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ANDOVER BANCORP, INC. REPORTS FOURTH QUARTER PROFIT FOR 1991

 ANDOVER BANCORP, INC. REPORTS FOURTH QUARTER PROFIT FOR 1991
 ANDOVER, Mass., Jan. 22 /PRNewswire/ -- Andover Bancorp, Inc. (NASDAQ: ANDB) today announced its operating results for the fourth quarter and for the year ended Dec. 31, 1991. At year end, Bancorp's assets amounted to $660 million and its capital to assets ratio was 8.2 percent. Net income for the fourth quarter amounted to $3.6 million or 87 cents per share as compared to a net loss of $7.0 million or $1.70 per share in the corresponding period of 1990.
 Gerald T. Mulligan, president and chief executive officer, stated that "Andover Bancorp's results for the fourth quarter represent an improved financial performance over third quarter and maintenance of a strong capital position at 8.2 percent. We are gratified that over the quarter we were able to decrease our level of non-performing assets and increase total assets while maintaining a strong capital position. Due in part to aggressive efforts by the Special Assets Group, the total of non-performing loans and loans acquired by foreclosure or substantively repossessed was reduced by $13.7 million during the fourth quarter of 1991. While we must continue to chip away at the substantial burden of non-performing assets, the reduction in the fourth quarter affords us the opportunity to refocus in 1992 on managing a competitive and streamlined organization with a strong retail franchise which makes us a leader among Merrimack Valley banks." As but one indication of the strength of the retail franchise, Mulligan cited the bank's active participation in the recent surge of homebuying and mortgage refinancing: some $47 million in residential mortgage loans closed in the fourth quarter and $75 million in residential loan applications were taken during the same period.
 The current quarter's net income of $3.6 million includes a net gain on the sale of securities and loans amounting to $461,000 as compared to a net loss of $3.0 million in the fourth quarter of 1990. Net interest margin for the quarter was $4.6 million, a 20.4 percent increase over the third quarter of 1991. The current quarter realized a net loss on real estate operations (including write-downs of other real estate owned) amounting to $3.7 million compared to a net loss of $1.0 million in the fourth quarter of 1990. Also included in the fourth quarter results are tax benefits in the amount of $7.5 million as compared to $1.7 million in the fourth quarter of 1990.
 For the year ended Dec. 31, 1991, Bancorp reported a net loss of $32.0 million or $7.81 per share as compared to a net loss of $9.3 million or $2.27 per share for 1990. The net loss in 1991 included a net gain of $849,000 on securities and loan sales as compared to a net loss of $3.4 million in 1990. Losses generated by real estate operations for 1991 amounted to $13.8 million compared to $3.9 million in 1990. The provision for loan losses for 1991 amounted to $33.3 million compared to $11.5 million in 1990. Total tax benefits for year-end 1991 totalled $10.3 million as compared to $1.1 million at year-end 1990.
 At Dec. 31, 1991, the allowance for loan losses was $22.6 million or 55 percent of non-performing loans. At that date, non-performing loans amounted to $41.1 million and other real estate owned or substantively repossessed totalled $28.9 million. At Dec. 31, 1990, non-performing loans were $31.8 million and other real estate owned or substantively repossessed totalled $22.1 million.
 At Dec. 31, 1991, restructured loans which were performing, totalled $264,000, as compared to $24.1 million at Dec. 31, 1990.
 Andover Bancorp, Inc. if 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 West Andover, Lawrence, Methuen, North Andover, and Tewksbury, Mass. The annual meeting of Andover Bancorp, Inc. stockholders is scheduled for Thursday, April 30, 1992.
 ANDOVER BANCORP, INC. AND SUBSIDIARIES
 Statement of Operations
 (in thousands)
 Quarter ended Year-to-Date
 12/31/91 12/31/90 12/31/91 12/31/90
 Interest income $12,807 $14,977 $52,727 $63,755
 Interest expense 8,219 10,325 35,920 42,969
 Net interest margin 4,588 4,652 16,807 20,786
 Provision for loan
 losses 1,500 6,379 33,250 11,483
 NIM, after provision 3,088 (1,727) (16,443) 9,303
 Fee and other income 320 487 2,901 2,749
 Losses on real estate
 operations (3,704) (1,043) (13,798) (3,938)
 Securities/loans
 gains (losses) 461 (2,962) 849 (3,386)
 Other non-interest
 expense 4,139 3,404 15,823 15,117
 Loss before
 tax benefit (3,974) (8,649) (42,314) (10,389)
 Tax benefit (7,536) (1,665) (10,321) (1,104)
 Net income (loss) $3,562 $(6,984) $(31,993) $(9,285)
 Per share data:
 Net income (loss) 87 cents $(1.70) $(7.81) $(2.27)
 Dividends declared 0.00 0.00 0.00 50 cents
 Book value 13.13 20.28 13.13 20.28
 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
 (in thousands)
 At Dec. 31 1991 1990
 Investments held for sale $3,699 ---
 MBS held for sale 37,337 $14,411
 Loans held for sale 8,025 5,641
 Investments 197,373 108,462
 Loans 364,074 456,375
 Allowance for loan losses (22,573) (13,260)
 Net loans 341,501 443,115
 Other real estate owned or
 substantively repossessed 28,932 22,091
 Other assets 42,731 61,690
 Total assets $659,598 $655,410
 Deposits $523,672 $526,741
 Borrowed funds 78,175 41,281
 Other liabilities 3,943 4,281
 Total liabilities 605,790 572,303
 Equity 53,808 83,107
 Total liabilities
 and equity $659,598 $655,410
 -0- 1/22/92
 /CONTACT: Joseph F. Casey, chief financial officer, of Andover Bancorp, 508-475-6103/
 (ANDB) CO: Andover Bancorp, Inc. ST: Massachusetts IN: FIN SU: ERN


PB-SH -- NE005 -- 2221 01/22/92 11:12 EST
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Date:Jan 22, 1992
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