Andover Bancorp, Inc. Announces A 13% Increase In First Quarter Net Income; Declares Cash Dividend

This press release contains certain statements that are forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as

amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Andover Bancorp, Inc.'s actual results could differ materially from those

projected in the forward-looking statements as a result, among other factors,

of the risk factors set forth in its filings with the Securities and Exchange

Commission and of changes in general economic conditions, changes in interest

rates and changes in the assumptions used in making such forward-looking

statements.



Apr 23, 2001, 01:00 ET from Andover Bancorp, Inc.

    ANDOVER, Mass., April 23 /PRNewswire Interactive Release/ -- Andover
 Bancorp, Inc. (Nasdaq:   ANDB) (www.andoverbank.com) announced 2001 first
 quarter net income of $5.1 million, or $0.75 per diluted share, compared to
 $4.6 million, or $0.69 per diluted share, for the corresponding quarter in
 2000.  The results for 2001 were positively impacted by the acquisition of the
 Gloucester Bank & Trust Company ("GBT") which was consummated on July 1, 2000.
     The Company also announced that its Board of Directors declared a cash
 dividend of $0.27 per share.  The dividend is payable on May 17, 2001, to
 stockholders of record on May 4, 2001.
     Gerald T. Mulligan, President and Chief Executive Officer, stated, "The
 first quarter of 2001 was impacted by a reduction in market interest rates.
 This reduction in interest rates provided a concomitant lowering of funding
 costs and generated an increase in the net interest margin from 3.43% during
 the first quarter of 2000 to 3.56% for the current quarter.  Declining
 mortgage interest rates, however, caused a reduction in the estimated fair
 value of servicing rights.  This reduction brought a charge to earnings of
 $207,000, reflected as a reduction of mortgage banking income.  The reduction
 in interest rates, coupled with a slowing economic picture, has caused us to
 be more selective in asset generation, especially assets with long-term fixed
 rates."
     Net interest income totaled $15.1 million for the quarter-ended March 31,
 2001, versus $12.5 million for the comparable quarter in 2000, an increase of
 21%.  This increase was due mainly to a 17% increase in average earnings
 assets (enhanced by the acquisition of GBT in the third quarter of 2000), as
 well as the aforementioned increase in net interest margin.
     Provision for loan losses totaled $275,000 for the first quarter of 2001
 versus $200,000 for the same quarter in 2000.  Due to net recoveries of
 $165,000 during the quarter ended March 31, 2001, the allowance for loan
 losses has risen to 751% of nonaccruing loans as of March 31, 2001 versus 549%
 as of March 31, 2000.
     The Company recorded a mortgage banking loss of $112,000 versus income of
 $424,000 for the first quarter of 2001 and 2000, respectively.  Included in
 the first quarter of 2001 was a charge to income of $207,000 in recognition of
 the decline in the estimated fair value of mortgage servicing rights.  The
 first quarter of 2000 included a credit to earnings resulting from a reduction
 in the valuation allowance of $250,000.
     Salaries and benefits expense totaled $4.3 million for the quarter ended
 March 31, 2001 versus $3.7 million for the same quarter in 2000.  This rise in
 expenses is due mainly to an increase in employees from the GBT acquisition
 and staffing for a new branch in Derry, New Hampshire.  In addition, Company-
 wide merit increases were awarded in the quarter.
     All other operating expense categories are generally higher during the
 first quarter of 2001 versus the comparable quarter of 2000, due primarily to
 the GBT acquisition as well as the cost of running a new branch in Derry, New
 Hampshire.  Amortization of the goodwill recorded as part of the Gloucester
 acquisition totaled $150,000 for the quarter ended March 31, 2001.  The
 Financial Accounting Standards Board (FASB) has issued an exposure draft on
 business combinations which, if adopted, will result in the cessation of this
 expense commencing for the quarter ending September 30, 2001, provided that
 the goodwill is not deemed to be impaired.
 
     Andover Bancorp, Inc. is the multi-bank holding company parent of Andover
 Bank and Gloucester Bank & Trust Company.  Andover Bank is a Massachusetts-
 chartered savings bank organized in 1834 and headquartered in Andover,
 Massachusetts, approximately 25 miles north of downtown Boston.  Andover Bank
 operates 13 banking offices in Andover, Lawrence, Methuen, North Andover and
 Tewksbury, Massachusetts, as well as Derry, Londonderry, and Salem, New
 Hampshire.  Gloucester Bank & Trust Company is a Massachusetts-chartered trust
 company with two banking offices located in Gloucester, Massachusetts.  The
 Annual Meeting of Shareholders is scheduled for Thursday, April 26, 2001, at
 the Andover Town House, 20 Main Street, Andover, MA, at 10:00 A.M.
 
 
                     ANDOVER BANCORP, INC. AND SUBSIDIARIES
                           (NASDAQ:   ANDB) (unaudited)
                     Condensed Consolidated Balance Sheets
                     (In thousands, except per share data)
 
                              March 31, 2001   Dec. 31, 2000  March 31, 2000
 
     Cash and Cash Equivalents       $58,608         $69,556       $39,652
     Assets Held for Sale             11,667           5,037         2,032
     Investments:
      Available for Sale             277,425         289,155       258,605
      Held to Maturity                35,841          48,533        60,017
       Total Investments             313,266         337,688       318,622
     Loans:
       Residential Real Estate       817,575         811,214       746,951
       Commercial Real Estate        289,623         284,419       210,115
       Construction and Land          84,691          89,922        73,030
       Consumer                       88,406          87,322        63,263
      Commercial Loans and Leases     82,626          83,304        56,619
       Total Loans                 1,362,921       1,356,181     1,149,978
      Allowance for Loan Losses     (15,080)        (14,640)      (11,403)
       Net Loans                   1,347,841       1,341,541     1,138,575
     Goodwill                          8,593           8,743           ---
     Mortgage Servicing Assets, Net    9,112           9,842        10,354
     Other Assets                     49,914          50,826        47,451
       Total Assets               $1,799,001      $1,823,233    $1,556,686
 
     Demand Deposit Accounts        $147,556        $145,660       $97,231
     Now Accounts                    163,994         151,168       110,416
     Money Market Accounts           110,924         107,814        94,765
     Savings Accounts                261,272         246,812       213,020
     Certificates of Deposit         570,576         569,735       482,187
      Total Deposits               1,254,322       1,221,189       997,619
     Cash Management Accounts         17,203          17,460        12,135
     Borrowings                      350,757         418,758       405,664
     Other Liabilities                16,362          12,205        13,299
       Total Liabilities           1,638,644       1,669,612     1,428,717
 
     Stockholders' Equity            154,204         150,491       131,614
     Accumulated Other
      Comprehensive Income (Loss)      6,153           3,130       (3,645)
      Total Stockholders' Equity     160,357         153,621       127,969
      Total Liabilities and
       Stockholders' Equity       $1,799,001      $1,823,233    $1,556,686
     Per Share Data:
     Tangible Book Value              $22.65          $21.72        $20.13
     Tangible Book Value (excluding
      SFAS #115)                      $21.73          $21.25        $20.71
     Shares Outstanding
      at End of Period             6,701,244       6,669,180     6,356,172
 
 
                     ANDOVER BANCORP, INC. AND SUBSIDIARIES
                           (NASDAQ:   ANDB) (unaudited)
                Condensed Consolidated Statements of Operations
                     (In thousands, except per share data)
 
                                                 Three Months Ended March 31,
                                                         2001           2000
     Interest and Dividend Income
      Loans                                           $26,643        $21,302
      Investment Securities                             3,985          3,280
      Mortgage-backed Securities                        1,866          2,182
      Short-term Investments                               70             11
       Total Interest and Dividend Income              32,564         26,775
     Deposits                                          11,527          8,663
     Federal Home Loan Bank Advances                    5,465          4,356
     Other Borrowings                                     484          1,250
       Total Interest Expense                          17,476         14,269
     Net Interest Income                               15,088         12,506
     Provision for Loan Losses                            275            200
     Net Interest Income, after Provision              14,813         12,306
 
     Fee and Other Income                               1,150            878
     Mortgage Banking Income (Loss)                     (112)            424
     Securities/Loans Gains                               173              7
     Losses on Real Estate Operations                     (3)           (20)
       Total Non-Interest Income                        1,208          1,289
 
     Salaries and Benefits                              4,256          3,696
     Office Occupancy and Equipment                     1,039            850
     Data Processing Expense                              851            648
     Marketing Expense                                    264            244
     Professional Fees                                    255            187
     Mortgage Banking Expense                              41             23
     Amortization of Goodwill                             150            ---
     Other Operating Expense                              979            771
       Total Non-Interest Expense                       7,835          6,419
       Income Before Income Tax Expense                 8,186          7,176
     Income Tax Expense                                 3,041          2,620
      Net Income                                      $ 5,145        $ 4,556
 
     Per Share Data:
     Basic Earnings per Share                           $0.77          $0.71
     Diluted Earnings per Share                         $0.75          $0.69
 
     Cash Dividends Declared                            $0.27          $0.24
 
     Weighted Average Shares Outstanding:
     Basic                                          6,704,245      6,434,357
     Diluted                                        6,896,099      6,593,515
 
 
                     ANDOVER BANCORP, INC. AND SUBSIDIARIES
                           (NASDAQ:   ANDB) (unaudited)
 
                            Selected Financial Data
                                ($ In Thousands)
 
                                        At or for the Quarters Ended
                                   March 31,        Dec. 31,     March 31,
                                        2001            2000          2000
 
     Balance Sheet Averages:
 
     Average Total Loans          $1,369,255      $1,342,476    $1,139,061
     Average Total Assets          1,784,612       1,773,776     1,511,137
     Average Total Earning Assets  1,716,854       1,704,892     1,466,161
     Average Deposits              1,208,241       1,208,996       973,612
     Average Interest-bearing
     Liabilities                   1,474,062       1,472,462     1,284,094
     Average Equity                  155,358         147,228       130,883
 
 
 
     Performance Ratios (Annualized):
 
     Return on Average Assets          1.17%           1.26%         1.21%
     Return on Average Equity          13.43           15.18         14.00
     Net Interest Margin                3.56            3.33          3.43
     Interest Rate Spread               2.88            2.65          2.87
     Efficiency Ratio                  48.59           47.79         46.49
 
 
 
     Asset Quality and Other Data:
 
     Loans Serviced for Others      $910,637        $936,026      $938,782
     Nonaccrual Loans                  2,007           1,676         2,077
     Non-performing Assets             2,037           1,706         2,271
     Net Loan (Charge-offs) Recoveries   165           (255)         (181)
     Nonaccrual Loans/Total Loans      0.15%           0.12%         0.18%
     Non-performing Assets/
     Total Assets                      0.11%           0.09%         0.15%
     Allowance for Loan Losses/
     Nonaccrual Loans                751.37%         873.51%       549.01%
     Allowance for Loan Losses/
     Total Loans                       1.11%           1.08%         0.99%
     Leverage Capital Ratio            8.20%           8.03%         8.71%
     Total Risk Based Capital Ratio   13.36%          12.92%        13.85%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X31487078
 
 

SOURCE Andover Bancorp, Inc.
    ANDOVER, Mass., April 23 /PRNewswire Interactive Release/ -- Andover
 Bancorp, Inc. (Nasdaq:   ANDB) (www.andoverbank.com) announced 2001 first
 quarter net income of $5.1 million, or $0.75 per diluted share, compared to
 $4.6 million, or $0.69 per diluted share, for the corresponding quarter in
 2000.  The results for 2001 were positively impacted by the acquisition of the
 Gloucester Bank & Trust Company ("GBT") which was consummated on July 1, 2000.
     The Company also announced that its Board of Directors declared a cash
 dividend of $0.27 per share.  The dividend is payable on May 17, 2001, to
 stockholders of record on May 4, 2001.
     Gerald T. Mulligan, President and Chief Executive Officer, stated, "The
 first quarter of 2001 was impacted by a reduction in market interest rates.
 This reduction in interest rates provided a concomitant lowering of funding
 costs and generated an increase in the net interest margin from 3.43% during
 the first quarter of 2000 to 3.56% for the current quarter.  Declining
 mortgage interest rates, however, caused a reduction in the estimated fair
 value of servicing rights.  This reduction brought a charge to earnings of
 $207,000, reflected as a reduction of mortgage banking income.  The reduction
 in interest rates, coupled with a slowing economic picture, has caused us to
 be more selective in asset generation, especially assets with long-term fixed
 rates."
     Net interest income totaled $15.1 million for the quarter-ended March 31,
 2001, versus $12.5 million for the comparable quarter in 2000, an increase of
 21%.  This increase was due mainly to a 17% increase in average earnings
 assets (enhanced by the acquisition of GBT in the third quarter of 2000), as
 well as the aforementioned increase in net interest margin.
     Provision for loan losses totaled $275,000 for the first quarter of 2001
 versus $200,000 for the same quarter in 2000.  Due to net recoveries of
 $165,000 during the quarter ended March 31, 2001, the allowance for loan
 losses has risen to 751% of nonaccruing loans as of March 31, 2001 versus 549%
 as of March 31, 2000.
     The Company recorded a mortgage banking loss of $112,000 versus income of
 $424,000 for the first quarter of 2001 and 2000, respectively.  Included in
 the first quarter of 2001 was a charge to income of $207,000 in recognition of
 the decline in the estimated fair value of mortgage servicing rights.  The
 first quarter of 2000 included a credit to earnings resulting from a reduction
 in the valuation allowance of $250,000.
     Salaries and benefits expense totaled $4.3 million for the quarter ended
 March 31, 2001 versus $3.7 million for the same quarter in 2000.  This rise in
 expenses is due mainly to an increase in employees from the GBT acquisition
 and staffing for a new branch in Derry, New Hampshire.  In addition, Company-
 wide merit increases were awarded in the quarter.
     All other operating expense categories are generally higher during the
 first quarter of 2001 versus the comparable quarter of 2000, due primarily to
 the GBT acquisition as well as the cost of running a new branch in Derry, New
 Hampshire.  Amortization of the goodwill recorded as part of the Gloucester
 acquisition totaled $150,000 for the quarter ended March 31, 2001.  The
 Financial Accounting Standards Board (FASB) has issued an exposure draft on
 business combinations which, if adopted, will result in the cessation of this
 expense commencing for the quarter ending September 30, 2001, provided that
 the goodwill is not deemed to be impaired.
 
     Andover Bancorp, Inc. is the multi-bank holding company parent of Andover
 Bank and Gloucester Bank & Trust Company.  Andover Bank is a Massachusetts-
 chartered savings bank organized in 1834 and headquartered in Andover,
 Massachusetts, approximately 25 miles north of downtown Boston.  Andover Bank
 operates 13 banking offices in Andover, Lawrence, Methuen, North Andover and
 Tewksbury, Massachusetts, as well as Derry, Londonderry, and Salem, New
 Hampshire.  Gloucester Bank & Trust Company is a Massachusetts-chartered trust
 company with two banking offices located in Gloucester, Massachusetts.  The
 Annual Meeting of Shareholders is scheduled for Thursday, April 26, 2001, at
 the Andover Town House, 20 Main Street, Andover, MA, at 10:00 A.M.
 
 
                     ANDOVER BANCORP, INC. AND SUBSIDIARIES
                           (NASDAQ:   ANDB) (unaudited)
                     Condensed Consolidated Balance Sheets
                     (In thousands, except per share data)
 
                              March 31, 2001   Dec. 31, 2000  March 31, 2000
 
     Cash and Cash Equivalents       $58,608         $69,556       $39,652
     Assets Held for Sale             11,667           5,037         2,032
     Investments:
      Available for Sale             277,425         289,155       258,605
      Held to Maturity                35,841          48,533        60,017
       Total Investments             313,266         337,688       318,622
     Loans:
       Residential Real Estate       817,575         811,214       746,951
       Commercial Real Estate        289,623         284,419       210,115
       Construction and Land          84,691          89,922        73,030
       Consumer                       88,406          87,322        63,263
      Commercial Loans and Leases     82,626          83,304        56,619
       Total Loans                 1,362,921       1,356,181     1,149,978
      Allowance for Loan Losses     (15,080)        (14,640)      (11,403)
       Net Loans                   1,347,841       1,341,541     1,138,575
     Goodwill                          8,593           8,743           ---
     Mortgage Servicing Assets, Net    9,112           9,842        10,354
     Other Assets                     49,914          50,826        47,451
       Total Assets               $1,799,001      $1,823,233    $1,556,686
 
     Demand Deposit Accounts        $147,556        $145,660       $97,231
     Now Accounts                    163,994         151,168       110,416
     Money Market Accounts           110,924         107,814        94,765
     Savings Accounts                261,272         246,812       213,020
     Certificates of Deposit         570,576         569,735       482,187
      Total Deposits               1,254,322       1,221,189       997,619
     Cash Management Accounts         17,203          17,460        12,135
     Borrowings                      350,757         418,758       405,664
     Other Liabilities                16,362          12,205        13,299
       Total Liabilities           1,638,644       1,669,612     1,428,717
 
     Stockholders' Equity            154,204         150,491       131,614
     Accumulated Other
      Comprehensive Income (Loss)      6,153           3,130       (3,645)
      Total Stockholders' Equity     160,357         153,621       127,969
      Total Liabilities and
       Stockholders' Equity       $1,799,001      $1,823,233    $1,556,686
     Per Share Data:
     Tangible Book Value              $22.65          $21.72        $20.13
     Tangible Book Value (excluding
      SFAS #115)                      $21.73          $21.25        $20.71
     Shares Outstanding
      at End of Period             6,701,244       6,669,180     6,356,172
 
 
                     ANDOVER BANCORP, INC. AND SUBSIDIARIES
                           (NASDAQ:   ANDB) (unaudited)
                Condensed Consolidated Statements of Operations
                     (In thousands, except per share data)
 
                                                 Three Months Ended March 31,
                                                         2001           2000
     Interest and Dividend Income
      Loans                                           $26,643        $21,302
      Investment Securities                             3,985          3,280
      Mortgage-backed Securities                        1,866          2,182
      Short-term Investments                               70             11
       Total Interest and Dividend Income              32,564         26,775
     Deposits                                          11,527          8,663
     Federal Home Loan Bank Advances                    5,465          4,356
     Other Borrowings                                     484          1,250
       Total Interest Expense                          17,476         14,269
     Net Interest Income                               15,088         12,506
     Provision for Loan Losses                            275            200
     Net Interest Income, after Provision              14,813         12,306
 
     Fee and Other Income                               1,150            878
     Mortgage Banking Income (Loss)                     (112)            424
     Securities/Loans Gains                               173              7
     Losses on Real Estate Operations                     (3)           (20)
       Total Non-Interest Income                        1,208          1,289
 
     Salaries and Benefits                              4,256          3,696
     Office Occupancy and Equipment                     1,039            850
     Data Processing Expense                              851            648
     Marketing Expense                                    264            244
     Professional Fees                                    255            187
     Mortgage Banking Expense                              41             23
     Amortization of Goodwill                             150            ---
     Other Operating Expense                              979            771
       Total Non-Interest Expense                       7,835          6,419
       Income Before Income Tax Expense                 8,186          7,176
     Income Tax Expense                                 3,041          2,620
      Net Income                                      $ 5,145        $ 4,556
 
     Per Share Data:
     Basic Earnings per Share                           $0.77          $0.71
     Diluted Earnings per Share                         $0.75          $0.69
 
     Cash Dividends Declared                            $0.27          $0.24
 
     Weighted Average Shares Outstanding:
     Basic                                          6,704,245      6,434,357
     Diluted                                        6,896,099      6,593,515
 
 
                     ANDOVER BANCORP, INC. AND SUBSIDIARIES
                           (NASDAQ:   ANDB) (unaudited)
 
                            Selected Financial Data
                                ($ In Thousands)
 
                                        At or for the Quarters Ended
                                   March 31,        Dec. 31,     March 31,
                                        2001            2000          2000
 
     Balance Sheet Averages:
 
     Average Total Loans          $1,369,255      $1,342,476    $1,139,061
     Average Total Assets          1,784,612       1,773,776     1,511,137
     Average Total Earning Assets  1,716,854       1,704,892     1,466,161
     Average Deposits              1,208,241       1,208,996       973,612
     Average Interest-bearing
     Liabilities                   1,474,062       1,472,462     1,284,094
     Average Equity                  155,358         147,228       130,883
 
 
 
     Performance Ratios (Annualized):
 
     Return on Average Assets          1.17%           1.26%         1.21%
     Return on Average Equity          13.43           15.18         14.00
     Net Interest Margin                3.56            3.33          3.43
     Interest Rate Spread               2.88            2.65          2.87
     Efficiency Ratio                  48.59           47.79         46.49
 
 
 
     Asset Quality and Other Data:
 
     Loans Serviced for Others      $910,637        $936,026      $938,782
     Nonaccrual Loans                  2,007           1,676         2,077
     Non-performing Assets             2,037           1,706         2,271
     Net Loan (Charge-offs) Recoveries   165           (255)         (181)
     Nonaccrual Loans/Total Loans      0.15%           0.12%         0.18%
     Non-performing Assets/
     Total Assets                      0.11%           0.09%         0.15%
     Allowance for Loan Losses/
     Nonaccrual Loans                751.37%         873.51%       549.01%
     Allowance for Loan Losses/
     Total Loans                       1.11%           1.08%         0.99%
     Leverage Capital Ratio            8.20%           8.03%         8.71%
     Total Risk Based Capital Ratio   13.36%          12.92%        13.85%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X31487078
 
 SOURCE  Andover Bancorp, Inc.