Equity Securities. Total equity securities decreased $686,000, or 23.8%, to $2.2 million at December 31, 2021 from $2.9 million at June 30, 2021 primarily due to the sale of various securities for proceeds of $803,000 offset in part by investment gains during the six months ended December 31, 2021.
Net Loans. Net loans of $993.7 million at December 31, 2021 decreased $88.1 million, or 8.1%, from $1.08 billion at June 30, 2021. By loan category, commercial and industrial loans decreased by $62.8 million, or 37.4%, to $105.1 million at December 31, 2021 from $167.9 million at June 30, 2021, commercial construction loans decreased by $18.9 million, or 29.2%, to $46.0 million at December 31, 2021 from $64.9 million at June 30, 2021, one-to four-family residential real estate loans decreased by $4.9 million, or 1.8%, to $274.6 million at December 31, 2021 from $279.5 million at June 30, 2021, commercial real estate loans decreased by $4.4 million, or 0.9%, to $485.7 million at December 31, 2021 from $490.1 million at June 30, 2021 and consumer loans decreased $741,000, or 2.9%, to $24.8 million at December 31, 2021 from $25.6 million at June 30, 2021. These decreases were marginally offset by an increase in home equity loans and lines of credit of $2.0 million, or 2.7%, to $77.5 million at December 31, 2021 from $75.5 million at June 30, 2021. The decrease in commercial and industrial loans was related to forgiveness of PPP loans which declined $37.4 million from $51.5 million at June 30, 2021 to $14.1 million at December 31, 2021, as well as, paydowns and reduced line of credit utilization during the six months ended December 31, 2021. The decrease in commercial construction loans was related to the conversion of loans to permanent financing. The decrease in commercial real estate loans and one-to four family residential real estate loans were both related to loan payoffs outpacing loan funding. The decrease in consumer loans was related to reduced line of credit utilization. The increase in home equity loans and lines of credit was related to loan originations outpacing amortization and prepayments.
Deposits. Total deposits increased $48.0 million, or 3.1%, to $1.58 billion at December 31, 2021 from $1.53 billion at June 30, 2021. The increase in deposits was primarily related to an increase in non-interest bearing demand accounts of $49.3 million, or 9.8%, to $554.2 million at December 31, 2021 from $504.9 million at June 30, 2021, an increase in savings accounts of $10.5 million, or 3.5%, to $311.3 million at December 31, 2021 from $300.8 million at June 30, 2021 and an increase in interest-bearing demand accounts of $2.9 million, or 1.7%, to $178.7 million at December 31, 2021 from $175.8 million at June 30, 2021. These increases were partially offset by a decrease in certificates of deposit of $8.3 million, or 8.8%, to $86.6 million at December 31, 2021 from $94.9 million at June 30, 2021 and a decrease in money market accounts of $6.4 million, or 1.4%, to $448.1 million at December 31, 2021 from $454.5 million at June 30, 2021. The increase in non-interest-bearing demand accounts and interest-bearing demand accounts was primarily related to growth in commercial deposit relationships. The increase in savings accounts was principally related to growth in existing consumer depositor accounts. The decrease in certificates of deposit was primarily due to the maturity of various accounts. The decrease in money market accounts was primarily due to routine fluctuations in municipal deposit accounts.
Total Shareholders’ Equity. Total shareholders’ equity increased $6.2 million, or 2.6%, to $244.0 million at December 31, 2021 from $237.8 million at June 30, 2021 primarily as a result from net income of $7.6 million for the six month period ended December 31, 2021, offset in part by an increase in unrealized holding losses on securities available for sale of $1.7 million.
Comparison of Operating Results for the Three Months Ended December 31, 2021 and December 31, 2020
General. Net income increased by $4.4 million, or 230.1%, to $6.3 million for the three months ended December 31, 2021 as compared to $1.9 million for the three months ended December 31, 2020. The increase was primarily due to a $4.9 million decrease in non-interest expense and a $1.6 million decrease in the provision for loan losses, partially offset by a $691,000 decrease in non-interest income, a $188,000 decrease in net interest income and a $1.3 million increase in income tax expense.
Interest and Dividend Income. Interest and dividend income decreased $387,000, or 3.4%, to $10.9 million for the three months ended December 31, 2021, from $11.2 million for the three months ended December 31, 2020 primarily due to a decrease in interest income on loans, offset in part by increases in interest income on securities and interest-earning deposits and other. The decrease was the result of a 67 basis points decrease in the average yield on interest-earning assets to 2.50% for the three months ended December 31, 2021, from 3.17% for the three months ended December 31, 2020. Average interest-earning assets increased by $315.4 million from $1.42 billion for the three months ended December 31, 2020 to $1.74 billion for the three months ended December 31, 2021.