Thank you, Kevin.
to the financial Slide net start quarter. items due X, $XXX.X offset totaled we Beginning our deposit with loan with will the review which compared more million in increase primarily interest our costs, quarter. in expense largely significant fourth reduction I interest with with on The able discussions some in were million preceding which was renew I As benefits to will I of results, the just $XXX.X my our income, higher the with of an associated yield.
and of the of our that reflects Our positive receivables average on on strategic average fourth rate XX five from the point basis demonstrates the parts in initiatives. increase increased This effect on we saw in third quarter rate quarter-over-quarter loans improvements versus to XXXX the quarter. loan in basis points X.XX% increase
quarter interest net core adjustments was five to deposits. a of points deposits nonaccrual decline driven by cost points of increase by higher basis average in core our time declined in rate basis, the first in those on basis XX-basis-points The XXXX. of balances partially a our higher Our margin of purchase reflecting deposit, margin reversals on excluding a or X.XX%, interest accounting $XXX,XXX and two by and
As effects another are key up priorities interest deposits bearing basis deposit basis of make XXXX, points quarter. of to beginning with also our cost of that our positive our we in the demonstrate moderated, in example the in preceding some for We points versus the this XX strategies. XX increase believe progresses the quarter first
that declined time for new fully more appreciate the will the time deposit more first on expiring Consequently, since rates points time delta XX quarter, it by repricing see progress. a during basis and the or began gap declined Although we rate meaningful CD quarter. rate between time rising. first before the the take the interest rate renewals the on In deposits we renewal first
no time in we of have deposit the time time maturing deposit expect quarter, to a to while repricing rate increasing on offering Assuming is rate deposits gap stabilized. our XXXX, changes decline as continue rates each
a new portfolio As a the trend next points and seven result, was costs reflect offset deposit yield, in adjustments, accounting in positive increases repricing of few The by excluding increase in purchase the on the basis loans the we we our would and which loan seeing. interest quarters. originations costs higher dollar increase are that our loan expect rates average bearing partially overall deposit to continue the benefits in the rate variable see
sale primary the the lower retain on loan attributable mortgage record gains with Consistent gains offset preceding of gain quarter. Slide was $XXX,XXX SBA to net gains than bit income we the all just any loans. to by this preceding on a on strategy did quarter non-interest in our not our higher compared moving net The sales. from our loan in quarter fourth on $XX.X variance X, production, loans was sale of the This with SBA preceding Now, was to quarter. of million, residential
the mortgage $XXX,XXX of The net which mortgage in gains sales quarter, the in we secondary sold the preceding majority quarter. portfolio. recorded We seasoned to from represented quarter of the During $XXX,XXX million market. residential versus this $XX loans our
other preceding of relatively non-interest were consistent All major of income the sources quarter. our with
Moving non-interest X. Slide on on to expenses
our preceding basis seasonal compensation $XX.X in compensation a the most excludes factor, taxes expense and from up which quarter. slightly Our On payroll significant was bonus increased in million year-over-year an higher quarter, non-interest reflects first was the accruals. the impact prior expense, expense seasonality the X%. by a variances which of a increase our from quarter The modest
Aside decline major have this believe We our of result expense, expense lower processing we line other our we control a from and management underscores as in also communications of items, initiatives. for data number result expense including had cost compensation a cost proactive implemented containment. effective
assets average to X.XX%, unchanged from reflects our successful expense preceding non-interest annualized the with was cost management. efforts Our generally which quarter,
on X, quarter moving Now, deposits. the time approximately Slide X% with end market money growth to deposits from increased the prior from and our coming of the total
With total of end deposit the the quarter and increase in slight XX.X% to year-end. loans, our in decline our the our at ratio net XX% improved loan at to first versus the deposits
will and we the are confident Now in portfolio. two, a moving X, in draws of Slide is trends that the circumstances, increase to We exposure criticized loans not our are the I nonaccruals that, those of quality. deterioration one, increase; had loss noticeable but our review and potential pervasive small on these given which asset indicative loans,
this year individual bank had to with end. elected the relationship $XX in Looking relationship from has was guarantor. loans exit nonaccruals, due proactively million increase our common to whereby $XX issues the we at of the million a $XX one to due million increase totaling solely nonaccrual
of the this this low on downgraded that in minimal. As all loss a prime are loans current of credit relationship did exhibit is quarter in and loans reserve LTV These bank were be nonaccrual exposure expects and weighted will LTVs status. the on in during the substandard these downgrade average Because locations, these to on low any the specific not not require XXs. result, potential and any three placed CRE Appraisals matured renewed. loans the properties to
in by a total for four properties of relationships additional a million total relationship, mentioned was classified are along again our provide including is larger driven will three comprised relationships, credit relationship We This previously I with on. entirely loans that also One some that criticized other saw background $XX prime two in CRE increase loans. and locations. the of unrelated one
on current fallen the both loan the to below has remain Although payments requirements. loans, continued debt coverage these our of service
this So exposure we nominal. on guarantor the we had to credit a With mention. loss potential this downgrade proactively relationship expect any special be strong to relationship, supporting
CRE million stabilizing. based this higher delays XXs, low for in is is had the LTV $XX on is property which for Next, but use repositioned we had loan appraisal. a in on being mixed condominium some that current rents, is
low loan company again potential the commercial property. was loss a we no we of location automotive financial mitigates any property, $XX And value and for of in finally, the industry. the location Given the have believe the and a exposure reserve the loan And prime strength to guarantor this on prime the million specific required.
by $XX to a aggregate, to While company their by company, time even some to nearly believe over this supported to strong the increased an downgrade at relationships parent we weaknesses the year, these proactively four mention loan it stronger course improvement our financials. loans expect this is million. see due is appropriate of and In special interim we this criticized in
is a balances. impact these had from our have that summary, a we geographic asset our problem not loans the in credit our this the exhibit on although modest our believe trends these exposure given loan believe perspective. had reduction the We these potential we nominal from discussed. In systemic size relationships, in or they whether Excluding any relatively are market all of we loan balances, overall, noticeable vertical of four loss broader issues. portfolio indicative details criticized would industry Furthermore, loans unique of
an had actual in which net of of this $XXX,XXX loans of losses, another points $XXX,XXX XXXX. two fourth we of represented basis and down in basis charge-offs in low of is net terms a very quarter from average losses. the In had We quarter level charge-offs, annualized on
points more Our million provision and covered XX basis points. quarter our call basis than for Kevin. from to in the our allowance that, losses of net loans total $X loan to back me to charge-offs With turn increased ratio let the XX
