What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-12 compared with 2025-11-12 · 141 added, 184 removed, 688 unchanged (32% of the section changed)

4 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2026 December 31,

Cash and cash equivalents $ 137,984 $ 138,453

Available-for-sale (“AFS”) securities, at fair value (amortized cost of $ 8,857 and $ 9,112 as of September 30, 2025 and December 31, 2024, respectively)

Held-to-maturity (“HTM”) securities, at amortized cost (fair value of $ 1,552 and $ 1,712 at September 30, 2025 and December 31, 2024, respectively)

Available-for-sale (“AFS”) securities, at fair value (amortized cost of $ 8,690 and $ 8,770 as of March 31, 2026 and December 31, 2025, respectively)

Held-to-maturity (“HTM”) securities, at amortized cost (fair value of $ 1,528 and $ 1,578 at March 31, 2026 and December 31, 2025, respectively)

Equity securities 5,000 —

Loans held-for-sale 281 542

24 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, none issued or outstanding

Common stock, $ 0.01 par value, 40,000,000 shares authorized, 2,566,069 and 2,564,907 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 40,000,000 shares authorized, 2,568,043 and 2,567,953 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 28,797 28,737

8 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

INTEREST INCOME

16 unchanged sentences

Net gain on sale of loans 101 49

Other income — — — 30

Other income (loss) ( 53 ) —

Total noninterest income 910 1,098

5 unchanged sentences

Data processing 1,287 1,293

Net loss (gain) on OREO and repossessed assets 8 — 19 ( 10 )

Net loss and expenses on OREO and repossessed assets 3 3

Total noninterest expense 7,874 7,914

13 unchanged sentences

(In thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 1,576 $ 1,167

Available for sale securities:

Unrealized gains arising during the period 208 161 101 84

Income tax expense related to unrealized gains ( 44 ) ( 34 ) ( 21 ) ( 18 )

Other comprehensive income, net of tax 164 127 80 66

Unrealized losses arising during the period ( 101 ) ( 21 )

Income tax benefit related to unrealized losses 21 4

Other comprehensive loss, net of tax benefit ( 80 ) ( 17 )

Comprehensive income $ 1,496 $ 1,150

3 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)

For the Three Months Ended March 31, 2026 and 2025 (unaudited)

(In thousands, except share and per share amounts)

4 unchanged sentences

Stockholders’

Balance, at June 30, 2025

2,566,069 $ 25 $ 28,590 $ 78,517 $ ( 1,128 ) $ 106,004

Net income — — — 1,695 — 1,695

Other comprehensive income, net of tax — — — — 164 164

Share-based compensation — — 75 — — 75

Cash dividends paid on common stock ($ 0.19 per share)

— — — ( 488 ) — ( 488 )

Balance, at September 30, 2025

2,566,069 $ 25 $ 28,665 $ 79,724 $ ( 964 ) $ 107,450

Balance, at December 31, 2025

1 unchanged sentence

Net income — — — 1,576 — 1,576

Other comprehensive income, net of tax — — — — 80 80

Other comprehensive loss, net of tax benefit — — — — ( 80 ) ( 80 )

Share-based compensation — — 57 — — 57

2 unchanged sentences

Common stock options exercised 90 — 3 — — 3

Balance, at September 30, 2025

Balance, at March 31, 2026

2,568,043 $ 25 $ 28,797 $ 82,518 $ ( 926 ) $ 110,414

4 unchanged sentences

Stockholders’

Balance, at June 30, 2024

2,557,284 $ 25 $ 28,198 $ 74,173 $ ( 1,049 ) $ 101,347

Net income — — — 1,154 — 1,154

Other comprehensive gain, net of tax — — — — 127 127

Share-based compensation — — 98 — — 98

Common stock surrendered ( 5,053 ) — ( 218 ) — — ( 218 )

Cash dividends paid on common stock ($ 0.19 per share)

— — — ( 487 ) — ( 487 )

Common stock options exercised 11,864 — 218 — — 218

Balance, at September 30, 2024

2,564,095 $ 25 $ 28,296 $ 74,840 $ ( 922 ) $ 102,239

Balance, at December 31, 2024

1 unchanged sentence

Net income — — — 1,167 — 1,167

Other comprehensive gain, net of tax — — — — 66 66

Other comprehensive loss, net of tax benefit — — — — ( 17 ) ( 17 )

Share-based compensation — — 81 — — 81

Restricted common stock awards issued 8,048 — — — — —

Cash dividends paid on common stock ($ 0.19 per share)

— — — ( 487 ) — ( 487 )

Common stock repurchased ( 1,626 ) — ( 18 ) ( 47 ) — ( 65 )

Common stock surrendered ( 5,053 ) — ( 218 ) — — ( 218 )

Common stock options exercised 1,162 — 21 — — 21

Balance, at September 30, 2024

Balance, at March 31, 2025

2,566,069 $ 25 $ 28,515 $ 76,952 $ ( 1,061 ) $ 104,431

4 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

10 unchanged sentences

Net change in advances from borrowers for taxes and insurance 1,238 1,190

Net gain on disposal of premises and equipment, net — ( 30 )

Deferred income tax 70 ( 273 )

Net loss on disposal of assets, net 53 —

Net gain on sale of loans ( 101 ) ( 49 )

11 unchanged sentences

Proceeds from principal payments of held-to-maturity securities 8 9

Net increase in loans ( 7,692 ) ( 6,598 )

Purchase of equity investments ( 5,000 ) —

Net change in loans ( 16,019 ) 13,883

FHLB stock purchased ( 60 ) ( 4 )

Purchase of BOLI ( 290 ) —

Purchases of premises and equipment, net ( 32 ) ( 38 )

Proceeds from disposal of premises and equipment, net — 30

Proceeds from sale of OREO and other repossessed assets 261 —

Net cash used in investing activities ( 7,339 ) ( 5,697 )

Net cash (used in)/provided by investing activities ( 21,062 ) 13,919

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in deposits 19,626 72,548

FHLB stock purchased ( 5 ) ( 9 )

Common stock repurchases — ( 65 )

Purchase of common stock surrendered to pay tax liability — ( 218 )

Dividends paid on common stock ( 541 ) ( 487 )

8 unchanged sentences

Noncash investing and financing activities:

Loans transferred from loans held-for-sale to loans held-for-portfolio 2,275 859

Loans transferred from loans held-for-portfolio to OREO and repossessed assets 15 41

ROU assets obtained in exchange for new operating lease liabilities — 66

ROU assets obtained in exchange for new finance lease liabilities 130 —

Derecognition of ROU asset 98 —

Derecognition of lease liability 98 —

See Notes to Condensed Consolidated Financial Statements

16 unchanged sentences

Note 2 – Accounting Pronouncements Recently Issued or Adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

This ASU requires public business entities to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

This ASU was released in response to stakeholder feedback indicating that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

The Company adopted this ASU on January 1, 2025 for disclosure in the Company’s Annual Report on Form 10-K for the year ending December 31, 2025, with no material impact expected on the Company’s consolidated results of operations, financial position or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which will change the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (for example, employee compensation, depreciation and amortization) in expense captions.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which will change the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (for example, employee compensation, depreciation and amortization) in expense captions.

This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company will evaluate the impact of this guidance through the date of adoption.

The Company is currently evaluating the impact of this guidance on its disclosures and expects adoption will result in a more disaggregated presentation of expense line items in its financial statement footnotes.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software , which simplifies and modernizes the accounting for internal-use software by removing prescriptive project stage guidance and introducing a new capitalization threshold.

Under the revised standard, software development costs are capitalized when management authorizes and commits funding for the project, and it is probable the software will be completed and used as intended.

This ASU is effective for annual and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company does not expect the adoption of this guidance to have a significant impact on the Company’s Consolidated Financial Statements.

In November 2025, the FASB issued ASU 2025‑08, Financial Instruments - Credit Losses (Topic 326):

Purchased Loans , which expands the scope of the “gross‑up” method, formerly applicable only to purchased credit‑deteriorated ("PCD") assets, to include acquired non‑PCD loans that meet certain criteria, now referred to as “purchased seasoned loans” (PSLs).

Under this model, an allowance for expected credit losses is recognized at acquisition, offsetting the loan’s amortized cost basis, thereby eliminating the day-one credit‑loss expense previously required for non‑PCD assets.

PSLs are defined as non‑PCD loans acquired either (i) through a business combination, or (ii) purchased more than 90 days after origination when the acquirer was not involved in origination.

This ASU is effective on a prospective basis for loans acquired on or after the adoption date, which is for interim and annual reporting periods beginning after December 15, 2026.

Early adoption is permitted.

This ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.

In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270):

Narrow‑Scope Improvements , which clarifies and enhances guidance under ASC 270 on interim financial reporting by (i) clarifying the scope of ASC 270 such that it now explicitly applies only to entities that issue complete interim financial statements and related notes under U.S.

GAAP, (ii) establishing clear guidance on the form of interim financial statements and notes, incorporating a comprehensive list of

required interim disclosures drawn from across the ASC, and (iii) introducing a requirement to disclose material events and changes occurring after the end of the last annual period that could impact interim results.

This ASU is effective for interim and annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

This ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.

Note 3 – Investments

At September 30, 2025, the Company did not own any debt securities classified as trading or any equity investment securities, except for the FHLB securities described in “Note 8 — Borrowings, FHLB Stock and Subordinated Notes.”

At March 31, 2026, the Company did not own any debt securities classified as trading.

Debt securities

The amortized cost and estimated fair value of our AFS securities and the corresponding amounts of gross unrealized gains and losses at the dates indicated were as follows (in thousands):

Losses Estimated

September 30, 2025

March 31, 2026

Municipal bonds $ 6,303 $ 9 $ ( 930 ) $ 5,382

7 unchanged sentences

Losses Estimated

September 30, 2025

March 31, 2026

Municipal bonds $ 703 $ — $ ( 180 ) $ 523

5 unchanged sentences

Total $ 1,892 $ — $ ( 314 ) $ 1,578

The amortized cost and estimated fair value of AFS and HTM securities at September 30, 2025, by contractual maturity, are shown below (in thousands).

The amortized cost and estimated fair value of AFS and HTM securities at March 31, 2026, by contractual maturity, are shown below (in thousands).

Expected maturities of AFS securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Investments not due at a single maturity date, consisting of agency mortgage-backed securities, are shown separately.

September 30, 2025

March 31, 2026

Available-for-sale Held-to-maturity

1 unchanged sentence

Cost Estimated Fair Value

Due within one year $ 150 $ 150 $ — $ —

Due after one year through five years 305 305 — —

3 unchanged sentences

Total $ 8,690 $ 7,517 $ 1,884 $ 1,528

There were no pledged securities at September 30, 2025 or December 31, 2024.

There were no sales of AFS or HTM securities during the three and nine months ended September 30, 2025 and 2024.

Accrued interest receivable on securities totaled $ 76 thousand at September 30, 2025 and $ 48 thousand at December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets.

There were no pledged securities at March 31, 2026 or December 31, 2025.

There were no sales of AFS or HTM securities during the three months ended March 31, 2026 and 2025.

Accrued interest receivable on securities totaled $ 75 thousand at March 31, 2026 and $ 47 thousand at December 31, 2025, in the accompanying Condensed Consolidated Balance Sheets.

Accrued interest receivable is excluded from the allowance for credit losses.

The following table summarizes the aggregate fair value and gross unrealized loss by length of time of those investments for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position at the dates indicated (in thousands):

September 30, 2025

March 31, 2026

Less Than 12 Months 12 Months or Longer Total

23 unchanged sentences

Total held-to-maturity securities $ — $ — $ 1,578 $ ( 314 ) $ 1,578 $ ( 314 )

There was no allowance for credit losses on securities at September 30, 2025 or December 31, 2024.

At both September 30, 2025 and December 31, 2024, the total securities portfolio consisted of 11 agency mortgage-backed securities and 11 municipal bonds.

At September 30, 2025 , there were no securities in an unrealized loss position for less than 12 months and 16 securities in an unrealized loss position for more than 12 months.

At December 31, 2024 there was one security in an unrealized loss position for less than 12 months and 15 securities in an unrealized loss position for more than 12 months.

There was no allowance for credit losses on securities at March 31, 2026 or December 31, 2025.

At both March 31, 2026 and December 31, 2025, the total securities portfolio consisted of 11 agency mortgage-backed securities and 11 municipal bonds.

There were no securities in an unrealized loss position for less than 12 months and 15 securities in an unrealized loss position

for more than 12 months at both March 31, 2026 and December 31, 2025.

The unrealized losses were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities and not related to the underlying credit of the issuers or the underlying collateral.

It is expected that these securities will not be settled at a price less than the amortized cost of each investment.

There was no provision for credit losses recognized for investment securities during the three and nine months ended September 30, 2025 and 2024, because the declines in fair value were not attributable to credit quality and because we do not intend, and it is not likely that we will be required, to sell these securities before recovery of their amortized cost basis.

There was no provision for credit losses recognized for investment securities during the three months ended March 31, 2026 and 2025, because the declines in fair value were not attributable to credit quality and because we do not intend, and it is not likely that we will be required, to sell these securities before recovery of their amortized cost basis.

Equity Securities

At March 31, 2026, the Company held equity securities without readily determinable fair values with a carrying value of $ 5.0 million, accounted for under the measurement alternative in accordance with ASC 321.

During the three months ended March 31, 2026, there was no impairment and no observable price changes.

The Company held no equity securities at December 31, 2025.

Note 4 – Loans

Loans-held-for portfolio (which excludes loans held-for-sale) at the dates indicated were as follows (in thousands):

September 30,

2026 December 31,

17 unchanged sentences

Total loans held-for-portfolio, net $ 912,883 $ 896,928

(1) Includes premiums resulting from purchased loans of $ 373 thousand related to one-to-four family loans, $ 220 thousand related to commercial and multifamily loans, and $ 51 thousand related to commercial business loans as of September 30, 2025.

(1) Includes premiums resulting from purchased loans of $ 361 thousand related to one-to-four family loans, $ 204 thousand related to commercial and multifamily loans, and $ 46 thousand related to commercial business loans as of March 31, 2026.

Includes premiums resulting from purchased loans of $ 367 thousand related to one-to-four family loans, $ 212 thousand related to commercial and multifamily loans, and $ 49 thousand related to commercial business loans as of December 31, 2025.

As of September 30, 2025, there were three collateral dependent consumer mortgage loans, totaling $ 186 thousand, that were in process of foreclosure .

As of March 31, 2026, there were five collateral dependent one-to-four-family real estate loans, totaling $ 1.1 million, that were in process of foreclosure .

The following table presents a summary of activity in the ACL on loans and the reserve for unfunded loan commitments for the periods indicated (in thousands):

Three Months Ended September 30,

ACL - Loans Reserve for Unfunded Loan Commitments ACL ACL - Loans Reserve for Unfunded Loan Commitments ACL

Balance at beginning of period $ 8,536 $ 122 $ 8,658 $ 8,493 $ 245 $ 8,738

Provision for (release of) credit losses during the period 65 ( 10 ) 55 106 ( 98 ) 8

Net charge-offs during the period ( 37 ) — ( 37 ) ( 14 ) — ( 14 )

Balance at end of period $ 8,564 $ 112 $ 8,676 $ 8,585 $ 147 $ 8,732

Nine Months Ended September 30,

Three Months Ended March 31,

ACL - Loans Reserve for Unfunded Loan Commitments ACL ACL - Loans Reserve for Unfunded Loan Commitments ACL

3 unchanged sentences

Balance at end of period $ 8,635 $ 222 $ 8,857 $ 8,393 $ 116 $ 8,509

Accrued interest receivable on loans receivable totaled $ 3.7 million at September 30, 2025 and $ 3.4 million at December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets.

Accrued interest receivable on loans receivable totaled $ 3.6 million at both March 31, 2026 and December 31, 2025, in the accompanying Condensed Consolidated Balance Sheets.

Accrued interest receivable is excluded from the ACL.

21 unchanged sentences

The following tables summarize the activity in the ACL - loans for the periods indicated (in thousands):

Three Months Ended September 30, 2025

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

One-to-four family $ 3,327 $ — $ — $ ( 47 ) $ 3,280

Home equity 360 — — ( 6 ) 354

Commercial and multifamily 1,236 — — 74 1,310

Construction and land 269 — — 64 333

Manufactured homes (1)

1,395 ( 47 ) — 31 1,379

Floating homes 1,410 — — ( 47 ) 1,363

Other consumer (2)

451 ( 10 ) 20 ( 21 ) 440

Commercial business 88 — — 17 105

Total $ 8,536 $ ( 57 ) $ 20 $ 65 $ 8,564

(1) During the three months ended September 30,2025, there was one manufactured loan for $ 47 thousand originated in 2023 that was charged off.

(2) During the three months ended September 30,2025, there was one automobile loan for $ 1 thousand originated in 2021 that was charged off, with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Three Months Ended September 30, 2024

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

One-to-four family $ 2,798 $ — $ — $ 14 $ 2,812

Home equity 199 — — 15 214

Commercial and multifamily 1,130 — — 155 1,285

Construction and land 1,072 — — ( 302 ) 770

Manufactured homes 938 — 53 991

Floating homes 1,910 — — 150 2,060

Other consumer (1)

348 ( 20 ) 6 23 357

Commercial business 98 — — ( 2 ) 96

Total $ 8,493 $ ( 20 ) $ 6 $ 106 $ 8,585

(1) During the three months ended September 30, 2024, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

10 unchanged sentences

Total $ 8,605 $ ( 26 ) $ 7 $ 49 $ 8,635

(1) During the nine months ended September 30, 2025, there were two manufactured home loans originated in 2022 and 2023 for $ 19 thousand and $ 47 thousand, respectively, that were charged off and then subsequently foreclosed upon.

(2) During the nine months ended September 30, 2025, there was one automobile loan for $ 1 thousand originated in 2021 that was charged off and one other consumer loan for $ 16 thousand originated in 2024 related to a consumer line of credit that was charged off, with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Nine Months Ended September 30, 2024

(1) During the three months ended March 31,2026, there was one manufactured loan for $ 20 thousand originated in 2017 that was charged off.

(2) During the three months ended March 31,2026, gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Three Months Ended March 31, 2025

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

10 unchanged sentences

Total $ 8,499 $ ( 27 ) $ 6 $ ( 85 ) $ 8,393

(1) During the nine months ended September 30, 2024, there was one manufactured home loan for $ 23 thousand originated in 2020 that was charged off and then subsequently foreclosed upon.

(2) During the nine months ended September 30, 2024, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.

(1) During the three months ended March 31, 2025, there was one manufactured home loan originated in 2022 that was charged off and then subsequently foreclosed upon.

(2) During the three months ended March 31, 2025, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.

Credit Quality Indicators.

10 unchanged sentences

Assets which do not currently expose us to sufficient risk to warrant classification as substandard or doubtful but possess weaknesses are required to be designated as special mention.

There were no loans classified as doubtful or loss as of September 30, 2025 and December 31, 2024.

The following tables present the internally assigned grades as of September 30, 2025 and December 31, 2024, by type of loan and origination year (in thousands):

At September 30, 2025

There were no loans classified as doubtful or loss as of March 31, 2026 and December 31, 2025.

The following tables present the internally assigned grades as of March 31, 2026 and December 31, 2025, by type of loan and origination year (in thousands):

At March 31, 2026

Term Loans Amortized Cost Basis by Origination Year Revolving Loans Amortized Cost Basis Revolving Loans Amortized Cost Basis Converted to Term

46 unchanged sentences

Pass $ 97,005 $ 33,810 $ 24,641 $ 78,185 $ 87,836 $ 72,359 $ — $ — $ 393,836

Special mention — — — — — 1,375 — — 1,375

Substandard — — — 4,990 6,069 3,197 — — 14,256

2 unchanged sentences

Pass $ 22,342 $ 16,867 $ 7,785 $ 1,025 $ 668 $ 1,134 $ — $ — $ 49,821

Special mention — — 17,349 — — — — — 17,349

Substandard — — — 150 — — — — 150

6 unchanged sentences

Pass $ 10,100 $ 18,833 $ 6,291 $ 14,636 $ 22,632 $ 14,404 $ — $ — $ 86,896

Substandard — — 2,350 — — — — — 2,350

Total floating homes $ 10,100 $ 18,833 $ 6,291 $ 14,636 $ 22,632 $ 14,404 $ — $ — $ 86,896

8 unchanged sentences

Pass $ 162,554 $ 99,941 $ 72,049 $ 168,464 $ 213,077 $ 142,445 $ 28,787 $ 881 $ 888,198

Special mention — — 17,349 — — 1,375 — — 18,724

Substandard — — 1,345 5,648 6,166 3,957 98 121 17,335

3 unchanged sentences

The following table presents the amortized cost of nonaccrual loans as of the dates indicated, by type of loan (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

with no ACL Total

4 unchanged sentences

Manufactured homes 475 475 461 461

Floating homes — — 2,363 2,363

Other consumer 259 259 262 262

2 unchanged sentences

The following tables present the aging of past due loans, based on amortized cost, as of the dates indicated, by type of loan (in thousands):

September 30, 2025

March 31, 2026

Past Due 60-89 Days

36 unchanged sentences

Any other type of modification, including the use of multiple categories above.

At September 30, 2025, the Company had no commitments to extend additional credit to borrowers owing loan receivables with modified terms.

There were no loans modified within the three and nine months ended September 30, 2025 and 2024.

At September 30, 2025 and December 31, 2024, we had no loan receivables that defaulted subsequent to their modification.

At March 31, 2026, the Company had no commitments to extend additional credit to borrowers owing loan receivables with modified terms.

There were no loans modified within the three months ended March 31, 2026 and 2025.

We have no modified loan receivables that have subsequently defaulted at March 31, 2026 and December 31, 2025.

Troubled debt restructurings (“TDRs”).

1 unchanged sentence

Troubled Debt Restructurings and Vintage Disclosures , the Company had granted a variety of concessions to borrowers in the form of loan modifications that were considered TDRs.

Loans classified as legacy TDRs totaled $ 1.1 million and $ 1.3 million at September 30, 2025 and December 31, 2024, respectively.

Loans classified as legacy TDRs totaled $ 1.1 million at both March 31, 2026 and December 31, 2025 .

Collateral Dependent Loans .

4 unchanged sentences

The following tables summarize collateral dependent loans by collateral type as of the dates indicated (in thousands):

September 30, 2025

March 31, 2026

Commercial Real Estate Residential Real Estate Land Other Residential RVs/Automobiles Business Assets Total

21 unchanged sentences

Manufactured homes — — — 480 — — 480

Floating homes — — — 2,363 — — 2,363

Other consumer — — — 256 6 — 262

6 unchanged sentences

ASC 820 defines fair values for financial instruments as the exit price, the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions.

The Company’s fair values for financial instruments at September 30, 2025 and December 31, 2024 were determined based on these requirements.

The Company’s fair values for financial instruments at March 31, 2026 and December 31, 2025 were determined based on these requirements.

The following methods and assumptions were used to estimate the fair value of the Company’s financial instruments:

9 unchanged sentences

government securities.

Equity investments - Equity investments consist of securities without readily determinable fair values and are accounted for under the measurement alternative in accordance with ASC 321.

Accordingly, these investments are carried at cost, less impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments, with any such adjustments and impairment recognized in net income.

Loans held-for-sale - The fair value of fixed-rate one-to-four family loans is based on whole loan forward prices obtained from government sponsored enterprises.

9 unchanged sentences

OREO and repossessed assets – The fair value of OREO and repossessed assets is based on the current appraised value of the collateral less estimated costs to sell.

Off-balance sheet financial instruments - The fair value of off-balance sheet financial instruments, which consisted entirely of loan commitments at September 30, 2025 and December 31, 2024, is estimated based on fees charged to others to enter into similar agreements, taking into account the remaining terms of the agreements and credit standing of the Company’s clients.

The estimated fair value of these commitments was not significant at September 30, 2025 and December 31, 2024.

Off-balance sheet financial instruments - The fair value of off-balance sheet financial instruments, which consisted entirely of loan commitments at March 31, 2026 and December 31, 2025, is estimated based on fees charged to others to enter into similar agreements, taking into account the remaining terms of the agreements and credit standing of the Company’s clients.

The estimated fair value of these commitments was not significant at March 31, 2026 and December 31, 2025.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.

1 unchanged sentence

Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s quarterly valuation process.

There were no transfers between levels during the three and nine months ended September 30, 2025 and 2024.

There were no transfers between levels during the three months ended March 31, 2026 and 2025.

The following tables present information about the level in the fair value hierarchy for the Company’s financial assets and liabilities, whether recognized or recorded at fair value or not as of the dates indicated (in thousands):

September 30, 2025 Fair Value Measurements Using:

March 31, 2026 Fair Value Measurements Using:

Value Estimated

4 unchanged sentences

Held-to-maturity securities 1,884 1,528 — 1,528 —

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

Loans held-for-sale 281 281 — 281 —

20 unchanged sentences

The following tables present the balance of assets measured at fair value on a recurring basis as of the dates indicated (in thousands):

Fair Value at September 30, 2025

Fair Value at March 31, 2026

Description Total Level 1 Level 2 Level 3

8 unchanged sentences

The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring basis as of the dates indicated:

September 30, 2025

March 31, 2026

Financial Instrument Valuation Technique Unobservable Input(s) Range

2 unchanged sentences

Discount rate 9.0 %- 13.5 % ( 10 %)

Average debt service cost per residential loan $ 96.00

December 31, 2025

3 unchanged sentences

Discount rate 9.0 %- 13.5 % ( 10 %)

Average debt service cost per residential loan $ 96.00

Generally, any significant increases in the prepayment speed assumption and discount rate utilized in the fair value measurement of the MSRs will result in a negative fair value adjustment (and decrease in the fair value measurement).

2 unchanged sentences

As a result of the difficulty in observing certain significant valuation inputs affecting our “Level 3” fair value assets, we are required to make judgments regarding these items’ fair values.

There were no assets or liabilities (excluding MSRs) measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and nine months ended September 30, 2025 and 2024.

There were no assets or liabilities (excluding MSRs) measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three months ended March 31, 2026 and 2025.

MSRs are measured at fair value using significant unobservable inputs (Level 3) on a recurring basis, and a reconciliation of these assets can be found in “Note 6—Mortgage Servicing Rights.

The following tables present the balance of assets measured at fair value on a nonrecurring basis at the dates indicated (in thousands):

Fair Value at September 30, 2025

Fair Value at March 31, 2026

Total Level 1 Level 2 Level 3

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

OREO and repossessed assets 99 — — 99

2 unchanged sentences

Total Level 1 Level 2 Level 3

OREO and repossessed assets $ 344 $ — $ — $ 344

Collateral dependent loans 5,934 — — 5,934

There were no liabilities carried at fair value, measured on a recurring or nonrecurring basis, at both September 30, 2025 and December 31, 2024.

There were no liabilities carried at fair value, measured on a recurring or nonrecurring basis at both March 31, 2026 and December 31, 2025.

Note 6 – Mortgage Servicing Rights

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $ 406.2 million at September 30, 2025 compared to $ 425.8 million at December 31, 2024.

Of these total balances, the unpaid principal balances of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at September 30, 2025 and December 31, 2024 were $ 404.1 million and $ 423.7 million, respectively.

The unpaid principal balance of loans serviced for other financial institutions totaled $ 2.1 million at both September 30, 2025 and December 31, 2024.

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $ 393.8 million at March 31, 2026 compared to $ 398.4 million at December 31, 2025.

Of these total balances, the unpaid principal balances of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at March 31, 2026 and December 31, 2025 were $ 392.1 million and $ 396.3 million, respectively.

The unpaid principal balance of loans serviced for other financial institutions totaled $ 1.8 million at March 31, 2026 compared to $ 2.0 million at December 31, 2025.

Loans serviced for Fannie Mae and others are not included in the Company’s financial statements as they are not assets of the Company.

A summary of the change in the balance of mortgage servicing assets during the periods indicated were as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Beginning balance, at fair value $ 4,183 $ 4,769

6 unchanged sentences

The key economic assumptions used in determining the fair value of mortgage servicing rights at the dates indicated are as follows:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Prepayment speed (Public Securities Association “PSA” model) 125 % 125 %

2 unchanged sentences

Average debt service cost per residential loan $ 96.00 $ 96.00

The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights, which are included in mortgage servicing income on the Condensed Consolidated Statements of Income, totaled $ 262 thousand and $ 794 thousand for three and nine months ended September 30, 2025, and $ 280 thousand and $ 841 thousand for the three and nine months ended September 30, 2024, respectively.

The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights, which are included in mortgage servicing income on the Condensed Consolidated Statements of Income, totaled $ 248 thousand and $ 269 thousand for three months ended March 31, 2026 and 2025, respectively.

Note 7 – Commitments and Contingencies

5 unchanged sentences

The following tables present advances from the FHLB as of the dates indicated (dollars in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

FHLB advances:

2 unchanged sentences

$ 10,000 $ 10,000

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Outstanding balance $ 10,000 $ 10,000

3 unchanged sentences

The following table presents the maturity of our FHLB advances (dollars in thousands):

September 30, 2025

March 31, 2026

Remainder of 2026 $ —

4 unchanged sentences

The following table presents the Company’s borrowing capacity from the FHLB as of the dates indicated:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Amount available to borrow under credit facility (1)

10 unchanged sentences

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 both September 30, 2025 and December 31, 2024, the Company had an investment of $ 1.7 million in FHLB of Des Moines stock.

At both March 31, 2026 and December 31, 2025, the Company had an investment of $ 1.1 million in FHLB of Des Moines stock.

Federal Reserve Bank of San Francisco (“FRB SF”) Borrowings

1 unchanged sentence

The terms of the agreement call for a blanket pledge of a portion of the Company’s consumer and commercial business loans based on the Company’s outstanding borrowing balance.

At September 30, 2025 and December 31, 2024, the amount available to borrow under this credit facility was $ 19.5 million and $ 20.8 million, respectively, subject to eligible pledged collateral.

The Company had no outstanding borrowings under this arrangement at September 30, 2025 and December 31, 2024.

At March 31, 2026 and December 31, 2025, the amount available to borrow under this credit facility was $ 19.1 million and $ 18.5 million, respectively, subject to eligible pledged collateral.

The Company had no outstanding borrowings under this arrangement at March 31, 2026 and December 31, 2025.

Other Borrowings

1 unchanged sentence

The line has a one year term maturing on June 30, 2026 and is renewable annually.

As of September 30, 2025, the amount available under this line of credit was $ 20.0 million.

There was no balance on this line of credit as of September 30, 2025 and December 31, 2024.

As of March 31, 2026, the amount available under this line of credit was $ 20.0 million.

There was no balance on this line of credit as of March 31, 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 have an initial fixed interest rate of 5.25 % to, but excluding, October 1, 2025, payable semi-annually in arrears.

From, and including, October 1, 2025, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to a benchmark rate, which is expected to be 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 may be redeemed by the Company, in whole or in part, on October 1, 2025, or on any subsequent interest payment date.

Prior to October 1, 2025, the Company could redeem these notes, in whole but not in part, only under limited circumstances set forth in the terms of the subordinated notes.

The balance of the subordinated notes was $ 11.8 million as of both September 30, 2025 and December 31, 2024.

Subsequent to quarter end on October 1, 2025, the Company redeemed $ 4.0 million of the $ 12.0 million of its subordinated notes outstanding.

Refer to “Note 11—Subsequent Events” for further detail.

The subordinated notes had an initial fixed interest rate of 5.25 % to, but excluding, October 1, 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 allowed.

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 March 31, 2026 and December 31, 2025.

Note 9 – Earnings Per Common Share

The following table summarizes the calculation of earnings per share for the periods indicated (in thousands, except per share data):

Three Months Ended Nine Months Ended

2025 2024 2025 2024

The following table summarizes the calculation of earnings per share for the periods indicated (dollars in thousands, except per share data):

Three Months Ended

Net income $ 1,576 $ 1,167

10 unchanged sentences

Earnings per share, diluted $ 0.61 $ 0.45

There were no anti-dilutive securities during the three and nine months ended September 30, 2025 and September 30, 2024.

There were no anti-dilutive securities during the three months ended March 31, 2026 and March 31, 2025.

Note 10 – Leases

We currently have operating leases for branch locations, a loan production office and our corporate office.

The term for our leases generally begins on the date we become legally obligated for the rent payments or we take possession of the building premises, whichever is earlier.

The term for our leases generally begins on the date we become legally obligated for the rent payments or we take possession of the building

premises, whichever is earlier.

Our real estate leases have initial terms ranging from one to 10.5 years and typically include one renewal option.

As of September 30, 2025, our leases had remaining terms ranging from 5 months to 4.7 years.

As of March 31, 2026, our leases had remaining terms ranging from 11 months to 4.2 years.

The operating leases require us to pay property taxes and operating expenses for the properties.

We also have finance leases for certain equipment, including copier machines which had an initial term of five years and a remaining term of approximately 4.25 years.

We also have finance leases for certain equipment, including copier machines, which had an initial term of five years and a remaining term of approximately 3.75 years as of March 31, 2026 .

During the three months ended March 31, 2026, we provided notice that our Tacoma branch would close in April 2026 as part of ongoing strategic consolidation efforts.

In connection with this closure, the lease was modified to a shorter term ending in the second quarter of 2026.

The modification resulted in the derecognition of $ 98 thousand in both our operating right-of-use asset and operating lease liability.

The following table presents the lease right-of-use assets and lease liabilities recorded on the Condensed Consolidated Balance Sheets at the dates indicated (in thousands):

September 30,

2026 December 31,

4 unchanged sentences

The following table presents the components of lease expense for the periods indicated (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Lease expense

6 unchanged sentences

The following table presents the schedule of lease liability payments at the date indicated (in thousands):

September 30, Finance Leases Operating Leases Total Lease Payments

2026 $ 29 $ 1,145 $ 1,174

March 31, Finance Leases Operating Leases Total Lease Payments

Remainder of 2026 $ 22 $ 849 $ 871

2027 29 1,083 1,112

5 unchanged sentences

Lease term and discount rate by lease type consisted of the following at the dates indicated:

September 30,

2026 December 31,

6 unchanged sentences

Supplemental cash flow information related to leases was as follows for the periods indicated (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities for operating leases:

5 unchanged sentences

Note 11 – Subsequent Events

On October 1, 2025, the Company redeemed $ 4.0 million of its $ 12.0 million of outstanding subordinated notes.

This transaction represented a partial redemption under the terms of the subordinated notes.

Refer to “Note—8 Borrowings” for additional information regarding the redemption parameters.

On October 28, 2025, the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.19 per common share, payable on November 21, 2025 to stockholders of record at the close of business on November 7, 2025.

On April 28, 2026, the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.21 per common share, payable on May 26, 2026 to stockholders of record at the close of business on May 11, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements