Form 8-K

8-K — Sound Financial Bancorp, Inc.

Accession: 0001541119-26-000026

Filed: 2026-10-27

Period: 2026-10-27

CIK: 0001541119

SIC: 6035 (SAVINGS INSTITUTION, FEDERALLY CHARTERED)

Item: Results of Operations and Financial Condition

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — sfbc-20261027.htm (Primary)

EX-99.1 (a09302026earningsrelease-e.htm)

GRAPHIC (sfbcworkivaercoverpagelogo.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: sfbc-20261027.htm · Sequence: 1

sfbc-20261027

0001541119false00015411192026-10-272026-10-27

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): October 27, 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 class Trading Symbol(s) Name of each exchange on which registered

Common Stock, $0.01 par value SFBC The 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 October 27, 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 third quarter and nine months ended September 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 October 27, 2026, the Company announced its Board of Directors declared a cash dividend on Company common stock of $0.21 per share, payable on November 20, 2026 to stockholders of record as of the close of business on November 06, 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 October 27, 2026 announcing third quarter 2026 earnings and regular quarterly cash dividend.

104 Cover 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: October 27, 2026

By: /s/ Laura Lee Stewart

Laura Lee Stewart

CEO

EX-99.1

Filename: a09302026earningsrelease-e.htm · Sequence: 2

Document

Sound Financial Bancorp, Inc. Q3 2026 Results

Seattle, WA, October 27, 2026 — Sound Financial Bancorp, Inc. (the "Company") (Nasdaq: SFBC), the holding company for Sound Community Bank (the "Bank"), today reported net income of $2.3 million for the quarter ended September 30, 2026, or $0.90 diluted earnings per share, compared to net income of $2.5 million, or $0.98 diluted earnings per share, for the quarter ended June 30, 2026, and $1.7 million, or $0.66 diluted earnings per share, for the quarter ended September 30, 2025. 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 November 20, 2026 to stockholders of record as of the close of business on November 6, 2026.

Comments from the Chief Executive Officer and President / Chief Financial Officer

“Economic uncertainty and increasing rates are influencing business and consumer loan demand again this quarter. Given slower growth, our strong capital position and the reduced Community Bank Leverage Ratio requirement, we continued our efforts to reduce higher-cost debt, including the repayment of our remaining subordinated debt subsequent to quarter-end. Consistent balance sheet management is key to our steady performance in the third quarter, much like last quarter,” remarked Laurie Stewart, Chief Executive Officer.

"Third-quarter results demonstrate continued progress in improving the underlying economics of our balance sheet. Net interest margin increased to 3.76%, compared to 3.74% the prior quarter and 3.48% a year ago, while our average cost of deposits declined to 2.11% from 2.15% last quarter and 2.32% a year ago. Year-to-date earnings increased 30.5% compared to the prior year. We also continued to reduce higher-cost funding, including repayment of approximately $2.0 million of subordinated debt during the quarter and repayment of the remaining $6.0 million subsequent to quarter-end. While loans declined during the quarter, we remain focused on adding relationships where returns appropriately compensate us for credit, liquidity and capital risk. We believe these actions position us to continue improving the Company's earnings profile while maintaining strong liquidity and capital", said Wes Ochs, President and Chief Financial Officer.

Q3 2026 Financial Performance

Total assets decreased $23.1 million or 2.2% to $1.04 billion at September 30, 2026, from $1.07 billion at June 30, 2026, and decreased $17.6 million or 1.7% from $1.06 billion at September 30, 2025.

Net interest income decreased $101 thousand or 1.1% to $9.5 million for the quarter ended September 30, 2026, from $9.6 million for the quarter ended June 30, 2026, and increased $550 thousand or 6.2% from $8.9 million for the quarter ended September 30, 2025.

Net interest margin ("NIM"), annualized, was 3.76% for the quarter ended September 30, 2026, compared to 3.74% for the quarter ended June 30, 2026 and 3.48% for the quarter ended September 30, 2025.

Loans held-for-portfolio decreased $14.0 million or 1.6% to $878.0 million at September 30, 2026, compared to $892.0 million at June 30, 2026, and decreased $31.7 million or 3.5% compared to $909.7 million at September 30, 2025.

A $282 thousand release of provision for credit losses was recorded for the quarter ended September 30, 2026, compared to a $223 thousand release of provision for the quarter ended June 30, 2026, and a $55 thousand provision for the quarter ended September 30, 2025. The allowance for credit losses on loans to total loans outstanding was 0.93% at September 30, 2026, compared to 0.94% at June 30, 2026 and September 30, 2025.

Total deposits decreased $24.2 million or 2.6% to $906.7 million at September 30, 2026, compared to $930.9 million at June 30, 2026, and increased $7.7 million or 0.9% compared to $898.9 million at September 30, 2025. Noninterest-bearing deposits decreased $921 thousand or 0.7% to $128.4 million at September 30, 2026, compared to $129.3 million at June 30, 2026, and decreased $3.0 million or 2.3% compared to $131.4 million at September 30, 2025.

Total noninterest income decreased $290 thousand or 20.3% to $1.1 million for the quarter ended September 30, 2026, compared to the quarter ended June 30, 2026, and increased $258 thousand or 29.3% compared to the quarter ended September 30, 2025.

The loans-to-deposits ratio was 97.1% at September 30, 2026, compared to 96.0% at June 30, 2026 and 101.4% at September 30, 2025.

Total noninterest expense decreased $123 thousand or 1.5% to $8.0 million for the quarter ended September 30, 2026, compared to the quarter ended June 30, 2026, and increased $329 thousand or 4.3% compared to the quarter ended September 30, 2025.

Total nonperforming loans increased $440 thousand or 5.5% to $8.5 million at September 30, 2026, from $8.1 million at June 30, 2026, and increased $5.8 million or 212.7% from $2.7 million at September 30, 2025. Nonperforming loans to total loans was 0.97% and the allowance for credit losses on loans to total nonperforming loans was 96.22% at September 30, 2026.

The Bank maintained capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at September 30, 2026.

Operating Results

Net Interest Income after Provision for Credit Losses

For the Quarter Ended Q3 2026 vs. Q2 2026 Q3 2026 vs. Q3 2025

September 30,

2026 June 30,

2026 September 30,

2025 Amount

($) Percentage (%) Amount

($) Percentage (%)

(Dollars in thousands, unaudited)

Interest income $ 14,478 $ 14,846 $ 14,652 $ (368) (2.5) % $ (174) (1.2) %

Interest expense 4,988 5,255 5,712 (267) (5.1) % (724) (12.7) %

Net interest income 9,490 9,591 8,940 (101) (1.1) % 550 6.2 %

(Release of) Provision for credit losses (282) (223) 55 (59) 26.5 % (337) (612.7) %

Net interest income after provision for credit losses $ 9,772 $ 9,814 $ 8,885 $ (42) (0.4) % $ 887 10.0 %

Q3 2026 vs. Q2 2026

Interest income decreased $368 thousand, or 2.5%, to $14.5 million for the quarter ended September 30, 2026, compared to $14.8 million for the quarter ended June 30, 2026. The decrease was primarily due to a seven basis point decline in the average yield on loans and lower average balances of loans, interest-bearing cash, and investments, partially offset by a 45 basis point increase in the average yield on investments and three basis point increase in the average yield on interest-earning cash.

Interest income on loans decreased $399 thousand, or 2.9%, to $13.4 million for the quarter ended September 30, 2026, compared to $13.8 million for the quarter ended June 30, 2026. The average balance of total loans was $886.6 million for the quarter ended September 30, 2026, compared to $911.9 million for the quarter ended June 30, 2026. The decrease in the average balance of total loans was primarily due to declines in commercial construction loans, partially offset by growth in home equity lines of credit, residential construction loans, and floating home loans. The average yield on total loans was 5.99% for the quarter ended September 30, 2026, down from 6.06% for the quarter ended June 30, 2026. This decrease in yield was primarily due to the collection of a large prepayment penalty on a commercial loan in the prior quarter.

Interest income on investments was $202 thousand for the quarter ended September 30, 2026, compared to $187 thousand for the quarter ended June 30, 2026. The increase was due to a 45 basis point increase in average yield, partially offset by a decrease in the average balance of investments. Interest income on interest-earning cash increased to $898 thousand for the quarter ended September 30, 2026, compared to $882 thousand for quarter ended June 30, 2026, reflecting a higher average yield as a result of the Federal Reserve rate increase in September.

Interest expense decreased $267 thousand, or 5.1%, to $5.0 million for the quarter ended September 30, 2026, compared to the quarter ended June 30, 2026. The decrease was primarily the result of lower average balances of savings and money market accounts, certificates of deposit, subordinated notes and FHLB advances, together with lower average rates paid on deposits. These decreases were partially offset by a higher rate paid on subordinated notes, which bear a variable rate. The average cost of deposits declined to 2.11% for the quarter ended September 30, 2026, from 2.15% for the quarter ended June 30, 2026, as higher cost deposits repriced at lower rates in response to declining market interest rates from September 2025 through September 2026. Interest expense on FHLB advances also declined from the prior quarter, primarily reflecting the early repayment of an advance during the prior quarter.

Net interest margin, annualized, increased to 3.76% for the quarter ended September 30, 2026, from 3.74% for the quarter ended June 30, 2026, primarily due to lower funding costs. The average cost of interest-bearing liabilities decreased six basis points to 2.52%, reflecting the repayment of borrowings, which averaged $8.6 million at 4.21% during the prior quarter, a $2.0 million decrease in average subordinated notes outstanding, and a nine basis point decrease in the average rate paid on certificate accounts to 3.53%. The yield on interest-earning assets decreased six basis points to 5.74%, primarily due to the absence of a $109 thousand prepayment penalty on a commercial loan collected during the prior quarter.

balances of loans and unfunded commitments and an improvement in the Federal Reserve's unemployment forecast over the next 12 months. Other qualitative adjustments were largely applied to the same segments at a similar risk adjustment compared to the quarter ended June 30, 2026; however, there was an increase in the qualitative reserve for the volume of past-due consumer secured loans. 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.

Q3 2026 vs. Q3 2025

Interest income on loans decreased $134 thousand, or 1.0%, to $13.4 million for the quarter ended September 30, 2026, compared to $13.5 million for the quarter ended September 30, 2025. The average balance of total loans was $886.6 million for the quarter ended September 30, 2026, down from $910.3 million for the quarter ended September 30, 2025. The average yield on total loans was 5.99% for the quarter ended September 30, 2026, up from 5.89% for the quarter ended September 30, 2025.

Interest income on investments was $202 thousand for the quarter ended September 30, 2026, compared to $124 thousand for the quarter ended September 30, 2025. The increase was primarily due to a 106 basis point increase in average yield and an increase in the average balance of investments, as lower yielding investments paid down and a higher yielding equity investment was purchased in January 2026. Interest income on interest-earning cash decreased $118 thousand to $898 thousand for the quarter ended September 30, 2026, compared to $1.0 million for the quarter ended September 30, 2025. The decrease was primarily a result of a lower average yield, reflecting lower market interest rates, partially offset by a higher average balance of interest-earning cash.

Interest expense decreased $724 thousand, or 12.7%, to $5.0 million for the quarter ended September 30, 2026, compared to $5.7 million for the quarter ended September 30, 2025. The decrease was primarily the result of a $25.0 million decrease in the average balance of FHLB advances, a $6.0 million decrease in the average balance of subordinated debt, and a $5.8 million decrease in the average balance of interest-bearing demand and NOW accounts, 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 436 basis point increase in the rate paid on subordinated debt, an $8.7 million increase in savings and money market account balances, and a $3.2 million increase in certificate account balances. In the current quarter, we repaid all outstanding FHLB advances and $2.0 million in subordinated debt. During the prior quarter, we repaid $10.0 million of FHLB advances that were scheduled to mature in January 2028 and bore an interest rate of 4.06%. During the fourth quarter of 2025, we paid down 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 2.11% for the quarter ended September 30, 2026, down from 2.32% for the quarter ended September 30, 2025. The average cost of subordinated debt was 10.01% for the quarter ended September 30, 2026, up from 5.65% for the quarter ended September 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 September 30, 2026, we paid off all remaining subordinated debt, totaling $6.0 million, as part of our strategic objective to utilize our excess liquidity to pay down high cost debt. There were no FHLB advances for the quarter ended September 30, 2026, compared to $25.0 million in advances with an average rate of 4.27% for the quarter ended September 30, 2025.

Net interest margin, annualized, increased to 3.76% for the quarter ended September 30, 2026, from 3.48% for the quarter ended September 30, 2025, primarily due to lower funding costs. The average cost of interest-bearing liabilities decreased 27 basis points to 2.52%, reflecting the repayment of borrowings, which averaged $25.0 million at 4.27% during the prior year quarter, and decreases in the average rates paid on savings and money market accounts, to 2.36% from 2.69%, and on certificate accounts, to 3.53% from 3.80%. The yield on interest-earning assets increased three basis points to 5.74% as higher yields on loans and investments were largely offset by a lower yield on interest-earning cash, which decreased to 3.61% from 4.22%.

A release of provision for credit losses of $282 thousand was recorded for the quarter ended September 30, 2026, consisting of a release of provision for credit losses on loans of $233 thousand and a release of provision for credit losses on unfunded loan commitments of $49 thousand. This compared to a provision for credit losses of $55 thousand for the quarter ended September 30, 2025, consisting of a provision for credit losses on loans of $65 thousand and a release of provision for credit losses on unfunded loan commitments of $10 thousand. The release of provision in the current quarter compared to the same quarter last year resulted primarily from a decrease in loan balances, improvements in the Federal Reserve's unemployment forecast, changes in loan mix, and annual updates to the model assumptions, partially offset by additional qualitative adjustments applied to all commercial loan segments, reflecting increased uncertainty in market conditions surrounding inflation, geopolitical events, an uncertainty adjustment tied to the impact of tariffs, and other external factors affecting our clients. Additional qualitative adjustments were also made to multifamily and other consumer secured segments related to the volume of past due and adversely rated loans in the current quarter that were not present in the third quarter of 2025.

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.

Noninterest Income

For the Quarter Ended Q3 2026 vs. Q2 2026 Q3 2026 vs. Q3 2025

September 30,

2026 June 30,

2026 September 30,

2025 Amount

($) Percentage (%) Amount

($) Percentage (%)

(Dollars in thousands, unaudited)

Service charges and fee income $ 711 $ 684 $ 672 $ 27 3.9 % $ 39 5.8 %

Earnings on bank-owned life insurance (“BOLI”) 142 277 225 (135) (48.7) % (83) (36.9) %

Mortgage servicing income 249 245 262 4 1.6 % (13) (5.0) %

Fair value adjustment on mortgage servicing rights (105) 119 (372) (224) (188.2) % 267 (71.8) %

Net gain on sale of loans 145 112 94 33 29.5 % 51 54.3 %

Other income (3) (8) — 5 (62.5) % (3) — %

Total noninterest income $ 1,139 $ 1,429 $ 881 $ (290) (20.3) % $ 258 29.3 %

Q3 2026 vs. Q2 2026

Noninterest income during the third quarter of 2026 decreased $290 thousand, or 20.3%, compared to the quarter ended June 30, 2026. The decrease was primarily due to the following changes:

•a $224 thousand decrease in the fair value adjustment on mortgage servicing rights, primarily due to changes in market valuation assumptions during the third quarter, including an increase in the cost of servicing assumption and the impact of a smaller servicing portfolio; and

•a $135 thousand decrease in earnings on BOLI, primarily due to lower market valuation in the current quarter.

The decreases were partially offset by:

•a $33 thousand increase in gain on sale of loans, primarily due to higher loan origination volumes in the current quarter; and

•a $27 thousand increase in service charges and fee income, primarily due to an increase in the collection of loan late fees and deposit fees as a result of a new large depositor relationship in the third quarter and higher fees on existing business depositor relationships.

Loans sold during the quarter ended September 30, 2026, totaled $9.4 million, compared to $7.3 million during the quarter ended June 30, 2026. The increase was primarily due to seasonal fluctuations in loan origination volume and the timing of loan sales.

Q3 2026 vs. Q3 2025

Noninterest income increased $258 thousand, or 29.3%, during the current quarter compared to the quarter ended September 30, 2025, primarily as a result of:

•a $267 thousand improvement in the fair value adjustment on mortgage servicing rights, primarily due to changes in valuation assumptions, including slower estimated prepayment speeds resulting from higher market interest rates, partially offset by an increase in the cost of servicing assumption recorded in the current quarter and by the impact of a smaller servicing portfolio;

•a $51 thousand increase in net gain on sale of loans due to an increase in the volume of loans sold resulting from lower market interest rates in the current year; and

•a $39 thousand increase in service charges and fee income primarily due to higher deposit fee income, higher loan fees associated with reconveyance activity, and higher loan late fees.

These increases were partially offset by:

•an $83 thousand decrease in BOLI earnings primarily due to fluctuations in market conditions affecting BOLI valuations; and

•a $13 thousand decrease in mortgage servicing income, primarily due to the impact of a smaller servicing portfolio.

Noninterest Expense

For the Quarter Ended Q3 2026 vs. Q2 2026 Q3 2026 vs. Q3 2025

September 30,

2026 June 30,

2026 September 30,

2025 Amount

($) Percentage (%) Amount

($) Percentage (%)

(Dollars in thousands, unaudited)

Salaries and benefits $ 4,293 $ 4,645 $ 4,259 $ (352) (7.6) % $ 34 0.8 %

Operations 1,701 1,617 1,483 84 5.2 % 218 14.7 %

Regulatory assessments 198 129 221 69 53.5 % (23) (10.4) %

Occupancy 399 388 431 11 2.8 % (32) (7.4) %

Data processing 1,404 1,332 1,274 72 5.4 % 130 10.2 %

Net loss (gain) on OREO and repossessed assets 10 17 8 (7) (41.2) % 2 25.0 %

Total noninterest expense $ 8,005 $ 8,128 $ 7,676 $ (123) (1.5) % $ 329 4.3 %

Q3 2026 vs. Q2 2026

The decrease in noninterest expense during the current quarter compared to the quarter ended June 30, 2026 was primarily related to:

•a $352 thousand decrease in salaries and benefits due to lower incentive compensation expense, the impact of lower market valuations of investments supporting our deferred compensation arrangements for key executives (which was partially offset by decreases in BOLI income recorded in noninterest income), partially offset by higher medical expenses;

This decrease was partially offset by

•an $84 thousand increase in operations expense, primarily due to higher costs associated with our debit card processing, partially offset by lower state and local tax expense and lower legal expenses;

•a $72 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;

•a $69 thousand increase in regulatory assessments primarily due to the release of an accrual in the prior quarter related to exam costs, as the actual costs incurred were lower than previously estimated as compared to no release in the current quarter; and

•an $11 thousand increase in occupancy, primarily due to a refund of triple net overpayments on a leased property in the prior quarter.

Q3 2026 vs. Q3 2025

The increase in noninterest expense during the current quarter compared to the quarter ended September 30, 2025 was primarily related to:

•a $218 thousand increase in operations expense, primarily due to higher costs associated with debit card processing;

•a $130 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 the addition of new features, such as fraud detection software, with the goal of lowering operational losses; and

•a $34 thousand increase in salaries and benefits, primarily due to an increase in medical expense, lower deferred loan origination costs due to fewer loan originations in the current quarter, and higher salaries, partially offset by lower market valuations on our deferred compensation for key executives (which was partially offset by the decrease in income on BOLI recorded in noninterest income), lower stock compensation expense and lower incentive compensation expense.

These increases were partially offset by:

•a $32 thousand decrease in occupancy expense, primarily due to lower building lease charges in the third quarter of 2026 following the closure of our Tacoma branch during the second quarter of 2026; and

•a $23 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.

Balance Sheet Review, Capital Management and Credit Quality

Assets totaled $1.04 billion at September 30, 2026, down from $1.07 billion at June 30, 2026 and down from $1.06 billion at September 30, 2025. The decrease from June 30, 2026 was primarily a result of a lower balance of loans held-for-portfolio and lower balances of cash and cash equivalents. The decrease from September 30, 2025 was primarily a result of a lower balance of loans held-for-portfolio, partially offset by a higher balance of cash and cash equivalents and a new equity investment in the first quarter of 2026.

Cash and cash equivalents decreased $7.3 million, or 6.1%, to $112.8 million at September 30, 2026, compared to $120.1 million at June 30, 2026, and increased $11.6 million, or 11.5%, from $101.2 million at September 30, 2025. The decrease from June 30, 2026 primarily reflected deposit outflows and repayments of subordinated debt, partially offset by repayment of loans held-for-portfolio. The increase from September 30, 2025 was primarily due to repayment of loans held-for-portfolio and an increase in deposits, partially offset by the purchase of a $5.0 million Community Reinvestment Act ("CRA") - eligible workforce housing equity investment and the repayment of borrowings and subordinated debt.

Investment securities decreased $605 thousand, or 6.4%, to $8.8 million at September 30, 2026, compared to $9.5 million at June 30, 2026, and decreased $690 thousand, or 7.2%, from $9.5 million at September 30, 2025. Held-to-maturity securities totaled $1.9 million at September 30, 2026, June 30, 2026 and September 30, 2025. Available-for-sale securities totaled $7.0 million at September 30, 2026, compared to $7.6 million at both June 30, 2026 and September 30, 2025. The changes in our available-for-sale and held-to-maturity portfolios from June 30, 2026 and September 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 $878.0 million at September 30, 2026, compared to $892.0 million at June 30, 2026 and $909.7 million at September 30, 2025. The decrease from June 30, 2026 was primarily due to a decline in commercial construction loan balances. The decrease from September 30, 2025 reflected declines in commercial nonowner occupied loans, primarily due to the early payoff of low-rate loans, as well as one-to-four family loans, driven by fewer new home loan originations and normal amortization, and a smaller reduction in consumer secured loans. These decreases were partially offset by growth in residential construction and land loans, home equity loans, and several commercial loan categories.

Equity securities totaled $5.0 million at both September 30, 2026 and June 30, 2026, compared to zero at September 30, 2025. The increase primarily related to an investment made during the first quarter of 2026 in an 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 $470 thousand, or 5.8%, to $8.6 million at September 30, 2026, from $8.1 million at June 30, 2026, and increased $5.5 million, or 180.0%, from $3.1 million at September 30, 2025. The increase from June 30, 2026 was primarily due to the placement of $649 thousand of consumer secured loans on nonaccrual status, partially offset by loans returned to accrual status and principal repayments. The increase from one year ago was primarily due to $6.6 million of new nonaccrual loans, partially offset by loan payoffs totaling $282 thousand, loans returned to accrual status, principal repayments, and charge-offs.

Nonperforming loans totaled $8.5 million at September 30, 2026, with commercial and multifamily loans representing $4.2 million, or 48.9% of total nonperforming loans, reflecting a concentration of nonperforming loans within larger relationships. One-to-four family nonperforming loans totaled $2.3 million, or 27.6% 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 $77 thousand at September 30, 2026, representing 0.9% of total NPAs.

NPAs to total assets were 0.82%, 0.76% and 0.29% at September 30, 2026, June 30, 2026 and September 30, 2025, respectively. The allowance for credit losses on loans as a percentage of total loans outstanding was 0.93% at September 30, 2026, compared to 0.94% at both June 30, 2026 and September 30, 2025. Net loan charge-offs were $13 thousand for the

third quarter of 2026, compared to $30 thousand for the second quarter of 2026 and $37 thousand for the third quarter of 2025.

The following table summarizes our NPAs at the dates indicated (dollars in thousands, unaudited):

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Nonperforming Loans:

One-to-four family $ 2,346 $ 2,458 $ 1,939 $ 1,597 $ 609

Home equity loans 307 310 383 187 201

Commercial and multifamily 4,155 4,191 4,213 3,163 1,065

Construction and land 159 159 80 82 103

Manufactured homes 949 696 475 461 476

Commercial business — — 30 30 —

Other consumer 579 241 259 262 263

Total nonperforming loans 8,495 8,055 7,379 5,782 2,717

OREO and Other Repossessed Assets:

One-to-four family — — — 259 259

Manufactured homes 77 47 99 85 85

Total OREO and repossessed assets 77 47 99 344 344

Total NPAs $ 8,572 $ 8,102 $ 7,478 $ 6,126 $ 3,061

Percentage of Nonperforming Assets:

One-to-four family 27.4 % 30.3 % 25.9 % 26.1 % 19.9 %

Home equity loans 3.6 3.8 5.1 3.1 6.6

Commercial and multifamily 48.5 51.7 56.3 51.6 34.8

Construction and land 1.9 2.0 1.1 1.3 3.4

Manufactured homes 11.1 8.6 6.4 7.5 15.6

Commercial business — — 0.4 0.5 —

Other consumer 6.8 3.0 3.5 4.3 8.5

Total nonperforming loans 99.1 99.4 98.7 94.4 88.8

Percentage of OREO and Other Repossessed Assets:

One-to-four family — — — 4.2 8.4

Manufactured homes 0.9 0.6 1.3 1.4 2.8

Total OREO and repossessed assets 0.9 0.6 1.3 5.6 11.2

Total NPAs 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

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:

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Allowance for Credit Losses on Loans

Balance at beginning of period $ 8,420 $ 8,635 $ 8,605 $ 8,564 $ 8,536

(Release of) provision for credit losses during the period (233) (185) 49 68 65

Net charge-offs during the period (13) (30) (19) (27) (37)

Balance at end of period $ 8,174 $ 8,420 $ 8,635 $ 8,605 $ 8,564

Allowance for Credit Losses on Unfunded Loan Commitments

Balance at beginning of period $ 184 $ 222 $ 148 $ 112 $ 122

(Release of) provision for credit losses during the period (49) (38) 74 36 (10)

Balance at end of period 135 184 222 148 112

Allowance for Credit Losses $ 8,309 $ 8,604 $ 8,857 $ 8,753 $ 8,676

Allowance for credit losses on loans to total loans 0.93 % 0.94 % 0.94 % 0.95 % 0.94 %

Allowance for credit losses on loans and unfunded loan commitments to total loans 0.95 % 0.96 % 0.96 % 0.97 % 0.95 %

Allowance for credit losses on loans to total nonperforming loans 96.22 % 104.53 % 117.02 % 148.82 % 315.20 %

Allowance for credit losses on loans and unfunded loan commitments to total nonperforming loans 97.81 % 106.82 % 120.03 % 151.38 % 319.32 %

Total deposits decreased $24.2 million, or 2.6%, to $906.7 million at September 30, 2026, from $930.9 million at June 30, 2026, and increased $7.7 million, or 0.9%, from $898.9 million at September 30, 2025. The decrease in total deposits from June 30, 2026 was primarily due to the managed reduction of higher cost reciprocal deposits. The increase from September 30, 2025 was primarily due to growth from new depositors and existing depositors increasing their balances. Noninterest-bearing deposits decreased $921 thousand, or 0.7%, to $128.4 million at September 30, 2026, compared to $129.3 million at June 30, 2026, and decreased $3.0 million, or 2.3%, compared to $131.4 million at September 30, 2025. Noninterest-bearing deposits represented 14.2%, 13.9% and 14.6% of total deposits at September 30, 2026, June 30, 2026 and September 30, 2025, respectively.

There were no FHLB advances at September 30, 2026 or June 30, 2026, and $25.0 million at September 30, 2025. The decrease from September 30, 2025 was due to the early repayment of a $10.0 million FHLB advance during the prior 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 $5.8 million at September 30, 2026 and $7.8 million at June 30, 2026, compared to $11.8 million at September 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 our ongoing efforts to reduce higher cost debt, and an additional $2.0 million paydown during the current quarter. Subsequent to September 30, 2026, we repaid the remaining $6.0 million in subordinated debt.

Stockholders’ equity totaled $114.0 million at September 30, 2026, an increase of $1.4 million, or 1.3%, from $112.6 million at June 30, 2026, and an increase of $6.5 million, or 6.1%, from $107.5 million at September 30, 2025. The increase from June 30, 2026 was primarily the result of $2.3 million of net income earned during the current quarter, partially offset by a $400 thousand increase in accumulated other comprehensive loss, net of tax, and the payment of $541 thousand in cash dividends to the Company's stockholders.

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 "may," "believe," "will likely result," "are expected to," "will continue," "is anticipated," "anticipate," "expect," "estimate," "project," "plan," "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; 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 Sound Community 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 the Company's 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, except as required by law.

CONSOLIDATED INCOME STATEMENTS

(Dollars in thousands, unaudited)

For the Quarter Ended

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Interest income $ 14,478 $ 14,846 $ 14,465 $ 14,284 $ 14,652

Interest expense 4,988 5,255 5,418 5,622 5,712

Net interest income 9,490 9,591 9,047 8,662 8,940

(Release of) provision for credit losses (282) (223) 123 104 55

Net interest income after (release of) provision for credit losses 9,772 9,814 8,924 8,558 8,885

Noninterest income:

Service charges and fee income 711 684 624 649 672

Earnings on bank-owned life insurance 142 277 130 189 225

Mortgage servicing income 249 245 248 253 262

Fair value adjustment on mortgage servicing rights (105) 119 (140) (160) (372)

Net gain on sale of loans 145 112 101 73 94

Other income (loss) (3) (8) (53) (137) —

Total noninterest income 1,139 1,429 910 867 881

Noninterest expense:

Salaries and benefits 4,293 4,645 4,458 3,533 4,259

Operations 1,701 1,617 1,501 1,683 1,483

Regulatory assessments 198 129 198 (53) 221

Occupancy 399 388 427 460 431

Data processing 1,404 1,332 1,287 1,200 1,274

Net loss on OREO and repossessed assets 10 17 3 17 8

Total noninterest expense 8,005 8,128 7,874 6,840 7,676

Income before provision for income taxes 2,906 3,115 1,960 2,585 2,090

Provision for income taxes 584 597 384 339 395

Net income $ 2,322 $ 2,518 $ 1,576 $ 2,246 $ 1,695

CONSOLIDATED INCOME STATEMENTS

(Dollars in thousands, unaudited)

For the Nine Months Ended September 30

2026 2025

Interest income $ 43,789 $ 43,273

Interest expense 15,661 17,007

Net interest income 28,128 26,266

(Release of) provision for credit losses (382) 22

Net interest income after release of provision for credit losses 28,510 26,244

Noninterest income:

Service charges and fee income 2,018 2,020

Earnings on bank-owned life insurance 549 648

Mortgage servicing income 742 794

Fair value adjustment on mortgage servicing rights (126) (551)

Net gain on sale of loans 357 187

Other income (64) —

Total noninterest income 3,476 3,098

Noninterest expense:

Salaries and benefits 13,396 13,175

Operations 4,819 4,291

Regulatory assessments 525 663

Occupancy 1,214 1,284

Data processing 4,024 3,821

Net loss (gain) on OREO and repossessed assets

30 19

Total noninterest expense 24,008 23,253

Income before provision for income taxes 7,978 6,089

Provision for income taxes 1,565 1,175

Net income $ 6,413 $ 4,914

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, unaudited)

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

ASSETS

Cash and cash equivalents $ 112,752 $ 120,072 $ 137,984 $ 138,453 $ 101,156

Available-for-sale securities, at fair value 6,978 7,575 7,517 7,699 7,637

Held-to-maturity securities, at amortized cost 1,868 1,876 1,884 1,892 1,899

Equity securities 5,000 5,000 5,000 — —

Loans held-for-sale 283 1,591 281 542 271

Loans held-for-portfolio 878,000 891,969 921,518 905,533 909,715

Allowance for credit losses - loans (8,174) (8,420) (8,635) (8,605) (8,564)

Total loans held-for-portfolio, net 869,826 883,549 912,883 896,928 901,151

Accrued interest receivable 3,783 3,747 3,888 3,771 3,896

Bank-owned life insurance, net 24,217 24,055 23,747 23,327 23,138

Other real estate owned ("OREO") and other repossessed assets, net 77 47 99 344 344

Mortgage servicing rights, at fair value 4,268 4,277 4,096 4,183 4,305

Federal Home Loan Bank ("FHLB") stock, at cost 669 670 1,120 1,060 1,735

Premises and equipment, net 4,075 4,127 4,168 4,239 4,421

Right-of-use assets 2,643 2,889 3,133 3,423 3,679

Other assets 6,150 6,249 6,251 6,312 6,531

TOTAL ASSETS $ 1,042,589 $ 1,065,724 $ 1,112,051 $ 1,092,173 $ 1,060,163

LIABILITIES

Interest-bearing deposits $ 778,272 $ 801,541 $ 837,409 $ 816,309 $ 767,554

Noninterest-bearing deposits 128,419 129,340 131,092 132,566 131,389

Total deposits 906,691 930,881 968,501 948,875 898,943

Borrowings — — 10,000 10,000 25,000

Accrued interest payable 623 634 496 674 774

Lease liabilities 2,836 3,103 3,364 3,671 3,943

Other liabilities 10,187 9,597 8,839 10,366 10,146

Advance payments from borrowers for taxes and insurance 2,420 1,119 2,625 1,387 2,116

Subordinated notes, net 5,833 7,822 7,812 7,801 11,791

TOTAL LIABILITIES 928,590 953,156 1,001,637 982,774 952,713

STOCKHOLDERS' EQUITY:

Common stock 25 25 25 25 25

Additional paid-in capital 28,896 28,846 28,797 28,737 28,665

Retained earnings 86,277 84,496 82,518 81,483 79,724

Accumulated other comprehensive loss, net of tax (1,199) (799) (926) (846) (964)

TOTAL STOCKHOLDERS' EQUITY 113,999 112,568 110,414 109,399 107,450

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,042,589 $ 1,065,724 $ 1,112,051 $ 1,092,173 $ 1,060,163

KEY FINANCIAL RATIOS

(unaudited)

For the Quarter Ended

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Annualized return on average assets 0.88 % 0.94 % 0.58 % 0.84 % 0.63 %

Annualized return on average equity 8.10 % 9.03 % 5.78 % 8.19 % 6.26 %

Annualized net interest margin(1)

3.76 % 3.74 % 3.51 % 3.36 % 3.48 %

Annualized efficiency ratio(2)

75.31 % 73.76 % 79.08 % 71.78 % 78.16 %

(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

September 30, 2026 June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025

Basic earnings per share $ 0.90 $ 0.98 $ 0.61 $ 0.87 $ 0.66

Diluted earnings per share $ 0.90 $ 0.98 $ 0.61 $ 0.87 $ 0.66

Weighted-average basic shares outstanding 2,564,776 2,564,165 2,562,467 2,557,608 2,556,562

Weighted-average diluted shares outstanding 2,580,513 2,574,631 2,574,212 2,574,586 2,575,575

Common shares outstanding at period-end 2,569,649 2,568,043 2,568,043 2,567,953 2,566,069

Book value per share $ 44.36 $ 43.83 $ 43.00 $ 42.60 $ 41.87

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

September 30, 2026 June 30, 2026 September 30, 2025

Average Outstanding Balance Interest Earned/Paid Yield/Rate Average Outstanding Balance Interest Earned/Paid Yield/Rate Average Outstanding Balance Interest Earned/Paid Yield/Rate

Interest-Earning Assets:

Loans receivable $ 886,588 $ 13,378 5.99 % $ 911,869 $ 13,777 6.06 % $ 910,330 $ 13,512 5.89 %

Interest-earning cash 98,803 898 3.61 % 98,902 882 3.58 % 95,422 1,016 4.22 %

Investments

16,077 202 4.98 % 16,566 187 4.53 % 12,541 124 3.92 %

Total interest-earning assets $ 1,001,468 14,478 5.74 % $ 1,027,337 $ 14,846 5.80 % $ 1,018,293 14,652 5.71 %

Interest-Bearing Liabilities:

Savings and money market accounts $ 357,714 2,126 2.36 % $ 370,406 2,177 2.36 % $ 348,996 2,367 2.69 %

Demand and NOW accounts 126,483 85 0.27 % 130,208 95 0.29 % 132,309 103 0.31 %

Certificate accounts 295,895 2,630 3.53 % 299,654 2,704 3.62 % 292,725 2,805 3.80 %

Subordinated notes 5,829 147 10.01 % 7,819 189 9.70 % 11,787 168 5.65 %

Borrowings — — — % 8,571 90 4.21 % 25,000 269 4.27 %

Total interest-bearing liabilities $ 785,921 4,988 2.52 % $ 816,658 5,255 2.58 % $ 810,817 5,712 2.79 %

Net interest income/spread $ 9,490 3.22 % $ 9,591 3.22 % $ 8,940 2.91 %

Net interest margin 3.76 % 3.74 % 3.48 %

Ratio of interest-earning assets to interest-bearing liabilities 127 % 126 % 126 %

Noninterest-bearing deposits $ 131,276 $ 128,204 $ 127,970

Total deposits $ 911,368 $ 4,841 2.11 % $ 928,472 $ 4,976 2.15 % $ 902,000 $ 5,275 2.32 %

Total funding (1)

$ 917,197 $ 4,988 2.16 % $ 944,862 $ 5,255 2.23 % $ 938,787 $ 5,712 2.41 %

(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.

Nine Months Ended

September 30, 2026 September 30, 2025

Average Outstanding Balance Interest Earned/Paid Yield/Rate Average Outstanding Balance Interest Earned/Paid Yield/Rate

Interest-Earning Assets:

Loans receivable $ 904,089 $ 40,461 5.98 % $ 900,780 $ 39,795 5.91 %

Interest-earning cash 106,049 2,841 3.58 % 97,996 3,123 4.26 %

Investments

16,099 487 4.04 % 12,769 355 3.72 %

Total interest-earning assets $ 1,026,237 43,789 5.70 % $ 1,011,545 43,273 5.72 %

Interest-Bearing Liabilities:

Savings and money market accounts $ 372,138 6,610 2.37 % $ 342,046 6,684 2.61 %

Demand and NOW accounts 127,543 261 0.27 % 137,090 317 0.31 %

Certificate accounts 298,943 8,070 3.61 % 292,028 8,704 3.98 %

Subordinated notes 7,145 522 9.77 % 11,777 504 5.72 %

Borrowings 6,337 198 4.18 % 25,002 798 4.27 %

Total interest-bearing liabilities $ 812,106 15,661 2.58 % $ 807,943 17,007 2.81 %

Net interest income/spread $ 28,128 3.13 % $ 26,266 2.91 %

Net interest margin 3.66 % 3.47 %

Ratio of interest-earning assets to interest-bearing liabilities 126 % 125 %

Noninterest-bearing deposits $ 131,048 $ 125,370

Total deposits $ 929,672 $ 14,941 2.15 % $ 896,534 $ 15,705 2.34 %

Total funding (1)

$ 943,154 $ 15,661 2.22 % $ 933,313 $ 17,007 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 annualized total interest expense divided by average total funding.

LOANS

(Dollars in thousands, unaudited)

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Real estate loans:

One-to-four family $ 238,083 $ 244,168 $ 251,146 $ 253,841 $ 257,797

Home equity 34,790 32,107 31,903 31,468 29,903

Commercial and multifamily 389,734 381,809 409,810 409,729 408,802

Construction and land 57,612 76,158 71,878 50,261 52,797

Total real estate loans 720,219 734,242 764,737 745,299 749,299

Consumer loans:

Manufactured homes 43,343 42,668 42,968 43,080 42,735

Floating homes 88,556 87,566 84,927 87,315 88,674

Other consumer 13,096 13,832 15,978 16,571 17,031

Total consumer loans 144,995 144,066 143,873 146,966 148,440

Commercial business loans 14,737 15,748 15,164 15,378 14,214

Total loans 879,951 894,056 923,774 907,643 911,953

Less:

Premiums 553 583 610 627 644

Deferred fees, net (2,504) (2,670) (2,866) (2,737) (2,882)

Allowance for credit losses - loans (8,174) (8,420) (8,635) (8,605) (8,564)

Total loans held-for-portfolio, net $ 869,826 $ 883,549 $ 912,883 $ 896,928 $ 901,151

DEPOSITS

(Dollars in thousands, unaudited)

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Noninterest-bearing demand $ 128,419 $ 129,340 $ 131,092 $ 132,566 $ 131,388

Interest-bearing demand 129,058 130,210 130,642 125,634 129,570

Savings 59,154 59,081 58,881 59,478 60,106

Money market 296,994 314,205 345,913 331,604 286,827

Certificates 293,066 298,045 301,973 299,593 291,052

Total deposits $ 906,691 $ 930,881 $ 968,501 $ 948,875 $ 898,943

CREDIT QUALITY DATA

(Dollars in thousands, unaudited)

At or For the Quarter Ended

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Total nonperforming loans $ 8,495 $ 8,055 $ 7,379 $ 5,782 $ 2,717

OREO and other repossessed assets 77 47 99 344 344

Total nonperforming assets $ 8,572 $ 8,102 $ 7,478 $ 6,126 $ 3,061

Net charge-offs during the quarter $ (13) $ (30) $ (19) $ (27) $ (37)

(Release of) provision for credit losses during the quarter (282) (223) 123 104 55

Allowance for credit losses - loans 8,174 8,420 8,635 8,605 8,564

Allowance for credit losses - loans to total loans 0.93 % 0.94 % 0.94 % 0.95 % 0.94 %

Allowance for credit losses - loans to total nonperforming loans 96.22 % 104.53 % 117.02 % 148.82 % 315.20 %

Nonperforming loans to total loans 0.97 % 0.90 % 0.80 % 0.64 % 0.30 %

Nonperforming assets to total assets 0.82 % 0.76 % 0.67 % 0.56 % 0.29 %

OTHER STATISTICS

(Dollars in thousands, unaudited)

At or For the Quarter Ended

September 30,

2026 June 30,

2026 March 31,

2026 December 31,

2025 September 30,

2025

Total loans to total deposits 97.05 % 96.04 % 95.38 % 95.65 % 101.45 %

Noninterest-bearing deposits to total deposits 14.16 % 13.89 % 13.54 % 13.97 % 14.62 %

Average total assets for the quarter $ 1,047,197 $ 1,071,897 $ 1,094,501 $ 1,066,451 $ 1,063,972

Average total equity for the quarter $ 113,791 $ 111,863 $ 110,575 $ 108,837 $ 107,375

Contact

Financial:

Wes Ochs

President/CFO

(206) 436-8587

Media:

Laurie Stewart

CEO

(206) 436-1495

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Code for the postal or zip code

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No definition available.

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- Definition

Name of the state or province.

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No definition available.

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- Definition

A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Indicate if registrant meets the emerging growth company criteria.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.

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No definition available.

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- Definition

Two-character EDGAR code representing the state or country of incorporation.

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No definition available.

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- Definition

The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Local phone number for entity.

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No definition available.

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 13e

-Subsection 4c

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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14d

-Subsection 2b

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- Definition

Title of a 12(b) registered security.

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-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b

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- Definition

Name of the Exchange on which a security is registered.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection d1-1

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Name:

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Data Type:

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Balance Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14a

-Subsection 12

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- Definition

Trading symbol of an instrument as listed on an exchange.

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No definition available.

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 230

-Section 425

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