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Hampden Bancorp, Inc. Reports First Quarter Results and Declares Cash Dividend

Posted by Dana in October 30th 2009

Hampden Bancorp, Inc. (the “Company”) (NASDAQ: HBNK), which is the holding company for Hampden Bank (the “Bank”), announced the results of operations for the three months ended September 30, 2009.

The Company had a net loss for the three months ended September 30, 2009 of $162,000, or $(0.02) per fully diluted share, as compared to a net profit of $47,000, or $0.01 per fully diluted share, for the same period in 2008. For the three month period ended September 30, 2009, net interest income increased by $512,000 compared to the three month period ended September 30, 2008. A partial offset to this increase was an increase in the provision for loan losses of $338,000 for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. The increase in the provision for loan losses is due to increases in loan delinquencies, increases in non-accrual loans, increases in impaired loans, growth in the loan portfolio, and general economic conditions. There was also an increase in non-interest expense of $598,000 for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. The increase in non-interest expense was mainly due to a write-down of other real estate owned of $225,000, an increase in FDIC insurance and assessment expenses of $112,000, and an increase in other general and administrative expenses of $128,000 for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Non-interest income, including net gains on sales of securities and loans, increased by $123,000 compared to the three month period ended September 30, 2008.

The Company’s total assets decreased $1.4 million, or 0.3%, from $567.7 million at June 30, 2009 to $566.2 million at September 30, 2009. Net loans, including loans held for sale, increased $15.8 million, or 4.1%, to $403.3 million at September 30, 2009, and securities increased 0.6% or $685,000 from $116.1 million to $116.8 million as of September 30, 2009. Cash and cash equivalents decreased $17.5 million, or 48.4%, to $18.7 million at September 30, 2009. The Company also repurchased 114,800 shares of Company stock for $1.2 million pursuant to the Company’s second Stock Repurchase Program announced in January 2009.

Non-performing assets totaled $6.1 million or 1.08% of total assets, at September 30, 2009 compared to $5.3 million, or 0.93% of total assets, at June 30, 2009. Total non-performing assets included $4.9 million of non-performing loans and $1.2 million of other real estate owned. From June 30, 2009 to September 30, 2009, commercial non-performing loans have increased $680,000, residential mortgage non-performing loans have increased $330,000 and consumer non-performing loans have increased $227,000. A partial offset to these increases was a decrease in commercial mortgage non-performing loans of $224,000. As a result of the continuing economic downturn in the greater Springfield area, the Company has identified additional impaired loans, and in total now have $16.9 million of impaired loans as of September 30, 2009. The Company has established a $390,000 specific reserve, which management feels is sufficient to cover estimated losses for these impaired loans.

Deposits increased $7.9 million, or 2.1%, to $389.4 million at September 30, 2009 from $381.5 million at June 30, 2009. Money market accounts increased $4.7 million, demand deposits increased $2.9 million, NOW accounts increased $1.2 million and certificates of deposit increased $715,000. Savings accounts decreased $1.7 million from June 30, 2009 to September 30, 2009.

Short-term borrowings, including repurchase agreements, decreased $3.3 million, or 26.8%, to $9.1 million at September 30, 2009 from $12.4 million at June 30, 2009. Long-term debt decreased $4.2 million, or 5.9%, to $66.7 million at September 30, 2009 from $70.9 million at June 30, 2009.

Stockholders’ equity decreased $418,000, or 0.4%, to $96.3 million at September 30, 2009 from $96.7 million at June 30, 2009. The Company repurchased 114,800 shares of Company stock, at an average price of $10.68 per share, in the first quarter of fiscal 2010 pursuant to the Company’s second Stock Repurchase Program announced in January 2009. Our ratio of capital to total assets remained at 17.0% as of September 30, 2009.

The Company also announced today that the Board of Directors of the Company declared a quarterly cash dividend of $0.03 per common share, payable on November 25, 2009, to shareholders of record at the close of business on November 10, 2009.