Average noninterest bearing deposits were $2.96 billion for the fourth quarter of 2014 compared with $2.92 billion for the third quarter of 2014. Our total cost of deposits and customer repurchase agreements for the fourth quarter was 11 basis points compared with 10 basis points for the prior quarter. At December 31st, 2014, our total deposits and customers repurchase agreements were $6.17 billion compared with $5.53 billion for the same period a year ago and $6.29 billion at September 30, 2014. Our ongoing objective remains to maintain a low cost stable source of funding for our loans and securities.
Interest income, for the fourth quarter of 2014 totaled $65.3 million consistent with the third quarter of 2014. The $65.3 million for the fourth quarter included $1.3 million of discount accretion from principal reductions and payoffs. This compares to $1.4 million of discount accretion for the prior quarter. Total investment income of $18.3 million increased $575,000 or 3.25% from $17.7 million for the third quarter of 2014. Noninterest income was $9.9 million for the fourth quarter of 2014 compared with $8 million for the third quarter.
Now expenses, we continue to closely monitor and manage our expenses. Noninterest expense for the fourth quarter was $31.3 million compared with $32.5 million for the third quarter. Noninterest expense represented 1.67% of average assets for the quarter compared with 1.75% for the third quarter. The quarter over quarter decrease in expenses was partially due to the cost synergies we achieved related to the acquisition and integration of American Security Bank. Noninterest expense increased by $12.2 million in 2014, the year over year increase was partially due to expenses related to the acquisition of American Security Bank. This included nonrecurring acquisition related cost of $2 million.
Now I’d like to turn the call over to Rich Thomas, our CFO, to discuss our effective tax rate, investment portfolio and overall capital position. Rich?
Rich Thomas – Executive Vice President & Chief Financial Officer
Thanks, Chris, good morning, everyone. Our effective tax rate was 35.7% for the fourth quarter. The overall tax rate for 2014 was 36.1%. Now to our investment portfolio. During the fourth quarter of 2014, we sold an average of approximately $100.7 million in overnight funds to the Federal Reserve and received a yield of approximately 25 basis points on collective balances. We also maintained an average of $19.9 million in short term CDs with other financial institutions, yielding approximately 80 basis points. At December 31st, 2014, investment securities totaled $3.14billion, up $23 million from the third quarter of 2014. Investment securities represented 42.54% of our total assets at quarter end.
At December 31st, 2014, we had an unrealized gain of $53.6 million in our total investment portfolio compared to an unrealized gain of $31.2 million for the prior quarter. Virtually all of our mortgage backed securities are issued by Freddie Mac or Fannie Mae, which have the implied guarantee of the U.S. Government.
