Springfield-based Hampden Bancorp delivered record earnings in 2013, ending the year on a somewhat positive note after it staved off an effort by activist shareholders to force a merger or sale.
Net income for the six months ended Dec. 31 totaled $2.2 million, representing a 46 percent increase over the $1.5 million it earned in the comparable period in 2012. Net income for the quarter ended Dec. 31 totaled $1 million, compared with $771,000 in the year ago period.
“Management’s strategy to drive growth by capitalizing on the company’s competitive strengths as a strong, local, community bank focused on business lending, while improving efficiency, has resulted in this increased profitability. Once again, our results this quarter reflected good loan growth, improved fee income and higher net interest income,” President and CEO Glenn Welch said in a statement.
The holding company for Hampden Bank had come under pressure last year to increase profits and hired an investment firm to help figure out how it might enhance shareholder value. That didn’t stop a Texas hedge fund, with about an 8 percent interest in the company’s stock, from nominating its own candidates to the board of directors in hopes of forcing a sale or merger. Stockholders at the company’s annual meeting in November ultimately rejected those candidates, while still not ruling out the possibility of a sale and approving a “say-on-pay” vote.
Total assets increased $41.4 million, or 6.3 percent, to $694.3 million at Dec. 31, from $653 million at June 30. Net loans, including loans held for sale, increased $45.8 million, or 10.2 percent, to $497.5 million, boosted chiefly by increases in the commercial loan portfolio, which grew $43.3 million, or 18.6 percent, over that six-month period. Commercial real estate loans increased $25.8 million, commercial construction loans increased $7.5 million, and commercial loans increased $10 million. The majority of the commercial construction loans are written to become permanent financing, the company said.
Net interest income increased $477,000, or 5 percent, in the latter half of 2013, compared with the same period a year ago.
The company increased its provision for loan losses by $25,000 in response to loan growth. Non-performing assets totaled $4.3 million or 0.61 percent of total assets, at Dec. 31, compared with $5.2 million, or 0.80 percent of total assets, at June 30.
The company’s board of directors declared a quarterly cash dividend of 6 cents per common share to be paid Feb. 28 to shareholders of record on Feb. 14.