Investments

6 Months Ended

Jun. 30, 2025

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

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


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2025

Municipal bonds	$	6,333	$	10	$	(1,129)	$	5,214
Agency mortgage-backed securities	2,616		11		(320)		2,307

Total	$	8,949	$	21	$	(1,449)	$	7,521

December 31, 2024

Municipal bonds	$	6,354	$	11	$	(991)	$	5,374
Agency mortgage-backed securities	2,758		7		(349)		2,416

Total	$	9,112	$	18	$	(1,340)	$	7,790

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


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2025

Municipal bonds	$	704	$	—	$	(191)	$	513
Agency mortgage-backed securities	1,409		—		(235)		1,174

Total	$	2,113	$	—	$	(426)	$	1,687

December 31, 2024

Municipal bonds	$	704	$	—	$	(163)	$	541
Agency mortgage-backed securities	1,426		—		(255)		1,171

Total	$	2,130	$	—	$	(418)	$	1,712

The amortized cost and estimated fair value of AFS and HTM securities at June 30, 2025, by contractual maturity, are shown below (in thousands). Expected maturities of AFS securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Investments not due at a single maturity date, consisting of agency mortgage-backed securities, are shown separately.


	June 30, 2025
	Available-for-sale				Held-to-maturity
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value

Due after one year through five years	$	454	$	455	$	—	$	—
Due after five years through ten years	1,717		1,623		—		—
Due after ten years	4,162		3,136		704		512
Agency mortgage-backed securities	2,616		2,307		1,409		1,175
Total	$	8,949	$	7,521	$	2,113	$	1,687

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

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

Accrued interest receivable on securities totaled $48 thousand at both June 30, 2025 and December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets. Accrued interest receivable is excluded from the allowance for credit losses.

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


	June 30, 2025
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available-for-sale securities

Municipal bonds	$	—	$	—	$	3,549	$	(1,130)	$	3,549	$	(1,130)
Agency mortgage-backed securities	44		—		1,931		(319)		1,975		(319)

Total available-for-sale securities	$	44	$	—	$	5,480	$	(1,449)	$	5,524	$	(1,449)
Held-to-maturity securities

Municipal bonds	$	—	$	—	$	512	$	(191)	$	512	$	(191)
Agency mortgage-backed securities	—		—		1,175		(235)		1,175		(235)

Total held-to-maturity securities	$	—	$	—	$	1,687	$	(426)	$	1,687	$	(426)


	December 31, 2024
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available-for-sale securities

Municipal bonds	$	—	$	—	$	3,708	$	(991)	$	3,708	$	(991)
Agency mortgage-backed securities	44		(2)		2,020		(347)		2,064		(349)

Total	$	44	$	(2)	$	5,728	$	(1,338)	$	5,772	$	(1,340)
Held-to-maturity securities

Municipal bonds	$	—	$	—	$	540	$	(163)	$	540	$	(163)
Agency mortgage-backed securities	—		—		1,172		(255)		1,172		(255)

Total held-to-maturity securities	$	—	$	—	$	1,712	$	(418)	$	1,712	$	(418)

There was no allowance for credit losses on securities at June 30, 2025 or December 31, 2024. At both June 30, 2025 and December 31, 2024, the total securities portfolio consisted of 11 agency mortgage-backed securities and 11 municipal bonds. At both June 30, 2025 and December 31, 2024, there was one security in an unrealized loss position for less than 12 months and 15 securities in an unrealized loss position for more than 12 months. The unrealized losses were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, and not related to the underlying credit of the issuers or the underlying collateral. It is expected that these securities will not be settled at a price less than the amortized cost of each investment. There was no provision for credit losses recognized for investment securities during the three and six months ended June 30, 2025 and 2024, because the declines in fair value were not attributable to credit quality and because we do not intend, and it is not likely that we will be required, to sell these securities before recovery of their amortized cost basis.

Sound Financial Bancorp, Inc. 10-Q