Access National Reports Record Quarterly Earnings, Declares Dividend

Wed Oct 19, 2011 8:47am EDT

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Access National Reports Record Quarterly Earnings, Declares Dividend

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported third quarter net income of $3.1 million, a record level of quarterly earnings and a 27.8% increase over the $2.4 million recorded in the third quarter of 2010. This represents the company’s 45th consecutive quarterly profit over its 12 year history. Net income per diluted common share was $0.30, an increase of 30.4% over the $0.23 reported in the third quarter of 2010. The increase in net income is primarily due to a combination of a decrease in interest expense and an increase in non-interest income.

Based upon record earnings, strong capital and a favorable outlook, the Board of Directors declared a cash dividend of $0.04 per share for holders of record as of November 3, 2011 and payable November 25, 2011.

Net income for the nine months ended September 30, 2011 totaled approximately $8.1 million compared to $5.3 million for the same period in 2010. While mortgage banking earnings rose in the year over year period, the core commercial banking segment contributed 83.5% of the year to date earnings in 2011 compared to 76% in 2010.

YTD diluted earnings per share were $0.78 compared to $0.50 in 2010. Book Value per common share at September 30, 2011 was $7.84, 12.6% higher than the $6.96 value at December 31, 2010. The company remains “Well Capitalized” under banking regulations as the total equity to assets ratio was 10.91% at September 30, 2011.

Return on average assets annualized was 1.69% for the third quarter of 2011 compared to 1.22% for the third quarter of 2010. Return on average equity annualized was 15.9% for the quarter ended September 30, 2011 compared to 13.9% for the same period last year. The net interest margin expanded to 4.02% compared to 4.00% in the linked quarter and 3.36% for the quarter ended September 30, 2010.

Loans held for investment totaled $542.6 million, compared to $491.5 million at December 31, 2010, an increase of $51.1 million due to continued focus on expanding the commercial loan-driven relationships. Total assets amounted to $765.5 million compared to $831.8 million at December 31, 2010. The decrease in assets was primarily attributable to a reduction in securities, interest-bearing balances and federal funds sold.

Commercial demand deposits have increased 37.1% from December 31, 2010 to $115.1 million at September 30, 2011 and represent 19.3% of total deposits at September 30, 2011 while savings and interest-bearing deposits increased $9.3 million from December 31, 2010. Time deposits decreased $71.4 million from year end December 31, 2010 primarily due to a deliberate reduction in non-core rate sensitive deposits.

Non-performing assets (NPA) totaled $7.7 million or 1.1% of total assets while the allowance for loan losses totaled $11.5 million or 2.13% of total loans held for investment and 149% of NPA as of September 30, 2011.

Access National Corporation is the parent company of Access National Bank, an independent, nationally chartered bank serving the business community of the greater DC Metropolitan area. Additional information is available on our website at www.AccessNationalBank.com. Shares of Access National Corporation are traded on the NASDAQ Global Market under the symbol "ANCX".

This press release contains “forward-looking statements” within the meaning of the federal securities laws. These statements may be identified as “may”, “could”, “expect”, “believe”, anticipate”, “intend”, “plan” or variations thereof. These forward-looking statements may contain information related to those matters such as the Company’s intent, belief, or expectation with respect to matters such as financial performance. Such statements are necessarily based on assumptions and estimates and are inherently subject to a variety of risks and uncertainties concerning the Company’s operations and business environment, which are difficult to predict and beyond control of the company. Such risks and uncertainties could cause the actual results of the Company to differ materially from those matters expressed or implied in such forward-looking statements. For an explanation of certain risks and uncertainties associated with forward-looking statements, please refer to the Company’s Annual Report on Form 10-K and other SEC filings.

     
Access National Corporation
Consolidated Balance Sheet
       
September 30, September 30, December 31,
2011 2010 2010
(In Thousands)   (unaudited)   (unaudited)    
 
ASSETS
 
Cash and due from banks $ 10,909 $ 13,012 $ 9,198
 
Interest-bearing balances and federal funds sold 32,017 19,493 102,709
 
Securities available for sale - at fair value 70,287 152,775 128,745
 
Loans held for sale - at fair value 96,764 123,048 82,244
 
Loans held for investment
net of allowance for loan losses of $11,537, $9,722
and $10,527, respectively 531,045 468,605 481,002
 
Premises, equipment and land 8,720 8,552 8,934
 
Other assets 15,725 19,353 18,992
     
Total assets $ 765,467 $ 804,838 $ 831,824  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 115,110 $ 87,446 $ 83,972
 
Savings and interest-bearing deposits 167,673 160,897 158,352
 
Time deposits   314,119   358,614   385,524  
 
Total deposits 596,902 606,957 627,848
 
Short-term borrowings 65,015 69,815 80,348
 
Long-term borrowings 5,375 37,587 37,034
 
Subordinated debentures 6,186 6,186 6,186
 
Other liabilities and accrued expenses 11,813 11,638 8,215
     
Total Liabilities   685,291   732,183   759,631  
 
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized;
issued and outstanding, 10,224,742, 10,459,826
and 10,376,169 shares, respectively 8,538 8,734 8,664
 
Surplus 16,900 18,207 17,794
 
Retained earnings 54,637 45,391 47,530
 
Accumulated other comprehensive income 101 323 (1,795 )
     
Total shareholders' equity   80,176   72,655   72,193  
     
Total liabilities and shareholders' equity $ 765,467 $ 804,838 $ 831,824  
 
Access National Corporation        
Consolidated Statement of Operations
           
Three Months Ended Nine Months Ended
September 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010
(In Thousands Except for Share Data)   (unaudited)
 
INTEREST INCOME
Interest and fees on loans $ 8,354 $ 8,190 $ 24,168 $ 24,039
 
Interest on federal funds sold and bank balances 25 58 97 172
 
Interest on securities   497     583     1,710     1,537  
Total interest income 8,876 8,831 25,975 25,748
 
INTEREST EXPENSE
Interest on deposits 1,235 1,888 3,925 5,905
 
Interest on other borrowings   435     584     1,430     1,912  
Total interest expense   1,670     2,472     5,355     7,817  
Net interest income 7,206 6,359 20,620 17,931
 
Provision for loan losses   715     575     936     1,321  
Net interest income after provision for loan losses 6,491 5,784 19,684 16,610
 
NONINTEREST INCOME
Service charges and fees 178 164 519 490
 
Gain on sale of loans 11,821 10,457 24,719 24,095
 
Other Income   (1,297 )   (211 )   (597 )   (875 )
Total noninterest income 10,702 10,410 24,641 23,710
 
NONINTEREST EXPENSE
Salaries and benefits 6,950 5,979 18,220 16,595
 
Occupancy and equipment 639 613 1,982 1,943
 
Other operating expense   4,785     5,677     11,606     13,276  
Total noninterest expense   12,374     12,269     31,808     31,814  
Income before income tax 4,819 3,925 12,517 8,506
 
Income tax expense   1,706     1,489     4,446     3,176  
NET INCOME $ 3,113   $ 2,436   $ 8,071   $ 5,330  
 
Earnings per common share:
Basic $ 0.30   $ 0.23   $ 0.78   $ 0.51  
Diluted $ 0.30   $ 0.23   $ 0.78   $ 0.50  
 
Average outstanding shares:
Basic 10,227,631 10,474,543 10,303,840 10,539,924
Diluted 10,301,250 10,495,734 10,365,793 10,559,122
 
Performance and Capital Ratios          
                         
Nine Months Six Months Three Months Nine Months Twelve Months
Ended Ended Ended Ended Ended
September 30, June 30, March 31, September 30,

December 31,

(Dollars In Thousands)   2011   2011   2011   2010   2010
 
Return on average assets (annualized) 1.46 % 1.35 % 1.20 % 0.95 % 0.98 %
Return on average equity (annualized) 14.20 % 13.31 % 12.53 % 10.12 % 10.85 %
Net interest margin 3.85 % 3.77 % 3.55 % 3.35 % 3.41 %
Efficiency ratio - Bank only 52.61 % 52.72 % 52.32 % 60.73 % 59.02 %
Total equity to assets 10.47 % 10.91 % 10.38 % 9.03 % 8.68 %
 
Averages
Assets 736,426 734,947 763,780 750,968 772,600
Loans held for investment 510,177 501,501 494,920 472,361 475,726
Loans held for sale 36,068 29,186 29,021 49,144 63,868
Interest-bearing deposits & federal funds sold 53,002 54,269 80,249 93,323 86,531
Investment securities 114,517 126,848 135,281 98,381 107,685
Earning assets 713,764 711,804 739,472 713,209 733,810
Interest-bearing deposits 442,822 436,857 486,785 487,451 498,028
Total deposits 537,119 524,083 566,966 558,958 572,138
Repurchase agreements & federal funds sold 36,935 36,583 36,064 26,028 29,202
Commercial paper & other short term borrowings 66,696 80,206 66,637 33,938 38,088
Long-term borrowings 12,648 12,927 13,204 45,984 45,423
Equity 75,774 74,517 72,988 70,240 69,827
 
Banking segment - income before taxes $ 10,456 $ 7,474 $ 3,348 $ 6,475 $ 8,760
Mortgage segment - income before taxes $ 3,828 $ 1,459 $ 711 $ 3,292 $ 4,983
Other segments - income before taxes $ (1,767 ) $ (1,235 ) $ (507 ) $ (1,261 ) $ (1,641 )
Mortgage loan originations $ 551,883 $ 315,317 $ 139,412 $ 620,312 $ 908,959
Allowance for losses on mortgage loans sold $ 2,395 $ 2,286 $ 2,113 $ 4,488 $ 1,991
 
Book value per common share $ 7.84 $ 7.56 $ 7.21 $ 6.95 $ 6.96
                                         
Composition of Loan Portfolio          
                       
  September 30, 2011   December 31, 2010   September 30, 2010
(Dollars In Thousands) Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

 
Commercial real estate-Owner Occupied $ 144,984 26.72 % $ 137,171 27.91 % $ 137,748 28.80 %
Commercial real estate-Income Producing 108,096 19.92 83,173 16.92 85,826 17.94
Residential real estate 131,399 24.22 135,440 27.55 137,745 28.80
Commercial 115,696 21.32 94,765 19.28 78,556 16.42
Real estate construction 39,825 7.34 38,093 7.75 37,066 7.75
Consumer   2,582   0.48     2,887   0.59     1,386   0.29  
Total loans $ 542,582 100.00 % $ 491,529 100.00 % $ 478,327 100.00 %
Less allowance for loan losses   11,537   10,527   9,722
$ 531,045 $ 481,002 $ 468,605
                             
           
Composition of Deposits
                         
    September 30, 2011   December 31, 2010   September 30, 2010
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

 
Demand deposits $ 115,110 19.28 % $ 83,972 13.37 % $ 87,446 14.41 %
Interest-bearing demand deposits 63,140 10.58 24,548 3.91 26,021 4.29
Savings and money market 104,533 17.51 133,804 21.31 109,816 18.09
CDARS-reciprocal time deposits 164,340 27.54 234,221 37.31 208,670 34.38
Brokered deposits 30,203 5.06 33,519 5.34 59,795 9.85
Time deposits   119,576   20.03       117,784   18.76       115,209   18.98  
Total Deposits $ 596,902   100.00 %   $ 627,848   100.00 %   $ 606,957   100.00 %
                                     
Asset Quality Trend Profile          
                     
Nine Months Six Months Three Months Nine Months Twelve Months
Ended Ended Ended Ended Ended
(Dollars In Thousands)   September 30, 2011   June 30, 2011   March 31, 2011   September 30, 2010   December 31, 2010
 
Total assets $ 765,467 $ 713,016 $ 717,198 $ 804,838 $ 831,824
Total loans held for investment $ 542,582 $ 520,674 $ 497,469 $ 478,327 $ 491,529
 
Allowance for loan losses - beginning balance $ 10,527 $ 10,527 $ 10,527 $ 9,127 $ 9,127
Charge offs (944 ) (553 ) (184 ) (1,231 ) (2,048 )
Recoveries   1,019       862       156       505       632  
Net charge offs 75 309 (28 ) (726 ) (1,416 )
Provision for loan losses   935       221       223       1,321       2,816  
Allowance for loan losses - ending balance $ 11,537     $ 11,057     $ 10,722     $ 9,722     $ 10,527  
 
Allowance for loan losses/loans held for investment 2.13 % 2.12 % 2.16 % 2.03 % 2.14 %
 
Delinquent 30 - 90 days $ 4,226 $ 171 $ 2,100 $ 840 $ 2,771
Percentage of loans delinquent 0.78 % 0.03 % 0.42 % 0.18 % 0.56 %
 
Non-accrual loans $ 7,077 $ 7,481 $ 9,163 $ 6,952 $ 8,561
OREO $ 590 $ 590 $ 1,859 $ 3,276 $ 1,859
Total NPA $ 7,667 $ 8,071 $ 11,022 $ 10,228 $ 10,420
NPA to total assets 1.00 % 1.13 % 1.53 % 1.27 % 1.25 %
Allowance for loan losses/NPA 150.48 % 137.00 % 97.28 % 95.06 % 101.03 %
 
OREO Expense $ 420 $ 395 $ 68 $ 1,324 $ 2,335
Gain on Sale of OREO $ 1,325     $ 1,325     $ 15     $ 349     $ 1,253  
OREO expense net $ (905 )   $ (930 )   $ 53     $ 975     $ 1,082  
 
Allowance for losses on mortgage loans sold $ 2,395 $ 2,286 $ 2,113 $ 4,488 $ 1,991
Provision for losses on mortgage loans sold $ 527 $ 289 $ 126 $ 2,400 $ 3,836
                                         
             
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended    
                                     
    September 30, 2011   June 30, 2011   September 30, 2010
Average Income / Yield / Average Income / Yield / Average Income / Yield /
    Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
(Dollars In Thousands)
Assets:
Interest earning assets:
Securities $ 90,258 $ 497 2.20 % $ 118,506 $ 580 1.96 % $ 127,467 $ 583 1.83 %
Loans held for sale 49,641 591 4.76 % 29,348 342 4.66 % 70,913 840 4.74 %
Loans(1) 527,258 7,763 5.89 % 508,010 7,590 5.98 % 471,308 7,350 6.24 %
Interest-bearing balances and federal funds sold   50,509       25   0.20 %   28,575       17   0.24 %   88,014       58   0.26 %
Total interest earning assets 717,666 8,876 4.95 % 684,439 8,529 4.98 % 757,702 8,831 4.66 %
Noninterest earning assets:
Cash and due from banks 10,373 10,870 12,516
Premises, land and equipment 8,747 8,843 8,609
Other assets 13,374 13,204 33,155
Less: allowance for loan losses   (11,235 )   (10,789 )   (9,625 )
Total noninterest earning assets   21,259     22,128     44,655  
Total Assets $ 738,925   $ 706,567   $ 802,357  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 64,155 $ 85 0.53 % $ 23,431 $ 26 0.44 % $ 34,217 $ 47 0.55 %
Money market deposit accounts 105,718 146 0.55 % 108,988 156 0.57 % 133,866 319 0.95 %
Savings accounts 2,962 1 0.14 % 2,848 2 0.28 % 3,862 9 0.93 %
Time deposits   281,723       1,003   1.42 %   252,211       995   1.58 %   356,644       1,513   1.70 %
Total interest-bearing deposits 454,558 1,235 1.09 % 387,478 1,179 1.22 % 528,589 1,888 1.43 %
Borrowings:
FHLB Advances 2,935 3 0.41 % 26,484 24 0.36 % 8,202 71 3.46 %
Securities sold under agreements to repurchase and federal funds purchased 37,627 17 0.18 % 37,097 19 0.20 % 28,376 23 0.32 %
Other short-term borrowings 7,183 9 0.50 % 37,142 56 0.60 % 26,451 61 0.92 %
FHLB Long-term borrowings 5,913 54 3.65 % 6,466 55 3.40 % 8,127 73 3.59 %
FDIC Term Note 29,999 299 3.99 % 29,999 297 3.96 % 29,998 299 3.99 %
Subordinated Debentures   6,186       53   3.43 %   6,186       52   3.36 %   6,186       57   3.69 %
Total borrowings   89,843       435   1.94 %   143,374       503   1.40 %   107,340       584   2.18 %
Total interest-bearing deposits and borrowings 544,401 1,670 1.23 % 530,852 1,682 1.27 % 635,929 2,472 1.55 %
Noninterest-bearing liabilities:
Demand deposits 107,746 94,179 74,870
Other liabilities   8,566     5,643     21,286  
Total liabilities 660,713 630,674 732,085
Shareholders' Equity   78,212     75,893     70,272  
Total Liabilities and Shareholders' Equity: $ 738,925   $ 706,567   $ 802,357  
 
Interest Spread(2) 3.72 % 3.72 % 3.11 %
 
Net Interest Margin(3) $ 7,206   4.02 % $ 6,847   4.00 % $ 6,359   3.36 %
 
(1) Loans placed on nonaccrual status are included in loan balances
(2) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest-bearing liabilities.
(3) Net interest margin is net interest income, expressed as a percentage of average earning assets.
 
     
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Nine Months Ended      
 
                         
    September 30, 2011   September 30, 2010
Average Income / Yield / Average Income / Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 114,517 $ 1,710 1.99 % $ 98,381 $ 1,537 2.08 %
Loans held for sale 36,068 1,282 4.74 % 49,144 1,801 4.89 %
Loans(1) 510,177 22,886 5.98 % 472,361 22,238 6.28 %
Interest-bearing balances and federal funds sold   53,002       97   0.24 %   93,323       172   0.25 %
Total interest-earning assets 713,764 25,975 4.85 % 713,209 25,748 4.81 %
Noninterest-earning assets:
Cash and due from banks 11,297 9,652
Premises, land and equipment 8,847 8,671
Other assets 13,394 28,788
Less: allowance for loan losses   (10,876 )   (9,352 )
Total noninterest-earning assets   22,662     37,759  
Total Assets $ 736,426   $ 750,968  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 37,153 $ 138 0.50 % $ 31,774 $ 150 0.63 %
Money market deposit accounts 112,893 496 0.59 % 132,034 1,103 1.11 %
Savings accounts 2,905 4 0.18 % 3,979 28 0.94 %
Time deposits   289,871       3,287   1.51 %   319,664       4,624   1.93 %
Total interest-bearing deposits 442,822 3,925 1.18 % 487,451 5,905 1.62 %
Borrowings:
FHLB Advances 11,308 42 0.50 % 12,489 384 4.10 %
Securities sold under agreements to repurchase and federal funds purchased 36,935 53 0.19 % 26,028 81 0.41 %
Other short-term borrowings 25,389 114 0.60 % 21,449 150 0.93 %
FHLB Long-term borrowings 6,462 171 3.53 % 9,801 243 3.31 %
FDIC Term Note 29,999 892 3.96 % 29,997 892 3.96 %
Subordinated Debentures   6,186       158   3.41 %   6,186       162   3.49 %
Total borrowings   116,279       1,430   1.64 %   105,950       1,912   2.41 %
Total interest-bearing deposits and borrowings 559,101 5,355 1.28 % 593,401 7,817 1.76 %
Noninterest-bearing liabilities:
Demand deposits 94,297 71,507
Other liabilities   7,254     15,820  
Total liabilities 101,551 87,327
Shareholders' Equity   75,774     70,240  
Total Liabilities and Shareholders' Equity: $ 736,426   $ 750,968  
 
Interest Spread(2) 3.58 % 3.06 %
 
Net Interest Margin(3) $ 20,620   3.85 % $ 17,931   3.35 %
(1) Loans placed on nonaccrual status are included in loan balances
(2) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest-bearing liabilities.
(3) Net interest margin is net interest income, expressed as a percentage of average earning assets.

Access National Corporation
Michael Clarke, 703-871-2100