Access National Reports Earnings and Declares Dividend

Tue Jan 21, 2014 4:15pm EST

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Access National Reports Earnings and Declares Dividend

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank (Bank), reported fourth quarter 2013 net income of $3.2 million, or $0.31 per share. This represents the Corporation’s 54th consecutive quarterly profit over its 56 quarter history. Consistent with management’s stated objective of a 40%-50% payout ratio against core earnings, the Board of Directors declared a cash dividend of $0.11 per share for holders of record as of February 6, 2014 and payable on February 25, 2014. This cash dividend is in addition to a $0.70 special cash dividend paid to shareholders in the fourth quarter of 2013.

Net income for 2013 was $13.2 million or $1.27 per diluted share. Importantly, the banking segment pretax earnings increased 18% during 2013 in comparison to 2012. The mortgage segment contribution declined significantly in 2013 when compared with 2012 due to various factors including a reduction in volume and gain on sale margin. During the third quarter of 2013, management was able to align overhead with expected production which enabled the mortgage division to record income before taxes of $234 thousand for the fourth quarter of 2013 compared to a near break-even performance in the third quarter of 2013. For the year, the mortgage division’s pre-tax contribution was 24% which aligns with management’s intent, being that 70 – 80% of the Corporation’s net income is generated from the core business of the Bank.

Net interest margin for 2013 decreased to 3.85% from 3.94% for 2012. On a linked quarter basis, the margin improved slightly to 3.89% for the three months ended December 31, 2013 from 3.88% reported in the prior quarter.

On a consolidated basis, the Corporation reported annualized return on average assets of 1.50% and 1.55% for the three and twelve month periods ended December 31, 2013, respectively. Meanwhile, the annualized return on average equity was 13.34% and 14.00% for the three and twelve month periods ended December 31, 2013, respectively.

Total assets at December 31, 2013 amounted to $847.2 million compared to $863.9 million at December 31, 2012, an overall decline of $16.7 million. Growth in loans held for investment of $70.1 million and a $12.1 million increase in investments was offset by a decrease in loans held for sale of $87.2 million. Loans held for investment increased at an annualized rate of 19.70% or $32.2 million on a linked quarter basis lead by a notable increase in the commercial loan base.

The decrease in total deposits at December 31, 2013 of $98.5 million when compared to December 31, 2012 was due mainly to a $138.5 million planned reduction in brokered and Certificate of Deposit Account Registry Service (CDARS) deposits which was offset by an increase in demand deposits of $40.5 million or 17.21%. Management continues to focus on expanding business banking relationships as evidenced by the growth in demand deposits and was able to utilize more cost effective borrowing avenues thereby reducing the Corporation’s need for brokered and CDARS deposits during 2013.

Non-performing assets (NPAs) decreased to $2.5 million or 0.30% of total assets at December 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 December 31, 2013. The allowance for loan losses totaled $13.1 million or 1.91% of total loans held for investment as of December 31, 2013.

During the fourth quarter of 2013, the Corporation declared a special cash dividend of $0.70 per share. This was the impetus for the decrease in book value per common share at December 31, 2013 to $8.79 from $8.85 at December 31, 2012. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 10.76% at December 31, 2013 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
           
  December 31, December 31,
2013 2012
(In Thousands)   (Unaudited)    
 
ASSETS
 
Cash and due from banks $ 8,117 $ 15,735
 
Interest-bearing balances and federal funds sold 15,302 22,206
 
Investment securities:
Available-for-sale, at fair value 76,552 35,759
Held-to-maturity, at amortized cost (fair value of $15,662 and, $45,308)   16,280     44,952
Total investment securities 92,832 80,711
 
Restricted Stock, at amortized cost 8,559 4,237
 
Loans held for sale - at fair value 24,353 111,542
 
Loans held for investment
net of allowance for loan losses of $13,136 and $12,500, respectively 673,919 604,478
 
Premises, equipment and land, net 8,389 8,517
 
Other assets 15,711 16,488
   
Total assets $ 847,182   $ 863,914
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 189,908 $ 164,161

 

Savings and interest-bearing deposits 200,196 187,997
 
Time deposits   182,868     319,338
 
Total deposits 572,972 671,496
 
Short-term borrowings 172,855 83,091
 
Long-term borrowings - -
 
Subordinated debentures - 6,186
 
Other liabilities and accrued expenses 10,221 11,874
   
Total Liabilities   756,048     772,647
 
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized;
issued and outstanding, 10,369,420 and 10,317,767
shares, respectively 8,659 8,615
 
Additional paid in capital 17,320 17,155
 
Retained earnings 67,121 65,404
 
Accumulated other comprehensive income (loss), net (1,966 ) 93
   
Total shareholders' equity   91,134     91,267
   
Total liabilities and shareholders' equity $ 847,182   $ 863,914
 
     
Access National Corporation
Consolidated Statement of Operations
                     
Three Months Ended Twelve Months Ended
December 31, 2013 December 31, 2013 December 31, 2012
(In Thousands Except for Share Data)     (Unaudited)   (Unaudited)    
 
INTEREST INCOME
Interest and fees on loans $ 8,373 $ 33,841 $ 34,371
 
Interest on federal funds sold and bank balances 31 107 79
 
Interest on securities   489   1,928   2,266  
Total interest income 8,893 35,876 36,716
 
INTEREST EXPENSE
Interest on deposits 720 3,486 4,529
 
Interest on other borrowings   61   226   636  
Total interest expense   781   3,712   5,165  
Net interest income 8,112 32,164 31,551
 
Provision for loan losses   -   675   1,515  
Net interest income after provision for loan losses 8,112 31,489 30,036
 
NONINTEREST INCOME
Service charges and fees 196 691 666
 
Gain on sale of loans 2,929 21,109 55,749
 
Other Income   1,079   6,350   (1,621 )
Total noninterest income 4,204 28,150 54,794
 
NONINTEREST EXPENSE
Salaries and benefits 4,749 25,289 31,481
 
Occupancy and equipment 618 2,579 2,722
 
Other operating expense   2,006   11,330   22,196  
Total noninterest expense   7,373   39,198   56,399  
Income before income tax 4,943 20,441 28,431
 
Income tax expense   1,749     7,234   10,708  
NET INCOME $ 3,194   $ 13,207 $ 17,723  
 
Earnings per common share:
Basic $ 0.31 $ 1.28 $ 1.73  
Diluted $ 0.31 $ 1.27 $ 1.71  
 
Average outstanding shares:
Basic 10,343,158 10,319,802 10,253,656
Diluted 10,406,086 10,403,155 10,363,267
 
Performance and Capital Ratios        
                     
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
(Dollars In Thousands)   2013   2012   2013   2012
 
Return on average assets (annualized) 1.50 % 2.97 % 1.55 % 2.15 %
Return on average equity (annualized) 13.34 % 26.80 % 14.00 % 19.68 %
Net interest margin 3.89 % 3.92 % 3.85 % 3.94 %
Efficiency ratio - Bank only 45.75 % 47.79 % 49.50 % 51.71 %
Total average equity to earning assets 11.48 % 11.49 % 11.28 % 11.24 %
 
Averages
Assets $ 849,141 $ 844,174 $ 854,572 $ 826,233
Loans held for investment 667,146 601,240 648,744 583,724
Loans held for sale 20,528 88,799 42,667 78,543
Interest-bearing deposits & federal funds sold 48,473 24,826 46,217 33,272
Investment securities 95,934 99,075 97,260 105,520
Earning assets 834,236 813,787 836,129 800,917
Interest-bearing deposits 408,265 507,445 485,860 526,346
Total deposits 617,469 682,781 678,531 672,693
Repurchase agreements & federal funds purchased 25,145 26,825 25,524 26,744
Other short term borrowings 99,130 20,429 43,077 14,748
Long-term borrowings - 7,314 3,135 9,201
Equity $ 95,763 $ 93,470 $ 94,352 $ 90,047
 
Banking segment - income before taxes $ 4,937 $ 4,252 $ 17,330 $ 14,730
Mortgage segment - income before taxes $ 234 $ 5,790 $ 4,879 $ 15,656
Other segments - income before taxes $ (228 ) $ (170 ) $ (1,768 ) $ (1,955 )
Mortgage loan originations and brokered loans $ 82,789 $ 322,364 $ 574,951 $ 1,130,089
Allowance for losses on mortgage loans sold $ 4,645 $ 4,376 $ 4,645 $ 4,376
 
Book value per common share $ 8.79 $ 8.85 $ 8.79 $ 8.85
     
Composition of Loan Portfolio
                       
    December 31, 2013   December 31, 2012
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

 
Commercial real estate-owner occupied $ 196,804 28.65 % $ 182,655 29.60 %
Commercial real estate-non owner occupied 90,676 13.20 107,213 17.38
Residential real estate 173,639 25.27 144,521 23.43
Commercial 182,220 26.52 149,389 24.21
Real estate construction 38,842 5.65 30,038 4.87
Consumer   4,874   0.71     3,162   0.51  
Total loans $ 687,055 100.00 % $ 616,978 100.00 %
Less allowance for loan losses   13,136   12,500
$ 673,919 $ 604,478
                       
         
Composition of Deposits
                       
    December 31, 2013   December 31, 2012
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

 
Demand deposits $ 189,908 33.14 % $ 164,161 24.45 %
Interest-bearing demand deposits 85,735 14.96 71,015 10.58
Savings and money market 114,169 19.93 116,554 17.36
CDARS-reciprocal time deposits 47,535 8.30 170,835 25.44
Brokered deposits 14,103 2.46 29,277 4.35
Time deposits 121,522   21.21       119,654   17.82  
Total Deposits $ 572,972   100.00 %   $ 671,496   100.00 %
 
         
Asset Quality Trend Profile
                     
Twelve Months Nine Months Six Months Three Months Twelve Months
Ended Ended Ended Ended Ended
(Dollars In Thousands)   December 31, 2013   September 30, 2013   June 30, 2013   March 31, 2013   December 31, 2012
 
Total assets $ 847,182 $ 846,564 $ 841,683 $ 876,361 $ 863,914
Total loans held for investment $ 687,055 $ 654,807 $ 641,464 $ 639,696 $ 616,978
 
Allowance for loan losses - beginning balance $ 12,500 $ 12,500 $ 12,500 $ 12,500 $ 11,738
Charge offs (541 ) (476 ) - - (2,165 )
Recoveries   502       326       282       135       1,412  
Net charge offs (39 ) (150 ) 282 135 (753 )
Provision for loan losses   675       675       225       225       1,515  
Allowance for loan losses - ending balance $ 13,136     $ 13,025     $ 13,007     $ 12,860     $ 12,500  
 
Allowance for loan losses/loans held for investment 1.91 % 1.99 % 2.03 % 2.01 % 2.03 %
 
Delinquent 30 - 90 days $ - $ - $ 1,070 $ 671 $ -
Percentage of loans delinquent 0.00 % 0.00 % 0.17 % 0.10 % 0.00 %
 
Non-accrual loans $ 2,535 $ 2,902 $ 2,299 $ 1,738 $ 2,743
OREO $ -     $ -     $ -     $ -     $ -  
Total NPA $ 2,535     $ 2,902     $ 2,299     $ 1,738     $ 2,743  
NPA to total assets 0.30 % 0.34 % 0.27 % 0.20 % 0.32 %
Allowance for loan losses/NPA 518.19 % 448.83 % 565.77 % 739.93 % 455.71 %
 
OREO Expense $ 40 $ 40 $ 40 $ 39 $ 6
Gain on Sale of OREO $ -     $ -     $ -     $ -     $ -  
OREO expense net $ 40     $ 40     $ 40     $ 39     $ 6  
 
Allowance for losses on mortgage loans sold $ 4,645 $ 4,645 $ 4,645 $ 4,475 $ 4,376
Provision for losses on mortgage loans sold $ 388 $ 388 $ 388 $ 218 $ 2,510
                                         
 
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
                         
    December 31, 2013   December 31, 2012
  Average  

Income/

 

Yield/

  Average  

Income/

 

Yield/

    Balance   Expense   Rate   Balance   Expense   Rate
(Dollars In Thousands)
Assets:
Interest earning assets:
Securities $ 98,089 $ 489 1.99 % $ 98,922 $ 475 1.92 %
Loans held for sale 20,528 197 3.84 % 88,799 774 3.49 %
Loans(1) 667,146 8,176 4.90 % 601,240 7,925 5.27 %
Interest-bearing balances and federal funds sold   48,473       31   0.26 %   24,826       17   0.27 %
Total interest earning assets 834,236 8,893 4.26 % 813,787 9,191 4.52 %
Noninterest earning assets:
Cash and due from banks 7,546 16,877
Premises, land and equipment 8,447 8,503
Other assets 12,023 17,124
Less: allowance for loan losses   (13,111 )   (12,117 )
Total noninterest earning assets   14,905     30,387  
Total Assets $ 849,141   $ 844,174  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 81,509 $ 43 0.21 % $ 82,543 $ 45 0.22 %
Money market deposit accounts 121,496 61 0.20 % 110,919 99 0.36 %
Savings accounts 2,647 2 0.30 % 2,512 1 0.16 %
Time deposits   202,613       614   1.21 %   311,471       872   1.12 %
Total interest-bearing deposits 408,265 720 0.71 % 507,445 1,017 0.80 %
Borrowings:
FHLB Advances 99,130 55 0.22 % 20,429 26 0.51 %
Securities sold under agreements to repurchase and federal funds purchased 25,145 6 0.10 % 26,825 10 0.15 %
FHLB Long-term borrowings - - 0.00 % 1,128 112 39.72 %
Subordinated Debentures   -       -   0.00 %   6,186       54   3.49 %
Total borrowings   124,275       61   0.20 %   54,568       202   1.48 %
Total interest-bearing deposits and borrowings 532,540 781 0.59 % 562,013 1,219 0.87 %
Noninterest-bearing liabilities:
Demand deposits 209,204 175,335
Other liabilities   11,634     13,356  
Total liabilities 753,378 750,704
Shareholders' Equity   95,763     93,470  
Total Liabilities and Shareholders' Equity: $ 849,141   $ 844,174  
 
Interest Spread(2) 3.68 % 3.65 %
 
Net Interest Margin(3) $ 8,112   3.89 % $ 7,972   3.92 %
                         
(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, 2013   December 31, 2012
Average

Income/

Yield/

Average

Income/

Yield/

(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 98,501 $ 1,928 1.96 % $ 105,378 $ 2,266 2.15 %
Loans held for sale 42,667 1,505 3.53 % 78,543 2,953 3.76 %
Loans(1) 648,744 32,336 4.98 % 583,724 31,418 5.38 %
Interest-bearing balances and federal funds sold   46,217       107   0.23 %   33,272       79   0.24 %
Total interest-earning assets 836,129 35,876 4.29 % 800,917 36,716 4.58 %
Noninterest-earning assets:
Cash and due from banks 9,852 11,848
Premises, land and equipment 8,480 8,548
Other assets 13,035 16,914
Less: allowance for loan losses   (12,924 )   (11,994 )
Total noninterest-earning assets   18,443     25,316  
Total Assets $ 854,572   $ 826,233  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 75,706 $ 148 0.20 % $ 63,203 $ 171 0.27 %
Money market deposit accounts 120,307 282 0.23 % 119,621 484 0.40 %
Savings accounts 2,483 5 0.20 % 2,587 4 0.15 %
Time deposits   287,364       3,051   1.06 %   340,935       3,870   1.14 %
Total interest-bearing deposits 485,860 3,486 0.72 % 526,346 4,529 0.86 %
Borrowings:
FHLB Advances 43,077 97 0.23 % 11,141 65 0.58 %
Securities sold under agreements to repurchase and federal funds purchased 25,524 26 0.10 % 26,744 38 0.14 %
FHLB Long-term borrowings - - 0.00 % 3,015 212 7.03 %
FDIC Term Note - - 0.00 % 3,607 98 2.72 %
Subordinated Debentures   3,135       103   3.29 %   6,186       223   3.60 %
Total borrowings   71,736       226   0.32 %   50,693       636   1.25 %
Total interest-bearing deposits and borrowings 557,596 3,712 0.67 % 577,039 5,165 0.90 %
Noninterest-bearing liabilities:
Demand deposits 192,671 146,347
Other liabilities   9,953     12,800  
Total liabilities 760,220 736,186
Shareholders' Equity   94,352     90,047  
Total Liabilities and Shareholders' Equity: $ 854,572   $ 826,233  
 
Interest Spread(2) 3.63 % 3.69 %
 
Net Interest Margin(3) $ 32,164   3.85 % $ 31,551   3.94 %
                         
 
(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