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ANDOVER BANCORP, INC. REPORTS THIRD QUARTER AND YEAR-TO-DATE PROFIT

ANDOVER BANCORP, INC. REPORTS THIRD QUARTER AND YEAR-TO-DATE PROFIT
 ANDOVER, Mass., Oct. 14 /PRNewswire/ -- Andover Bancorp, Inc. (NASDAQ: ANDB) today announced its operating results for the third quarter and nine months ended Sept. 30, 1992. The results reported below reflect the outcome of a recently concluded routine examination of Andover Bank by the Federal Deposit Insurance Corporation.
 Net income for the third quarter amounted to $1.6 million or 40 cents per share as compared to a net loss of $9.7 million or $2.36 per share for the corresponding period in 1991. Year-to-date profits totalled $4.2 million or $1.02 per share compared with a net loss of $35.6 million or $8.67 per share for the comparable nine months of 1991.
 At Sept. 30, 1992, nonaccruing loans amounted to $20.9 million, a reduction of $7.7 million or 27.0 percent from $28.6 million at June 30, 1992 and a reduction of $20.2 million or 49.1 percent from $41.1 million at Dec. 31, 1991. Other real estate owned (OREO) or substantively repossessed totalled $31.5 million at the end of the third quarter, compared with $28.0 million and $28.9 million, respectively, at June 30, 1992 and Dec. 31, 1991.
 With the third quarter allowance for loan losses totalling $17.1 million or 4.1 percent of total loans and 81.8 percent of nonaccruing loans, up from 67.6 percent at the end of the second quarter of 1992, it was determined that no additional provision for loan losses was necessary in the third quarter. Net charge-offs for the third quarter of 1992 totalled $2.3 million. In the corresponding period of 1991, the provision amounted to $8.3 million and net charge-offs were $8.4 million.
 Gerald T. Mulligan, president and chief executive officer, stated that "We continue to see, throughout the company, positive financial results, particularly with our success in reducing nonperforming assets, increasing net interest income and returning the bank to consistent profitability. Our optimism for the future is tempered somewhat by the exceeding slow recovery in the local New England economy."
 Third quarter 1992 net income included a net gain on the sale of securities and loans amounting to $438,000 and a net loss of $2.5 million attributable to real estate operations. This compares to a net gain of $795,000 and a net loss of $3.2 million, respectively, in the third quarter of 1991.
 Bancorp's assets increased from $611.8 million at Sept. 30, 1991 to $719.7 million at Sept. 30, 1992. Its capital to assets ratio now stands at 8.1 percent, with a book value per share of $14.14.
 As stated in the 1991 Annual Report, the company currently accounts for income taxes under the deferred method. The company has performed an analysis of the effect and timing of a tax accounting change, which is required for all companies by Jan. 1, 1993. Based on its analysis, the company will implement Statement #109 "Accounting for Income Taxes" beginning on Jan. 1, 1993 and anticipates recording a tax benefit in the range of $2.5-3.0 million in the first quarter of 1993 Statement of Operations.
 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.
 Andover Bancorp, Inc., and Subsidiaries
 Selected Financial Data for the Quarters Ended:
 (dollars in thousands)
 Sept. 30, Dec. 31, Sept. 30
 1992 1991 1991
 Nonaccruing Loans $20,909 $41,089 $61,170
 Restructured Loans 908 264 459
 In-substance Foreclosures 18,862 18,700 5,962
 Real Estate Owned 12,595 10,232 16,550
 Total Non-Performing Assets $53,274 $70,285 $84,141
 Interest Rate Spread 3.28 pct. 2.46 pct. 1.89 pct.
 Net Interest Margin 3.63 2.99 2.53
 Capital Ratios: (a)
 Leverage or Core Capital
 Ratio 7.7 pct 7.7 pct. 7.1 pct.
 Risk-Based Capital
 Tier I Capital Ratio 11.9 10.5 9.5
 Total Capital Ratio 13.4 12.0 11.0
 ----
 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
 September 30, September 30,
 1992 1991 1992 1991
 Interest income $12,839 $12,427 $38,648 $39,920
 Interest expense 6,786 8,616 21,707 27,701
 Net interest income 6,053 3,811 16,941 12,219
 Provisions for loan
 losses --- 8,250 750 31,750
 NII, after
 provision 6,053 (4,439) 16,191 (19,531)
 Fee and other income 870 948 3,177 2,581
 Losses on real estate
 operations (2,538) (3,169) (7,843) (10,094)
 Securities/loans gains 438 795 2,809 388
 Other non-interest
 expense 3,447 4,096 10,713 11,684
 Income (loss) before
 tax benefit 1,376 (9,961) 3,621 (38,340)
 Tax benefit 250 300 550 2,785
 Net income (loss) $1,626 ($9,661) $4,171 ($35,555)
 Per share data
 Net income (loss) 40 cents ($2.36) $1.02 ($8.67)
 Book value 14.14 12.23 14.14 12.23
 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
 September 30,
 (in thousands)
 1992 1991
 Assets held for sale $45,878 $26,585
 Investments 207,552 135,932
 Loans 415,180 419,322
 Allowance for loan
 losses (17,107) (26,040)
 Net loans 398,073 393,282
 Other real estate owned
 or substantively
 repossessed 31,457 22,512
 Other assets 36,761 33,467
 Total assets $719,721 $611,778
 Deposits $530,721 531,388
 Borrowed funds 126,810 26,100
 Other liabilities 4,211 4,144
 Total liabilities 661,742 561,632
 Equity 57,979 50,146
 Total liabilities and
 equity $719,721 $611,778
 -0- 10/14/92
 /CONTACT: Joseph F. Casey, chief financial officer of Andover Bancorp., 508-749-2213/
 (ANDB) CO: Andover Bancorp. ST: Massachusetts IN: FIN SU: ERN


DD -- NE002 -- 9687 10/14/92 08:47 EDT
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Date:Oct 14, 1992
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