The effective tax rate was 26.5% for the fourth quarter of 2022, as compared to 11.0% for the same period in 2021, due to certain discrete tax benefits related to share-based compensation recognized in the fourth quarter of 2021, specifically, voluntary stock option exercises.
Full Year Earnings
Net income for the year ended December 31, 2022 was $28.5 million, or $3.47 per diluted share, compared to $17.9 million, or $2.26 per diluted share for the same period in 2021. Returns on average assets and equity for the year ended December 31, 2022 were 2.31% and 19.44%, respectively, compared to 1.77% and 13.42% for the same period of 2021.
Net interest income for the year ended December 31, 2022 increased $15.6 million, or 35.8%, to $59.3 million, due to growth in average interest earning assets totaling $216.6 million, or 22.3%, to $1.2 billion and increases in average yields on interest earning assets when compared to the same period in 2021. Our net interest margin increased to 4.99% in the current period as the margin was positively impacted by growth in higher yielding variable rate commercial loans and increases in short-term interest rates. The average yield on loans increased 61 basis points to 6.40% when comparing 2022 to the prior year. Average loans increased $126.7 million, or 17.7%, to $844.4 million when compared to the prior year, driven primarily by growth in the commercial loan portfolio. Average securities increased $70.5 million to $204.5 million as management opportunistically invested excess liquidity in the securities portfolios driving average yields up 41 basis points to 2.03% and increasing interest income $2.0 million to $4.2 million in the current year. The movement in short-term interest rates increased yields and interest income on our reverse repurchase agreements and interest earning cash balances.
The provision for loan losses was $3.5 million for the year ended December 31, 2022, which was a $3.5 million decrease from the 2021 provision of $7.0 million due to the charge recognized in 2021 on our legacy NFL consumer post settlement loan portfolio.
Noninterest income was $24.9 million for the year ended December 31, 2022, a $3.9 million increase from the same period in 2021, driven by increases in payment processing and ASP fees in the current year and offset by net valuation losses of $384 thousand on the NFL portfolio in 2021. Payment processing income increased $1.1 million as compared to the prior year period despite $500 thousand in early termination fees in 2021. Payment processing volumes and transactions for the credit and debit card processing platform increased $4.3 billion, or 18.1%, to $28.0 billion and 103.0 million, or 23.8%, to 536.0 million transactions, respectively, for the year ended December 31, 2022, as compared to the same period in 2021. These increases were driven by expansion of our sales channels through ISOs, increased number of merchants, volume increases and the reopening of the economy post pandemic. ASP fee income increased from $29 thousand in 2021 to $2.5 million in 2022 and is directly impacted by the average balance of those funds and short-term interest rates.
Noninterest expense increased $6.9 million, or 19.7%, to $42.0 million for the year ended 2022, as compared to the same period in 2021. This increase was primarily driven by increases in employee compensation and benefits, professional services costs, data processing, occupancy and equipment, advertising and marketing, hiring related costs and travel and business relations. Employee compensation and benefits costs increased $4.0 million, or 18.6%, due to increases in staff and officer level employees to support growth, continued investment in digital platforms and related sales/marketing divisions, and the impact of salary, bonus and stock-based compensation increases. Consulting service costs decreased $216 thousand, or 20.6%, partially offsetting the increase in employee compensation and benefits as previously contracted consultants were hired, primarily in our technology development and digital marketing departments. Professional services costs increased $676 thousand due to continued business development and administration primarily related to our CECL implementation and the NFL consumer loan transaction. Data processing costs increased $551 thousand, or 15.0%, due to increased processing volume, primarily driven by our core banking platform, and additional costs related to our technology implementations. Occupancy and equipment costs increased $428 thousand, or 15.2%, primarily due to amortization of our investments in internally developed software to support our new digital platform and additional office space to support our continued growth. Advertising and marketing costs increased $288 thousand, or 24.5%, as we continued to grow our digital marketing platform and expand our thought leadership in our national verticals. Hiring related costs increased $272 thousand as we continue to invest in our future. Travel and business relations costs increased $239 thousand as we continued to re-engage in our traditional high touch marketing and sales efforts on a national basis to complement our digital marketing efforts.
The Company’s efficiency ratio was 49.8% for the year ended December 31, 2022, as compared to 54.2% in 2021. This significant improvement is a result of industry leading revenue growth driven by our core national platforms. These national platforms have benefited from our investments in technology, digital marketing, employees, and other branchless infrastructure that support our industry leading returns.
The effective tax rate was 26.5% for the year ended 2022, as compared to 21.1% for the same period in 2021, due to certain discrete tax benefits related to share-based compensation recognized in the fourth quarter of 2021, specifically, voluntary stock option exercises.
Asset Quality
At December 31, 2022, nonperforming loan balances totaled $4 thousand and consisted of one nonaccrual consumer loan which has subsequently been paid off. Our two commercial nonaccrual loans totaling $5.8 million at September 30, 2022 were paid-off in full,
