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Hampden Bancorp, Inc. Reports First Quarter Results

^{Published on 2011-10-31 13:23:58 - Market Wire}
 

SPRINGFIELD, Mass.--([ BUSINESS WIRE ])--Hampden Bancorp, Inc. (the aCompanya) (NASDAQ: HBNK), which is the holding company for Hampden Bank (the aBanka), announced the results of operations for the three months ended September 30, 2011.

The Company had net income for the three months ended September 30, 2011 of $536,000, or $0.08 per fully diluted share, as compared to $543,000, or $0.08 per fully diluted share, for the same period in 2010. The Company had an increase in net interest income of $155,000 for the three months ended September 30, 2011 compared to the three months ended September 30, 2010. There was a decrease in interest and dividend income, including fees, of $430,000, or 6.4%, for the three months ended September 30, 2011 compared to the three months ended September 30, 2010. This decrease in interest income was mainly due to a decrease in loan income of $289,000 and a decrease in debt securities income of $137,000. For the three month period ended September 30, 2011, interest expense decreased by $585,000, or 27.0%, compared to the three month period ended September 30, 2010. This decrease in interest expense was due to a decrease in deposit interest expense of $426,000 and a decrease in borrowing interest expense of $159,000. There was a decrease in the rates of deposits and a decrease in the average balance of borrowed funds due to the Company paying off some higher rate borrowings. The increase in net interest income was more than offset by an increase in non-interest expense of $172,000 for the three months ended September 30, 2011 compared to the same period in 2010. The increase in non-interest expense was mainly due to an increase in salaries and employee benefits of $104,000, or 4.4%, and an increase in other general and administrative expenses of $69,000, or 7.9%, for the three months ended September 30, 2011 compared to the same period in 2010. Our combined federal and state effective tax rate was 34.2% for the three months ended September 30, 2011 compared to 35.7% for the same period in 2010.

The Companyas total assets decreased $6.9 million, or 1.2%, from $573.3million at June 30, 2011 to $566.4million at September 30, 2011. Net loans, including loans held for sale, decreased $2.0 million, or 0.5%, to $396.0 million at September 30, 2011, and securities decreased $2.8 million, or 2.5%, to $109.1 million as of September 30, 2011 compared to June 30, 2011. Cash and cash equivalents decreased $2.6 million, or 8.3%, to $28.6 million at September 30, 2011.

Non-performing assets totaled $7.2 million or 1.26% of total assets, at September 30, 2011 compared to $7.5 million, or 1.30% of total assets, at June 30, 2011. Total non-performing assets included $5.9 million of non-performing loans and $1.3 million of other real estate owned. From June 30, 2011 to September 30, 2011, residential mortgage non-performing loans have decreased $151,000, commercial non-performing loans have decreased $120,000, consumer, including home equity, non-performing loans have decreased $29,000 and commercial real estate non-performing loans have decreased $12,000. Impaired loans totaled $19.0 million as of September 30, 2011. The Company has established $604,000 in specific reserves for impaired loans. Management believes that a 1.44% allowance for loan losses to total loans ratio is sufficient to cover estimated losses. The allowance for loan losses to non-performing loans ratio increased from 88.06% at June 30, 2011 to 97.09% at September 30, 2011.

Deposits increased $1.1million, or 0.3%, to $418.4million at September 30, 2011 from $417.3million at June 30, 2011. Money market accounts increased $3.9 million, demand deposits increased $3.4 million, NOW accounts increased $1.9 million and savings accounts increased $1.4 million. Certificates of deposits decreased $9.6 million.

Short-term borrowings, consisting of repurchase agreements, decreased $318,000, or 4.4%, to $6.9 million at September 30, 2011 from $7.2 million at June 30, 2011. Long-term debt decreased $5.2 million, or 10.9%, to $42.3 million at September 30, 2011 from $47.5 million at June 30, 2011.

Stockholdersa equity decreased $954,000, or 1.0%, to $92.6 million at September 30, 2011 from $93.5 million at June 30, 2011. The Company repurchased 137,482 shares of Company stock for $1.8 million, at an average price of $12.91 per share, in the three months ended September 30, 2011 pursuant to the Companyas third and fourth Stock Repurchase Programs announced in June 2010 and December 2010, respectively. In addition, the Company repurchased 1,281 shares of Company stock, at an average price of $13.10 per share, in the first quarter of fiscal 2012 in connection with the vesting of a restricted stock grant as part of our 2008 Equity Incentive Plan. The Company purchased these shares from the employee plan participant for settlement of tax withholding obligations. Our ratio of capital to total assets remained flat at 16.3% at September 30, 2011 compared to June 30, 2011.

Thomas R. Burton, President and CEO stated, aAs we closed out the first quarter of our fiscal year, we are somewhat encouraged by increased business banking activity, a slightly better local economy and stable performance of the loan portfolio. We continue to work down our cost of funds as certificates of deposit mature and we move more toward traditional core deposit accounts. Non-performing loans have stabilized and we appear to be well reserved at this time. During the quarter, we purchased 103,539 shares of our stock as part of our fourth stock buy-back program at a significant discount to book value. As of September 30, we have 235,631 shares remaining to purchase as part of this program.a

Established in 1852, Hampden Bank is a full service community bank serving the families and businesses in and around Hampden County. The Bank has ten office locations in Springfield, Agawam, Longmeadow, West Springfield, Wilbraham, and Indian Orchard. Hampden Bank offers customers the latest in internet banking, including on-line banking and bill payment services.

Certain statements herein constitute aforward-looking statementsa within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Because these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. As a result, actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like abelievea, aexpecta, aanticipatea, aestimatea, and aintenda or future or conditional verbs such as awilla, awoulda, ashoulda, acoulda, or amay.a Certain factors that could have a material adverse affect on the operations of the Bank include, but are not limited to, increased competitive pressure among financial service companies, national and regional economic conditions, changes in interest rates, changes in consumer spending, borrowing and savings habits, legislative and regulatory changes, adverse changes in the securities markets, inability of key third-party providers to perform their obligations to Hampden Bank, changes in relevant accounting principles and guidelines and our ability to successfully implement our branch expansion strategy. Additionally, other risks and uncertainties are described in the Companyas Annual Report on Form 10-K filed with the Securities and Exchange Commission (the aSECa) which is available through the SECas website at [ www.sec.gov ]. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise.