Andover Posts $22.3 Million Loss

Reflecting deeper lending woes than anticipated, Andover Bancorp of Massachusetts announced a $22.3 million loss for the second quarter and a 68% increase in nonperforming loans.

The announcement followed an exam by the Federal Deposit Insurance Corp. The company set aside $19.5 million for loan losses, $3.5 million more than previously estimated.

The company, which has $638 million in assets, operates a state-chartered savings bank based in the Boston suburb of Andover. The institution is one of many FDIC-insured thrifts in Massachusetts being squeezed by the downturn in New England. The company posted a loss of $277,000 in the year-earlier period.

While the company's level of shareholder equity is relatively high at 9.3% of assets, its reserves equal only 46% of nonperforming loans. Analysts expect equity to be eroded as the company continues to increase its reserves.

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