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 ended March 31, 2011.
The Company reported net income for the three months ended March 31, 2011 of $43,000, or $0.01 earnings per share, as compared to a net loss of $50,000, or $0.01 loss per share, for the same period in 2010. The increase in net income for the three months ended March 31, 2011 compared to the three months ended March 31, 2010, was primarily due to an increase in net interest income of $214,000, or 5.2%, an increase in non-interest income of $54,000, or 8.9%, and a decrease in the provision for loan losses of $40,000, or 14.7%, partially offset by an increase in non-interest expense of $210,000, or 4.6%.
Net interest income increased $214,000, or 5.2%, from $4.2 million at March 31, 2010 to $4.4 million at March 31, 2011. The increase in net interest income was primarily due to a $210,000, or 10.3%, decrease in interest expense.
The net interest margin increased 3 basis points from 3.43%, for the three months ended March 31, 2010, to 3.46% for the three months ended March 31, 2011. The interest rate spread increased by 9 basis points from 3.05% at March 31, 2010 to 3.14% at March 31, 2011. 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. The average balance of demand deposits, an interest free source of funds, increased $8.7 million, or 22.2%, for the three months ended March 31, 2011 compared to the three months ended March 31, 2010.Non-interest income for the three months ended March 31, 2011, increased $54,000, or 8.9%, from $607,000 at March 31, 2010 to $661,000 at March 31, 2011. Income from net loan sales and servicing increased $65,000, or 78.3%, and customer service fees and commissions increased $36,000, or 8.4%. These improvements were partially offset by a $63,000 loss on the sale of other real estate owned and a $9,000, or 8.4%, decrease in income from bank owned life insurance.
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