Springfield’s Hampden Bancorp Inc., the holding company for Hampden Bank, has reported a net loss of $670,000 for the three months ended Dec. 31, 2009 compared to a net profit of $190,000 for the same period in 2008, a decrease blamed on a $1.5 million increase in its provision for loan losses.

The increase in the provision for loan losses is due to growth in loan delinquencies, non-accrual loans, impaired loans and the loan portfolio and general economic conditions, according to a statement.

There was also an increase in non-interest expense of $302,000 for the three months ended Dec. 31, 2009 compared to the three months ended Dec. 31, 2008. The increase in non-interest expense was mainly due to an increase in other general and administrative expenses of $104,000, an increase in advertising expenses of $70,000, an increase in salaries and employee benefits of $60,000, and an increase in occupancy and equipment of $45,000.

The company also reported a net loss of $832,000 for the six months ended Dec. 31, 2009, compared to a net profit of $237,000 for the same period in 2008. The decrease in net income was primarily due to an increase in the provision for loan losses of $1.8 million.

"We are disappointed to be reporting a loss for the first six months of our fiscal year due in large part to a significant provision for loan losses primarily due to our concern primarily over one large lending relationship," said Thomas R. Burton, president and CEO. "The bank’s loan loss reserve ratio to total loans outstanding has increased over the prior year while our charge offs to date have remained relatively low. We continue to remain wary of the economic situation in New England and its impact particularly on our commercial customers."

The company’s board of directors has also declared a quarterly cash dividend of $0.03 per common share, payable Feb. 26 to shareholders of record at the close of business on Feb. 12.