Access National Reports 50% Increase in Annual Earnings, Increases Dividend

Tue Jan 31, 2012 4:05pm EST

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Access National Reports 50% Increase in Annual Earnings, Increases Dividend

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported fourth quarter net income of $3.3 million, a 47.7% increase over the $2.2 million recorded in the fourth quarter of 2010. This represents the company’s 46th consecutive quarterly profit over its 12 year history. Net income per dilutive common share was $0.32, an increase of 45.5% over the $0.22 reported in the fourth quarter of 2010.

Based on record earnings, strong capital and favorable outlook, the Board of Directors declared a cash dividend of $0.05 per share, representing the fourth increase over the last year for holders of record as of February 13, 2012 and payable February 24, 2012.

CEO Mike Clarke noted, “Since onset of the financial crisis, our shareholder-focused leadership has increased dividend payouts while increasing retained earnings by $33.9 million to $57.5 million. In turn, our book value per share has risen 54% over the same period, from $5.27 at December 31, 2006 to $8.13 at December 31, 2011. In the 12 months ended December 31, 2011, common shareholders experienced a 16.8% increase in book value and received $0.13 in payouts. Based upon the latest dividend action, the annual payout rate of $0.20 exceeds a 2.0% yield on last week’s ending market price of $9.25.” The company remains “Well Capitalized” under banking regulations and poised for measured and responsible growth as the total equity to assets ratio was 10.23% at December 31, 2011.

Net income for the year ended December 31, 2011 was $11.4 million ($1.10 diluted EPS), a 50% increase compared to $7.6 million ($0.72 diluted EPS) the same period in 2010.

Return on average assets annualized was 1.61% for the fourth quarter of 2011 compared to 1.08% for the fourth quarter of 2010. Return on average assets for the year ended December 31, 2011 was 1.50%, up from 0.98% in 2010. Return on average equity annualized was 15.9% for the fourth quarter of 2011 compared to 12.6% for the same period last year. Return on average equity was 14.80% compared to 10.85% last year.

Loans held for investment totaled $569.4 million compared to $491.5 million at December 31, 2010, an increase of $77.9 million as a result increased loan demand and a continued focus on expanding the commercial loan-driven relationships.

Total assets amounted to $809.8 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 35.6% from December 31, 2010 to $113.9 million at December 31, 2011 and represent 17.7% of total deposits at December 31, 2011. Savings and interest-bearing deposits increased $45.5 million from December 31, 2010 and time deposits decreased $58.3 million from year end December 31, 2010, primarily due to a deliberate reduction in non-core rate sensitive deposits.

Non-performing assets (NPA) totaled $6.7 million or 0.83% of total assets, down from 1.0% at September 30, 2011. Meanwhile, the allowance for loan losses totaled $11.7 million or 2.06% of total loans held for investment and 175% of NPA as of December 31, 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
   
December 31, December 31,
2011 2010
(In Thousands)   (unaudited)    
 
ASSETS
 
Cash and due from banks $ 5,362 $ 9,198
 
Interest-bearing balances and federal funds sold 38,547 102,709
 
Investment securities:
Available-for-sale, at fair value 45,837 124,307
Held-to-maturity, at amortized cost (fair value of $39,978 and $0) 39,987 -
Restricted Stock, at amortized cost   3,665   4,438  
Total investment securities 89,489 128,745
 
Loans held for sale - at fair value 95,126 82,244
 

Loans held for investment net of allowance for loan losses of $11,738 and $10,527, respectively

557,662 481,002
 
Premises, equipment and land 8,671 8,934
 
Other assets 14,901 18,992
   
Total assets $ 809,758 $ 831,824  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 113,885 $ 83,972
 
Savings and interest-bearing deposits 182,005 158,352
 
Time deposits   349,123   385,524  
 
Total deposits 645,013 627,848
 
Short-term borrowings 59,904 80,348
 
Long-term borrowings 4,821 37,034
 
Subordinated debentures 6,186 6,186
 
Other liabilities and accrued expenses 11,019 8,215
   
Total Liabilities   726,943   759,631  
 
SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,192,649 and 10,376,169 shares, respectively

8,511 8,664
 
Surplus 16,716 17,794
 
Retained earnings 57,529 47,530
 
Accumulated other comprehensive income 59 (1,795 )
   
Total shareholders' equity   82,815   72,193  
   
Total liabilities and shareholders' equity $ 809,758 $ 831,824  
 

Access National Corporation
Consolidated Statement of Operations
             
  Three Months Ended   Twelve Months Ended
December 31, December 31,   December 31,
(In Thousands Except for Share Data)   2011   2011   2010
INTEREST INCOME
Interest and fees on loans $ 8,640 $ 32,808 $ 32,691
 
Interest on federal funds sold and bank balances 46 143 210
 
Interest on securities   506     2,216     2,242
Total interest income 9,192 35,167 35,143
 
INTEREST EXPENSE
Interest on deposits 1,279 5,204 7,633
 
Interest on other borrowings   416     1,846     2,481
Total interest expense   1,695     7,050     10,114
Net interest income 7,497 28,117 25,029
 
Provision for loan losses   213     1,149     2,816
Net interest income after provision for loan losses 7,284 26,968 22,213
 
NONINTEREST INCOME

Service charges and fees

174 693 666
 
Gain on sale of loans 11,851 36,570 32,501
 
Other Income   (237 )   (834 )   1,493

Total noninterest income

11,788 36,429 34,660
 
NONINTEREST EXPENSE
Salaries and benefits 7,195 25,415 22,047
 
Occupancy and equipment 949 2,931 2,606
 
Other operating expense   5,770     17,376     20,118
Total noninterest expense   13,914     45,722     44,771
Income before income tax 5,158 17,675 12,102
 
Income tax expense   1,841     6,287     4,526
NET INCOME $ 3,317   $ 11,388   $ 7,576
 
Earnings per common share:
Basic $ 0.33   $ 1.11   $ 0.72
Diluted $ 0.32   $ 1.10   $ 0.72
 
Average outstanding shares:
Basic 10,199,686 10,277,801 10,503,383
Diluted 10,279,923 10,344,325 10,525,258
 

Performance and Capital Ratios            
                         
Twelve Months Three Months Three Months Three Months Three Months Twelve Months
Ended Ended Ended Ended Ended Ended
December 31, December 31, September 30, June 30, March 31,

December 31,

(Dollars In Thousands)   2011   2011   2011   2011   2011   2010
 
Return on average assets (annualized) 1.50 % 1.61 % 1.69 % 1.51 % 1.20 % 0.98 %
Return on average equity (annualized) 14.80 % 15.87 % 15.92 % 13.92 % 12.53 % 10.85 %
Net interest margin 3.82 % 3.77 % 4.02 % 4.00 % 3.55 % 3.41 %
Efficiency ratio - Bank only 52.92 % 53.85 % 52.38 % 53.06 % 52.32 % 59.02 %
Total equity to assets 10.23 % 10.23 % 10.47 % 10.91 % 10.38 % 8.68 %
 
Averages
Assets 758,994 822,190 738,925 707,859 763,780 772,600
Loans held for investment 520,062 549,245 527,258 508,010 494,920 475,726
Loans held for sale 51,774 91,962 49,641 29,347 29,021 63,868
Interest-bearing deposits & federal funds sold 58,128 73,338 50,509 28,575 80,249 86,531
Investment securities 105,042 80,670 90,147 118,506 135,281 107,685
Earning assets 735,929 795,129 717,666 684,439 739,472 733,810
Interest-bearing deposits 465,301 523,958 454,558 387,478 486,785 498,028
Total deposits 565,450 648,856 562,304 481,657 566,966 572,138
Repurchase agreements & federal funds sold 36,612 35,655 37,627 37,097 36,064 29,202
Commercial paper & other short term borrowings 59,220 30,326 34,338 93,625 66,637 38,088
Long-term borrowings 12,382 11,592 12,099 12,652 13,204 45,423
Equity 76,969 83,614 78,212 76,746 72,988 69,827
 
Banking segment - income before taxes $ 13,972 $ 3,516 $ 2,982 $ 4,126 $ 3,348 $ 8,760
Mortgage segment - income before taxes $ 6,358 $ 2,530 $ 2,369 $ 748 $ 711 $ 4,983
Other segments - income before taxes $ (2,655 ) $ (888 ) $ (531 ) $ (729 ) $ (507 ) $ (1,641 )
Mortgage loan originations $ 831,564 $ 279,681 $ 236,566 $ 175,905 $ 139,412 $ 908,959
Allowance for losses on mortgage loans sold $ 2,616 $ 2,616 $ 2,395 $ 2,286 $ 2,113 $ 1,991
 
Book value per common share $ 8.13 $ 8.13 $ 7.84 $ 7.56 $ 7.21 $ 6.96
 

Composition of Loan Portfolio        
                 
    December 31, 2011   December 31, 2010
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

 
Commercial real estate-Owner Occupied $ 171,599 30.14 % $ 137,169 27.91 %
Commercial real estate-Income Producing 102,904 18.07 80,830 16.44
Residential real estate 130,557 22.93 137,752 28.02
Commercial 131,816 23.15 94,798 19.29
Real estate construction 29,705 5.22 38,093 7.75
Consumer   2,819 0.49     2,887 0.59  
Total loans $ 569,400 100.00 % $ 491,529 100.00 %
Less allowance for loan losses   11,738   10,527
$ 557,662 $ 481,002
 

Composition of Deposits        
                 
    December 31, 2011   December 31, 2010
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

 
Demand deposits $ 113,885 17.66 % $ 83,972 13.37 %
Interest-bearing demand deposits 59,798 9.27 24,548 3.91
Savings and money market 121,252 18.80 110,967 21.31
CDARS-reciprocal time deposits 192,326 29.82 234,221 37.31
Brokered deposits 31,228 4.84 56,356 5.34
Time deposits   126,524   19.61       117,784   18.76  
Total Deposits $ 645,013   100.00 %   $ 627,848   100.00 %
 

Asset Quality Trend Profile          
                     
Twelve Months Twelve Months Nine Months Six Months Three Months
Ended Ended Ended Ended Ended
(Dollars In Thousands)   December 31, 2011   December 31, 2010   September 30, 2011   June 30, 2011   March 31, 2011
 
Total assets $ 809,758 $ 831,824 $ 765,467 $ 713,016 $ 717,198
Total loans held for investment $ 569,400 $ 491,529 $ 542,582 $ 520,674 $ 497,469
 
Allowance for loan losses - beginning balance 10,527 $ 9,127 $ 10,527 $ 10,527 $ 10,527
Charge offs (1,232 ) (2,048 ) (944 ) (553 ) (184 )
Recoveries   1,295       632       1,019       862       156  
Net charge offs 63 (1,416 ) 75 309 (28 )
Provision for loan losses   1,149       2,816       935       221       223  
Allowance for loan losses - ending balance   11,738     $ 10,527     $ 11,537     $ 11,057     $ 10,722  
 
Allowance for loan losses/loans held for investment 2.06 % 2.14 % 2.13 % 2.12 % 2.16 %
 
Delinquent 30 - 90 days 271 $ 2,771 $ 4,226 $ 171 $ 2,100
Percentage of loans delinquent 0.05 % 0.56 % 0.78 % 0.03 % 0.42 %
 
Non-accrual loans $ 6,703 $ 8,561 $ 7,077 $ 7,481 $ 9,163
OREO $ - $ 1,859 $ 590 $ 590 $ 1,859
Total NPA $ 6,703 $ 10,420 $ 7,667 $ 8,071 $ 11,022
NPA to total assets 0.83 % 1.25 % 1.00 % 1.13 % 1.53 %
Allowance for loan losses/NPA 175.12 % 101.03 % 150.48 % 137.00 % 97.28 %
 
OREO Expense $ 523 $ 2,335 $ 420 $ 395 $ 68
Gain on Sale of OREO $ 1,452     $ 1,253     $ 1,325     $ 1,325     $ 15  
OREO expense net $ (929 )   $ 1,082     $ (905 )   $ (930 )   $ 53  
 
Allowance for losses on mortgage loans sold $ 2,616 $ 1,991 $ 2,395 $ 2,286 $ 2,113
Provision for losses on mortgage loans sold $ 966 $ 3,836 $ 527 $ 289 $ 126
 

  Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
               
December 31, 2011 September 30, 2011 December 31, 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 $ 80,584 $ 506 2.51 % $ 90,258 $ 497 2.20 % $ 135,294 $ 705 2.08 %
Loans held for sale 91,962 894 3.89 % 49,641 591 4.76 % 107,474 1,181 4.40 %
Loans(1) 549,245 7,746 5.64 % 527,258 7,763 5.89 % 485,710 7,471 6.15 %
Interest-bearing balances and federal funds sold   73,338       46   0.25 %   50,509       25   0.20 %   66,377       38   0.23 %
Total interest earning assets 795,129 9,192 4.62 % 717,666 8,876 4.95 % 794,855 9,395 4.73 %
Noninterest earning assets:
Cash and due from banks 13,648 10,373 14,715
Premises, land and equipment 8,715 8,747 8,610
Other assets 16,553 13,374 26,673
Less: allowance for loan losses   (11,855 )   (11,235 )   (9,880 )
Total noninterest earning assets   27,061     21,259     40,118  
Total Assets $ 822,190   $ 738,925   $ 834,973  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 73,529 $ 89 0.48 % $ 64,155 $ 85 0.53 % $ 25,394 $ 34 0.54 %
Money market deposit accounts 105,739 132 0.50 % 105,718 146 0.55 % 134,918 241 0.71 %
Savings accounts 2,697 2 0.30 % 2,962 1 0.14 % 3,820 3 0.31 %
Time deposits   341,993       1,056   1.24 %   281,723       1,003   1.42 %   365,281       1,450   1.59 %
Total interest-bearing deposits 523,958 1,279 0.98 % 454,558 1,235 1.09 % 529,413 1,728 1.31 %
Borrowings:
FHLB Advances - - 0.00 % 2,935 3 0.41 % 8,220 45 2.19 %
Securities sold under agreements to repurchase and federal funds purchased 35,655 14 0.16 % 37,627 17 0.18 % 38,620 24 0.25 %
Other short-term borrowings - - 0.00 % 7,183 9 0.50 % 42,182 79 0.75 %
FHLB Long-term borrowings 5,406 48 3.55 % 5,913 54 3.65 % 7,572 69 3.65 %
FDIC Term Note 30,326 299 3.94 % 29,999 299 3.99 % 29,998 299 3.99 %
Subordinated Debentures   6,186       55   3.56 %   6,186       53   3.43 %   6,186       53   3.43 %
Total borrowings   77,573       416   2.15 %   89,843       435   1.94 %   132,778       569   1.71 %
Total interest-bearing deposits and borrowings 601,531 1,695 1.13 % 544,401 1,670 1.23 % 662,191 2,297 1.39 %
Noninterest-bearing liabilities:
Demand deposits 124,898 107,746 81,842
Other liabilities   12,147     8,566     19,607  
Total liabilities 738,576 660,713 763,640
Shareholders' Equity   83,614     78,212     71,333  
Total Liabilities and Shareholders' Equity: $ 822,190   $ 738,925   $ 834,973  
 
Interest Spread(2) 3.50 % 3.72 % 3.34 %
 
Net Interest Margin(3) $ 7,497   3.77 % $ 7,206   4.02 % $ 7,098   3.57 %

 

(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      
Twelve Months      
Ended December 31,
                         
    December 31, 2011   December 31, 2010
Average Income / Yield / Average Income / Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 105,964 $ 2,216 2.09 % $ 107,685 $ 2,242 2.08 %
Loans held for sale 51,774 2,176 4.20 % 63,868 2,982 4.67 %
Loans(1) 520,062 30,632 5.89 % 475,726 29,709 6.24 %
Interest-bearing balances and federal funds sold   58,128       143   0.25 %   86,531       210   0.24 %
Total interest-earning assets 735,928 35,167 4.78 % 733,810 35,143 4.79 %
Noninterest-earning assets:
Cash and due from banks 12,066 10,927
Premises, land and equipment 8,819 8,655
Other assets 13,304 28,693
Less: allowance for loan losses   (11,123 )   (9,485 )
Total noninterest-earning assets   23,066     38,790  
Total Assets $ 758,994   $ 772,600  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 48,349 $ 227 0.47 % $ 30,166 $ 183 0.61 %
Money market deposit accounts 111,090 628 0.57 % 132,761 1,345 1.01 %
Savings accounts 2,853 6 0.21 % 3,939 30 0.76 %
Time deposits   303,009       4,343   1.43 %   331,162       6,075   1.83 %
Total interest-bearing deposits 465,301 5,204 1.12 % 498,028 7,633 1.53 %
Borrowings:
FHLB Advances 8,458 42 0.50 % 11,413 429 3.76 %
Securities sold under agreements to repurchase and federal funds purchased 36,612 67 0.18 % 29,202 105 0.36 %
Other short-term borrowings 20,681 114 0.55 % 26,674 228 0.85 %
FHLB Long-term borrowings 6,196 219 3.53 % 9,239 312 3.38 %
FDIC Term Note 30,081 1,191 3.96 % 29,998 1,191 3.97 %
Subordinated Debentures   6,186       213   3.44 %   6,186       216   3.49 %
Total borrowings   108,214       1,846   1.71 %   112,712       2,481   2.20 %
Total interest-bearing deposits and borrowings 573,515 7,050 1.23 % 610,740 10,114 1.66 %
Noninterest-bearing liabilities:
Demand deposits 100,149 74,111
Other liabilities   8,361     17,922  
Total liabilities 108,510 92,033
Shareholders' Equity   76,969     69,827  
Total Liabilities and Shareholders' Equity: $ 758,994   $ 772,600  
 
Interest Spread(2) 3.55 % 3.13 %
 
Net Interest Margin(3) $ 28,117   3.82 % $ 25,029   3.41 %
                         

 

(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