Chicopee Bancorp saw an 8 percent drop in its net income during the third quarter this year due to rising noninterest expenses and provision for loan losses coupled with a decrease in net interest income.
The holding company for Chicopee Savings Bank recorded an after-tax net income of $573,000 as of Sept. 30, compared with $623,000 for the same period last year. During the third quarter this year, noninterest expenses increased $143,000, or 3 percent, net interest income fell $86,000 and the company increased its provision for loan losses by $43,000, or 25.4 percent.
Chicopee Bancorp also recorded a 23.2 percent increase in noninterest income to $764,000 during the third quarter. The company attributed this increase to an 11.9 percent increase in service charges, fees and commissions, primarily due to seasonal activity in commercial deposit accounts. Loan sales and servicing net increased $52,000, or 288.9 percent, to $70,000 for the three months ended Sept. 30. These increases were partially offset by a $19,000, or 17.0 percent, decrease in the net loss on the sale of other real estate owned.
The decrease in net interest income of $86,000 to $4.6 million this year from $4.7 million last year was due to the 6.4 percent decrease in interest and dividend income, partially offset by a 22.1 percent decrease in interest expense.
Total assets increased $4.9 million, or 0.8 percent, to $604.9 million at Sept. 30. from $600 million at Dec. 31, 2012. The increase in total assets was primarily due to the increase in cash and cash equivalents of $14 million, or 35.3 percent, offset by the $3.9 million decrease in net loans and a decrease of $4.4 million, or 7.5 percent, in held-to-maturity securities. The 35.3 percent increase in cash and cash equivalents was due to the seasonal deposit growth in the third quarter.
The $3.9 million, or 0.8 percent, decrease in net loans was due to a $6.2 million, or 5.2 percent, decrease in one- to four-family real estate loans, a decrease of $2.9 million, or 1.5 percent, in commercial real estate loans and a decrease in construction loans of $769,000, or 1.9 percent, offset by the increase of $5.6 million, or 6.6 percent, in commercial and industrial loans.
The $6.2 million decrease in one- to four-family residential real estate loans was primarily due to prepayments and refinancing activity attributed to the historically low interest rates.
The company’s board of directors declared its fourth quarterly cash dividend of 5 cents per share. Stockholders of record on Nov. 8, will receive the cash dividend on or about Nov. 20.
