Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 10, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-35633 | ||
Entity Registrant Name | Sound Financial Bancorp, Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 45-5188530 | ||
Entity Address, Address Line One | 2400 3rd Avenue, | ||
Entity Address, Address Line Two | Suite 150, | ||
Entity Address, City or Town | Seattle, | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98121 | ||
City Area Code | 206 | ||
Local Phone Number | 448-0884 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | SFBC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 72.1 | ||
Entity Common Stock, Shares Outstanding | 2,623,466 | ||
Documents Incorporated by Reference | PART III of Form 10-K – Portions of the Registrant's Proxy Statement for its 2022 Annual Meeting of Stockholders. The 2022 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Entity Central Index Key | 0001541119 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Moss Adams LLP |
Auditor Location | Everett, Washington |
Auditor Firm ID | 659 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 183,590 | $ 193,828 |
Available-for-sale securities, at fair value | 8,419 | 10,218 |
Loans held-for-sale | 3,094 | 11,604 |
Loans held for portfolio | 686,398 | 613,363 |
Allowance for loan losses | (6,306) | (6,000) |
Total loans held for portfolio, net | 680,092 | 607,363 |
Accrued interest receivable | 2,217 | 2,254 |
Bank-owned life insurance ("BOLI"), net | 21,095 | 14,588 |
Other real estate owned ("OREO") and repossessed assets, net | 659 | 594 |
Mortgage servicing rights ("MSR"), at fair value | 4,273 | 3,780 |
Federal Home Loan Bank ("FHLB") stock, at cost | 1,046 | 877 |
Premises and equipment, net | 5,819 | 6,270 |
Lease right of use assets, net | 5,811 | 6,722 |
Other assets | 3,576 | 3,304 |
Total assets | 919,691 | 861,402 |
Deposits | ||
Interest-bearing | 607,854 | 615,491 |
Noninterest-bearing demand | 190,466 | 132,490 |
Total deposits | 798,320 | 747,981 |
Borrowings | 0 | 0 |
Accrued interest payable | 200 | 369 |
Lease liabilities | 6,242 | 7,134 |
Other liabilities | 8,571 | 7,674 |
Advance payments from borrowers for taxes and insurance | 1,366 | 1,168 |
Subordinated notes, net | 11,634 | 11,592 |
Total liabilities | 826,333 | 775,918 |
COMMITMENTS AND CONTINGENCIES (Notes 12 and 18) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 40,000,000 shares authorized, 2,613,768 and 2,592,587 issued and outstanding at December 31, 2021 and 2020, respectively | 26 | 25 |
Additional paid-in capital | 27,956 | 27,106 |
Unearned shares - Employee Stock Ownership Plan ("ESOP") | 0 | (113) |
Retained earnings | 65,237 | 58,226 |
Accumulated other comprehensive income, net of tax | 139 | 240 |
Total stockholders' equity | 93,358 | 85,484 |
Total liabilities and stockholders' equity | $ 919,691 | $ 861,402 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 2,613,768 | 2,592,587 |
Common stock, shares outstanding (in shares) | 2,613,768 | 2,592,587 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INTEREST INCOME | ||
Loans, including fees | $ 33,389 | $ 34,439 |
Interest and dividends on investments, cash and cash equivalents | 485 | 497 |
Total interest income | 33,874 | 34,936 |
INTEREST EXPENSE | ||
Deposits | 3,282 | 7,004 |
Borrowings | 0 | 255 |
Subordinated notes | 672 | 191 |
Total interest expense | 3,954 | 7,450 |
Net interest income | 29,920 | 27,486 |
PROVISION FOR LOAN LOSSES | 425 | 925 |
Net interest income after provision for loan losses | 29,495 | 26,561 |
NONINTEREST INCOME | ||
Service charges and fee income | 2,247 | 1,905 |
Earnings on cash surrender value of BOLI | 416 | 348 |
Mortgage servicing income | 1,284 | 1,027 |
Fair value adjustment on MSRs | (808) | (1,857) |
Net gain on sale of loans | 4,190 | 6,022 |
Total noninterest income | 7,329 | 7,445 |
NONINTEREST EXPENSE | ||
Salaries and benefits | 14,257 | 12,083 |
Operations | 5,765 | 5,461 |
Regulatory assessments | 379 | 590 |
Occupancy | 1,748 | 1,881 |
Data processing | 3,263 | 2,658 |
Net (gain)/loss and expenses on OREO and repossessed assets | (16) | 5 |
Total noninterest expense | 25,396 | 22,678 |
Income before provision for income taxes | 11,428 | 11,328 |
Provision for income taxes | 2,272 | 2,391 |
Net income | $ 9,156 | $ 8,937 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 3.52 | $ 3.46 |
Diluted (in dollars per share) | $ 3.46 | $ 3.42 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 2,582,775 | 2,562,650 |
Diluted (in shares) | 2,626,516 | 2,592,532 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 9,156 | $ 8,937 |
Available for sale securities: | ||
Unrealized (losses)/gains arising during the year | (128) | 82 |
Income tax benefit/(expense) related to unrealized losses/gains | 27 | (17) |
Other comprehensive (loss)/income, net of tax | (101) | 65 |
Comprehensive income | $ 9,055 | $ 9,002 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Unearned ESOP Shares | Retained Earnings | Accumulated Other Comprehensive Income, net of tax |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 2,567,389 | |||||
Balance, beginning of period at Dec. 31, 2019 | $ 77,726 | $ 25 | $ 26,343 | $ (227) | $ 51,410 | $ 175 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 8,937 | 8,937 | ||||
Other comprehensive (loss)/income, net of tax benefit | 65 | 65 | ||||
Share-based compensation | 338 | 338 | ||||
Restricted stock awards issued (in shares) | 13,600 | |||||
Cash dividends on common stock | $ (2,072) | (2,072) | ||||
Common stock repurchased (in shares) | (2,477) | (2,477) | ||||
Common stock repurchased | $ (73) | (24) | (49) | |||
Common stock surrendered (in shares) | (3,423) | |||||
Restricted shares forfeited (in shares) | (1,915) | |||||
Common stock options exercised (in shares) | 19,413 | |||||
Common stock options exercised | 239 | 239 | ||||
Allocation of ESOP shares | $ 324 | 210 | 114 | |||
Balance, end of period (in shares) at Dec. 31, 2020 | 2,592,587 | 2,592,587 | ||||
Balance, end of period at Dec. 31, 2020 | $ 85,484 | $ 25 | 27,106 | (113) | 58,226 | 240 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 9,156 | 9,156 | ||||
Other comprehensive (loss)/income, net of tax benefit | (101) | (101) | ||||
Share-based compensation | 360 | 360 | ||||
Restricted stock awards issued (in shares) | 10,168 | |||||
Cash dividends on common stock | $ (2,039) | (2,039) | ||||
Common stock repurchased (in shares) | (3,657) | (3,657) | ||||
Common stock repurchased | $ (152) | (46) | (106) | 0 | ||
Common stock surrendered (in shares) | (4,091) | |||||
Restricted shares forfeited (in shares) | (1,890) | |||||
Common stock options exercised (in shares) | 20,651 | |||||
Common stock options exercised | 182 | $ 1 | 181 | |||
Allocation of ESOP shares | $ 468 | 355 | 113 | |||
Balance, end of period (in shares) at Dec. 31, 2021 | 2,613,768 | 2,613,768 | ||||
Balance, end of period at Dec. 31, 2021 | $ 93,358 | $ 26 | $ 27,956 | $ 0 | $ 65,237 | $ 139 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends on common stock (in dollars per share) | $ 0.78 | $ 0.80 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 9,156 | $ 8,937 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Amortization of net discounts on investments | 134 | 160 |
Provision for loan losses | 425 | 925 |
Depreciation and amortization | 676 | 905 |
Compensation expense related to stock options and restricted stock | 360 | 338 |
Fair value adjustment on mortgage servicing rights | 808 | 1,857 |
Right of use assets amortization | 911 | 919 |
Change in lease liabilities | (892) | (876) |
Increase in cash surrender value of BOLI | (416) | (348) |
Net change in advances from borrowers for taxes and insurance | 198 | (137) |
Deferred income tax | (43) | 355 |
Net gain on sale of loans | (4,190) | (6,022) |
Proceeds from sale of loans held-for-sale | 150,325 | 258,531 |
Originations of loans held-for-sale | (138,926) | (265,448) |
Net gain on OREO and repossessed assets | (16) | 0 |
Change in operating assets and liabilities: | ||
Accrued interest receivable | 37 | (48) |
Other assets | (202) | 19 |
Accrued interest payable | (169) | 143 |
Other liabilities | 897 | (694) |
Net cash provided by (used in) operating activities | 19,073 | (484) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of available-for-sale securities | (1,950) | (8,889) |
Proceeds from principal payments, maturities and sales of available-for-sale securities | 3,529 | 7,909 |
Net increase in loans | (73,238) | 5,940 |
Purchase of BOLI | (6,091) | (57) |
Purchases of premises and equipment, net | (225) | (407) |
Proceeds from sale of OREO and other repossessed assets | 35 | 0 |
Net cash (used in) provided by investing activities | (77,940) | 4,496 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase in deposits | 50,339 | 131,263 |
Proceeds from borrowings | 0 | 174,291 |
Repayment of borrowings | 0 | (181,791) |
Proceeds from subordinated notes, net | 0 | 11,582 |
FHLB stock purchased | (169) | 283 |
Common stock repurchases | (152) | (73) |
Allocation of ESOP shares | 468 | 324 |
Dividends paid on common stock | (2,039) | (2,072) |
Proceeds from common stock option exercises | 182 | 239 |
Net cash provided by financing activities | 48,629 | 134,046 |
Net change in cash and cash equivalents | (10,238) | 138,058 |
Cash and cash equivalents, beginning of period | 193,828 | 55,770 |
Cash and cash equivalents, end of period | 183,590 | 193,828 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 2,895 | 1,960 |
Interest paid on deposits, borrowings and subordinated debt | 4,123 | 7,307 |
Loans transferred from loans held-for-portfolio to OREO and repossessed assets | 84 | 19 |
Noncash transfer from assets in process to premises and equipment | $ 144 | $ 692 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Sound Financial Bancorp, a Maryland corporation ("Sound Financial Bancorp" or the "Company"), is the parent holding company for its wholly owned subsidiary, Sound Community Bank (the "Bank") and the Bank's wholly-owned subsidiary, Sound Community Insurance Agency, Inc. Substantially all of Sound Financial Bancorp's business is conducted through Sound Community Bank, a Washington state-chartered commercial bank. As a Washington commercial bank, the Bank's regulators are the Washington State Department of Financial Institutions ("WDFI") and the Federal Deposit Insurance Corporation ("FDIC"). The Board of Governors of the Federal Reserve System ("Federal Reserve") is the primary federal regulator for Sound Financial Bancorp. The Company’s business activities generally are limited to passive investment activities and oversight of its investment in the Bank. Accordingly, the information set forth in this report relates primarily to the Bank. Subsequent events – The Company has evaluated subsequent events for potential recognition and disclosure. See "Note 21—Subsequent Events" for further information. Basis of Presentation and Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair value of MSRs, valuations of impaired loans and OREO, and the realization of deferred taxes. The accompanying consolidated financial statements include the accounts of Sound Financial Bancorp and its wholly-owned subsidiaries, Sound Community Bank and Sound Community Insurance Agency, Inc. All significant intercompany balances and transactions between Sound Financial Bancorp and its subsidiaries have been eliminated in consolidation. Cash and cash equivalents – For purposes of reporting cash flows, cash and cash equivalents include cash on hand and in banks and interest-bearing deposits. All have original maturities of three months or less and may exceed federally insured limits. Investment securities – Investment securities are classified into one of three categories: (1) held-to-maturity, (2) available-for-sale or (3) trading. The Company had no held-to-maturity or trading securities at December 31, 2021 or 2020. Available-for-sale securities consist of debt securities that the Company has the intent and ability to hold for an indefinite period, but not necessarily to maturity. Such securities may be sold to implement the Company's asset/liability management strategies and/or in response to changes in interest rates and similar factors. Available-for-sale securities are reported at fair value. Dividend and interest income are recognized when earned. Unrealized gains and losses, net of the related deferred tax effect, are reported as a net amount in accumulated other comprehensive income (loss) on available-for-sale securities in the consolidated balance sheets. Realized gains and losses on available-for-sale securities, determined using the specific identification method, are included in earnings. Amortization of premiums and accretion of discounts are recognized as adjustments to interest income using the interest method over the period to the earlier of call date or maturity. The Company reviews investment securities on an ongoing basis for the presence of other-than-temporary impairment ("OTTI") or permanent impairment, taking into consideration current market conditions, fair value in relation to cost, extent and nature of the change in fair value, issuer rating changes and trends, whether the Company intends to sell a security or if it is likely that the Company will be required to sell the security before recovery of its amortized cost basis of the investment, which may be maturity, and other factors. For debt securities, if the Company intends to sell the security or it is likely that it will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If the Company does not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and the fair value, is recognized as a charge to other comprehensive income. The Company does not intend to sell these securities and it is more likely than not that it will not be required to sell the securities before anticipated recovery of the remaining amortized cost basis. The Company closely monitors its investment securities for changes in credit risk. Loans held-for-sale – To mitigate interest-rate sensitivity, from time to time, certain fixed-rate mortgage loans are identified as held-for-sale in the secondary market. Accordingly, such loans are classified as held-for-sale in the consolidated balance sheets and are carried at the lower of cost or estimated fair market value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Mortgage loans held-for-sale are generally sold with the mortgage servicing rights retained by the Company. Gains or losses on sales of loans are recognized based on the difference between the selling price and the carrying value of the related loans sold based on the specific identification method. Loans – The Company grants mortgage, commercial, and consumer loans to clients. A substantial portion of the loan portfolio is represented by loans secured by real estate located throughout the Puget Sound region, especially King, Snohomish and Pierce Counties, and in Clallam and Jefferson Counties of Washington State. The ability of the Company's debtors to honor their contracts is dependent upon employment, real estate and general economic conditions in these areas. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balance adjusted for any charge-offs, allowance for loan losses, and any deferred fees or costs on origination of loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method over the contractual life of the loan for term loans or the straight-line method for open-ended loans. The accrual of interest is discontinued at the time the loan is 90 days past due or if, in management's opinion, the borrower may be unable to meet payment of obligations as they become due, as well as when required by regulatory provisions. Loans are typically charged off no later than 120 days past due, unless secured by collateral. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current, future payments are reasonably assured and payments have been received for six A loan is considered impaired when it is probable that the Company will be unable to collect all amounts (principal and interest) due according to the contractual terms of the original loan agreement. When a loan has been identified as being impaired, the amount of the impairment is measured by using discounted cash flows, except when, as a practical expedient, the current fair value of the collateral, reduced by costs to sell, is used. When the measurement of the impaired loan is less than the recorded investment in the loan (including accrued interest), impairment is recognized by charging off the impaired portion or creating or adjusting a specific allocation of the allowance for loan losses. The Company recognizes interest income on impaired loans, including cash receipts, based on its existing methods of recognizing interest income on nonaccrual loans. A loan is classified as a troubled debt restructuring ("TDR") when certain concessions have been made to the contractual terms, such as reductions of interest rates or deferrals of interest or principal payments due to the borrower's deteriorated financial condition. All TDRs are reported and accounted for as impaired loans. In March 2020, the Company began offering short-term loan modifications to assist borrowers during the novel coronavirus disease 2019 ("COVID-19") pandemic. The Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and related bank regulatory guidance provides that a short-term modification made in response to COVID-19 and which meets certain criteria does not need to be placed on nonaccrual status or accounted for as a TDR, pursuant to applicable accounting and regulatory guidance until the earlier of 60 days after the national emergency termination date or January 1, 2022. At December 31, 2021, there were two one-to-four family residential loans totaling $64 thousand operating under forbearance agreements due to COVID-19. Since these loans were performing loans that were current on their payments prior to the COVID-19 pandemic, these modifications are not considered TDRs pursuant to applicable accounting and regulatory guidance until January 1, 2022. The Company continues to monitor these loans through its normal credit risk processes. Allowance for loan losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to expense and represents management's best estimate of probable losses incurred within the existing loan portfolio as of the balance sheet date. The level of the allowance reflects management's view of trends in loan loss activity, current loan portfolio quality and present economic, political and regulatory conditions. Portions of the allowance may be allocated for specific loans; however, the allowance is available for any loan that is charged off. The allowance is increased by provisions charged to earnings and by recoveries of amounts previously charged off, and is reduced by charge-offs on loans (or portions thereof) deemed to be uncollectible. Loan charge-offs are recognized when management believes the collectability of the principal balance outstanding is unlikely. Full or partial charge-offs on collateral dependent impaired loans are generally recognized when the collateral is deemed to be insufficient to support the carrying value of the loan. The allowance for loan losses is maintained at a level sufficient to provide for probable credit losses based upon evaluating known and inherent risks in the loan portfolio. The allowance is provided based upon management's continuing analysis of the pertinent factors underlying the quality of the loan portfolio. These factors include changes in the size and composition of the loan portfolio, delinquency levels, actual loan loss experience, current economic conditions, and detailed analysis of individual loans for which full collectability may not be assured. The detailed analysis includes techniques to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The allowance consists of specific, general and unallocated components. The general component of the allowance for loan losses covers non-impaired loans and is determined using a formula-based approach. The formula first incorporates either the historical loss rates of the Company or the historical loss rates of its peer group if minimal loss history exists. This historical loss rate factor is then adjusted for qualitative factors. Qualitative factors are used to estimate losses related to factors that are not captured in the historical loss rates and are based on management’s evaluation of available internal and external data and involve significant management judgement. Qualitative factors include changes in lending standards, changes in economic conditions, changes in the nature and volume of loans, changes in lending management, changes in delinquencies, changes in the loan review system, changes in the value of collateral, the existence of concentrations, and the impact of other external factors. Finally, the general component of the allowance for loan losses is adjusted for changes in the assigned grades of loans, which include the following: pass, watch, special mention, substandard, doubtful, and loss. As loans are downgraded from watch to the lower categories, they are assigned an additional factor to account for the increased credit risk. Loan grades involve significant management judgment. For such loans that are also classified as impaired, a specific component within the allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan are lower than the carrying value of that loan. An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. The Company considers installment loans to be pools of smaller balance, homogenous loans that are collectively evaluated for impairment, unless such loans are subject to a TDR agreement. The appropriateness of the allowance for loan losses is estimated based upon those factors and trends identified by management at the time consolidated financial statements are prepared. When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the allowance for loan losses. The existence of some or all of the following criteria will generally confirm that a loss has been incurred: the loan is significantly delinquent and the borrower has not demonstrated the ability or intent to bring the loan current; the Company has no recourse to the borrower, or if it does, the borrower has insufficient assets to pay the debt; the estimated fair value of the loan collateral is significantly below the current loan balance, and there is little or no near-term prospect for improvement. The ultimate recovery of all loans is susceptible to future market factors beyond the Company's control. These factors may result in losses or recoveries differing significantly from those provided in the consolidated financial statements. Transfers of financial assets – Transfers of an entire financial asset, or a participating interest in an entire financial asset, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Mortgage servicing rights – MSRs represent the value associated with servicing residential mortgage loans, when the mortgage loans have been sold into the secondary market and the related servicing has been retained by the Company. The Company may also purchase MSRs. The value is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. The Company measures its mortgage servicing assets at fair value and reports changes in fair value through earnings under the caption fair value adjustment on MSRs in other income in the period in which the change occurs. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimates and actual prepayment speeds and default rates and losses. Currently, we do not hedge the effects of changes in fair value of our servicing assets. Premises and equipment – Premises, leasehold improvements and furniture and equipment are carried at cost, less accumulated depreciation and amortization. Furniture and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 1 to 10 years. The cost of leasehold improvements is amortized using the straight-line method over the terms of the related leases. The cost of premises is amortized using the straight-line method over the estimated useful life of the building, up to 39 years. Management reviews premises, leasehold improvements and furniture and equipment for impairment when factors exist indicating potential impairment. Bank-owned life insurance, net – The carrying amount of BOLI approximates its fair value, and is estimated using the cash surrender value, net of any surrender charges. Federal Home Loan Bank stock – The Company is a member of the FHLB of Des Moines. FHLB stock represents the Company's investment in the FHLB and is carried at par value, which reasonably approximates its fair value. As a member of the FHLB, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets, or FHLB advances. At December 31, 2021 and 2020, the Company's minimum required investment in FHLB stock was $1.0 million and $877 thousand, respectively. Typically, the Company may request redemption at par value of any stock in excess of the minimum required investment. Stock redemptions are at the discretion of the FHLB. Other real estate owned and repossessed assets – OREO and repossessed assets represent real estate and other assets which the Company has taken control of in partial or full satisfaction of loans. At the time of foreclosure, OREO and repossessed assets are recorded at fair value less estimated costs to sell, which becomes the new basis. Any write-downs based on the asset's fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the property is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Revenue and expenses from operations and subsequent adjustments to the carrying amount of the property are included in other noninterest expense in the consolidated statements of income. In some instances, the Company may make loans to facilitate the sales of OREO. Management reviews all sales for which it is the lending institution. Any gains related to sales of other real estate owned may be deferred until the buyer has a sufficient investment in the property. Leases – We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets and operating lease liabilities in our consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Additionally, for equipment leases, we apply a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities. The Company has not entered into leases that meet the definition of a financing lease. Income Taxes – Income taxes are accounted for using the asset and liability method. Under this method a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company's income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not, that all or some portion of the potential deferred tax asset will not be realized. Segment reporting – The Company operates in one segment and makes management decisions based on consolidated results. The Company's operations are solely in the financial services industry and include providing to its clients traditional banking and other financial services. Off-balance-sheet credit-related financial instruments – In the normal course of operations, the Company engages in a variety of financial transactions that are not recorded in our financial statements. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. These transactions are used primarily to manage customers' requests for funding and take the form of loan commitments, letters of credit and lines of credit. Such financial instruments are recorded when they are funded. The Company also maintains a separate allowance for off-balance sheet credit commitments. Management estimates anticipated losses using historical data and utilization assumptions. The allowance for off-balance sheet credit commitments totaled $405 thousand and $256 thousand at December 31, 2021 and 2020 and is included in other liabilities on the consolidated balance sheets. Advertising costs – The Company expenses advertising costs as they are incurred. Advertising costs, including other marketing expenses were $415 thousand and $249 thousand for the years ended December 31, 2021 and 2020, respectively. Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale investments, are reported as a separate component of the equity section of the consolidated balance sheets, net of tax. Such items, along with net income, are components of comprehensive income. Intangible assets – At December 31, 2021 and 2020, the Company had $97 thousand and $128 thousand, respectively, of identifiable intangible assets included in other assets as a result of the acquisition of deposits from other institutions. These assets are amortized using the straight-line method over a period of eight Employee stock ownership plan – The Company sponsors a internally-leveraged ESOP. As shares are committed to be released, compensation expense is recorded equal to the market price of the shares, and the shares become outstanding for purposes of earnings per share calculations. Cash dividends on allocated shares (those credited to ESOP participants' accounts) are recorded as a reduction of stockholders' equity and distributed directly to participants' accounts. Cash dividends on unallocated shares (those held by the ESOP not yet credited to participants' accounts) are used to pay administrative expenses and debt service requirements of the ESOP. See "Note 14—Employee Benefits" for further information. Unearned ESOP shares are shown as a reduction of stockholders' equity. When the shares are released, unearned common shares held by the ESOP are reduced by the cost of the ESOP shares released and the differential between the fair value and the cost is charged to additional paid in capital. The loan receivable from the ESOP to the Company is not reported as an asset nor is the debt of the ESOP reported as a liability on the Company's consolidated statements of condition. Earnings Per Common Share – Earnings per share is computed using the two-class method. Basic earnings per share is computed by dividing net income available to common shares by the weighted average number of common shares outstanding during the period, excluding any participating securities. Participating securities include unvested restricted shares. Unvested restricted shares are considered participating securities because holders of these securities receive non-forfeitable dividends at the same rate as the holders of the Company's common stock. Diluted earnings per share is computed by dividing net income available to common stockholders adjusted for reallocation of undistributed earnings of unvested restricted shares by the weighted average number of common shares determined for the basic earnings per share plus the dilutive effect of common stock equivalents using the treasury stock method based on the average market price for the period. Some stock options are anti-dilutive and therefore are not included in the calculation of diluted earnings per share. Fair value – Fair value is the price that would be received when an asset is sold or a liability is transferred in an orderly transaction between market participants at the measurement date. Fair values of the Company's financial instruments are based on the fair value hierarchy which requires an entity to maximize the use of observable inputs, typically market data obtained from third parties, and minimize the use of unobservable inputs, which reflects its estimates for market assumptions, when measuring fair value. Three levels of valuation inputs are ranked in accordance with the prescribed fair value hierarchy as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Assets or liabilities whose significant value drivers are unobservable. In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to fair value measurements. In certain cases, the inputs used to measure fair value of an asset or liability may fall into different levels of the fair value hierarchy. The level within which the fair value measurement is categorized is based on the lowest level unobservable input that is significant to the fair value measurement in its entirety. Therefore, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. Share-Based Compensation – The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. These costs are recognized on a straight-line basis over the vesting period during which an employee is required to provide services in exchange for the award, also known as the requisite service period. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted. When determining the estimated fair value of stock options granted, the Company utilizes various assumptions regarding the expected volatility of the stock price, the risk-free interest rate for periods within the contractual life of the stock option, and the |
Accounting Pronouncements Recen
Accounting Pronouncements Recently Issued or Adopted | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Pronouncements Recently Issued or Adopted | Accounting Pronouncements Recently Issued or Adopted The Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), signed into law on March 27, 2020, provides relief from certain accounting and financial reporting requirements under U.S. GAAP. Section 4013 of the CARES Act provides temporary relief from the accounting and reporting requirements for troubled debt restructurings (“TDRs”) under Accounting Standards Codification ("ASC") 310-40 for loan modifications related to the novel coronavirus disease 2019 ("COVID-19") pandemic. In addition, on April 7, 2020, a group of banking agencies issued an interagency statement (“Interagency Statement”) for evaluating whether loan modifications that occur in response to the COVID-19 pandemic are TDRs. The Interagency Statement was originally issued on March 22, 2020, but the banking agencies revised it to address the relationship between their TDR accounting and disclosure guidance and the TDR guidance in Section 4013 of the CARES Act. Section 4013 of the CARES Act permits the suspension of ASC 310-40 for loan modifications that are made by financial institutions in response to the COVID-19 pandemic if (1) the borrower was not more than 30 days past due as of December 31, 2019, and (2) the modifications are related to arrangements that defer or delay the payment of principal or interest, or change the interest rate on the loan. The Interagency Statement indicates that a lender can conclude that a borrower is not experiencing financial difficulty if either (1) short-term (e.g., six months) modifications are made in response to COVID-19, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant related to loans in which the borrower is less than 30 days past due on its contractual payments at the time a modification program is implemented, or (2) the modification or deferral program is mandated by the federal government or a state government. Accordingly, any loan modification made in response to the COVID-19 pandemic that meets either of these practical expedients would not be considered a TDR. The Company adopted this guidance effective March 27, 2020. On December 27, 2020, the Consolidated Appropriations Act 2021 (“CAA 2021”) was signed into law. Among other purposes, CAA 2021 provides coronavirus emergency response and relief, including extending relief offered under the CARES Act related to restructured loans as a result of COVID-19 through January 1, 2022 or 60 days after the end of the national emergency declared by the President, whichever is earlier. In October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-08, “ Receivables – Nonrefundable Fees and Other Costs ” (“ASU 2020-08”). ASU 2020-08 clarifies that the Company should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. ASU 2020-08 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this ASU effective January 1, 2021. The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements. On March 2020, the FASB issued ASU No. 2020-04, " Reference Rate Reform" ("Topic 848"). This ASU applies to contracts, hedging relationships, and other transactions that reference LIBOR or other rate references expected to be discontinued because of reference rate reform. The ASU permits an entity to make necessary modifications to eligible contracts or transactions without requiring contract re-measurement or reassessment of a previous accounting determination. In January 2021, ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. A portion of the Bank’s commercial real estate loans and its interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee.This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by removing the exception to the incremental approach for intra- period tax allocation when there is a loss from continuing operations and income or a gain from other items, removing the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, and removing the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Disclosure requirements removed from FASB Subtopic 715-20 include the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, the amount and timing of plan assets expected to be returned to the employer, related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, and, for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs and benefit obligation for postretirement health care benefits. Disclosure requirements added to FASB Subtopic 715-20 include the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This ASU is effective for fiscal years ending after December 15, 2020. The Company adopted this ASU effective January 1, 2021. The adoption of ASU No. 2018-14 did not have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology where loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The income statement would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. The new guidance may result in an increase in the allowance for loan losses; however, the Company is still in the process of determining the magnitude of the change and its impact on the Company's consolidated financial statements. The FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326) , delaying implementation of ASU No. 2016-13 for SEC smaller reporting company filers until fiscal years beginning after December 15, 2022. The Bank meets the requirements of a smaller reporting company and will delay implementation of ASU No. 2016-13. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted CashFederal Reserve System ("Federal Reserve") regulations require that the Company maintain certain minimum reserve balances either as cash on hand or on deposit with the Federal Reserve Bank, based on a percentage of deposits. In March 2020, the Federal Reserve announced that it would be reducing the reserve requirement for all depository institutions to zero percent effective March 26, 2020. The Company' reserve balances were zero at December 31, 2021 and 2020, respectively. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The amortized cost and fair value of available-for-sale securities and the corresponding amounts of gross unrealized gains and losses at December 31, 2021 and 2020 were as follows (in thousands): Amortized Gross Gross Estimated December 31, 2021 Municipal bonds $ 5,931 $ 148 $ (13) $ 6,066 Agency mortgage-backed securities 2,312 53 (12) 2,353 Total available-for-sale securities $ 8,243 $ 201 $ (25) $ 8,419 December 31, 2020 Municipal bonds $ 5,209 $ 204 $ — $ 5,413 Agency mortgage-backed securities 4,706 105 (6) 4,805 Total available-for-sale securities $ 9,915 $ 309 $ (6) $ 10,218 The following table details the amortized cost and fair value of available-for-sale securities at December 31, 2021, by contractual maturity (in thousands). Expected maturities of available-for-sale 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, primarily mortgage-backed securities, are shown separately. December 31, 2021 Amortized Fair Weighted-Average Yield Due within one year $ 260 $ 266 3.80 % Due in one to five years 151 160 2.58 Due after five to ten years 1,226 1,319 5.27 Due after ten years 4,294 4,321 2.68 Mortgage-backed securities 2,312 2,353 1.81 Total $ 8,243 $ 8,419 3.12 % There were no pledged securities at December 31, 2021 and 2020. There were no sales of available-for-sale securities during the years ended December 31, 2021 and 2020. The following tables summarize the aggregate fair value and gross unrealized loss by length of time of those investments that have been in a continuous unrealized loss position at December 31, 2021 and 2020 (in thousands): December 31, 2021 Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Municipal bonds $ 1,632 $ (13) $ — $ — $ 1,632 $ (13) Agency mortgage-backed securities $ — $ — $ 402 $ (12) $ 402 $ (12) Total $ 1,632 $ (13) $ 402 $ (12) $ 2,034 $ (25) December 31, 2020 Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Agency mortgage-backed securities $ 1,618 $ (6) $ — $ — $ 1,618 $ (6) Total $ 1,618 $ (6) $ — $ — $ 1,618 $ (6) There were no credit losses recognized in earnings during the years ended December 31, 2021 and 2020 relating to the Company's securities. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Loans | Loans The composition of the loan portfolio, excluding loans held-for-sale, at December 31, 2021 and 2020 is as follows (in thousands): December 31, 2021 2020 Real estate loans: One-to-four family $ 207,660 $ 130,657 Home equity 13,250 16,265 Commercial and multifamily 278,175 265,774 Construction and land 63,105 62,752 Total real estate loans 562,190 475,448 Consumer loans: Manufactured homes 21,636 20,941 Floating homes 59,268 39,868 Other consumer 16,748 15,024 Total consumer loans 97,652 75,833 Commercial business loans 28,026 64,217 Total loans 687,868 615,498 Premiums for purchased loans (1) 897 — Deferred fees (2,367) (2,135) Total loans, gross 686,398 613,363 Allowance for loan losses (6,306) (6,000) Total loans, net $ 680,092 $ 607,363 (1) Includes premiums of $556 thousand related to one-to-four family loans, $181 thousand related to commercial and multifamily loans, and $160 thousand related to commercial business loans as of December 31, 2021. The Company was automatically authorized to participate in the Small Business Administration's (“SBA”) Paycheck Protection Program (“PPP”) as a qualified U.S. SBA lender. The Bank began originating PPP loans following the enactment of the CARES Act in April 2020. PPP loans are fully guaranteed by the SBA, intended for businesses impacted by the COVID-19 pandemic and designed to provide near term relief to help small businesses sustain operations. These loans have either a two-year or five-year maturity date and earn interest at 1%. The Bank also earns a fee based on the size of the loan, which is recognized over the life of the loan. Through December 31, 2021, the Bank had funded PPP loans totaling $119.2 million, $4.2 million of which remained outstanding at December 31, 2021. PPP loans are included in commercial business loans above. During the year ended December 31, 2021, the Company purchased $24.1 million of one-to-four family real estate loans and $4.3 million of commercial business participations with the United States Department of Agriculture. The Company purchased no loans during the year ended December 31, 2020. The following table presents the balance in the allowance for loan losses and the unpaid principal balance in loans, net of partial charge-offs by portfolio segment and based on impairment method at December 31, 2021 (in thousands): Allowance: Individually Evaluated for Impairment Allowance: Collectively Evaluated for Impairment Ending Balance Loans Held for Investment: Individually Evaluated for Impairment Loans Held for Investment: Collectively Evaluated for Impairment Ending Balance One-to-four family $ 112 $ 1,290 $ 1,402 $ 4,066 $ 203,594 $ 207,660 Home equity 7 86 93 215 13,035 13,250 Commercial and multifamily — 2,340 2,340 2,380 275,795 278,175 Construction and land 4 646 650 68 63,037 63,105 Manufactured homes 144 331 475 221 21,415 21,636 Floating homes — 372 372 493 58,775 59,268 Other consumer 26 284 310 106 16,642 16,748 Commercial business — 269 269 176 27,850 28,026 Unallocated — 395 395 — — — Total $ 293 $ 6,013 $ 6,306 $ 7,725 $ 680,143 $ 687,868 The following table presents the balance in the allowance for loan losses and the unpaid principal balance in loans, net of partial charge-offs by portfolio segment and based on impairment method at December 31, 2020 (in thousands): Allowance: Individually Evaluated for Impairment Allowance: Collectively Evaluated for Impairment Ending Balance Loans Held for Investment: Individually Evaluated for Impairment Loans Held for Investment: Collectively Evaluated for Impairment Ending Balance One-to-four family $ 165 $ 898 $ 1,063 $ 3,705 $ 126,952 $ 130,657 Home equity 14 133 147 293 15,972 16,265 Commercial and multifamily — 2,370 2,370 353 265,421 265,774 Construction and land 6 572 578 77 62,675 62,752 Manufactured homes 163 366 529 265 20,676 20,941 Floating homes — 328 328 518 39,350 39,868 Other consumer 30 258 288 114 14,910 15,024 Commercial business — 291 291 615 63,602 64,217 Unallocated — 406 406 — — — Total $ 378 $ 5,622 $ 6,000 $ 5,940 $ 609,558 $ 615,498 The following table summarizes the activity in the allowance for loan losses for the year ended December 31, 2021 (in thousands): Beginning Charge-offs Recoveries (Recapture)/ Provision Ending One-to-four family $ 1,063 $ (76) $ — $ 415 $ 1,402 Home equity 147 (8) 6 (52) 93 Commercial and multifamily 2,370 — — (30) 2,340 Construction and land 578 — — 72 650 Manufactured homes 529 (2) 3 (55) 475 Floating homes 328 — — 44 372 Other consumer 288 (50) 6 66 310 Commercial business 291 — 2 (24) 269 Unallocated 406 — — (11) 395 $ 6,000 $ (136) $ 17 $ 425 $ 6,306 The following table summarizes the activity in the allowance for loan losses for the year ended December 31, 2020 (in thousands): Beginning Charge-offs Recoveries (Recapture)/ Provision Ending One-to-four family $ 1,120 $ (20) $ 63 $ (100) $ 1,063 Home equity 178 (2) 46 (75) 147 Commercial and multifamily 1,696 — — 674 2,370 Construction and land 492 — — 86 578 Manufactured homes 480 — 2 47 529 Floating homes 283 — — 45 328 Other consumer 112 (48) 14 210 288 Commercial business 331 (620) — 580 291 Unallocated 948 — — (542) 406 $ 5,640 $ (690) $ 125 $ 925 $ 6,000 Credit Quality Indicators. Federal regulations provide for the classification of lower quality assets as substandard, doubtful or loss. An asset is considered substandard if it is inadequately protected by the current net worth and payment capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in assets classified substandard with the added characteristic that the weaknesses make collection or liquidation of the assets in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without establishment of a specific loss reserve is not warranted. When the Company classifies problem loans as either substandard or doubtful, it may establish a specific allowance in an amount we deem prudent to address the risk specifically (if the loan is impaired) or it may allow the loss to be addressed in the general allowance (if the loan is not impaired). General allowances represent loss reserves which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been specifically allocated to particular problem assets. When the Company classifies problem loans as a loss, it charges-off such loans in the period in which they are deemed uncollectible. Assets that do not currently expose the Company to sufficient risk to warrant classification as substandard or doubtful but possess identified weaknesses are classified as either watch or special mention loans. Determination as to the classification of our assets and the amount of our valuation allowances is subject to review by the FDIC, the Bank's federal regulator, and the WDFI, the Bank's state banking regulator, both of whom can order the establishment of additional loss allowances. Pass rated loans are loans that are not otherwise classified or criticized. The following table represents the internally assigned grades at December 31, 2021, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Grade: Pass $ 203,883 $ 12,904 $ 233,300 $ 56,310 $ 21,137 $ 58,171 $ 16,728 $ 23,713 $ 626,146 Watch 363 23 32,770 4,347 305 — — 3,561 41,369 Special Mention — — 4,553 830 — 604 — 211 6,198 Substandard 3,414 323 7,552 1,618 194 493 20 541 14,155 Doubtful — — — — — — — — — Loss — — — — — — — — — Total $ 207,660 $ 13,250 $ 278,175 $ 63,105 $ 21,636 $ 59,268 $ 16,748 $ 28,026 $ 687,868 The following table represents the internally assigned grades at December 31, 2020, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Grade: Pass $ 113,185 $ 15,556 $ 228,652 $ 44,360 $ 19,606 $ 38,746 $ 15,000 $ 56,743 $ 531,848 Watch 15,142 245 22,945 13,808 1,115 604 — 5,202 59,061 Special Mention — — 10,813 3,939 — — — 310 15,062 Substandard 2,330 464 3,364 645 220 518 24 1,962 9,527 Doubtful — — — — — — — — — Loss — — — — — — — — — Total $ 130,657 $ 16,265 $ 265,774 $ 62,752 $ 20,941 $ 39,868 $ 15,024 $ 64,217 $ 615,498 Nonaccrual and Past Due Loans . Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual once the loan is 90 days past due or sooner if, in management's opinion, the borrower may be unable to meet payment of obligations as they become due, as well as when required by regulatory provisions. The following table presents the recorded investment in nonaccrual loans at December 31, 2021 and 2020, by type of loan (in thousands): December 31, 2021 2020 One-to-four family $ 2,207 $ 1,668 Home equity 140 156 Commercial and multifamily 2,380 353 Construction and land 33 40 Manufactured homes 122 149 Floating homes 493 518 Commercial business 176 — Total $ 5,552 $ 2,884 The following table represents the aging of the recorded investment in past due loans (excluding COVID-19 modified loans) at December 31, 2021, by type of loan (in thousands): 30-59 Days 60-89 Days Greater than 90 Recorded Investment Total Current Total One-to-four family $ 1,805 $ 58 $ 87 $ — $ 1,950 $ 205,710 $ 207,660 Home equity — — 140 — 140 13,110 13,250 Commercial and multifamily — — — — — 278,175 278,175 Construction and land 837 — — — 837 62,268 63,105 Manufactured homes 123 — 59 — 182 21,454 21,636 Floating homes — — 244 — 244 59,024 59,268 Other consumer 2 76 — — 78 16,670 16,748 Commercial business 6 — 176 — 182 27,844 28,026 Total $ 2,773 $ 134 $ 706 $ — $ 3,613 $ 684,255 $ 687,868 The following table represents the aging of the recorded investment in past due loans (excluding COVID-19 modified loans) at December 31, 2020, by type of loan (in thousands): 30-59 Days 60-89 Days Greater Than 90 Recorded Investment Total Current Total One-to-four family $ 498 $ 362 $ 1,407 $ — $ 2,267 $ 128,390 $ 130,657 Home equity 102 — 112 — 214 16,051 16,265 Commercial and multifamily — — 353 — 353 265,421 265,774 Construction and land 690 — 40 — 730 62,022 62,752 Manufactured homes 159 74 149 — 382 20,559 20,941 Floating homes — 269 249 — 518 39,350 39,868 Other consumer 15 1 — — 16 15,008 15,024 Commercial business 583 — — — 583 63,634 64,217 Total $ 2,047 $ 706 $ 2,310 $ — $ 5,063 $ 610,435 $ 615,498 Nonperforming Loans. Loans are considered nonperforming when they are placed on nonaccrual. The following table represents the credit risk profile based on payment activity at December 31, 2021, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Performing $ 205,453 $ 13,110 $ 275,795 $ 63,072 $ 21,514 $ 58,775 $ 16,748 $ 27,850 $ 682,316 Nonperforming 2,207 140 2,380 33 122 493 — 176 5,552 Total $ 207,660 $ 13,250 $ 278,175 $ 63,105 $ 21,636 $ 59,268 $ 16,748 $ 28,026 $ 687,868 The following table represents the credit risk profile based on payment activity at December 31, 2020, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Performing $ 128,989 $ 16,109 $ 265,421 $ 62,712 $ 20,792 $ 39,350 $ 15,024 $ 64,217 $ 612,614 Nonperforming 1,668 156 353 40 149 518 — — 2,884 Total $ 130,657 $ 16,265 $ 265,774 $ 62,752 $ 20,941 $ 39,868 $ 15,024 $ 64,217 $ 615,498 Impaired Loans . A loan is considered impaired when it is determined that the Company may not be able to collect payments of principal or interest when due under the terms of the loan. In the process of identifying loans as impaired, the Company takes into consideration factors which include payment history and status, collateral value, financial condition of the borrower, and the probability of collecting scheduled payments in the future. Minor payment delays and insignificant payment shortfalls typically do not result in a loan being classified as impaired. The significance of payment delays and shortfalls is considered on a case-by-case basis, after taking into consideration the totality of circumstances surrounding the loan and the borrower, including payment history. Impairment is measured on a loan-by-loan basis for all loans in the portfolio. All TDRs are also classified as impaired loans and are included in the loans individually evaluated for impairment in the calculation of the allowance for loan losses. Impaired loans at December 31, 2021 and 2020, by type of loan were as follows (in thousands): December 31, 2021 Recorded Investment Unpaid Principal Without With Total Related One-to-four family $ 4,177 $ 3,109 $ 957 $ 4,066 $ 112 Home equity 215 140 75 215 7 Commercial and multifamily 2,380 2,380 — 2,380 — Construction and land 68 33 35 68 4 Manufactured homes 221 44 177 221 144 Floating homes 493 493 — 493 — Other consumer 106 — 106 106 26 Commercial business 176 176 — 176 — Total $ 7,836 $ 6,375 $ 1,350 $ 7,725 $ 293 December 31, 2020 Recorded Investment Unpaid Principal Without With Total Related One-to-four family $ 3,791 $ 2,392 $ 1,313 $ 3,705 $ 165 Home equity 293 156 137 293 14 Commercial and multifamily 353 353 — 353 — Construction and land 77 40 37 77 6 Manufactured homes 268 47 218 265 163 Floating homes 518 518 — 518 — Other consumer 114 — 114 114 30 Commercial business 615 615 — 615 — Total $ 6,029 $ 4,121 $ 1,819 $ 5,940 $ 378 The following table provides the average recorded investment and interest income on impaired loans for the year ended December 31, 2021 and 2020, by type of loan (in thousands): Year Ended December 31, 2021 Year Ended December 31, 2020 Average Interest Income Average Interest Income One-to-four family $ 3,471 $ 198 $ 6,067 $ 175 Home equity 287 16 332 17 Commercial and multifamily 617 138 398 19 Construction and land 111 4 479 4 Manufactured homes 239 17 366 24 Floating homes 508 18 429 30 Other consumer 110 5 130 5 Commercial business 318 2 1,062 19 Total $ 5,661 $ 398 $ 9,263 $ 293 Forgone interest on nonaccrual loans was $312 thousand and $168 thousand for the year ended December 31, 2021 and 2020, respectively. Troubled debt restructurings. TDRs, accounted for under ASC 310-40, are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Once a TDR has performed according to its modified terms for six months and the collection of principal and interest under the revised terms is deemed probable, we remove the TDR from nonperforming status. Loans classified as TDRs totaled $2.6 million and $3.2 million at December 31, 2021 and 2020, respectively, and are included in impaired loans. The Company has granted, in its TDRs, a variety of concessions to borrowers in the form of loan modifications. The modifications granted can generally be described in the following categories: Rate Modification : A modification in which the interest rate is changed. Term Modification : A modification in which the maturity date, timing of payments or frequency of payments is changed. Payment Modifications: A modification in which the dollar amount of the payment is changed. Interest only modifications in which a loan is converted to interest only payments for a period of time are included in this category. Combination Modification : Any other type of modification, including the use of multiple categories above. There was one loan totaling $25 thousand that was modified as a TDR during the year ended December 31, 2021. The following TDR loans were paid off during the year ended December 31, 2021: one commercial loans totaling $429 thousand and one home equity loan totaling $57 thousand. There were no TDRs for which there was a payment default within the first 12 months of modification during the year ended December 31, 2021. There was one TDR totaling $161 thousand for which there was a payment default within the first 12 months of modification during the year ended December 31, 2020. There was one commercial business TDR loan totaling $45 thousand that was charged off during the year ended December 31, 2021 and one commercial business TDR loan totaling $97 thousand that was charged off during the year ended December 31, 2020. The Company had no commitments to extend additional credit to borrowers owing receivables whose terms have been modified into TDRs. In the ordinary course of business, the Company makes loans to its employees, officers and directors. Certain loans to employees, officers and directors are offered at discounted rates as compared to other clients as permitted by federal regulations. Employees, officers, and directors are eligible for mortgage loans with an adjustable rate that resets annually to 1.0% - 1.5% over the Bank's rolling cost of funds. Employees, officers and directors are also eligible for consumer loans that are 1.00% below the market loan rate at the time of origination. Director and officer loans are summarized as follows (in thousands): December 31, 2021 2020 Balance, beginning of period $ 3,995 $ 3,225 Advances — 196 New / (reclassified) loans, net 551 1,233 Repayments (181) (659) Balance, end of period $ 4,365 $ 3,995 At December 31, 2021 and 2020, loans totaling $7.3 million and $11.8 million, respectively, represented real estate secured loans that had current loan-to-value ratios above supervisory guidelines. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2021 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights | Mortgage Servicing RightsThe Company’s MSR portfolio totaled $508.1 million at December 31, 2021, compared to $488.7 million at December 31, 2020. Of this total balance, the unpaid principal balance of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at December 31, 2021 and 2020 was $504.1 million and $481.6 million, respectively. The unpaid principal balances of loans serviced for other financial institutions at December 31, 2021 and 2020, totaled $4.0 million and $7.1 million, respectively. 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 at December 31, 2021 and 2020 were as follows (in thousands): December 31, 2021 2020 Beginning balance, at fair value $ 3,780 $ 3,239 Servicing rights that result from transfers and sale of financial assets 1,301 2,398 Changes in fair value: Due to changes in model inputs or assumptions (1) (808) (1,857) Ending balance, at fair value $ 4,273 $ 3,780 (1) Includes changes due to collection/realization of expected cash flows and curtailments. The key economic assumptions used in determining the fair value of mortgage servicing rights at the dates indicated are as follows: December 31, 2021 2020 Prepayment speed (Public Securities Association "PSA" model) 205 % 247 % Weighted-average life 5.8 years 5.2 years Yield to maturity discount rate 12.5 % 10.0 % The amount of contractually specified servicing, late and ancillary fees earned on the mortgage servicing rights are included in mortgage servicing income on the Consolidated Statements of Income and totaled $1.3 million and $1.0 million for the years ended December 31, 2021 and 2020, respectively. See "Note 1—Organization and Significant Accounting Policies" and "Note 11— Fair Measurements" for additional information on MSRs. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Premises and Equipment Premises and equipment at December 31, 2021 and 2020 are summarized as follows (in thousands): December 31, 2021 2020 Land $ 920 $ 920 Buildings and improvements 7,059 6,944 Furniture and equipment 5,804 5,694 13,783 13,558 Less: Accumulated depreciation and amortization (7,964) (7,288) Premises and equipment, net $ 5,819 $ 6,270 Depreciation and amortization expense was $676 thousand and $905 thousand for the years ended December 31, 2021 and 2020, respectively. |
Other Real Estate Owned and Rep
Other Real Estate Owned and Repossessed Assets | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Other Real Estate Owned and Repossessed Assets | Other Real Estate Owned and Repossessed Assets The following table presents activity related to OREO and other repossessed assets for the periods shown (in thousands): Year Ended December 31, 2021 2020 Beginning balance, January 1 $ 594 $ 575 Additions to OREO and repossessed assets 84 19 Sales (19) — Write-downs/Losses — — Ending balance, December 31 $ 659 $ 594 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2021 | |
Deposits [Abstract] | |
Deposits | Deposits A summary of deposit accounts with the corresponding weighted-average cost of funds at December 31, 2021 and 2020, are presented below (dollars in thousands): December 31, 2021 December 31, 2020 Deposit Wtd. Avg Deposit Wtd. Avg Noninterest-bearing demand $ 187,684 — % $ 129,299 — % Interest-bearing demand 307,061 0.19 230,492 0.44 Savings 103,401 0.08 83,778 0.27 Money market 91,670 0.21 65,748 0.39 Certificates 105,722 1.57 235,473 2.36 Escrow (1) 2,782 — 3,191 — Total $ 798,320 0.41 % $ 747,981 1.01 % (1) Escrow balances shown in noninterest-bearing deposits on the Consolidated Balance Sheets. Scheduled maturities of time deposits at December 31, 2021, are as follows (in thousands): Year Ending December 31, Amount 2022 $ 55,552 2023 39,061 2024 4,217 2025 4,558 2026 2,225 Thereafter 109 $ 105,722 Savings, demand, and money market accounts have no contractual maturity. Certificates of deposit have maturities of five years or less. The aggregate amount of time deposits in denominations of more than $250 thousand at December 31, 2021 and 2020, totaled $19.1 million and $79.9 million, respectively. Deposits in excess of $250 thousand are not federally insured. There were no brokered deposits outstanding at December 31, 2021 and 2020, respectively. Deposits from related parties held by the Company were $4.9 million and $6.4 million at December 31, 2021 and 2020, respectively. |
Borrowings, FHLB Stock and Subo
Borrowings, FHLB Stock and Subordinated Notes | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings, FHLB Stock and Subordinated Notes | Borrowings, FHLB Stock and Subordinated Notes The Company utilizes a loan agreement with the FHLB of Des Moines, the terms of which call for a blanket pledge of a portion of the Company's mortgage and commercial and multifamily portfolios based on the outstanding balance. At December 31, 2021 and 2020, the maximum amount available to borrow under this credit facility was $417.7 million and $390.5 million, respectively, subject to eligible pledged collateral. At December 31, 2021, the credit facility was collateralized as follows: one-to-four family mortgage loans with an advance equivalent of $59.7 million, commercial and multifamily mortgage loans with an advance equivalent of $52.9 million and home equity loans with an advance equivalent of $482 thousand. At December 31, 2020, the credit facility was collateralized as follows: one-to-four family mortgage loans with an advance equivalent of $103.6 million, commercial and multifamily mortgage loans with an advance equivalent of $128.9 million and home equity loans with an advance equivalent of $2.8 million. The Company had no outstanding borrowings under this arrangement at December 31, 2021 and 2020. The weighted-average interest rate of the Company's borrowings under this agreement was —% and 3.10% for the years ended December 31, 2021 and 2020, respectively. The maximum amount outstanding from FHLB advances during 2021 was $— and during 2020 was $10.1 million. The average balance outstanding was $0.0 million during 2021 and $7.1 million during 2020. Additionally, the Company had outstanding letters of credit from the FHLB of Des Moines with a notional amount of $11.5 million and $21.6 million at December 31, 2021 and 2020, respectively, to secure public deposits. At December 31, 2021 and 2020, the remaining amount available to borrow from the FHLB of Des Moines was $101.5 million and $213.7 million, respectively. As a member of the FHLB system, the Bank is required to maintain a minimum level of investment in the FHLB of Des Moines stock based on specific percentages of its outstanding FHLB advances. At December 31, 2021 and 2020, the Company had an investment of $1.0 million and $877 thousand, respectively, in FHLB of Des Moines stock. The Company participates in the Federal Reserve Bank Borrower-in-Custody program, which gives the Company access to the discount window and, beginning in 2020, the Paycheck Protection Program Liquidity Facility ("PPPLF"). Extensions of credit under the PPPLF concluded on July 30, 2021. The terms of both programs call for a pledge of specific assets. The Company pledges commercial and consumer loans as collateral for this borrower-in-custody line of credit and PPP loans for the PPPLF. The Company had unused borrowing capacity of $22.4 million and $23.6 million under the borrower-in-custody program at December 31, 2021 and 2020 and $— and $43.3 million under the PPPLF at December 31, 2021 and 2020. The Company had no outstanding borrowings under either program at December 31, 2021 and 2020. The Company has access to an unsecured Fed Funds line of credit from the Pacific Coast Banker's Bank. The line has a one-year term maturing on June 30, 2022 and is renewable annually. At December 31, 2021, the amount available under this line of credit was $20.0 million. There was no balance on this line of credit at December 31, 2021 and 2020, respectively. Sound Financial Bancorp completed a private placement of $12.0 million in aggregate principal of 5.25% Fixed-to-Floating Rate Subordinated Notes (the "subordinated notes") due 2030 resulting in net proceeds, after placement fees and offering expenses, of approximately $11.6 million during the quarter ended September 30, 2020. The subordinated notes have a stated maturity of October 1, 2030 and bear interest at a fixed rate of 5.25% per year until October 1, 2025. From October 1, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 513 basis points. As provided in the subordinated notes, the interest rate on the subordinated notes during the applicable floating rate period may be determined based on a rate other than three-month term SOFR. Prior to October 1, 2025, Sound Financial Bancorp may redeem the subordinated notes, in whole but not in part, only under certain limited circumstances set forth in the subordinated notes. On or after October 1, 2025, Sound Financial Bancorp may redeem the subordinated notes, in whole or in part, at its option, on any interest payment date. Any redemption by Sound Financial Bancorp would be at a redemption price equal to 100% of the principal amount of the subordinated notes being redeemed, together with any accrued and unpaid interest on the subordinated notes being redeemed to but excluding the date of redemption. The Notes are unsecured obligations and are subordinated in right of payment to all existing and future indebtedness, deposits and other liabilities of Sound Financial Bancorp 's current and future subsidiaries, including the Bank’s deposits as well as Sound Financial Bancorp 's subsidiaries' liabilities to general creditors and liabilities arising during the ordinary course of business. The Notes may be included in Tier 2 capital for Sound Financial Bancorp under current regulatory guidelines and interpretations. At December 31, 2021 and 2020, subordinated notes included $366 thousand and $408 thousand of unamortized debt issuance costs. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company determines the fair values of its financial instruments based on the requirements established in ASC 820, Fair Value Measurements , which provides a framework for measuring fair value in accordance with U.S. GAAP and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. 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 December 31, 2021 were determined based on these requirements. The following methods and assumptions were used to estimate the fair value of other financial instruments: Cash and Cash Equivalents - The estimated fair value is equal to the carrying amount. Treasury Bills - The estimated fair value is equal to the carrying amount. Available-for-Sale Securities - Available-for-sale securities are recorded at fair value based on quoted market prices, if available. If quoted market prices are not available, management utilizes third-party pricing services or broker quotations from dealers in the specific instruments. Level 2 securities include those traded on an active exchange, as well as U.S. government securities. Loans Held-for-Sale - Residential mortgage loans held-for-sale are recorded at the lower of cost or fair value. The fair value of fixed-rate residential loans is based on whole loan forward prices obtained from government-sponsored enterprises. At December 31, 2021 and 2020, loans held-for-sale were carried at cost, as no impairment was required. Loans Held for Portfolio - The estimated fair value of loans held for portfolio consists of a credit adjustment to reflect the estimated adjustment to the carrying value of the loans due to credit-related factors and a yield adjustment, to reflect the estimated adjustment to the carrying value of the loans due to a differential in yield between the portfolio loan yields and estimated current market rate yields on loans with similar characteristics. The estimate fair value of loans-held-for-portfolio reflect exit price assumptions. The liquidity premiums/discounts are part of the valuation for exit pricing. Mortgage Servicing Rights -The fair value of mortgage servicing rights is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds, discount rates, and delinquency rate assumptions as inputs. FHLB stock - The estimated fair value is equal to the par value of the stock. Non-maturity Deposits - The estimated fair value is equal to the carrying amount. Time Deposits - The estimated fair value of time deposits is based on the difference between interest costs paid on the Company’s time deposits and current market rates for time deposits with comparable characteristics. Borrowings - The fair value of borrowings are estimated using the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Subordinated Notes- The fair value of subordinated notes t is estimated using discounted cash flows based on current lending rates for similar long-term debt instruments with similar terms and remaining time to maturity. A description of the valuation methodologies used for impaired loans and OREO is as follows: Impaired Loans - The fair value of collateral dependent loans is based on the current appraised value of the collateral less estimated costs to sell, or internally developed models utilizing a calculation of expected discounted cash flows which contain management’s assumptions. 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 for the Company's off-balance sheet loan commitments 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 is not significant. The following tables present information about the level in the fair value hierarchy for the Company’s financial assets and liabilities, whether or not recognized or recorded at fair value as December 31, 2021 and 2020 (in thousands): December 31, 2021 Fair Value Measurements Using: Carrying Estimated Level 1 Level 2 Level 3 FINANCIAL ASSETS: Cash and cash equivalents $ 183,590 $ 183,590 $ 183,590 $ — $ — Available for sale securities 8,419 8,419 — 8,419 — Loans held-for-sale 3,094 3,094 — 3,094 — Loans held for portfolio, net 680,092 675,154 — — 675,154 Accrued interest receivable 2,217 2,217 2,217 — — Mortgage servicing rights 4,273 4,273 — — 4,273 FHLB Stock 1,046 1,046 — 1,046 — FINANCIAL LIABILITIES: Non-maturity deposits 692,598 692,598 — 692,598 — Time deposits 105,722 106,834 — 106,834 — Subordinated notes 11,634 11,634 — 11,634 — Accrued interest payable 200 200 200 — — December 31, 2020 Fair Value Measurements Using: Carrying Estimated Level 1 Level 2 Level 3 FINANCIAL ASSETS: Cash and cash equivalents $ 193,828 $ 193,828 $ 193,828 $ — $ — Available for sale securities 10,218 10,218 — 10,218 — Loans held-for-sale 11,604 11,604 — 11,604 — Loans held for portfolio, net 607,363 608,575 — — 608,575 Accrued interest receivable 2,254 2,254 2,254 — — Mortgage servicing rights 3,780 3,780 — — 3,780 FHLB Stock 877 877 — 877 — FINANCIAL LIABILITIES: Non-maturity deposits 512,508 512,508 — 512,508 — Time deposits 235,473 238,629 — 238,629 — Borrowings 11,592 11,592 — 11,592 — Accrued interest payable 369 369 369 — — The following tables present the balance of assets measured at fair value on a recurring basis at December 31, 2021 and 2020 (in thousands): Fair Value at December 31, 2021 Description Total Level 1 Level 2 Level 3 Municipal bonds $ 6,066 $ — $ 6,066 $ — Agency mortgage-backed securities 2,353 — 2,353 — Mortgage servicing rights 4,273 — — 4,273 Fair Value at December 31, 2020 Description Total Level 1 Level 2 Level 3 Municipal bonds $ 5,413 $ — $ 5,413 $ — Agency mortgage-backed securities 4,805 — 4,805 — Mortgage servicing rights 3,780 — — 3,780 For the years ended December 31, 2021 and 2020, there were no transfers between Level 1 and Level 2 or between Level 2 and Level 3. The following table provides 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 at December 31, 2021: Financial Valuation Unobservable Input(s) Range Mortgage Servicing Rights Discounted cash flow Prepayment speed assumption 204%-344% (205%) Discount rate 10.5%-14.5% (12.5%) The following table provides 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 at December 31, 2020: Financial Valuation Unobservable Input(s) Range Mortgage Servicing Rights Discounted cash flow Prepayment speed assumption 178%-276% (247%) Discount rate 10%-12% (10%) Generally, any significant increases in the constant prepayment rate and discount rate utilized in the fair value measurement of the mortgage servicing rights will result in a negative fair value adjustment (and decrease in the fair value measurement). Conversely, a decrease in the constant prepayment rate and discount rate will result in a positive fair value adjustment (and increase in the fair value measurement). An increase in the weighted average life assumptions will result in a decrease in the constant prepayment rate and conversely, a decrease in the weighted average life will result in an increase of the constant prepayment rate. 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. Different persons in possession of the same facts may reasonably arrive at different conclusions as to the inputs to be applied in valuing these assets and their fair values. Such differences may result in significantly different fair value measurements. There were no assets or liabilities (excluding mortgage servicing rights) measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the years ended December 31, 2021 and 2020. Mortgage servicing rights are measured at fair value using significant unobservable input (Level 3) on a recurring basis and a reconciliation of this asset can be found in "Note 6—Mortgage Servicing Rights." The following table presents the balance of assets measured at fair value on a nonrecurring basis and the total losses resulting from these fair value adjustments (in thousands): Fair Value at December 31, 2021 Description Total Level 1 Level 2 Level 3 OREO and repossessed assets $ 659 $ — $ — $ 659 Impaired loans 7,725 — — 7,725 Fair Value at December 31, 2020 Description Total Level 1 Level 2 Level 3 OREO and repossessed assets $ 594 $ — $ — $ 594 Impaired loans 5,940 — — 5,940 There were no liabilities carried at fair value, measured on a recurring or nonrecurring basis, at December 31, 2021 and 2020. The following table provides a description of the valuation technique, observable 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 nonrecurring basis at December 31, 2021: December 31, 2021 Financial Valuation Technique(s) Unobservable Input(s) Range (Weighted Average) OREO Third Party Appraisals No discounts N/A Impaired loans (1) Discounted Cash Flow Discount Rate 0-10% (4%) Impaired loans (2) Third Party Appraisals No discounts N/A (1) Represents troubled debt restructurings included within impaired loans. (2) Excludes troubled debt restructurings. December 31, 2020 Financial Valuation Technique(s) Unobservable Input(s) Range OREO Third Party Appraisals No discounts N/A Impaired loans (1) Discounted Cash Flow Discount Rate 0-10% (6%) Impaired loans (2) Third Party Appraisals No discounts N/A (1) Represents troubled debt restructurings included within impaired loans. (2) Excludes troubled debt restructurings. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases We have operating leases for branch locations, loan production offices, our corporate office and certain equipment. The lease term for our leases begins on the date we become legally obligated for the rent payments or we take possession of the building, whichever is earlier. Generally, our real estate leases have initial terms of three The following table represents the Consolidated Balance Sheet classification of the Company’s right of use assets and lease liabilities (in thousands): December 31, 2021 2020 Operating lease right-of-use assets $ 5,811 $ 6,722 Operating lease liabilities 6,242 7,134 The following table represents the components of lease expense (in thousands): Year Ended December 31, 2021 2020 Operating lease expense: Office leases $ 1,134 $ 1,160 Equipment leases — 10 Sublease income (11) (12) Net lease expense $ 1,123 $ 1,158 The following table represents the maturity of lease liabilities: December 31, 2021 Office Equipment Operating Lease Commitments 2022 $ 1,016 $ — 2023 989 — 2024 968 — 2025 885 — 2026 862 — Thereafter 2,150 — Total lease payments 6,870 — Less: Present value discount 628 — Present value of lease liabilities $ 6,242 $ — Lease term and discount rate by lease type consist of the following: December 31, 2021 2020 Weighted-average remaining lease term: Office leases 7.0 years 7.9 years Equipment leases 0.0 years 1.4 years Weighted-average discount rate (annualized): Office leases 2.67 % 2.66 % Equipment leases — % 1.62 % Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows Office leases $ 1,042 $ 1,097 Equipment leases — 20 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period, reduced for average unallocated ESOP shares and average unvested restricted stock awards. Unvested share-based awards containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock (such as stock awards and options) were exercised or converted to common stock or resulted in the issuance of common stock that then shared in the Company’s earnings. Diluted earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period increased for the dilutive effect of unexercised stock options and unvested restricted stock awards. The dilutive effect of the unexercised stock options and unvested restricted stock awards is calculated under the treasury stock method utilizing the average market value of the Company's stock for the period. Earnings per share are summarized for the periods presented in the following table (in thousands, except per share data): Year Ended December 31, 2021 2020 Net income $ 9,156 $ 8,937 Weighted average number of shares outstanding, basic 2,583 2,563 Effect of potentially dilutive common shares 44 30 Weighted average number of shares outstanding, diluted 2,627 2,593 Earnings per share, basic $ 3.52 $ 3.46 Earnings per share, diluted $ 3.46 $ 3.42 There were no anti-dilutive securities for the year ended December 31, 2021 or 2020. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Employee Benefits | Employee Benefits The Company has a 401(k) retirement plan that allows employees to defer a portion of their salary into the 401(k) plan. The Company matches a portion of employees' salary deferrals. 401(k) costs are accrued and funded on a current basis. The Company contributed $230 thousand and $217 thousand to the plan for the years ended December 31, 2021 and 2020, respectively. The Bank maintains a deferred compensation account for the benefit of Ms. Stewart, established in 1994 in connection with an incentive plan which is no longer active. Ms. Stewart was fully vested in her benefits under this plan as of January 2005. Pursuant to the terms of the plan, payments in an amount equal to the fair market value of the assets in the deferred compensation account shall be made to Ms. Stewart (or to her designated beneficiary in the event of her death) in 120 equal monthly installments commencing on the last day of the month following the month in which her employment with the Bank is terminated. In the event of the death of Ms. Stewart and her designated beneficiary prior to the account being fully paid, the remaining value of the account shall be paid in a lump sum to the beneficiary’s estate. The assets in the deferred compensation account consist of cash which is held in a certificate of deposit at the Bank and earns interest at market rates. At December 31, 2021, the amounts held in the certificates of deposit at the Bank were $111 thousand, compared to $109 thousand at December 31, 2020. The Bank maintains a nonqualified deferred compensation plan (the “NQDC Plan”), which was effective on January 1, 2017. The purpose of the NQDC Plan is to provide a select group of management or highly-compensated employees of the Bank with an opportunity to defer the receipt of up to eighty percent (80%) of their annual base salary, bonus, performance-based compensation and any commission income and to assist the Company in attracting, retaining and motivating employees of high caliber and experience. In addition to elective deferrals, the Bank may make discretionary and other contributions to be credited to the account of any or all participants, subject to the vesting requirements set forth in the NQDC Plan. Discretionary contributions by the Bank become 100% vested upon the completion of three years of service from a participant’s effective date of participation in the NQDC Plan (with accelerated vesting upon death, disability or a change in control), while other Bank contributions (including matching contributions) vest at the rate of 20% per year, beginning with the participant’s two-year anniversary of his or her date of hire. During the years ended December 31, 2021, and 2020, the Bank made discretionary contributions to the NQDC Plan in the amount of $93 thousand and $90 thousand, respectively. Each participant’s deferred compensation account is credited with an investment return determined as if the account was invested in one or more investment funds. Each participant elects the investment funds in which his or her account shall be deemed to be invested. Distributions of vested account balances are made upon death, disability, separation from service, or a specified in-service date unforeseeable emergency. Distributions shall be made in a single cash payment or, at the election of the participant, in annual installments for a period of up to ten (10) years in the case of a separation from service and in annual installments for a period of up to five (5) years in the case of an in-service distribution. The obligations of the Bank under the NQDC Plan are general unsecured obligations of the Bank to pay deferred compensation in the future to eligible participants in accordance with the terms of the NQDC Plan from the general assets of the Bank, although the Bank may establish a trust to hold amounts which the Bank may use to satisfy NQDC Plan distributions from time to time. Distributions from the NQDC Plan are governed by the Internal Revenue Code and the NQDC Plan. The Company may, at any time, in its sole discretion, terminate the NQDC Plan or amend or modify the NQDC Plan, in whole or in part, except that no such termination, amendment or modification shall have any retroactive effect to reduce any amounts deemed to be accrued and vested prior to such amendment. Supplemental Executive Retirement Plans. The Company maintains two supplemental executive retirement plans for the benefit of Ms. Stewart, which are intended to be unfunded, non-contributory defined benefit plans maintained primarily to provide her with supplemental retirement income. The first supplemental executive retirement plan ("SERP 1") was effective as of August 14, 2007. The second supplemental executive retirement plan ("SERP 2") was effective as of December 30, 2011, at which time the benefits under SERP 1 were frozen. Under the terms of SERP 1, as amended, Ms. Stewart is entitled to receive $53,320 per year for life commencing on the first day of the month following her separation from service (as defined in SERP 1) for any reason from Sound Community Bank, subject to a six-month delay if required by Section 409A of the Internal Revenue Code. No payments will be made under SERP 1 in the event of Ms. Stewart's death and any payments that have commenced will cease upon death. In the event Ms. Stewart is involuntarily terminated in connection with a change in control (as defined in SERP 1), she will be entitled to receive the annual benefit described in the first sentence of this paragraph commencing upon such termination. Under the terms of SERP 2, as amended, upon Ms. Stewart's termination of employment with Sound Community Bank for any reason other than death, she will be entitled to receive additional retirement benefits of $96,390 per year for life commencing on the first day of the month following her separation from service (as defined in SERP 2) from Sound Community Bank, subject to a six-month delay if required by Section 409A of the Internal Revenue Code. In the event of Ms. Stewart's death, her beneficiary will be entitled to a single lump sum payment within 90 days thereafter in an amount equal to the Bank's accrual for her retirement benefit under SERP 2 as of the date of death, or approximately $1.1 million at December 31, 2021. If a change in control occurs (as defined in SERP 2), Ms. Stewart will receive her full retirement benefit under SERP 2 commencing upon the first day of the month following her separation from service from Sound Community Bank. Stock Options and Restricted Stock The Company currently has one active stockholder approved equity incentive plan, the Amended and Restated 2013 Equity Incentive Plan (the "2013 Plan"). The 2013 Plan permits the grant of restricted stock, restricted stock units, stock options, and stock appreciation rights. The equity incentive plan approved by stockholders in 2008 (the "2008 Plan") expired in November 2018 and no further awards may be made under the 2008 Plan; provided, however, all awards outstanding under the 2008 Plan remain outstanding in accordance with their terms. Under the 2013 Plan, 181,750 shares of common stock were approved for awards for stock options and stock appreciation rights and 116,700 shares of common stock were approved for awards for restricted stock and restricted stock units. At December 31, 2021, on an adjusted basis, awards for stock options totaling 271,854 shares and awards for restricted stock totaling 142,201 shares of Company common stock have been granted in the aggregate, net of any forfeitures, under the 2008 Plan and 2013 Plan to participants. During the years ended December 31, 2021 and 2020, share-based compensation expense totaled $360 thousand and $338 thousand, respectively. Stock Option Awards All stock option awards granted under the 2008 Plan vest in 20 percent annual increments commencing one year from the grant date in accordance with the requirements of the 2008 Plan. The stock option awards granted to date under the 2013 Plan provide for immediate vesting of a portion of the award with the balance of the award vesting on the anniversary date of each grant date in equal annual installments over periods of one Company. All of the options granted under the 2008 Plan and the 2013 Plan are exercisable for a period of 10 years from the date of grant, subject to vesting. The following is a summary of the Company's stock option plan award activity during the period ended December 31, 2021: Shares Weighted-Average Weighted-Average Aggregate Outstanding at January 1, 2021 100,977 $ 22.00 4.71 $ 1,045,041 Granted 12,250 32.46 Exercised (20,651) 15.99 Forfeited (1,170) 34.93 Expired (90) 33.88 Outstanding at December 31, 2021 91,316 24.59 4.77 1,772,667 Exercisable 73,393 22.38 3.89 1,586,949 Expected to vest, assuming a 0% forfeiture rate over the vesting term 91,316 $ 24.59 4.77 $ 1,772,667 At December 31, 2021, there was $81 thousand of total unrecognized compensation cost related to non-vested stock options granted under the Plan. The cost is expected to be recognized over the remaining weighted-average vesting period of 2.4 years. The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model. The fair value of options granted in 2021 and 2020 were determined using the following weighted-average assumptions as of the grant date. Year Ended December 31, 2021 2020 Annual dividend yield 1.60 % 1.60 % Expected volatility 21.67 % 21.67 % Risk-free interest rate 0.60 % 1.38 % Expected term 6.50 years 6.50 years Weighted-average grant date fair value per option granted $ 5.64 $ 7.14 Restricted Stock Awards The fair value of the restricted stock awards is equal to the fair value of the Company's stock at the date of grant. Compensation expense is recognized over the vesting period that the awards are based. The restricted stock awards granted under the 2008 Plan vest in 20% annual increments commencing one year from the grant date. The restricted stock awards granted to date under the 2013 Plan provide for immediate vesting of a portion of the award with the balance of the award vesting on the anniversary date of each of the grant date in equal annual installments over periods of one The following is a summary of the Company's non-vested restricted stock awards for the year ended December 31, 2021: Non-vested Shares Shares Weighted-Average Aggregate Non-vested at January 1, 2021 17,114 $ 35.03 Granted 10,168 32.46 Vested (7,806) 33.99 Forfeited (1,890) 34.93 Expired — — Non-vested at December 31, 2021 17,586 34.02 $ 44.00 Expected to vest assuming a 0% forfeiture rate over the vesting term 17,586 $ 34.02 $ 44.00 At December 31, 2021, there was $401 thousand of unrecognized compensation cost related to non-vested restricted stock granted under the Plan. The cost is expected to be recognized over the weighted-average vesting period of 2.2 years. The total fair value of shares vested for the years ended December 31, 2021 and 2020 was $265 thousand and $237 thousand, respectively. Employee Stock Ownership Plan In January 2008, the ESOP borrowed $1.2 million from the Company to purchase common stock of the Company, which was paid in full in 2017. In August 2012, in conjunction with the Company's conversion to a full stock company from the mutual holding company structure, the ESOP borrowed an additional $1.1 million from the Company to purchase common stock of the Company. The loan for $1.1 million is being repaid principally by the Bank through contributions to the ESOP over a period of 10 years. The interest rate on the loan is fixed at 2.25%, per annum. At December 31, 2021, the remaining balance of the ESOP loan was zero. Neither the loan balance nor the related interest expense is reflected on the consolidated financial statements. For the years ended December 31, 2021 and 2020, the ESOP was committed to release 11,340 shares of the Company's common stock to participants. There are no unallocated ESOP shares remaining to be released in 2022. The funds to purchase shares in the ESOP come from contributions the Bank makes twice a year to the Plan. For the years ended December 31, 2021 and 2020, the ESOP trustee purchased 7,343 shares and 10,483 shares of the Company's common stock for inclusion in the Plan. The number of allocated shares was 131,805 and 139,678 at December 31, 2021 and 2020, respectively. The fair value of the 150,497 restricted shares held by the ESOP trust was $6.6 million at December 31, 2021. ESOP compensation expense included in salaries and benefits was $781 thousand and $606 thousand for the years ended December 31, 2021 and 2020, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes at December 31, 2021 and 2020 was as follows (in thousands): December 31, 2021 2020 Current $ 2,315 $ 2,036 Deferred (43) 355 Total tax expense $ 2,272 $ 2,391 A reconciliation of the provision for income taxes for the years ended December 31, 2021 and 2020, with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes, is as follows (dollars in thousands): Year Ended December 31, 2021 2020 Provision at statutory rate $ 2,400 $ 2,380 Tax-exempt income (203) (186) Other 75 197 $ 2,272 $ 2,391 Federal Tax Rate 21.0 % 21.0 % Tax exempt rate (1.8) (1.6) Other 0.7 1.7 Effective tax rate 19.9 % 21.1 % The following table reflects the temporary differences that gave rise to the components of the Company's deferred tax assets at December 31, 2021 and 2020 (in thousands): December 31, 2021 2020 Deferred tax assets Deferred compensation and supplemental retirement $ 381 $ 340 Equity based compensation 120 68 Intangible assets 46 55 Lease liabilities 1,311 1,498 Other, net 71 29 Allowance for loan losses 1,324 1,260 Total deferred tax assets 3,253 3,250 Deferred tax liabilities Prepaid expenses (100) (85) FHLB stock dividends (40) (39) Unrealized gain on securities (37) (64) Depreciation (165) (251) Mortgage servicing rights (568) (387) Deferred loan costs (739) (698) Right of use assets (1,220) (1,412) Total deferred tax liabilities (2,869) (2,936) Net deferred tax asset $ 384 $ 314 At December 31, 2021 and 2020, the Company had no unrecognized tax benefits. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in "Provision for income taxes" in the Consolidated Statements of Income. During the years ended December 31, 2021 and 2020, the Company recognized no interest and penalties related to income taxes. The Company or its subsidiary files an income tax return in the U.S. federal jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2018. |
Capital
Capital | 12 Months Ended |
Dec. 31, 2021 | |
Brokers and Dealers [Abstract] | |
Capital | Capital Sound Financial Bancorp is a bank holding company under the supervision of the Federal Reserve. Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve, except that, pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act, effective August 30, 2018, a bank holding company with consolidated assets of less than $3.0 billion is generally not subject to the Federal Reserve’s capital regulations, which parallel the FDIC’s capital regulations.The Bank is a state-chartered, federally insured institution and thereby is subject to the capital requirements established by the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital regulations that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies. At December 31, 2021, according to the most recent notification from the FDIC, the Bank was categorized as "well capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed the Bank’s category. Prior to January 1, 2020, Sound Community Bank followed the FDIC’s prompt corrective actions standards. In order to be considered well-capitalized under the prompt corrective action standards, a bank must have a ratio of Common Equity Tier 1 ("CET1") capital to risk-weighted assets of at least 6.5%, a ratio of Tier 1 capital to risk-weighted assets of at least 8%, a ratio of total capital to risk-weighted assets of at least 10%, and a leverage ratio of at least 5%, and the bank must not be subject to a regulatory capital requirement imposed on it as an individual bank. In order to be considered adequately capitalized, a bank must have the minimum capital ratios described above. Effective January 1, 2020, the Bank elected to use the Community Bank Leverage Ratio (“CBLR”) framework as provided for in the Economic Growth, Regulatory Relief and Consumer Protection Act. To be eligible to utilize the CBLR, the Bank must have total consolidated assets of less than $10 billion, off-balance sheet exposures of 25% or less of its total consolidated assets, and trading assets and trading liabilities of 5.0% or less of its total consolidated assets, all as of the end of the most recent quarter. Under the CBLR framework, a bank will generally be considered well-capitalized and to have met the risk-based and leverage capital requirements of the capital regulations if it has a CBLR greater than 9.0%. A bank electing the framework that ceases to meet any qualifying criteria in a future period and that has a leverage ratio greater than 8% will be allowed a grace period of two reporting periods to satisfy the CBLR qualifying criteria or comply with the generally applicable capital requirements. A bank may opt out of the framework at any time, without restriction, by reverting to the generally applicable risk-based capital rule. At December 31, 2021, the Bank’s CBLR was 10.92%. For a bank holding company with less than $3.0 billion in assets, the capital guidelines apply on a bank-only basis and the Federal Reserve expects the holding company's subsidiary banks to be well-capitalized under the prompt corrective action regulations. If Sound Financial Bancorp was subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets, at December 31, 2021, Sound Financial Bancorp would have exceeded all regulatory capital requirements. The estimated CBLR calculated for Sound Financial Bancorp at December 31, 2021 was 10.09% During the years ended December 31, 2021 and 2020, the Company repurchased a total of 3,657 and 2,477 shares of Company common stock at an average price of $41.68 and $29.42 per share pursuant to the Company’s stock repurchase program, leaving $1.8 million available for future repurchase under the existing program. |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Credit Risk | Concentrations of Credit RiskMost of the Company's business activity is with clients located in the state of Washington. A substantial portion of the loan portfolio is represented by real estate loans throughout western Washington. The ability of the Company's debtors to honor their contracts is dependent upon the real estate and general economic conditions in the area. Loans to one borrower are generally limited by federal banking regulations to 15% of the Company's unimpaired capital and surplus. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its clients. These financial instruments generally represent a commitment to extend credit in the form of loans. The instruments involve, to varying degrees, elements of credit- and interest-rate risk in excess of the amount recognized in the consolidated balance sheets. The Company's exposure to credit loss, in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established by the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. These commitments are not reflected in the consolidated financial statements. The Company evaluates each client's creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management's credit evaluation of the client. Financial instruments whose contract amount represents credit risk were as follow (in thousands): December 31, 2021 2020 Residential mortgage commitments $ 6,663 $ 3,312 Unfunded construction commitments 89,797 18,981 Unused lines of credit 35,036 34,075 Irrevocable letters of credit 151 151 Total loan commitments $ 131,647 $ 56,519 At December 31, 2021, fixed-rate loan commitments totaled $6.7 million and had a weighted-average interest rate of 4.27%. At December 31, 2020, fixed-rate loan commitments totaled $3.3 million and had a weighted-average interest rate of 6.08%. At December 31, 2021 and 2020, the Company had letters of credit issued by the FHLB with a notional amount of $11.5 million and $21.6 million, respectively, in order to secure Washington State Public Funds. In the ordinary course of business, the Company sells loans without recourse that may have to be subsequently repurchased due to defects that occurred during the origination of the loan. The defects are categorized as documentation errors, underwriting errors, early payment defaults, and fraud. When a loan sold to an investor without recourse fails to perform, the investor will typically review the loan file to determine whether defects in the origination process occurred. If a defect is identified, the Company may be required to either repurchase the loan or indemnify the investor for losses sustained. If there are no defects, the Company has no commitment to repurchase the loan. At December 31, 2021 and 2020, the maximum amount of these guarantees totaled $508.1 million and $488.7 million, respectively. These amounts represent the unpaid principal balances of the Company's loans serviced for others' portfolios. There was $284 thousand of loans repurchased during the year ended December 31, 2021 and no loans repurchased during the year ended 2020. The Company pays certain medical, dental, prescription, and vision claims for its employees, on a self-insured basis. The Company has purchased stop-loss insurance to cover claims that exceed stated limits and has recorded estimated reserves for the ultimate costs for both reported claims and claims incurred but not reported, which were not considered significant at December 31, 2021. At December 31, 2021, the Company recorded no stop loss medical insurance claims exceeding stated coverage limits. At various times, the Company may be the defendant in various legal proceedings arising in connection with its business. It is the opinion of management that the financial position and the results of operations of the Company will not be materially adversely affected by the outcome of these legal proceedings and that adequate provision has been made in the accompanying consolidated balance sheets. |
Parent Company Financial Inform
Parent Company Financial Information | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Information | Parent Company Financial Information The Balance Sheets, Statements of Income, and Statements of Cash Flows for Sound Financial Bancorp (Parent Only) are presented below (dollars in thousands): Balance sheets December 31, 2021 2020 Assets Cash and cash equivalents $ 4,215 $ 6,837 Investment in Sound Community Bank 100,986 90,568 Other assets 58 65 Total assets $ 105,259 $ 97,470 Liabilities and Stockholders' Equity Subordinated notes, net $ 11,634 $ 11,592 Other liabilities 267 394 Total liabilities 11,901 11,986 Stockholders' equity 93,358 85,484 Total liabilities and stockholders' equity $ 105,259 $ 97,470 Statements of Income Year Ended December 31, 2021 2020 Interest expense on subordinated notes $ (673) $ (190) Other expenses (550) (572) Loss before income tax benefit and equity in undistributed net income of subsidiary (1,223) (762) Income tax benefit 257 160 Equity in undistributed earnings of subsidiary 9,690 9,539 Net income $ 8,724 $ 8,937 Statements of Cash Flows Year Ended December 31, 2021 2020 Cash flows from operating activities: Net income $ 8,724 $ 8,937 Adjustments to reconcile net income to net cash provided by operating activities: Other, net (78) 70 Expense allocation to holding company — 129 Equity in undistributed earnings of subsidiary (9,690) (9,539) Net cash used in operating activities (1,044) (403) Cash flows from investing activities: ESOP shares released 431 324 Net cash provided by investing activities 431 324 Cash flows from financing activities: Proceeds from issuance of subordinated notes, net — 11,582 Transfer of proceeds from issuance of debt to subsidiary — (5,500) Dividends paid (2,039) (2,072) Repurchase of stock (152) (73) Stock options exercised 182 239 Net cash (used in) provided by financing activities (2,009) 4,176 Net (decrease) increase in cash (2,622) 4,097 Cash and cash equivalents at beginning of year 6,837 2,740 Cash and cash equivalents at end of year $ 4,215 $ 6,837 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers All of the Company's revenue from contracts with customers in the scope of ASC 606— Revenue from Contracts with Customers ("ASC 606") is recognized in Noninterest Income with the exception of the net loss on OREO and repossessed assets, which is included in Noninterest Expense. The following table presents the Company's sources of Noninterest Income for the year ended December 31, 2021 and 2020 (in thousands). Items outside of the scope of ASC 606 are noted as such. Year Ended December 31, 2021 2020 Noninterest income: Service charges and fee income Account maintenance fees $ 311 $ 274 Transaction-based and overdraft service charges 356 327 Debit/ATM interchange fees 1,322 1,016 Credit card interchange fees 27 23 Loan fees (a) 178 205 Other fees (a) 53 60 Total service charges and fee income 2,247 1,905 Earnings on cash surrender value of bank-owned life insurance (a) 416 348 Mortgage servicing income (a) 1,284 1,027 Fair value adjustment on MSRs (a) (808) (1,857) Net gain on sale of loans (a) 4,190 6,022 Total noninterest income $ 7,329 $ 7,445 (a) Not within scope of ASC 606 Account maintenance fees and transaction-based and overdraft service charges The Company earns fees from its customers for account maintenance, transaction-based and overdraft services. Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis.The performance obligation is satisfied and fees are recognized on a monthly basis as the service period is completed. Transaction-based fees and overdraft service fees on deposit accounts are charged to deposit customers for specific services provided to the customer, such as non-sufficient funds, overdraft, and wire services. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer. Debit/ATM and credit card interchange income Debit/ATM interchange income represent fees earned when a debit card issued by the Bank is used for a transaction. The Bank earns interchange fees from debit cardholder transactions through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders' account. Certain expenses directly associated with the debit card are recorded on a net basis with the interchange income. The Company utilizes a third-party agency relationship to brand credit cards with fees for originating new accounts paid by the issuing bank. Credit card interchange income represents fees earned when a credit card is issued by the third-party agent. Similar to debit card interchange fees, the Bank earns an interchange fee for each transaction made with Sound Community Bank's branded credit cards. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders' credit card. Certain expenses and rebates directly related to the credit card interchange contract are recorded net of the interchange income. Net loss on OREO and repossessed assets We record a gain or loss from the sale of other real estate owned when control of the property transfers to the buyer, which generally occurs at the time of an executed deed of trust. When the Bank finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on sale, we adjust the transaction price and related gain or loss on sale if a significant financing component is present. The Company generated income/incurred expenses, net of gain/losses on sale of OREO, on our OREO properties of $(16) thousand and $5 thousand for the years ended December 31, 2021 and 2020, respectively, included in noninterest expense on the Consolidated Statements of Income. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn January 28, 2022, the Company declared on Company common stock a quarterly cash dividend of $0.17 per common share and a special cash dividend of $0.10 per share, payable on February 24, 2022 to stockholders of record at the close of business February 10, 2022. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Subsequent events | Subsequent events – The Company has evaluated subsequent events for potential recognition and disclosure. |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair value of MSRs, valuations of impaired loans and OREO, and the realization of deferred taxes. The accompanying consolidated financial statements include the accounts of Sound Financial Bancorp and its wholly-owned subsidiaries, Sound Community Bank and Sound Community Insurance Agency, Inc. All significant intercompany balances and transactions between Sound Financial Bancorp and its subsidiaries have been eliminated in consolidation. |
Cash and cash equivalents | Cash and cash equivalents – For purposes of reporting cash flows, cash and cash equivalents include cash on hand and in banks and interest-bearing deposits. All have original maturities of three months or less and may exceed federally insured limits. |
Investment securities | Investment securities – Investment securities are classified into one of three categories: (1) held-to-maturity, (2) available-for-sale or (3) trading. The Company had no held-to-maturity or trading securities at December 31, 2021 or 2020. Available-for-sale securities consist of debt securities that the Company has the intent and ability to hold for an indefinite period, but not necessarily to maturity. Such securities may be sold to implement the Company's asset/liability management strategies and/or in response to changes in interest rates and similar factors. Available-for-sale securities are reported at fair value. Dividend and interest income are recognized when earned. Unrealized gains and losses, net of the related deferred tax effect, are reported as a net amount in accumulated other comprehensive income (loss) on available-for-sale securities in the consolidated balance sheets. Realized gains and losses on available-for-sale securities, determined using the specific identification method, are included in earnings. Amortization of premiums and accretion of discounts are recognized as adjustments to interest income using the interest method over the period to the earlier of call date or maturity. The Company reviews investment securities on an ongoing basis for the presence of other-than-temporary impairment ("OTTI") or permanent impairment, taking into consideration current market conditions, fair value in relation to cost, extent and nature of the change in fair value, issuer rating changes and trends, whether the Company intends to sell a security or if it is likely that the Company will be required to sell the security before recovery of its amortized cost basis of the investment, which may be maturity, and other factors. For debt securities, if the Company intends to sell the security or it is likely that it will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If the Company does not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and the fair value, is recognized as a charge to other comprehensive income. The Company does not intend to sell |
Loans held-for-sale | Loans held-for-sale – To mitigate interest-rate sensitivity, from time to time, certain fixed-rate mortgage loans are identified as held-for-sale in the secondary market. Accordingly, such loans are classified as held-for-sale in the consolidated balance sheets and are carried at the lower of cost or estimated fair market value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Mortgage loans held-for-sale are generally sold with the mortgage servicing rights retained by the Company. Gains or losses on sales of loans are recognized based on the difference between the selling price and the carrying value of the related loans sold based on the specific identification method. |
Loans and Allowance for loan losses | Loans – The Company grants mortgage, commercial, and consumer loans to clients. A substantial portion of the loan portfolio is represented by loans secured by real estate located throughout the Puget Sound region, especially King, Snohomish and Pierce Counties, and in Clallam and Jefferson Counties of Washington State. The ability of the Company's debtors to honor their contracts is dependent upon employment, real estate and general economic conditions in these areas. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balance adjusted for any charge-offs, allowance for loan losses, and any deferred fees or costs on origination of loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method over the contractual life of the loan for term loans or the straight-line method for open-ended loans. The accrual of interest is discontinued at the time the loan is 90 days past due or if, in management's opinion, the borrower may be unable to meet payment of obligations as they become due, as well as when required by regulatory provisions. Loans are typically charged off no later than 120 days past due, unless secured by collateral. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current, future payments are reasonably assured and payments have been received for six A loan is considered impaired when it is probable that the Company will be unable to collect all amounts (principal and interest) due according to the contractual terms of the original loan agreement. When a loan has been identified as being impaired, the amount of the impairment is measured by using discounted cash flows, except when, as a practical expedient, the current fair value of the collateral, reduced by costs to sell, is used. When the measurement of the impaired loan is less than the recorded investment in the loan (including accrued interest), impairment is recognized by charging off the impaired portion or creating or adjusting a specific allocation of the allowance for loan losses. The Company recognizes interest income on impaired loans, including cash receipts, based on its existing methods of recognizing interest income on nonaccrual loans. A loan is classified as a troubled debt restructuring ("TDR") when certain concessions have been made to the contractual terms, such as reductions of interest rates or deferrals of interest or principal payments due to the borrower's deteriorated financial condition. All TDRs are reported and accounted for as impaired loans. Allowance for loan losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to expense and represents management's best estimate of probable losses incurred within the existing loan portfolio as of the balance sheet date. The level of the allowance reflects management's view of trends in loan loss activity, current loan portfolio quality and present economic, political and regulatory conditions. Portions of the allowance may be allocated for specific loans; however, the allowance is available for any loan that is charged off. The allowance is increased by provisions charged to earnings and by recoveries of amounts previously charged off, and is reduced by charge-offs on loans (or portions thereof) deemed to be uncollectible. Loan charge-offs are recognized when management believes the collectability of the principal balance outstanding is unlikely. Full or partial charge-offs on collateral dependent impaired loans are generally recognized when the collateral is deemed to be insufficient to support the carrying value of the loan. The allowance for loan losses is maintained at a level sufficient to provide for probable credit losses based upon evaluating known and inherent risks in the loan portfolio. The allowance is provided based upon management's continuing analysis of the pertinent factors underlying the quality of the loan portfolio. These factors include changes in the size and composition of the loan portfolio, delinquency levels, actual loan loss experience, current economic conditions, and detailed analysis of individual loans for which full collectability may not be assured. The detailed analysis includes techniques to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The allowance consists of specific, general and unallocated components. The general component of the allowance for loan losses covers non-impaired loans and is determined using a formula-based approach. The formula first incorporates either the historical loss rates of the Company or the historical loss rates of its peer group if minimal loss history exists. This historical loss rate factor is then adjusted for qualitative factors. Qualitative factors are used to estimate losses related to factors that are not captured in the historical loss rates and are based on management’s evaluation of available internal and external data and involve significant management judgement. Qualitative factors include changes in lending standards, changes in economic conditions, changes in the nature and volume of loans, changes in lending management, changes in delinquencies, changes in the loan review system, changes in the value of collateral, the existence of concentrations, and the impact of other external factors. Finally, the general component of the allowance for loan losses is adjusted for changes in the assigned grades of loans, which include the following: pass, watch, special mention, substandard, doubtful, and loss. As loans are downgraded from watch to the lower categories, they are assigned an additional factor to account for the increased credit risk. Loan grades involve significant management judgment. For such loans that are also classified as impaired, a specific component within the allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan are lower than the carrying value of that loan. An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. The Company considers installment loans to be pools of smaller balance, homogenous loans that are collectively evaluated for impairment, unless such loans are subject to a TDR agreement. The appropriateness of the allowance for loan losses is estimated based upon those factors and trends identified by management at the time consolidated financial statements are prepared. When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the allowance for loan losses. The existence of some or all of the following criteria will generally confirm that a loss has been incurred: the loan is significantly delinquent and the borrower has not demonstrated the ability or intent to bring the loan current; the Company has no recourse to the borrower, or if it does, the borrower has insufficient assets to pay the debt; the estimated fair value of the loan collateral is significantly below the current loan balance, and there is little or no near-term prospect for improvement. |
Transfers of financial assets | Transfers of financial assets – Transfers of an entire financial asset, or a participating interest in an entire financial asset, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Mortgage servicing rights | Mortgage servicing rights – MSRs represent the value associated with servicing residential mortgage loans, when the mortgage loans have been sold into the secondary market and the related servicing has been retained by the Company. The Company may also purchase MSRs. The value is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management judgment. The Company measures its mortgage servicing assets at fair value and reports changes in fair value through earnings under the caption fair value adjustment on MSRs in other income in the period in which the change occurs. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimates and actual prepayment speeds and default rates and losses. Currently, we do not hedge the effects of changes in fair value of our servicing assets. |
Premises and equipment | Premises and equipment – Premises, leasehold improvements and furniture and equipment are carried at cost, less accumulated depreciation and amortization. Furniture and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 1 to 10 years. The cost of leasehold improvements is amortized using the straight-line method over the terms of the related leases. The cost of premises is amortized using the straight-line method over the estimated useful life of the building, up to 39 years. Management reviews premises, leasehold improvements and furniture and equipment for impairment when factors exist indicating potential impairment. |
Bank-owned life insurance, net | Bank-owned life insurance, net – The carrying amount of BOLI approximates its fair value, and is estimated using the cash surrender value, net of any surrender charges. |
Federal Home Loan Bank stock | Federal Home Loan Bank stock – The Company is a member of the FHLB of Des Moines. FHLB stock represents the Company's investment in the FHLB and is carried at par value, which reasonably approximates its fair value. As a member of the FHLB, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets, or FHLB advances. Typically, the Company may request redemption at par value of any stock in excess of the minimum required investment. Stock redemptions are at the discretion of the FHLB. |
Other real estate owned and repossessed assets | Other real estate owned and repossessed assets – OREO and repossessed assets represent real estate and other assets which the Company has taken control of in partial or full satisfaction of loans. At the time of foreclosure, OREO and repossessed assets are recorded at fair value less estimated costs to sell, which becomes the new basis. Any write-downs based on the asset's fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the property is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Revenue and expenses from operations and subsequent adjustments to the carrying amount of the property are included in other noninterest expense in the consolidated statements of income. In some instances, the Company may make loans to facilitate the sales of OREO. Management reviews all sales for which it is the lending institution. Any gains related to sales of other real estate owned may be deferred until the buyer has a sufficient investment in the property. |
Leases | Leases – We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets and operating lease liabilities in our consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Additionally, for equipment leases, we apply a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities. The Company has not entered into leases that meet the definition of a financing lease. |
Income Taxes | Income Taxes – Income taxes are accounted for using the asset and liability method. Under this method a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company's income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not, that all or some portion of the potential deferred tax asset will not be realized. |
Segment reporting | Segment reporting – The Company operates in one segment and makes management decisions based on consolidated results. The Company's operations are solely in the financial services industry and include providing to its clients traditional banking and other financial services. |
Off-balance-sheet credit-related financial instruments | Off-balance-sheet credit-related financial instruments – In the normal course of operations, the Company engages in a variety of financial transactions that are not recorded in our financial statements. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. These transactions are used primarily to manage customers' requests for funding and take the form of loan commitments, letters of credit and lines of credit. Such financial instruments are recorded when they are funded. The Company also maintains a separate allowance for off-balance sheet credit commitments. Management estimates anticipated losses using historical data and utilization assumptions. The allowance for off-balance sheet credit commitments totaled $405 thousand and $256 thousand at December 31, 2021 and 2020 and is included in other liabilities on the consolidated balance sheets. |
Advertising costs | Advertising costs – The Company expenses advertising costs as they are incurred. |
Comprehensive income | Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale investments, are reported as a separate component of the equity section of the consolidated balance sheets, net of tax. Such items, along with net income, are components of comprehensive income. |
Intangible assets | Intangible assets – At December 31, 2021 and 2020, the Company had $97 thousand and $128 thousand, respectively, of identifiable intangible assets included in other assets as a result of the acquisition of deposits from other institutions. These assets are amortized using the straight-line method over a period of eight |
Employee stock ownership plan | Employee stock ownership plan – The Company sponsors a internally-leveraged ESOP. As shares are committed to be released, compensation expense is recorded equal to the market price of the shares, and the shares become outstanding for purposes of earnings per share calculations. Cash dividends on allocated shares (those credited to ESOP participants' accounts) are recorded as a reduction of stockholders' equity and distributed directly to participants' accounts. Cash dividends on unallocated shares (those held by the ESOP not yet credited to participants' accounts) are used to pay administrative expenses and debt service requirements of the ESOP. See "Note 14—Employee Benefits" for further information. Unearned ESOP shares are shown as a reduction of stockholders' equity. When the shares are released, unearned common shares held by the ESOP are reduced by the cost of the ESOP shares released and the differential between the fair value and the cost is charged to additional paid in capital. The loan receivable from the ESOP to the Company is not reported as an asset nor is the debt of the ESOP reported as a liability on the Company's consolidated statements of condition. |
Earnings Per Common Share | Earnings Per Common Share – Earnings per share is computed using the two-class method. Basic earnings per share is computed by dividing net income available to common shares by the weighted average number of common shares outstanding during the period, excluding any participating securities. Participating securities include unvested restricted shares. Unvested restricted shares are considered participating securities because holders of these securities receive non-forfeitable dividends at the same rate as the holders of the Company's common stock. Diluted earnings per share is computed by dividing net income available to common stockholders adjusted for reallocation of undistributed earnings of unvested restricted shares by the weighted average number of common shares determined for the basic earnings per share plus the dilutive effect of common stock equivalents using the treasury stock method based on the average market price for the period. Some stock options are anti-dilutive and therefore are not included in the calculation of diluted earnings per share. |
Fair value | Fair value – Fair value is the price that would be received when an asset is sold or a liability is transferred in an orderly transaction between market participants at the measurement date. Fair values of the Company's financial instruments are based on the fair value hierarchy which requires an entity to maximize the use of observable inputs, typically market data obtained from third parties, and minimize the use of unobservable inputs, which reflects its estimates for market assumptions, when measuring fair value. Three levels of valuation inputs are ranked in accordance with the prescribed fair value hierarchy as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Assets or liabilities whose significant value drivers are unobservable. In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to fair value measurements. In certain cases, the inputs used to measure fair value of an asset or liability may fall into different levels of the fair value hierarchy. The level within which the fair value measurement is categorized is based on the lowest level unobservable input that is significant to the fair value measurement in its entirety. Therefore, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. |
Share-Based Compensation | Share-Based Compensation – The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. These costs are recognized on a straight-line basis over the vesting period during which an employee is required to provide services in exchange for the award, also known as the requisite service period. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted. When determining the estimated fair value of stock options granted, the Company utilizes various assumptions regarding the expected volatility of the stock price, the risk-free interest rate for periods within the contractual life of the stock option, and the |
Reclassifications | Reclassifications – Certain amounts reported in prior years' consolidated financial statements may be reclassified to conform to the current presentation. The results of the reclassifications are typically not considered material and have no effect on previously reported net income, earnings per share or stockholders' equity. There were no reclassifications to prior year amounts in the current year. |
Accounting pronouncements recently issued or adopted | Accounting Pronouncements Recently Issued or Adopted The Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), signed into law on March 27, 2020, provides relief from certain accounting and financial reporting requirements under U.S. GAAP. Section 4013 of the CARES Act provides temporary relief from the accounting and reporting requirements for troubled debt restructurings (“TDRs”) under Accounting Standards Codification ("ASC") 310-40 for loan modifications related to the novel coronavirus disease 2019 ("COVID-19") pandemic. In addition, on April 7, 2020, a group of banking agencies issued an interagency statement (“Interagency Statement”) for evaluating whether loan modifications that occur in response to the COVID-19 pandemic are TDRs. The Interagency Statement was originally issued on March 22, 2020, but the banking agencies revised it to address the relationship between their TDR accounting and disclosure guidance and the TDR guidance in Section 4013 of the CARES Act. Section 4013 of the CARES Act permits the suspension of ASC 310-40 for loan modifications that are made by financial institutions in response to the COVID-19 pandemic if (1) the borrower was not more than 30 days past due as of December 31, 2019, and (2) the modifications are related to arrangements that defer or delay the payment of principal or interest, or change the interest rate on the loan. The Interagency Statement indicates that a lender can conclude that a borrower is not experiencing financial difficulty if either (1) short-term (e.g., six months) modifications are made in response to COVID-19, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant related to loans in which the borrower is less than 30 days past due on its contractual payments at the time a modification program is implemented, or (2) the modification or deferral program is mandated by the federal government or a state government. Accordingly, any loan modification made in response to the COVID-19 pandemic that meets either of these practical expedients would not be considered a TDR. The Company adopted this guidance effective March 27, 2020. On December 27, 2020, the Consolidated Appropriations Act 2021 (“CAA 2021”) was signed into law. Among other purposes, CAA 2021 provides coronavirus emergency response and relief, including extending relief offered under the CARES Act related to restructured loans as a result of COVID-19 through January 1, 2022 or 60 days after the end of the national emergency declared by the President, whichever is earlier. In October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-08, “ Receivables – Nonrefundable Fees and Other Costs ” (“ASU 2020-08”). ASU 2020-08 clarifies that the Company should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. ASU 2020-08 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this ASU effective January 1, 2021. The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements. On March 2020, the FASB issued ASU No. 2020-04, " Reference Rate Reform" ("Topic 848"). This ASU applies to contracts, hedging relationships, and other transactions that reference LIBOR or other rate references expected to be discontinued because of reference rate reform. The ASU permits an entity to make necessary modifications to eligible contracts or transactions without requiring contract re-measurement or reassessment of a previous accounting determination. In January 2021, ASU 2021-01 clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. A portion of the Bank’s commercial real estate loans and its interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee.This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by removing the exception to the incremental approach for intra- period tax allocation when there is a loss from continuing operations and income or a gain from other items, removing the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, and removing the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Disclosure requirements removed from FASB Subtopic 715-20 include the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, the amount and timing of plan assets expected to be returned to the employer, related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, and, for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic benefit costs and benefit obligation for postretirement health care benefits. Disclosure requirements added to FASB Subtopic 715-20 include the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This ASU is effective for fiscal years ending after December 15, 2020. The Company adopted this ASU effective January 1, 2021. The adoption of ASU No. 2018-14 did not have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology where loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The income statement would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. The new guidance may result in an increase in the allowance for loan losses; however, the Company is still in the process of determining the magnitude of the change and its impact on the Company's consolidated financial statements. The FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326) , delaying implementation of ASU No. 2016-13 for SEC smaller reporting company filers until fiscal years beginning after December 15, 2022. The Bank meets the requirements of a smaller reporting company and will delay implementation of ASU No. 2016-13. |
Fair value of financial instruments | The Company determines the fair values of its financial instruments based on the requirements established in ASC 820, Fair Value Measurements , which provides a framework for measuring fair value in accordance with U.S. GAAP and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. 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 December 31, 2021 were determined based on these requirements. The following methods and assumptions were used to estimate the fair value of other financial instruments: Cash and Cash Equivalents - The estimated fair value is equal to the carrying amount. Treasury Bills - The estimated fair value is equal to the carrying amount. Available-for-Sale Securities - Available-for-sale securities are recorded at fair value based on quoted market prices, if available. If quoted market prices are not available, management utilizes third-party pricing services or broker quotations from dealers in the specific instruments. Level 2 securities include those traded on an active exchange, as well as U.S. government securities. Loans Held-for-Sale - Residential mortgage loans held-for-sale are recorded at the lower of cost or fair value. The fair value of fixed-rate residential loans is based on whole loan forward prices obtained from government-sponsored enterprises. At December 31, 2021 and 2020, loans held-for-sale were carried at cost, as no impairment was required. Loans Held for Portfolio - The estimated fair value of loans held for portfolio consists of a credit adjustment to reflect the estimated adjustment to the carrying value of the loans due to credit-related factors and a yield adjustment, to reflect the estimated adjustment to the carrying value of the loans due to a differential in yield between the portfolio loan yields and estimated current market rate yields on loans with similar characteristics. The estimate fair value of loans-held-for-portfolio reflect exit price assumptions. The liquidity premiums/discounts are part of the valuation for exit pricing. Mortgage Servicing Rights -The fair value of mortgage servicing rights is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds, discount rates, and delinquency rate assumptions as inputs. FHLB stock - The estimated fair value is equal to the par value of the stock. Non-maturity Deposits - The estimated fair value is equal to the carrying amount. Time Deposits - The estimated fair value of time deposits is based on the difference between interest costs paid on the Company’s time deposits and current market rates for time deposits with comparable characteristics. Borrowings - The fair value of borrowings are estimated using the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Subordinated Notes- The fair value of subordinated notes t is estimated using discounted cash flows based on current lending rates for similar long-term debt instruments with similar terms and remaining time to maturity. A description of the valuation methodologies used for impaired loans and OREO is as follows: Impaired Loans - The fair value of collateral dependent loans is based on the current appraised value of the collateral less estimated costs to sell, or internally developed models utilizing a calculation of expected discounted cash flows which contain management’s assumptions. 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 for the Company's off-balance sheet loan commitments 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 is not significant. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost and Fair Value of AFS Securities | The amortized cost and fair value of available-for-sale securities and the corresponding amounts of gross unrealized gains and losses at December 31, 2021 and 2020 were as follows (in thousands): Amortized Gross Gross Estimated December 31, 2021 Municipal bonds $ 5,931 $ 148 $ (13) $ 6,066 Agency mortgage-backed securities 2,312 53 (12) 2,353 Total available-for-sale securities $ 8,243 $ 201 $ (25) $ 8,419 December 31, 2020 Municipal bonds $ 5,209 $ 204 $ — $ 5,413 Agency mortgage-backed securities 4,706 105 (6) 4,805 Total available-for-sale securities $ 9,915 $ 309 $ (6) $ 10,218 |
Schedule of Amortized Cost and Fair Value of Mortgage-backed Securities by Contractual Maturity | The following table details the amortized cost and fair value of available-for-sale securities at December 31, 2021, by contractual maturity (in thousands). Expected maturities of available-for-sale 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, primarily mortgage-backed securities, are shown separately. December 31, 2021 Amortized Fair Weighted-Average Yield Due within one year $ 260 $ 266 3.80 % Due in one to five years 151 160 2.58 Due after five to ten years 1,226 1,319 5.27 Due after ten years 4,294 4,321 2.68 Mortgage-backed securities 2,312 2,353 1.81 Total $ 8,243 $ 8,419 3.12 % |
Schedule of Aggregate Fair Value and Gross Unrealized Loss by Length of Time | The following tables summarize the aggregate fair value and gross unrealized loss by length of time of those investments that have been in a continuous unrealized loss position at December 31, 2021 and 2020 (in thousands): December 31, 2021 Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Municipal bonds $ 1,632 $ (13) $ — $ — $ 1,632 $ (13) Agency mortgage-backed securities $ — $ — $ 402 $ (12) $ 402 $ (12) Total $ 1,632 $ (13) $ 402 $ (12) $ 2,034 $ (25) December 31, 2020 Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Agency mortgage-backed securities $ 1,618 $ (6) $ — $ — $ 1,618 $ (6) Total $ 1,618 $ (6) $ — $ — $ 1,618 $ (6) |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Composition of the Loan Portfolio, Excluding Loans Held-for-sale | The composition of the loan portfolio, excluding loans held-for-sale, at December 31, 2021 and 2020 is as follows (in thousands): December 31, 2021 2020 Real estate loans: One-to-four family $ 207,660 $ 130,657 Home equity 13,250 16,265 Commercial and multifamily 278,175 265,774 Construction and land 63,105 62,752 Total real estate loans 562,190 475,448 Consumer loans: Manufactured homes 21,636 20,941 Floating homes 59,268 39,868 Other consumer 16,748 15,024 Total consumer loans 97,652 75,833 Commercial business loans 28,026 64,217 Total loans 687,868 615,498 Premiums for purchased loans (1) 897 — Deferred fees (2,367) (2,135) Total loans, gross 686,398 613,363 Allowance for loan losses (6,306) (6,000) Total loans, net $ 680,092 $ 607,363 |
Schedule of Allowance For Loan Losses and Unpaid Principal Balance in Loans | The following table presents the balance in the allowance for loan losses and the unpaid principal balance in loans, net of partial charge-offs by portfolio segment and based on impairment method at December 31, 2021 (in thousands): Allowance: Individually Evaluated for Impairment Allowance: Collectively Evaluated for Impairment Ending Balance Loans Held for Investment: Individually Evaluated for Impairment Loans Held for Investment: Collectively Evaluated for Impairment Ending Balance One-to-four family $ 112 $ 1,290 $ 1,402 $ 4,066 $ 203,594 $ 207,660 Home equity 7 86 93 215 13,035 13,250 Commercial and multifamily — 2,340 2,340 2,380 275,795 278,175 Construction and land 4 646 650 68 63,037 63,105 Manufactured homes 144 331 475 221 21,415 21,636 Floating homes — 372 372 493 58,775 59,268 Other consumer 26 284 310 106 16,642 16,748 Commercial business — 269 269 176 27,850 28,026 Unallocated — 395 395 — — — Total $ 293 $ 6,013 $ 6,306 $ 7,725 $ 680,143 $ 687,868 The following table presents the balance in the allowance for loan losses and the unpaid principal balance in loans, net of partial charge-offs by portfolio segment and based on impairment method at December 31, 2020 (in thousands): Allowance: Individually Evaluated for Impairment Allowance: Collectively Evaluated for Impairment Ending Balance Loans Held for Investment: Individually Evaluated for Impairment Loans Held for Investment: Collectively Evaluated for Impairment Ending Balance One-to-four family $ 165 $ 898 $ 1,063 $ 3,705 $ 126,952 $ 130,657 Home equity 14 133 147 293 15,972 16,265 Commercial and multifamily — 2,370 2,370 353 265,421 265,774 Construction and land 6 572 578 77 62,675 62,752 Manufactured homes 163 366 529 265 20,676 20,941 Floating homes — 328 328 518 39,350 39,868 Other consumer 30 258 288 114 14,910 15,024 Commercial business — 291 291 615 63,602 64,217 Unallocated — 406 406 — — — Total $ 378 $ 5,622 $ 6,000 $ 5,940 $ 609,558 $ 615,498 The following table summarizes the activity in the allowance for loan losses for the year ended December 31, 2021 (in thousands): Beginning Charge-offs Recoveries (Recapture)/ Provision Ending One-to-four family $ 1,063 $ (76) $ — $ 415 $ 1,402 Home equity 147 (8) 6 (52) 93 Commercial and multifamily 2,370 — — (30) 2,340 Construction and land 578 — — 72 650 Manufactured homes 529 (2) 3 (55) 475 Floating homes 328 — — 44 372 Other consumer 288 (50) 6 66 310 Commercial business 291 — 2 (24) 269 Unallocated 406 — — (11) 395 $ 6,000 $ (136) $ 17 $ 425 $ 6,306 The following table summarizes the activity in the allowance for loan losses for the year ended December 31, 2020 (in thousands): Beginning Charge-offs Recoveries (Recapture)/ Provision Ending One-to-four family $ 1,120 $ (20) $ 63 $ (100) $ 1,063 Home equity 178 (2) 46 (75) 147 Commercial and multifamily 1,696 — — 674 2,370 Construction and land 492 — — 86 578 Manufactured homes 480 — 2 47 529 Floating homes 283 — — 45 328 Other consumer 112 (48) 14 210 288 Commercial business 331 (620) — 580 291 Unallocated 948 — — (542) 406 $ 5,640 $ (690) $ 125 $ 925 $ 6,000 |
Schedule of Credit Quality Indicators | The following table represents the internally assigned grades at December 31, 2021, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Grade: Pass $ 203,883 $ 12,904 $ 233,300 $ 56,310 $ 21,137 $ 58,171 $ 16,728 $ 23,713 $ 626,146 Watch 363 23 32,770 4,347 305 — — 3,561 41,369 Special Mention — — 4,553 830 — 604 — 211 6,198 Substandard 3,414 323 7,552 1,618 194 493 20 541 14,155 Doubtful — — — — — — — — — Loss — — — — — — — — — Total $ 207,660 $ 13,250 $ 278,175 $ 63,105 $ 21,636 $ 59,268 $ 16,748 $ 28,026 $ 687,868 The following table represents the internally assigned grades at December 31, 2020, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Grade: Pass $ 113,185 $ 15,556 $ 228,652 $ 44,360 $ 19,606 $ 38,746 $ 15,000 $ 56,743 $ 531,848 Watch 15,142 245 22,945 13,808 1,115 604 — 5,202 59,061 Special Mention — — 10,813 3,939 — — — 310 15,062 Substandard 2,330 464 3,364 645 220 518 24 1,962 9,527 Doubtful — — — — — — — — — Loss — — — — — — — — — Total $ 130,657 $ 16,265 $ 265,774 $ 62,752 $ 20,941 $ 39,868 $ 15,024 $ 64,217 $ 615,498 |
Schedule of Investment in Nonaccrual Loans | The following table presents the recorded investment in nonaccrual loans at December 31, 2021 and 2020, by type of loan (in thousands): December 31, 2021 2020 One-to-four family $ 2,207 $ 1,668 Home equity 140 156 Commercial and multifamily 2,380 353 Construction and land 33 40 Manufactured homes 122 149 Floating homes 493 518 Commercial business 176 — Total $ 5,552 $ 2,884 |
Summary of Recorded Investment Aging In Past Due Loans | The following table represents the aging of the recorded investment in past due loans (excluding COVID-19 modified loans) at December 31, 2021, by type of loan (in thousands): 30-59 Days 60-89 Days Greater than 90 Recorded Investment Total Current Total One-to-four family $ 1,805 $ 58 $ 87 $ — $ 1,950 $ 205,710 $ 207,660 Home equity — — 140 — 140 13,110 13,250 Commercial and multifamily — — — — — 278,175 278,175 Construction and land 837 — — — 837 62,268 63,105 Manufactured homes 123 — 59 — 182 21,454 21,636 Floating homes — — 244 — 244 59,024 59,268 Other consumer 2 76 — — 78 16,670 16,748 Commercial business 6 — 176 — 182 27,844 28,026 Total $ 2,773 $ 134 $ 706 $ — $ 3,613 $ 684,255 $ 687,868 The following table represents the aging of the recorded investment in past due loans (excluding COVID-19 modified loans) at December 31, 2020, by type of loan (in thousands): 30-59 Days 60-89 Days Greater Than 90 Recorded Investment Total Current Total One-to-four family $ 498 $ 362 $ 1,407 $ — $ 2,267 $ 128,390 $ 130,657 Home equity 102 — 112 — 214 16,051 16,265 Commercial and multifamily — — 353 — 353 265,421 265,774 Construction and land 690 — 40 — 730 62,022 62,752 Manufactured homes 159 74 149 — 382 20,559 20,941 Floating homes — 269 249 — 518 39,350 39,868 Other consumer 15 1 — — 16 15,008 15,024 Commercial business 583 — — — 583 63,634 64,217 Total $ 2,047 $ 706 $ 2,310 $ — $ 5,063 $ 610,435 $ 615,498 |
Schedule of Credit Risk Profile Based on Payment Activity | The following table represents the credit risk profile based on payment activity at December 31, 2021, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Performing $ 205,453 $ 13,110 $ 275,795 $ 63,072 $ 21,514 $ 58,775 $ 16,748 $ 27,850 $ 682,316 Nonperforming 2,207 140 2,380 33 122 493 — 176 5,552 Total $ 207,660 $ 13,250 $ 278,175 $ 63,105 $ 21,636 $ 59,268 $ 16,748 $ 28,026 $ 687,868 The following table represents the credit risk profile based on payment activity at December 31, 2020, by type of loan (in thousands): One-to-four Home Commercial Construction Manufactured Floating Other Commercial Total Performing $ 128,989 $ 16,109 $ 265,421 $ 62,712 $ 20,792 $ 39,350 $ 15,024 $ 64,217 $ 612,614 Nonperforming 1,668 156 353 40 149 518 — — 2,884 Total $ 130,657 $ 16,265 $ 265,774 $ 62,752 $ 20,941 $ 39,868 $ 15,024 $ 64,217 $ 615,498 |
Schedule of Impaired Loans | Impaired loans at December 31, 2021 and 2020, by type of loan were as follows (in thousands): December 31, 2021 Recorded Investment Unpaid Principal Without With Total Related One-to-four family $ 4,177 $ 3,109 $ 957 $ 4,066 $ 112 Home equity 215 140 75 215 7 Commercial and multifamily 2,380 2,380 — 2,380 — Construction and land 68 33 35 68 4 Manufactured homes 221 44 177 221 144 Floating homes 493 493 — 493 — Other consumer 106 — 106 106 26 Commercial business 176 176 — 176 — Total $ 7,836 $ 6,375 $ 1,350 $ 7,725 $ 293 December 31, 2020 Recorded Investment Unpaid Principal Without With Total Related One-to-four family $ 3,791 $ 2,392 $ 1,313 $ 3,705 $ 165 Home equity 293 156 137 293 14 Commercial and multifamily 353 353 — 353 — Construction and land 77 40 37 77 6 Manufactured homes 268 47 218 265 163 Floating homes 518 518 — 518 — Other consumer 114 — 114 114 30 Commercial business 615 615 — 615 — Total $ 6,029 $ 4,121 $ 1,819 $ 5,940 $ 378 The following table provides the average recorded investment and interest income on impaired loans for the year ended December 31, 2021 and 2020, by type of loan (in thousands): Year Ended December 31, 2021 Year Ended December 31, 2020 Average Interest Income Average Interest Income One-to-four family $ 3,471 $ 198 $ 6,067 $ 175 Home equity 287 16 332 17 Commercial and multifamily 617 138 398 19 Construction and land 111 4 479 4 Manufactured homes 239 17 366 24 Floating homes 508 18 429 30 Other consumer 110 5 130 5 Commercial business 318 2 1,062 19 Total $ 5,661 $ 398 $ 9,263 $ 293 |
Schedule of Related Party Loans | Director and officer loans are summarized as follows (in thousands): December 31, 2021 2020 Balance, beginning of period $ 3,995 $ 3,225 Advances — 196 New / (reclassified) loans, net 551 1,233 Repayments (181) (659) Balance, end of period $ 4,365 $ 3,995 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Transfers and Servicing [Abstract] | |
Schedule of Change in the Balance of Mortgage Servicing Assets | A summary of the change in the balance of mortgage servicing assets at December 31, 2021 and 2020 were as follows (in thousands): December 31, 2021 2020 Beginning balance, at fair value $ 3,780 $ 3,239 Servicing rights that result from transfers and sale of financial assets 1,301 2,398 Changes in fair value: Due to changes in model inputs or assumptions (1) (808) (1,857) Ending balance, at fair value $ 4,273 $ 3,780 (1) Includes changes due to collection/realization of expected cash flows and curtailments. |
Schedule of Mortgage Service Rights Assumptions | The key economic assumptions used in determining the fair value of mortgage servicing rights at the dates indicated are as follows: December 31, 2021 2020 Prepayment speed (Public Securities Association "PSA" model) 205 % 247 % Weighted-average life 5.8 years 5.2 years Yield to maturity discount rate 12.5 % 10.0 % |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment at December 31, 2021 and 2020 are summarized as follows (in thousands): December 31, 2021 2020 Land $ 920 $ 920 Buildings and improvements 7,059 6,944 Furniture and equipment 5,804 5,694 13,783 13,558 Less: Accumulated depreciation and amortization (7,964) (7,288) Premises and equipment, net $ 5,819 $ 6,270 |
Other Real Estate Owned and R_2
Other Real Estate Owned and Repossessed Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Activity Related to OREO and Repossessed Assets | The following table presents activity related to OREO and other repossessed assets for the periods shown (in thousands): Year Ended December 31, 2021 2020 Beginning balance, January 1 $ 594 $ 575 Additions to OREO and repossessed assets 84 19 Sales (19) — Write-downs/Losses — — Ending balance, December 31 $ 659 $ 594 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deposits [Abstract] | |
Summary of Deposits Accounts with the Corresponding Weighted Average Cost of Funds | A summary of deposit accounts with the corresponding weighted-average cost of funds at December 31, 2021 and 2020, are presented below (dollars in thousands): December 31, 2021 December 31, 2020 Deposit Wtd. Avg Deposit Wtd. Avg Noninterest-bearing demand $ 187,684 — % $ 129,299 — % Interest-bearing demand 307,061 0.19 230,492 0.44 Savings 103,401 0.08 83,778 0.27 Money market 91,670 0.21 65,748 0.39 Certificates 105,722 1.57 235,473 2.36 Escrow (1) 2,782 — 3,191 — Total $ 798,320 0.41 % $ 747,981 1.01 % (1) Escrow balances shown in noninterest-bearing deposits on the Consolidated Balance Sheets. |
Schedule of Maturities of Time Deposits | Scheduled maturities of time deposits at December 31, 2021, are as follows (in thousands): Year Ending December 31, Amount 2022 $ 55,552 2023 39,061 2024 4,217 2025 4,558 2026 2,225 Thereafter 109 $ 105,722 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy for Financial Instruments | The following tables present information about the level in the fair value hierarchy for the Company’s financial assets and liabilities, whether or not recognized or recorded at fair value as December 31, 2021 and 2020 (in thousands): December 31, 2021 Fair Value Measurements Using: Carrying Estimated Level 1 Level 2 Level 3 FINANCIAL ASSETS: Cash and cash equivalents $ 183,590 $ 183,590 $ 183,590 $ — $ — Available for sale securities 8,419 8,419 — 8,419 — Loans held-for-sale 3,094 3,094 — 3,094 — Loans held for portfolio, net 680,092 675,154 — — 675,154 Accrued interest receivable 2,217 2,217 2,217 — — Mortgage servicing rights 4,273 4,273 — — 4,273 FHLB Stock 1,046 1,046 — 1,046 — FINANCIAL LIABILITIES: Non-maturity deposits 692,598 692,598 — 692,598 — Time deposits 105,722 106,834 — 106,834 — Subordinated notes 11,634 11,634 — 11,634 — Accrued interest payable 200 200 200 — — December 31, 2020 Fair Value Measurements Using: Carrying Estimated Level 1 Level 2 Level 3 FINANCIAL ASSETS: Cash and cash equivalents $ 193,828 $ 193,828 $ 193,828 $ — $ — Available for sale securities 10,218 10,218 — 10,218 — Loans held-for-sale 11,604 11,604 — 11,604 — Loans held for portfolio, net 607,363 608,575 — — 608,575 Accrued interest receivable 2,254 2,254 2,254 — — Mortgage servicing rights 3,780 3,780 — — 3,780 FHLB Stock 877 877 — 877 — FINANCIAL LIABILITIES: Non-maturity deposits 512,508 512,508 — 512,508 — Time deposits 235,473 238,629 — 238,629 — Borrowings 11,592 11,592 — 11,592 — Accrued interest payable 369 369 369 — — |
Schedule of Fair value of Assets Measured on Recurring Basis | The following tables present the balance of assets measured at fair value on a recurring basis at December 31, 2021 and 2020 (in thousands): Fair Value at December 31, 2021 Description Total Level 1 Level 2 Level 3 Municipal bonds $ 6,066 $ — $ 6,066 $ — Agency mortgage-backed securities 2,353 — 2,353 — Mortgage servicing rights 4,273 — — 4,273 Fair Value at December 31, 2020 Description Total Level 1 Level 2 Level 3 Municipal bonds $ 5,413 $ — $ 5,413 $ — Agency mortgage-backed securities 4,805 — 4,805 — Mortgage servicing rights 3,780 — — 3,780 |
Schedule of Quantitative Information | The following table provides 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 at December 31, 2021: Financial Valuation Unobservable Input(s) Range Mortgage Servicing Rights Discounted cash flow Prepayment speed assumption 204%-344% (205%) Discount rate 10.5%-14.5% (12.5%) The following table provides 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 at December 31, 2020: Financial Valuation Unobservable Input(s) Range Mortgage Servicing Rights Discounted cash flow Prepayment speed assumption 178%-276% (247%) Discount rate 10%-12% (10%) The following table provides a description of the valuation technique, observable 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 nonrecurring basis at December 31, 2021: December 31, 2021 Financial Valuation Technique(s) Unobservable Input(s) Range (Weighted Average) OREO Third Party Appraisals No discounts N/A Impaired loans (1) Discounted Cash Flow Discount Rate 0-10% (4%) Impaired loans (2) Third Party Appraisals No discounts N/A (1) Represents troubled debt restructurings included within impaired loans. (2) Excludes troubled debt restructurings. December 31, 2020 Financial Valuation Technique(s) Unobservable Input(s) Range OREO Third Party Appraisals No discounts N/A Impaired loans (1) Discounted Cash Flow Discount Rate 0-10% (6%) Impaired loans (2) Third Party Appraisals No discounts N/A (1) Represents troubled debt restructurings included within impaired loans. (2) Excludes troubled debt restructurings. |
Schedule of Fair value of Assets Measured on Nonrecurring Basis | The following table presents the balance of assets measured at fair value on a nonrecurring basis and the total losses resulting from these fair value adjustments (in thousands): Fair Value at December 31, 2021 Description Total Level 1 Level 2 Level 3 OREO and repossessed assets $ 659 $ — $ — $ 659 Impaired loans 7,725 — — 7,725 Fair Value at December 31, 2020 Description Total Level 1 Level 2 Level 3 OREO and repossessed assets $ 594 $ — $ — $ 594 Impaired loans 5,940 — — 5,940 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Balance Sheet Information Related to Leases | The following table represents the Consolidated Balance Sheet classification of the Company’s right of use assets and lease liabilities (in thousands): December 31, 2021 2020 Operating lease right-of-use assets $ 5,811 $ 6,722 Operating lease liabilities 6,242 7,134 |
Schedule of Components of the Leases and Supplemental Cash Flow Information | The following table represents the components of lease expense (in thousands): Year Ended December 31, 2021 2020 Operating lease expense: Office leases $ 1,134 $ 1,160 Equipment leases — 10 Sublease income (11) (12) Net lease expense $ 1,123 $ 1,158 Lease term and discount rate by lease type consist of the following: December 31, 2021 2020 Weighted-average remaining lease term: Office leases 7.0 years 7.9 years Equipment leases 0.0 years 1.4 years Weighted-average discount rate (annualized): Office leases 2.67 % 2.66 % Equipment leases — % 1.62 % Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities for operating leases: Operating cash flows Office leases $ 1,042 $ 1,097 Equipment leases — 20 |
Schedule of Lease Liability Maturities | The following table represents the maturity of lease liabilities: December 31, 2021 Office Equipment Operating Lease Commitments 2022 $ 1,016 $ — 2023 989 — 2024 968 — 2025 885 — 2026 862 — Thereafter 2,150 — Total lease payments 6,870 — Less: Present value discount 628 — Present value of lease liabilities $ 6,242 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Common Share | Earnings per share are summarized for the periods presented in the following table (in thousands, except per share data): Year Ended December 31, 2021 2020 Net income $ 9,156 $ 8,937 Weighted average number of shares outstanding, basic 2,583 2,563 Effect of potentially dilutive common shares 44 30 Weighted average number of shares outstanding, diluted 2,627 2,593 Earnings per share, basic $ 3.52 $ 3.46 Earnings per share, diluted $ 3.46 $ 3.42 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Plan Award Activity | The following is a summary of the Company's stock option plan award activity during the period ended December 31, 2021: Shares Weighted-Average Weighted-Average Aggregate Outstanding at January 1, 2021 100,977 $ 22.00 4.71 $ 1,045,041 Granted 12,250 32.46 Exercised (20,651) 15.99 Forfeited (1,170) 34.93 Expired (90) 33.88 Outstanding at December 31, 2021 91,316 24.59 4.77 1,772,667 Exercisable 73,393 22.38 3.89 1,586,949 Expected to vest, assuming a 0% forfeiture rate over the vesting term 91,316 $ 24.59 4.77 $ 1,772,667 |
Schedule of Weighted-average Assumptions Used in Determining Fair Value of Options Granted | The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model. The fair value of options granted in 2021 and 2020 were determined using the following weighted-average assumptions as of the grant date. Year Ended December 31, 2021 2020 Annual dividend yield 1.60 % 1.60 % Expected volatility 21.67 % 21.67 % Risk-free interest rate 0.60 % 1.38 % Expected term 6.50 years 6.50 years Weighted-average grant date fair value per option granted $ 5.64 $ 7.14 |
Schedule of Nonvested Restricted Stock Awards | The following is a summary of the Company's non-vested restricted stock awards for the year ended December 31, 2021: Non-vested Shares Shares Weighted-Average Aggregate Non-vested at January 1, 2021 17,114 $ 35.03 Granted 10,168 32.46 Vested (7,806) 33.99 Forfeited (1,890) 34.93 Expired — — Non-vested at December 31, 2021 17,586 34.02 $ 44.00 Expected to vest assuming a 0% forfeiture rate over the vesting term 17,586 $ 34.02 $ 44.00 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes at December 31, 2021 and 2020 was as follows (in thousands): December 31, 2021 2020 Current $ 2,315 $ 2,036 Deferred (43) 355 Total tax expense $ 2,272 $ 2,391 |
Schedule of Reconciliation of Provision for Income Taxes | A reconciliation of the provision for income taxes for the years ended December 31, 2021 and 2020, with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes, is as follows (dollars in thousands): Year Ended December 31, 2021 2020 Provision at statutory rate $ 2,400 $ 2,380 Tax-exempt income (203) (186) Other 75 197 $ 2,272 $ 2,391 Federal Tax Rate 21.0 % 21.0 % Tax exempt rate (1.8) (1.6) Other 0.7 1.7 Effective tax rate 19.9 % 21.1 % |
Schedule of Components of Deferred Tax Assets | The following table reflects the temporary differences that gave rise to the components of the Company's deferred tax assets at December 31, 2021 and 2020 (in thousands): December 31, 2021 2020 Deferred tax assets Deferred compensation and supplemental retirement $ 381 $ 340 Equity based compensation 120 68 Intangible assets 46 55 Lease liabilities 1,311 1,498 Other, net 71 29 Allowance for loan losses 1,324 1,260 Total deferred tax assets 3,253 3,250 Deferred tax liabilities Prepaid expenses (100) (85) FHLB stock dividends (40) (39) Unrealized gain on securities (37) (64) Depreciation (165) (251) Mortgage servicing rights (568) (387) Deferred loan costs (739) (698) Right of use assets (1,220) (1,412) Total deferred tax liabilities (2,869) (2,936) Net deferred tax asset $ 384 $ 314 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Financial Instruments whose Contract Amount Represents Credit Risk | Financial instruments whose contract amount represents credit risk were as follow (in thousands): December 31, 2021 2020 Residential mortgage commitments $ 6,663 $ 3,312 Unfunded construction commitments 89,797 18,981 Unused lines of credit 35,036 34,075 Irrevocable letters of credit 151 151 Total loan commitments $ 131,647 $ 56,519 |
Parent Company Financial Info_2
Parent Company Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Balance Sheets | Balance sheets December 31, 2021 2020 Assets Cash and cash equivalents $ 4,215 $ 6,837 Investment in Sound Community Bank 100,986 90,568 Other assets 58 65 Total assets $ 105,259 $ 97,470 Liabilities and Stockholders' Equity Subordinated notes, net $ 11,634 $ 11,592 Other liabilities 267 394 Total liabilities 11,901 11,986 Stockholders' equity 93,358 85,484 Total liabilities and stockholders' equity $ 105,259 $ 97,470 |
Schedule of Statements of Income | Statements of Income Year Ended December 31, 2021 2020 Interest expense on subordinated notes $ (673) $ (190) Other expenses (550) (572) Loss before income tax benefit and equity in undistributed net income of subsidiary (1,223) (762) Income tax benefit 257 160 Equity in undistributed earnings of subsidiary 9,690 9,539 Net income $ 8,724 $ 8,937 |
Schedule of Statements of Cash Flows | Statements of Cash Flows Year Ended December 31, 2021 2020 Cash flows from operating activities: Net income $ 8,724 $ 8,937 Adjustments to reconcile net income to net cash provided by operating activities: Other, net (78) 70 Expense allocation to holding company — 129 Equity in undistributed earnings of subsidiary (9,690) (9,539) Net cash used in operating activities (1,044) (403) Cash flows from investing activities: ESOP shares released 431 324 Net cash provided by investing activities 431 324 Cash flows from financing activities: Proceeds from issuance of subordinated notes, net — 11,582 Transfer of proceeds from issuance of debt to subsidiary — (5,500) Dividends paid (2,039) (2,072) Repurchase of stock (152) (73) Stock options exercised 182 239 Net cash (used in) provided by financing activities (2,009) 4,176 Net (decrease) increase in cash (2,622) 4,097 Cash and cash equivalents at beginning of year 6,837 2,740 Cash and cash equivalents at end of year $ 4,215 $ 6,837 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Noninterest Income | The following table presents the Company's sources of Noninterest Income for the year ended December 31, 2021 and 2020 (in thousands). Items outside of the scope of ASC 606 are noted as such. Year Ended December 31, 2021 2020 Noninterest income: Service charges and fee income Account maintenance fees $ 311 $ 274 Transaction-based and overdraft service charges 356 327 Debit/ATM interchange fees 1,322 1,016 Credit card interchange fees 27 23 Loan fees (a) 178 205 Other fees (a) 53 60 Total service charges and fee income 2,247 1,905 Earnings on cash surrender value of bank-owned life insurance (a) 416 348 Mortgage servicing income (a) 1,284 1,027 Fair value adjustment on MSRs (a) (808) (1,857) Net gain on sale of loans (a) 4,190 6,022 Total noninterest income $ 7,329 $ 7,445 (a) Not within scope of ASC 606 |
Organization and Significant _3
Organization and Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)segmentloan | Dec. 31, 2020USD ($) | |
Property, Plant and Equipment [Line Items] | ||
Minimum past due period after which accrual of interest is discontinued | 90 days | |
Loans charge off period, maximum | 120 days | |
Period of consecutive monthly loan payments for loan to return to accrual status | 6 months | |
Number of contracts | loan | 1 | |
Modifications not considered TDRs | $ 25,000 | |
Minimum required investment in Federal Home Loan Bank Stock | $ 1,000,000 | $ 877,000 |
Number of operating segments | segment | 1 | |
Allowance for off-balance sheet credit commitments | $ 405,000 | 256,000 |
Advertising costs | $ 415,000 | 249,000 |
PPP loans | ||
Property, Plant and Equipment [Line Items] | ||
Number of contracts | loan | 2 | |
Modifications not considered TDRs | $ 64,000 | |
Minimum | Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 1 year | |
Maximum | Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 10 years | |
Maximum | Building | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 39 years | |
Core Deposits | ||
Property, Plant and Equipment [Line Items] | ||
Intangible asset | $ 97,000 | 128,000 |
Remaining weighted average life | 3 years 3 months 18 days | |
Impairment loss on intangible assets | $ 0 | $ 0 |
Core Deposits | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Amortization period | 8 years | |
Core Deposits | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Amortization period | 10 years |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents [Abstract] | ||
Reserve balances with Federal Reserve Bank | $ 0 | $ 0 |
Investments -Schedule of Amorti
Investments -Schedule of Amortized Cost and Fair Value of AFS Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 8,243 | $ 9,915 |
Gross Unrealized Gains | 201 | 309 |
Gross Unrealized Losses | (25) | (6) |
Available-for-sale securities, at fair value | 8,419 | 10,218 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,931 | 5,209 |
Gross Unrealized Gains | 148 | 204 |
Gross Unrealized Losses | (13) | 0 |
Available-for-sale securities, at fair value | 6,066 | 5,413 |
Agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,312 | 4,706 |
Gross Unrealized Gains | 53 | 105 |
Gross Unrealized Losses | (12) | (6) |
Available-for-sale securities, at fair value | $ 2,353 | $ 4,805 |
Investments -Schedule of Amor_2
Investments -Schedule of Amortized Cost and Fair Value of Mortgage-backed Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due within one year | $ 260 | |
Due in one to five years | 151 | |
Due after five to ten years | 1,226 | |
Due after ten years | 4,294 | |
Mortgage-backed securities | 2,312 | |
Amortized Cost | 8,243 | $ 9,915 |
Fair Value | ||
Due within one year | 266 | |
Due in one to five years | 160 | |
Due after five to ten years | 1,319 | |
Due after ten years | 4,321 | |
Mortgage-backed securities | 2,353 | |
Total | $ 8,419 | $ 10,218 |
Weighted-Average Yield | ||
Due within one year | 3.80% | |
Due in one to five years | 2.58% | |
Due after five to ten years | 5.27% | |
Due after ten years | 2.68% | |
Mortgage-backed securities | 1.81% | |
Total | 3.12% |
Investments -Narrative (Details
Investments -Narrative (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($)security | |
Debt Securities, Available-for-sale [Line Items] | ||
Pledged securities | $ 0 | $ 0 |
Sale of AFS securities | 0 | 0 |
Credit losses recognized in earnings | 0 | 0 |
Available-for-sale securities, at fair value | $ 8,419,000 | $ 10,218,000 |
Number of securities in unrealized loss position for less than 12 months | security | 2 | 6 |
Number of securities in unrealized loss position for more than 12 months | security | 1 | |
Agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of portfolio securities | security | 10 | 16 |
Available-for-sale securities, at fair value | $ 2,353,000 | $ 4,805,000 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of portfolio securities | security | 10 | 10 |
Available-for-sale securities, at fair value | $ 6,066,000 | $ 5,413,000 |
Number of securities in unrealized loss position for more than 12 months | security | 0 |
Investments -Summary of Aggrega
Investments -Summary of Aggregate Fair Value and Gross Unrealized Loss by Length of Time (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value | ||
Less Than 12 Months | $ 1,632 | $ 1,618 |
12 Months or Longer | 402 | 0 |
Total | 2,034 | 1,618 |
Unrealized Loss | ||
Less Than 12 Months | (13) | (6) |
12 Months or Longer | (12) | 0 |
Total | (25) | (6) |
Municipal bonds | ||
Fair Value | ||
Less Than 12 Months | 1,632 | |
12 Months or Longer | 0 | |
Total | 1,632 | |
Unrealized Loss | ||
Less Than 12 Months | (13) | |
12 Months or Longer | 0 | |
Total | (13) | |
Agency mortgage-backed securities | ||
Fair Value | ||
Less Than 12 Months | 0 | 1,618 |
12 Months or Longer | 402 | 0 |
Total | 402 | 1,618 |
Unrealized Loss | ||
Less Than 12 Months | 0 | (6) |
12 Months or Longer | (12) | 0 |
Total | $ (12) | $ (6) |
Loans -Composition of the Loan
Loans -Composition of the Loan Portfolio, Excluding Loans Held-for-sale (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 687,868 | $ 615,498 | |
Premiums for purchased loans | 897 | 0 | |
Deferred fees | (2,367) | (2,135) | |
Total loans, gross | 686,398 | 613,363 | |
Allowance for loan losses | (6,306) | (6,000) | $ (5,640) |
Total loans held for portfolio, net | 680,092 | 607,363 | |
PPP loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amount of loans funded | 119,200 | ||
Real estate loans: | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 562,190 | 475,448 | |
Real estate loans: | One-to-four family | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 207,660 | 130,657 | |
Premiums for purchased loans | (556) | ||
Allowance for loan losses | (1,402) | (1,063) | (1,120) |
Real estate loans: | Home equity | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 13,250 | 16,265 | |
Allowance for loan losses | (93) | (147) | (178) |
Real estate loans: | Commercial and multifamily | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 278,175 | 265,774 | |
Premiums for purchased loans | (181) | ||
Allowance for loan losses | (2,340) | (2,370) | (1,696) |
Real estate loans: | Construction and land | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 63,105 | 62,752 | |
Allowance for loan losses | (650) | (578) | (492) |
Consumer loans: | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 97,652 | 75,833 | |
Consumer loans: | Manufactured homes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 21,636 | 20,941 | |
Allowance for loan losses | (475) | (529) | (480) |
Consumer loans: | Floating homes | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 59,268 | 39,868 | |
Allowance for loan losses | (372) | (328) | (283) |
Consumer loans: | Other consumer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 16,748 | 15,024 | |
Allowance for loan losses | (310) | (288) | (112) |
Commercial business loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | 28,026 | 64,217 | |
Premiums for purchased loans | (160) | ||
Allowance for loan losses | (269) | $ (291) | $ (331) |
Commercial business loans | PPP loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total loans | $ 4,200 |
Loans -Narrative (Details)
Loans -Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 687,868 | $ 615,498 |
Forgone interest on nonaccrual loans | 312 | 168 |
Loans classified as TDRs | $ 2,600 | $ 3,200 |
Number of contracts | loan | 1 | |
Total modifications | $ 25 | |
Number of loans for which there was payment default within first 12 months of modification | loan | 0 | 1 |
Amount of loans for which there was payment default within first 12 months of modification | $ 161 | |
Discount on market loan rate for consumer loans to employees and officers | 1.00% | |
Real estate secured loans with current loan-to-value ratios above supervisory guidelines | $ 7,300 | 11,800 |
Performing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 682,316 | 612,614 |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Annual adjustable rate over rolling cost of funds | 1.00% | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Annual adjustable rate over rolling cost of funds | 1.50% | |
Commercial business loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 28,026 | $ 64,217 |
Loans purchased | $ 4,300 | |
Number of contracts paid off during the period | loan | 1 | |
TDR loans paid off during the period | $ 429 | |
Number of TDR loans charged off | loan | 1 | 1 |
TDR charged off | $ 45 | $ 97 |
Commercial business loans | Performing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 27,850 | 64,217 |
Real estate loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 562,190 | 475,448 |
Real estate loans: | One-to-four family | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 207,660 | 130,657 |
Loans purchased | 24,100 | |
Real estate loans: | One-to-four family | Performing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 205,453 | 128,989 |
Real estate loans: | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 13,250 | 16,265 |
Real estate loans: | Home equity | Performing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 13,110 | 16,109 |
Consumer loans: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 97,652 | 75,833 |
Consumer loans: | Manufactured homes | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 21,636 | 20,941 |
Consumer loans: | Manufactured homes | Performing | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 21,514 | $ 20,792 |
Consumer loans: | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of contracts paid off during the period | loan | 1 | |
TDR loans paid off during the period | $ 57 | |
PPP loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amount of loans funded | 119,200 | |
PPP loans | Commercial business loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 4,200 |
Loans -Schedule of Allowance Fo
Loans -Schedule of Allowance For Loan Losses and Unpaid Principal Balance in Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | $ 293 | $ 378 | |
Allowance: Collectively Evaluated for Impairment | 6,013 | 5,622 | |
Ending Balance | 6,306 | 6,000 | $ 5,640 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 7,725 | 5,940 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 680,143 | 609,558 | |
Ending Balance | 687,868 | 615,498 | |
Real estate loans: | |||
Loans held for investment | |||
Ending Balance | 562,190 | 475,448 | |
Consumer loans: | |||
Loans held for investment | |||
Ending Balance | 97,652 | 75,833 | |
Commercial business loans | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 0 | 0 | |
Allowance: Collectively Evaluated for Impairment | 269 | 291 | |
Ending Balance | 269 | 291 | 331 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 176 | 615 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 27,850 | 63,602 | |
Ending Balance | 28,026 | 64,217 | |
Unallocated | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 0 | 0 | |
Allowance: Collectively Evaluated for Impairment | 395 | 406 | |
Ending Balance | 395 | 406 | 948 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 0 | 0 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 0 | 0 | |
Ending Balance | 0 | 0 | |
One-to-four family | Real estate loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 112 | 165 | |
Allowance: Collectively Evaluated for Impairment | 1,290 | 898 | |
Ending Balance | 1,402 | 1,063 | 1,120 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 4,066 | 3,705 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 203,594 | 126,952 | |
Ending Balance | 207,660 | 130,657 | |
Home equity | Real estate loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 7 | 14 | |
Allowance: Collectively Evaluated for Impairment | 86 | 133 | |
Ending Balance | 93 | 147 | 178 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 215 | 293 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 13,035 | 15,972 | |
Ending Balance | 13,250 | 16,265 | |
Commercial and multifamily | Real estate loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 0 | 0 | |
Allowance: Collectively Evaluated for Impairment | 2,340 | 2,370 | |
Ending Balance | 2,340 | 2,370 | 1,696 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 2,380 | 353 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 275,795 | 265,421 | |
Ending Balance | 278,175 | 265,774 | |
Construction and land | Real estate loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 4 | 6 | |
Allowance: Collectively Evaluated for Impairment | 646 | 572 | |
Ending Balance | 650 | 578 | 492 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 68 | 77 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 63,037 | 62,675 | |
Ending Balance | 63,105 | 62,752 | |
Manufactured homes | Consumer loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 144 | 163 | |
Allowance: Collectively Evaluated for Impairment | 331 | 366 | |
Ending Balance | 475 | 529 | 480 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 221 | 265 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 21,415 | 20,676 | |
Ending Balance | 21,636 | 20,941 | |
Floating homes | Consumer loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 0 | 0 | |
Allowance: Collectively Evaluated for Impairment | 372 | 328 | |
Ending Balance | 372 | 328 | 283 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 493 | 518 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 58,775 | 39,350 | |
Ending Balance | 59,268 | 39,868 | |
Other consumer | Consumer loans: | |||
Allowance for loan losses | |||
Allowance: Individually Evaluated for Impairment | 26 | 30 | |
Allowance: Collectively Evaluated for Impairment | 284 | 258 | |
Ending Balance | 310 | 288 | $ 112 |
Loans held for investment | |||
Loans Held for Investment: Individually Evaluated for Impairment | 106 | 114 | |
Loans Held for Investment: Collectively Evaluated for Impairment | 16,642 | 14,910 | |
Ending Balance | $ 16,748 | $ 15,024 |
Loans -Summary of Activity in A
Loans -Summary of Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | $ 6,000 | $ 5,640 |
Charge-offs | (136) | (690) |
Recoveries | 17 | 125 |
Provision for loan losses | 425 | 925 |
Ending Allowance | 6,306 | 6,000 |
Real estate loans: | One-to-four family | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 1,063 | 1,120 |
Charge-offs | (76) | (20) |
Recoveries | 0 | 63 |
Provision for loan losses | 415 | (100) |
Ending Allowance | 1,402 | 1,063 |
Real estate loans: | Home equity | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 147 | 178 |
Charge-offs | (8) | (2) |
Recoveries | 6 | 46 |
Provision for loan losses | (52) | (75) |
Ending Allowance | 93 | 147 |
Real estate loans: | Commercial and multifamily | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 2,370 | 1,696 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for loan losses | (30) | 674 |
Ending Allowance | 2,340 | 2,370 |
Real estate loans: | Construction and land | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 578 | 492 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for loan losses | 72 | 86 |
Ending Allowance | 650 | 578 |
Consumer loans: | Manufactured homes | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 529 | 480 |
Charge-offs | (2) | 0 |
Recoveries | 3 | 2 |
Provision for loan losses | (55) | 47 |
Ending Allowance | 475 | 529 |
Consumer loans: | Floating homes | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 328 | 283 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for loan losses | 44 | 45 |
Ending Allowance | 372 | 328 |
Consumer loans: | Other consumer | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 288 | 112 |
Charge-offs | (50) | (48) |
Recoveries | 6 | 14 |
Provision for loan losses | 66 | 210 |
Ending Allowance | 310 | 288 |
Commercial business | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 291 | 331 |
Charge-offs | 0 | (620) |
Recoveries | 2 | 0 |
Provision for loan losses | (24) | 580 |
Ending Allowance | 269 | 291 |
Unallocated | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Allowance | 406 | 948 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for loan losses | (11) | (542) |
Ending Allowance | $ 395 | $ 406 |
Loans -Schedule of Credit Quali
Loans -Schedule of Credit Quality Indicators (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 687,868 | $ 615,498 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 626,146 | 531,848 |
Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 41,369 | 59,061 |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 6,198 | 15,062 |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 14,155 | 9,527 |
Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 562,190 | 475,448 |
Real estate loans: | One-to-four Family | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 207,660 | 130,657 |
Real estate loans: | One-to-four Family | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 203,883 | 113,185 |
Real estate loans: | One-to-four Family | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 363 | 15,142 |
Real estate loans: | One-to-four Family | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | One-to-four Family | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 3,414 | 2,330 |
Real estate loans: | One-to-four Family | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | One-to-four Family | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Home Equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 13,250 | 16,265 |
Real estate loans: | Home Equity | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 12,904 | 15,556 |
Real estate loans: | Home Equity | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 23 | 245 |
Real estate loans: | Home Equity | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Home Equity | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 323 | 464 |
Real estate loans: | Home Equity | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Home Equity | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Commercial and Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 278,175 | 265,774 |
Real estate loans: | Commercial and Multifamily | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 233,300 | 228,652 |
Real estate loans: | Commercial and Multifamily | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 32,770 | 22,945 |
Real estate loans: | Commercial and Multifamily | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,553 | 10,813 |
Real estate loans: | Commercial and Multifamily | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 7,552 | 3,364 |
Real estate loans: | Commercial and Multifamily | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Commercial and Multifamily | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Construction and Land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 63,105 | 62,752 |
Real estate loans: | Construction and Land | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 56,310 | 44,360 |
Real estate loans: | Construction and Land | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,347 | 13,808 |
Real estate loans: | Construction and Land | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 830 | 3,939 |
Real estate loans: | Construction and Land | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,618 | 645 |
Real estate loans: | Construction and Land | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Real estate loans: | Construction and Land | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 97,652 | 75,833 |
Consumer loans: | Manufactured Homes | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 21,636 | 20,941 |
Consumer loans: | Manufactured Homes | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 21,137 | 19,606 |
Consumer loans: | Manufactured Homes | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 305 | 1,115 |
Consumer loans: | Manufactured Homes | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Manufactured Homes | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 194 | 220 |
Consumer loans: | Manufactured Homes | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Manufactured Homes | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Floating Homes | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 59,268 | 39,868 |
Consumer loans: | Floating Homes | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 58,171 | 38,746 |
Consumer loans: | Floating Homes | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 604 |
Consumer loans: | Floating Homes | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 604 | 0 |
Consumer loans: | Floating Homes | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 493 | 518 |
Consumer loans: | Floating Homes | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Floating Homes | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Other Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 16,748 | 15,024 |
Consumer loans: | Other Consumer | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 16,728 | 15,000 |
Consumer loans: | Other Consumer | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Other Consumer | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Other Consumer | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 20 | 24 |
Consumer loans: | Other Consumer | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans: | Other Consumer | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Commercial business | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 28,026 | 64,217 |
Commercial business | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 23,713 | 56,743 |
Commercial business | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 3,561 | 5,202 |
Commercial business | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 211 | 310 |
Commercial business | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 541 | 1,962 |
Commercial business | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Commercial business | Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 0 | $ 0 |
Loans -Schedule of Investment i
Loans -Schedule of Investment in Nonaccrual Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | $ 5,552 | $ 2,884 |
Real estate loans: | One-to-four family | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 2,207 | 1,668 |
Real estate loans: | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 140 | 156 |
Real estate loans: | Commercial and multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 2,380 | 353 |
Real estate loans: | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 33 | 40 |
Consumer loans: | Manufactured homes | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 122 | 149 |
Consumer loans: | Floating homes | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 493 | 518 |
Commercial business | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | $ 176 | $ 0 |
Loans -Summary of Recorded Inve
Loans -Summary of Recorded Investment Aging In Past Due Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Total Loans | $ 687,868 | $ 615,498 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 2,773 | 2,047 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 134 | 706 |
Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 706 | 2,310 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 3,613 | 5,063 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 684,255 | 610,435 |
Real estate loans: | One-to-four family | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 207,660 | 130,657 |
Real estate loans: | One-to-four family | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 1,805 | 498 |
Real estate loans: | One-to-four family | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 58 | 362 |
Real estate loans: | One-to-four family | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 87 | 1,407 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Real estate loans: | One-to-four family | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 1,950 | 2,267 |
Real estate loans: | One-to-four family | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 205,710 | 128,390 |
Real estate loans: | Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 13,250 | 16,265 |
Real estate loans: | Home equity | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 102 |
Real estate loans: | Home equity | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Real estate loans: | Home equity | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 140 | 112 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Real estate loans: | Home equity | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 140 | 214 |
Real estate loans: | Home equity | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 13,110 | 16,051 |
Real estate loans: | Commercial and multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 278,175 | 265,774 |
Real estate loans: | Commercial and multifamily | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Real estate loans: | Commercial and multifamily | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Real estate loans: | Commercial and multifamily | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 353 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Real estate loans: | Commercial and multifamily | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 353 |
Real estate loans: | Commercial and multifamily | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 278,175 | 265,421 |
Real estate loans: | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 63,105 | 62,752 |
Real estate loans: | Construction and land | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 837 | 690 |
Real estate loans: | Construction and land | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Real estate loans: | Construction and land | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 40 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Real estate loans: | Construction and land | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 837 | 730 |
Real estate loans: | Construction and land | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 62,268 | 62,022 |
Consumer loans: | Manufactured homes | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 21,636 | 20,941 |
Consumer loans: | Manufactured homes | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 123 | 159 |
Consumer loans: | Manufactured homes | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 74 |
Consumer loans: | Manufactured homes | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 59 | 149 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Consumer loans: | Manufactured homes | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 182 | 382 |
Consumer loans: | Manufactured homes | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 21,454 | 20,559 |
Consumer loans: | Floating homes | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 59,268 | 39,868 |
Consumer loans: | Floating homes | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Consumer loans: | Floating homes | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 269 |
Consumer loans: | Floating homes | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 244 | 249 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Consumer loans: | Floating homes | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 244 | 518 |
Consumer loans: | Floating homes | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 59,024 | 39,350 |
Consumer loans: | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 16,748 | 15,024 |
Consumer loans: | Other consumer | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 2 | 15 |
Consumer loans: | Other consumer | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 76 | 1 |
Consumer loans: | Other consumer | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Consumer loans: | Other consumer | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 78 | 16 |
Consumer loans: | Other consumer | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 16,670 | 15,008 |
Commercial business | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 28,026 | 64,217 |
Commercial business | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 6 | 583 |
Commercial business | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 0 | 0 |
Commercial business | Greater than 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 176 | 0 |
Recorded Investment > 90 Days and Accruing | 0 | 0 |
Commercial business | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | 182 | 583 |
Commercial business | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total Loans | $ 27,844 | $ 63,634 |
Loans -Schedule of Credit Risk
Loans -Schedule of Credit Risk Profile Based on Payment Activity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 687,868 | $ 615,498 |
Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 682,316 | 612,614 |
Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 5,552 | 2,884 |
Real estate loans: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 562,190 | 475,448 |
Real estate loans: | One-to-four Family | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 207,660 | 130,657 |
Real estate loans: | One-to-four Family | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 205,453 | 128,989 |
Real estate loans: | One-to-four Family | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,207 | 1,668 |
Real estate loans: | Home Equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 13,250 | 16,265 |
Real estate loans: | Home Equity | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 13,110 | 16,109 |
Real estate loans: | Home Equity | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 140 | 156 |
Real estate loans: | Commercial and Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 278,175 | 265,774 |
Real estate loans: | Commercial and Multifamily | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 275,795 | 265,421 |
Real estate loans: | Commercial and Multifamily | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,380 | 353 |
Real estate loans: | Construction and Land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 63,105 | 62,752 |
Real estate loans: | Construction and Land | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 63,072 | 62,712 |
Real estate loans: | Construction and Land | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 33 | 40 |
Consumer loans: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 97,652 | 75,833 |
Consumer loans: | Manufactured Homes | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 21,636 | 20,941 |
Consumer loans: | Manufactured Homes | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 21,514 | 20,792 |
Consumer loans: | Manufactured Homes | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 122 | 149 |
Consumer loans: | Floating Homes | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 59,268 | 39,868 |
Consumer loans: | Floating Homes | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 58,775 | 39,350 |
Consumer loans: | Floating Homes | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 493 | 518 |
Consumer loans: | Other Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 16,748 | 15,024 |
Consumer loans: | Other Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 16,748 | 15,024 |
Consumer loans: | Other Consumer | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Commercial business loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 28,026 | 64,217 |
Commercial business loans | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 27,850 | 64,217 |
Commercial business loans | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 176 | $ 0 |
Loans -Schedule of Impaired Loa
Loans -Schedule of Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financing receivable Impaired | ||
Unpaid Principal Balance | $ 7,836 | $ 6,029 |
Without Allowance | 6,375 | 4,121 |
With Allowance | 1,350 | 1,819 |
Total Recorded Investment | 7,725 | 5,940 |
Related Allowance | 293 | 378 |
Average Recorded Investment | 5,661 | 9,263 |
Interest Income Recognized | 398 | 293 |
Real estate loans: | One-to-four family | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 4,177 | 3,791 |
Without Allowance | 3,109 | 2,392 |
With Allowance | 957 | 1,313 |
Total Recorded Investment | 4,066 | 3,705 |
Related Allowance | 112 | 165 |
Average Recorded Investment | 3,471 | 6,067 |
Interest Income Recognized | 198 | 175 |
Real estate loans: | Home equity | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 215 | 293 |
Without Allowance | 140 | 156 |
With Allowance | 75 | 137 |
Total Recorded Investment | 215 | 293 |
Related Allowance | 7 | 14 |
Average Recorded Investment | 287 | 332 |
Interest Income Recognized | 16 | 17 |
Real estate loans: | Commercial and multifamily | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 2,380 | 353 |
Without Allowance | 2,380 | 353 |
With Allowance | 0 | 0 |
Total Recorded Investment | 2,380 | 353 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 617 | 398 |
Interest Income Recognized | 138 | 19 |
Real estate loans: | Construction and land | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 68 | 77 |
Without Allowance | 33 | 40 |
With Allowance | 35 | 37 |
Total Recorded Investment | 68 | 77 |
Related Allowance | 4 | 6 |
Average Recorded Investment | 111 | 479 |
Interest Income Recognized | 4 | 4 |
Consumer loans: | Manufactured homes | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 221 | 268 |
Without Allowance | 44 | 47 |
With Allowance | 177 | 218 |
Total Recorded Investment | 221 | 265 |
Related Allowance | 144 | 163 |
Average Recorded Investment | 239 | 366 |
Interest Income Recognized | 17 | 24 |
Consumer loans: | Floating homes | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 493 | 518 |
Without Allowance | 493 | 518 |
With Allowance | 0 | 0 |
Total Recorded Investment | 493 | 518 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 508 | 429 |
Interest Income Recognized | 18 | 30 |
Consumer loans: | Other consumer | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 106 | 114 |
Without Allowance | 0 | 0 |
With Allowance | 106 | 114 |
Total Recorded Investment | 106 | 114 |
Related Allowance | 26 | 30 |
Average Recorded Investment | 110 | 130 |
Interest Income Recognized | 5 | 5 |
Commercial business loans | ||
Financing receivable Impaired | ||
Unpaid Principal Balance | 176 | 615 |
Without Allowance | 176 | 615 |
With Allowance | 0 | 0 |
Total Recorded Investment | 176 | 615 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 318 | 1,062 |
Interest Income Recognized | $ 2 | $ 19 |
Loans -Schedule of Related Part
Loans -Schedule of Related Party Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Balance, beginning of period | $ 3,995 | $ 3,225 |
Advances | 0 | 196 |
New / (reclassified) loans, net | 551 | 1,233 |
Repayments | (181) | (659) |
Balance, end of period | $ 4,365 | $ 3,995 |
Mortgage Servicing Rights -Narr
Mortgage Servicing Rights -Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Assets at Fair Value [Line Items] | ||
Mortgage servicing rights portfolio | $ 508.1 | $ 488.7 |
Contractually specified servicing, late and ancillary fees earned on the mortgage servicing rights | 1.3 | 1 |
Federal National Mortgage Association | ||
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced for others | 504.1 | 481.6 |
Other financial institutions | ||
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced for others | $ 4 | $ 7.1 |
Mortgage Servicing Rights -Summ
Mortgage Servicing Rights -Summary of Change in the Balance of Mortgage Servicing Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Beginning balance, at fair value | $ 3,780 | $ 3,239 |
Servicing rights that result from transfers and sale of financial assets | 1,301 | 2,398 |
Changes in fair value: | ||
Due to changes in model inputs or assumptions | (808) | (1,857) |
Ending balance, at fair value | $ 4,273 | $ 3,780 |
Mortgage Servicing Rights -Mort
Mortgage Servicing Rights -Mortgage Service Rights Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Transfers and Servicing [Abstract] | ||
Prepayment speed (Public Securities Association "PSA" model) | 205.00% | 247.00% |
Weighted-average life | 5 years 9 months 18 days | 5 years 2 months 12 days |
Yield to maturity discount rate | 12.50% | 10.00% |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 13,783 | $ 13,558 |
Less: Accumulated depreciation and amortization | (7,964) | (7,288) |
Premises and equipment, net | 5,819 | 6,270 |
Depreciation and amortization | 676 | 905 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 920 | 920 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 7,059 | 6,944 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 5,804 | $ 5,694 |
Other Real Estate Owned and R_3
Other Real Estate Owned and Repossessed Assets (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($) | |
Other Real Estate [Roll Forward] | ||
Beginning balance | $ 594 | $ 575 |
Additions to OREO and repossessed assets | 84 | 19 |
Sales | (19) | 0 |
Write-downs/Losses | 0 | 0 |
Ending balance | $ 659 | $ 594 |
Number of loans in process of foreclosure | loan | 1,000 | |
Mortgage loans in process of foreclosure, amount | $ 39 |
Deposits - Corresponding Weight
Deposits - Corresponding Weighted-average Cost of Funds & Maturities of Time Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deposit Balance | ||
Noninterest-bearing demand | $ 187,684 | $ 129,299 |
Interest-bearing demand | 307,061 | 230,492 |
Savings | 103,401 | 83,778 |
Money market | 91,670 | 65,748 |
Certificates | 105,722 | 235,473 |
Escrow | 2,782 | 3,191 |
Total deposits | $ 798,320 | $ 747,981 |
Wtd. Avg Rate | ||
Noninterest-bearing demand | 0.00% | 0.00% |
Interest-bearing demand | 0.19% | 0.44% |
Savings | 0.08% | 0.27% |
Money market | 0.21% | 0.39% |
Certificates | 1.57% | 2.36% |
Escrow | 0.00% | 0.00% |
Total | 0.41% | 1.01% |
Time Deposits, Fiscal Year Maturity [Abstract] | ||
2022 | $ 55,552 | |
2023 | 39,061 | |
2024 | 4,217 | |
2025 | 4,558 | |
2026 | 2,225 | |
Thereafter | 109 | |
Total time deposits | $ 105,722 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deposits [Abstract] | ||
Maximum time to maturity of certificate accounts | 5 years | |
Time deposits in denominations of $250,000 or more | $ 19,100,000 | $ 79,900,000 |
Brokered deposits | 0 | 0 |
Related party deposits | 4,900,000 | 6,400,000 |
Maximum federal insurability of time deposits | $ 250,000 | $ 250,000 |
Borrowings, FHLB Stock and Su_2
Borrowings, FHLB Stock and Subordinated Notes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | |||
Minimum required investment in Federal Home Loan Bank Stock | $ 1,000,000 | $ 877,000 | |
Proceeds from subordinated notes, net | 0 | 11,582,000 | |
Subordinated notes | |||
Short-term Debt [Line Items] | |||
Aggregate principal | $ 12,000,000 | ||
Interest rate | 5.25% | ||
Proceeds from subordinated notes, net | $ 11,600,000 | ||
Redemption price, percentage of principal amount redeemed | 100.00% | ||
Unamortized debt issuance cost | (366,000) | (408,000) | |
Subordinated notes | Period before October 1, 2025 | |||
Short-term Debt [Line Items] | |||
Interest rate | 5.25% | ||
Subordinated notes | After October 1, 2025 | |||
Short-term Debt [Line Items] | |||
Incremental term | 3 months | ||
Subordinated notes | After October 1, 2025 | SOFR | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 5.13% | ||
FHLB | |||
Short-term Debt [Line Items] | |||
Maximum borrowing capacity | 417,700,000 | 390,500,000 | |
Outstanding borrowings | $ 0 | $ 0 | |
Weighted-average interest rate of borrowings | 0.00% | 3.10% | |
Maximum amount outstanding | $ 0 | $ 10,100,000 | |
Average balance outstanding | 0 | 7,100,000 | |
Minimum required investment in Federal Home Loan Bank Stock | 1,000,000 | 877,000 | |
One-to-four family | FHLB | |||
Short-term Debt [Line Items] | |||
Loans used as collateral for credit facility | 59,700,000 | 103,600,000 | |
Commercial and multifamily | FHLB | |||
Short-term Debt [Line Items] | |||
Loans used as collateral for credit facility | 52,900,000 | 128,900,000 | |
Home equity | FHLB | |||
Short-term Debt [Line Items] | |||
Loans used as collateral for credit facility | 482,000 | 2,800,000 | |
Line of Credit | Pacific Coast Banker's Bank | |||
Short-term Debt [Line Items] | |||
Outstanding borrowings | $ 0 | 0 | |
Term period | 1 year | ||
Current borrowing capacity | $ 20,000,000 | ||
Irrevocable letters of credit | FHLB | |||
Short-term Debt [Line Items] | |||
Letters of credit to secure public deposits | 11,500,000 | 21,600,000 | |
Net remaining amount available | 101,500,000 | 213,700,000 | |
Federal Reserve Bank | |||
Short-term Debt [Line Items] | |||
Outstanding borrowings | 0 | 0 | |
Unused borrowing capacity | 22,400,000 | 23,600,000 | |
Line of Credit | PPPLF | |||
Short-term Debt [Line Items] | |||
Outstanding borrowings | 0 | 0 | |
Unused borrowing capacity | $ 0 | $ 43,300,000 |
Fair Value Measurements -Schedu
Fair Value Measurements -Schedule of Fair Value Hierarchy for Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
FINANCIAL ASSETS: | |||
Available for sale securities | $ 8,419 | $ 10,218 | |
Accrued interest receivable | 2,217 | 2,254 | |
Mortgage servicing rights | 4,273 | 3,780 | $ 3,239 |
FINANCIAL LIABILITIES: | |||
Accrued interest payable | 200 | 369 | |
Level 1 | |||
FINANCIAL ASSETS: | |||
Cash and cash equivalents | 183,590 | 193,828 | |
Available for sale securities | 0 | 0 | |
Loans held-for-sale | 0 | 0 | |
Loans held for portfolio, net | 0 | 0 | |
Accrued interest receivable | 2,217 | 2,254 | |
Mortgage servicing rights | 0 | 0 | |
FHLB Stock | 0 | 0 | |
FINANCIAL LIABILITIES: | |||
Non-maturity deposits | 0 | 0 | |
Time deposits | 0 | 0 | |
Subordinated notes | 0 | 0 | |
Accrued interest payable | 200 | 369 | |
Level 2 | |||
FINANCIAL ASSETS: | |||
Cash and cash equivalents | 0 | 0 | |
Available for sale securities | 8,419 | 10,218 | |
Loans held-for-sale | 3,094 | 11,604 | |
Loans held for portfolio, net | 0 | 0 | |
Accrued interest receivable | 0 | 0 | |
Mortgage servicing rights | 0 | 0 | |
FHLB Stock | 1,046 | 877 | |
FINANCIAL LIABILITIES: | |||
Non-maturity deposits | 692,598 | 512,508 | |
Time deposits | 106,834 | 238,629 | |
Subordinated notes | 11,634 | 11,592 | |
Accrued interest payable | 0 | 0 | |
Level 3 | |||
FINANCIAL ASSETS: | |||
Cash and cash equivalents | 0 | 0 | |
Available for sale securities | 0 | 0 | |
Loans held-for-sale | 0 | 0 | |
Loans held for portfolio, net | 675,154 | 608,575 | |
Accrued interest receivable | 0 | 0 | |
Mortgage servicing rights | 4,273 | 3,780 | |
FHLB Stock | 0 | 0 | |
FINANCIAL LIABILITIES: | |||
Non-maturity deposits | 0 | 0 | |
Time deposits | 0 | 0 | |
Subordinated notes | 0 | 0 | |
Accrued interest payable | 0 | 0 | |
Carrying Value | |||
FINANCIAL ASSETS: | |||
Cash and cash equivalents | 183,590 | 193,828 | |
Available for sale securities | 8,419 | 10,218 | |
Loans held-for-sale | 3,094 | 11,604 | |
Loans held for portfolio, net | 680,092 | 607,363 | |
Accrued interest receivable | 2,217 | 2,254 | |
Mortgage servicing rights | 4,273 | 3,780 | |
FHLB Stock | 1,046 | 877 | |
FINANCIAL LIABILITIES: | |||
Non-maturity deposits | 692,598 | 512,508 | |
Time deposits | 105,722 | 235,473 | |
Subordinated notes | 11,634 | 11,592 | |
Accrued interest payable | 200 | 369 | |
Estimated Fair Value | |||
FINANCIAL ASSETS: | |||
Cash and cash equivalents | 183,590 | 193,828 | |
Available for sale securities | 8,419 | 10,218 | |
Loans held-for-sale | 3,094 | 11,604 | |
Loans held for portfolio, net | 675,154 | 608,575 | |
Accrued interest receivable | 2,217 | 2,254 | |
Mortgage servicing rights | 4,273 | 3,780 | |
FHLB Stock | 1,046 | 877 | |
FINANCIAL LIABILITIES: | |||
Non-maturity deposits | 692,598 | 512,508 | |
Time deposits | 106,834 | 238,629 | |
Subordinated notes | 11,634 | 11,592 | |
Accrued interest payable | $ 200 | $ 369 |
Fair Value Measurements -Sche_2
Fair Value Measurements -Schedule of Fair value of Assets Measured on Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Municipal bonds | $ 6,066 | $ 5,413 |
Agency mortgage-backed securities | 2,353 | 4,805 |
Mortgage servicing rights | 4,273 | 3,780 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Municipal bonds | 0 | 0 |
Agency mortgage-backed securities | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Municipal bonds | 6,066 | 5,413 |
Agency mortgage-backed securities | 2,353 | 4,805 |
Mortgage servicing rights | 0 | 0 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Municipal bonds | 0 | 0 |
Agency mortgage-backed securities | 0 | 0 |
Mortgage servicing rights | 4,273 | 3,780 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO and repossessed assets | 659 | 594 |
Impaired loans | 7,725 | 5,940 |
Nonrecurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO and repossessed assets | 0 | 0 |
Impaired loans | 0 | 0 |
Nonrecurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO and repossessed assets | 0 | 0 |
Impaired loans | 0 | 0 |
Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO and repossessed assets | 659 | 594 |
Impaired loans | $ 7,725 | $ 5,940 |
Fair Value Measurements -Summar
Fair Value Measurements -Summary of Quantitative Information (Details) - Level 3 - Discounted cash flow | Dec. 31, 2021 | Dec. 31, 2020 |
Prepayment speed assumption | Recurring | Mortgage Servicing Rights | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Mortgage Servicing Rights | 2.04 | 1.78 |
Prepayment speed assumption | Recurring | Mortgage Servicing Rights | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Mortgage Servicing Rights | 3.44 | 2.76 |
Prepayment speed assumption | Recurring | Mortgage Servicing Rights | Weighted average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Mortgage Servicing Rights | 2.05 | 2.47 |
Discount rate | Recurring | Mortgage Servicing Rights | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Mortgage Servicing Rights | 0.105 | 0.10 |
Discount rate | Recurring | Mortgage Servicing Rights | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Mortgage Servicing Rights | 0.145 | 0.12 |
Discount rate | Recurring | Mortgage Servicing Rights | Weighted average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Mortgage Servicing Rights | 0.125 | 0.10 |
Discount rate | Nonrecurring | Impaired loans | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
OREO and repossessed assets | 0 | 0 |
Discount rate | Nonrecurring | Impaired loans | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
OREO and repossessed assets | 0.10 | 0.10 |
Discount rate | Nonrecurring | Impaired loans | Weighted average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
OREO and repossessed assets | 0.04 | 0.06 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Lessee, Lease, Description [Line Items] | |
Number of renewal options | 1 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial lease term | 3 years |
Remaining lease term | 2 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial lease term | 10 years |
Remaining lease term | 7 years 6 months |
Leases - Summary of Balance She
Leases - Summary of Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 5,811 | $ 6,722 |
Operating lease liabilities | $ 6,242 | $ 7,134 |
Leases - Summary of Components
Leases - Summary of Components of the Leases and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Sublease income | $ (11) | $ (12) |
Net lease expense | 1,123 | 1,158 |
Office Leases | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease expense: | $ 1,134 | $ 1,160 |
Weighted-average remaining lease term: | 7 years | 7 years 10 months 24 days |
Weighted-average discount rate (annualized): | 2.67% | 2.66% |
Operating cash flows | $ 1,042 | $ 1,097 |
Equipment Leases | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease expense: | $ 0 | $ 10 |
Weighted-average remaining lease term: | 0 years | 1 year 4 months 24 days |
Weighted-average discount rate (annualized): | 0.00% | 1.62% |
Operating cash flows | $ 0 | $ 20 |
Leases - Schedule of Lease Liab
Leases - Schedule of Lease Liability Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Present value of lease liabilities | $ 6,242 | $ 7,134 |
Office Leases | ||
Property, Plant and Equipment [Line Items] | ||
2022 | 1,016 | |
2023 | 989 | |
2024 | 968 | |
2025 | 885 | |
2026 | 862 | |
Thereafter | 2,150 | |
Total lease payments | 6,870 | |
Less: Present value discount | 628 | |
Present value of lease liabilities | 6,242 | |
Equipment Leases | ||
Property, Plant and Equipment [Line Items] | ||
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total lease payments | 0 | |
Less: Present value discount | 0 | |
Present value of lease liabilities | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income available to common stockholders, basic | $ 9,156 | $ 8,937 |
Net income available to common stockholders, diluted | $ 9,156 | $ 8,937 |
Weighted average number of shares outstanding, basic (in shares) | 2,582,775 | 2,562,650 |
Effect of potentially dilutive common shares (in shares) | 44,000 | 30,000 |
Weighted average number of shares outstanding, diluted (in shares) | 2,626,516 | 2,592,532 |
Earnings per share, basic (in dollars per share) | $ 3.52 | $ 3.46 |
Earnings per share, diluted (in dollars per share) | $ 3.46 | $ 3.42 |
Anti-dilutive securities not included in computation of diluted earnings per common share (in shares) | 0 | 0 |
Employee Benefits -401(K) Plan
Employee Benefits -401(K) Plan and Deferred Compensation Plan Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)monthly_installment | Dec. 31, 2020USD ($) | |
Deferred Compensation Liability [Abstract] | ||
Employer contribution amount | $ 230 | $ 217 |
Equal monthly installment | monthly_installment | 120 | |
Deferred compensation liability | $ 111 | 109 |
Nonqualified deferred compensation plan | ||
Deferred Compensation Liability [Abstract] | ||
Percentage of annual compensation to be deferred | 80.00% | |
Percentage of employer discretionary contribution | 100.00% | |
Deferred compensation, requisite service period | 3 years | |
Annual vesting rate | 20.00% | |
Deferred compensation, service period for vesting to commence | 2 years | |
Employer discretionary contribution | $ 93 | $ 90 |
Nonqualified deferred compensation plan | Maximum | ||
Deferred Compensation Liability [Abstract] | ||
Period of distribution in case of separation from service in annual installments | 10 years | |
Period of in-service distributions in annual installments | 5 years |
Employee Benefits -Supplemental
Employee Benefits -Supplemental Executive Retirement Plans Narrative (Details) - Ms. Stewart | 12 Months Ended |
Dec. 31, 2021USD ($)plan | |
SERP | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of supplemental executive retirement plans | plan | 2 |
SERP 1 | |
Defined Benefit Plan Disclosure [Line Items] | |
Annual benefit payment related to supplemental executive retirement benefit plans | $ 53,320 |
SERP 2 | |
Defined Benefit Plan Disclosure [Line Items] | |
Annual benefit payment related to supplemental executive retirement benefit plans | $ 96,390 |
Period to pay single lump sum amount | 90 days |
Lump sum amount eligible for beneficiary | $ 1,100,000 |
Employee Benefits -Stock Option
Employee Benefits -Stock Options and Restricted Stock Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loanshares | Dec. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of existing Equity Incentive Plans | loan | 1 | |
Share-based compensation | $ | $ 360 | $ 338 |
Employee stock option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cumulative number of shares issued (in shares) | 271,854 | |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cumulative number of shares issued (in shares) | 142,201 | |
2013 Plan | Stock options and stock appreciation rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 181,750 | |
2013 Plan | Restricted stock and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 116,700 |
Employee Benefits -Stock Opti_2
Employee Benefits -Stock Option Awards Narrative (Details) - Employee stock option $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Term of awards | 10 years |
Unrecognized compensation cost | $ 81 |
Remaining weighted-average vesting period | 2 years 4 months 24 days |
2008 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award annual vesting rights | 20.00% |
Vesting commencement period from grant date | 1 year |
2013 Plan | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 1 year |
2013 Plan | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Employee Benefits -Summary of S
Employee Benefits -Summary of Stock Option Plan Award Activity (Details) - Employee stock option - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding at the beginning of the year (in shares) | 100,977 | |
Granted (in shares) | 12,250 | |
Exercised (in shares) | (20,651) | |
Forfeited (in shares) | (1,170) | |
Expired (in shares) | (90) | |
Outstanding at the end of the year (in shares) | 91,316 | 100,977 |
Exercisable (in shares) | 73,393 | |
Expected to vest, assuming a 0% forfeiture rate over the vesting term (in shares) | 91,316 | |
Weighted-Average Exercise Price | ||
Outstanding, beginning of the year (in dollars per share) | $ 22 | |
Granted (in dollars per share) | 32.46 | |
Exercised (in dollars per share) | 15.99 | |
Forfeited (in dollars per share) | 34.93 | |
Expired (in dollars per share) | 33.88 | |
Outstanding, end of the year (in dollars per share) | 24.59 | $ 22 |
Exercisable (in dollars per share) | 22.38 | |
Expected to vest, assuming a 0% forfeiture rate over the vesting term (in dollars per share) | $ 24.59 | |
Weighted-Average Remaining Contractual Term In Years and Aggregate Instrinsic Value | ||
Outstanding, contractual term | 4 years 9 months 7 days | 4 years 8 months 15 days |
Exercisable, contractual term | 3 years 10 months 20 days | |
Expected to vest, assuming a 0% forfeiture rate over the vesting term, contractual term | 4 years 9 months 7 days | |
Outstanding, aggregate intrinsic value | $ 1,772,667 | $ 1,045,041 |
Exercisable, aggregate intrinsic value | 1,586,949 | |
Expected to vest, assuming a 0% forfeiture rate over the vesting term, aggregate intrinsic value | $ 1,772,667 | |
Forfeiture rate | 0.00% | |
Summary of Weighted-average Assumptions Used in Determining Fair Value of Options Granted | ||
Annual dividend yield | 1.60% | 1.60% |
Expected volatility | 21.67% | 21.67% |
Risk-free interest rate | 0.60% | 1.38% |
Expected term | 6 years 6 months | 6 years 6 months |
Weighted-average grant date fair value per option granted (in dollars per share) | $ 5.64 | $ 7.14 |
Employee Benefits -Restricted S
Employee Benefits -Restricted Stock Awards Narrative (Details) - Restricted stock - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 401 | |
Remaining weighted-average vesting period | 2 years 2 months 12 days | |
Total fair value of shares vested | $ 265 | $ 237 |
2008 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award annual vesting rights | 20.00% | |
Vesting commencement period from grant date | 1 year | |
2013 Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
2013 Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years |
Employee Benefits -Summary of N
Employee Benefits -Summary of Nonvested Restricted Stock Awards (Details) - Restricted stock | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Shares | |
Non-vested, beginning of period (in shares) | shares | 17,114 |
Granted (in shares) | shares | 10,168 |
Vested (in shares) | shares | (7,806) |
Forfeited (in shares) | shares | (1,890) |
Expired (in shares) | shares | 0 |
Non-vested, end of period (in shares) | shares | 17,586 |
Expected to vest assuming a 0% forfeiture rate over the vesting term (in shares) | shares | 17,586 |
Weighted-Average Grant-Date Fair Value Per Share | |
Non-vested, beginning of period (in dollars per share) | $ 35.03 |
Granted (in dollars per share) | 32.46 |
Vested (in dollars per share) | 33.99 |
Forfeited (in dollars per share) | 34.93 |
Non-vested, end of period (in dollars per share) | 34.02 |
Expected to vest assuming a 0% forfeiture rate over the vesting term (in dollars per share) | 34.02 |
Aggregate Intrinsic Value Per Share | |
Aggregate intrinsic value per share (in dollars per share) | 44 |
Expected to vest assuming a 0% forfeiture rate over the vesting term, aggregate intrinsic value per share (in dollars per share) | $ 44 |
Forfeiture rate | 0.00% |
Employee Benefits - Employee St
Employee Benefits - Employee Stock Ownership Plan Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2012 | Jan. 31, 2008 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
Shares released (in shares) | 11,340 | |||
Unallocated shares (in shares) | 0 | |||
Shares purchased by ESOP (in shares) | 7,343 | 10,483 | ||
Number of allocated shares (in shares) | 131,805 | 139,678 | ||
Number of restricted shares held by the trust (in shares) | 150,497 | |||
Fair value of shares held by ESOP trust | $ 6,600,000 | |||
ESOP compensation expense | 781,000 | $ 606,000 | ||
ESOP Borrowing 2008 | ||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
Amount borrowed by ESOP to purchase common stock | $ 1,200,000 | |||
ESOP Borrowing 2012 | ||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ||||
Amount borrowed by ESOP to purchase common stock | $ 1,100,000 | $ 1,100,000 | ||
Repayment period | 10 years | |||
ESOP loan interest rate | 2.25% | |||
ESOP remaining loan balance from shares purchased | $ 0 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 2,315 | $ 2,036 |
Deferred | (43) | 355 |
Total tax expense | $ 2,272 | $ 2,391 |
Income Taxes -Reconciliation of
Income Taxes -Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Provision at statutory rate | $ 2,400 | $ 2,380 |
Tax-exempt income | (203) | (186) |
Other | 75 | 197 |
Total tax expense | $ 2,272 | $ 2,391 |
Federal Tax Rate | 21.00% | 21.00% |
Tax exempt rate | (1.80%) | (1.60%) |
Other | 0.70% | 1.70% |
Effective tax rate | 19.90% | 21.10% |
Income Taxes -Components of Def
Income Taxes -Components of Deferred Tax Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets | ||
Deferred compensation and supplemental retirement | $ 381,000 | $ 340,000 |
Equity based compensation | 120,000 | 68,000 |
Intangible assets | 46,000 | 55,000 |
Lease liabilities | 1,311,000 | 1,498,000 |
Other, net | 71,000 | 29,000 |
Allowance for loan losses | 1,324,000 | 1,260,000 |
Total deferred tax assets | 3,253,000 | 3,250,000 |
Deferred tax liabilities | ||
Prepaid expenses | (100,000) | (85,000) |
FHLB stock dividends | (40,000) | (39,000) |
Unrealized gain on securities | (37,000) | (64,000) |
Depreciation | (165,000) | (251,000) |
Mortgage servicing rights | (568,000) | (387,000) |
Deferred loan costs | (739,000) | (698,000) |
Right of use assets | (1,220,000) | (1,412,000) |
Total deferred tax liabilities | (2,869,000) | (2,936,000) |
Net deferred tax asset | 384,000 | 314,000 |
Unrecognized tax benefits | 0 | 0 |
Income tax penalties and interest expense | $ 0 | $ 0 |
Capital - Narrative (Details)
Capital - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Community bank leverage ratio | 0.1092 | |
Common stock repurchased (in shares) | shares | 3,657 | 2,477 |
Stock repurchase program, average price (in dollars per share) | $ / shares | $ 41.68 | $ 29.42 |
Stock repurchase program, remaining authorized repurchase amount | $ | $ 1.8 | |
Sound Financial Bancorp | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Community bank leverage ratio | 0.1009 |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts receivable | Customer concentration risk | Maximum | |
Concentration Risk [Line Items] | |
Loans to any borrower as a percent of unimpaired capital and surplus | 15.00% |
Commitments and Contingencies -
Commitments and Contingencies -Summary of Financial Instruments whose Contract Amount Represents Credit Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amount represents a credit risk | $ 131,647 | $ 56,519 |
Residential mortgage commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amount represents a credit risk | 6,663 | 3,312 |
Unfunded construction commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amount represents a credit risk | 89,797 | 18,981 |
Unused lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amount represents a credit risk | 35,036 | 34,075 |
Irrevocable letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amount represents a credit risk | $ 151 | $ 151 |
Commitments and Contingencies_2
Commitments and Contingencies -Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Guarantor Obligations [Line Items] | ||
Fixed rate loan commitments | $ 6,700,000 | $ 3,300,000 |
Weighted average interest rate on fixed rate loan commitments | 4.27% | 6.08% |
Notional amount on letters of credit to secure Washington State Public Funds | $ 11,500,000 | $ 21,600,000 |
Loan Repurchase Guarantee | ||
Guarantor Obligations [Line Items] | ||
Maximum amounts of guarantees on loans sold without recourse | 508,100,000 | 488,700,000 |
Loans repurchased | $ 284,000 | $ 0 |
Parent Company Financial Info_3
Parent Company Financial Information -Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | |||
Cash and cash equivalents | $ 183,590 | $ 193,828 | |
Other assets | 3,576 | 3,304 | |
Total assets | 919,691 | 861,402 | |
Liabilities and Stockholders' Equity | |||
Subordinated notes, net | 11,634 | 11,592 | |
Other liabilities | 8,571 | 7,674 | |
Total liabilities | 826,333 | 775,918 | |
Stockholders' equity | 93,358 | 85,484 | $ 77,726 |
Total liabilities and stockholders' equity | 919,691 | 861,402 | |
Parent Company | |||
Assets | |||
Cash and cash equivalents | 4,215 | 6,837 | |
Investment in Sound Community Bank | 100,986 | 90,568 | |
Other assets | 58 | 65 | |
Total assets | 105,259 | 97,470 | |
Liabilities and Stockholders' Equity | |||
Subordinated notes, net | 11,634 | 11,592 | |
Other liabilities | 267 | 394 | |
Total liabilities | 11,901 | 11,986 | |
Stockholders' equity | 93,358 | 85,484 | |
Total liabilities and stockholders' equity | $ 105,259 | $ 97,470 |
Parent Company Financial Info_4
Parent Company Financial Information -Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Income Statements, Captions [Line Items] | ||
Income tax benefit | $ (2,272) | $ (2,391) |
Net income | 9,156 | 8,937 |
Parent Company | ||
Condensed Income Statements, Captions [Line Items] | ||
Interest expense on subordinated notes | (673) | (190) |
Other expenses | (550) | (572) |
Loss before income tax benefit and equity in undistributed net income of subsidiary | (1,223) | (762) |
Income tax benefit | 257 | 160 |
Equity in undistributed earnings of subsidiary | 9,690 | 9,539 |
Net income | $ 8,724 | $ 8,937 |
Parent Company Financial Info_5
Parent Company Financial Information -Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 9,156 | $ 8,937 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net cash provided by (used in) operating activities | 19,073 | (484) |
Cash flows from investing activities: | ||
Net cash (used in) provided by investing activities | (77,940) | 4,496 |
Cash flows from financing activities: | ||
Proceeds from subordinated notes, net | 0 | 11,582 |
Dividends paid | (2,039) | (2,072) |
Repurchase of stock | (152) | (73) |
Stock options exercised | 182 | 239 |
Net cash provided by financing activities | 48,629 | 134,046 |
Net change in cash and cash equivalents | (10,238) | 138,058 |
Cash and cash equivalents, beginning of period | 193,828 | 55,770 |
Cash and cash equivalents, end of period | 183,590 | 193,828 |
Parent Company | ||
Cash flows from operating activities: | ||
Net income | 8,724 | 8,937 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Other, net | (78) | 70 |
Expense allocation to holding company | 0 | 129 |
Equity in undistributed earnings of subsidiary | (9,690) | (9,539) |
Net cash provided by (used in) operating activities | (1,044) | (403) |
Cash flows from investing activities: | ||
ESOP shares released | 431 | 324 |
Net cash (used in) provided by investing activities | 431 | 324 |
Cash flows from financing activities: | ||
Proceeds from subordinated notes, net | 0 | 11,582 |
Transfer of proceeds from issuance of debt to subsidiary | 0 | (5,500) |
Dividends paid | (2,039) | (2,072) |
Repurchase of stock | (152) | (73) |
Stock options exercised | 182 | 239 |
Net cash provided by financing activities | (2,009) | 4,176 |
Net change in cash and cash equivalents | (2,622) | 4,097 |
Cash and cash equivalents, beginning of period | 6,837 | 2,740 |
Cash and cash equivalents, end of period | $ 4,215 | $ 6,837 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Service charges and fee income | ||
Loan fees | $ 178 | $ 205 |
Other fees | 53 | 60 |
Total service charges and fee income | 2,247 | 1,905 |
Earnings on cash surrender value of BOLI | 416 | 348 |
Mortgage servicing income | 1,284 | 1,027 |
Fair value adjustment on MSRs | (808) | (1,857) |
Net gain on sale of loans | 4,190 | 6,022 |
Total noninterest income | 7,329 | 7,445 |
Net loss on OREO | (16) | 0 |
Net (loss) gain on OREO | (16) | 5 |
Account maintenance fees | ||
Service charges and fee income | ||
Service charges and fee income within scope of ASC 606 | 311 | 274 |
Transaction-based and overdraft service charges | ||
Service charges and fee income | ||
Service charges and fee income within scope of ASC 606 | 356 | 327 |
Debit/ATM interchange fees | ||
Service charges and fee income | ||
Service charges and fee income within scope of ASC 606 | 1,322 | 1,016 |
Credit card interchange fees | ||
Service charges and fee income | ||
Service charges and fee income within scope of ASC 606 | $ 27 | $ 23 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Jan. 28, 2022$ / shares |
Dividend Declared | |
Subsequent Event [Line Items] | |
Dividends declared (in dollars per share) | $ 0.17 |
Special Dividend Declared | |
Subsequent Event [Line Items] | |
Dividends declared (in dollars per share) | $ 0.10 |