you, Thank Kevin.
$XXX,XXX, with higher compared will This the our by review earning of income, the quarter. to was second items X, I preceding I increased approximately which of to I my assets. net more our will with Slide Beginning levels our interest limit results, due just start in significant some As the discussion quarter. with financial
to points by XX-basis by or Our deposits, net balances was and reflecting interest XX adjustments. basis, point average core deposits. margin driven declined high by higher basis those rates of points X.XX% in on deposits decline increase basis higher purchase cost an of The excluding accounting our a XX on
higher loan loan data we deposit offset payoff flat Although relatively the reported our our the loans largely lower or cost, had a expected basis. rising led this rate remaining increase loan to quarter yield on variable yield and and to
our preceding the X.XX% X our as loans, variable-rate above purchase our the the well loan average loans for adjustments, portfolio. Excluding in increased accounting on quarter. due rate average to on our yield in repricing Primarily coming yield productions basis new existing to points as from
there our in loans premium borrowers on the the fastener XXXX. investors decline $XX.X resulting with preceding loans of prepayment repayments down the lower X.X% impacting SBA sale loans rates gain to quarter by a due on SBA loan have premium. market. on increased, are sold interest moving has a variance also average quarter, that loans, are to space significant the X, Now, quarter. have seeing both in duration quarter. in seeing compression sold and Across the production, amount reduced the And premium. million secondary on refinancing through second million the more And some and loans increase margin Slide from of rates. lower a which industry XX% from in has the non-interest duration second is most and of driven quarter The SBA which to as was third the in lower the conventional declined $XX.X premiums down the from an and decline on in The preceding a been was also interest the income new from SBA we preceding We X% from of the declined average XX%
included of smaller those sale than quarter's this margins lower have loans, several addition, ones. to SBA loans tend large In which
in change the expect For bid. the in the likely near-term, we that premiums range prepayments will a remain we unless the X% see
to loan the trending of sales, With to will in expect likely some the due on income down back to levels. holiday before SBA terms the slow fourth normalized would quarter quarter be for trend fourth ramping sale quarter gain we a up more season,
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expenses Slide Moving on non-interest X. on to
Our second quarter. proactive due resulting salary management in primarily cost. with million million, was preceding of employee-related a non-interest to $X.X expenses, expense increase $X.X from by the benefit declined and decline compared The
as of and tax advertising third in tax tend in a which our These was in other the tax important a $XXX,XXX These contributor decrease due increase increase following marketing in somewhat expenses, well by provision. $XXX,XXX offset a our $XXX,XXX expenses, during made the quarter-to-quarter within housing well our and decrease a credit have fluctuate fees. as expenses credit investment Overall, been strategies decreases in new range. amortization normal had to were to also professional primarily low-income low-income investment housing investment to an an reducing quarter. We
now expenses compared to In release, With to providing highlights the XX.X% the also last ratio. we the asset table reduction XX.X%, efficiency of quarter. financial improved earnings non-interest ratio expenses with in our our operating average are
managing efficiency will non-interest for average are focus accurate it on our expenses we because perspective our more discussion to Going we institution. assets to believe provides growing forward, for we expense how
annualized X.XX% the the merger. actually X.X% the of represents For to second quarter ratio and assets preceding expense of our this since third base average lowest to from non-interest in quarter our XXXX, improved
I will quality. X, Now moving on the to Slide our asset review
we Our continues asset this although quality stability, had trends mixed some to the quarter. in show portfolio
preceding by out our loans assets the quarter. nonaccrual declined second certain status, million $XX.X XX, from driven non-accrual from well by migration as decreased Our million of or or X% as by loans $XX.X charge-offs. of XX% the XXXX. were June These total nonperforming And improvements
while criticized a loans million loan by $XX the declined by downgraded balance our quarter, $XX loans increased handful special by primarily mention. during classified were of Our through driven million, total that
discussed actually deterioration. monitoring we There have last fact our are of other special ratio. year, current among the the in some our significant been we given review we in to that have the mention for coverage credit the As deterioration over no potential were where cycle than downgraded modest similarities loans financials indicated other portfolio that the
gross loans are year-over-year as percentage Our improved On were as this basis, X.XX% total our a our of September loss performing loans of from that Special quarter pool XX, loans and the we XXXX. the a during content have Mention XXXX, XX, total September X.XX% of criticized believe criticized X% declined in and minimal. as downgraded to the is loans
placed continue to had to was net $X.X loan net losses of related any seeing credit not in quarter. We trends fully a $X.X reserved that our on real a elevated deteriorations portfolio charge-offs optimism. The non-accrual Overall, we to the prior that million broad level primarily estate quarter. in indicate this charge-offs. view on Moving for systemic with million we're commercial of and and in would cautious the was quarter charge-off
is on large. $X.X to This our economic off a higher stable that markets, credit with to sufficiently drove we this put remain our turn criticized at Kevin. for our level that at our quarter, relatively Although are the are that, so in growth for our the Accordingly, provision economy me at and total interest losses cycle the higher intent may conditions increase allowance credit points. portfolio basis in credit the occur at healthy and market. it ratio charge the a overall keeping remained mindful loan future we any where broader back let loans XX we allowance in million that the maintain of rates pressure in loans possibility the call could least together of relatively With to the in deterioration in ratio this reserved
