The decrease in interest expense during the current quarter from the same quarter a year ago was primarily the result of a $18.9 million decrease in the average balance of interest-bearing demand and NOW accounts, a $25.5 million decrease in the average balance of certificate accounts, and a $15.0 million decrease in the average balance of FHLB advances, as well as lower average rates paid on all categories of interest-bearing deposits; resulting from lower market interest rates generally. 2024 Allowance for Credit Losses on Loans Balance at beginning of period $ 8,499 $ 8,585 $ 8,493 $ 8,598 $ 8,760 (Release of) provision for credit losses during the period (85 ) (73 ) 106 (88 ) (106 ) Net charge-offs during the period (21 ) (13 ) (14 ) (17 ) (56 ) Balance at end of period $ 8,393 $ 8,499 $ 8,585 $ 8,493 $ 8,598 Allowance for Credit Losses on Unfunded Loan Commitments Balance at beginning of period $ 234 $ 147 $ 245 $ 266 $ 193 Provision for (release of) provision for credit losses during the period (118 ) 87 (98 ) (21 ) 73 Balance at end of period 116 234 147 245 266 Allowance for Credit Losses $ 8,509 $ 8,733 $ 8,732 $ 8,738 $ 8,864 Allowance for credit losses on loans to total loans 0.95 % 0.94 % 0.95 % 0.96 % 0.96 % Allowance for credit losses to total loans 0.96 % 0.97 % 0.97 % 0.98 % 0.99 % Allowance for credit losses on loans to total nonperforming loans 86.95 % 113.46 % 101.13 % 95.33 % 94.97 % Allowance for credit losses to total nonperforming loans 88.15 % 116.58 % 102.86 % 98.08 % 97.91 % Factors which could cause actual results to differ materially, include, but are not limited to: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation or deflation, a recession or slowed economic growth, as well as supply chain disruptions; changes in the interest rate environment, including increases and decreases in the Board of Governors of the Federal Reserve System (the Federal Reserve) benchmark rate and the duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; secondary market conditions for loans;expectations regarding key growth initiatives and strategic priorities; environmental, social and governance goals and targets; results of examinations of the Company or the Bank by their regulators; increased competition; changes in management's business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on our third-party vendors; the potential for new or increased tariffs, trade restrictions, or geopolitical tensions that could affect economic activity or specific industry sectors; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company's latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with or furnished to the SEC, which are available at www.soundcb.com and on the SEC's website at www.sec.gov.
Author: Sound Financial Bancorp, Inc.
Published at: 2025-04-29 21:35:00
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