South Atlantic Bancshares, parent of South Atlantic Bank, reported consolidated net income of $10.8 million, or $1.42 per diluted common share, for the twelve months ended December 31, 2021, an increase of $3.7 million, or $0.46 per diluted common share, compared to the twelve months ended December 31, 2020.
Consolidated net income was $2.3 million, or $0.29 per diluted common share, for the three months ended December 31, 2021, an increase of $411 thousand, or $0.05 per diluted common share, compared to the three months ended December 31, 2020.
Net income for the twelve months ended December 31, 2021 totaled $10.8 million, or $1.42 per diluted common shares, compared to $7.2 million, or $0.96 per diluted common share, reported for the same twelve months ended December 31, 2020.
Net income for the three months ended December 31, 2021 totaled $2.3 million, or $0.29 per diluted common share, compared to $1.8 million or $0.24 per diluted common shares, reported for the same three months ended December 31, 2020.
Net interest income was $35.8 million for the twelve months ended December 31, 2021 compared to $30.0 million for the twelve months ended December 31, 2020, an increase of $5.8 million, or 19.2 percent, primarily due to the recognition of $3.8 million of Paycheck Protection Program ("PPP") fee income resulting from PPP loans that were forgiven by the Small Business Administration ("SBA") or otherwise repaid during the twelve months ended December 31, 2021, as well as an increase of $2.3 million in interest income for the twelve months ended December 31, 2021 on securities due to increased securities holdings, and a $1.4 million decrease in interest expense for the twelve months ended December 31, 2021.
Net interest income was $9.2 million for the three months ended December 31, 2021, an increase of $1.0 million, or 12.3 percent, compared to $8.2 million for the three months ended December 31, 2020.
This increase during the three months ended December 31, 2021 is primarily due to an increase of $931 thousand in interest income on securities due to increased securities holdings and a $115 thousand decrease in interest expense, partially offset by a decline of $445 thousand of PPP fee income resulting from PPP loans that were forgiven by the SBA or otherwise repaid during the period compared to the three months ended December 31, 2020.
Discount accretion included in the net interest income was $307 thousand for the twelve months ended December 31, 2021 compared to $349 thousand for the same period in 2020.
For the three months ended December 31, 2021, accretion was $74 thousand compared to $82 thousand for the same period in 2020.
Noninterest income increased $1.9 million, or 23.3 percent, to $9.8 million for the twelve months ended December 31, 2021 compared to $8.0 million for the twelve months ended December 31, 2020.
This increase in noninterest income during the twelve months ended December 31, 2021 is primarily due to a $1.2 million increase in secondary mortgage fees and a $579 thousand increase in merchant card activity and debit card fees compared to the twelve months ending December 31, 2020.
Noninterest income declined $182 thousand, or 8.5 percent, for the three months ending December 31, 2021 compared to the three months ending December 31, 2020.
This decline in noninterest income during the three months ended December 31, 2021 is primarily due to a $340 thousand decrease in secondary mortgage fees compared to the three months ended December 31, 2020.
Noninterest expense increased $3.2 million, or 11.7 percent, to $30.7 million for the twelve months ending December 31, 2021 compared to $27.5 million for the twelve months ended December 31, 2020.
This increase in noninterest expense during the twelve months ended December 31, 2021 is primarily due to salary and benefits expenses increasing by $2.2 million due to increased commissions on mortgage production, the hiring of six full time equivalent employees related to opening of the Bank's eleventh branch office on Hilton Head Island, South Carolina, the hiring of support personnel due to the Bank's growth in all of its markets, and increased FDIC deposit insurance costs related to the growth in deposits during the period.
Noninterest expense increased $399 thousand, or 5.4 percent, during the three months ending December 31, 2021 compared to the three months ending December 31, 2020 primarily due to a $194 thousand increase in salaries and benefits due to mortgage commissions and personal costs related to the Bank's new Hilton Head Island branch office, and a $303 thousand increase in occupancy costs related to depreciation acceleration on furniture, fixtures and equipment.
Our effective tax rate for the twelve months ended December 31, 2021 was 19.8 percent compared to 17.6 percent for the twelve months ended December 31, 2020.
This increase can be attributed to a reduction in non-taxable income on securities in 2021 compared to 2020. ■