Sound Financial Bancorp(SFBC) - 2025 Q3 - Quarterly Results

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]