Net Interest Income. Net interest income for the three months ended March 31, 2023 was $45.3 million, a decrease of $18.2 million, or 28.7%, from $63.5 million for the three months ended March 31, 2022. In addition, net interest-earning assets declined $56.7 million year over year to $1,293.1 million for the quarter ended March 31, 2023. The net interest margin decreased 109 basis points to 2.27% from March 31, 2022. The decrease in net interest income was primarily due to the cost of interest-bearing liabilities rising faster than the yield on interest-earning assets. The average cost of interest-bearing liabilities increased 230 basis points to 2.80% for the three months ended March 31, 2023 from 0.50% for the three months ended March 31, 2022 compared to 84 basis points to 4.61% for the interest-earning assets from 3.77% for the same period. After a lag, the net interest margin is expected to expand when the Fed stops raising rates. Included in net interest income for the three months ended March 31, 2023 and 2022, was prepayment penalty income, net reversals and recovered interest from non-accrual loans totaling $0.7 million and $1.7 million, respectively, net gains (losses) from fair value adjustments on qualifying hedges totaling $0.1 million and ($0.1) million for the three months ended March 31, 2023 and 2022, respectively, and purchase accounting income adjustments of $0.3 million and $1.1 million, respectively. Excluding all of these items, the net interest margin for the three months ended March 31, 2023 was 2.21%, a decrease of 101 basis points, from 3.22% for the three months ended March 31, 2022.
Provision for Credit Losses. During the three months ended March 31, 2023, the provision for credit losses was $7.5 million compared to $1.4 million for the three months ended March 31, 2022. The provision recorded during the three months ended March 31, 2023 was primarily due to a charge-off and increased reserves on two previously identified credits. The current average loan-to-value ratio for our non-performing assets collateralized by real estate was 50.7% at March 31, 2023. The Bank continues to maintain conservative underwriting standards.
Non-Interest Income. Non-interest income for the three months ended March 31, 2023 was $6.9 million, an increase of $5.6 million from $1.3 million in the prior year comparable period. The increase was primarily due to the prior year period inclusion of net losses from fair value adjustments totaling $1.8 million compared to net gains totaling $2.6 million recorded during the current year period.
Non-Interest Expense. Non-interest expense for the three months ended March 31, 2023 was $37.7 million, a decrease of $1.1 million, or 2.8%, from $38.8 million for the three months ended March 31, 2022. The decrease was primarily due to salary related expense accruals that were reversed in the first quarter of 2023, a benefit for Employee Retention Tax Credit refunds received in the first quarter of 2023 and the effects of the decreased stock price on the attendant benefits plans. In addition, during the first quarter of 2023, the Company recognized seasonal expenses totaling $4.1 million compared to $4.3 million in the first quarter of 2022.
Income before Income Taxes. Income before income taxes for the three months ended March 31, 2023 was $7.0 million, a decrease of $17.7 million, or 71.8%, from $24.6 million for the three months ended March 31, 2022 for the reasons discussed above.
Provision for Income Taxes. The provision for income taxes was $1.8 million for the three months ended March 31, 2023, a decrease of $4.6 million, or 72.0%, from $6.4 million for the three months ended March 31, 2022. The decrease was primarily due to the decline in income before taxes and a decrease in the effective tax rate. The effective tax rate for three months ended March 31, 2023 was 25.9% compared to 26.1% for the three months ended March 31, 2022.
FINANCIAL CONDITION
Assets. Total assets at March 31, 2023 were $8,479.1 million, an increase of $56.2 million, or 0.7%, from $8,422.9 million at December 31, 2022. Total net loans decreased $28.9 million, or 0.4%, during the three months ended March 31, 2023, to $6,865.4 million from $6,894.3 million at December 31, 2022. Loan originations and purchases were $173.5 million for the three months ended March 31, 2023, a decrease of $155.8 million, or 47.3%, from $329.3 million for the three months ended March 31, 2022. We continue to focus on the origination of multi-family residential, commercial real estate and commercial business loans with a full banking relationship. The loan pipeline was $266.1 million at March 31, 2023, compared to $252.2 million at December 31, 2022.