This model realizes and is based on the last two years of originations, obviously, making account for the COVID-related portfolio performance and utilizes new alternative data. We’ve got a new fraud score that we think will save us hundreds of thousand dollars a month in synthetic fraud avoidance. And we believe that this is our best buy box yet. The initial results from this model is quite positive. We also continue to infuse our business with AI platforms to increase efficiency and accuracy. This is not a new thing for us. We’ve been sort of on the AI bandwagon for the last five years. Obviously, we use machine learning in our originations model. We have a new, well, we’ve been using it for about a year. It’s an AI machine learning based document, document review AI in our originations, which is increasing efficiency.
We are testing new AI voice bots and new AI tech bots. What we’ve learned in the last seven to eight years is texting is probably the best collection tactic. We believe we found the best voice bot in the market. And connecting that voice bot to our texting platform should certainly help our collections performance. One other thing of note is our real estate platform. We were lucky enough to have most of our leases come up for renewal post-COVID. So we were able to leverage the softening commercial real estate market. And we renewed or moved four of our five leases within the last quarter, believe it or not. And we’re looking at a $10.8 million savings in those — in that real estate footprint over the next four years. We’ve also leveraged what we think a best-in-class work from home platform to reduce our space as well.
So with that, I’ll turn it back to Danny.
Danny Bharwani: Thanks, Mike. I’ll go over the financial results. For the revenues for the fourth quarter, $92 million. That’s an 11% increase over the $83 million from the fourth quarter of 2022. For the full year, revenues were $352 million, is a 7% increase over the full year revenue of $329.7 million in 2022. Of course, our largest component of revenue is interest income. The fair value portfolio is now up to $2.7 billion. And that portfolio is yielding 11.3% remembering that, that yield is net of credit losses. Also included in revenues for the quarter and for the year are marks to our fair value portfolio. In the fourth quarter, we booked a markup of $6 million to that fair value portfolio. That’s compared to — for the full year, it was $12 million in markups for the fair value portfolio.
That’s compared to $15.3 million in fair value markups for the prior year 2022 period. The markup is a result of better-than-expected performance in that fair value portfolio. Looking at expenses, $82.1 million for the fourth quarter is 27% higher than the 64.7% in the fourth quarter ’22. For the full year, $290.9 million in expenses is 36% higher than the $213.5 million in 2022. A couple of things of note under expenses. We continue to see reverse negative loss provisions from our CECL portfolio. That’s the portfolio that we originated prior to 2018 that’s not accounted for under fair value. We booked a lifetime loss reserve on that portfolio, and the results are coming in on that better than we expected, so we’re able to reverse any loss reserves that are no longer required.
That number was $1.6 million in the fourth quarter, $22.3 million for the full year and those numbers compared to $4.7 million in the fourth quarter of ’22 and $28.1 million for the full year ’22. Also, another large mover in terms of expenses is interest expense. That has increased to $40.2 million in the fourth quarter from $28.9 million in the fourth quarter of last year. For the full year, interest expense is $146.6 million compared to $87.5 million in 2022. Largely, those increase in interest expense is largely attributable to higher rates, but there’s some smaller component of that, that can be attributed to portfolio growth. Pretax earnings, $9.8 million for the fourth quarter compared to $18.3 million. It’s a 46% reduction from the prior year fourth quarter.
For the year, $61.1 million is a 47% reduction from $116.2 million in 2022. Likewise, net income follows those same trends, $7.2 million for the quarter compared to $14.1 million a year ago quarter. For the year, 2023, $45.3 million of net income versus $86 million in 2022. Moving over to the balance sheet. A couple of things of note here, our finance receivables at fair value now at $2.7 million, like I said earlier — $2.7 billion, excuse me, is 10% higher than the $2.5 billion where we were at the end of 2022. Looking at our debt balance. The one thing of note here is our securitization debt is $2.265 billion at the end of ’23 versus $2.1 billion at the end of ’22. Doing the math, that’s a 7% increase on the debt compared to a 10% increase on fair value assets.
So we’re able to manage with lower leverage on — and building up our balance sheet is certainly a sign of strength for our balance sheet. Looking at shareholders’ equity at the end of the year, $274.7 million is the highest in our history. That’s 20% higher than the $228.4 million at the end of 2022. And that’s driven by 49 consecutive quarters of pretax profit that we’ve been able to generate over the last 12 years and change. Looking at other metrics, our net interest margin of 51.7% is 4% less than the 54.1% a year ago. For the year period, our net interest margin is $205.4 million is 15% lower than 2022. Core operating expenses are $43.5 million is 7% higher than the $40.6 million in the fourth quarter of ’22. For the year, core operating expenses is $166.6 million for ’23 versus $154.1 million in 2022 as an 8% increase.
