Access National Increases First Quarter Earnings and Dividend

Mon Apr 22, 2013 4:42pm EDT

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Access National Increases First Quarter Earnings and Dividend

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported first quarter net income of $3.7 million, a $247 thousand increase over the $3.4 million recorded in the first quarter of 2012. This represents the company’s 51st consecutive quarterly profit over its 53 quarter history. Net income per diluted common share was $0.35, an increase of 6% over the $0.33 reported in the first quarter of 2012.

The Board of Directors declared a cash dividend of $0.10 per share for holders of record as of May 8, 2013 and payable on May 24, 2013. This dividend represents a steady migration towards the stated objective equal to a 40% payout ratio of core earnings. It also represents a 1 cent increase from the prior quarter and a 9 cent cumulative increase over the past 2 years.

The increase in net income between the first quarter of 2013 and 2012 is mainly attributable to a 17% increase in pretax earnings from the banking segment while the mortgage segment contribution decreased slightly in the first quarter of 2013 when compared to the first quarter of 2012.

Net interest margin for the first quarter of 2013 decreased to 3.73% from 3.91% as of the first quarter of 2012.

Annualized return on average assets was 1.66% for both the first quarter of 2013 and 2012. Annualized return on average equity was 15.95% for the quarter ended March 31, 2013 compared to 16.03% for the same period last year.

Total assets amounted to $876.4 million compared to $863.9 million at December 31, 2012. While the growth in assets was minimal, the overall distribution of assets experienced a major shift resulting from growth of the commercial banking segment and lower activity in the mortgage segment. The decrease in loans held for sale of $42.0 million was offset by a growth in investment securities of $18.7 million, interest bearing and cash balances of $14.1 million, and loans held for investment of $22.7 million. The growth in loans held for investment was highlighted by a 7.2% or $10.8 million growth in commercial and industrial loans to the bank’s target market.

Total deposits at March 31, 2013 increased $61.7 million from December 31, 2012. As a result of management’s continued focus on expanding business banking relationships, noninterest-bearing deposits increased $20.6 million or 12.56% from December 31, 2012, and comprised 25.21% of the deposit portfolio at March 31, 2013.

Non-performing assets (NPAs) decreased to $1.7 million or 0.20% of total assets at March 31, 2013, down from $2.7 million or 0.32% of assets at December 31, 2012. The Corporation did not have other real estate owned at March 31, 2013. The allowance for loan losses totaled $12.9 million or 2.01% of total loans held for investment as of March 31, 2013.

Book value per common share increased 8.7% at March 31, 2013 to $9.10, compared to $8.37 at March 31, 2012 during which time shareholders have also received $0.99 of dividends per share. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 10.72% at March 31, 2013 and continued to exceed standards of being “Well Capitalized” as set forth under banking regulations.

The Corporation announced April 2, 2013, the closure of its Mortgage Production Branch (Branch) located in Denver, Colorado with all activities and obligations terminated as of April 30, 2013. In order to evaluate the impact of this change on the overall Corporation’s financial performance, condensed consolidated pro forma financial statements are presented at the end of this release. The pro forma information is presenting results as if the Branch, which is closing April 30, 2013, had not been in existence in the three month periods ended March 31, 2013 and 2012. The pro forma reflects year over year increases in loan volume of 7.4% and purchase loan units of 12.68% from continuing operations. Closure of the Denver Mortgage Production Branch will enable management to focus resources aimed at cultivating purchase oriented business in the Washington DC Metropolitan area consistent with the bank’s target market.

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
             
March 31,

December 31,

March 31,
2013 2012 2012
(In Thousands)   (Unaudited)       (Unaudited)
 
ASSETS
 
Cash and due from banks $ 8,780 $ 15,735 $ 6,769
 
Interest-bearing balances and federal funds sold 43,241 22,206 30,009
 
Investment securities:
Available-for-sale, at fair value 68,538 35,759 38,209
Held-to-maturity, at amortized cost (fair value of $31,096, $45,308 and $64,802)   30,854     44,952   64,950
Total investment securities 99,392 80,711 103,159
 
Restricted Stock, at amortized cost 2,034 4,237 3,665
 
Loans held for sale - at fair value 69,587 111,542 75,552
 

Loans held for investment net of allowance for loan losses of $12,860, $12,500 and $11,941, respectively

626,836 604,478 561,374
 
Premises, equipment and land, net 8,539 8,517 8,584
 
Other assets 17,952 16,488 15,643
     
Total assets $ 876,361   $ 863,914 $ 804,755
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 184,785 $ 164,161 $ 136,895
 
Savings and interest-bearing deposits 187,223 187,997 193,396
 
Time deposits   361,159     319,338   336,934
 
Total deposits 733,167 671,496 667,225
 
Short-term borrowings 32,258 83,091 32,343
 
Long-term borrowings - - 3,268
 
Subordinated debentures 6,186 6,186 6,186
 
Other liabilities and accrued expenses 10,777 11,874 10,126
     
Total Liabilities   782,388     772,647   719,148
 
SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,329,104, 10,317,767 and 10,228,761 shares, respectively

8,625 8,615 8,541
 
Additional paid in capital 17,270 17,155 16,613
 
Retained earnings 68,159 65,404 60,434
 
Accumulated other comprehensive income (loss), net (81 ) 93 19
     
Total shareholders' equity   93,973     91,267   85,607
     
Total liabilities and shareholders' equity $ 876,361   $ 863,914 $ 804,755
 
 
Access National Corporation
Consolidated Statement of Operations
 
  Three Months Ended
March 31, 2013   March 31, 2012
(In Thousands Except for Share and Per Share Data)   (unaudited)   (unaudited)
 
INTEREST INCOME
Interest and fees on loans $ 8,596 $ 8,671
 
Interest on federal funds sold and bank balances 25 31
 
Interest on securities   535   649
Total interest income 9,156 9,351
 
INTEREST EXPENSE
Interest on deposits 1,001 1,273
 
Interest on other borrowings   66   210
Total interest expense   1,067   1,483
Net interest income 8,089 7,868
 
Provision for loan losses   225   718
Net interest income after provision for loan losses 7,864 7,150
 
NONINTEREST INCOME
Service charges and fees 169 177
 
Gain on sale of loans 7,881 10,944
 
Other Income   2,794   980
Total noninterest income 10,844 12,101
 
NONINTEREST EXPENSE
Salaries and benefits 8,069 8,335
 
Occupancy and equipment 704 651
 
Other operating expense   3,882   4,778
Total noninterest expense   12,655   13,764
Income before income tax 6,053 5,487
 
Income tax expense   2,369   2,050
NET INCOME   3,684   3,437
 
Earnings per common share:
Basic $ 0.36 $ 0.34
Diluted $ 0.35 $ 0.33
 
Average outstanding shares:
Basic 10,322,623 10,200,656
Diluted 10,437,600 10,312,845
 
 
Performance and Capital Ratios
 
  Three Months   Three Months   Twelve Months   Twelve Months
Ended Ended Ended Ended
March 31, March 31, December 31, December 31,
(Dollars In Thousands)   2013   2012   2012   2011
 
Return on average assets (annualized) 1.66 % 1.66 % 2.15 % 1.50 %
Return on average equity (annualized) 15.95 % 16.03 % 19.68 % 14.80 %
Net interest margin 3.73 % 3.91 % 3.94 % 3.82 %
Efficiency ratio - Bank only 53.22 % 52.17 % 51.71 % 52.92 %
Total average equity to earning assets 10.66 % 10.64 % 11.24 % 10.46 %
 
Averages
Assets $ 888,589 $ 827,438 $ 826,233 $ 758,994
Loans held for investment 626,504 568,351 583,724 520,062
Loans held for sale 74,768 79,575 78,543 51,774
Interest-bearing deposits & federal funds sold 58,935 50,471 33,272 58,128
Investment securities 106,644 106,644 105,520 107,765
Earning assets 866,906 804,884 800,917 735,928
Interest-bearing deposits 575,786 558,029 526,346 465,301
Total deposits 744,843 670,327 672,693 565,450
Repurchase agreements & federal funds purchased 30,389 28,426 26,744 36,612
Commercial paper & other short term borrowings 5,056 15,708 14,748 59,220
Long-term borrowings 6,186 4,750 9,201 12,382
Equity $ 92,397 $ 85,801 $ 90,047 $ 76,969
 
Banking segment - income before taxes $ 3,798 $ 3,240 $ 14,730 $ 13,972
Mortgage segment - income before taxes $ 2,808 $ 2,832 $ 15,656 $ 6,358
Other segments - income before taxes $ (553 ) $ (585 ) $ (1,955 ) $ (2,655 )
Mortgage loan originations and brokered loans $ 217,680 $ 257,295 $ 1,130,089 $ 831,564
Allowance for losses on mortgage loans sold $ 4,475 $ 2,874 $ 4,376 $ 2,616
 
Book value per common share $ 9.10 $ 8.37 $ 8.85 $ 8.13
 
 
Composition of Loan Portfolio
 
    March 31, 2013   December 31, 2012

 

 

 

  Percentage  

 

  Percentage

(Dollars In Thousands)

 

Amount

  of Total  

Amount

  of Total
 
Commercial real estate-owner occupied $ 185,306 28.97 % $ 182,655 29.60 %
Commercial real estate-non owner occupied 104,428 16.32 107,213 17.38
Residential real estate 150,229 23.48 144,521 23.43
Commercial 160,150 25.04 149,389 24.21
Real estate construction 35,252 5.51 30,038 4.87
Consumer   4,331   0.68     3,162   0.51  
Total loans $ 639,696 100.00 % $ 616,978 100.00 %
Less allowance for loan losses   12,860   12,500
$ 626,836 $ 604,478
                         
 
       
Composition of Deposits
                     
    March 31, 2013   December 31, 2012
Percentage of Percentage of
(Dollars In Thousands)   Amount   Total   Amount   Total
 
Demand deposits $ 184,785 25.21

%

$ 164,161 24.44 %
Interest-bearing demand deposits 56,837 7.75 71,015 10.58
Savings and money market 130,170 17.75 116,554 17.36
CDARS-reciprocal time deposits 219,896 29.99 170,835 25.44
Brokered deposits 27,202 3.71 29,277 4.36
Time deposits 114,277   15.59     119,654   17.82  
Total Deposits $ 733,167   100.00 %   $ 671,496   100.00 %
       
Asset Quality Trend Profile
                     
  Three Months Twelve Months Nine Months Six Months

Three Months

Ended Ended Ended Ended

Ended

(Dollars In Thousands)  

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

March 31, 2012

 
Total assets $ 876,361 $ 863,914 $ 849,348 $ 841,709 $

804,755

Total loans held for investment $ 639,696 $ 616,978 $ 590,619 $ 582,600 $

573,315

 
Allowance for loan losses - beginning balance $ 12,500 $ 11,738 $ 11,738 $ 11,738

$

11,738

Charge offs - (2,165 ) (1,829 ) (1,425 ) (984 )
Recoveries   135       1,412       799       528      

469

 
Net charge offs 135 (753 ) (1,030 ) (897 ) (515 )
Provision for loan losses   225       1,515       1,340       1,190      

718

 
Allowance for loan losses - ending balance $ 12,860     $ 12,500     $ 12,048     $ 12,031     $

11,941

 
 
Allowance for loan losses/loans held for investment 2.01 % 2.03 % 2.04 % 2.06 %

2.08

%
 
Delinquent 30 - 90 days $ 671 $ - $ - $ 614 $

-

Percentage of loans delinquent 0.10 % 0.00 % 0.00 % 0.11 % 0.00 %

 

Non-accrual loans $ 1,738 $ 2,743 $ 3,626 $ 5,209 $

5,350

OREO $ - $ - $ - $ - $

-

Total NPA $ 1,738 $ 2,743 $ 3,626 $ 5,209

$

5,350

NPA to total assets 0.20 % 0.32 % 0.43 % 0.62 % 0.66 %
Allowance for loan losses/NPA 739.93 % 455.71 % 332.27 % 230.97 % 223.20 %
 

OREO Expense

$ 39 $ 6 $ 1 $ 1 $

2

Gain on Sale of OREO

$ -     $ -     $ -     $ -     $

-

 

OREO expense net

$ 39     $ 6     $ 1     $ 1     $

2

 
 
Allowance for losses on mortgage loans sold $ 4,475 $ 4,376 $ 4,802 $ 4,216 $

2,874

Provision for losses on mortgage loans sold $ 218 $ 2,510 $ 2,186 $ 1,600 $

258

                                         
 
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
         
March 31, 2013 March 31, 2012
Average Income / Yield / Average Income / Yield /
Balance   Expense   Rate Balance   Expense   Rate
(Dollars In Thousands)
Assets:
Interest earning assets:
Securities $ 106,697 $ 535 2.00 % $ 106,487 $ 649 2.44 %
Loans held for sale 74,768 614 3.28 % 79,575 850 4.27 %
Loans(1) 626,504 7,982 5.10 % 568,351 7,821 5.50 %
Interest-bearing balances and federal funds sold   58,937       25   0.17 %   50,471       31   0.25 %
Total interest earning assets 866,906 9,156 4.22 % 804,884 9,351 4.65 %
Noninterest earning assets:
Cash and due from banks 11,386 8,966
Premises, land and equipment 8,544 8,641
Other assets 14,361 16,754
Less: allowance for loan losses   (12,608 )   (11,807 )
Total noninterest earning assets   21,683     22,554  
Total Assets $ 888,589   $ 827,438  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 85,053 $ 42 0.20 % $ 62,243 $ 51 0.33 %
Money market deposit accounts 118,927 89 0.30 % 130,362 146 0.45 %
Savings accounts 2,444 1 0.14 % 2,557 1 0.16 %
Time deposits   369,362       869   0.94 %   362,867       1,075   1.19 %
Total interest-bearing deposits 575,786 1,001 0.70 % 558,029 1,273 0.91 %
Borrowings:
FHLB Advances 5,056 4 0.32 % 1,203 4 1.33 %
Securities sold under agreements to repurchase and federal funds purchased 30,389 9 0.11 % 28,426 10 0.14 %
Other short-term borrowings - - 0.00 % - - 0.00 %
FHLB Long-term borrowings - - 0.00 % 4,750 41 3.45 %
FDIC Term Note - - 0.00 % 14,505 98 2.70 %
Subordinated Debentures   6,186       53   3.43 %   6,186       57   3.69 %
Total borrowings   41,631       66   0.63 %   55,070       210   1.53 %
Total interest-bearing deposits and borrowings 617,417 1,067 0.69 % 613,099 1,483 0.97 %
Noninterest-bearing liabilities:
Demand deposits 169,056 112,298
Other liabilities   9,719     16,240  
Total liabilities 796,192 741,637
Shareholders' Equity   92,397     85,801  
Total Liabilities and Shareholders' Equity: $ 888,589   $ 827,438  
 
Interest Spread(2) 3.53 % 3.68 %
 
Net Interest Margin(3) $ 8,089   3.73 % $ 7,868   3.91 %
 

(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
Condensed Consolidated Statement of Income
Three Months Ended March 31, 2013
(In Thousands, Except for Share Data)
       
As Reported

Adjustment for

Mortgage Production

Branch Closure

Pro Forma Totals
Interest and dividend income $ 9,156 $ - $ 9,156
 
Interest expense   1,067     -     1,067  
 
Net interest income 8,089 - 8,089
Provision for loan losses   225     -     225  
Net interest income after provision for loan losses 7,864 - 7,864
 
Noninterest income 10,844 (3,240 ) 7,604
 
Noninterest expense   12,655     (1,921 )   10,734  
 
Income before income taxes 6,053 (1,319 ) 4,734
 
Provision for income taxes   2,369     (514 )   1,855  
 
Net income $ 3,684   $ (805 ) $ 2,879  
 
Earnings per common share:
Basic $ 0.36   $ (0.08 ) $ 0.28  
Diluted $ 0.35   $ (0.08 ) $ 0.27  
 
Average outstanding shares:
Basic 10,322,623 - 10,322,623
Diluted 10,437,600 - 10,437,600
 
 
Average total assets (in thousands) $ 888,589 $ (827 ) $ 887,762
Average shareholders' equity (in thousands) $ 92,397 $ (981 ) $ 91,416
 
Return on average assets (annualized) 1.66 % (0.36 )% 1.30 %
Return on average shareholders' equity (annualized) 15.95 % (3.35 )% 12.60 %
 
Total loan volume (in thousands) $ 217,680 $ (65,741 ) $ 151,939
Purchase loan units as a percentage of business 25.13 % 12.61 % 37.74 %
 
    Access National Corporation
Condensed Consolidated Statement of Income
Three Months Ended March 31, 2012
(In Thousands, Except for Share Data)
       
As Reported

Adjustment for

Mortgage Production

Branch Closure

Pro Forma Totals
Interest and dividend income $ 9,351 $ - $ 9,351
 
Interest expense   1,483     -     1,483  
 
Net interest income 7,868 - 7,868
Provision for loan losses   718     -     718  
Net interest income after provision for loan losses 7,150 - 7,150
 
Noninterest income 12,101 (5,519 ) 6,582
 
Noninterest expense   13,764     (3,601 )   10,163  
 
Income before income taxes 5,487 (1,918 ) 3,569
 
Provision for income taxes   2,050     (748 )   1,302  
 
Net income $ 3,437   $ (1,170 ) $ 2,267  
 
Earnings per common share:
Basic $ 0.34   $ (0.11 ) $ 0.23  
Diluted $ 0.33   $ (0.11 ) $ 0.22  
 
Average outstanding shares:
Basic 10,200,656 - 10,200,656
Diluted 10,312,845 - 10,312,845
 
 
Average total assets (in thousands) $ 827,438 $ (1,305 ) $ 826,133
Average shareholders' equity (in thousands) $ 85,801 $ (686 ) $ 85,115
 
Return on average assets (annualized) 1.66 %

(0.56

)%

1.10 %
Return on average shareholders' equity (annualized) 16.03 % (5.38 )% 10.65 %
 
Total loan volume (in thousands) $ 257,295 $ (115,798 ) $ 141,497
Purchase loan units as a percentage of business 17.80 % $ 19.37 % $ 37.17 %
 

Access National Corporation
Michael Clarke, 703-871-2100

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