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ANDOVER BANCORP, INC. REPORTS 20 PERCENT INCREASE IN THIRD QUARTER EARNINGS; INCREASES DIVIDEND

 ANDOVER, Mass., Oct. 21 /PRNewswire/ -- Andover Bancorp, Inc. (NASDAQ:ANDB) reported net income of $2.0 million or $0.47 per share for the quarter ended September 30, 1993, compared to $1.6 million or $0.40 per share in the corresponding quarter of 1992. For the nine months ended September 30, 1993, net income increased 37 percent to $5.7 million or $1.39 per share from $4.2 million or $1.02 per share in 1992. Included in the results for the third quarter of 1993 was a provision of $200,000 for anticipated accelerated prepayments of mortgages serviced for investors. No such provision was required in the third quarter of 1992.
 Andover Bancorp's Board of Directors declared, today, a cash dividend of $0.10 per share. The dividend is payable on Nov. 15, 1993, to stockholders of record on November 1, 1993.
 Aided by a favorable interest rate environment which has produced annualized loan growth to date of over 19 percent, total assets increased to $820 million. This growth has contributed to an 18 percent increase in net interest income in 1993 over 1992.
 At Sept. 30, 1993, non-performing assets were $29.8 million, down 44 percent from the third quarter of 1992. No provision for loan losses was recorded during the third quarter of 1993 as, among other factors, the allowance for loan losses equalled 108 percent of nonaccruing loans. Losses on real estate operations, which include all costs and provisions for market value decline on foreclosed properties, declined $1.5 million, or 58 percent from the third quarter of 1992.
 Gerald T. Mulligan, president and chief executive officer, stated, "Continued steady progress in reducing problem assets, coupled with strong growth in our core banking business, were instrumental in the Board's decision to increase the dividend. The current rate of $0.10 per share represents a modest 21 percent payout of earnings and a doubling of the previous quarter's dividend rate."
 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
 9/30/93 12/31/92 9/30/92
 (Dollars in Thousands)
 Nonaccruing loans $13,015 $15,912 $20,909
 Restructured loans 1,549 2,560 908
 In-substance foreclosures 7,008 13,413 18,862
 Real estate owned 8,215 11,028 12,595
 Total non-performing assets $29,787 $42,913 $53,274
 Interest rate spread 3.15 pct 3.40 pct 3.28 pct
 Net interest margin 3.52 3.75 3.63
 Capital Ratios: (a)
 Leverage or core
 capital ratio 8.2 pct 8.1 pct 7.7 pct
 Risk-Based Capital
 Tier 1 capital ratio 14.4 12.6 11.9
 Total capital ratio 15.6 13.9 13.4
 (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
 Sept. 30,
 (In thousands)
 1993 1992
 Assets held for sale $25,386 $45,878
 Investments 308,477 207,552
 Loans 439,846 415,180
 Allowance for loan losses (14,006) (17,107)
 Net loans 425,840 398,073
 Other real estate owned 15,223 31,457
 Other assets 44,713 36,761
 Total assets $820,639 $719,721
 Deposits $539,540 $530,721
 Borrowings 208,596 126,810
 Other liabilities 5,082 4,211
 Total liabilities 753,218 661,742
 Stockholders' equity 67,421 57,979
 Total liabilities &
 stockholders' equity $820,639 $719,721
 Condensed Consolidated Statements of Operations
 (In thousands)
 Quarters Ended Year-to-Date
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Interest income $13,145 $12,839 $39,396 $38,648
 Interest expense 6,504 6,786 19,424 21,707
 Net interest income 6,641 6,053 19,972 16,941
 Provision for
 loan losses --- --- --- 750
 NII, after provision 6,641 6,053 19,972 16,191
 Fee and other income 746 870 2,292 3,177
 Losses on real estate
 operations (1,064) (2,538) (3,668) (7,843)
 Securities/loans
 gains (losses) 15 438 (57) 2,809
 Other non-interest
 expenses 3,835 3,447 10,913 10,713
 Income before tax
 expense (benefit) 2,503 1,376 7,626 3,621
 Income tax expense
 (benefit) 550 (250) 1,924 (550)
 Net income $1,953 $1,626 $5,702 $4,171
 Per Share Data:
 Net income $0.47 $0.40 $1.39 $1.02
 Book value 16.33 14.14 16.33 14.14
 Shares outstanding:
 At end of period 4,129,839 4,098,980 4,129,839 4,098,980
 Weighted average 4,125,918 4,098,980 4,112,909 4,098,980
 -0- 10/21/93
 /CONTACT: Joseph F. Casey, chief financial officer and treasurer of Andover Bancorp, 508-749-2213
 (ANDB)


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

DJ -- NE011 -- 5343 10/21/93 14:47 EDT
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Date:Oct 21, 1993
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