Access National Reports 44% Increase in Second Quarter Earnings, Declares Dividend

Mon Jul 23, 2012 4:41pm EDT

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Access National Reports 44% Increase in Second Quarter Earnings, Declares Dividend

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported record second quarter net income of $3.9 million, a 44.4% increase over the $2.7 million recorded in the second quarter of 2011. This represents the company’s 4th consecutive quarterly earnings in excess of $3 million and its 48th consecutive quarterly profit over its 12½ year history. Net income per diluted common share was $0.38, an increase of 46.2% over the $0.26 reported in the second quarter of 2011.

Based on record earnings, strong capital and favorable outlook, the Board of Directors declared a cash dividend of $0.06 per share for holders of record as of August 8, 2012 and payable on August 24, 2012.

Net income for the six months ended June 30, 2012 totaled $7.3 million compared to $5.0 million for the same period in 2011, highlighted by an increase in pre-tax, pre-provision earnings of the commercial bank segment and increased earnings in the mortgage banking segment driven by an increase in loan origination volume. Net interest margin remained steady at 3.95% for the 6 month period ended June 30, 2012 as compared to 3.77% for the same period in 2011. Diluted earnings per share were $0.71 compared to $0.48 in 2011.

Return on annualized average assets was 1.95% for the second quarter of 2012 compared to 1.66% for the first quarter of 2012 and 1.51% for the second quarter of 2011. Return on annualized average equity was 17.55% for the quarter ended June 30, 2012 compared to 16.03% for the first quarter of 2012 and 13.92% for the same period last year.

Total assets amounted to $841.7 million compared to $809.8 million at December 31, 2011. The increase in assets is mainly attributable to an increase in both loans held for investment as well as loans held for sale, and was funded by the increase in deposits.

Total deposits at June 30, 2012 increased $35.9 million or 5.56% from December 31, 2011. As a result of management’s continued focus on expanding business banking relationships, demand deposits increased $43.4 million or 38.13% from December 13, 2011 and comprised 23.10% of the deposit portfolio, up from 17.66% at December 31, 2011. The overall increase in deposits allowed the Company to decrease its borrowings which, coupled with other factors, contributed to the increase in net interest margin.

Non-performing assets (NPAs) decreased to $5.2 million or 0.62% of total assets, down from $5.3 million or 0.66% of assets at March 31, 2012. The Corporation did not have other real estate owned at June 30, 2012. The allowance for loan losses totaled $12.0 million or 2.06% of total loans held for investment as of June 30, 2012.

Book Value per common share increased 14.4% at June 30, 2012 to $8.65, compared to $7.56 at June 30, 2011. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 10.58% at June 30, 2012 and continued to exceed standards of being “Well Capitalized” as set forth under banking regulations.

Access National Corporation is the parent company of Access National Bank, an independent, nationally chartered bank serving the business community of the greater Washington 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
               
  June 30, December 31, June 30,
2012 2011 2011
(In Thousands)   (Unaudited)       (Unaudited)
 
ASSETS
 
Cash and due from banks $ 11,322 $ 5,362 $ 8,451
 
Interest-bearing balances and federal funds sold 22,335 38,547 14,202
 
Investment securities:
Available-for-sale, at fair value 32,477 45,837 91,516

Held-to-maturity, at amortized cost (fair value of $70,363, $39,978 and $0)

  69,936   39,987   -  
Total investment securities 102,413 85,824 91,516
 
Restricted Stock, at amortized cost 5,788 3,665 5,007
 
Loans held for sale - at fair value 100,310 95,126 56,519
 
Loans held for investment
net of allowance for loan losses of $12,031, $11,738
and $11,057, respectively 570,569 557,662 509,617
 
Premises, equipment and land 8,517 8,671 8,739
 
Other assets 20,455 14,901 18,965
     
Total assets $ 841,709 $ 809,758 $ 713,016  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 157,305 $ 113,885 $ 128,945
 
Savings and interest-bearing deposits 173,423 182,005 126,885
 
Time deposits   350,203   349,123   252,083  
 
Total deposits 680,931 645,013 507,913
 
Short-term borrowings 48,161 59,904 107,457
 
Long-term borrowings 2,964 4,821 5,929
 
Subordinated debentures 6,186 6,186 6,186
 
Other liabilities and accrued expenses 14,419 11,019 7,712
     
Total Liabilities   752,661   726,943   635,197  
 
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized;
issued and outstanding, 10,250,802, 10,192,649,
and 10,299,041 shares, respectively 8,559 8,511 8,600
 
Additional paid in capital 16,753 16,716 17,419
 
Retained earnings 63,673 57,529 51,946
 
Accumulated other comprehensive income (loss), net 63 59 (146 )
     
Total shareholders' equity   89,048   82,815   77,819  
     
Total liabilities and shareholders' equity $ 841,709 $ 809,758 $ 713,016  
                       

     
Access National Corporation
Consolidated Statement of Operations
             
Three Months Ended Six Months Ended
June 30, 2012 June 30, 2012 June 30, 2011
(In Thousands Except for Share Data)   (unaudited)
 
INTEREST INCOME
Interest and fees on loans $ 8,369 $ 17,040 $ 15,814
 
Interest on federal funds sold and bank balances 19 50 72
 
Interest on securities   614     1,263     1,213
Total interest income 9,002 18,353 17,099
 
INTEREST EXPENSE
Interest on deposits 1,150 2,423 2,690
 
Interest on other borrowings   120     330     995
Total interest expense   1,270     2,753     3,685
Net interest income 7,732 15,600 13,414
 
Provision for loan losses   472     1,190     221
Net interest income after provision for loan losses 7,260 14,410 13,193
 
NONINTEREST INCOME
Service charges and fees 160 337 341
 
Gain on sale of loans 14,738 25,682 12,898
 
Other Income   (1,166 )   (186 )   700
Total noninterest income 13,732 25,833 13,939
 
NONINTEREST EXPENSE
Salaries and benefits 7,474 15,809 11,270
 
Occupancy and equipment 579 1,230 1,343
 
Other operating expense   6,358     11,136     6,821
Total noninterest expense   14,411     28,175     19,434
Income before income tax 6,581 12,068 7,698
 
Income tax expense   2,691     4,741     2,740
NET INCOME $ 3,890   $ 7,327   $ 4,958
 
Earnings per common share:
Basic $ 0.38   $ 0.72   $ 0.48
Diluted $ 0.38   $ 0.71   $ 0.48
 
Average outstanding shares:
Basic 10,237,515 10,219,085 10,341,944
Diluted 10,349,704 10,331,529 10,398,064
                       

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

December 31,

(Dollars In Thousands)     2012       2012       2011       2011       2011       2011       2011       2010  
 
Return on average assets (annualized) 1.95 % 1.66 % 1.50 % 1.61 % 1.69 % 1.51 % 1.20 % 0.98 %
Return on average equity (annualized) 17.55 % 16.03 % 14.80 % 15.87 % 15.92 % 13.92 % 12.53 % 10.85 %
Net interest margin 3.98 % 3.91 % 3.82 % 3.77 % 4.02 % 4.00 % 3.55 % 3.41 %
Efficiency ratio - Bank only 52.63 % 52.17 % 52.92 % 53.85 % 52.38 % 53.06 % 52.32 % 59.02 %
Total average equity to earning assets 11.42 % 10.66 % 10.46 % 10.52 % 10.90 % 11.21 % 9.87 % 9.52 %
 
Averages
Assets $ 798,272 $ 827,438 $ 758,994 $ 822,190 $ 738,925 $ 707,859 $ 763,780 $ 772,600
Loans held for investment 579,541 568,351 520,062 549,245 527,258 508,010 494,920 475,726
Loans held for sale 57,721 79,575 51,774 91,962 49,641 29,347 29,021 63,868
Interest-bearing deposits & federal funds sold 27,613 50,471 58,128 73,338 50,509 28,575 80,250 86,531
Investment securities 111,277 106,487 105,964 80,584 90,258 118,506 135,281 107,685
Earning assets 776,152 804,884 735,929 795,129 717,666 684,439 739,472 733,810
Interest-bearing deposits 510,999 558,029 465,301 523,958 454,558 387,478 486,785 498,028
Total deposits 647,491 670,327 565,450 648,856 562,304 481,657 566,966 572,138
Repurchase agreements & federal funds purchased 24,777 28,426 36,612 35,655 37,627 37,097 36,064 29,202
Commercial paper & other short term borrowings 17,335 15,708 59,220 30,326 34,338 93,625 66,637 38,088
Long-term borrowings 9,442 10,936 12,382 11,592 12,099 12,652 13,204 45,423
Equity $ 88,648 $ 85,801 $ 76,969 $ 83,614 $ 78,212 $ 76,746 $ 72,988 $ 69,827
 
Banking segment - income before taxes $ 3,502 $ 3,240 $ 13,972 $ 3,516 $ 2,982 $ 4,126 $ 3,348 $ 8,760
Mortgage segment - income before taxes $ 3,715 $ 2,832 $ 6,358 $ 2,530 $ 2,369 $ 748 $ 711 $ 4,983
Other segments - income before taxes $ (636 ) $ (585 ) $ (2,655 ) $ (888 ) $ (531 ) $ (729 ) $ (507 ) $ (1,641 )
Mortgage loan originations and brokered loans $ 266,850 $ 257,295 $ 831,564 $ 279,681 $ 236,566 $ 175,905 $ 139,412 $ 908,959
Allowance for losses on mortgage loans sold $ 4,216 $ 2,874 $ 2,616 $ 2,616 $ 2,395 $ 2,286 $ 2,113 $ 1,991
 
Book value per common share $ 8.65 $ 8.37 $ 8.13 $ 8.13 $ 7.84 $ 7.56 $ 7.21 $ 6.96
                                                                 
       
Composition of Loan Portfolio
                 
    June 30, 2012   December 31, 2011
Percentage Percentage
(Dollars In Thousands)   Amount   of Total   Amount   of Total
 
Commercial real estate - owner occupied $ 180,133 30.92 % $ 171,599 30.14 %
Commercial real estate - non-owner occupied 105,468 18.10 104,976 18.44
Residential real estate 126,645 21.74 128,485 22.56
Commercial 140,272 24.08 131,816 23.15
Real estate construction 26,880 4.61 29,705 5.22
Consumer   3,202   0.55     2,819   0.49  
Total loans $ 582,600 100.00 % $ 569,400 100.00 %
Less allowance for loan losses   12,031   11,738
$ 570,569 $ 557,662
                     

Composition of Deposits        
                 
    June 30, 2012   December 31, 2011
Percentage Percentage
(Dollars In Thousands)   Amount   of Total   Amount   of Total
 
Demand deposits $ 157,305 23.10 % $ 113,885 17.66 %
Interest-bearing demand deposits 50,243 7.38 59,798 9.27
Savings and money market 110,605 16.24 121,252 18.80
CDARS-reciprocal time deposits 193,219 28.38 192,326 29.82
Brokered deposits 40,326 5.92 31,228 4.84
Time deposits   129,233   18.98       126,524   19.61  
Total Deposits $ 680,931   100.00 %   $ 645,013   100.00 %
                 
           
Asset Quality Trend Profile
                             
  Six Months Three Months Twelve Months Twelve Months Nine Months Six Months Three Months
Ended Ended Ended Ended Ended Ended Ended
(Dollars In Thousands)   June 30, 2012   March 31, 2012   December 31, 2011   December 31, 2010   September 30, 2011   June 30, 2011   March 31, 2011
 
Total assets $ 841,709 $ 804,755 $ 809,758 $ 831,824 $ 765,467 $ 713,016 $

717,198

Total loans held for investment

$

582,600

$

573,315

$

569,400

$

491,529

$

542,582

$

520,674

$

497,469

 
Allowance for loan losses - beginning balance $ 11,738 $ 11,738 10,527 $ 9,127 $ 10,527 $ 10,527 $

10,527

Charge offs (1,425 ) (984 ) (1,232 ) (2,048 ) (944 ) (553 ) (184 )
Recoveries   528       469       1,295       632       1,019       862      

156

 
Net charge offs (897 ) (515 ) 63 (1,416 ) 75 309 (28 )
Provision for loan losses   1,190       718       1,149       2,816       935       221      

223

 
Allowance for loan losses - ending balance $ 12,031     $ 11,941       11,738     $ 10,527     $ 11,537     $ 11,057     $

10,722

 
 
Allowance for loan losses/loans held for investment 2.06 % 2.08 % 2.06 % 2.14 % 2.13 % 2.12 % 2.16 %
 
Delinquent 30 - 90 days

$

614

$

-

 

271

$ 2,771 $ 4,226 $ 171 $

2,100

Percentage of loans delinquent 0.11 % 0.00 % 0.05 % 0.56 % 0.78 % 0.03 % 0.42 %

 

Non-accrual loans $ 5,209 $ 5,350 $ 6,703 $ 8,561 $ 7,077 $ 7,481 $

9,163

OREO $ - $ - $ - $ 1,859 $ 590 $ 590 $

1,859

Total NPA $ 5,209 $ 5,350 $ 6,703 $ 10,420 $ 7,667 $ 8,071 $

11,022

NPA to total assets 0.62 % 0.66 % 0.83 % 1.25 % 1.00 % 1.13 % 1.53 %
Allowance for loan losses/NPA 230.97 % 223.20 % 175.12 % 101.03 % 150.48 % 137.00 % 97.28 %
 
OREO Expense $ 1 $ 2 $ 523 $ 2,335 $ 420 $ 395 $

68

Gain on Sale of OREO $ -     $ -     $ 1,452     $ 1,253     $ 1,325     $ 1,325     $

15

 
OREO expense net $ 1     $ 2     $ (929 )   $ 1,082     $ (905 )   $ (930 )   $

53

 
 
Allowance for losses on mortgage loans sold $ 4,216 $ 2,874 $ 2,616 $ 1,991 $ 2,395 $ 2,286 $

2,113

Provision for losses on mortgage loans sold $ 1,600 $ 258 $ 966 $ 3,836 $ 527 $ 289 $

126

                                                         

 
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
               
    Three Month Period Ended
    June 30, 2012   March 31, 2012   June 30, 2011
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, at amortized cost(1) $ 111,277 $ 614 2.21 % $ 106,487 $ 649 2.44 % $ 118,506 $ 580 1.96 %
Loans held for sale 57,721 511 3.54 % 79,575 850 4.27 % 29,348 342 4.66 %
Loans(2) 579,541 7,858 5.42 % 568,351 7,821 5.50 % 508,010 7,590 5.98 %
Interest-bearing balances and federal funds sold   27,613       19   0.28 %   50,471       31   0.25 %   28,575       17   0.24 %
Total interest earning assets 776,152 9,002 4.64 % 804,884 9,351 4.65 % 684,439 8,529 4.98 %
Non-interest earning assets:
Cash and due from banks 9,381 8,966 10,870
Premises, land, and equipment 8,561 8,641 8,843
Other assets 16,123 16,754 13,204
Less: allowance for loan losses   (11,945 )   (11,807 )   (10,789 )
Total non-interest earning assets   22,120     22,554     22,128  
Total Assets $ 798,272   $ 827,438   $ 706,567  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 64,481 $ 40 0.25 % $ 62,243 $ 51 0.33 % $ 23,431 $ 26 0.44 %
Money market deposit accounts 118,984 124 0.42 % 130,362 146 0.45 % 108,988 156 0.57 %
Savings accounts 2,678 1 0.15 % 2,557 1 0.16 % 2,848 2 0.28 %
Time deposits   324,856       985   1.21 %   362,867       1,075   1.19 %   252,211       995   1.58 %
Total interest-bearing deposits 510,999 1,150 0.90 % 558,029 1,273 0.91 % 387,478 1,179 1.22 %
Borrowings:
FHLB Advances 17,335 24 0.55 % 1,203 4 1.33 % 26,484 24 0.36 %
Securities sold under agreements to repurchase and federal funds purchased 24,777 9 0.15 % 28,426 10 0.14 % 37,097 19 0.20 %
Other short-term borrowings - - 0.00 % - - 0.00 % 37,142 56 0.60 %
FHLB long-term borrowings 3,256 31 3.81 % 4,750 41 3.45 % 6,466 55 3.40 %
Senior unsecured term note - - 0.00 % 14,505 98 2.70 % 29,999 297 3.96 %
Subordinated Debentures   6,186       56   3.62 %   6,186       57   3.69 %   6,186       52   3.36 %
Total borrowings   51,554       120   0.93 %   55,070       210   1.53 %   143,374       503   1.40 %
Total interest-bearing liabilities   562,553       1,270   0.90 %   613,099       1,483   0.97 %   530,852       1,682   1.27 %
Noninterest-bearing liabilities:
Demand deposits 136,492 112,298 94,179
Other liabilities   10,579     16,240     5,643  
Total liabilities 709,624 741,637 630,674
Shareholders' Equity   88,648     85,801     75,893  
Total Liabilities and Shareholders' Equity: $ 798,272   $ 827,438   $ 706,567  
 
Interest spread(3) 3.74 % 3.68 % 3.72 %
 
Net interest margin(4) $ 7,732   3.98 % $ 7,868   3.91 % $ 6,847   4.00 %
                                     
 

(1) Includes restricted stock.

(2) Loans placed on nonaccrual status are included in loan balances.

(3) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest-bearing liabilities.

(4) 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
         
    Six Month Period Ended
    June 30, 2012   June 30, 2011
Average Income / Yield / Average Income / Yield /
    Balance   Expense   Rate   Balance   Expense   Rate
(Dollars In Thousands)
Assets:
Interest earning assets:
Securities, at amortized cost(1) $ 108,882 $ 1,263 2.32 % $ 126,848 $ 1,213 1.91 %
Loans held for sale 68,648 1,361 3.97 % 29,186 691 4.74 %
Loans(2) 573,946 15,679 5.46 % 501,501 15,123 6.03 %
Interest-bearing balances and federal funds sold   39,043       50   0.26 %   54,269       72   0.27 %
Total interest earning assets 790,519 18,353 4.64 % 711,804 17,099 4.80 %
Non-interest earning assets:
Cash and due from banks 9,173 11,529
Premises, land, and equipment 8,601 8,885
Other assets 16,438 13,423
Less: allowance for loan losses   (11,876 )   (10,694 )
Total noninterest earning assets   22,336     23,143  
Total Assets $ 812,855   $ 734,947  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 63,362 $ 91 0.29 % $ 23,428 $ 53 0.45 %
Money market deposit accounts 124,673 270 0.43 % 116,540 350 0.60 %
Savings accounts 2,618 2 0.15 % 2,876 3 0.21 %
Time deposits   343,861       2,060   1.20 %   294,013       2,284   1.55 %
Total interest-bearing deposits 534,514 2,423 0.91 % 436,857 2,690 1.23 %
Borrowings:
FHLB Advances 9,269 28 0.60 % 15,564 39 0.50 %
Securities sold under agreements to repurchase and federal funds purchased 26,601 19 0.14 % 36,583 37 0.20 %
Other short-term borrowings - - 0.00 % 34,643 105 0.61 %
FHLB long-term borrowings 4,003 72 3.60 % 6,741 117 3.47 %
Senior unsecured term note 7,253 98 2.70 % 29,999 592 3.95 %
Subordinated Debentures   6,186       113   3.65 %   6,186       105   3.39 %
Total borrowings   53,312       330   1.24 %   129,716       995   1.53 %
Total interest-bearing liabilities   587,826       2,753   0.94 %   566,573       3,685   1.30 %
Noninterest-bearing liabilities:
Demand deposits 124,395 87,226
Other liabilities   13,409     6,631  
Total Liabilities 725,630 660,430
Shareholders' Equity   87,225     74,517  
Total Liabilities and Shareholders' Equity: $ 812,855   $ 734,947  
 
Interest spread(3) 3.71 % 3.50 %
 
Net interest margin(4) $ 15,600   3.95 % $ 13,414   3.77 %
                         
 

(1) Includes restricted stock.

(2) Loans placed on nonaccrual status are included in loan balances.

(3) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest-bearing liabilities.

(4) Net interest margin is net interest income, expressed as a percentage of average earning assets.

Access National Corporation
Michael Clarke, 703-871-2100