Year-over-year quarterly income dropped $600,000 to $2.79 million at Cape Cod Five Cents Savings Bank, due largely to a rapid increase in mortgage rates coupled with decreased volume in residential lending and less profit earned per loan as rising rates slowed refinance and home purchase activity.

Still, the bank increased its capital, asset size and deposits during the quarter ended June 30. Capital increased $4.5 million to $227.5 million from Dec. 31, and total assets increased $39.2 million to $2.36 billion.

At the quarter’s end total deposits were $2.09 billion, up $49.8 million, and net loans also increased by $115.8 million, ending the quarter at $1.87 billion. The bank made no provision to the allowance for loan losses in the second quarter, and its loan coverage ratio of 0.95 percent is down from 1.03 percent on Dec. 31. The trust and asset management department finished the second quarter with $816.1 million in assets under management, a $47.2 million increase from year-end 2012.