Net interest income, before the provision for credit losses, in the first quarter of 2023 and 2022 was $25.2M and $24.3M, respectively, an increase of $839,000, or 3.4%. The increase in net interest income resulted from an increase in interest income of $11.3M, or 43.5%, which was offset by an increase in interest expense of $10.4 million, or 663.2%, compared to the prior year quarter. Interest income on loans increased $9.9M, or 44.4%, during the current quarter compared to the prior year quarter. In addition, interest income from investment securities increased $1.0 million, or 32.7%, from the same quarter in the prior year. The increase in interest expense was due primarily to a $6.4 million increase in interest expense on deposits, and a $3.7 million increase in interest expense on FHLB advances and federal funds purchased. These increases were primarily due to rising interest rates between the two periods. "The first quarter of 2023 was very eventful, as we witnessed two bank failures, concerns about the health of the overall banking system, possible industry-wide deposit runoff and continued discussions of a recession. Despite these events, the strength of our business model is showing its resilience. We’re well prepared to manage through the current environment, as we have in previous challenging cycles and downturns. We are also fortunate to be located in Texas, which continues to have a vibrant economy. Our balance sheet is strong because we continue to maintain a disciplined approach to credit and market risks. Our unrealized losses on all securities at the end of the month was a moderate 12.8% of total capital and our liquidity remains strong. We’ve designed very granular loan and deposit portfolios with strong core customer relationships, all of which creates strength and stability for our Company," commented Ty Abston, the Company’s Chairman and Chief Executive Officer.
Published first on TheFly
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