Sound Financial Bancorp Reports 158% Increase in Q2 Net Income to $2.1 Million

Sound Financial Bancorp, Inc. reported a significant increase in its financial performance for the second quarter and first half of 2025, as detailed in its latest 10-Q filing. The company achieved a net income of $2.1 million for the three months ended June 30, 2025, a 158.1% increase from $795,000 in the same period last year. This translates to earnings per diluted share of $0.79, compared to $0.31 in the prior year. For the six months ended June 30, 2025, net income rose to $3.2 million, or $1.24 per diluted share, up from $1.6 million, or $0.61 per diluted share, in 2024. The increase in profitability was primarily driven by a $1.8 million rise in net interest income, which reached $9.3 million for the quarter, alongside a decrease in noninterest expenses.

Total assets for Sound Financial Bancorp increased by $64.6 million, or 6.5%, to $1.06 billion as of June 30, 2025, compared to $993.6 million at the end of 2024. This growth was largely attributed to a substantial increase in cash and cash equivalents, which surged by 135% to $102.5 million, reflecting the return of reciprocal deposits that had been temporarily moved off-balance sheet. Loans held-for-portfolio also saw a modest increase of $4.1 million, or 0.5%, totaling $895.8 million, with notable growth in commercial and multifamily loans, which rose by 7.2%.

In terms of operational metrics, total deposits increased by $61.7 million, or 7.4%, to $899.5 million, driven by the reintroduction of reciprocal deposits. However, noninterest-bearing deposits decreased by 6.3% to $124.2 million, reflecting normal fluctuations in customer account balances. The company’s allowance for credit losses on loans increased slightly to $8.5 million, or 0.94% of total loans, as a result of portfolio growth and qualitative adjustments for market uncertainties. Nonperforming assets decreased significantly by 51.1% to $3.7 million, indicating improved credit quality.

Looking ahead, Sound Financial Bancorp remains focused on maintaining its capital position and liquidity. The company’s stockholders’ equity increased to $106 million, up 2.3% from the previous period, supported by net income and stock-based compensation. The company continues to expect to pay quarterly cash dividends, with a recent declaration of $0.19 per share. Management is optimistic about future performance, citing a well-diversified loan portfolio and a strong capital base, while also acknowledging potential risks from economic conditions and market fluctuations.