Springfield-based Hampden Bancorp Inc., which is the holding company for Hampden Bank, reported $27,000 net income for the quarter ended June 30, a significant decrease compared the $622,000 reported during the same time last year.

The decrease in net income was primarily attributed to a $400,000 increase in the provision for loan losses, for the three month period ended June 30, compared to the same three month period in 2010, according to a statement. The increase in the provision for loan losses is due to increases in non-accrual loans, increases in impaired loans and general economic conditions, the company said in a statement.

For the 12 months ended June 30, Hampden Bancorp reported $1.3 million net income, compared to a net loss of $353,000 for the same period in 2010. The reason for the increase in net income was due to a decrease in the provision for loan losses of $2.4 million year-over-year.

"2011 saw a significant improvement in net income over last year due primarily to a decline in the provision for loan losses and a general improvement in the performance of the loan portfolio," said Thomas R. Burton, president and CEO. "However the current quarter results were disappointing in comparison to past quarters due in part to a higher provision for loan losses and a continued compressed net interest margin due primarily to low loan volumes, particularly in commercial lending."

Hampden Bancorp also declared a quarterly cash dividend of 3-cents per common share, payable on Aug. 31 to shareholders of record at the close of business on Aug. 18.