The decrease in interest expense during the current quarter from the same quarter a year ago was primarily the result of a $15.6 million decrease in the average balance of interest-bearing demand and NOW accounts, a $29.2 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, reflecting lower market interest rates. 2024 Allowance for Credit Losses on Loans Balance at beginning of period $ 8,393 $ 8,499 $ 8,585 $ 8,493 $ 8,598 Provision for (release of) credit losses during the period 164 (85 ) (73 ) 106 (88 ) Net charge-offs during the period (21 ) (21 ) (13 ) (14 ) (17 ) Balance at end of period $ 8,536 $ 8,393 $ 8,499 $ 8,585 $ 8,493 Allowance for Credit Losses on Unfunded Loan Commitments Balance at beginning of period $ 116 $ 234 $ 147 $ 245 $ 266 Provision for (release of) credit losses during the period 6 (118 ) 87 (98 ) (21 ) Balance at end of period 122 116 234 147 245 Allowance for Credit Losses $ 8,658 $ 8,509 $ 8,733 $ 8,732 $ 8,738 Allowance for credit losses on loans to total loans 0.94 % 0.95 % 0.94 % 0.95 % 0.96 % Allowance for credit losses to total loans 0.96 % 0.96 % 0.97 % 0.97 % 0.98 % Allowance for credit losses on loans to total nonperforming loans 253.59 % 86.95 % 113.46 % 101.13 % 95.33 % Allowance for credit losses to total nonperforming loans 257.22 % 88.15 % 116.58 % 102.86 % 98.08 % 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 persistent inflation, recessionary pressures or slowing economic growth; changes in interest rate levels and the duration of such changes, including action by the Board of Governors of the Federal Reserve System 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 monetary and fiscal policy responses thereto; the effects of a federal government shutdown, debt ceiling standoff, or other fiscal uncertainty; 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; the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity; legislation or regulatory change, including but not limited to shifts in capital requirement, banking regulation, tax laws, or consumer protection laws; vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; geopolitical development and international conflict, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in 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, domestic political 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: 2025-07-29 20:56:00
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