Net income for the second quarter declined 32 percent, or $291,000, to $618,000 at Springfield-based Hampden Bancorp, compared with $909,000 for the same period last year.
In a statement accompanying its quarterly earnings release, the holding company for Hampden Bank said that figure included $310,000 in restructuring costs associated with the elimination of two senior vice president positions. The company saw a 3 cent increase in its diluted earnings per share to 54 cents, representing the greatest increase in its earnings per share since Hampden Bancorp was formed.
“We are proud to have delivered record earnings per share performance in the midst of a challenging interest rate environment,” Glenn Welch, president and CEO, said in a statement. “We recognized that in light of the industry-wide threat to net interest margins, we needed to pursue a multi-pronged strategy of eliminating targeted expenses, delivering core relationship-based balance sheet growth, and continuing our disciplined capital management process of returning capital to shareholders through stock buybacks and dividends. We believe our continued vigilance in targeting non-interest expenses, coupled with our robust business pipeline will position us to achieve greater levels in operating efficiency as we move forward.”
Total assets increased $37 million, or 6 percent, to $653 million at June 30.
Net loans, including loans held for sale, increased $44.4 million, or 10.9 percent, to $451.6 million for the same time frame. The majority of the loan increase was in the commercial loan portfolio, which increased $41.2 million, or 21.6 percent, in total for the year ended June 30. Commercial construction loans increased $18.8 million, commercial real estate loans increased $14.4 million and commercial loans increased $8.0 million.
Non-performing assets totaled $5.2 million or 0.8 percent of total assets, at the end of June compared with $4.1 million, or 0.67 percent of total assets, the same time last year. Total non-performing assets included $4 million of non-performing loans and $1.2 million of other real estate owned. The ratio of allowance for loan losses to total loans stood at 1.2 percent, which management believes will be sufficient to cover estimated losses, according to the company’s statement.
Deposits increased $40 million, or 9.2 percent, to $474.8 million at June 30. Money market accounts increased $28.1 million, demand deposits increased $13.9 million, savings accounts increased $7.8 million and NOW accounts increased $2.6 million. Certificates of deposits decreased $12.5 million.
The company’s board of directors also declared a 20 percent increase in its quarterly cash dividend to 6 cents per common share. The dividend will be paid Aug. 30 to shareholders of record at the close of business on Aug. 16.
