Springfield’s Hampden Bancorp Inc., the holding company for Hampden Bank, has reported $491,000 in net income for the three months ended Dec. 31, 2010, compared to a net loss of $670,000 for the same period in 2009.
The increase in net income was due principally to a decrease in the provision for loan losses of $1.5 million, or 83.3 percent. Also, for the three month period ended Dec. 31, interest expense decreased by $558,000 compared to the same period in 2009. This decrease in interest expense was due to a decrease in deposit interest expense of $400,000 and a decrease in borrowing interest expense of $158,000. An offset to this was a decrease in interest and dividend income, including fees, of $516,000, or 7.4 percent. This decrease in interest income was mainly due to a decrease in debt securities income of $276,000 and a decrease in loan income of $247,000, according to a statement.
The company reported $1 million in net income for the six months ended Dec. 31, 2010, compared to a net loss of $832,000 for the same period in 2009. The reason for the increase in net income was due to a decrease in the provision for loan losses of $2 million, or 77.3 percent, for the six months ended Dec. 31, 2010, compared to the same period in 2009. Interest expense decreased by $1.1 million during this period, a decrease caused by a decline in deposit interest expense of $740,000 and a decrease in borrowing interest expense of $318,000 for the six months ended Dec. 31, 2010, compared to the same period in 2009.
"The low interest rate climate continues to create yield and margin challenges and the stagnant local economy has limited loan growth," said Thomas R. Burton, president and CEO. "However, we are pleased to report a profit for the quarter of $491,000 versus a loss a year ago of $670,000. Non performing loans, although relatively consistent with the past quarter, increased from 1.37 percent to 2.15 percent of total loans from June 30, 2010 to Dec. 31, 2010. Impaired loans have remained consistent with prior quarters, indicating some evidence of trough in the commercial real estate market. Ultimately, we continue to remain cautiously optimistic that our local economy has seen the worse of this recession."
The board of directors of the company declared a quarterly cash dividend of 3-cents per common share, payable on Feb. 25 to shareholders of record at the close of business on Feb. 11.
