Springfield’s Hampden Bancorp Inc., the holding company for Hampden Bank, has reported $622,000 in net income for the three months ended June 30, compared to $106,000 for the same period in 2009.

The increase in net income was primarily due to a decrease in interest expense of $639,000 compared to the three month period ended June 30, 2009, of which $446,000 was due to a decrease in deposit interest expense and $193,000 was due to a decrease in borrowings interest expense.

The company had a net loss of $353,000 for the 12 months ended June 30, compared to net income of $286,000 for the same period in 2009.

The decrease in net income was primarily due to an increase in the provision for loan losses of $2.9 million for the 12 months ended June 30, 2010 compared to the 12 months ended June 30, 2009

"We are cautiously optimistic that we have seen the worst of the effects of the recession in our loan portfolio. Non performing loans to total loans have not increased from the previous quarter and totals 1.37 percent while our allowance for loan losses equals 1.52 percent of the total loan portfolio," said Thomas R. Burton, president and CEO. "Although the loss for the year was $353,000, earnings for the quarter ended June 30 were $622,000, due in large part to a more normalized provision for loan losses of $300,000. Net interest margin continues to improve as the cost of funds decline, the result of the current low interest rate environment as well as an increase in transaction and money market deposit accounts."

The company repurchased 198,300 shares of company stock, at an average price of $10.79 per share, in the first and second quarters of fiscal 2010 pursuant to the company’s second Stock Repurchase Program announced in January 2009.

The board of directors of the company also declared a quarterly cash dividend of 3-cents per common share. The dividend will be paid Aug 30 to shareholders of record at the close of business on Aug. 16.