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ANDOVER BANCORP, INC. REPORTS FIFTH CONSECUTIVE QUARTERLY PROFIT

 ANDOVER, Mass., Jan. 21 /PRNewswire/ -- Andover Bancorp, Inc. (NASDAQ: ANDB) today announced its operating results for the fourth quarter and for the year ended Dec. 31, 1992. Net income for the fourth quarter amounted to $4.0 million or 98 cents per share as compared to net income of $3.6 million or 87 cents per share for the corresponding quarter in 1991. For the year ended Dec. 31, 1992, Andover reported net income of $7.9 million or $1.93 per share, compared with a net loss of $32.0 million or $7.81 per share in 1991.
 The current quarter's net income included a previously announced tax benefit of $2.6 million resulting from the adoption, effective Jan. 1, 1992, of SFAS No. 109 "Accounting for Income Taxes". The company elected to adopt the new accounting standard in 1992, rather than 1993 as earlier expected, based on a recent decision by the Federal Financial Institution's Examination Council allowing the adoption of Statement No. 109 and the recording of a corresponding asset for regulatory capital purposes.
 The current quarter's net income also included a net gain on the sale of securities and loans amounting to $300,000 as compared to a net gain of
$461,000 in the fourth quarter of 1991. The company's annual results in 1992 included a net gain of $3.1 million on securities and loan sales as compared to a net gain of $849,000 in 1991. In addition, the company recognized the impact of SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other than Pensions" as a cumulative effect of an accounting change in the amount of $159,000, which was net of related taxes.
 Losses generated by real estate operations in 1992 amounted to $10.4 million as compared to $13.8 million in 1991. The provision for loan losses for 1992 amounted to $750,000, compared to $33.3 million in 1991. Total tax benefits for 1992 were $2.9 million as compared to $10.3 million in 1991.
 The fourth quarter of 1992 marked the fifth consecutive quarterly decline in non-performing assets (NPA's). As of Dec. 31, 1992, NPA's totalled $42.9 million, a reduction of $27.4 million or 39 percent from Dec. 31, 1991. Included in NPA's as of Dec. 31, 1992 was $8.2 million of loans that were either restructured and paying according to their modified terms, or less than 90 days past due. During the fourth quarter of 1992, NPA's declined $10.4 million or 19 percent, and totalled 5.5 percent of year end assets as compared to 10.7 percent at Dec. 31, 1991. Nonaccruing loans amounted to $15.9 million at year end, a reduction of $5.0 million or 24 percent from $20.9 million at Sept. 30, 1992. Other real estate owned (OREO) or substantively repossessed totalled $24.4 million at year end, a reduction of $7.0 million or 22 percent from the end of the third quarter.
 At Dec. 31, 1992, the allowance for loan losses was $16.1 million or 101 percent of nonaccruing loans. No provision for loan losses was deemed necessary in the fourth quarter. Net charge-offs totalled $1.1 million for the fourth quarter of 1992 as compared to $5.0 million in the corresponding quarter of 1991. Net charge-offs for 1992 and 1991 totalled $7.3 million and $23.9 million, respectively.
 1992 marked Andover Bank's strongest year of residential loan originations ever. The bank originated a total of $323.7 million in residential loans for the year as compared to $154.4 million during 1991. Andover services all of its loan originations, thereby retaining fee income. At Dec. 31, 1992, Andover serviced $724.3 million in residential mortgages, of which approximately $494.3 million were serviced for other investors.
 Gerald T. Mulligan, president and CEO, stated that "The 1992 fiscal year has been marked by success in substantially reducing non-performing assets, increasing core earnings and reaching record levels of mortgage loan originations. It is gratifying to see our success recognized by the financial community; during 1992, Andover Bancorp's stock price registered a 441.2 percent increase."
 Andover Bancorp, Inc. is the parent holding company of Andover Bank. The bank is a Massachusetts-chartered savings bank organized in 1834 and headquartered in Andover, Mass., approximately 25 miles north of downtown Boston. The bank operates branch banking offices in Andover, Lawrence, Methuen, North Andover, and Tewksbury, Mass. The 1993 Annual Meeting of Andover Bancorp, Inc. stockholders is scheduled for Thursday, April 29, 1993.
 Andover Bancorp, Inc., and Subsidiaries
 Selected Financial Data for the Quarters Ended:
 (dollars in thousands)
 Dec. 31, Dec. 31, Sept. 30
 1992 1991 1992
 Nonaccruing Loans $15,912 $41,089 $20,909
 Restructured Loans 2,560 264 908
 In-substance Foreclosures 13,413 18,700 18,862
 Real Estate Owned 11,028 10,232 12,595
 Total Non-Performing Assets $42,913 $70,285 $53,274
 Interest Rate Spread 3.40 pct. 2.46 pct. 3.28 pct.
 Net Interest Margin 3.75 2.99 3.63
 Capital Ratios: (a)
 Leverage or Core Capital
 Ratio 8.10 pct 7.67 pct. 7.68 pct.
 Risk-Based Capital
 Tier I Capital Ratio 12.6 10.5 11.9
 Total Capital Ratio 13.9 12.0 13.4
 ----
 NOTE: (a) Capital ratios are calculated based on FDIC data for Andover Bank and exceed all regulatory requirements.
 Andover Bancorp, Inc. and Subsidiaries
 (Unaudited)
 Statement of Operations
 (in thousands)
 Quarters Ended Year-to-date
 December 31, December 31,
 1992 1991 1992 1991
 Interest income $13,062 $12,807 $51,710 $52,727
 Interest expense 6,555 8,219 28,262 35,920
 Net interest income 6,507 4,588 23,448 16,807
 Provision for loan
 losses --- 1,500 750 33,250
 N11, after
 provision 6,507 3,088 22,698 (16,443)
 Fee and other income 913 320 4,090 2,901
 Losses on real estate
 operations (2,538) (3,704) (10,381) (13,798)
 Securities/loans gains 300 461 3,109 849
 Other non-interest
 expense 3,637 4,139 14,350 15,823
 Income (loss) before
 tax benefit 1,545 (3,974) 5,166 (42,314)
 Tax benefit 2,459 7,536 2,903 10,321
 Net income (loss)
 before change in
 accounting principle 4,004 3,562 8,069 (31,993)
 Cumulative effect of
 accounting change --- --- (159) ---
 Net income (loss) $4,004 $3,562 $7,910 $(31,993)
 Per share data
 Net income (loss)
 before changes in
 accounting principle 98 cents 87 cents $1.97 ($7.81)
 Cumulative effect of
 accounting change --- --- (0.04) ---
 Net income (loss) 98 cents 87 cents $1.93 ($7.81)
 Book value $15.06 $13.13 $15.06 $13.13
 Shares outstanding
 At end of period 4,098,980 4,098,980 4,098,980 4,098,980
 Weighted average 4,098,980 4,098,980 4,098,980 4,098,980
 Condensed Consolidated Balance Sheets
 December 31,
 (in thousands)
 1992 1991
 Assets held for sale $50,946 $49,061
 Investments 292,827 197,373
 Loans 384,965 364,074
 Allowance for loan
 losses (16,054) (22,573)
 Net loans 368,911 341,501
 Other real estate owned
 or substantively
 repossessed 24,441 28,932
 Other assets 47,159 42,731
 Total assets $784,284 $659,598
 Deposits $539,765 $523,672
 Borrowed funds 178,226 78,175
 Other liabilities 4,575 3,943
 Total liabilities 722,566 605,790
 Equity 61,718 53,808
 Total liabilities and
 equity $784,284 $659,598
 -0- 1/21/93
 /CONTACT: Joseph F. Casey, chief financial officer of Andover Bancorp., 508-749-2213/
 (ANDB)


CO: Andover Bancorp. ST: Massachusetts IN: FIN SU: ERN

DD -- NE016 -- 7523 01/21/93 14:55 EST
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Date:Jan 21, 1993
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