Non-interest income was $5.3 million for the year ended December 31, 2023 compared to $5.2 million for the year ended December 31, 2022, an increase of 1.8%. Most significantly impacting the comparative year end periods was a $1.5 million decline in the loss on sales and calls of securities primarily due to the execution of a balance sheet and regulatory capital management strategy in 2022. The securities losses were partially offset by $1.2 million in gains from the termination of two derivatives contracts, recorded in other non-interest income in 2022, resulting in the $1.1 million decline in other non-interest income for the year ended December 31, 2023 compared to the year ended December 31, 2022. Also impacting the comparative year end periods were decreases of $219,000 in life insurance proceeds, $96,000 in customer service fees due to a decline in overdraft fees and $95,000 in fees derived from loan activity primarily due to a decline in title insurance commissions for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Non-interest expense was $19.9 million for both the year ended December 31, 2023 and the year ended December 31, 2022. Most significantly impacting non-interest expense in the comparative year end periods was a $355,000 increase in data processing expense primarily due to a $238,000 breakage fee paid to Juniata’s current core service provider as Juniata plans to convert to a new core service provider in the first quarter of 2024, a $227,000 increase in merger and acquisition expense as a result of the Path Valley branch acquisition and a $99,000 increase in FDIC insurance premiums due to an increase in the assessment rate for all institutions in 2023. These increases were partially offset by a decline of $446,000 in low-income housing partnership amortization expense for the year ended December 31, 2023 versus the comparable 2022 period due to the completion of the 10-year amortization period in January 2023 for one of Juniata’s low-income housing partnership investments, as well as a $319,000 decrease in taxes, other than income, between the comparative year end periods due to a decline in Pennsylvania Shares Tax expense and recording a $62,000 Pennsylvania Shares Tax refund in the 2023 period.
An income tax provision of $970,000 was recorded for the year ended December 31, 2023 compared to an income tax provision of $642,000 recorded for the year ended December 31, 2022. Juniata qualifies for a federal tax credit for investments in low-income housing partnerships. The tax credit decreased $536,000, or 59.4%, from $902,000 in the year ended December 31, 2022 to $366,000 in the year ended December 31, 2023 due to the completion of the amortization period for one of Juniata’s low-income housing partnership investments.
Financial Results for the Quarter
Annualized return on average assets for the three months ended December 31, 2023 was 0.79%, a decrease of 23.3%, compared to 1.03% for the three months ended December 31, 2022. Annualized return on average equity for the three months ended December 31, 2023 was 17.47%, a decrease of 27.0%, compared to 23.93% for the three months ended December 31, 2022.
Net interest income was $5.6 million for the three months ended December 31, 2023 compared to $6.2 million for the three months ended December 31, 2022. Average interest earning assets increased $64.2 million, or 8.2%, to $847.3 million for the three months ended December 31, 2023, compared to the same period in 2022, primarily due to an increases of $48.8 million, or 10.4%, in average loans and $9.4 million, or 3.0%, in average investment securities. Average interest bearing liabilities increased by $32.3 million, or 5.6%, compared to the comparable 2022 period, primarily due to growth in average time deposits and short-term borrowings. The yield on average loans increased by 59 basis points, while the yield on investment securities decreased by 18 basis points for the three months ended December 31, 2023 compared to the three months ended December 31, 2022 while the rates on average time deposits and short-term borrowings and other interest bearing liabilities increased by 200 basis points and 145 basis points, respectively, over the same period, primarily due to the 100 basis point increase in market interest rates between periods as well as competitive pricing pressures. The yield on earning assets increased 33 basis points, to 4.10%, for the three months ended December 31, 2023 compared to same period in 2022, while the cost to fund interest earning assets with interest bearing liabilities increased 120 basis points, to 2.08%. The net interest margin, on a fully tax equivalent basis, decreased from 3.13% for the three months ended December 31, 2022, to 2.64% for the three months ended December 31, 2023.
Juniata recorded a credit loss expense of $89,000 for the three months ended December 31, 2023 compared to a provision expense of $105,000 for the three months ended December 31, 2022. This decrease was due primarily to lower loan growth for the three months ended December 31, 2023 compared to the same period in 2022.
Non-interest income was $1.4 million for the three months ended December 31, 2023 and $1.3 million for the three months ended December 31, 2022, an increase of 13.6%. Most significantly impacting non-interest income in the comparative three month periods was a $62,000 increase in fees derived from loan activity primarily due to changes in the fair market value of risk participation agreements for participated loan relationships. Also impacting the comparative three month periods were increases of $53,000 in the change in value of equity securities and $41,000 in debit card fee income for the three months ended December 31, 2023 compared to the three months ended December 31, 2022.