Cape Cod Five Cents Savings Bank reported net income of $1.6 million for the three months ended March 31, down 31.5 percent compared to $2.4 million in net income for the comparable period last year.

The first quarter results are after increased expenses of $2.1 million for loan loss reserves and $800,000 in FDIC premiums, the bank said.

The loan loss provision for the three-month period was $2.3 million, as the bank increased the loan loss reserve to more than $14.8 million based on management’s assessment of its loan portfolio quality in the current challenging economic environment. With increasing unemployment and a contraction in consumer spending, even the most carefully underwritten loan portfolio comes under strain over time, the bank said in a statement.

The bank’s capital grew to $175.1 million this quarter. The bank said it continues to be well capitalized under all regulatory definitions.