UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35633 Sound Financial Bancorp, Inc. (Exact name of registrant as specified in its charter) | Maryland | 45-5188530 | | --- | --- ...

Sound Financial Bancorp, Inc. Q2 2025 Results Seattle, WA, July 29, 2025 — Sound Financial Bancorp, Inc. (the "Company") (Nasdaq: SFBC), the holding company for Sound Community Bank (the "Bank"), today reported net income of $2.1 million for the quarter ended June 30, 2025, or $0.79 diluted earnings per share, as compared to net income of $1.2 million, or $0.45 diluted earnings per share, for the quarter ended March 31, 2025, and $795 thousand, or $0.31 diluted earnings per share, for the quarter ended June ...

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)

Sound Financial Bancorp, Inc. Q1 2025 Results Seattle, WA, April 29, 2025 — Sound Financial Bancorp, Inc. (the "Company") (Nasdaq: SFBC), the holding company for Sound Community Bank (the "Bank"), today reported net income of $1.2 million for the quarter ended March 31, 2025, or $0.45 diluted earnings per share, as compared to net income of $1.9 million, or $0.74 diluted earnings per share, for the quarter ended December 31, 2024, and $770 thousand, or $0.30 diluted earnings per share, for the quarter ended ...

Core Viewpoint - Sound Financial Bancorp, Inc. reported a net income of $1.2 million for Q1 2025, a decrease from $1.9 million in Q4 2024, but an increase from $770 thousand in Q1 2024, alongside a cash dividend declaration of $0.19 per share [1][2][40] Financial Performance - Total assets increased by $75.6 million or 7.6% to $1.07 billion at March 31, 2025, compared to $993.6 million at December 31, 2024, but decreased by $17.5 million or 1.6% from $1.09 billion at March 31, 2024 [6] - Loans held-for-portfolio decreased by $13.9 million or 1.5% to $886.2 million at March 31, 2025, compared to $900.2 million at December 31, 2024, and decreased by $11.7 million or 1.3% from $897.9 million at March 31, 2024 [6][33] - Total deposits increased by $72.5 million or 8.7% to $910.3 million at March 31, 2025, from $837.8 million at December 31, 2024, but decreased by $6.5 million or 0.7% from $916.9 million at March 31, 2024 [7] Income and Expenses - Net interest income decreased by $149 thousand or 1.8% to $8.1 million for Q1 2025, compared to $8.2 million for Q4 2024, but increased by $611 thousand or 8.2% from $7.5 million for Q1 2024 [9] - Total noninterest income decreased by $62 thousand or 5.3% to $1.1 million for Q1 2025, compared to Q4 2024, and was virtually unchanged compared to Q1 2024 [11][24] - Total noninterest expense increased by $856 thousand or 12.1% to $7.9 million for Q1 2025, compared to Q4 2024, and increased by $258 thousand or 3.4% compared to Q1 2024 [11][25] Credit Quality - Total nonperforming loans increased by $2.2 million or 28.9% to $9.7 million at March 31, 2025, from $7.5 million at December 31, 2024, and increased by $600 thousand or 6.6% from $9.1 million at March 31, 2024 [8] - The allowance for credit losses on loans to total loans outstanding was 0.95% at March 31, 2025, compared to 0.94% at December 31, 2024, and 0.96% at March 31, 2024 [10][35] Capital Management - Stockholders' equity totaled $104.4 million at March 31, 2025, an increase of $765 thousand or 0.7% from $103.7 million at December 31, 2024, and an increase of $3.4 million or 3.4% from $101.0 million at March 31, 2024 [40]

Loan and Credit Quality - Modified loans to troubled borrowers totaled $1.3 million at December 31, 2024, down from $1.7 million at December 31, 2023[94]. - Classified assets amounted to $27.4 million at December 31, 2024, representing 26.4% of equity capital and 2.8% of total assets[98]. - The allowance for credit losses (ACL) on loans was $8.5 million, or 0.94% of the total loan portfolio, compared to $8.8 million, or 0.98% at December 31, 2023[102]. - Nonaccrual loans increased to $7.5 million, or 0.83% of total loans outstanding, from $3.6 million, or 0.40% in the previous year[105]. - The ACL as a percentage of nonperforming loans decreased to 113.46% at December 31, 2024, from 246.34% at December 31, 2023[108]. - Net charge-offs were $100 thousand for the year ended December 31, 2024, compared to $163 thousand for the year ended December 31, 2023[108]. - Special mention assets totaled $18.7 million at December 31, 2024[97]. - The company maintains an allowance for credit losses on loans using the Current Expected Credit Loss (CECL) methodology, which reflects management's best estimate of lifetime expected credit losses[209]. Deposits and Funding - Total deposits increased by $11.3 million to $837.8 million at December 31, 2024, primarily due to a $52.0 million, or 33.8%, increase in money market accounts[122]. - Core deposits represented approximately 87.3% of total deposits at December 31, 2024, compared to 86.6% at December 31, 2023[119]. - Interest-bearing demand and savings accounts decreased by $26.2 million, or 15.6%, and $8.2 million, or 11.8%, respectively, from December 31, 2023, to December 31, 2024[122]. - Noninterest-bearing demand accounts increased by $6.0 million, or 4.8%, in 2024 compared to 2023[122]. - The company had $25.0 million of outstanding FHLB fixed-rate advances at December 31, 2024, with maturities ranging from January 2026 to January 2028[129]. - Approximately $167.3 million of the deposit portfolio was uninsured as of December 31, 2024[125]. - The company had no brokered deposits at December 31, 2024, compared to $5.0 million of brokered money market accounts at December 31, 2023[119]. - The total amount available under the FHLB agreement at December 31, 2024, was $172.3 million[129]. Regulatory and Compliance - The company is subject to extensive regulatory oversight from the FDIC and WDFI, which includes the ability to require higher loan loss reserves[140]. - The implementation of the Current Expected Credit Loss (CECL) standard may reduce the company's retained earnings and affect regulatory capital[156]. - The company must maintain specified levels of regulatory capital under FDIC and FRB regulations, with the CBLR framework providing a simplified measure of capital adequacy[152]. - The FDIC has increased initial base deposit insurance assessment rates by two basis points starting in 2023, which may impact the company's operating expenses[147]. - Sound Financial Bancorp is subject to comprehensive regulation by the Federal Reserve under the Bank Holding Company Act, ensuring safe and sound operations[177]. - The Federal Reserve limits the payment of cash dividends by bank holding companies if net income is insufficient to cover both the cash dividend and a rate of earnings retention[185]. - Sound Community Bank is required to disclose its privacy policy and inform consumers of their rights to opt out of certain practices[165]. - Non-compliance with federal or state privacy and cybersecurity laws could lead to substantial regulatory fines and reputational harm[167]. Economic and Market Conditions - Economic conditions in the Puget Sound area significantly impact the bank's loan repayment capabilities and overall financial performance[200]. - The bank's loan portfolio includes higher-risk loans, such as commercial and multifamily real estate loans, which are sensitive to economic fluctuations[204]. - The COVID-19 pandemic has led to increased uncertainty in the commercial real estate market, affecting demand for office space[204]. - The bank's financial performance is influenced by external economic factors, including inflation and monetary policy changes[202]. Risk Management - The effectiveness of the company's risk management framework is critical, as ineffective management could lead to unexpected losses and materially affect financial results[254]. - The company faces ongoing challenges from an increasing prevalence of fraud and financial crimes, which have resulted in financial losses despite preventive measures[236]. - The company has not incurred substantial losses from cyber-attacks to date, but ongoing advancements in internet and mobile banking heighten exposure to cybersecurity risks[223]. - The reliance on external vendors for essential operations exposes the company to operational and information security risks, which could disrupt operations and impair customer service[229]. - The adoption of Artificial Intelligence (AI) introduces model risk and regulatory compliance concerns, particularly regarding transparency and explainability in decision-making processes[231]. Employee and Workforce - As of December 31, 2024, Sound Community Bank employed 108 full-time and 15 part-time employees, with a workforce composition of approximately 62% female[194][195]. - The average employee tenure at Sound Community Bank is 6.14 years, indicating strong employee engagement[195]. Financial Performance and Strategy - The company had $1.3 million in unrestricted cash as of December 31, 2024, to support dividend and debt payments[260]. - The company's investment strategy emphasizes safer investments, prioritizing risk management over yield[112]. - The company relies on competitive pricing policies, marketing, and client service to attract and retain deposits[119]. - The company did not recognize any credit losses on investment securities during the year ended December 31, 2024[116]. - The company faces risks related to mortgage banking income volatility, particularly in a rising interest rate environment, which may decrease loan originations and revenues[219]. - Increased prepayment rates can negatively impact the fair value of mortgage servicing rights and loan administration fee income[220].

Company Information - Sound Financial Bancorp, Inc. is a bank holding company and the parent company of Sound Community Bank [2] - The company is headquartered in Seattle, Washington, and operates full-service branches in several locations including Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow, and University Place [2] - 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 [2] Upcoming Events - The annual meeting of shareholders is scheduled for May 27, 2025 [1] - The record date for shareholders entitled to vote at the annual meeting is March 31, 2025 [1] Contact Information - For additional information, Laurie Stewart serves as the President and CEO, and can be contacted at 206.436.1495 [3]

Financial Performance - Net income for Q4 2024 was $1.9 million, or $0.74 diluted earnings per share, compared to $1.2 million, or $0.45 diluted earnings per share in Q3 2024[1]. - Net income for 2024 was $4,640,000, a decrease of 37.9% compared to $7,439,000 in 2023[32]. - Basic earnings per share rose to $0.75 in Q4 2024, up from $0.47 in Q4 2023, marking a growth of 59.6%[36]. - The annualized return on average assets improved to 0.70% in Q4 2024, up from 0.46% in Q4 2023[34]. - The efficiency ratio improved to 75.25% in Q4 2024, down from 84.63% in Q4 2023, indicating better cost management[34]. Income and Expenses - Net interest income increased by $347 thousand, or 4.4%, to $8.2 million for Q4 2024, up from $7.9 million in Q3 2024[6]. - Noninterest income decreased by $75 thousand, or 6.1%, to $1.2 million for the quarter ended December 31, 2024, compared to the previous quarter, but increased by $94 thousand, or 8.8%, compared to the same quarter in 2023[13]. - Noninterest expense decreased by $621 thousand, or 8.1%, to $7.1 million for the quarter ended December 31, 2024, compared to the previous quarter, and decreased by $248 thousand, or 3.4%, from the same quarter in 2023[14]. - Total noninterest income for the quarter ended December 31, 2024, was $1.160 million, compared to $1.235 million for the quarter ended September 30, 2024[31]. Assets and Liabilities - Total assets decreased by $107.3 million, or 9.7%, to $993.6 million at December 31, 2024, from $1.10 billion at September 30, 2024[5]. - Total deposits decreased by $92.4 million, or 9.9%, to $837.8 million at December 31, 2024, from $930.2 million at September 30, 2024[5]. - Cash and cash equivalents decreased by $105.3 million, or 70.7%, to $43.6 million at December 31, 2024, compared to the previous quarter, primarily due to higher deposit withdrawals[17]. - Total loans held-for-portfolio were $900.2 million at December 31, 2024, compared to $901.7 million at September 30, 2024, and $894.5 million at December 31, 2023[19]. - Total interest-earning assets increased to $1,044,507 thousand with a net interest income of $8,220 thousand, resulting in a net interest margin of 3.13% for the three months ended December 31, 2024[39]. Credit Quality - Nonperforming loans decreased by $998 thousand, or 11.8%, to $7.5 million at December 31, 2024, from $8.5 million at September 30, 2024[5]. - The allowance for credit losses on loans to total loans outstanding was 0.94% at December 31, 2024, compared to 0.95% at September 30, 2024[5]. - Net loan charge-offs for the fourth quarter of 2024 totaled $13 thousand, compared to $14 thousand for the third quarter of 2024, and $15 thousand for the fourth quarter of 2023[21]. - Total nonperforming loans decreased to $7,491,000 from $9,053,000 year-over-year, representing a decline of 17.3%[46]. - Nonperforming loans to total loans ratio improved to 0.83% from 1.01% year-over-year[46]. Deposits and Funding - The loans-to-deposits ratio was 108% at December 31, 2024, compared to 97% at September 30, 2024[5]. - Noninterest-bearing deposits increased by $2.8 million, or 2.2%, to $132.5 million at December 31, 2024, compared to $129.7 million at September 30, 2024[24]. - Total deposits amounted to $926,734 thousand, with an average interest expense of $6,017 thousand, leading to a cost of total funding of 2.68%[39]. - FHLB advances totaled $25.0 million at December 31, 2024, down from $40.0 million at September 30, 2024[25].

Financial Performance - The company reported net income of $1.9 million for Q4 2024, an increase from $1.2 million in Q3 2024 and $1.2 million in Q4 2023, resulting in diluted earnings per share of $0.74 [1][11] - Net interest income increased by $347 thousand, or 4.4%, to $8.2 million for Q4 2024 compared to Q3 2024, and increased by $653 thousand, or 8.6%, from Q4 2023 [11][12] - Total noninterest income decreased by $75 thousand, or 6.1%, to $1.2 million for Q4 2024 compared to Q3 2024, but increased by $94 thousand, or 8.8%, compared to Q4 2023 [19] Balance Sheet and Capital Management - Total assets decreased by $107.3 million, or 9.7%, to $993.6 million at December 31, 2024, from $1.10 billion at September 30, 2024 [6][21] - Total deposits decreased by $92.4 million, or 9.9%, to $837.8 million at December 31, 2024, compared to $930.2 million at September 30, 2024 [6][30] - Stockholders' equity increased by $1.4 million, or 1.4%, to $103.7 million at December 31, 2024, from $102.2 million at September 30, 2024 [30] Loan and Credit Quality - Loans held-for-portfolio decreased by $1.6 million, or 0.2%, to $900.2 million at December 31, 2024, compared to $901.7 million at September 30, 2024 [24] - Nonperforming loans decreased by $998 thousand, or 11.8%, to $7.5 million at December 31, 2024, from $8.5 million at September 30, 2024 [8][25] - The allowance for credit losses on loans to total loans outstanding was 0.94% at December 31, 2024, compared to 0.95% at September 30, 2024 [26] Operational Efficiency - The company achieved a 15-basis-point increase in net interest margin (NIM) to 3.13% for Q4 2024, primarily due to reduced deposit costs [3][17] - Total noninterest expense decreased by $621 thousand, or 8.1%, to $7.1 million for Q4 2024 compared to Q3 2024 [20] - The company maintained capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at December 31, 2024 [10]