EARNING ASSETS
Earning assets are defined as those assets that produce interest income. By maintaining a healthy asset utilization rate, i.e., the volume of earning assets as a percentage of total assets, the Company maximizes income. The earning asset ratio (average interest earning assets divided by average total assets) equaled 94.4% at March 31, 2022 and 93.9% at March 31, 2021. This indicates that the management of earning assets is a priority and non-earning assets, primarily cash and due from banks, fixed assets and other assets, are maintained at minimal levels. The primary earning assets are loans and securities.
Our primary earning asset, total loans, increased to $779,028,000 as of March 31, 2022, up $26,187,000, or 3.5% since year-end 2021. The loan portfolio continues to be well diversified. Non-performing assets decreased since year-end 2021, but overall asset quality has remained consistent. Total non-performing assets were $7,018,000 as of March 31, 2022, a decrease of $48,000, or 0.7% from $7,066,000 reported in non-performing assets as of December 31, 2021. Total allowance for loan losses to total non-performing assets was 127.34% as of March 31, 2022 and 122.84% at December 31, 2021. See the Non-Performing Assets section on page 42 for more information.
In addition to loans, another primary earning asset is our overall securities portfolio, which decreased in size from December 31, 2021 to March 31, 2022. Debt securities available-for-sale amounted to $434,881,000 as of March 31, 2022, a decrease of $3,035,000 from year-end 2021. The decrease in debt securities available-for-sale is mainly due to a $21,876,000 decrease in the market value of the portfolio as a result of the current interest rate environment, offset by the deployment of $34,314,000 in cash to purchase debt securities, along with other portfolio activity.
Interest-bearing deposits in other banks decreased as of March 31, 2022, to $1,068,000 from $51,738,000 at year-end 2021 due to decreased cash held at the Federal Reserve Bank. Time deposits with other banks were $0 at March 31, 2022 and $247,000 at December 31, 2021 due to the maturity of the one remaining time deposit.
LOANS
Total loans increased to $779,028,000 as of March 31, 2022 as compared to $752,841,000 as of December 31, 2021. The table on page 19 provides data relating to the composition of the Company’s loan portfolio on the dates indicated. Total loans increased by $26,187,000 or 3.5%.
Steady demand for borrowing by businesses accounted for the 3.5% increase in the loan portfolio from December 31, 2021 to March 31, 2022. Overall, the Commercial and Industrial portfolio (which includes tax-free Commercial and Industrial loans) decreased $695,000 or 0.8% from $82,526,000 at December 31, 2021 to $81,831,000 at March 31, 2022. The decrease in the Commercial and Industrial portfolio during the three months ended March 31, 2022 was mainly attributable to a reduction of $3,650,000 in the portion of the Commercial and Industrial portfolio attributable to SBA PPP loans, the balance of which decreased from $4,894,000 at December 31, 2021 to $1,244,000 at March 31, 2022, as a result of loan forgiveness. The portion of the Commercial and Industrial portfolio excluding SBA PPP loans increased $2,955,000 during the three months ended March 31, 2022, mainly resulting from $3,246,000 in new loan originations for the three months ended March 31, 2022 and an increase in utilization of existing Commercial and Industrial lines of credit of $2,013,000, offset by loan payoffs of $808,000 and regular principal payments and other typical fluctuations in the Commercial and Industrial portfolio during the three months ended March 31, 2022. The Commercial Real Estate portfolio (which includes tax-free Commercial Real Estate loans) increased $28,267,000 or 5.4% from $521,654,000 at December 31, 2021 to $549,921,000 at March 31, 2022. The increase is mainly attributable to new loan originations of $53,605,000 for the three months ended March 31, 2022, offset by loan payoffs of $23,289,000 and a decrease in utilization of existing Commercial Real Estate lines of credit of $1,002,000, as well as regular principal payments and other typical amortization in the Commercial Real Estate portfolio during the three months ended March 31, 2022. Residential Real Estate loans decreased $1,393,000 or 1.0% from $143,383,000 at December 31, 2021 to $141,990,000 at March 31, 2022. The decrease was mainly the result of $7,180,000 in new loan originations and an increase in utilization of existing Residential Real Estate (Home Equity) lines of credit of $1,018,000, offset by net loans sold of $2,719,000, loan payoffs of $6,294,000 (of which $1,872,000 was refinanced with the Bank during the three months ended March 31,2022 with the new refinanced loan balances included in the new