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ANDOVER BANCORP, INC. REPORTS 2ND QUARTER EARNINGS; REINSTITUTES DIVIDEND

 ANDOVER, Mass., July 22 /PRNewswire/ -- Andover Bancorp, Inc. (NASDAQ: ANDB) reported net income of $1.9 million or $0.46 per share for the quarter ended June 30, 1993, compared to net income of $1.0 million or $0.25 per share in the corresponding quarter of 1992. For the six months ended June 30, 1993, net income increased 47 percent to $3.7 million or $0.91 per share from $2.5 million or $0.62 per share in 1992. Included in the results for the second quarter of 1993 was a provision of $500,000 for accelerated prepayments of mortgages serviced for investors. No such provision was required in the second quarter of 1992.
 Andover Bancorp's Board of Directors declared, today, a cash dividend of $0.05 per share. The dividend is payable on August 16, 1993, to stockholders of record on August 2, 1993.
 Operating trends remained favorable in 1993. Compared to the first six months of 1992, net interest income increased by 22 percent; losses on real estate operations, which includes all costs and provisions for market value decline on foreclosure properties, declined by 51 percent. Operating expenses decreased modestly.
 Non-performing assets at June 30, 1993, were $32.2 million, down 44 percent from the second quarter of 1992. No provision for loan losses was recorded during the second quarter of 1993 as the allowance for loan losses equalled 116 percent of nonaccruing loans.
 Gerald T. Mulligan, President and Chief Executive Officer, stated, "We are very pleased to report a year-to-date increase in pre-tax earnings of over 128 percent from 1992. This earnings strength has been greatly aided by significant reductions in non-performing assets and the related cost to carry them, a stable net interest margin and prudent expense control. It's especially gratifying that the health of the Bank's balance sheet and strong earnings improvement, evidenced by six consecutive quarters of operating earnings, allows for the resumption of a dividend payment. We are very grateful to our long-term shareholders for their patience, understanding and support."
 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.
 Selected Financial Data for the Quarters Ended
 (Dollars in Thousands)
 June 30, 1993 Dec. 31, 1992 June 30, 1992
 Nonaccruing Loans $12,454 $15,912 $28,643
 Restructured Loans 1,653 2,560 910
 In-Substance
 Foreclosures 8,844 13,413 16,712
 Real Estate Owned 9,268 11,028 11,268
 Total Non-Performing
 Assets $32,219 $42,913 $57,533
 Interest Rate Spread 3.38 pct 3.40 pct 3.03 pct
 Net Interest Margin 3.75 3.75 3.39
 Capital Ratios: (a)
 Leverage or Core
 Capital Ratio 7.99 pct 8.10 pct 7.48 pct
 Risk-Based Capital
 Tier 1 Capital Ratio 14.2 12.6 11.4
 Total Capital Ratio 15.5 13.9 12.9
 (a) Capital ratios are calculated based on FDIC data for Andover Bank and exceed all regulatory requirements.
 ANDOVER BANCORP, INC. AND SUBSIDIARIES
 (unaudited)
 Condensed Consolidated Balance Sheets
 June 30,
 (In thousands)
 1993 1992 1993 1992
 Assets Held for Deposits $539,187 $522,734
 Sale $25,775 $93,554
 Investments 286,246 191,551 Borrowed
 Funds 171,877 139,548
 Loans 420,387 389,984 Other
 Liabilities 4,390 4,123
 Allowance for Loan
 Losses (14,408) (19,363) Total
 Liabil-
 ities 715,454 666,405
 Net Loans 405,979 370,621 Stockholders'
 Other Real Equity 65,574 56,353
 Estate Owned 18,112 27,980
 Other Assets 44,916 39,052 Total Liabil-
 ities and
 Stockholders'
 Total Assets $781,028 $722,758 Equity $781,028 $722,758
 Condensed Consolidated Statements of Operations
 (In thousands)
 Quarters Ended Year-to-Date
 June 30, June 30,
 1993 1992 1993 1992
 Interest Income $13,121 $12,807 $26,251 $25,809
 Interest Expense 6,357 7,221 12,920 14,921
 Net Interest Income 6,764 5,586 13,331 10,888
 Provision for Loan
 Losses -- -- -- 750
 Nll, after Provision 6,764 5,586 13,331 10,138
 Fee and Other Income 759 892 1,546 2,307
 Losses on Real
 Estate Operations (1,284) (2,397) (2,604) (5,305)
 Securities/Loans
 Gains (Losses) (179) 251 (72) 2,371
 Other Non-Interest
 Expense 3,615 3,589 7,078 7,266
 Income Before
 Tax Expense
 (Benefit) 2,445 743 5,123 2,245
 Tax Expense
 (Benefit) 550 (300) 1,374 (300)
 Net Income $1,895 $1,043 $3,749 $2,545
 Per Share Data:
 Net Income $0.46 $0.25 $0.91 $0.62
 Book Value 15.94 13.75 15.94 13.75
 Shares Outstanding:
 At End of Period 4,114,853 4,098,980 4,114,853 4,098,980
 Weighted Average 4,110,808 4,098,980 4,106,296 4,098,980
 -0- 7/22/93
 /CONTACT: Joseph F. Casey, chief financial officer, Andover


Bancorp, Inc., 508-749-2213/
 (ANDB)


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

DJ -- NE019 -- 4809 07/22/93 17:19 EDT
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Date:Jul 22, 1993
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