Net income for the fourth quarter of 2020 was $5.8 million ($2.36 per share), compared to $1.8 million ($0.74 per share) during the fourth quarter of 2019. The Company has experienced record earnings for the twelve months ended December 31, 2020, with net income of $20.1 million, compared to $8.9 million for the twelve months ended December 31, 2019, an increase of $11.3 million or 127%.
Net interest income was $38.8 million during the twelve months ended December 31, 2020, compared to $33.5 million for the twelve months ended December 31, 2019. The net interest margin was 3.31% in 2020, and 3.19% in 2019.
Noninterest income was $35.9 million for the twelve months ended December 31, 2020, an increase of $19.2 million, or 115.0%, compared to $16.7 million during the twelve months ended December 31, 2019. The increase can be primarily attributed to growth in mortgage banking fees which increased by $14.6 million, or 155%, from $9.4 million in the prior year. First State Mortgage net income increased by $9.6 million and contributed $10.2 million for the year, compared to $0.6 million for all of 2019.
Noninterest expense was $42.0 million during the twelve months ended December 31, 2020, compared to $36.4 million for the twelve months ended December 31, 2019, an increase of $5.6 million, or 15%. Most of this increase is related to the increased mortgage banking activity, as well as expenses related to the Bank's core processing conversion to Fiserv Premier.
Total loans increased $79.1 million, or 8%, to $1.05 billion from $973 million at December 31, 2019. There were $30.1 million in Paycheck Protection Plan (PPP) loans included in loan balances at December 31, 2020. Nonperforming loans as a percent of total loans were 0.73% as of December 31, 2020, up slightly from .58% at December 31, 2019.
The Company adjusted the Bank's provision for loan loss to reflect potential increased credit risk, due to the COVID-19 pandemic. After taking an additional $1.5 million the fourth quarter of 2020, the Company has taken $5.1 million during 2020, an increase of $3.3 million over the prior year. The allowance for loan loss ended at $15.5 million at December 31, 2020.
Deposits increased $167.8 million, or 17.3%, year-over-year, with much of the growth due to COVID relief programs and PPP funding. As a result, borrowed money decreased significantly at December 31, 2020, ending at $25.1 million, compared to $33.8 million at December 31, 2019. The investment portfolio of $99.4 million decreased slightly over the same period, down from $101.7 million at December 31, 2019.
The Company's capital levels remain solid as of December 31, 2020, with a Tier 1 leverage ratio of 9.70% and a total risk-based ratio of 13.8%, compared to 9.9% and 13.3%, respectively, as of December 31, 2019. Stimulus relief funding and PPP lending impacted capital ratios at year end 2020 due to strong deposit growth and the SBA guarantee of the PPP loans which carry a 0% risk-weighting.
On December 30, 2020, the Board of Directors declared a regular dividend of $0.15 per share and a special dividend of $0.15 per share for a total of $0.30 per share payable January 14, 2021, to shareholders of record as of December 31, 2020.
In announcing the results, President and Chief Executive Officer, Tim McConville, stated "Our fourth quarter numbers continued a strong trend and were some of the best in our history. Once again, the strong results from our mortgage subsidiary contributed to the record earnings performance despite significantly increasing our reserves. We are monitoring what effect COVID-19 will have on our credits, but most likely it will be mid-2021 before we have a clearer picture. We do believe, however, we are well-positioned to absorb any losses we may encounter. Growth continues to occur at an impressive pace as we head into 2021." ■