On behalf of the board of directors of Andover Bancorp, Inc. and the employees of Andover Bank, I am honored to report on our strong operating performance in 2025, our 141st year in operation.
The economic headwinds that banks faced over the past few years moderated in 2025 as the Federal Reserve Bank lowered short-term interest rates from their post-pandemic highs. This moderation caused the yield curve to normalize, ending what has been the longest rate inversion in modern US financial history. This traditional rate environment is more conducive to our “spread” banking model of lending at a higher rate than what we pay on our deposits.
In review of our operating performance for 2025, our net income of $4,378,866 was higher than last year’s net income of $3,157,449, for an increase of $1,221,417, or 39%. Earnings per share were $2.17, compared to $1.53 for 2024. Earnings growth was powered primarily by the expanding net interest margins caused by the interest rate changes previously mentioned and robust loan originations, led by our Stow Loan Production Office (LPO).
I am incredibly pleased to report record growth in our balance sheet for 2025. In comparing the change in the balance sheet from 2024, total assets increased by $21.5 million to a record of $587 million, or 3.8%, total deposits increased by $11 million to a record of $544.3 million, or 2%, and net loans increased by $9.8 million to $273.2 million, or 3.7%. Strong balance sheet growth was propelled by our strength in core transactional deposits that are highly valued in the banking industry. We also achieved record growth in small business loans for the 3rd time in 4 years, with total originations exceeding the $30 million mark.
Stockholders’ equity increased by $10.8 million, or 61% to $28.5 million, and was positively impacted by an increase in the market value of our securities portfolio caused by the declining market interest rates. The bank remains well-capitalized as our capital ratios remain well above the regulatory capital requirements. Asset quality also remains strong, as our total delinquency remains well below 1%, and our net charge-offs on a loan portfolio of $273 million were approximately $30,000. These results compare favorably to our peer group and continue to indicate the bank operates in a safe and sound manner.
I am pleased to report that 2025 marked the 43rd consecutive year the bank has paid a record dividend. This performance remains unmatched in the State of Ohio and demonstrates the long-term financial strength and stability of Andover Bank. Total dividends declared for 2025 were $0.76 per share, compared to $0.755 per share in 2024. Since 2020, the bank has returned over $16 million to shareholders in the form of cash dividends or market share repurchases. These actions serve to validate the Board’s confidence in our business model and our continued efforts to enhance shareholder value.
We continue to execute on our strategic initiatives. As mentioned in our mid-year 2025 report, we hired two very seasoned, professional lenders from the greater Pittsburgh area who had a very productive year working from their homes. We plan to open our 2nd Loan Production Office in that area by midyear 2026. This strategy remains consistent with our efforts to grow and refine our small business banking program to complement our strong relationship-based retail franchise. We remain optimistic that this geographical expansion will provide excellent growth opportunities for years to come. These efforts exemplify our strategic theme for the past year: Vision in action. Growth with purpose.
It is always a pleasure for me to highlight the bank’s accomplishments, and this year is no exception. Banks are rated under the Community Reinvestment Act (CRA) on how they meet the credit needs of the communities they serve. I am honored to announce that the bank has once again received an outstanding CRA rating from our 2025 performance evaluation conducted by the Federal Reserve Bank of Cleveland. This rating matches well with our mission statement commitment to strengthening the communities we serve. The bank also received The Star Beacon’s Reader’s Choice Award as Ashtabula County’s best bank for the 4th year in a row. Finally, we were again recognized as a Bauer 5-Star rated bank. Bauer Financial is an independent firm that evaluates financial institutions based on factors like capital adequacy, profitability, and asset quality, signifying that Andover Bank is among the strongest and most financially stable banks in the country.
Our continued success is based on the principled business philosophies set by our Board of Directors, who provide steadfast vision and leadership, our greatest asset, our employees, who continue to exceed expectations, and you, our shareholders, for your continued confidence and support of your local independent community bank.
Stephen E. Varckette
President and
Chief Executive Officer