Access National Corporation (NASDAQ: ANCX), holding company for Access National Bank, reported third quarter net income of $2.4 million compared to $2.2 million recorded in the third quarter of 2009. This represents the company’s 41 st consecutive quarterly profit. Earnings per diluted share were $0.23 for the quarter ended September 30, 2010, compared to $0.21 per diluted share in the third quarter of 2009. Net income for the nine months ended September 30, 2010 totaled $5.3 million or $0.50 per diluted share, compared to net income of $7.6 million or $0.73 per diluted share for the first nine months of 2009. The decrease in earnings is primarily due to a 68.3% decrease in net income from mortgage banking activities that was partially offset by a 136.0% increase in net income from the banking segment.

Loans held for investment totaled $478.3 million at September 30, 2010 compared to $486.6 million at December 31, 2009 as economic conditions continue to impact loan demand. The Bank was recognized as the #1 ranked small business lender by dollar volume among all banks in the Washington Metropolitan Area District, according to the United States Small Business Administration (SBA) for the government fiscal year ended Sept. 30, 2010. In 2009, the bank was the #1 SBA lender among community banks in the district, which includes Northern Virginia and suburban Maryland. The outlook for SBA Loans got brighter when the Small Business Jobs Act was signed into law September 27, 2010. Among other things, the Act provides for larger SBA loans of up to $5 million from $2 million and relaxed the definition of small business to include the lower middle market business segment that is so dominant in the bank’s market area.

Investment securities have increased $104.9 million subsequent to December 31, 2009 as a result of deposit growth and low loan demand. All of the securities purchased this year were government agencies.

Total deposits have grown by $140.3 million from $466.6 million at December 31, 2009 to $606.9 million at September 30, 2010. Noninterest-bearing deposit balances increased 25.3% or $17.7 million during the nine month period as the bank continues to grow its portfolio of local operating businesses with core operating accounts.

Income before taxes for the nine months ended September 30, 2010 from the banking segment totaled $6.5 million, up from $3.0 million for the same period in 2009. Income before taxes from the mortgage segment decreased $7.3 million from $10.6 million for the nine months ended September 30, 2009 to $3.3 million for the same period in 2010.

Return on average assets for the first nine months of 2010 annualized was 0.95% compared to 1.39% for the same period in 2009. Return on average equity annualized was 10.12% for the first nine months of 2010 compared to 15.92% in the prior year. Book value per common share was $6.95 at September 30, 2010, an increase of 10.5% compared to $6.29 at September 30, 2009.

Assets totaled $804.8 million at September 30, 2010 compared to $695.2 million at September 30, 2009. The increase in total assets is due to the increase in deposits.

Non-performing assets (NPAs) totaled approximately $10.2 million or 1.27% of assets at September 30, 2010 down from $12.1 million or 1.53% of assets at June 30, 2010. NPAs are comprised of non-accrual loans totaling $7.0 million and other real estate owned of $3.2 million. The allowance for loan losses totaled 2.07% of total loans held for investment as of September 30, 2010 compared to 2.03% for the second quarter of 2010 and coverage of the allowance to NPAs increased to 95.06% from 77.35% at June 30, 2010.

Access National Corporation and its subsidiary bank continue to exceed standards of being “Well Capitalized” as defined under banking regulations. The ratio of total equity to total assets at September 30, 2010 was 9.03% compared to 9.49% at September 30, 2009.

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, December 31, September 30,
(In Thousands)     2010     2009     2009
ASSETS
 
Cash and due from banks $ 13,012 $ 5,965 $ 8,719
 
Interest-bearing balances and federal funds sold 19,493 25,256 47,166
 
Securities available for sale - at fair value 152,775 47,838 73,474
 
Loans held for sale - at fair value 123,048 76,232 60,400
 
Loans held for investment

net of allowance for loan losses of $9,722, $9,127 and $8,179, respectively
468,605 477,437 480,897
 
Premises, equipment and land 8,552 8,759 8,843
 
Other assets 19,353 25,392 15,704
           
Total assets $ 804,838 $ 666,879 $ 695,203
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 87,446 $ 69,782 $ 84,296
 
Savings and interest bearing deposits 160,897 138,988 128,556
 
Time deposits   358,614   257,875   299,891
 
Total deposits 606,957 466,645 512,743
 
Short-term borrowings 69,815 64,249 55,685
 
Long-term borrowings 37,587 46,330 47,300
 
Subordinated debentures 6,186 6,186 6,186
 
Other liabilities and accrued expenses 11,638 15,691 7,320
           
Total Liabilities   732,183   599,101   629,234
 
SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,459,826, 10,537,428, and 10,483,007 shares, respectively
8,734 8,799 8,753
 
Surplus 18,207 18,552 18,301
 
Retained earnings 45,391 40,377 38,436
 
Accumulated other comprehensive income 323 50 479
           
Total shareholders' equity   72,655   67,778   65,969
           
Total liabilities and shareholders' equity $ 804,838 $ 666,879 $ 695,203
                         
 
 
Access National Corporation
Consolidated Statement of Operations
                             
    Three Months Ended     Nine Months Ended
September 30, September 30,     September 30,
(In Thousands Except for Share Data)     2010     2010     2009
INTEREST INCOME
Interest and fees on loans $ 8,190 $ 24,039 $ 25,918
 
Interest on federal funds sold and bank balances 58 172 112
 
Interest on securities   583     1,537     2,553
Total interest income 8,831 25,748 28,583
 
INTEREST EXPENSE
Interest on deposits 1,888 5,905 8,287
 
Interest on other borrowings   584     1,912     2,603
Total interest expense   2,472     7,817     10,890
Net interest income 6,359 17,931 17,693
 
Provision for loan losses   575     1,321     4,816
Net interest income after provision for loan losses 5,784 16,610 12,877
 
NONINTEREST INCOME
Service charges and fees 164 490 401
 
Gain on sale of loans 10,457 24,095 38,267
 
Other Income   (211 )   (875 )   5,467
Total noninterest income 10,410 23,710 44,135
 
NONINTEREST EXPENSE
Salaries and benefits 5,979 16,595 21,444
 
Occupancy and equipment 613 1,943 1,895
 
Other operating expense   5,677     13,276     21,123
Total noninterest expense   12,269     31,814     44,462
Income before income tax 3,925 8,506 12,550
 
Income tax expense   1,489     3,176     4,962
NET INCOME $ 2,436   $ 5,330   $ 7,588
 
Earnings per common share:
Basic $ 0.23   $ 0.51   $ 0.73
Diluted $ 0.23   $ 0.50   $ 0.73
 
Average outstanding shares:
Basic 10,474,543 10,539,924 10,354,897
Diluted 10,495,734 10,559,122 10,400,753
                             
 
 
Performance and Capital Ratios
                                         
  Three Months   Three Months   Three Months   Nine Months   Nine Months
Ended Ended Ended Ended Ended
September 30, June 30, March 31,

September 30,
September 30,
(Dollars in Thousands)   2010   2010   2010   2010   2009
 
Return on average assets (annualized) 1.21 % 0.84 % 0.74 % 0.95 % 1.39 %
Return on average equity (annualized) 13.87 % 9.24 % 7.01 % 10.12 % 15.92 %
Net interest margin 3.36 % 3.16 % 3.58 % 3.35 % 3.37 %
Efficiency ratio - Bank only 58.64 % 53.39 % 71.71 % 60.73 % 59.55 %
Total equity to assets 9.03 % 8.91 % 10.86 % 9.03 % 9.49 %
 
Banking segment - income before taxes $ 2,428 $ 2,586 $ 1,461 $ 6,475 $ 2,978
Mortgage segment - income before taxes $ 1,939 $ 575 $ 778 $ 3,292 $ 10,576
Other segments - income before taxes $ (442 ) $ (487 ) $ (332 ) $ (1,261 ) $ 756
Mortgage loan originations $ 231,804 $ 180,365 $ 148,941 $ 561,110 $ 1,237,382
Allowance for losses on mortgage loans sold   $ 4,488     $ 3,630     $ 3,768     $ 4,488     $ 1,779  
 
Asset Quality Trend Profile
                                         
  Nine Months   Six Months   Three Months   Twelve Months   Twelve Months
Ended Ended Ended Ended Ended
September 30, June 30, March 31, December 31, December 31,
(Dollars in Thousands)   2010   2010   2010   2009   2008
 
Total assets $ 804,838 $ 790,570 $ 637,381 $ 666,879 $ 702,324
Total loans held for investment $ 478,327 $ 468,883 $ 469,728 $ 486,564 $ 485,929
 
Allowance for loan losses - beginning balance $ 9,127 $ 9,127 $ 9,127 $ 7,462 $ 7,462
Charge offs (1,231 ) (974 ) (392 ) (5,310 ) (5,560 )
Recoveries   505     449     324     911     137  
Net charge offs (726 ) (525 ) (68 ) (4,399 ) (5,423 )
Provision for loan losses   1,321     746     198     6,064     5,423  
Allowance for loan losses - ending balance $ 9,722   $ 9,348   $ 9,257   $ 9,127   $ 7,462  
 
Allowance for loan losses/loans held for investment 2.03 % 1.99 % 1.97 % 1.88 % 1.53 %
 
Delinquent 30 - 90 days $ 840 $ 358 $ 845 $ 1,267 $ 6,459
Percentage of loans delinquent 0.18 % 0.08 % 0.18 % 0.26 % 1.33 %
 
Non-accrual loans $ 6,952 $ 6,752 $ 9,447 $ 7,032 $ 2,875
OREO $ 3,276 $ 5,334 $ 4,073 $ 5,111 $ 4,455
Total NPA $ 10,228 $ 12,086 $ 13,520 $ 12,143 $ 7,330
NPA to total assets 1.27 % 1.53 % 2.12 % 1.82 % 1.04 %
 
Allowance for loan losses/NPA 95.06 % 77.35 % 68.47 % 75.16 % 101.80 %
REO expense $ 1,324 $ 676 $ 459 $ 1,497 $ 22
                                         
 
 
Composition of Loan Portfolio
                                     
    September 30, 2010   December 31, 2009   September 30, 2009
    Percentage     Percentage     Percentage
(Dollars in Thousands)   Amount   of Total   Amount   of Total   Amount   of Total
 
Commercial $ 78,556 16.42 % $ 72,628 14.93 % $ 69,997 14.31 %
Commercial real estate 223,574 46.74 220,301 45.28 222,229 45.44
Real estate construction 37,066 7.75 41,508 8.53 45,310 9.27
Residential real estate 137,745 28.80 150,792 30.99 150,204 30.71
Consumer and other   1,386   0.29     1,335   0.27     1,337   0.27  
Total loans $ 478,327 100.00 % $ 486,564 100.00 % $ 489,077 100.00 %
Less allowance for loan losses   9,722   9,127   8,179
$ 468,605 $ 477,437 $ 480,898
                                     
 
Access National Corporation
Summary of Non-Performing Assets
       
(In Thousands)   September 30, 2010

Non-Performing Loans
 
CRE - Owner occupied Industrial Building Chantilly VA, Bankruptcy $ 3,061
CRE - Church Suburban MD Bankruptcy, Listed for sale 686
CRE - Industrial land - Washington D.C. Leases pending 374
SFR - Construction Leesburg VA, Foreclosure Action Pending 1,489
SFR - 2 Suburban MD, Listed for sale 961
C&I - 2 Loans to operating businesses in Northern VA 77
SFR - No.Va.   304
Total Non-Performing Loans $ 6,952
 

Real Estate Owned
CRE - Office building Baltimore MD, Listed for sale $ 1,890
CRE - 2 Office Condos No.Va. 427
SFR - Northern VA - Bankruptcy   959
Total Real Estate Owned $ 3,276
   

Total Non-Performing Assets
$ 10,228
       
 
 
Composition of Deposits
                                     
    September 30, 2010   December 31, 2009   September 30, 2009
    Percentage     Percentage     Percentage
(Dollars In Thousands)   Amount   of Total   Amount   of Total   Amount   of Total
 
Demand deposits $ 87,446 14.41 % $ 69,782 14.95 % $ 84,296 16.44 %
Interest-bearing demand deposits 26,021 4.29 25,918 5.56 28,735 5.60
Savings and money market 109,816 18.09 103,070 22.09 99,822 19.47
CDARS-reciprocal time deposits 208,670 34.38 41,550 8.90 56,180 10.96
Brokered deposits 59,795 9.85 129,660 27.79 127,691 24.90
Time deposits   115,209   18.98     96,665   20.71     116,019   22.63  
Total Deposits $ 606,957   100.00 % $ 466,645   100.00 % $ 512,743   100.00 %
                                     
 
 
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
                                                             
    September 30, 2010   June 30, 2010   September 30, 2009
  Average   Income /   Yield /   Average   Income /   Yield /   Average   Income /   Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest earning assets:
Securities $ 127,467 $ 583 1.83 % $ 113,784 $ 604 2.12 % $ 70,320 $ 712 4.05 %
Loans held for sale 70,913 840 4.74 % 44,984 572 5.09 % 52,967 718 5.42 %
Loans (1) 471,308 7,350 6.24 % 469,122 7,405 6.31 % 497,969 7,752 6.23 %
Interest-bearing balances and federal funds sold   88,014       58   0.26 %   128,864       77   0.24 %   61,301       34   0.22 %
Total interest earning assets 757,702 8,831 4.66 % 756,754 8,658 4.58 % 682,557 9,216 5.40 %
Noninterest earning assets:
Cash and due from banks 12,516 8,885 6,708
Premises, land and equipment 8,609 8,674 12,862
Other assets 33,155 32,781 14,802
Less: allowance for loan losses   (9,625 )   (9,056 )   (8,250 )
Total noninterest earning assets   44,655     41,284     26,122  
Total Assets $ 802,357   $ 798,038   $ 708,679  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 34,217 $ 47 0.55 % $ 37,501 $ 60 0.64 % $ 35,376 $ 100 1.13 %
Money market deposit accounts 133,866 319 0.95 % 132,409 391 1.18 % 100,023 377 1.51 %
Savings accounts 3,862 9 0.93 % 3,942 9 0.91 % 4,408 16 1.45 %
Time deposits   356,644       1,513   1.70 %   357,590       1,589   1.78 %   302,287       1,976   2.61 %
Total interest-bearing deposits 528,589 1,888 1.43 % 531,442 2,049 1.54 % 442,094 2,469 2.23 %
Borrowings:
FHLB Advances 8,202 71 3.46 % 11,662 111 3.81 % 22,535 253 4.49 %
Securities sold under agreements to repurchase and federal funds purchased 28,376 23 0.32 % 25,307 30 0.47 % 22,193 25 0.45 %
Other short-term borrowings 26,451 61 0.92 % 22,703 54 0.95 % 13,697 32 0.93 %
FHLB Long-term borrowings 8,127 73 3.59 % 8,681 77 3.55 % 20,210 170 3.36 %
FDIC Term Note 29,998 300 4.00 % 29,997 297 3.96 % 29,996 299 3.99 %
Subordinated Debentures   6,186       57   3.69 %   6,186       53   3.43 %   6,186       57   3.69 %
Total borrowings   107,340       585   2.18 %   104,536       622   2.38 %   114,817       836   2.91 %
Total interest-bearing deposits and borrowings 635,929 2,473 1.56 % 635,978 2,671 1.68 % 556,911 3,305 2.37 %
Noninterest-bearing liabilities:
Demand deposits 74,870 73,409 74,878
Other liabilities   21,286     18,539     11,208  
Total liabilities 732,085 727,926 642,997
Shareholders' Equity   70,272     70,112     65,682  
Total Liabilities and Shareholders' Equity: $ 802,357   $ 798,038   $ 708,679  
 
Interest Spread (2) 3.11 % 2.90 % 3.03 %
 
Net Interest Margin (3) $ 6,358   3.36 % $ 5,987   3.16 % $ 5,911   3.46 %
                                                             
 

(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, 2010   September 30, 2009
  Average   Income /   Yield /   Average   Income /   Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 98,381 $ 1,537 2.08 % $ 73,491 $ 2,553 4.63 %
Loans held for sale 49,144 1,801 4.89 % 68,906 2,648 5.12 %
Loans (1) 472,361 22,238 6.28 % 491,375 23,270 6.31 %
Interest-bearing balances and federal funds sold   93,323       172   0.25 %   65,613       112   0.23 %
Total interest-earning assets 713,209 25,748 4.81 % 699,385 28,583 5.45 %
Noninterest-earning assets:
Cash and due from banks 9,652 6,345
Premises, land and equipment 8,671 9,050
Other assets 28,788 18,676
Less: allowance for loan losses   (9,352 )   (7,919 )
Total noninterest-earning assets   37,759     26,152  
Total Assets $ 750,968   $ 725,537  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 31,774 $ 150 0.63 % $ 27,242 $ 223 1.09 %
Money market deposit accounts 132,034 1,103 1.11 % 87,254 1,011 1.54 %
Savings accounts 3,979 28 0.94 % 4,456 48 1.44 %
Time deposits   319,664       4,624   1.93 %   330,293       7,005   2.83 %
Total interest-bearing deposits 487,451 5,905 1.62 % 449,245 8,287 2.46 %
Borrowings:
FHLB Advances 12,489 384 4.10 % 24,144 740 4.09 %
Securities sold under agreements to repurchase and federal funds purchased 26,028 81 0.41 % 24,363 91 0.50 %
Other short-term borrowings 21,449 150 0.93 % 17,848 127 0.95 %
FHLB Long-term borrowings 9,801 244 3.32 % 26,300 692 3.51 %
FDIC Term Note 29,997 892 3.96 % 25,491 768 4.02 %
Subordinated Debentures   6,186       162   3.49 %   6,186       185   3.99 %
Total borrowings   105,950       1,913   2.41 %   124,332       2,603   2.79 %
Total interest-bearing deposits and borrowings 593,401 7,818 1.76 % 573,577 10,890 2.53 %
Noninterest-bearing liabilities:
Demand deposits 71,507 78,535
Other liabilities   15,820     9,866  
Total liabilities 87,327 661,978
Shareholders' Equity   70,240     63,559  
Total Liabilities and Shareholders' Equity: $ 750,968   $ 725,537  
 
Interest Spread (2) 3.06 % 2.92 %
 
Net Interest Margin (3) $ 17,930   3.35 % $ 17,693   3.37 %
                                         
 

(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.
 

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