183](index=183&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - None[184](index=184&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company's operations - Not applicable[185](index=185&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section provides other information, including details on trading plans by directors and officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended **June 30, 2025**[186](index=186&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, employment agreements, equity incentive plans, and certifications - Includes Articles of Incorporation, Bylaws, Employment Agreements, Equity Incentive Plans, and Certifications[191](index=191&type=chunk) [SIGNATURES](index=54&type=section&id=SIGNATURES) This section contains the official signatures of the Company's principal executive officer and principal financial officer, certifying the report - Report signed by **Laura Lee Stewart** (President/CEO) and **Wes Ochs** (EVP/CSO/CFO) on **August 11, 2025**[196](index=196&type=chunk)

[Introduction & Executive Summary](index=1&type=section&id=Introduction%20%26%20Executive%20Summary) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Sound Financial Bancorp, Inc. reported a significant increase in net income and diluted EPS for Q2 2025 compared to the previous quarter and prior year. The Board declared a cash dividend of $0.19 per share | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Net Income | $2.1 million | $1.2 million | $795 thousand | | Diluted EPS | $0.79 | $0.45 | $0.31 | - The Board of Directors declared a cash dividend of **$0.19 per share**, payable on August 25, 2025[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted a 2% increase in the loan portfolio, improved credit quality, and a 5 basis point reduction in the cost of funds. Strategic focus remains on maintaining strong credit quality, improving net interest margin, controlling expenses, and realizing benefits from prior technology investments - The Company increased its loans held for portfolio by **2%** in the quarter, improved credit quality, and reduced its cost of funds by **5 basis points**, emphasizing money market products[2](index=2&type=chunk) - Teams remain focused on maintaining strong credit quality, improving net interest margin, and controlling expenses, resolving three of the four largest nonaccrual loans during the quarter[3](index=3&type=chunk) - Net interest income continues to improve by replacing lower yielding loans and growing the portfolio, with expected continued decline in funding costs and further efficiencies from technology investments[4](index=4&type=chunk) [Q2 2025 Financial Performance Summary](index=1&type=section&id=Q2%202025%20Financial%20Performance%20Summary) Key financial metrics for Q2 2025 show significant improvements in net interest income and net interest margin, alongside a decrease in total assets and deposits, and a substantial reduction in nonperforming loans Q2 2025 Key Financial Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | | Net interest income | $9.3 million | $8.1 million | $7.4 million | | Total assets | $1.06 billion | $1.07 billion | $1.07 billion | | Loans held-for-portfolio | $904.3 million | $886.2 million | $889.3 million | | Total deposits | $899.5 million | $910.3 million | $906.8 million | | Noninterest-bearing deposits | $124.2 million | $126.7 million | $124.9 million | | Loans-to-deposits ratio | 101% | 98% | 98% | | Total nonperforming loans | $3.4 million | $9.7 million | $8.9 million | | Nonperforming loans to total loans | 0.37% | - | - | | Allowance for credit losses to NPLs | 253.59% | - | - | | Net interest margin (NIM), annualized | 3.67% | 3.25% | 2.92% | | Provision for credit losses | $170 thousand | ($203 thousand) | ($109 thousand) | | Total noninterest income | $1.1 million | $1.1 million | $1.2 million | | Total noninterest expense | $7.7 million | $7.9 million | $7.7 million | [Operating Results](index=3&type=section&id=Operating%20Results) [Net Interest Income after Provision for Credit Losses (Table)](index=3&type=section&id=Net%20Interest%20Income%20after%20Provision%20for%20Credit%20Losses%20%28Table%29) The table provides a comparative overview of interest income, interest expense, net interest income, and provision for credit losses across Q2 2025, Q1 2025, and Q2 2024, highlighting significant quarter-over-quarter and year-over-year changes Operating Results (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Q2 2025 vs. Q1 2025 Amount ($) | Q2 2025 vs. Q1 2025 Percentage (%) | Q2 2025 vs. Q2 2024 Amount ($) | Q2 2025 vs. Q2 2024 Percentage (%) | | :-------------------------------------------------- | :------------ | :------------- | :------------ | :----------------------------- | :--------------------------------- | :----------------------------- | :--------------------------------- | | Interest income | $14,915 | $13,706 | $14,039 | $1,209 | 8.8% | $876 | 6.2% | | Interest expense | $5,660 | $5,635 | $6,591 | $25 | 0.4% | ($931) | (14.1)% | | Net interest income | $9,255 | $8,071 | $7,448 | $1,184 | 14.7% | $1,807 | 24.3% | | Provision for (release of) credit losses | $170 | ($203) | ($109) | $373 | (183.7)% | $279 | (256.0)% | | Net interest income after provision for credit losses | $9,085 | $8,274 | $7,557 | $811 | 9.8% | $1,528 | 20.2% | [Q2 2025 vs Q1 2025 Analysis](index=3&type=section&id=Q2%202025%20vs%20Q1%202025%20Analysis) Interest income increased by 8.8% QoQ, primarily driven by higher average balances of interest-earning cash, increased average yields on loans and investments, and loan payoffs. Interest expense saw a slight increase, while a provision for credit losses was recorded due to loan portfolio growth and qualitative adjustments - Interest income increased **$1.2 million**, or **8.8%**, to **$14.9 million**, primarily due to a higher average balance of interest-earning cash, a **45 basis point** increase in the average yield on loans, and a **45 basis point** increase in the average yield on investments[8](index=8&type=chunk) - Interest income on loans increased **$1.1 million**, or **8.8%**, to **$13.7 million**, with the average yield on total loans rising to **6.14%** from **5.69%**, driven by nonaccrual loan payoffs and new originations at higher rates[9](index=9&type=chunk) - A provision for credit losses of **$170 thousand** was recorded, compared to a release of **$203 thousand** in the prior quarter, mainly due to a larger loan portfolio, increased unfunded commitments, and additional qualitative adjustments for certain loan segments[12](index=12&type=chunk) [Q2 2025 vs Q2 2024 Analysis](index=4&type=section&id=Q2%202025%20vs%20Q2%202024%20Analysis) Interest income on loans increased by 11.2% YoY, with the average loan yield rising to 6.14%. Interest expense decreased significantly due to lower average balances and rates on interest-bearing deposits and FHLB advances. A provision for credit losses was recorded in Q2 2025 compared to a release in Q2 2024 - Interest income on loans increased **$1.4 million**, or **11.2%**, to **$13.7 million**, with the average yield on total loans rising to **6.14%** from **5.56%**, primarily due to nonaccrual loan payoffs, new originations at higher rates, and upward repricing on variable-rate loans[13](index=13&type=chunk) - Interest expense decreased primarily due to lower average balances of interest-bearing demand, NOW, certificate accounts, and FHLB advances, as well as lower average rates paid on all categories of interest-bearing deposits[15](index=15&type=chunk) - A provision for credit losses of **$170 thousand** was recorded, compared to a release of **$109 thousand** in the prior year's quarter, reflecting factors such as loan portfolio growth and qualitative adjustments[16](index=16&type=chunk) [Noninterest Income](index=4&type=section&id=Noninterest%20Income) [Noninterest Income Table](index=4&type=section&id=Noninterest%20Income%20Table) The table details the components of noninterest income for Q2 2025, Q1 2025, and Q2 2024, showing changes in service charges, BOLI earnings, mortgage servicing income, and other categories Noninterest Income (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Q2 2025 vs. Q1 2025 Amount ($) | Q2 2025 vs. Q1 2025 Percentage (%) | Q2 2025 vs. Q2 2024 Amount ($) | Q2 2025 vs. Q2 2024 Percentage (%) | | :------------------------------------ | :------------ | :------------- | :------------ | :----------------------------- | :--------------------------------- | :----------------------------- | :--------------------------------- | | Service charges and fee income | $664 | $684 | $761 | ($20) | (2.9)% | ($97) | (12.7)% | | Earnings on bank-owned life insurance | $229 | $195 | $134 | $34 | 17.4% | $95 | 70.9% | | Mortgage servicing income | $263 | $269 | $279 | ($6) | (2.2)% | ($16) | (5.7)% | | Fair value adjustment on MSR | ($80) | ($99) | ($116) | $19 | (19.2)% | $36 | (31.0)% | | Net gain on sale of loans | $44 | $49 | $74 | ($5) | (10.2)% | ($30) | (40.5)% | | Other income | — | — | $30 | — | —% | ($30) | (100.0)% | | Total noninterest income | $1,120 | $1,098 | $1,162 | $22 | 2.0% | ($42) | (3.6)% | [Q2 2025 vs Q1 2025 Analysis](index=4&type=section&id=Q2%202025%20vs%20Q1%202025%20Analysis) Total noninterest income increased slightly QoQ, driven by higher earnings from BOLI and a lower fair value adjustment on mortgage servicing rights. This was partially offset by a decrease in service charges and fee income and a decline in net gain on loan sales - The increase in noninterest income was primarily related to a **$34 thousand** increase in earnings from BOLI due to market fluctuations and a **$19 thousand** lower adjustment for the fair value of mortgage servicing rights[18](index=18&type=chunk) - These increases were partially offset by a **$20 thousand** decrease in service charges and fee income due to the absence of a Mastercard volume incentive received in the prior quarter[18](index=18&type=chunk) - Net gain on sale of loans declined by **$5 thousand**, reflecting lower pricing margins on loans sold, despite an increase in loan sale volume[19](index=19&type=chunk) [Q2 2025 vs Q2 2024 Analysis](index=5&type=section&id=Q2%202025%20vs%20Q2%202024%20Analysis) Total noninterest income decreased YoY, mainly due to lower service charges, mortgage servicing income, net gain on loan sales, and other income. These decreases were partially offset by a significant increase in BOLI earnings and an improvement in the fair value adjustment of mortgage servicing rights - The decrease in noninterest income was primarily due to a **$97 thousand** decrease in service charges and fee income, a **$16 thousand** decrease in mortgage servicing income, a **$30 thousand** decrease in net gain on sale of loans, and a **$30 thousand** decrease in other income[24](index=24&type=chunk) - These decreases were partially offset by a **$95 thousand** increase in earnings from BOLI, primarily due to a strategic decision to exchange existing policies into higher yielding ones, and a **$36 thousand** improvement in the adjustment for the fair value of mortgage servicing rights[24](index=24&type=chunk) [Noninterest Expense](index=5&type=section&id=Noninterest%20Expense) [Noninterest Expense Table](index=5&type=section&id=Noninterest%20Expense%20Table) The table presents a comparative breakdown of noninterest expenses for Q2 2025, Q1 2025, and Q2 2024, showing changes across categories like salaries, operations, and data processing Noninterest Expense (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Q2 2025 vs. Q1 2025 Amount ($) | Q2 2025 vs. Q1 2025 Percentage (%) | Q2 2025 vs. Q2 2024 Amount ($) | Q2 2025 vs. Q2 2024 Percentage (%) | | :------------------------------------ | :------------ | :------------- | :------------ | :----------------------------- | :--------------------------------- | :----------------------------- | :--------------------------------- | | Salaries and benefits | $4,321 | $4,595 | $4,658 | ($274) | (6.0)% | ($337) | (7.2)% | | Operations | $1,443 | $1,365 | $1,569 | $78 | 5.7% | ($126) | (8.0)% | | Regulatory assessments | $222 | $221 | $220 | $1 | 0.5% | $2 | 0.9% | | Occupancy | $416 | $437 | $397 | ($21) | (4.8)% | $19 | 4.8% | | Data processing | $1,254 | $1,293 | $910 | ($39) | (3.0)% | $344 | 37.8% | | Net loss (gain) on OREO and repossessed assets | $9 | $3 | ($17) | $6 | 200.0% | $26 | (152.9)% | | Total noninterest expense | $7,665 | $7,914 | $7,737 | ($249) | (3.1)% | ($72) | (0.9)% | [Q2 2025 vs Q1 2025 Analysis](index=5&type=section&id=Q2%202025%20vs%20Q1%202025%20Analysis) Total noninterest expense decreased QoQ, primarily driven by lower salaries and benefits due to annual deferred compensation timing and higher deferred salaries, as well as decreases in occupancy and data processing costs. These reductions were partially offset by increased operations expense and OREO-related expenses - The decrease in noninterest expense was primarily a result of a **$274 thousand** decrease in salaries and benefits, a **$21 thousand** decrease in occupancy, and a **$39 thousand** decrease in data processing costs[25](index=25&type=chunk) - These decreases were partially offset by a **$78 thousand** increase in operations expense due to higher deposit product costs and loan fees, and a **$6 thousand** increase in expenses related to OREO and repossessed assets due to a new property[23](index=23&type=chunk)[26](index=26&type=chunk) [Q2 2025 vs Q2 2024 Analysis](index=6&type=section&id=Q2%202025%20vs%20Q2%202024%20Analysis) Total noninterest expense decreased YoY, mainly due to lower salaries and benefits and operations expense, reflecting cost-saving initiatives. This was partially offset by significant increases in data processing expenses due to project implementations and new software, as well as higher occupancy and OREO-related expenses - The decrease in noninterest expense was primarily a result of a **$337 thousand** decrease in salaries and benefits and a **$126 thousand** decrease in operations expense due to cost saving initiatives and process improvements[32](index=32&type=chunk) - These decreases were partially offset by a **$344 thousand** increase in data processing expenses due to project implementations and new software technology, a **$19 thousand** increase in occupancy expense, and a **$26 thousand** increase in OREO-related expenses[32](index=32&type=chunk) [Balance Sheet Review, Capital Management and Credit Quality](index=6&type=section&id=Balance%20Sheet%20Review%2C%20Capital%20Management%20and%20Credit%20Quality) [Assets Overview](index=6&type=section&id=Assets%20Overview) Total assets decreased slightly QoQ and YoY, primarily due to lower cash and cash equivalents. Loans held-for-portfolio, however, increased due to new originations across most loan segments - Total assets decreased **$10.9 million** or **1.0%** to **$1.06 billion** at June 30, 2025, from **$1.07 billion** at March 31, 2025, primarily due to lower cash and cash equivalents[27](index=27&type=chunk) - Cash and cash equivalents decreased **$29.0 million**, or **22.0%**, to **$102.5 million** at June 30, 2025, primarily due to lower deposit balances and an increase in loans held-for-portfolio[28](index=28&type=chunk) - Loans held-for-portfolio increased **$18.1 million** or **2.0%** to **$904.3 million** at June 30, 2025, primarily due to new loan originations across most segments, excluding other consumer loans[30](index=30&type=chunk) [Nonperforming Assets (NPAs)](index=6&type=section&id=Nonperforming%20Assets%20%28NPAs%29) Nonperforming assets (NPAs) significantly decreased by 62.2% QoQ and 59.4% YoY, primarily due to substantial loan payoffs, including large commercial real estate and floating home loans. The ratio of NPAs to total assets improved to 0.35% - Nonperforming assets (NPAs) decreased **$6.0 million**, or **62.2%**, to **$3.7 million** at June 30, 2025, from **$9.7 million** at March 31, 2025, primarily due to payoffs totaling **$6.9 million**[31](index=31&type=chunk) - NPAs to total assets improved to **0.35%** at June 30, 2025, compared to **0.91%** at March 31, 2025 and **0.84%** at June 30, 2024[32](index=32&type=chunk) Nonperforming Assets Summary (Dollars in thousands) | Category | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :------------ | | Total nonperforming loans | $3,366 | $9,653 | $8,909 | | OREO and Other Repossessed Assets | $300 | $41 | $115 | | Total NPAs | $3,666 | $9,694 | $9,024 | [Allowance for Credit Losses](index=7&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses on loans to total loans outstanding remained stable at 0.94%. The allowance for credit losses on loans to total nonperforming loans significantly increased to 253.59%, indicating robust coverage for potential losses - The allowance for credit losses on loans to total loans outstanding was **0.94%** at June 30, 2025, compared to **0.95%** at March 31, 2025 and **0.96%** at June 30, 2024[32](index=32&type=chunk) - Net loan charge-offs were **$21 thousand** for both Q2 and Q1 2025, compared to **$17 thousand** for Q2 2024[33](index=33&type=chunk) Allowance for Credit Losses Summary (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------------------------- | :------------ | :------------- | :------------ | | Allowance for Credit Losses on Loans (End of Period) | $8,536 | $8,393 | $8,493 | | Provision for (release of) credit losses on loans | $164 | ($85) | ($88) | | Net charge-offs during the period | ($21) | ($21) | ($17) | | Allowance for Credit Losses on Unfunded Loan Commitments (End of Period) | $122 | $116 | $245 | | Allowance for credit losses on loans to total loans | 0.94% | 0.95% | 0.96% | | Allowance for credit losses on loans to total nonperforming loans | 253.59% | 86.95% | 95.33% | [Deposits](index=8&type=section&id=Deposits) Total deposits decreased by 1.2% QoQ and 0.8% YoY, primarily due to normal daily fluctuations in customer account balances. Noninterest-bearing deposits also saw a slight decrease - Total deposits decreased **$10.9 million**, or **1.2%**, to **$899.5 million** at June 30, 2025, from **$910.3 million** at March 31, 2025, primarily due to normal daily fluctuations[35](index=35&type=chunk) - Noninterest-bearing deposits decreased **$2.5 million**, or **2.0%**, to **$124.2 million** at June 30, 2025, representing **13.7%** of total deposits[35](index=35&type=chunk) [Borrowings & Subordinated Notes](index=8&type=section&id=Borrowings%20%26%20Subordinated%20Notes) FHLB advances remained stable QoQ at $25.0 million but decreased YoY from $40.0 million, primarily used to support loan growth and maintain liquidity. Subordinated notes remained consistent at $11.8 million - FHLB advances totaled **$25.0 million** at June 30, 2025 and March 31, 2025, down from **$40.0 million** at June 30, 2024, primarily used to support organic loan growth and maintain liquidity[36](index=36&type=chunk) - Subordinated notes, net, totaled **$11.8 million** at both June 30, 2025 and March 31, 2025, and **$11.7 million** at June 30, 2024[36](index=36&type=chunk) [Stockholders' Equity](index=8&type=section&id=Stockholders%27%20Equity) Stockholders' equity increased by 1.5% QoQ and 4.6% YoY, driven primarily by net income earned during the quarter and share-based compensation, partially offset by an increase in accumulated other comprehensive loss and cash dividends - Stockholders' equity totaled **$106.0 million** at June 30, 2025, an increase of **$1.6 million**, or **1.5%**, from March 31, 2025, and an increase of **$4.7 million**, or **4.6%**, from June 30, 2024[37](index=37&type=chunk) - The increase in stockholders' equity was primarily the result of **$2.1 million** of net income and **$75 thousand** in share-based compensation, partially offset by a **$67 thousand** increase in accumulated other comprehensive loss and **$487 thousand** in cash dividends[37](index=37&type=chunk) [Company Information](index=8&type=section&id=Company%20Information) [Company Overview](index=8&type=section&id=Company%20Overview) Sound Financial Bancorp, Inc. is the holding company for Sound Community Bank, headquartered in Seattle, Washington, with full-service branches in several locations and a loan production office. The bank is a Fannie Mae Approved Lender and Seller/Servicer - Sound Financial Bancorp, Inc. is the parent company of Sound Community Bank, headquartered in Seattle, Washington, with full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place[38](index=38&type=chunk) - Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one loan production office located in the Madison Park neighborhood of Seattle[38](index=38&type=chunk) [Forward-Looking Statements Disclaimer](index=9&type=section&id=Forward-Looking%20Statements%20Disclaimer) [Disclaimer Details](index=9&type=section&id=Disclaimer%20Details) This section provides a disclaimer regarding forward-looking statements, outlining that such statements are based on assumptions and expectations, subject to risks and uncertainties, and may differ materially from actual results. It lists various factors that could cause actual results to differ, including economic conditions, interest rate changes, regulatory shifts, and technological advancements. The Company disclaims any obligation to revise these statements - Forward-looking statements are based on underlying assumptions and expectations, subject to risks, uncertainties, and unknown factors, and may include projections of future financial performance[39](index=39&type=chunk) - Factors that could cause actual results to differ materially include adverse impacts to economic conditions, changes in interest rate levels, the impact of inflation, bank failures, changes in consumer habits, risks of lending activities, and regulatory changes[40](index=40&type=chunk) - The Company does not undertake—and specifically disclaims any obligation—to revise any forward-looking statement to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statement[41](index=41&type=chunk) [Consolidated Financial Statements](index=10&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Income Statements (Six Months Ended)](index=10&type=section&id=Consolidated%20Income%20Statements%20%28Six%20Months%20Ended%29) The consolidated income statements for the six months ended June 30, 2025, show an increase in net interest income and net income compared to the same period in 2024, despite a slight decrease in total noninterest income Consolidated Income Statements (Dollars in thousands, unaudited) | Metric | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------------- | :------------------------------------- | | Interest income | $28,622 | $27,799 | | Interest expense | $11,295 | $12,891 | | Net interest income | $17,327 | $14,908 | | Release of provision for credit losses | ($33) | ($142) | | Net interest income after release of provision for credit losses | $17,360 | $15,050 | | Total noninterest income | $2,216 | $2,258 | | Total noninterest expense | $15,578 | $15,394 | | Income before provision for income taxes | $3,998 | $1,914 | | Provision for income taxes | $779 | $350 | | Net income | $3,219 | $1,564 | [Consolidated Income Statements (Quarter Ended)](index=11&type=section&id=Consolidated%20Income%20Statements%20%28Quarter%20Ended%29) The consolidated income statements for the quarter ended June 30, 2025, demonstrate strong growth in net interest income and net income compared to previous quarters, despite a provision for credit losses Consolidated Income Statements (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Interest income | $14,915 | $13,706 | $14,736 | $14,838 | $14,039 | | Interest expense | $5,660 | $5,635 | $6,516 | $6,965 | $6,591 | | Net interest income | $9,255 | $8,071 | $8,220 | $7,873 | $7,448 | | Provision for (release of) provision for credit losses | $170 | ($203) | $14 | $8 | ($109) | | Net interest income after provision for credit losses | $9,085 | $8,274 | $8,206 | $7,865 | $7,557 | | Total noninterest income | $1,120 | $1,098 | $1,160 | $1,235 | $1,162 | | Total noninterest expense | $7,665 | $7,914 | $7,058 | $7,679 | $7,737 | | Income before provision for income taxes | $2,540 | $1,458 | $2,308 | $1,421 | $982 | | Provision for income taxes | $488 | $291 | $389 | $267 | $187 | | Net income | $2,052 | $1,167 | $1,919 | $1,154 | $795 | [Consolidated Balance Sheets](index=12&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets at June 30, 2025, show a slight decrease in total assets and liabilities compared to the prior quarter, while stockholders' equity increased. Loans held-for-portfolio increased, offset by a decrease in cash and deposits Consolidated Balance Sheets (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | **ASSETS:** | | | | | | | Cash and cash equivalents | $102,542 | $131,494 | $43,641 | $148,930 | $135,111 | | Available-for-sale securities, at fair value | $7,521 | $7,689 | $7,790 | $8,032 | $7,996 | | Held-to-maturity securities, at amortized cost | $2,113 | $2,121 | $2,130 | $2,139 | $2,147 | | Loans held-for-sale | $2,025 | $2,267 | $487 | $65 | $257 | | Loans held-for-portfolio, net | $895,750 | $877,833 | $891,672 | $893,148 | $880,781 | | Total assets | $1,058,242 | $1,069,186 | $993,633 | $1,100,930 | $1,074,859 | | **LIABILITIES:** | | | | | | | Total deposits | $899,459 | $910,347 | $837,799 | $930,197 | $906,769 | | Borrowings | $25,000 | $25,000 | $25,000 | $40,000 | $40,000 | | Subordinated notes, net | $11,780 | $11,770 | $11,759 | $11,749 | $11,738 | | Total liabilities | $952,238 | $964,755 | $889,967 | $998,691 | $973,512 | | **STOCKHOLDERS' EQUITY:** | | | | | | | Total stockholders' equity | $106,004 | $104,431 | $103,666 | $102,239 | $101,347 | | Total liabilities and stockholders' equity | $1,058,242 | $1,069,186 | $993,633 | $1,100,930 | $1,074,859 | [Key Financial Ratios](index=13&type=section&id=Key%20Financial%20Ratios) Key financial ratios for Q2 2025 demonstrate improved profitability and efficiency, with significant increases in return on average assets, return on average equity, and net interest margin, alongside a notable decrease in the efficiency ratio Key Financial Ratios (unaudited) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Annualized return on average assets | 0.78% | 0.45% | 0.70% | 0.42% | 0.30% | | Annualized return on average equity | 7.78% | 4.53% | 7.40% | 4.50% | 3.17% | | Annualized net interest margin | 3.67% | 3.25% | 3.13% | 2.98% | 2.92% | | Annualized efficiency ratio | 73.88% | 86.31% | 75.25% | 84.31% | 89.86% | [Per Common Share Data](index=13&type=section&id=Per%20Common%20Share%20Data) Per common share data for Q2 2025 shows an increase in both basic and diluted earnings per share, as well as book value per share, reflecting improved profitability and equity growth Per Common Share Data (unaudited) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Basic earnings per share | $0.80 | $0.45 | $0.75 | $0.45 | $0.31 | | Diluted earnings per share | $0.79 | $0.45 | $0.74 | $0.45 | $0.31 | | Weighted-average basic shares outstanding | 2,556,562 | 2,554,265 | 2,547,210 | 2,544,233 | 2,540,538 | | Weighted-average diluted shares outstanding | 2,577,990 | 2,578,609 | 2,578,771 | 2,569,368 | 2,559,015 | | Common shares outstanding at period-end | 2,566,069 | 2,566,069 | 2,564,907 | 2,564,095 | 2,557,284 | | Book value per share | $41.31 | $40.70 | $40.42 | $39.87 | $39.63 | [Average Balance, Average Yield Earned, and Average Rate Paid](index=14&type=section&id=Average%20Balance%2C%20Average%20Yield%20Earned%2C%20and%20Average%20Rate%20Paid) [Three Months Ended](index=14&type=section&id=Three%20Months%20Ended) This section details the average balances, interest earned/paid, and yields/rates for interest-earning assets and interest-bearing liabilities for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, illustrating the components of net interest income and margin Average Balance, Average Yield Earned, and Average Rate Paid (Dollars in thousands, unaudited) | Metric | June 30, 2025 Average Outstanding Balance | June 30, 2025 Interest Earned/Paid | June 30, 2025 Yield/Rate | March 31, 2025 Average Outstanding Balance | March 31, 2025 Interest Earned/Paid | March 31, 2025 Yield/Rate | June 30, 2024 Average Outstanding Balance | June 30, 2024 Interest Earned/Paid | June 30, 2024 Yield/Rate | | :------------------------------------ | :-------------------------------------- | :--------------------------------- | :----------------------- | :--------------------------------------- | :---------------------------------- | :------------------------ | :--------------------------------------- | :---------------------------------- | :----------------------- | | **Interest-Earning Assets:** | | | | | | | | | | | Loans receivable | $895,039 | $13,695 | 6.14% | $896,822 | $12,588 | 5.69% | $891,863 | $12,320 | 5.56% | | Interest-earning cash | $102,572 | $1,097 | 4.29% | $95,999 | $1,010 | 4.27% | $120,804 | $1,586 | 5.28% | | Investments | $12,842 | $123 | 3.84% | $12,924 | $108 | 3.39% | $13,935 | $133 | 3.84% | | Total interest earning assets | $1,010,453 | $14,915 | 5.92% | $1,005,745 | $13,706 | 5.53% | $1,026,602 | $14,039 | 5.50% | | **Interest-Bearing Liabilities:** | | | | | | | | | | | Savings and money market accounts | $346,655 | $2,258 | 2.61% | $335,419 | $2,058 | 2.49% | $301,454 | $2,115 | 2.82% | | Demand and NOW accounts | $138,150 | $107 | 0.31% | $140,905 | $108 | 0.31% | $153,739 | $148 | 0.39% | | Certificate accounts | $288,286 | $2,860 | 3.98% | $289,960 | $3,039 | 4.25% | $317,496 | $3,731 | 4.73% | | Subordinated notes | $11,777 | $168 | 5.72% | $11,766 | $168 | 5.79% | $11,735 | $168 | 5.76% | | Borrowings | $25,007 | $267 | 4.28% | $25,000 | $262 | 4.25% | $40,000 | $429 | 4.31% | | Total interest bearing liabilities | $809,875 | $5,660 | 2.80% | $803,050 | $5,635 | 2.85% | $824,424 | $6,591 | 3.22% | | Net interest income/spread | | $9,255 | 3.12% | | $8,071 | 2.68% | | $7,448 | 2.28% | | Net interest margin | | | 3.67% | | | 3.25% | | | 2.92% | | Total deposits | $894,997 | $5,225 | 2.34% | $892,499 | $5,205 | 2.37% | $901,567 | $5,994 | 2.67% | [Six Months Ended](index=15&type=section&id=Six%20Months%20Ended) This section provides the average balances, interest earned/paid, and yields/rates for interest-earning assets and interest-bearing liabilities for the six months ended June 30, 2025, and June 30, 2024, offering a broader view of interest rate dynamics Average Balance, Average Yield Earned, and Average Rate Paid (Dollars in thousands, unaudited) | Metric | June 30, 2025 Average Outstanding Balance | June 30, 2025 Interest Earned/Paid | June 30, 2025 Yield/Rate | June 30, 2024 Average Outstanding Balance | June 30, 2024 Interest Earned/Paid | June 30, 2024 Yield/Rate | | :------------------------------------ | :-------------------------------------- | :--------------------------------- | :----------------------- | :--------------------------------------- | :---------------------------------- | :----------------------- | | **Interest-Earning Assets:** | | | | | | | | Loans receivable | $895,926 | $26,283 | 5.92% | $893,646 | $24,553 | 5.53% | | Interest-earning cash | $99,304 | $2,107 | 4.28% | $114,082 | $3,002 | 5.29% | | Investments | $11,551 | $232 | 4.05% | $12,633 | $244 | 3.88% | | Total interest-earning assets | $1,006,781 | $28,622 | 5.73% | $1,020,361 | $27,799 | 5.48% | | **Interest-Bearing Liabilities:** | | | | | | | | Savings and money market accounts | $341,068 | $4,317 | 2.55% | $292,954 | $3,981 | 2.73% | | Demand and NOW accounts | $139,520 | $214 | 0.31% | $156,751 | $289 | 0.37% | | Certificate accounts | $289,119 | $5,899 | 4.11% | $316,495 | $7,426 | 4.72% | | Subordinated notes | $11,772 | $336 | 5.76% | $11,730 | $336 | 5.76% | | Borrowings | $25,003 | $529 | 4.27% | $40,000 | $859 | 4.32% | | Total interest-bearing liabilities | $806,482 | $11,295 | 2.82% | $817,930 | $12,891 | 3.17% | | Net interest income/spread | | $17,327 | 2.91% | | $14,908 | 2.31% | | Net interest margin | | | 3.47% | | | 2.94% | | Total deposits | $893,755 | $10,430 | 2.35% | $896,858 | $11,696 | 2.62% | [Loans](index=16&type=section&id=Loans) The loan portfolio shows growth in commercial and multifamily, home equity, manufactured homes, and floating homes, while one-to-four family and construction and land loans experienced declines. Total loans held-for-portfolio, net, increased to $895.75 million at June 30, 2025 Loans (Dollars in thousands, unaudited) | Loan Category | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | One-to-four family | $262,672 | $262,457 | $269,684 | $271,702 | $268,488 | | Home equity | $28,582 | $28,112 | $26,686 | $25,199 | $26,185 | | Commercial and multifamily | $398,429 | $392,798 | $371,516 | $358,587 | $342,632 | | Construction and land | $49,926 | $42,492 | $73,077 | $85,724 | $96,962 | | Manufactured homes | $43,112 | $42,448 | $41,128 | $40,371 | $38,953 | | Floating homes | $91,448 | $86,626 | $86,411 | $86,155 | $81,622 | | Other consumer | $17,259 | $18,224 | $17,720 | $18,266 | $18,422 | | Commercial business loans | $14,779 | $14,690 | $15,605 | $17,481 | $17,860 | | Total loans | $906,207 | $887,847 | $901,827 | $903,485 | $891,124 | | Total loans held-for-portfolio, net | $895,750 | $877,833 | $891,672 | $893,148 | $880,781 | [Deposits](index=16&type=section&id=Deposits) Total deposits decreased to $899.46 million at June 30, 2025, with decreases in noninterest-bearing demand, interest-bearing demand, and savings accounts, partially offset by an increase in certificates Deposits (Dollars in thousands, unaudited) | Deposit Type | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Noninterest-bearing demand | $124,197 | $126,687 | $132,532 | $129,717 | $124,915 | | Interest-bearing demand | $137,222 | $143,595 | $142,126 | $148,740 | $152,829 | | Savings | $61,813 | $63,533 | $61,252 | $61,455 | $63,368 | | Money market | $282,346 | $287,058 | $206,067 | $285,655 | $253,873 | | Certificates | $293,881 | $289,474 | $295,822 | $304,630 | $311,784 | | Total deposits | $899,459 | $910,347 | $837,799 | $930,197 | $906,769 | [Credit Quality Data](index=17&type=section&id=Credit%20Quality%20Data) Credit quality significantly improved, with total nonperforming assets decreasing by 62.2% QoQ. The allowance for credit losses on loans to total nonperforming loans ratio dramatically increased to 253.59%, indicating strong coverage Credit Quality Data (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total nonperforming loans | $3,366 | $9,653 | $7,491 | $8,489 | $8,909 | | OREO and other repossessed assets | $300 | $41 | — | $115 | $115 | | Total nonperforming assets | $3,666 | $9,694 | $7,491 | $8,604 | $9,024 | | Net charge-offs during the quarter | ($21) | ($21) | ($13) | ($14) | ($17) | | Provision for (release of) credit losses during the quarter | $170 | ($203) | $14 | $8 | ($109) | | Allowance for credit losses - loans | $8,536 | $8,393 | $8,499 | $8,585 | $8,493 | | Allowance for credit losses - loans to total loans | 0.94% | 0.95% | 0.94% | 0.95% | 0.96% | | Allowance for credit losses - loans to total nonperforming loans | 253.59% | 86.95% | 113.46% | 101.13% | 95.33% | | Nonperforming loans to total loans | 0.37% | 1.09% | 0.83% | 0.94% | 1.00% | | Nonperforming assets to total assets | 0.35% | 0.91% | 0.75% | 0.78% | 0.84% | [Other Statistics](index=17&type=section&id=Other%20Statistics) Key operational statistics for Q2 2025 include a loans-to-deposits ratio of 100.75% and noninterest-bearing deposits representing 13.81% of total deposits. Average total assets and equity for the quarter also increased Other Statistics (Dollars in thousands, unaudited) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total loans to total deposits | 100.75% | 97.53% | 107.64% | 97.13% | 98.27% | | Noninterest-bearing deposits to total deposits | 13.81% | 13.92% | 15.82% | 13.95% | 13.78% | | Average total assets for the quarter | $1,055,881 | $1,051,135 | $1,089,067 | $1,095,404 | $1,070,579 | | Average total equity for the quarter | $105,803 | $104,543 | $103,181 | $102,059 | $100,961 | [Contact Information](index=17&type=section&id=Contact%20Information) [Contact Details](index=17&type=section&id=Contact%20Details) Contact details for financial inquiries (Wes Ochs, EVP/CFO) and media inquiries (Laurie Stewart, President/CEO) are provided - For financial inquiries, contact Wes Ochs, Executive Vice President/CFO at **(206) 436-8587**[59](index=59&type=chunk) - For media inquiries, contact Laurie Stewart, President/CEO at **(206) 436-1495**[59](index=59&type=chunk)

Core Viewpoint - Sound Financial Bancorp, Inc. reported a net income of $2.1 million for Q2 2025, reflecting a significant increase compared to previous quarters, alongside a cash dividend declaration of $0.19 per share [1][6]. Financial Performance - Net income for Q2 2025 was $2.1 million, or $0.79 diluted earnings per share, compared to $1.2 million, or $0.45 per share in Q1 2025, and $795 thousand, or $0.31 per share in Q2 2024 [1]. - Total assets decreased by $10.9 million, or 1.0%, to $1.06 billion at June 30, 2025, from $1.07 billion at March 31, 2025 [7]. - Loans held-for-portfolio increased by $18.1 million, or 2.0%, to $904.3 million at June 30, 2025, compared to $886.2 million at March 31, 2025 [7]. - Total deposits decreased by $10.9 million, or 1.2%, to $899.5 million at June 30, 2025, from $910.3 million at March 31, 2025 [7][32]. - Net interest income increased by $1.2 million, or 14.7%, to $9.3 million for Q2 2025, compared to $8.1 million for Q1 2025 [7][10]. Credit Quality and Provision for Losses - Total nonperforming loans decreased by $6.3 million, or 65.1%, to $3.4 million at June 30, 2025, from $9.7 million at March 31, 2025 [7][29]. - A provision for credit losses of $170 thousand was recorded for Q2 2025, compared to a release of provision for credit losses of $203 thousand in Q1 2025 [14][18]. - The allowance for credit losses on loans to total loans outstanding was 0.94% at June 30, 2025, compared to 0.95% at March 31, 2025 [31][32]. Noninterest Income and Expenses - Total noninterest income increased by $22 thousand, or 2.0%, to $1.1 million for Q2 2025, compared to Q1 2025 [19][20]. - Total noninterest expense decreased by $249 thousand, or 3.1%, to $7.7 million for Q2 2025, compared to Q1 2025 [7][25]. Capital Management - Stockholders' equity totaled $106.0 million at June 30, 2025, an increase of $1.6 million, or 1.5%, from $104.4 million at March 31, 2025 [34]. - The company maintained capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at June 30, 2025 [7][34].

PART I - FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's analysis of financial condition and operations, market risk disclosures, and internal controls [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Sound Financial Bancorp, Inc. as of March 31, 2025, show an increase in total assets to $1.07 billion from $993.6 million at year-end 2024, primarily driven by a significant rise in cash and cash equivalents. Net income for the first quarter of 2025 was $1.2 million, a 51.6% increase from $770 thousand in the same period of 2024, largely due to higher net interest income. The statements reflect the company's financial position, operational results, and cash flows for the period [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, highlighting changes in assets, liabilities, and equity Condensed Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $131,494 | $43,641 | +201.3% | | Total loans held-for-portfolio, net | $877,833 | $891,672 | -1.6% | | Total assets | $1,069,186 | $993,633 | +7.6% | | Total deposits | $910,347 | $837,799 | +8.7% | | Total liabilities | $964,755 | $889,967 | +8.4% | | Total stockholders' equity | $104,431 | $103,666 | +0.7% | - The significant increase in **cash and cash equivalents** was a primary driver for the growth in total assets[10](index=10&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the company's operational performance, focusing on revenue, expenses, and net income Condensed Consolidated Statements of Income Highlights (unaudited) | Metric | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net interest income | $8,071 | $7,460 | +8.2% | | Release of credit losses | $(203) | $(33) | +515.2% | | Noninterest income | $1,098 | $1,096 | +0.2% | | Noninterest expense | $7,914 | $7,656 | +3.4% | | Net income | $1,167 | $770 | +51.6% | | Diluted EPS | $0.45 | $0.30 | +50.0% | - **Net income grew significantly year-over-year**, driven by an increase in net interest income and a larger release of credit losses[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section outlines the company's comprehensive income, including net income and other comprehensive loss components Comprehensive Income (unaudited) | Metric | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net income | $1,167 | $770 | | Other comprehensive loss, net of tax | $(17) | $(62) | | Comprehensive income | $1,150 | $708 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in stockholders' equity, including net income and dividend distributions - Stockholders' equity increased from **$103.7 million** at Dec 31, 2024, to **$104.4 million** at March 31, 2025. The increase was primarily due to net income of **$1.2 million**, partially offset by cash dividends of **$487 thousand**[16](index=16&type=chunk) - The company paid a cash dividend of **$0.19 per share** during the first quarter of 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,852 | $3,519 | | Net cash provided by (used in) investing activities | $13,923 | $(5,101) | | Net cash provided by financing activities | $72,078 | $89,869 | | **Net change in cash and cash equivalents** | **$87,853** | **$88,287** | - The net increase in cash was primarily driven by a net increase in deposits of **$72.5 million** and a net decrease in loans of **$13.9 million**[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements - The company operates under one segment and has not made any significant changes to its accounting policies from the 2024 Form 10-K[23](index=23&type=chunk)[24](index=24&type=chunk) - Total loans held-for-portfolio decreased to **$886.2 million** at March 31, 2025, from **$900.2 million** at December 31, 2024. The Allowance for Credit Losses (ACL) on loans was **$8.4 million**[32](index=32&type=chunk) - Nonaccrual loans increased to **$9.7 million** as of March 31, 2025, from **$7.5 million** at December 31, 2024[46](index=46&type=chunk) - The company has **$25.0 million** in FHLB advances and **$11.8 million** in subordinated notes outstanding as of March 31, 2025[75](index=75&type=chunk)[81](index=81&type=chunk) - On April 29, 2025, the Board of Directors declared a quarterly cash dividend of **$0.19 per common share**[87](index=87&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 51.6% year-over-year increase in Q1 2025 net income to a $611 thousand rise in net interest income and a $170 thousand increase in the release of credit loss provisions. The net interest margin improved to 3.25% from 2.95% due to decreased funding costs. Total assets grew by 7.6% to $1.07 billion, driven by higher cash balances from the return of reciprocal deposits. The loan portfolio saw a slight decrease, mainly from a reduction in construction and land loans. Nonperforming assets increased to 0.91% of total assets. The company remains well-capitalized, with a Community Bank Leverage Ratio (CBLR) of 9.98%, exceeding the 9% minimum [Comparison of Financial Condition](index=30&type=section&id=Comparison%20of%20Financial%20Condition) This section analyzes changes in the company's balance sheet, including assets, liabilities, and equity - Total assets increased by **$75.6 million (7.6%)** to **$1.07 billion** at March 31, 2025, primarily due to an **$87.9 million** increase in cash and cash equivalents, which was driven by the return of reciprocal deposits that were strategically moved off-balance sheet at year-end 2024[98](index=98&type=chunk)[99](index=99&type=chunk) - Net loans held-for-portfolio decreased by **$13.8 million (1.6%)** to **$877.8 million**. This was mainly caused by a **$30.6 million (41.9%)** decline in construction and land loans due to project completions and a significant loan payoff[101](index=101&type=chunk)[103](index=103&type=chunk) - Total deposits increased by **$72.5 million (8.7%)** to **$910.3 million**, largely due to the return of reciprocal deposits. However, noninterest-bearing deposits decreased by **$5.8 million (4.4%)**[115](index=115&type=chunk) - Nonperforming assets (NPAs) increased by **$2.2 million** to **$9.7 million**, representing **0.91% of total assets**, up from **0.75%** at year-end 2024. The increase was primarily due to the addition of six loans totaling **$2.4 million** to nonaccrual status[111](index=111&type=chunk)[112](index=112&type=chunk) [Comparison of Results of Operations](index=37&type=section&id=Comparison%20of%20Results%20of%20Operations) This section discusses the company's financial performance, focusing on revenue, expenses, and profitability drivers - Net income for Q1 2025 was **$1.2 million**, a **51.6% increase** from **$770 thousand** in Q1 2024. This was primarily driven by a **$611 thousand** increase in net interest income[124](index=124&type=chunk) Net Interest Margin Analysis | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net interest income | $8,071 thousand | $7,460 thousand | | Net interest rate spread | 2.68% | 2.32% | | Net interest margin | 3.25% | 2.95% | - The net interest margin improved by **30 basis points** year-over-year, mainly due to decreased funding costs from lower average rates on deposits and a lower average balance of borrowings[132](index=132&type=chunk) - A release of credit losses of **$203 thousand** was recorded in Q1 2025, compared to a release of **$33 thousand** in Q1 2024. The release was primarily due to a decline in the loan portfolio balance[134](index=134&type=chunk) - Noninterest expense increased by **3.4%** to **$7.9 million**, largely due to a **$276 thousand** increase in data processing expenses related to project implementations[138](index=138&type=chunk)[140](index=140&type=chunk) [Capital and Liquidity](index=41&type=section&id=Capital%20and%20Liquidity) This section assesses the company's capital adequacy, liquidity position, and dividend policies - Stockholders' equity increased by **$765 thousand** to **$104.4 million** in Q1 2025, reflecting net income of **$1.2 million**, partially offset by **$487 thousand** in common stock dividends[119](index=119&type=chunk)[144](index=144&type=chunk) - The company paid a cash dividend of **$0.19 per share** in Q1 2025, consistent with Q1 2024[145](index=145&type=chunk) - As of March 31, 2025, the company had significant available liquidity, including **$139.2 million** in cash and AFS securities, **$167.5 million** in FHLB borrowing capacity, and **$20.3 million** through the Federal Reserve's discount window[152](index=152&type=chunk) - The stock repurchase program approved in January 2024 expired on January 26, 2025, and was not renewed. No shares were repurchased in Q1 2025[147](index=147&type=chunk)[170](index=170&type=chunk) [Regulatory Capital](index=43&type=section&id=Regulatory%20Capital) This section details the company's compliance with regulatory capital requirements and ratios - The company and the Bank are considered **well-capitalized**. As of March 31, 2025, the Bank's Community Bank Leverage Ratio (CBLR) was **10.76%** and the Company's was **9.98%**, both exceeding the **9% minimum requirement**[160](index=160&type=chunk) - The company has elected to phase in the regulatory capital effects of the CECL accounting standard over a three-year transition period, which began on January 1, 2023[161](index=161&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk since the disclosures provided in its 2024 Form 10-K - There have been no material changes in the Company's market risk since its 2024 Form 10-K[163](index=163&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025, and concluded they were effective. There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls - The Principal Executive Officer and Principal Financial Officer concluded that as of March 31, 2025, the Company's disclosure controls and procedures were effective[164](index=164&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[167](index=167&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other relevant disclosures [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the normal course of business, but any potential liability from these is not expected to have a material adverse effect on its financial condition - The Company is occasionally involved in legal proceedings, but any liability from currently pending cases is not expected to have a material adverse effect on the business or financial condition[168](index=168&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Form 10-K - There have been no material changes in the Risk Factors previously disclosed in Item 1A of the 2024 Form 10-K[169](index=169&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's stock repurchase program, which authorized up to $1.5 million in purchases, expired on January 26, 2025. No shares were repurchased during the first quarter of 2025 - The stock repurchase program announced on January 26, 2024, expired on January 26, 2025[170](index=170&type=chunk) Share Repurchases for Q1 2025 | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2025 | — | $— | | February 2025 | — | $— | | March 2025 | — | $— | | **Total** | **—** | **$—** | [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - During the three months ended March 31, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[173](index=173&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, forms of stock certificates, various management and compensation agreements, and required certifications by the CEO and CFO - The report includes standard corporate governance documents, management compensation plans, and required SEC certifications as exhibits[179](index=179&type=chunk)