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Sound Financial Bancorp (Nasdaq: SFBC) lifts Q2 profit and declares $0.21 dividend

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Sound Financial Bancorp reported stronger Q2 2026 results, with net income of $2.5 million, or $0.98 diluted EPS, up from $1.6 million, or $0.61, in Q1 2026 and $2.1 million, or $0.79, a year earlier. Annualized return on average assets rose to 0.94% and return on average equity to 9.03%. The Board declared a quarterly cash dividend of $0.21 per share, payable August 21, 2026 to shareholders of record on August 7, 2026.

Net interest income increased to $9.5 million and net interest margin improved to 3.73%, helped by higher loan and investment yields, lower funding costs and the collection of a large prepayment penalty on a commercial loan. Noninterest income grew to $1.5 million, driven by favorable mortgage servicing rights valuation, higher bank-owned life insurance earnings and a dividend from an equity investment. Assets were $1.07 billion, loans held-for-portfolio were $892.0 million and deposits were $930.9 million, producing a 96.0% loans-to-deposits ratio and no FHLB advances outstanding. Credit quality weakened, with nonperforming assets rising to $8.1 million, or 0.76% of assets, though the allowance for credit losses on loans remained 0.94% of total loans and the bank continued to be categorized as well-capitalized.

Positive

  • Q2 profitability strengthened, with net income of $2.5 million and diluted EPS of $0.98, up from $1.6 million and $0.61 in Q1 2026 and above $2.1 million and $0.79 a year earlier.
  • Core earnings metrics improved: net interest margin rose to 3.73%, and annualized return on average assets and equity increased to 0.94% and 9.03%, supported by higher asset yields and lower funding costs.
  • Balance sheet and capital actions were constructive, with FHLB advances reduced to $0, subordinated debt paydowns, and a regular cash dividend of $0.21 per share declared for August 21, 2026.

Negative

  • Asset quality showed notable deterioration, as nonperforming assets increased to $8.1 million, or 0.76% of total assets, compared with $3.7 million, or 0.35%, a year earlier.
  • Balance sheet contracted in the quarter, with loans held-for-portfolio declining to $892.0 million and total deposits falling 3.9% sequentially to $930.9 million, partly from reducing higher-cost reciprocal deposits.

Filing Explained

A non-recurring loan prepayment penalty aided Q2 results; completed debt repayments lowered obligations, while nonperforming loans rose by June 30.

At the disclosed June 30, 2026 quarter-end, Q2 earnings included a large commercial-loan prepayment penalty that the company identifies as non-recurring; the filing therefore does not establish that this contribution will repeat.

The company repaid $10.0 million of FHLB borrowings during the quarter and reported no FHLB advances at June 30, 2026; after quarter-end, it also repaid $2.0 million of subordinated debt. These are completed reductions in borrowings, rather than additional borrowing capacity.

At June 30, 2026, cash and equivalents were $120.1 million, down from $138.0 million at March 31, 2026, while deposits were $930.9 million and loans held for portfolio were $892.0 million.

The quarter-end balance sheet thus shows lower cash alongside lower deposits, loans and FHLB borrowings; the filing attributes the cash reduction primarily to deposit declines and the $10.0 million FHLB repayment.

Credit quality remains a separate line item to track: nonperforming assets reached $8.1 million at June 30, 2026, including $4.2 million of commercial and multifamily nonperforming loans, while the allowance for credit losses on loans was 0.94% of loans and 104.53% of nonperforming loans.

The June 30 nonperforming-loan and allowance tables in the next quarterly filing will show whether this balance-sheet credit mix has changed.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 8.01 Other Events Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Net income $2.5 million Quarter ended June 30, 2026
Diluted EPS $0.98 per share Quarter ended June 30, 2026
Net interest margin 3.73% Annualized, quarter ended June 30, 2026
Total assets $1.07 billion At June 30, 2026
Loans held-for-portfolio $892.0 million At June 30, 2026
Total deposits $930.9 million At June 30, 2026
Nonperforming assets to total assets 0.76% At June 30, 2026
Quarterly dividend $0.21 per share Payable August 21, 2026 to holders of record August 7, 2026
net interest margin financial
"Net interest margin ("NIM"), annualized, was 3.73% for the quarter ended June 30, 2026"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
nonperforming assets financial
"Nonperforming assets (“NPAs”), which are comprised of nonaccrual loans ... increased"
Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.
allowance for credit losses financial
"The allowance for credit losses on loans as a percentage of total loans outstanding was 0.94%"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
FHLB advances financial
"During the current quarter, we repaid $10.0 million of FHLB borrowings"
FHLB advances are loans that member banks and credit unions borrow from one of the regional Federal Home Loan Banks, using mortgages or other eligible assets as collateral. They matter to investors because these advances provide a reliable source of funding that affects a lender’s liquidity, borrowing costs and balance-sheet risk — like a neighborhood credit cooperative loan that helps a business cover shortfalls or finance growth without selling its assets.
mortgage servicing rights financial
"a $259 thousand increase in the fair value adjustment on mortgage servicing rights"
Mortgage servicing rights are the contractual right to collect mortgage payments, manage escrow accounts, handle customer service and delinquency actions on a pool of home loans, in exchange for a portion of the loan’s payments. They matter to investors because their value behaves like a revenue stream that can rise or fall with interest rates and borrower behavior — similar to owning a toll bridge where income depends on traffic volume and maintenance costs — and thus affect a lender’s earnings and risk profile.
Net income Q2 2026 $2.518 million Up from $1.576 million in Q1 2026 and $2.052 million in Q2 2025
Diluted EPS Q2 2026 $0.98 Up from $0.61 in Q1 2026 and $0.79 in Q2 2025
Net interest margin Q2 2026 3.73% Increased from 3.51% in Q1 2026 and 3.67% in Q2 2025
Noninterest income Q2 2026 $1.514 million Up 66.4% from Q1 2026 and 35.2% from Q2 2025
Noninterest expense Q2 2026 $8.128 million Up 3.2% from Q1 2026 and 6.0% from Q2 2025
Annualized return on average assets Q2 2026 0.94% Improved from 0.58% in Q1 2026
Annualized return on average equity Q2 2026 9.03% Improved from 5.78% in Q1 2026
Dividend per share $0.21 Payable August 21, 2026 to shareholders of record August 7, 2026

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FAQ

What were Sound Financial Bancorp (SFBC) Q2 2026 earnings?
Sound Financial Bancorp reported Q2 2026 net income of $2.5 million, or $0.98 diluted EPS. This compares with $1.6 million, or $0.61, in Q1 2026 and $2.1 million, or $0.79, in Q2 2025, reflecting stronger quarterly profitability.

How did SFBC’s net interest margin and revenue perform in Q2 2026?
In Q2 2026, SFBC’s net interest income was $9.5 million and net interest margin was 3.73%. Margin improved from 3.51% in Q1 2026 and 3.67% a year earlier, helped by higher loan yields, lower funding costs and a large commercial loan prepayment penalty.

What dividend did Sound Financial Bancorp (SFBC) declare with these results?
The Board declared a cash dividend of $0.21 per share on common stock. It is payable on August 21, 2026 to shareholders of record as of the close of business on August 7, 2026, continuing regular capital returns.

How are SFBC’s loans, deposits and funding positioned as of June 30, 2026?
At June 30, 2026, SFBC held $892.0 million in loans held-for-portfolio and $930.9 million in deposits, for a loans-to-deposits ratio of about 96.0%. There were no FHLB advances outstanding and subordinated notes, net, totaled $7.8 million.

What is the credit quality and allowance picture for SFBC in Q2 2026?
Nonperforming assets were $8.1 million, or 0.76% of total assets, and nonperforming loans were 0.90% of total loans. The allowance for credit losses on loans remained 0.94% of total loans, and Q2 included a $223 thousand release of provision for credit losses.

How did noninterest income and expenses trend for SFBC in Q2 2026?
Q2 2026 noninterest income rose to $1.5 million, up 66.4% from Q1 2026 and 35.2% year over year, driven by mortgage servicing rights valuation, BOLI income and fees. Noninterest expense increased to $8.1 million, up 3.2% sequentially and 6.0% year over year.
0001541119false00015411192026-07-282026-07-28


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
_____________________________________________
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 2026
SOUND FINANCIAL BANCORP, INC.
(Exact name of registrant as specified in its charter)
Maryland 001-35633 45-5188530
(State or other jurisdiction of incorporation) (Commission File No.) (IRS Employer Identification No.)
2400 3rd Avenue, Suite 150, Seattle, Washington
 98121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (206) 448-0884
 
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueSFBCThe NASDAQ Stock Market LLC

Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
☐



Items to be Included in this Report

Item 2.02.           Results of Operations and Financial Condition.

On July 28, 2026, Sound Financial Bancorp, Inc. (the “Company”), (Nasdaq: SFBC), the holding company of Sound Community Bank, issued its earnings press release announcing financial results for the second quarter and six months ended June 30, 2026. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.


Item 8.01.           Other Events.

On July 28, 2026, the Company announced its Board of Directors declared a cash dividend on Company common stock of $0.21 per share, payable on August 21, 2026 to stockholders of record as of the close of business on August 07, 2026. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.


Item 9.01.            Financial Statements and Exhibits.

(d)   Exhibits
The following exhibit is being furnished herewith and this list shall constitute the exhibit index:
99.1
Press Release dated July 28, 2026 announcing second quarter 2026 earnings and regular quarterly cash dividend.
104Cover page interactive data file (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
 SOUND FINANCIAL BANCORP, INC. 
    
Date: July 28, 2026
By:/s/ Laura Lee Stewart 
  Laura Lee Stewart 
  CEO



sfbcworkivaercoverpagelogo.jpg
Sound Financial Bancorp, Inc. Q2 2026 Results
Seattle, WA, July 28, 2026 — Sound Financial Bancorp, Inc. (the "Company") (Nasdaq: SFBC), the holding company for Sound Community Bank (the "Bank"), today reported net income of $2.5 million for the quarter ended June 30, 2026, or $0.98 diluted earnings per share, compared to net income of $1.6 million, or $0.61 diluted earnings per share, for the quarter ended March 31, 2026, and $2.1 million, or $0.79 diluted earnings per share, for the quarter ended June 30, 2025. Consistent with the Company's commitment to deploy capital thoughtfully, the Company also announced today that its Board of Directors declared a cash dividend on the Company's common stock of $0.21 per share, payable on August 21, 2026 to stockholders of record as of the close of business on August 7, 2026.
Comments from the Chief Executive Officer and President / Chief Financial Officer
“Our mid-year results reflect our continued focus on enhancing financial performance despite ongoing client concerns regarding economic uncertainty, inflation and interest rates. While commercial production slowed during the quarter, saleable residential production grew. As of June 30, 2026, our year-to-date originations of saleable residential loans nearly exceeded our total originations of those loans for all of 2025, representing significant improvement over both last year and 2024,” remarked Laurie Stewart, Chief Executive Officer.

"The second quarter represented a continued step forward in our profitability and balance sheet optimization initiatives. During the quarter, we meaningfully reduced low-rate loans held-for-portfolio, managed down higher-rate reciprocal deposits, repaid FHLB advances, and maintained a loans-to-deposits ratio at quarter-end of approximately 96%. These actions reflect our ongoing focus on profitability, liquidity, and prudent capital deployment,” said Wes Ochs, President and Chief Financial Officer. “We remain focused on generating profitable growth, improving operating efficiency, and deploying capital thoughtfully while maintaining strong liquidity and capital ratios.”
Q2 2026 Financial Performance
Total assets decreased $46.3 million or 4.2% to $1.07 billion at June 30, 2026, from $1.11 billion at March 31, 2026, and increased $7.5 million or 0.7% from $1.06 billion at June 30, 2025.
Net interest income increased $459 thousand or 5.1% to $9.5 million for the quarter ended June 30, 2026, from $9.0 million for the quarter ended March 31, 2026, and increased $251 thousand or 2.7% from $9.3 million for the quarter ended June 30, 2025.
Net interest margin ("NIM"), annualized, was 3.73% for the quarter ended June 30, 2026, compared to 3.51% for the quarter ended March 31, 2026 and 3.67% for the quarter ended June 30, 2025.
Loans held-for-portfolio decreased $29.5 million or 3.2% to $892.0 million at June 30, 2026, compared to $921.5 million at March 31, 2026, and decreased $12.3 million or 1.4% compared to $904.3 million at June 30, 2025.
A $223 thousand release of provision for credit losses was recorded for the quarter ended June 30, 2026, compared to a $123 thousand provision for the quarter ended March 31, 2026, and a $170 thousand provision for the quarter ended June 30, 2025. The allowance for credit losses on loans to total loans outstanding was 0.94% at June 30, 2026, March 31, 2026 and June 30, 2025.
Total deposits decreased $37.6 million or 3.9% to $930.9 million at June 30, 2026, compared to $968.5 million at March 31, 2026, and increased $31.4 million or 3.5% compared to $899.5 million at June 30, 2025. Noninterest-bearing deposits decreased $1.8 million or 1.3% to $129.3 million at June 30, 2026, compared to $131.1 million at March 31, 2026, and increased $5.1 million or 4.1% compared to $124.2 million at June 30, 2025.
Total noninterest income increased $604 thousand or 66.4% to $1.5 million for the quarter ended June 30, 2026, compared to the quarter ended March 31, 2026, and increased $394 thousand or 35.2% compared to the quarter ended June 30, 2025.
The loans-to-deposits ratio was 96.0% at June 30, 2026, compared to 95.4% at March 31, 2026 and 100.8% at June 30, 2025.
Total noninterest expense increased $254 thousand or 3.2% to $8.1 million for the quarter ended June 30, 2026, compared to the quarter ended March 31, 2026, and increased $463 thousand or 6.0% compared to the quarter ended June 30, 2025.
Total nonperforming loans increased $676 thousand or 9.2% to $8.1 million at June 30, 2026, from $7.4 million at March 31, 2026, and increased $4.7 million or 139.3% from $3.4 million at June 30, 2025. Nonperforming loans to total loans was 0.90% and the allowance for credit losses on loans to total nonperforming loans was 104.53% at June 30, 2026.
The Bank maintained capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at June 30, 2026.
1

Operating Results
Net Interest Income after Provision for Credit Losses
For the Quarter EndedQ2 2026 vs. Q1 2026Q2 2026 vs. Q2 2025
June 30,
2026		March 31,
2026		June 30,
2025		Amount
($)		Percentage (%)Amount
($)		Percentage (%)
(Dollars in thousands, unaudited)
Interest income$14,761 $14,465 $14,915 $296 2.0 %$(154)(1.0)%
Interest expense5,255 5,418 5,660 (163)(3.0)%(405)(7.2)%
Net interest income9,506 9,047 9,255 459 5.1 %251 2.7 %
(Release of) Provision for credit losses(223)123 170 (346)(281.3)%(393)(231.2)%
Net interest income after provision for credit losses$9,729 $8,924 $9,085 $805 9.0 %$644 7.1 %
Q2 2026 vs. Q1 2026
Interest income increased $296 thousand, or 2.0%, to $14.8 million for the quarter ended June 30, 2026, compared to $14.5 million for the quarter ended March 31, 2026. The increase was primarily due to a 16 basis point increase in the average yield on loans and an 18 basis point increase in the average yield on investments, partially offset by lower average balances of loans and interest-bearing cash.
Interest income on loans increased $470 thousand, or 3.5%, to $13.8 million for the quarter ended June 30, 2026, compared to $13.3 million for the quarter ended March 31, 2026. The average balance of total loans was $911.9 million for the quarter ended June 30, 2026, compared to $914.1 million for the quarter ended March 31, 2026. The decrease in the average balance of total loans was primarily due to declines in commercial and multifamily loans, one-to-four family loans and other consumer loans, partially offset by growth in construction and land loans. The average balances for home equity loans, floating home loans and commercial business loans remained relatively unchanged from the prior quarter. The average yield on total loans was 6.06% for the quarter ended June 30, 2026, up from 5.90% for the quarter ended March 31, 2026. This increase in yield was primarily due to new loan originations at higher rates during the current quarter and repayment of loans at lower yields, as well as the collection of a large prepayment penalty on a commercial loan, a non-recurring item of a magnitude that the company does not expect to repeat in future periods.
Interest income on investments was $102 thousand for the quarter ended June 30, 2026, compared to $97 thousand for the quarter ended March 31, 2026. The increase was primarily due to an 18 basis point increase in average yield, partially offset by a decrease in the average balance of investments. Interest income on interest-earning cash decreased to $882 thousand for the quarter ended June 30, 2026, compared to $1.1 million for quarter ended March 31, 2026, reflecting a lower average balance.
Interest expense decreased $163 thousand, or 3.0%, to $5.3 million for the quarter ended June 30, 2026, compared to the quarter ended March 31, 2026. The decrease was primarily the result of lower average balances of savings and money market accounts, certificates of deposit and FHLB advances, together with lower funding costs on deposits. These decreases were partially offset by a higher average balance of demand and NOW accounts. The average cost of deposits declined to 2.15% for the quarter ended June 30, 2026, from 2.19% for the quarter ended March 31, 2026, as higher cost deposits repriced at lower rates in response to declining market interest rates from September 2025 through June 2026. Interest expense on FHLB advances also declined from the prior quarter, primarily reflecting the early repayment of an advance during the current quarter.
Net interest margin, annualized, increased to 3.73% for the quarter ended June 30, 2026, from 3.51% for the quarter ended March 31, 2026, primarily due to an increase in yields earned on loans receivable and investments and lower funding costs, as well as the collection of a large prepayment penalty on a commercial loan mentioned above.
A release of provision for credit losses of $223 thousand was recorded for the quarter ended June 30, 2026, consisting of a release of provision for credit losses on loans of $185 thousand and a release of provision for credit losses on unfunded loan commitments of $38 thousand. This compared to a provision for credit losses of $123 thousand for the quarter ended March 31, 2026, consisting of a provision for credit losses on loans of $49 thousand and provision for credit losses on unfunded loan commitments of $74 thousand. The decrease in the provision for credit losses for the quarter ended June 30, 2026 compared to the quarter ended March 31, 2026 primarily reflects decreases in the balances of loans and unfunded commitments. Other qualitative adjustments were largely applied to the same segments at a similar risk adjustment compared to the quarter ended March 31, 2026. Expected credit loss estimates are based on a range of factors, including market conditions, borrower-specific information, projected delinquencies, and the anticipated effects of economic trends on borrowers' ability to repay.
2

Q2 2026 vs. Q2 2025
Interest income on loans increased $82 thousand, or 0.6%, to $13.8 million for the quarter ended June 30, 2026, compared to $13.7 million for the quarter ended June 30, 2025. The average balance of total loans was $911.9 million for the quarter ended June 30, 2026, up from $895.0 million for the quarter ended June 30, 2025. The average yield on total loans was 6.06% for the quarter ended June 30, 2026, down from 6.14% for the quarter ended June 30, 2025.
Interest income on investments was $102 thousand for the quarter ended June 30, 2026, compared to $123 thousand for the quarter ended June 30, 2025. The decrease was primarily due to a 30 basis point decline in average yield and a decrease in the average balance of investments. Interest income on interest-earning cash decreased $215 thousand to $882 thousand for the quarter ended June 30, 2026, compared to $1.1 million for the quarter ended June 30, 2025. The decrease was primarily a result of a lower average yield, reflecting lower market interest rates, and, to a lesser extent, a lower average balance of interest-earning cash.
Interest expense decreased $405 thousand, or 7.2%, to $5.3 million for the quarter ended June 30, 2026, compared to $5.7 million for the quarter ended June 30, 2025. The decrease was primarily the result of a $16.4 million decrease in the average balance of FHLB advances, a $7.9 million decrease in the average balance of interest-bearing demand and NOW accounts, and a $4.0 million decrease in the average balance of subordinated debt, as well as lower average rates paid on all categories of interest-bearing deposits and borrowings reflecting lower market interest rates, partially offset by a 398 basis point increase in the rate paid on subordinated debt, a $25.9 million increase in savings and money market account balances, and a $9.3 million increase in certificate account balances. During the current quarter, we repaid $10.0 million of FHLB borrowings that were scheduled to mature in January 2028 with an interest rate of 4.06%. During the fourth quarter of 2025, we paid down our subordinated debt by $4.0 million and repaid $15.0 million of FHLB borrowings that were scheduled to mature in January 2026. The average cost of deposits was 2.15% for the quarter ended June 30, 2026, down from 2.34% for the quarter ended June 30, 2025. The average cost of subordinated debt was 9.70% for the quarter ended June 30, 2026, up from 5.72% for the quarter ended June 30, 2025, due to the debt converting to a variable-rate instrument that reprices on a quarterly basis beginning in the fourth quarter of 2025 from the previous fixed-rate period. Subsequent to June 30, 2026, we paid down an additional $2.0 million in subordinated debt as part of our strategic objective to utilize our excess liquidity to pay down high costing debt. The average cost of FHLB advances was 4.21% for the quarter ended June 30, 2026, down from 4.28% for the quarter ended June 30, 2025, due to repayment of $15.0 million of advances during the fourth quarter of 2025 and repayment of $10.0 million of advances at the end of the current quarter.
Net interest margin, annualized, increased to 3.73% for the quarter ended June 30, 2026, from 3.67% for the quarter ended June 30, 2025, reflecting lower funding costs, partially offset by lower interest income.
A release of provision for credit losses of $223 thousand was recorded for the quarter ended June 30, 2026, consisting of a release of provision for credit losses on loans of $185 thousand and a release of provision for credit losses on unfunded loan commitments of $38 thousand. This compared to a provision for credit losses of $170 thousand for the quarter ended June 30, 2025, consisting of a provision for credit losses on loans of $164 thousand and a provision for credit losses on unfunded loan commitments of $6 thousand. The release of provision in the current quarter compared to the same quarter last year resulted primarily from a decrease in loan balances and from annual updates to the model assumptions, partially offset by additional qualitative adjustments applied to the commercial loan segment, reflecting increased uncertainty in market conditions surrounding geopolitical events, in addition to the uncertainty adjustment tied to the impact of tariffs and other external factors affecting our clients already applied to our consumer portfolio. Expected credit loss estimates consider various factors, including market conditions, borrower-specific information, projected delinquencies, and anticipated effects of economic trends on borrowers' ability to repay.

3

Noninterest Income
For the Quarter EndedQ2 2026 vs. Q1 2026Q2 2026 vs. Q2 2025
June 30,
2026		March 31,
2026		June 30,
2025		Amount
($)		Percentage (%)Amount
($)		Percentage (%)
(Dollars in thousands, unaudited)
Service charges and fee income$684 $624 $664 $60 9.6 %$20 3.0 %
Earnings on bank-owned life insurance (“BOLI”)277 130 229 147 113.1 %48 21.0 %
Mortgage servicing income245 248 263 (3)(1.2)%(18)(6.8)%
Fair value adjustment on mortgage servicing rights119 (140)(80)259 (185.0)%199 (248.8)%
Net gain on sale of loans112 101 44 11 10.9 %68 154.5 %
Other income77 (53)— 130 (245.3)%77 — %
Total noninterest income$1,514 $910 $1,120 $604 66.4 %$394 35.2 %
Q2 2026 vs. Q1 2026
Noninterest income during the second quarter of 2026 increased $604 thousand, or 66.4%, compared to the quarter ended March 31, 2026. The increase was primarily due to the following changes in certain income categories:
•a $259 thousand increase in the fair value adjustment on mortgage servicing rights, primarily due to changes in market valuation assumptions, including slower estimated prepayment speeds resulting from higher market interest rates, partially offset by the impact of a smaller servicing portfolio;
•a $147 thousand increase in earnings on BOLI, primarily due to higher market valuation in the current quarter;
•a $130 thousand increase in other income due to the receipt of a dividend paid from our equity investment in the second quarter, as well as lower costs associated with closing our Tacoma branch; and
•a $60 thousand increase in service charges and fee income, primarily due to higher interchange income, partially related to seasonal increases in debit card transaction activity, and higher fees related to past due loans and loan payoff activity.

Loans sold during the quarter ended June 30, 2026, totaled $7.3 million, compared to $6.1 million during the quarter ended March 31, 2026. The increase was primarily due to seasonal fluctuations in loan origination volume and the timing of loan sales.

Q2 2026 vs. Q2 2025
Noninterest income increased $394 thousand, or 35.2% during the current quarter compared to the quarter ended June 30, 2025, primarily as a result of:
•a $199 thousand improvement in the fair value adjustment on mortgage servicing rights, primarily due to changes in valuation assumptions, including an increase in the cost of servicing assumption recorded in the prior year quarter and slower estimated prepayment speeds resulting from higher market interest rates during the current quarter, partially offset by the impact of a smaller servicing portfolio;
•a $77 thousand increase in other income due to same reason noted above in the sequential quarter; and
•a $68 thousand increase in net gain on sale of loans due to an increase in the volume of loans sold.

4

Noninterest Expense
For the Quarter EndedQ2 2026 vs. Q1 2026Q2 2026 vs. Q2 2025
June 30,
2026		March 31,
2026		June 30,
2025		Amount
($)		Percentage (%)Amount
($)		Percentage (%)
(Dollars in thousands, unaudited)
Salaries and benefits$4,645 $4,458 $4,321 $187 4.2 %$324 7.5 %
Operations1,617 1,501 1,443 116 7.7 %174 12.1 %
Regulatory assessments129 198 222 (69)(34.8)%(93)(41.9)%
Occupancy388 427 416 (39)(9.1)%(28)(6.7)%
Data processing1,332 1,287 1,254 45 3.5 %78 6.2 %
Net loss (gain) on OREO and repossessed assets17 3 9 14 466.7 %8 88.9 %
Total noninterest expense$8,128 $7,874 $7,665 $254 3.2 %$463 6.0 %
Q2 2026 vs. Q1 2026
The increase in noninterest expense during the current quarter compared to the quarter ended March 31, 2026 was primarily related to:
•a $187 thousand increase in salaries and benefits due to the impact of higher market valuations of investments supporting our deferred compensation arrangements for key executives (which was partially offset by increases in BOLI income recorded in noninterest income), partially offset by lower base salary expense and lower incentive compensation expense;
•a $116 thousand increase in operations expense, primarily due to higher costs associated with our debit card processing and higher charitable contributions in the current quarter;
•a $45 thousand increase in data processing expense, primarily due to higher processing costs related to annual increases in software vendor contracts and increased application programming interface ("API") and usage charges.
These increases were partially offset by:
•a $69 thousand decrease in regulatory assessments primarily due to the release of an accrual related to exam costs as the actual costs incurred were lower than previously estimated; and
•a $39 thousand decrease in occupancy due to the closure of our Tacoma branch and repair work performed in connection with the decommissioning of ITMs in the prior quarter.

Q2 2026 vs. Q2 2025
The increase in noninterest expense during the current quarter compared to the quarter ended June 30, 2025 was primarily related to:
•a $324 thousand increase in salaries and benefits due to annual wage increases, lower deferred loan origination costs due to smaller loan growth, higher market valuations on our deferred compensation for key executives (which was partially offset by the increase in income on BOLI recorded in noninterest income), and higher medical expense due to overall higher medical costs, partially offset by lower stock compensation expense and lower incentive compensation expense;
•a $174 thousand increase in operations expense, primarily due to higher costs associated with our debit card processing; and
•a $78 thousand increase in data processing expense, primarily due to higher processing costs related to annual increases in software vendor contracts, increased API and usage charges and partially due to the addition of new features, such as fraud detection software, with the goal of lowering operational losses.

These increases were partially offset by:

•a $93 thousand decrease in regulatory assessments, primarily due to reduced quarterly assessments resulting from a lower rate applied to a lower average asset balance and the release of an accrual related to exam costs as actual costs incurred were lower than previously estimated; and
•a $28 thousand decrease in occupancy expense, primarily due to lower building lease charges in 2026 following the closure of our Tacoma branch during the second quarter of 2026.

5


Balance Sheet Review, Capital Management and Credit Quality
Assets totaled $1.07 billion at June 30, 2026, down from $1.11 billion at March 31, 2026 and up from $1.06 billion at June 30, 2025. The decrease from March 31, 2026 was primarily a result of a lower balance of loans held-for-portfolio and lower balances of cash and cash equivalents. The increase from June 30, 2025 was primarily a result of higher balances of cash and cash equivalents and a new equity investment in the first quarter of 2026, partially offset by lower balance of loans held-for-portfolio.
Cash and cash equivalents decreased $17.9 million, or 13.0%, to $120.1 million at June 30, 2026, compared to $138.0 million at March 31, 2026, and increased $17.5 million, or 17.1%, from $102.5 million at June 30, 2025. The decrease from March 31, 2026 primarily relates to a decrease in deposit balances and early repayment of $10.0 million in FHLB borrowings that were scheduled to mature in January 2028, partially offset by a decrease in loans held-for-portfolio. The increase from June 30, 2025 was primarily due to higher deposit balances and a decrease in loans held-for-portfolio, partially offset by a new equity investment and the repayment of borrowings and subordinated debt during the fourth quarter of 2025 and the current quarter.
Investment securities increased $50 thousand, or 0.5%, to $9.5 million at June 30, 2026, compared to $9.4 million at March 31, 2026, and decreased $183 thousand, or 1.9%, from $9.6 million at June 30, 2025. Held-to-maturity securities totaled $1.9 million at both June 30, 2026 and March 31, 2026, compared to $2.1 million at June 30, 2025. Available-for-sale securities totaled $7.6 million at June 30, 2026, compared to $7.5 million at both March 31, 2026 and June 30, 2025. The changes in our available-for-sale and held-to-maturity portfolios from March 31, 2026 and June 30, 2025 primarily related to principal paydowns and maturities, partially offset by fair value adjustments on the available-for-sale portfolio.
Loans held-for-portfolio totaled $892.0 million at June 30, 2026, compared to $921.5 million at March 31, 2026 and $904.3 million at June 30, 2025. The decrease from March 31, 2026 was primarily due to a decline in commercial and multifamily loan balances, which consisted primarily of lower rate, long-term loans. The decrease from June 30, 2025 reflected declines in one-to-four family loans, driven by fewer new home loan originations and normal amortization, as well as decreases in commercial and multifamily loans, floating home loans, and other consumer loans. These decreases were partially offset by growth in construction and land loans and home equity loans.
Equity securities totaled $5.0 million at both June 30, 2026 and March 31, 2026, compared to zero at June 30, 2025. The increase primarily related to an investment made during the first quarter of 2026 in a higher yielding Community Reinvestment Act (“CRA”)-eligible workforce housing equity investment. The investment represented a deployment of a portion of our interest-earning cash and partially replaced the reduction in our CRA-eligible available-for-sale debt securities. While equity investments generally carry greater risk than debt securities, the investment represents a relatively small percentage of our total assets.
Nonperforming assets (“NPAs”), which are comprised of nonaccrual loans (including nonperforming modified loans), other real estate owned (“OREO”) and other repossessed assets, increased $624 thousand, or 8.3%, to $8.1 million at June 30, 2026, from $7.5 million at March 31, 2026, and increased $4.4 million, or 121.0%, from $3.7 million at June 30, 2025. The increase from March 31, 2026 was primarily due to the placement of $850 thousand of loans on nonaccrual status, partially offset by loan payoffs, loans returned to accrual status, loan charge-offs, and OREO sales. The increase from one year ago was primarily due to $6.4 million of new nonaccrual loans, partially offset by loan payoffs totaling $1.0 million, loans returned to accrual status, and charge-offs.
Nonperforming loans totaled $8.1 million at June 30, 2026, with commercial and multifamily loans representing $4.2 million, or 52.0% of total nonperforming loans, reflecting a concentration of nonperforming loans within in larger relationships. One-to-four family nonperforming loans totaled $2.5 million, or 30.5% of total nonperforming loans, and the remaining balance of nonperforming loans was primarily comprised of manufactured home, home equity, and other consumer loans. OREO and other repossessed assets totaled $47 thousand in June 30, 2026, representing 0.6% of total NPAs.
NPAs to total assets were 0.76%, 0.67% and 0.35% at June 30, 2026, March 31, 2026 and June 30, 2025, respectively. The allowance for credit losses on loans as a percentage of total loans outstanding was 0.94% at June 30, 2026, March 31, 2026 and June 30, 2025. Net loan charge-offs were $30 thousand for the second quarter of 2026, compared to $19 thousand for the first quarter of 2026 and $21 thousand for the second quarter of 2025.
6

The following table summarizes our NPAs at the dates indicated (dollars in thousands, unaudited):
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Nonperforming Loans:     
One-to-four family$2,458 $1,939 $1,597 $609 $1,423 
Home equity loans310 383 187 201 359 
Commercial and multifamily4,191 4,213 3,163 1,065 1,065 
Construction and land159 80 82 103 21 
Manufactured homes696 475 461 476 489 
Floating homes— — — — — 
Commercial business— 30 30 — — 
Other consumer241 259 262 263 9 
Total nonperforming loans8,055 7,379 5,782 2,717 3,366 
OREO and Other Repossessed Assets:
One-to-four family— — 259 259 259 
Manufactured homes47 99 85 85 41 
Total OREO and repossessed assets47 99 344 344 300 
Total NPAs$8,102 $7,478 $6,126 $3,061 $3,666 
Percentage of Nonperforming Assets:
One-to-four family30.3 %25.9 %26.1 %19.9 %38.8 %
Home equity loans3.8 5.1 3.1 6.6 9.8 
Commercial and multifamily51.7 56.3 51.6 34.8 29.1 
Construction and land2.0 1.1 1.3 3.4 0.6 
Manufactured homes8.6 6.4 7.5 15.6 13.3 
Floating homes— — — — — 
Commercial business— 0.4 0.5 — — 
Other consumer3.0 3.5 4.3 8.5 0.2 
Total nonperforming loans99.4 98.7 94.4 88.8 91.8 
Percentage of OREO and Other Repossessed Assets:
One-to-four family— — 4.2 8.4 7.1 
Manufactured homes0.6 1.3 1.4 2.8 1.1 
Total OREO and repossessed assets0.6 1.3 5.6 11.2 8.2 
Total NPAs100.0 %100.0 %100.0 %100.0 %100.0 %


7

The following table summarizes the allowance for credit losses at the dates and for the periods indicated (dollars in thousands, unaudited):
 At or For the Quarter Ended:
June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Allowance for Credit Losses on Loans
Balance at beginning of period$8,635 $8,605 $8,564 $8,536 $8,393 
(Release of) provision for credit losses during the period(185)49 68 65 164 
Net charge-offs during the period(30)(19)(27)(37)(21)
Balance at end of period$8,420 $8,635 $8,605 $8,564 $8,536 
Allowance for Credit Losses on Unfunded Loan Commitments
Balance at beginning of period$222 $148 $112 $122 $116 
(Release of) provision for credit losses during the period(38)74 36 (10)6 
Balance at end of period184 222 148 112 122 
Allowance for Credit Losses$8,604 $8,857 $8,753 $8,676 $8,658 
Allowance for credit losses on loans to total loans0.94 %0.94 %0.95 %0.94 %0.94 %
Allowance for credit losses to total loans0.96 %0.96 %0.97 %0.95 %0.96 %
Allowance for credit losses on loans to total nonperforming loans104.53 %117.02 %148.82 %315.20 %253.59 %
Allowance for credit losses to total nonperforming loans106.82 %120.03 %151.38 %319.32 %257.22 %

Total deposits decreased $37.6 million, or 3.9%, to $930.9 million at June 30, 2026, from $968.5 million at March 31, 2026, and increased $31.4 million, or 3.5%, from $899.5 million at June 30, 2025. The decrease in total deposits from March 31, 2026 was primarily due to the managed reduction of higher cost reciprocal deposits. The increase from June 30, 2025 was primarily due to growth from new depositors and existing depositors increasing their balances. Noninterest-bearing deposits decreased $1.8 million, or 1.3%, to $129.3 million at June 30, 2026, compared to $131.1 million at March 31, 2026 and increased $5.1 million, or 4.1%, compared to $124.2 million at June 30, 2025. Noninterest-bearing deposits represented 13.9%, 13.5% and 13.8% of total deposits at June 30, 2026, March 31, 2026 and June 30, 2025, respectively.
There were no FHLB advances at June 30, 2026, compared to $10.0 million at March 31, 2026 and $25.0 million at June 30, 2025. The decreases from March 31, 2026 and June 30, 2025 were due to the early repayment of a $10.0 million FHLB advance during the current quarter, which was originally scheduled to mature in January 2028, and the early repayment of a $15.0 million FHLB advance during the fourth quarter of 2025, which was originally scheduled to mature in January 2026. FHLB advances are primarily used to support organic loan growth and maintain liquidity ratios in line with our asset/liability objectives. Subordinated notes, net, totaled $7.8 million at both June 30, 2026 and March 31, 2026, compared to $11.8 million at June 30, 2025. The decrease in subordinated notes reflects a $4.0 million paydown completed on the first scheduled repricing date of October 1, 2025, as part of a our ongoing efforts to reduce higher cost debt. Subsequent to June 30, 2026, we repaid an additional $2.0 million of subordinated debt.
Stockholders’ equity totaled $112.6 million at June 30, 2026, an increase of $2.2 million, or 2.0%, from $110.4 million at March 31, 2026, and an increase of $6.6 million, or 6.2%, from $106.0 million at June 30, 2025. The increase from March 31, 2026 was primarily the result of $2.5 million of net income earned during the current quarter, a $127 thousand decrease in accumulated other comprehensive loss, net of tax, and $49 thousand in share-based compensation, partially offset by the payment of $540 thousand in cash dividends to the Company's stockholders.

8

Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, which is headquartered in Seattle, Washington and has full-service branches in Seattle, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. 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. For more information, please visit www.soundcb.com.


Forward-Looking Statements Disclaimer

When used in this press release and in documents filed or furnished by Sound Financial Bancorp, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), as well as in the Company's other press releases, other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of the Company's future financial performance based on its growth strategies and anticipated trends in its business. These statements are only predictions based on the Company's current expectations and projections about future events and may turn out to be wrong because of inaccurate assumptions, the factors listed below or other factors that the Company cannot foresee that could cause the Company's actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made.

Factors that could cause the Company's actual results to differ materially from those expressed or implied by these forward-looking statements and from historical performance include, but are not limited to: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of persistent inflation, recessionary pressures or slowing economic growth; changes in interest rate levels and volatility, and the timing and pace of such changes, including actions by the Board of Governors of the Federal Reserve System, which could adversely affect the Company's revenues and expenses, the values of the Company's assets and obligations and the availability and cost of capital and liquidity; the impact of inflation and related monetary and fiscal policy responses, including their effects on consumer and business behavior; the effects of a federal government shutdown, debt ceiling standoff, or other fiscal uncertainty; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry on investor and depositor sentiment; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; secondary market conditions for loans; the Company's ability to implement key growth initiatives and strategic priorities; environmental, social and governance matters; results of examinations of the Company or the Bank by their regulators; increased competition; changes in management's business strategies; the ability to adapt to rapid technological changes, including advancements related to artificial intelligence, digital banking platforms, and cybersecurity; legislation or regulatory changes, including but not limited to changes in capital requirements, banking regulations, tax laws, or consumer protection laws; vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; geopolitical developments and international conflicts, as well as the imposition of new or increased tariffs and trade restrictions, any of which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events on our business; and other factors described in the Company's latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with or furnished to the SEC, which are available at www.soundcb.com and on the SEC's website at www.sec.gov.

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.

9

CONSOLIDATED INCOME STATEMENTS
(Dollars in thousands, unaudited)
 For the Quarter Ended
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Interest income$14,761 $14,465 $14,284 $14,652 $14,915 
Interest expense5,255 5,418 5,622 5,712 5,660 
Net interest income9,506 9,047 8,662 8,940 9,255 
(Release of) provision for credit losses(223)123 104 55 170 
Net interest income after (release of) provision for credit losses9,729 8,924 8,558 8,885 9,085 
Noninterest income:
Service charges and fee income684 624 649 672 664 
Earnings on bank-owned life insurance277 130 189 225 229 
Mortgage servicing income 245 248 253 262 263 
Fair value adjustment on mortgage servicing rights119 (140)(160)(372)(80)
Net gain on sale of loans112 101 73 94 44 
Other income (loss)77 (53)(137)— — 
Total noninterest income1,514 910 867 881 1,120 
Noninterest expense:
Salaries and benefits4,645 4,458 3,533 4,259 4,321 
Operations1,617 1,501 1,683 1,483 1,443 
Regulatory assessments129 198 (53)221 222 
Occupancy388 427 460 431 416 
Data processing1,332 1,287 1,200 1,274 1,254 
Net loss on OREO and repossessed assets17 3 17 8 9 
Total noninterest expense8,128 7,874 6,840 7,676 7,665 
Income before provision for income taxes3,115 1,960 2,585 2,090 2,540 
Provision for income taxes597 384 339 395 488 
Net income$2,518 $1,576 $2,246 $1,695 $2,052 


10

CONSOLIDATED INCOME STATEMENTS
(Dollars in thousands, unaudited)
 
For the Six Months Ended June 30,
 20262025
Interest income$29,225 $28,622 
Interest expense10,673 11,295 
Net interest income18,552 17,327 
Release of provision for credit losses(100)(33)
Net interest income after release of provision for credit losses18,652 17,360 
Noninterest income:
Service charges and fee income1,307 1,348 
Earnings on bank-owned life insurance407 423 
Mortgage servicing income 493 531 
Fair value adjustment on mortgage servicing rights(21)(179)
Net gain on sale of loans212 93 
Other income24 — 
Total noninterest income2,422 2,216 
Noninterest expense:
Salaries and benefits9,103 8,916 
Operations3,118 2,808 
Regulatory assessments327 442 
Occupancy815 853 
Data processing2,619 2,547 
Net loss (gain) on OREO and repossessed assets
20 12 
Total noninterest expense16,002 15,578 
Income before provision for income taxes5,072 3,998 
Provision for income taxes981 779 
Net income$4,091 $3,219 

11

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, unaudited)
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
ASSETS   
Cash and cash equivalents$120,072 $137,984 $138,453 $101,156 $102,542 
Available-for-sale securities, at fair value7,575 7,517 7,699 7,637 7,521 
Held-to-maturity securities, at amortized cost1,876 1,884 1,892 1,899 2,113 
Equity securities5,000 5,000 — — — 
Loans held-for-sale1,591 281 542 271 2,025 
Loans held-for-portfolio891,969 921,518 905,533 909,715 904,286 
Allowance for credit losses - loans(8,420)(8,635)(8,605)(8,564)(8,536)
Total loans held-for-portfolio, net883,549 912,883 896,928 901,151 895,750 
Accrued interest receivable3,747 3,888 3,771 3,896 3,658 
Bank-owned life insurance, net24,055 23,747 23,327 23,138 22,913 
Other real estate owned ("OREO") and other repossessed assets, net47 99 344 344 300 
Mortgage servicing rights, at fair value4,277 4,096 4,183 4,305 4,638 
Federal Home Loan Bank ("FHLB") stock, at cost670 1,120 1,060 1,735 1,734 
Premises and equipment, net4,127 4,168 4,239 4,421 4,498 
Right-of-use assets2,889 3,133 3,423 3,679 3,933 
Other assets6,249 6,251 6,312 6,531 6,617 
TOTAL ASSETS$1,065,724 $1,112,051 $1,092,173 $1,060,163 $1,058,242 
LIABILITIES
Interest-bearing deposits$801,541 $837,409 $816,309 $767,554 $775,262 
Noninterest-bearing deposits129,340 131,092 132,566 131,389 124,197 
Total deposits930,881 968,501 948,875 898,943 899,459 
Borrowings— 10,000 10,000 25,000 25,000 
Accrued interest payable634 496 674 774 634 
Lease liabilities3,103 3,364 3,671 3,943 4,213 
Other liabilities9,597 8,839 10,366 10,146 10,238 
Advance payments from borrowers for taxes and insurance1,119 2,625 1,387 2,116 914 
Subordinated notes, net7,822 7,812 7,801 11,791 11,780 
TOTAL LIABILITIES953,156 1,001,637 982,774 952,713 952,238 
STOCKHOLDERS' EQUITY:
Common stock25 25 25 25 25 
Additional paid-in capital28,846 28,797 28,737 28,665 28,590 
Retained earnings84,496 82,518 81,483 79,724 78,517 
Accumulated other comprehensive loss, net of tax(799)(926)(846)(964)(1,128)
TOTAL STOCKHOLDERS' EQUITY112,568 110,414 109,399 107,450 106,004 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,065,724 $1,112,051 $1,092,173 $1,060,163 $1,058,242 


12

KEY FINANCIAL RATIOS
(unaudited)
 For the Quarter Ended
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Annualized return on average assets0.94 %0.58 %0.84 %0.63 %0.78 %
Annualized return on average equity9.03 %5.78 %8.19 %6.26 %7.78 %
Annualized net interest margin(1)
3.73 %3.51 %3.36 %3.48 %3.67 %
Annualized efficiency ratio(2)
73.76 %79.08 %71.78 %78.16 %73.88 %
(1)Net interest income divided by average interest earning assets.
(2)Noninterest expense divided by total revenue (net interest income and noninterest income).

​

PER COMMON SHARE DATA
(unaudited)
 At or For the Quarter Ended
 June 30, 2026March 31, 2026December 31, 2025September 30, 2025June 30, 2025
Basic earnings per share$0.98 $0.61 $0.87 $0.66 $0.80 
Diluted earnings per share$0.98 $0.61 $0.87 $0.66 $0.79 
Weighted-average basic shares outstanding2,564,165 2,562,467 2,557,608 2,556,562 2,556,562 
Weighted-average diluted shares outstanding2,574,631 2,574,212 2,574,586 2,575,575 2,577,990 
Common shares outstanding at period-end2,568,043 2,568,043 2,567,953 2,566,069 2,566,069 
Book value per share$43.83 $43.00 $42.60 $41.87 $41.31 
​



13

AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE PAID
(Dollars in thousands, unaudited)

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Income and yields on tax-exempt obligations have not been computed on a tax equivalent basis. All average balances are daily average balances. Nonaccrual loans have been included in the table as loans carrying a zero yield for the period they have been on nonaccrual (dollars in thousands).
Three Months Ended
June 30, 2026March 31, 2026June 30, 2025
Average Outstanding BalanceInterest Earned/PaidYield/RateAverage Outstanding BalanceInterest Earned/PaidYield/RateAverage Outstanding BalanceInterest Earned/PaidYield/Rate
Interest-Earning Assets:
Loans receivable$911,869 $13,777 6.06 %$914,113 $13,307 5.90 %$895,039 $13,695 6.14 %
Interest-earning cash98,902 882 3.58 %120,683 1,061 3.57 %102,572 1,097 4.29 %
Investments
11,566 102 3.54 %11,701 97 3.36 %12,842 123 3.84 %
Total interest-earning assets$1,022,337 14,761 5.79 %1,046,497 $14,465 5.61 %$1,010,453 14,915 5.92 %
Interest-Bearing Liabilities:
Savings and money market accounts$370,406 2,177 2.36 %$388,633 2,306 2.41 %$344,553 2,258 2.63 %
Demand and NOW accounts130,208 95 0.29 %125,932 82 0.26 %138,150 107 0.31 %
Certificate accounts299,654 2,704 3.62 %301,341 2,736 3.68 %290,388 2,860 3.95 %
Subordinated notes7,819 189 9.70 %7,808 186 9.66 %11,777 168 5.72 %
Borrowings8,571 90 4.21 %10,556 108 4.15 %25,007 267 4.28 %
Total interest-bearing liabilities$816,658 5,255 2.58 %$834,270 5,418 2.63 %$809,875 5,660 2.80 %
Net interest income/spread$9,506 3.21 %$9,047 2.97 %$9,255 3.12 %
Net interest margin3.73 %3.51 %3.67 %
Ratio of interest-earning assets to interest-bearing liabilities125 %125 %125 %
Noninterest-bearing deposits$128,204 $133,691 $121,906 
Total deposits928,472 $4,976 2.15 %949,597 $5,124 2.19 %894,997 $5,225 2.34 %
Total funding (1)
944,862 5,255 2.23 %967,961 5,418 2.27 %931,781 5,660 2.44 %
(1)Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as total interest expense divided by average total funding.

14

Six Months Ended
June 30, 2026June 30, 2025
Average Outstanding BalanceInterest Earned/PaidYield/RateAverage Outstanding BalanceInterest Earned/PaidYield/Rate
Interest-Earning Assets:
Loans receivable$912,985 $27,083 5.98 %$895,926 $26,283 5.92 %
Interest-earning cash109,732 1,943 3.57 %99,304 2,107 4.28 %
Investments
11,634 199 3.45 %12,883 232 3.63 %
Total interest-earning assets$1,034,351 29,225 5.70 %$1,008,113 28,622 5.73 %
Interest-Bearing Liabilities:
Savings and money market accounts$379,469 4,484 2.38 %$338,514 4,317 2.57 %
Demand and NOW accounts128,082 176 0.28 %139,520 214 0.31 %
Certificate accounts300,493 5,440 3.65 %291,673 5,899 4.08 %
Subordinated notes7,813 375 9.68 %11,772 336 5.76 %
Borrowings9,558 198 4.18 %25,003 529 4.27 %
Total interest-bearing liabilities$825,415 10,673 2.61 %$806,482 11,295 2.82 %
Net interest income/spread$18,552 3.09 %$17,327 2.90 %
Net interest margin3.62 %3.47 %
Ratio of interest-earning assets to interest-bearing liabilities125 %125 %
Noninterest-bearing deposits$130,933 $124,048 
Total deposits938,977 $10,100 2.17 %893,755 $10,430 2.35 %
Total funding (1)
956,348 10,673 2.25 %930,530 11,295 2.45 %
(1)Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.
15

LOANS
(Dollars in thousands, unaudited)
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Real estate loans:
One-to-four family$244,168 $251,146 $253,841 $257,797 $262,672 
Home equity32,107 31,903 31,468 29,903 28,582 
Commercial and multifamily381,809 409,810 409,729 408,802 398,429 
Construction and land76,158 71,878 50,261 52,797 49,926 
Total real estate loans734,242 764,737 745,299 749,299 739,609 
Consumer loans:
Manufactured homes42,668 42,968 43,080 42,735 43,112 
Floating homes87,566 84,927 87,315 88,674 91,448 
Other consumer13,832 15,978 16,571 17,031 17,259 
Total consumer loans144,066 143,873 146,966 148,440 151,819 
Commercial business loans15,748 15,164 15,378 14,214 14,779 
Total loans894,056 923,774 907,643 911,953 906,207 
Less:
Premiums583 610 627 644 662 
Deferred fees, net(2,670)(2,866)(2,737)(2,882)(2,583)
Allowance for credit losses - loans(8,420)(8,635)(8,605)(8,564)(8,536)
Total loans held-for-portfolio, net$883,549 $912,883 $896,928 $901,151 $895,750 



DEPOSITS
(Dollars in thousands, unaudited)

 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Noninterest-bearing demand$129,340 $131,092 $132,566 $131,388 $124,197 
Interest-bearing demand130,210 130,642 125,634 129,570 137,222 
Savings59,081 58,881 59,478 60,106 61,813 
Money market314,205 345,913 331,604 286,827 282,346 
Certificates298,045 301,973 299,593 291,052 293,881 
Total deposits$930,881 $968,501 $948,875 $898,943 $899,459 

16

CREDIT QUALITY DATA
(Dollars in thousands, unaudited)
 
 At or For the Quarter Ended
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
Total nonperforming loans$8,055 $7,379 $5,782 $2,717 $3,366 
OREO and other repossessed assets47 99 344 344 300 
Total nonperforming assets$8,102 $7,478 $6,126 $3,061 $3,666 
Net charge-offs during the quarter$(30)$(19)$(27)$(37)$(21)
Provision for (release of) credit losses during the quarter(223)123 104 55 170 
Allowance for credit losses - loans8,420 8,635 8,605 8,564 8,536 
Allowance for credit losses - loans to total loans0.94 %0.94 %0.95 %0.94 %0.94 %
Allowance for credit losses - loans to total nonperforming loans104.53 %117.02 %148.82 %315.20 %253.59 %
Nonperforming loans to total loans0.90 %0.80 %0.64 %0.30 %0.37 %
Nonperforming assets to total assets0.76 %0.67 %0.56 %0.29 %0.35 %



OTHER STATISTICS
(Dollars in thousands, unaudited)
At or For the Quarter Ended
 June 30,
2026		March 31,
2026		December 31,
2025		September 30,
2025		June 30,
2025
   
Total loans to total deposits96.04 %95.38 %95.65 %101.45 %100.75 %
Noninterest-bearing deposits to total deposits13.89 %13.54 %13.97 %14.62 %13.81 %
Average total assets for the quarter$1,071,897$1,094,501$1,066,451$1,063,972$1,055,881
Average total equity for the quarter$111,863$110,575$108,837$107,375$105,803


Contact


Financial: 
Wes Ochs  
President/CFO 
(206) 436-8587  
Media:
Laurie Stewart
CEO
(206) 436-1495
17

Source: View Original Filing on SEC EDGAR

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