Affiliated Community Bancorp, Inc. announces stock repurchase program, 1995 earnings, and declares first quarter dividend.

WALTHAM, Mass.--(BUSINESS WIRE)--Jan. 19, 1996--Affiliated Community Bancorp, Inc. (NASDAQ:AFCB) (the holding company for Lexington Savings Bank and The Federal Savings Bank) today announced a stock repurchase program.

This program will commence immediately and authorizes the purchase of up to 238,000 shares (4.5%) of Affiliated's common stock in open market transactions during 1996 subject to market conditions.

Timothy J. Hansberry, President and Chief Executive Officer of Affiliated, commented "We are pleased to initiate this repurchase program of Affiliated stock. Given its strong capital position, the corporation believes that the repurchase of stock is a favorable long term investment and is in keeping with its commitment to enhancing shareholder value."

Also today, Affiliated reported 1995 twelve month net income of $5,707,000 or $1.07 per share. This figure is net of the costs associated with the October 1995 merger of Main Street Community Bancorp, Inc. (the parent of The Federal Savings Bank) and Lexington Savings Bank to form Affiliated. The merger was accounted for as a pooling of interests; thus, as was previously announced, the one-time transaction expenses (investment banking, legal, accounting and other costs) must be charged Affiliated's fourth quarter 1995 earnings. The costs, which are largely nondeductible for federal income tax purposes, amounted to an after tax net of $1,889,000 or about the previous estimate.

For 1995, without merger costs, Affiliated would have reported net income of $7,596,000 or $1.42 per share. In 1994, before the tax credit provided by the change in the income tax reserve under FASB 109, Affiliated would have reported net income of $5,951,000 or $1.12 per share. During 1994, this credit had the effect of reducing income tax expense by $1,075,000 thereby increasing per share net income by $.20 per share; there were no such income tax credits in 1995. Thus, on a comparable basis, earnings improved by 28% from 1994 to 1995.

For the fourth quarter ended December 31, 1995, Affiliated reported net income of $135,000 or $.03 per share, again after the merger costs. The net income for the current quarter without merger costs would have been $2,024,000 or $.38 per share. This is compared to net income in the fourth quarter of 1994 of $1,389,000 or $.26 per share before the tax credit provided by the change in the income tax reserve under FASB 109 and $1,714,000 or $.32 per share after the impact of the income tax credit. The fourth quarter of 1994 included $325,000 ($.06 per share) of favorable income tax credits with no such income tax credit in the fourth quarter of 1995. Thus, on a comparable basis, earnings improved by 46% from quarter to quarter.

Net interest income for the year ended December 31, 1995 was $27,772,000, a 15% increase from $24,182,000 for 1994. Net interest income for the fourth quarter was $7,101,000 versus $6,351,000 for the fourth quarter of 1994, a 12% increase.

Non-interest expense, excluding merger expense, was $16,245,000 for 1995, up $966,000 or 6% from 1994. Fourth quarter non-interest expense, excluding merger related items, was $4,040,000, flat with the fourth quarter of 1994. The fourth quarter of 1995 included reduced FDIC insurance expense. Without this reduced deposit insurance, expenses were up 2%.

Total consolidated assets at December 31, 1995 for Affiliated stood at $878 million vs. $794 million one year earlier. At December 31, 1995 net loans, including loans held for sale, were $537 million, an increase of $69 million or 15% from year end 1994. Total deposits were $584 million as of December 31, 1995, a 10%, $52 million increase from December 31, 1994.

The provisions for loan losses were $325,000 and $550,000 for 1995 and 1994 respectively. The corresponding fourth quarter figures were $25,000 and $75,000 for 1995 and 1994 respectively. The allowance for loan losses at December 31, 1995 amounted to $7,127,000 and represented 146% of non-performing loans at that date. Non-performing assets on December 31, 1995 were $6,289,000, 0.72% of total assets versus $5,333,000 and 0.67% of total assets for December 31, 1994.

"We are very pleased with our progress during 1995", said Hansberry. "We believe that our concept of high quality community banks affiliated in holding company is an excellent alternative to the current trend of regional bank consolidation and that the customer appreciation of the concept is seen in loan growth, deposit growth and earnings improvement of the banks."

The Board of Directors, at their meeting held on Jan. 18, 1996 declared a regular quarterly cash dividend of $0.12 per share on its 5,303,200 shares of common stock outstanding. The dividend is payable Feb. 16, 1996 to stockholders of record on January 31, 1996. This current dividend is equal to the $0.12 per share paid November 1995.

Affiliated Community Bancorp, Inc. is the parent company of Lexington Savings Bank and The Federal Savings Bank which are located in Middlesex County, Massachusetts. The Federal Savings Bank was founded in 1880 in Waltham, has four offices located in Waltham, Concord and Weston and had total assets of $455 million as of December 31, 1995. Lexington Savings Bank, with total year-end assets of $423 million, was founded in 1871 and has seven banking offices in Lexington, Arlington, Bedford and Burlington.

                    AFFILIATED COMMUNITY BANCORP INC.
                             (NASDAQ:AFCB)
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                        Dec. 31, 1995 and 1994
                           ($ In Thousands)

                                         1995          1994

Investments                            $305,416      $290,306

Loans                                   543,877       474,574
Allowance for Loan Losses                (7,127)       (6,996)
Net Loans                               536,750       467,578

Other Real Estate Owned                   1,201         4,355
Other Assets                             35,113        31,357

Total Assets                           $878,480      $793,596

Deposits                               $583,832      $532,270
Borrowings                              187,514       161,021
Other Liabilities                         7,844         7,019
Total Liabilities                       779,190       700,310

Equity                                   99,200        94,829
Unrealized (Gain) Loss
  on Securities AFS/HTM                      90        (1.543)
Equity Net                               99,290        93,286

Total Liabilities and Equity           $878,480      $793,596

-0-

                         Operating Highlights
                           ($ in thousands)

                            Quarters Ended       Year-to-Date
                            December 31,         December 31

                             1995   1994         1995     1994

Interest income             $16,015 $13,305      $60,996 $47,240

Interest Expense              8,914  6,954        33,224  23,058
    Net interest income       7,101  6,351        27,772  24,182

Provision for Loan Losses        25     75           325     550

Net interest income
    after provision           7,076  6,276        27,447   23,632

Non-interest income             420    213         1,693    1,479

Merger Related Expenses        1,989    --         1,989      --

Other non-interest
    expense                   4,040  4,040        16,245   15,279

Income before taxes           1,467  2,449        10,906   9,832

Taxes (1)                     1,332    735         5,199   2,806

Net income (1)                  135  1,714         5,707   7,026
 Merger Expenses, Net of
 Related Taxes                1,889                1,889
 FASB 109 Income Tax Credits          (325)               (1,075)

Results excluding merger
  expenses and FASB 109      $2,024 $1,389        $7,596  $5,951

(1) Earnings for the fourth quarter and earnings year-to-date in
1994 benefited from FASB 109, "Accounting for Income Taxes" credit
of $325,000 and $1,075,000 respectively.
-0-

                          OTHER FINANCIAL DATA
                            ($ In Thousands)

                             Quarters Ended       Year-to-Date
                                Sept. 30,           Sept. 30,
                             1995      1994      1995      1994

Earnings Per Share
 (fully diluted)            $ 0.03    $ 0.32    $ 1.07    $ 1.32
Return on Avg. Assets         0.06%     0.88%     0.69%     0.97%
Return on Avg. Equity         0.55%     7.36%     5.90%     7.68%
Interest Rate Spread          2.75%     2.85%     2.81%     2.99%
Interest Rate Margin          3.41%     3.39%     3.46%     3.49%

Results excluding merger
expenses and FASB 109:
  Earning Per Share
   (fully diluted)           $0.38     $0.26     $1.42     $1.12
  Return on Avg. Assets       0.94%     0.71%     0.92%     0.82%
  Return on Avg. Equity       8.21%     5.97%     7.85%     6.50%

At End of Period:
  Book Value Per Share      $18.99    $17.92    $18.99    $17.92
  Equity to Assets           11.30%    11.75%    11.30%    11.75%
  Non-performing Loans      $4,888      $978    $4,888      $978
  Non-performing Assets     $6,289    $5,333    $6,289    $5,333
Shares Outstanding:
  At End of Period       5,296,700 5,286,700 5,296,700 5,286,700
  Weighted Average       5,356,969 5,302,673 5,346,053 5,302,673

CONTACT: Affiliated Community Bancorp., Inc.

John G. Fallon

Executive Vice President, CFO

617/894-6810 ext.399

or

James A. Morgan

Assistant Vice President

Investment Officer

617/894-6810 ext.28