compared to the same period in 2022, primarily due to the increase in pre-tax income.
Interviewer: Mr. CEO, I noticed that your company had a decrease in net income compared to the same period last year. Can you explain why that is?
CEO: Yes, our net income was affected by a decrease in net interest income due to the increase in the Federal Reserve rate. This caused the cost of deposits and borrowings to increase significantly and impacted our profitability.
Interviewer: I also noticed that you had a recovery of credit losses for the first quarter of 2023. Can you explain what that means?
CEO: Yes, we had a recovery of credit losses for loans that were charged off over 10 years ago. This means that we were able to recover some of the losses we previously incurred on these loans.
Interviewer: Your noninterest income also decreased compared to the same period last year. Can you elaborate on the reasons behind this?
CEO: Yes, our noninterest income was primarily affected by a decrease in mortgage banking revenue and the gain on sale of SBA loans, which reflects a decline in refinances due to rising interest rates.
Interviewer: Lastly, I noticed that your expenses decreased compared to the same period last year. Can you explain why that is?
CEO: Our expenses decreased due to a decrease in other expenses, primarily third-party fees incurred during the first quarter of 2022 related to the recruitment and hiring of new employees. However, our salaries and benefits increased due to normal annual salary increases as well as the hiring of several new employees.
Original Release: https://www.globenewswire.com/news-release/2023/04/25/2653907/0/en/Farmers-and-Merchants-Bancshares-Inc-Reports-Earnings-of-1-900-851-or-0-62-Per-Share-for-the-Three-Months-Ended-March-31-2023.html