Net income increased $446,000, or 57 percent, to $1.2 million during the quarter ended Sept. 30 at Hampden Bancorp, the holding company for Springfield-based Hampden Bank.

"We are driving growth by leveraging our competitive strengths as a well-capitalized community bank, while improving efficiency and profitability across the organization," President and CEO Glenn Welch said in a statement. "Our results this quarter-end reflected strong loan growth and improved fee income, as well as the benefit of continued expense reductions. We believe this momentum will allow us to continue to report strong earnings and deliver sustainable stockholder value based on a strong pipeline and a more efficient organization."

The company also increased its net interest income by 1.8 percent, or $87,000, and decreased its interest expenses by $147,000 or 10.4 percent. The latter included a $157,000 decrease in deposit interest expenses due to a decrease in rates offset by an increase in the average balance of deposits.

Interest and dividend income decreased $60,000, or 1 percent, for the three months ended Sept. 30, compared with the same period last year mainly due to a $119,000 decrease in debt security investment income. The net interest margin declined to 3.1 percent for the three months ended compared with 3.32 percent in the three months ended Sept. 30, 2012.

The provision for loan losses increased $50,000 for the three months ended Sept. 30 compared with the same period in 2012 primarily due to current year loan growth.

Net loans, including loans held for sale, increased $30.5 million, or 6.8 percent, to $482.1 million. The majority of the loan increase was in the commercial loan portfolio, which increased $28.2 million, or 12.1 percent, in total from June 30, to Sept. 30, 2013. Commercial real estate loans increased $19.6 million, commercial construction loans increased $6.3 million and commercial loans increased $2.3 million. The majority of the commercial construction loans are written to become permanent financing. 

Non-performing assets totaled $4.8 million or 0.69 percent of total assets, at the end of September, compared with $5.2 million, or 0.8 percent of total assets, at June 30. Total non-performing assets included $3.6 million of non-performing loans and $1.2 million of other real estate owned.

The company’s total assets increased $43.2 million, or 6.6 percent, from $653 million at June 30, to $696.2 million at Sept. 30.