Chicopee Bancorp, Inc. (the “Company”) (NASDAQ - CBNK), the holding company for Chicopee Savings Bank (the “Bank”), announced the results of operations for the three months and year ended December 31, 2010.
The Company reported net income of $205,000, or $0.04 earnings per share, for the three months ended December 31, 2010, compared to a net loss of $136,000, or $0.02 loss per share, for the corresponding period in 2009. In the fourth quarter of 2010, the Company reported a $183,000, or 4.5%, increase in net interest income, a $74,000, or 9.9%, increase in non-interest income, a $45,000, or 1.0%, decrease in non-interest expense and a $140,000 income tax benefit due to the tax-exempt industrial revenue bond portfolio, compared to the corresponding period in 2009. These positive factors were partially offset by an increase in the provision for loan losses of $115,000, or 33.1%.
Net interest income for the fourth quarter of 2010 increased $183,000, or 4.5%, to $4.2 million from $4.0 million for the fourth quarter of 2009. The increase in net interest income resulted from a $199,000, or 9.3%, decrease in interest expense, offset by a $16,000, or 0.3%, decrease in interest income. The average cost of funds declined 30 basis points due to the continuation of low market interest rates, which allowed the Company to renew or replace maturing time deposits at lower costs. Average demand deposits, an interest free source of funds, increased $6.3 million, or 16.6%, from the fourth quarter of 2009. Interest income decreased due to a $136,000, or 2.3%, decrease in income from loans as the loan yield decreased from 5.53% at December 31, 2009 to 5.30% at December 31, 2010. The decrease in the loan yield was partially offset by $117,000, or 50.9%, increase in income from investment securities which increased by 95 basis points.