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 March 31, 2023 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 | | --- | -- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 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 | | --- | - ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 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 | | --- | --- | | (S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 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 | | --- | --- | | (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 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 | | --- | --- | | (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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 | | --- | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 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 | | --- | --- | | (S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 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 | | --- | --- | | (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Sound Financial Bancorp, Inc. (Exact Name of Registrant as Specified in its Charter) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 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 | Maryland | 45-5188530 | | --- | --- | | (State ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) The company, a bank holding company, primarily attracts deposits to fund a diversified loan portfolio, focusing on growth in higher-yielding commercial and consumer loans while maintaining asset quality - Consolidated Financial Highlights as of December 31, 2020 | Metric | Amount (in millions) | | :--- | :--- | | Total Consolidated Assets | $861.4 | | Loans Held for Portfolio | $613.4 | | Deposits | $748.0 | | Stockholders' Equity | $85.5 | - The company's principal business is attracting retail and commercial deposits to invest in a variety of loans, including one-to-four family residences, commercial and multifamily real estate, construction, and consumer loans[20](index=20&type=chunk) - A key part of the business model is originating residential mortgage loans, selling conforming loans to Fannie Mae while retaining servicing rights to generate noninterest income and maintain customer relationships[20](index=20&type=chunk) [Lending Activities](index=8&type=section&id=Lending%20Activities) The $615.5 million loan portfolio as of December 31, 2020, is diversified across commercial, residential, consumer, and construction loans, with a significant portion in PPP loans - Loan Portfolio Composition (December 31, 2020) | Loan Type | Amount (in thousands) | Percentage of Total | | :--- | :--- | :--- | | Commercial and multifamily | $265,774 | 43.2% | | One-to-four family | $130,657 | 21.2% | | Consumer loans | $75,833 | 12.4% | | Commercial business loans | $64,217 | 10.4% | | Construction and land | $62,752 | 10.2% | | **Total Loans** | **$615,498** | **100.0%** | - Commercial business loans increased significantly to **10.4%** of the portfolio in 2020 from 6.3% in 2019, largely due to the origination of 909 PPP loans totaling $74.8 million, of which **$43.3 million** remained outstanding at year-end[62](index=62&type=chunk)[63](index=63&type=chunk) - Total loan originations increased significantly in 2020 to **$575.2 million** from $309.1 million in 2019, driven by high activity in one-to-four family residential loans, commercial business loans, and construction loans[80](index=80&type=chunk) [Asset Quality](index=19&type=section&id=Asset%20Quality) Asset quality improved in 2020 with nonperforming assets decreasing to **$3.5 million** (0.40% of total assets), while the allowance for loan losses increased to **$6.0 million** (0.98% of total loans) - Nonperforming Assets Trend (in thousands) | Category | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Nonaccrual loans | $2,884 | $4,657 | | OREO and repossessed assets | $594 | $575 | | **Total Nonperforming Assets** | **$3,478** | **$5,232** | | **NPA as % of Total Assets** | **0.40%** | **0.73%** | - Allowance for Loan Losses Activity (in thousands) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Beginning Balance | $5,640 | $5,774 | | Provision / (Recapture) | $925 | ($125) | | Net Charge-offs | ($565) | ($9) | | **Ending Balance** | **$6,000** | **$5,640** | | **Allowance as % of Total Loans** | **0.98%** | **0.91%** | - The increase in net charge-offs in 2020 was primarily driven by a **$514,000** loss on a single commercial line of credit due to borrower bankruptcy and depressed collateral value[100](index=100&type=chunk) [Sources of Funds](index=25&type=section&id=Sources%20of%20Funds) Total deposits grew **21.3%** to **$748.0 million** in 2020, primarily from non-maturity deposits, enabling the payoff of FHLB advances and supplementing funding with **$12.0 million** in subordinated notes - Deposit Composition (in thousands) | Deposit Type | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Noninterest-bearing demand | $129,299 | $94,973 | | Interest-bearing demand | $230,492 | $159,774 | | Savings & Money market | $149,526 | $108,273 | | Certificates of deposit | $235,473 | $251,387 | | **Total Deposits** | **$747,981** | **$616,718** | - In September 2020, the company completed a private placement of **$12.0 million** in 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030, resulting in net proceeds of approximately **$11.6 million**[119](index=119&type=chunk) - FHLB advances were paid down to **zero** at the end of 2020, compared to **$7.5 million** outstanding at the end of 2019[120](index=120&type=chunk) [Regulation](index=29&type=section&id=How%20We%20Are%20Regulated) The company and its bank subsidiary are regulated by the Federal Reserve, WDFI, and FDIC, operating under the CBLR framework and maintaining a **10.4%** ratio, qualifying as "well-capitalized" - Effective January 1, 2020, the Company and Bank elected to use the Community Bank Leverage Ratio (CBLR) framework for capital adequacy[139](index=139&type=chunk) - As of December 31, 2020, the Bank's CBLR was **10.4%**, exceeding the temporary 8% requirement set by the CARES Act, and was considered "well-capitalized"[140](index=140&type=chunk)[141](index=141&type=chunk) - The Bank received a "satisfactory" rating in its most recent Community Reinvestment Act (CRA) evaluations from both the FDIC and the WDFI[148](index=148&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, economic downturns in its market, credit quality deterioration, interest rate fluctuations, cybersecurity threats, and regulatory changes - The COVID-19 pandemic presents significant uncertainty, potentially impacting credit quality, net interest income, and operational costs, with unpredictable ultimate financial impact[190](index=190&type=chunk)[193](index=193&type=chunk)[196](index=196&type=chunk) - A high concentration of loans in Washington state exposes the company to risks from local economic downturns, which could increase nonperforming loans and reduce collateral values[197](index=197&type=chunk)[199](index=199&type=chunk) - The loan portfolio contains higher-risk assets, including commercial real estate, construction, and consumer loans, which are more sensitive to economic changes than traditional residential mortgages, with PPP loans introducing specific credit and forgiveness risks[200](index=200&type=chunk)[202](index=202&type=chunk) - The company is exposed to cybersecurity risks, including data breaches and fraudulent activity, which could lead to financial losses, reputational damage, and increased costs[215](index=215&type=chunk)[217](index=217&type=chunk) [Properties](index=48&type=section&id=Item%202.%20Properties) The company operates nine offices, six of which are leased, with total rental expense of **$1.2 million** in 2020, and considers its facilities adequate - The company operates nine offices, six of which are leased properties[238](index=238&type=chunk) - Total rental expense was **$1.2 million** for the year ended December 31, 2020[238](index=238&type=chunk) [Legal Proceedings](index=49&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal actions but does not anticipate any material liability from such litigation - The company is periodically involved in legal actions but does not expect them to result in material liability[240](index=240&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=49&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under "SFBC"; a **$2.0 million** stock repurchase program was authorized in October 2020, with **$1.9 million** remaining at year-end - The company's common stock is listed on The NASDAQ Capital Market under the ticker symbol "SFBC"[243](index=243&type=chunk) - A stock repurchase program of up to **$2.0 million** was authorized in October 2020. By December 31, 2020, **2,477 shares** had been repurchased, with approximately **$1.9 million** remaining available under the plan[246](index=246&type=chunk)[247](index=247&type=chunk) [Selected Financial Data](index=50&type=section&id=Item%206.%20Selected%20Financial%20Data) Net income increased to **$8.9 million** in 2020, driving ROA to **1.10%** and ROE to **10.94%**, while total assets grew to **$861.4 million** and asset quality improved - Selected Financial Data (in thousands, except ratios) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | $861,402 | $719,853 | | Total Loans, net | $607,363 | $614,247 | | Total Deposits | $747,981 | $616,718 | | Stockholders' Equity | $85,484 | $77,726 | | Net Interest Income | $27,486 | $26,964 | | Net Income | $8,937 | $6,679 | | Return on Assets (ROA) | 1.10% | 0.95% | | Return on Equity (ROE) | 10.94% | 8.90% | | NPA to Total Assets | 0.40% | 0.73% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income increased to **$8.9 million** in 2020, driven by higher gain on loan sales and net interest income, despite increased loan loss provisions, with total assets growing **19.7%** to **$861.4 million** funded by deposit growth - Net income for 2020 was **$8.9 million** (**$3.42** per diluted share), up from **$6.7 million** (**$2.57** per diluted share) in 2019[307](index=307&type=chunk) - The increase in net income was primarily due to a **$4.6 million** increase in gain on sale of loans and higher net interest income, partially offset by a higher provision for loan losses[307](index=307&type=chunk)[321](index=321&type=chunk) - Total assets increased by **$141.5 million** (**19.7%**) to **$861.4 million**, largely due to a **$131.3 million** (**21.3%**) increase in total deposits[284](index=284&type=chunk)[298](index=298&type=chunk) - The company participated in the Paycheck Protection Program (PPP), funding **$74.8 million** in loans and providing payment relief on **$56.2 million** of other commercial and residential loans in response to the COVID-19 pandemic[277](index=277&type=chunk)[279](index=279&type=chunk) [Comparison of Financial Condition](index=57&type=section&id=Comparison%20of%20Financial%20Condition) Total assets increased **19.7%** to **$861.4 million** driven by cash growth from deposits, while net loans slightly decreased, and stockholders' equity grew **10.0%** to **$85.5 million** - Cash and cash equivalents increased by **$138.1 million**, or **247.6%**, to **$193.8 million** at year-end 2020, fueled by deposit growth and proceeds from subordinated notes[285](index=285&type=chunk) - Commercial business loans grew by **$25.3 million** (**65.0%**), mainly from PPP loan originations, while one-to-four family loans decreased by **$18.7 million** (**12.5%**) due to increased sales to the secondary market[288](index=288&type=chunk) - Nonperforming assets decreased by **33.5%** to **$3.5 million**, representing **0.40%** of total assets, down from 0.73% in the prior year[291](index=291&type=chunk) [Comparison of Results of Operation](index=61&type=section&id=Comparison%20of%20Results%20of%20Operation) Net income rose to **$8.9 million** in 2020, driven by a **$3.4 million** increase in noninterest income from loan sales, despite net interest margin compression to **3.57%** - Key Performance Metrics | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Interest Income | $27.5M | $27.0M | | Net Interest Margin | 3.57% | 4.06% | | Provision for Loan Losses | $925K | ($125K) | | Noninterest Income | $7.4M | $4.0M | | Noninterest Expense | $22.7M | $22.8M | | Net Income | $8.9M | $6.7M | - The net interest margin decreased by **49 basis points** to **3.57%**, impacted by downward pressure on asset yields from the low interest-rate environment and the addition of lower-yielding PPP loans[315](index=315&type=chunk) - Noninterest income surged primarily due to a **$4.6 million** increase in the net gain on sale of loans, which rose to **$6.0 million** in 2020 from **$1.4 million** in 2019, driven by high mortgage refinancing activity[321](index=321&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest-rate risk, managed via an EVE model, indicating an asset-sensitive position with a **10.0%** EVE increase for a **100 basis point** rate rise - The company's primary market risk is interest-rate risk, arising from the mismatch in maturities and re-pricing characteristics of its assets and liabilities[343](index=343&type=chunk) - Economic Value of Equity (EVE) Sensitivity Analysis (Dec 31, 2020) | Change in Interest Rates (bps) | EVE ($ Amount in thousands) | % Change | | :--- | :--- | :--- | | +400 | $140,541 | +26.49% | | +300 | $135,754 | +22.18% | | +200 | $129,996 | +17.00% | | +100 | $122,123 | +10.00% | | 0 | $111,112 | 0.00% | - The EVE analysis shows the company is asset-sensitive at year-end 2020, with its economic value of equity projected to increase in a rising rate environment[352](index=352&type=chunk) [Financial Statements and Supplementary Data](index=68&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2020 and 2019, with the auditor identifying the allowance for loan losses as a critical audit matter - The financial statements were audited by Moss Adams LLP, which issued an unqualified opinion[356](index=356&type=chunk) - The auditor identified the Allowance for Loan Losses as a critical audit matter, highlighting the subjective judgments required for internally assigned loan grades and qualitative factor estimations[361](index=361&type=chunk)[363](index=363&type=chunk) [Notes to Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the **$615.5 million** loan portfolio, **$6.0 million** allowance for loan losses, **$748.0 million** deposit base, **10.4%** CBLR, and **$3.8 million** mortgage servicing rights - In response to COVID-19, the company provided payment relief on **49 commercial loans** (**$37.2 million**) and **84 residential loans** (**$19.0 million**), not classified as TDRs under CARES Act guidance[398](index=398&type=chunk) - The mortgage servicing rights (MSR) portfolio totaled **$488.7 million** in unpaid principal balance, with a fair value of **$3.8 million** recorded on the balance sheet[468](index=468&type=chunk)[470](index=470&type=chunk) - The company has access to **$213.7 million** in borrowing capacity from the FHLB and **$66.9 million** from the Federal Reserve (including the PPPLF), with no outstanding balances at year-end 2020[480](index=480&type=chunk)[482](index=482&type=chunk) [Controls and Procedures](index=112&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020, with no material changes identified - The CEO and interim CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[559](index=559&type=chunk) - Management's assessment, based on the COSO framework, concluded that the company's internal control over financial reporting was effective as of December 31, 2020[563](index=563&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=113&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 proxy statement - Information for this section is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[568](index=568&type=chunk) [Executive Compensation](index=113&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the 2021 proxy statement - Information for this section is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[573](index=573&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=115&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2021 proxy statement, detailing **100,979** securities under equity compensation plans - Equity Compensation Plan Information (as of Dec 31, 2020) | Category | Number of Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Number of Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Equity Incentive Plan | 100,979 | $22.00 | 80,771 | PART IV [Exhibits, Financial Statement Schedules](index=115&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements from Item 8 and provides an index of all exhibits filed with the Form 10-K - This section lists the financial statements filed with the report and provides an index of exhibits, such as corporate governance documents and material agreements[581](index=581&type=chunk)[585](index=585&type=chunk)