Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported fourth quarter net income of $2.2 million, a 10% increase over the $2.0 million recorded in the fourth quarter of 2009. This represents the company’s 42 nd consecutive quarterly profit.

The Board of Directors also declared a cash dividend of $0.02 per share for shareholders of record as of February 10, 2011, representing a 100% increase over per share dividends paid in recent periods. The dividend will be paid on February 25, 2011.

Effective today, January 26, 2011, the Board of Directors elected Director James L. (Ted) Jadlos as Chairman, taking the place of the Lead Independent Director and Chairman positions occupied by John W. (Skip) Edgemond and Michael W. Clarke, respectively. Messrs. Edgemond and Clarke remain Directors and Mr. Clarke remains Chief Executive Officer. Mr. Jadlos agreed to expand his outside Director role in light of time availability following the sale of his own business, his increased ownership position, and interest in cultivating and shaping strategic opportunities that serve shareholder value. Mr. Jadlos has served as a Director of the Corporation since it was formed in 2002 and has served as a Director of Access National Bank since 2000.

Return on average assets was 1.08% for the fourth quarter and 0.98% for the year. Return on average equity was 12.60% for the fourth quarter and 10.85% for the year. Book value per common share was $6.96 at December 31, 2010, compared to $6.43 at December 31, 2009, an 8.2% year over year increase.

Earnings per diluted share were $0.22 for the quarter ended December 31, 2010, compared to $0.19 per diluted share in the fourth quarter of 2009. Net income for the year ended December 31, 2010 totaled $7.6 million or $0.72 per diluted share, compared to net income of $9.6 million or $0.92 per diluted share for the year ended December 31, 2009. The decrease in earnings is primarily due to a decrease in income generated from the mortgage banking segment as a result of a 42% decline in year over year origination volume. Net income from the banking segment totaled approximately $5.5 million, up 96% from the prior year.

Assets totaled $831.8 million at December 31, 2010 compared to $666.9, an increase of $164.9 million or 24.7% composed primarily of increases in cash and investment securities.

The company was successful in deploying its loan portfolio strategies in 2010. Access National Bank dominated regional volumes reported for SBA Guaranteed loans. In the quarter ended December 31, 2010, the Small Business Administration (SBA) reported regional loan volume of $24 million for Access National Bank, compared to just $4 million of volume for the second largest bank lender. For the calendar year 2010, SBA reported volume of $35 million for the company compared to $11 million for the second highest volume bank lender. The SBA activity was an important component of a larger focus on expanding core business relationships, upgrading credit and relationship profiles of new accounts and exiting targeted borrowers and loan types. Success in execution is further evidenced by a 30% year over year increase in commercial and industrial loans and a 20% increase in business demand deposit balances Overall, loans held for investment totaled $491.5 million at December 31, 2010 compared to $486.6 million at December 31, 2009. Loans held for sale totaled $82.2 million at December 31, 2010, up $6.0 million from the prior year.

Investment securities totaled $128.7 million at December 31, 2010 compared to $47.8 million at December 31, 2009. The growth in the investment portfolio is attributable to deposit growth and moderate net loan growth. All of the securities purchased in 2010 were government agencies.

Deposits totaled $627.8 million at December 31, 2010 compared to $466.6 million at December 31, 2009. Non-interest-bearing deposit balances totaled approximately $84.0 million compared to $69.8 million at December 31, 2009, a 20% increase.

Non-performing assets (NPAs, including Troubled Debt Restructurings or TDRs) totaled approximately $10.4 million or 1.25% of assets at December 31, 2010, down from $12.1 million or 1.82% of assets at December 31, 2009. NPAs are comprised of non-accrual loans totaling $8.5 million and other real estate owned of $1.9 million. The allowance for loan losses totaled $10.5 million or 2.14% of total loans held for investment as of December 31, 2010, compared to $9.1 million or 1.9% at December 31, 2009.

During the fourth quarter, Access National Mortgage reached settlement arrangements with its two largest mortgage investors wherein payments of $3.75 million were made to release the company from known and unknown repurchase obligations associated with approximately $3 billion of mortgage loans. Loans covered under the agreements included a disproportionate share of the non-prime and wholesale channel loans sold by the company during the applicable period that pose, in the company’s estimation and experience, the greatest repurchase potential. The wholesale and non-prime loan programs were terminated by the company in 2007. After removal of loans covered under the referenced settlement agreements and accounting for repayments, the company estimates approximately $2.9 billion of loans sold with remaining balances outstanding for which there may be potential liability: $1.9 billion in government insured loans, $826 million in prime loans and less than $200 million in non-prime loans.

With respect to ongoing repurchase liability, the company’s loss experience in order of magnitude has been greatest to lowest in non-prime loans, prime loans and government loans, respectively. The company has undertaken an extensive analysis of historical run-off rates, claim rates and loss rates given validated claims, in order to formulate a methodology for evaluating loss potential of claims.

The $3.75 million settlement was paid from the existing allowance for loan losses on mortgage loans sold. The company estimates that its remaining reserve of $2 million is adequate for all current and future exposure on previous period loan sales that are not covered under the referenced agreements. The company continues to apply a loss reserve methodology to current production that results in a provision expense in each period. Since adoption of representation and warranty loss reserve accounting in 2006, the reserve has proven adequate in each period to absorb all validated claims. Following this activity, the mortgage segment contributed net income before tax of $1.7 million or 47% of consolidated earnings for the three months ended December 31, 2010.

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,
(In Thousands)   2010   2009
ASSETS
 
Cash and due from banks $ 9,198 $ 5,965
 
Interest-bearing balances and federal funds sold 102,709 25,256
 
Securities available for sale - at fair value 128,745 47,838
 
Loans held for sale - at fair value 82,244 76,232
 
Loans held for investment
net of allowance for loan losses of $10,527 and $9,127,
respectively 481,002 477,437
 
Premises, equipment and land 8,934 8,759
 
Other assets 18,992 25,392
   
Total assets $ 831,824   $ 666,879
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 83,972 $ 69,782
 
Savings and interest-bearing deposits 158,352 138,988
 
Time deposits   385,524     257,875
 
Total deposits 627,848 466,645
 
Short-term borrowings 80,348 64,249
 
Long-term borrowings 37,034 46,330
 
Subordinated debentures 6,186 6,186
 
Other liabilities and accrued expenses 8,215 15,691
   
Total Liabilities   759,631     599,101
 
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized;
issued and outstanding, 10,376,169,
and 10,537,428 shares, respectively 8,664 8,799
 
Surplus 17,794 18,552
 
Retained earnings 47,530 40,377
 
Accumulated other comprehensive income (1,795 ) 50
   
Total shareholders' equity   72,193     67,778
   
Total liabilities and shareholders' equity $ 831,824   $ 666,879
                 
 
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)   2010   2010   2009
INTEREST INCOME
Interest and fees on loans $ 8,652 $ 32,691 $ 34,334
 
Interest on federal funds sold and bank balances 38 210 154
 
Interest on securities   705   2,242   3,038
Total interest income 9,395 35,143 37,526
 
INTEREST EXPENSE
Interest on deposits 1,728 7,633 10,568
 
Interest on other borrowings   569   2,481   3,400
Total interest expense   2,297   10,114   13,968
Net interest income 7,098 25,029 23,558
 
Provision for loan losses   1,495   2,816   6,064
Net interest income after provision for loan losses 5,603 22,213 17,494
 
NONINTEREST INCOME
Service charges and fees 176 666 536
 
Gain on sale of loans 8,406 32,501 49,262
 
Other Income   2,368   1,493   7,168
Total noninterest income 10,950 34,660 56,966
 
NONINTEREST EXPENSE
Salaries and benefits 5,452 22,047 28,122
 
Occupancy and equipment 663 2,606 2,497
 
Other operating expense   6,842   20,118   28,352
Total noninterest expense   12,957   44,771   58,971
Income before income tax 3,596 12,102 15,489
 
Income tax expense   1,350   4,526   5,854
NET INCOME $ 2,246 $ 7,576 $ 9,635
 
Earnings per common share:
Basic $ 0.22 $ 0.72 $ 0.93
Diluted $ 0.22 $ 0.72 $ 0.92
 
Average outstanding shares:
Basic 10,393,762 10,503,383 10,391,348
Diluted 10,423,668 10,525,258 10,432,857
                         
           
Performance and Capital Ratios
                             
Three Months Three Months Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended Ended Ended
December 31, September 30, June 30, March 31,

December 31,
December 31,
(Dollars In Thousands)   2010   2010   2010   2010   2010   2009
 
Return on average assets (annualized) 1.08 % 1.21 % 0.84 % 0.74 % 0.98 % 1.35 %
Return on average equity (annualized) 12.60 % 13.87 % 9.24 % 7.01 % 10.85 % 15.24 %
Net interest margin 3.57 % 3.36 % 3.16 % 3.58 % 3.41 % 3.42 %
Efficiency ratio - Bank only 54.98 % 58.64 % 53.39 % 71.71 % 59.02 % 60.41 %
Total equity to assets 8.68 % 9.03 % 8.91 % 10.86 % 8.68 % 10.16 %
 
Averages
Assets 834,973 802,357 798,037 654,622 772,600 714,970
Loans held for investment 485,710 471,308 469,122 476,713 475,726 490,393
Loans held for sale 107,474 70,913 44,984 31,528 63,868 65,780

Interest bearing deposits & federal funds sold
66,377 88,014 128,864 62,813 86,531 64,128
Investment securities 135,468 127,913 114,061 53,193 107,940 69,758
Earning assets 794,855 757,702 756,754 624,128 733,810 689,153
Interest bearing deposits 529,413 528,590 531,442 400,918 498,028 441,199
Total deposits 611,255 603,460 604,851 468,208 572,138 519,477
Repurchase agreements & federal funds sold 38,620 28,376 25,307 24,356 29,202 23,460
Commercial paper & other short term borrowings 50,402 34,653 34,365 32,775 38,088 41,316
Long-term borrowings 43,757 44,311 44,864 48,828 45,423 56,839
Equity 71,333 70,272 70,112 69,386 69,827 64,054
 
Banking segment - income before taxes $ 2,285 $ 2,428 $ 2,586 $ 1,461 $ 8,760 $ 4,225
Mortgage segment - income before taxes $ 1,691 $ 1,939 $ 575 $ 778 $ 4,983 $ 12,579
Other segments - income before taxes $ (380 ) $ (442 ) $ (487 ) $ (332 ) $ (1,641 ) $ (1,315 )
Mortgage loan originations (excludes brokered loans) $ 263,629 $ 231,804 $ 180,365 $ 148,941 $ 824,738 $ 1,517,397
Allowance for losses on mortgage loans sold $ 1,991 $ 4,488 $ 3,630 $ 3,768 $ 1,991 $ 3,332
                                                 
         
Asset Quality Trend Profile
                     
Twelve Months Nine Months Six Months Three Months Twelve Months
Ended Ended Ended Ended Ended
(Dollars In Thousands)  

December 31, 2010
 

September 30, 2010
 

June 30, 2010
 

March 31, 2010
 

December 31, 2009
 
Total assets $ 831,824 $ 804,838 $ 790,570 $ 637,381 $ 666,879
Total loans held for investment $ 491,529 $ 478,327 $ 468,883 $ 469,728 $ 486,564
 
Allowance for loan losses - beginning balance $ 9,127 $ 9,127 $ 9,127 $ 9,127 $ 7,462
Charge offs (2,048 ) (1,231 ) (974 ) (393 ) (5,310 )
Recoveries   632       505       449       324       911  
Net charge offs (1,416 ) (726 ) (525 ) (69 ) (4,399 )
Provision for loan losses   2,816       1,321       746       198       6,064  
Allowance for loan losses - ending balance $ 10,527     $ 9,722     $ 9,348     $ 9,256     $ 9,127  
 
Allowance for loan losses/loans held for investment 2.14 % 2.03 % 1.99 % 1.97 % 1.88 %
 
Delinquent 30 - 90 days $ 2,771 $ 840 $ 358 $ 845 $ 1,267
Percentage of loans delinquent 0.56 % 0.18 % 0.08 % 0.18 % 0.26 %
 
Non-accrual loans $ 8,561 $ 6,952 $ 6,752 $ 9,447 $ 7,032
OREO $ 1,859 $ 3,276 $ 5,334 $ 4,073 $ 5,111
Total NPA $ 10,420 $ 10,228 $ 12,086 $ 13,520 $ 12,143
NPA to total assets 1.25 % 1.27 % 1.53 % 2.12 % 1.82 %
Allowance for loan losses/NPA 101.03 % 95.06 % 77.35 % 68.47 % 75.16 %
 
OREO Expense $ 2,335 $ 1,324 $ 676 $ 459 $ 1,497
Gain on sale of OREO $ 1,253     $ 349     $ -     $ (98 )   $ -  
OREO expense net $ 1,082     $ 975     $ 676     $ 557     $ 1,497  
 
Allowance for losses on mortgage loans sold $ 1,991 $ 4,488 $ 3,630 $ 3,768 $ 3,332
Provision for losses on mortgage loans sold $ 3,836 $ 2,400 $ 1,100 $ 500 $ 5,050
                                         
       
Composition of Loan Portfolio
                   
    December 31, 2010  

December 31, 2009
(Dollars In Thousands)   Amount  

Percentage of Total
  Amount  

Percentage of Total
 
Commercial $ 94,765 19.28% $ 72,628 14.93%
Commercial real estate 218,013 44.35 220,301 45.28
Real estate construction 38,093 7.75 41,508 8.53
Residential real estate 137,771 28.03 150,792 30.99
Consumer and other 2,887   0.59 1,335   0.27
Total loans $ 491,529 100.00% $ 486,564 100.00%
Less allowance for loan losses 10,527 9,127
$ 481,002 $ 477,437
                   
 
Composition of Deposits
                 
    December 31, 2010   December 31, 2009
(Dollars In Thousands)   Amount  

Percentage of Total
  Amount  

Percentage of Total
     
Demand deposits $ 83,972 13.37 % $ 69,782 14.95 %
Interest-bearing demand deposits 24,548 3.91 25,918 5.56
Savings and money market 110,967 17.67 103,070 22.09
CDARS-reciprocal time deposits 234,221 37.31 41,550 8.90
Brokered deposits 56,356 8.98 129,660 27.79
Time deposits   117,784   18.76     96,665   20.71  
Total Deposits $ 627,848   100.00 % $ 466,645   100.00 %
                         
 
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended,
December 31, 2010
  December 31, 2010     December 31, 2009
Average   Income /   Yield / Average   Income /   Yield /
Balance   Expense   Rate Balance   Expense   Rate
(Dollars In Thousands)
Assets:
Interest earning assets:
Securities $ 135,294 $ 705 2.08 % $ 55,333 $ 485 3.51 %
Loans held for sale 107,474 1,181 4.40 % 55,760 712 5.11 %
Loans (1) 485,710 7,471 6.15 % 487,479 7,704 6.32 %
Interest-bearing balances and federal funds sold   66,377       38   0.23 %   59,475       42   0.28 %
Total interest earning assets 794,855 9,395 4.73 % 658,047 8,943 5.44 %
Noninterest earning assets:
Cash and due from banks 14,715 7,947
Premises, land and equipment 8,610 12,360
Other assets 26,673 16,023
Less: allowance for loan losses   (9,880 )   (8,500 )
Total noninterest earning assets   40,118     27,830  
Total Assets $ 834,973   $ 685,877  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 25,394 $ 34 0.54 % $ 27,169 $ 55 0.81 %
Money market deposit accounts 134,918 241 0.71 % 108,792 392 1.44 %
Savings accounts 3,820 3 0.31 % 4,511 12 1.06 %
Time deposits   365,281       1,450   1.59 %   276,849       1,822   2.63 %
Total interest-bearing deposits 529,413 1,728 1.31 % 417,321 2,281 2.19 %
Borrowings:
FHLB Advances 8,220 45 2.19 % 22,285 238 4.27 %
Securities sold under agreements to repurchase and federal funds purchased 38,620 24 0.25 % 20,780 24 0.46 %
Other short-term borrowings 42,182 79 0.75 % 17,023 42 0.99 %
FHLB Long-term borrowings 7,572 69 3.65 % 17,282 141 3.26 %
FDIC Term Note 29,998 299 3.99 % 29,996 299 3.99 %
Subordinated Debentures   6,186       53   3.43 %   6,186       53   3.43 %
Total borrowings   132,778       569   1.71 %   113,552       797   2.81 %
Total interest-bearing deposits and borrowings 662,191 2,297 1.39 % 530,873 3,078 2.32 %
Noninterest-bearing liabilities:
Demand deposits 81,842 79,085
Other liabilities   19,607     8,059  
Total liabilities 763,640 618,017
Shareholders' Equity   71,333     67,860  
Total Liabilities and Shareholders' Equity: $ 834,973   $ 685,877  
 
Interest Spread (2) 3.34 % 3.12 %
 
Net Interest Margin (3) $ 7,098   3.57 % $ 5,865   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, 2010
                         
    December 31, 2010   December 31, 2009
  Average   Income /   Yield /   Average   Income /   Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 107,685 $ 2,242 2.08 % $ 68,852 $ 3,038 4.41 %
Loans held for sale 63,868 2,982 4.67 % 65,780 3,361 5.11 %
Loans (1) 475,726 29,709 6.24 % 490,393 30,973 6.32 %
Interest-bearing balances and federal funds sold   86,531       210   0.24 %   64,128       154   0.24 %
Total interest-earning assets 733,810 35,143 4.79 % 689,153 37,526 5.45 %
Noninterest-earning assets:
Cash and due from banks 10,927 6,748
Premises, land and equipment 8,655 8,991
Other assets 28,693 18,143
Less: allowance for loan losses  

(9,485
)   (8,065 )
Total noninterest-earning assets   38,790     25,817  
Total Assets

$

772,600
 

$

714,970
 
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 30,166 $ 183 0.61 % $ 27,224 $ 278 1.02 %
Money market deposit accounts 132,761 1,345 1.01 % 92,682 1,403 1.51 %
Savings accounts 3,939 30 0.76 % 4,470 60 1.34 %
Time deposits   331,162       6,075   1.83 %   316,823       8,827   2.79 %
Total interest-bearing deposits 498,028 7,633 1.53 % 441,199 10,568 2.40 %
Borrowings:
FHLB Advances 11,413 429 3.76 % 23,676 979 4.13 %
Securities sold under agreements to repurchase and federal funds purchased 29,202 105 0.36 % 23,460 115 0.49 %
Other short-term borrowings 26,674 228 0.85 % 17,640 167 0.95 %
FHLB Long-term borrowings 9,239 312 3.38 % 24,026 833 3.47 %
FDIC Term Note 29,998 1,191 3.97 % 26,627 1,068 4.01 %
Subordinated Debentures   6,186       216   3.49 %   6,186       238   3.85 %
Total borrowings   112,712       2,481   2.20 %   121,615       3,400   2.80 %
Total interest-bearing deposits and borrowings 610,740 10,114 1.66 % 562,814 13,968 2.48 %
Noninterest-bearing liabilities:
Demand deposits 74,111 78,278
Other liabilities   17,922     9,824  
Total liabilities 92,033 650,916
Shareholders' Equity   69,827     64,054  
Total Liabilities and Shareholders' Equity:

$

772,600
 

$

714,970
 
 
Interest Spread (2) 3.13 % 2.97 %
 
Net Interest Margin (3) $ 25,029   3.41 % $ 23,558   3.42 %
 
 
(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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