Chicopee Bancorp, Inc. (the “Company”) (NASDAQ: CBNK), the holding company for Chicopee Savings Bank (the “Bank”), announced today the results of operations for the three and nine months ended September 30, 2011.
The Company reported net income of $371,000, or $0.07 earnings per share, for the three months ended September 30, 2011, an increase of $188,000, or 102.7%, compared to net income of $183,000, or $0.03 earnings per share, for the same period in 2010. The increase in net income was due to an increase in net interest income of $335,000, or 8.0%, a decrease in the provision for loan losses of $153,000, or 40.7%, and an increase in non-interest income of $94,000, or 15.6%, partially offset by an increase in non-interest expense of $335,000, or 7.7%.
The increase in net interest income of $335,000, or 8.0%, to $4.5 million at September 30, 2011, was due to a $312,000, or 15.4%, decrease in interest expense primarily due to a $224,000, or 14.8%, decrease in deposit costs and a decrease of $88,000, or 17.3%, in the cost of borrowing, which includes repurchase agreements. For the three months ended September 30, 2011, interest income increased $23,000, or 0.37%, as compared to the same period in 2010.
The net interest margin increased 24 basis points from 3.34% for the three months ended September 30, 2010, to 3.58% for the three months ended September 30, 2011. The interest rate spread increased 30 basis points from 2.99% for the three months ended September 30, 2010, to 3.29% for the three months ended September 30, 2011. The average cost of funds decreased 33 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 $9.7 million, or 23.8%, for the three months ended September 30, 2011 compared to the three months ended September 30, 2010.
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