Sound Financial Bancorp(US:SFBC)2024-05-14 00:03Financial Position - Total assets increased by $91.5 million, or 9.2%, to $1.09 billion at March 31, 2024, from $995.2 million at December 31, 2023[115] - Cash and cash equivalents rose by $88.3 million, or 177.7%, to $138.0 million at March 31, 2024, compared to $49.7 million at December 31, 2023[116] - Total deposits increased by $90.3 million, or 10.9%, to $916.9 million at March 31, 2024, compared to $826.5 million at December 31, 2023[129] - Total stockholders' equity increased by $338 thousand, or 0.3%, to $101.0 million at March 31, 2024, from $100.7 million at December 31, 2023[134] - Stockholders' equity totaled $101.0 million at March 31, 2024, up from $100.7 million at December 31, 2023, driven by net income of $770 thousand and $26 thousand from stock option exercises[159] Loan Portfolio - Loans held-for-portfolio, net, increased by $3.6 million, or 0.4%, to $889.3 million at March 31, 2024, from $885.7 million at December 31, 2023[118] - Commercial and multifamily real estate loans accounted for 36.1% of total loans at March 31, 2024[120] - Home equity loans increased by $1.3 million, or 5.7%, to $24.4 million at March 31, 2024[118] - Floating home loans increased by $9.1 million, or 12.2%, to $84.2 million at March 31, 2024[118] - Construction and land loans decreased by $15.0 million, or 11.9%, to $111.7 million at March 31, 2024[118] - Total loans held-for-sale decreased to $351 thousand at March 31, 2024, from $603 thousand at December 31, 2023[121] - Total loan commitments increased to $74.779 million as of March 31, 2024, compared to $72.654 million at December 31, 2023[172] Credit Quality - The allowance for credit losses on loans decreased by $162 thousand, or 1.8%, to $8.6 million at March 31, 2024[118] - The allowance for credit losses as a percentage of total loans outstanding was 0.99% at March 31, 2024, compared to 1.00% at December 31, 2023[124] - Nonperforming assets increased by $5.6 million, or 135.9%, to $9.7 million at March 31, 2024, from $4.1 million at December 31, 2023[126] - The ratio of nonaccrual loans to total loans was 1.01% at March 31, 2024, compared to 0.40% at December 31, 2023[127] - The total nonaccrual loans increased to $9.1 million at March 31, 2024, from $3.6 million at December 31, 2023, reflecting a significant rise in credit risk[127] Income Statement - Net income for Q1 2024 decreased by $1.4 million, or 64.5%, to $770 thousand, compared to $2.2 million in Q1 2023[141] - Interest income increased by $1.6 million, or 13.0%, to $13.8 million in Q1 2024, driven by higher average balances of loans and interest-bearing cash[142] - Interest income on loans rose by $852 thousand, or 7.5%, to $12.2 million in Q1 2024, with an average yield of 5.49%[143] - Interest expense surged by $3.5 million, or 124.8%, to $6.3 million in Q1 2024, primarily due to increased average balances in savings and money market accounts[147] - Net interest income fell by $1.9 million, or 20.4%, to $7.5 million in Q1 2024, with a net interest margin of 2.95%[149] - Noninterest income increased by $127 thousand, or 13.1%, to $1.1 million for the three months ended March 31, 2024, compared to $1.0 million for the same period in 2023[154] - Noninterest expense rose by $41 thousand, or 0.5%, to $7.7 million during the three months ended March 31, 2024, compared to $7.6 million for the same period in 2023[155] - The efficiency ratio for the quarter ended March 31, 2024, was 89.48%, compared to 73.65% for the same quarter in 2023, indicating a deterioration primarily due to lower net interest income[156] Regulatory and Capital - The Community Bank Leverage Ratio (CBLR) for the Bank was 10.55% as of March 31, 2024, exceeding the minimum requirement of 9%[175] - The company has approximately $1.5 million of common stock available for repurchase under its existing stock repurchase program as of March 31, 2024[162] - The Company has provided additional information related to regulatory capital in its 2023 Form 10-K[177] - There have been no material changes in the Company's market risk since the 2023 Form 10-K[178] Dividends and Tax - A quarterly dividend of $0.19 per common share was paid during the three months ended March 31, 2024, compared to $0.17 per share in the same period in 2023, resulting in a dividend payout ratio of 63.12%[160] - The provision for income taxes was $163 thousand for the three months ended March 31, 2024, with an effective tax rate of 17.47%, down from 20.15% in the same period in 2023[157] Interest Rates - The average cost of total deposits increased to 2.57% in Q1 2024, up from 1.05% in Q1 2023, reflecting higher rates on interest-bearing liabilities[147] - The weighted average cost of total deposits increased to 2.54% at March 31, 2024, from 1.64% at December 31, 2023[130] - The Federal Reserve increased the target range for the federal funds rate by 100 basis points to 5.25% to 5.50% as of March 31, 2024[150]