The net interest margin declined from 3.78% to 3.69%, or 9 basis points, during the first quarter of 2023 on a linked quarter basis as the funding cost increase of 25 basis points outpaced the earning asset yield increase of 16 basis points. The accelerated rise in the cost of funds in the first quarter of 2023 was driven by the continued historic pace of Federal Reserve interest rate increases, competitive deposit pricing in the marketplace, and a change in the Company’s deposit composition as customers looked for higher yield opportunities.
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