v3.26.1
Borrowings, FHLB Stock and Subordinated Notes
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Borrowings, FHLB Stock and Subordinated Notes Borrowings, FHLB Stock and Subordinated Notes
FHLB Advances
The following tables present advances from the FHLB as of the dates indicated (dollars in thousands):
June 30, 2026December 31, 2025
FHLB advances:
Short-term advances (one year or less)$— $— 
Long-term advances (over one year)— 10,000 
Total
$— $10,000 
June 30, 2026December 31, 2025
Fixed Rate:
Outstanding balance$— $10,000 
Interest rates ranging from— %4.06 %
Interest rates ranging to— %4.06 %
Weighted average interest rate— %4.06 %
FHLB Des Moines Borrowing Capacity
The Company has a loan agreement with the FHLB of Des Moines. The terms of the agreement call for a blanket pledge of a portion of the Company’s mortgage and commercial and multifamily loan portfolio based on the Company’s outstanding borrowing balance. Additionally, at June 30, 2026 and December 31, 2025, the Company had outstanding letters of credit from the FHLB of Des Moines to secure public deposits. The following table presents the Company’s borrowing capacity from the FHLB as of the dates indicated:
June 30, 2026December 31, 2025
Amount available to borrow under credit facility(1)
$485,376 $347,095 
Advance equivalent of collateral:
One-to-four family loans$197,352 $190,290 
Commercial and multifamily loans19,080 21,097 
Home equity loans275 278 
Notional amount of letters of credit outstanding15,000 14,000 
Remaining FHLB borrowing capacity(2)
$201,708 $187,665 
(1)Subject to eligible pledged collateral.
(2)Amount remaining from the advance equivalent of collateral less letters of credit outstanding and FHLB advances.
As a member of the FHLB, the Company is required to maintain a minimum level of investment in FHLB of Des Moines stock based on specific percentages of its outstanding FHLB advances. At June 30, 2026 and December 31, 2025, the Company had an investment of $670 thousand and $1.1 million, respectively, in FHLB of Des Moines stock.
Federal Reserve Bank of San Francisco (“FRB SF”) Borrowings
The Company has a borrowing agreement with the FRB SF. The terms of the agreement call for a blanket pledge of a portion of the Company’s consumer and commercial business loans as collateral for borrowings under this arrangement. At June 30, 2026 and December 31, 2025, the amount available to borrow under this credit facility was $21.1 million and $18.5 million, respectively, subject to eligible pledged collateral. The Company had no outstanding borrowings under this arrangement at June 30, 2026 and December 31, 2025. 
Other Borrowings
The Company has access to an unsecured Fed Funds line of credit from Pacific Coast Banker’s Bank (“PCBB”). The line has a 1.5 years term maturing on December 31, 2027, and is renewable upon conclusion of its term. As of June 30, 2026, the amount available under this line of credit was $20.0 million. There were no outstanding borrowings under this line of credit as of June 30, 2026 and December 31, 2025.
Subordinated Debt
In September 2020, the Company issued $12.0 million of fixed -to -floating rate subordinated notes that mature in 2030. The subordinated notes had an initial fixed interest rate of 5.25% through September 30, 2025, payable semi-annually in arrears. From, and including, October 1, 2025, the interest rate on the subordinated notes reset quarterly to a floating rate per annum equal to the then-current three-month term Secured Overnight Financing Rate, or SOFR, plus 513 basis points, payable quarterly in arrears. The subordinated notes mature on May 15, 2030, and are redeemable by the Company, in whole or in part, on any interest payment date on or after October 1, 2025. The Company completed a partial redemption of $4.0 million on October 1, 2025, the first date on which partial redemptions were permitted, and completed another partial redemption of $2.0 million subsequent to June 30, 2026. The subordinated notes may be included in Tier 2 capital for Sound Financial Bancorp under current regulatory guidelines and interpretations. The balance of the subordinated notes, net of debt issuance costs, was $7.8 million at both June 30, 2026 and December 31, 2025, prior to giving effect to the $2.0 million partial redemption completed subsequent to June 30, 2026.