Shares of Sport Chalet jumped 19 percent Thursday after the recreational gear retailer announced a new $65 million credit agreement that will lower its annual interest expense by about $800,000.

Bank of America increased available credit to $65 million from $45 million and granted Sport Chalet lower interest rates and more flexible payment terms. The new agreement secures Sports Chalet’s credit until October 2014.

“The increased borrowing capacity provides us with tremendous flexibility to support our strategic initiatives and to enhance our vendor relationships,” Chief Executive Craig Levra said in a statement. “With its favorable terms, especially in view of an extremely tight credit market, our agreement represents a strong vote of confidence in Sport Chalet by one of the nation’s leading lenders.”

Sport Chalet, based in La Canada-Flintridge, also has a seasonal revolving credit line which lasts from Sept. 1 to Dec. 31 and remains unchanged at $70 million.

Shares rose 40 cents, or 19 percent, to close at $2.51 in trading on the Nasdaq.