Interest and Dividend Income. Interest income decreased $150,000, or 7.3%, to $1.9 million for the quarter ended June 30, 2021 compared to the comparable quarter in 2020. Interest income on loans decreased $139,000, or 6.9%, to $1.9 million as of June 30, 2021. The average balance of portfolio loans during the three months ended June 30, 2021 increased $28.8 million to $186.3 million, compared to the three months ended June 30, 2020. The increase in average portfolio loans outstanding was primarily concentrated in one to four family owner-occupied mortgage loans, nonresidential real estate and land and construction loans. One to four family loans increased $6.8 million during the quarter ended June 30, 2021 as a portion of 15 year and 30 year fixed rate loans were placed in portfolio. Nonresidential real estate loans increased $6.9 million, land and construction loans increased $5.8 million and multifamily loans increased $3.6 million during the quarter ended June 30, 2021. The average yield on loans decreased 101 basis points to 3.84% for the three months ended June 30, 2021 from 4.85% for the three months ended June 30, 2020. The average balance of loans held for sale decreased $6.6 million, or 39.5%, during the quarter ended June 30, 2021 compared to the same quarter in 2020, while the average yield on loans held for sale increased 88 basis points, to 3.44% for the three months ended June 30, 2021 from 2.56% for the same quarter in 2020.
Interest income on securities was stable at $12,000 for the three months ended June 30, 2021. The average balance of securities increased $3.3 million to $9.4 million at June 30, 2021. The yield on securities decreased 42 basis points due to lower market interest rates. Interest income on other interest-earning assets decreased $12,000, or 46.2%. The yield on other interest-bearing assets decreased 24 basis points due to a lower dividend rate paid on FHLB stock and the decline in short term interest rates. The average balance on other interest-earning assets was stable at $20.4 million.
Interest Expense. Total interest expense decreased $166,000, or 24.8%, to $503,000 for the quarter ended June 30, 2021 from $669,000 for the quarter ended June 30, 2020. Interest expense on deposit accounts decreased $174,000, or 40.5%, to $255,000 for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020. The decrease in deposit expense between the comparable quarters in 2021 from 2020 was primarily due to a 49 basis point decrease in the average cost of deposits primarily due to lower market interest rates.
Interest expense on savings decreased $1,000 during the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020, due to lower market interest rates. The average balance of savings accounts increased $13.3 million. Interest expense on interest-bearing demand accounts was stable at $11,000 for the quarter ended June 30, 2021. The average cost of interest-bearing demand deposits was 0.15% for both quarters ended June 30, 2021 and 2020. The average balances in interest-bearing demand accounts increased $1.0 million during the three months ended June 30, 2021 compared to June 30, 2020. Interest expense on certificates of deposit decreased $175,000, or 40.6%. The average cost of certificates decreased 68 basis points to 1.50%. The average balance of certificates of deposit decreased $14.0 million to $58.4 million for the three months ended June 30, 2021 compared to the same period ended June 30, 2020.
Interest expense on FHLB advances increased $8,000, or 3.4%, to $248,000 for the quarter ended June 30, 2021 from the quarter ended June 30, 2020. The average balance of advances decreased $5.2 million, or 11.9%, for the quarter ended June 30, 2021. The average cost of FHLB borrowings increased 38 basis points to 2.56% for the quarter ended June 30, 2021.
During the three months ended June 30, 2021, the Bank prepaid FHLB advances totaling $2.0 million with a weighted-average interest rate of 2.88% and incurred a prepayment fee of $55,600. The prepayment penalty is included in Federal Home Loan Bank advance interest. It is our intent to continue to prepay higher rate Federal Home Loan Bank advances and incur the applicable prepayment penalties, as this is expected to reduce our cost of borrowings in future periods. We expect the result of prepaying the FHLB advances to result in a pre-tax expense of approximately $763,000. Refer to Note 11 for additional information regarding the prepayment of FHLB advances.
Net Interest Income. Net interest income increased $16,000, or 1.1%, for the quarter ended June 30, 2021 compared to the same quarter in 2020. The interest rate spread decreased to 2.27% for the quarter ended June 30, 2021 compared to 2.67% for the quarter ended June 30, 2020. The net interest margin decreased 28 basis points to 2.49% for the quarter ended June 30, 2021.
Provision for Loan Losses. Based on our analysis of the factors described in “Critical Accounting Policies – Allowance for Loan Losses” we did not record a provision for loan losses for the three months ended June 30, 2021. The allowance for loan losses was $1.7 million, or 0.82% of total loans, at June 30, 2021, compared to $1.5 million, or 0.89% of total loans, at June 30, 2020. The Company had no net charge-offs during the three-month period ended June 30, 2021. As a percentage of nonperforming loans, the allowance for loan losses was 646.0% at June 30, 2021. Total loans past due were $502,000, or 0.3% of total loans, at June 30, 2021.