Abington to Sell MBS in Balance Sheet Revamp

Abington Bancorp, Abington, Mass., has announced a major balance sheet restructuring program that includes the sale of $75 million of mortgage-backed securities.Abington said the restructuring is aimed at reducing unamortized premiums, improving earnings and operating ratios, strengthening capital, and reducing interest rate and price risk. Besides the sale of higher-risk MBS, the company said it will sell $22 million of smaller-denomination securities and liquidate short-term debt and a portion of its longer-term, high-cost Federal Home Loan Bank borrowings. "The elimination of higher-risk earning assets and repayment of some of our higher-cost borrowings is expected to improve our net interest income by over $1.5 million annually," said James P. McDonough, the company's president and chief executive officer. In May, Abington announced a revision of its 2002 financial results and a restatement of its 2001 results to correct certain accounting errors related to prepayments on MBS, among other things. Abington, the holding company for Abington Savings Bank, can be found online at http://www.abingtonsavings.com.