Access National Reports 59% Increase In Q2 Earnings, Continues Dividend Increase

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported record second quarter net income of $2.7 million, a 59.2% increase over the $1.7 million recorded in the second quarter of 2010. This represents the company’s 44 th consecutive quarterly profit over its 12-year history. Net income per diluted common share was $0.26, an increase of 62.5% over the $0.16 reported in the second quarter of 2010. Net income increased primarily due to a decrease in interest expense, gains realized on the sale of other real estate owned and a decrease in the provision for loan losses.

Based upon the record earnings, strong capital and favorable outlook, the Board of Directors declared a cash dividend of $0.04 per share for shareholders of record as of August 4, 2011 and payable on August 25, 2011. This action represents the third consecutive quarter of a dividend increase.

Net income for the six months ended June 30, 2011 totaled approximately $5.0 million compared to $2.9 million for the same period in 2010. Diluted earnings per share were $0.48 compared to $0.27 in 2010.

Return on average assets was 1.51% for the second quarter of 2011 compared to 0.84% for the second quarter of 2010. Return on average equity was 14.08% for the quarter ended June 30, 2011 compared to 9.24% for the same period last year.

Commercial and Industrial Loan growth fueled an increase in Loans Held for Investment by $23.2 million (4.7%) during the second quarter and $29.1 million (5.9%) year to date. SBA Loan activity contributed to the loan growth as Access remained the dominant SBA Lender in the Washington Area during the period ended June 30, 2011. Meanwhile, total Assets decreased to $713.0 million at June 30, 2011 compared to $831.8 at December 31, 2010. The decrease in assets was primarily attributable to a reduction in investments and loans held for sale.

Commercial demand deposits increased 53.5% during the first 6-months to $129 million, or 25.4% of total Deposits at June 30, 2011. Interest bearing deposits decreased by $164.9 million primarily as a result of a decrease in non-core rate sensitive deposits. Overall, Deposits totaled $507.9 million at June 30, 2011 compared to $627.8 million at December 31, 2010.

Non-performing assets (NPA) decreased to $8.1 million or 1.1% of total assets down from $11.0 million or 1.53% of assets at March 31, 2011. NPA are comprised of non-accrual loans totaling $7.5 million and other real estate owned of $600 thousand. The allowance for loan losses totaled $11.1 million or 2.12% of total loans held for investment as of June 30, 2011.

Book Value per common share increased 12.5% at June 30, 2011 to $7.56, compared to $6.71 at June 30, 2010. The retention of earnings helped the ratio of total equity to total assets increase to 10.91% at June 30, 2011 compared to 8.6% at June 30, 2010. Access National Corporation and its subsidiary bank continue 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 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,
2011 2010 2010
(In Thousands)   (unaudited)       (unaudited)
 
ASSETS
 
Cash and due from banks $ 8,451 $ 9,198 $ 10,553
 
Interest-bearing balances and federal funds sold 14,202 102,709 75,567
 
Securities available for sale - at fair value 96,523 128,745 128,003
 
Loans held for sale - at fair value 56,519 82,244 66,156
 
Loans held for investment
net of allowance for loan losses of $11,057, $10,527
and $9,348, respectively 509,618 481,002 459,535
 
Premises, equipment and land 8,738 8,934 8,640
 
Other assets 18,965 18,992 42,116
     
Total assets $ 713,016   $ 831,824   $ 790,570
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 128,945 $ 83,972 $ 78,313
 
Savings and interest-bearing deposits 126,885 158,352 177,360
 
Time deposits   252,083     385,524     352,391
 
Total deposits 507,913 627,848 608,064
 
Short-term borrowings 107,457 80,348 57,588
 
Long-term borrowings 5,929 37,034 38,141
 
Subordinated debentures 6,186 6,186 6,186
 
Other liabilities and accrued expenses 7,712 8,215 10,138
     
Total Liabilities   635,197     759,631     720,117
 
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized;
issued and outstanding, 10,299,041, 10,376,169
and 10,497,271 shares, respectively 8,600 8,664 8,765
 
Surplus 17,419 17,794 18,364
 
Retained earnings 51,946 47,530 43,060
 
Accumulated other comprehensive income (146 ) (1,795 ) 264
     
Total shareholders' equity   77,819     72,193     70,453
     
Total liabilities and shareholders' equity $ 713,016   $ 831,824   $ 790,570
 

 
Access National Corporation
Consolidated Statement of Operations
           
Three Months Ended Six Months Ended
June 30, 2011 June 30, 2011   June 30, 2010
(In Thousands Except for Share Data)

 

(unaudited)
 
INTEREST INCOME
Interest and fees on loans $ 7,932 $ 15,814 $ 15,849
 
Interest on federal funds sold and bank balances

17
72 114
 
Interest on securities  

580
    1,213   954  
Total interest income

8,529
17,099 16,917
 
INTEREST EXPENSE
Interest on deposits

1,179
2,690 4,017
 
Interest on other borrowings  

503
    995   1,328  
Total interest expense  

1,682
    3,685   5,345  
Net interest income 6,847 13,414 11,572
 
Provision for loan losses   (2 )   221   746  
Net interest income after provision for loan losses 6,849 13,193 10,826
 
NONINTEREST INCOME
Service charges and fees 168 341 326
 
Gain on sale of loans 7,382 12,898 13,638
 
Other Income   550     700   (664 )
Total noninterest income 8,100 13,939 13,300
 
NONINTEREST EXPENSE
Salaries and benefits 5,877 11,270 10,616
 
Occupancy and equipment 678 1,343 1,330
 
Other operating expense   4,248     6,821   7,599  
Total noninterest expense   10,803     19,434   19,545  
Income before income tax 4,146 7,698 4,581
 
Income tax expense   1,475     2,740   1,687  
NET INCOME   2,671   $ 4,958 $ 2,894  
 
Earnings per common share:
Basic $ 0.26   $ 0.48 $ 0.28  
Diluted $ 0.26   $ 0.48 $ 0.27  
 
Average outstanding shares:
Basic 10,324,502 10,341,944 10,572,614
Diluted 10,391,451 10,398,064 10,590,816
 

Performance and Capital Ratios
                                         
  Three Months   Three Months   Six Months   Six Months   Three Months   Three Months   Three Months   Three Months   Twelve Months
Ended Ended Ended Ended Ended Ended Ended Ended Ended

June 30,

June 30,

June 30,

June 30,

March 31,

December 31,

September 30,

March 31,

December 31,
(Dollars In Thousands)   2011   2010   2011   2010   2011   2010   2010   2010   2010
 
Return on average assets (annualized) 1.51 % 0.84 % 1.35 % 0.80 % 1.20 % 1.08 % 1.21 % 0.74 % 0.98 %
Return on average equity (annualized) 14.08 % 9.24 % 13.31 % 8.26 % 12.53 % 12.60 % 13.87 % 7.01 % 10.85 %
Net interest margin 4.00 % 3.16 % 3.77 % 3.35 % 3.55 % 3.57 % 3.36 % 3.58 % 3.41 %
Efficiency ratio - Bank only 53.06 % 53.39 % 44.19 % 41.47 % 52.32 % 54.98 % 58.64 % 71.71 % 59.02 %
Total equity to assets 10.91 % 8.91 % 10.91 % 8.91 % 10.38 % 8.68 % 9.03 % 10.86 % 8.68 %
 
Averages
Assets 706,567 798,038 734,947 725,434 763,780 834,973 802,357 654,622 772,600
Loans held for investment 508,010 469,122 501,501 472,897 494,920 485,710 471,308 476,713 475,726
Loans held for sale 29,348 44,984 29,186 38,293 29,021 107,474 70,913 31,528 63,868
Interest-bearing deposits & federal funds sold 28,575 128,864 54,269 96,021 80,249 66,377 88,014 62,813 86,531
Investment securities 117,214 114,061 125,000 83,795 132,873 135,468 127,913 53,193 107,940
Earning assets 684,439 756,754 711,804 690,807 739,472 794,855 757,702 624,128 733,810
Interest-bearing deposits 387,478 531,442 436,857 466,540 486,785 529,413 528,590 400,918 498,028
Total deposits 481,657 604,851 524,083 536,511 566,966 611,255 603,460 468,208 572,138
Repurchase agreements & federal funds sold 37,097 25,307 36,583 24,834 36,064 38,620 28,376 24,356 29,202
Commercial paper & other short term borrowings 93,625 34,365 80,206 33,574 66,637 49,755 34,653 32,775 38,088
Long-term borrowings 12,652 44,864 12,927 46,835 13,204 43,757 44,311 48,828 45,423
Equity 75,893 70,112 74,517 70,098 72,988 71,333 70,272 69,386 69,827
 
Banking segment - income before taxes $ 4,126 $ 2,586 $ 7,474 $ 4,047 $ 3,348 $ 2,285 $ 2,428 $ 1,461 $ 8,760
Mortgage segment - income before taxes $ 748 $ 575 $ 1,459 1,353 $ 711 $ 1,691 $ 1,939 $ 778 $ 4,983
Other segments - income before taxes $ (729 ) $ (487 ) $ (1,235 ) $ (820 ) $ (507 ) $ (380 ) $ (442 ) $ (332 ) $ (1,641 )
Mortgage loan originations $ 161,936 $ 180,365 $ 284,150 $ 329,305 $ 122,215 $ 263,629 $ 231,804 $ 148,941 $ 824,738
Allowance for losses on mortgage loans sold $ 2,286 $ 3,630 $ 2,286 $ 3,630 $ 2,113 $ 1,991 $ 4,488 $ 3,768 $ 1,991
 
Book value per common share $ 7.56 $ 6.71 $ 7.56 $ 6.71 $ 7.21 $ 6.96 $ 6.95 $ 6.52 $ 6.96
                                                                         
Composition of Loan Portfolio            
                         
    June 30, 2011   December 31, 2010   June 30, 2010
(Dollars In Thousands)   Amount  

Percentage ofTotal
 

Amount
 

Percentage ofTotal
  Amount  

Percentage ofTotal
 
Commercial real estate-Owner Occupied $ 139,374 26.77 % $ 137,169 27.91 % $ 130,062 27.74 %
Commercial real estate-Income Producing 96,349 18.50 80,844 16.45 85,329 18.20
Residential real estate 130,918 25.14 137,771 28.03 141,389 30.15
Commercial 116,660 22.41 94,765 19.28 75,595 16.12
Real estate construction 34,446 6.62 38,093 7.75 35,085 7.48
Consumer   2,927   0.56     2,887   0.59     1,423   0.31  
Total loans $ 520,674 100.00 % $ 491,529 100.00 % $ 468,883 100.00 %
Less allowance for loan losses   11,057   10,527   9,348
$ 509,617 $ 481,002 $ 459,535
                               

           
Composition of Deposits
                         
    June 30, 2011   December 31, 2010   June 30, 2010
(Dollars In Thousands)   Amount  

Percentage ofTotal
  Amount  

Percentage ofTotal
  Amount  

Percentage ofTotal
 
Demand deposits $ 128,945 25.39 % $ 83,972 13.37 % $ 78,313 12.88 %
Interest-bearing demand deposits 25,981 5.11 24,548 3.91 41,696 6.86
Savings and money market 100,904 19.87 110,967 17.67 110,622 18.19
CDARS-reciprocal time deposits 107,415 21.15 234,221 37.31 203,429 33.45
Brokered deposits 31,229 6.15 56,356 8.98 63,357 10.42
Time deposits   113,439   22.33       117,784   18.76       110,647   18.20  
Total Deposits $ 507,913   100.00 %   $ 627,848   100.00 %   $ 608,064   100.00 %
 
           
Asset Quality Trend Profile
                         
Six Months Three Months Twelve Months Nine Months Six Months Three Months
Ended Ended Ended Ended Ended Ended
(Dollars In Thousands)   June 30, 2011   March 31, 2011   December 31, 2010   September 30, 2010   June 30, 2010  

March 31, 2010
 
Total assets $ 713,016 $ 717,198 $ 831,824 $ 804,838 $ 790,570 $ 637,381
Total loans held for investment $ 520,674 $ 497,469 $ 491,529 $ 478,327 $ 468,883 $ 469,728
 
Allowance for loan losses - beginning balance $ 10,527 $ 10,527 $ 9,127 $ 9,127 $ 9,127 $ 9,127
Charge offs (553 ) (184 ) (2,048 ) (1,231 ) (974 ) (393 )
Recoveries   862       156       632       505       449       324  
Net charge offs 309 (28 ) (1,416 ) (726 ) (525 ) (69 )
Provision for loan losses   221       223       2,816       1,321       746       198  
Allowance for loan losses - ending balance $ 11,057     $ 10,722     $ 10,527     $ 9,722     $ 9,348     $ 9,256  
 
Allowance for loan losses/loans held for investment 2.12 % 2.16 % 2.14 % 2.03 % 1.99 % 1.97 %
 
Delinquent 30 - 90 days $ 171 $ 2,100 $ 2,771 $ 840 $ 358 $ 845
Percentage of loans delinquent 0.03 % 0.42 % 0.56 % 0.18 % 0.08 % 0.18 %
 
Non-accrual loans $ 7,481 $ 9,163 $ 8,561 $ 6,952 $ 6,752 $ 9,447
OREO $ 590 $ 1,859 $ 1,859 $ 3,276 $ 5,334 $ 4,073
Total NPA $ 8,071 $ 11,022 $ 10,420 $ 10,228 $ 12,086 $ 13,520
NPA to total assets 1.12 % 1.53 % 1.25 % 1.27 % 1.53 % 2.12 %
Allowance for loan losses/NPA 137.00 % 97.28 % 101.03 % 95.06 % 77.35 % 68.47 %
 
OREO Expense $ 395 $ 68 $ 2,335 $ 1,324 $ 676 $ 459
Gain on Sale of OREO $ 1,324     $ 15     $ 1,253     $ 349     $ -     $ (98 )
OREO expense net $ (929 )   $ 53     $ 1,082     $ 975     $ 676     $ 557  
 
Allowance for losses on mortgage loans sold $ 2,286 $ 2,113 $ 1,991 $ 4,488 $ 3,630 $ 3,768
Provision for losses on mortgage loans sold $ 289 $ 126 $ 3,836 $ 2,400 $ 1,100 $ 500
                         

  Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
               
June 30, 2011 March 31, 2011 June 30, 2010
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 $ 118,506 $ 580 1.96 % $ 135,281 $ 633 1.87 % $ 113,784 $ 604 2.12 %
Loans held for sale 29,348 342 4.66 % 29,021 349 4.81 % 44,984 572 5.09 %
Loans(1) 508,010 7,590 5.98 % 494,920 7,533 6.09 % 469,122 7,405 6.31 %
Interest-bearing balances and federal funds sold   28,575       17   0.24 %   80,249       55   0.27 %   128,864       77   0.24 %
Total interest earning assets 684,439 8,529 4.98 % 739,471 8,570 4.64 % 756,754 8,658 4.58 %
Noninterest earning assets:
Cash and due from banks 10,870 12,180 8,885
Premises, land and equipment 8,843 8,927 8,674
Other assets 13,204 13,799 32,781
Less: allowance for loan losses   (10,789 )   (10,597 )   (9,056 )
Total noninterest earning assets   22,128     24,309     41,284  
Total Assets $ 706,567   $ 763,780   $ 798,038  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 23,431 $ 26 0.44 % $ 23,425 $ 27 0.46 % $ 37,501 $ 60 0.64 %
Money market deposit accounts 108,988 156 0.57 % 124,176 194 0.62 % 132,409 391 1.18 %
Savings accounts 2,848 2 0.28 % 2,905 1 0.14 % 3,942 9 0.91 %
Time deposits   252,211       995   1.58 %   336,279       1,289   1.53 %   357,590       1,589   1.78 %
Total interest-bearing deposits 387,478 1,179 1.22 % 486,785 1,511 1.24 % 531,442 2,049 1.54 %
Borrowings:
FHLB Advances 26,484 24 0.36 % 4,523 15 1.33 % 11,662 110 3.77 %
Securities sold under agreements to repurchase and federal funds purchased 37,097 19 0.20 % 36,064 18 0.20 % 25,307 30 0.47 %
Other short-term borrowings 37,142 56 0.60 % 32,115 49 0.61 % 22,703 54 0.95 %
FHLB Long-term borrowings 6,466 55 3.40 % 7,018 62 3.53 % 8,681 77 3.55 %
FDIC Term Note 29,999 297 3.96 % 29,999 295 3.93 % 29,997 297 3.96 %
Subordinated Debentures   6,186       52   3.36 %   6,186       53   3.43 %   6,186       53   3.43 %
Total borrowings   143,374       503   1.40 %   115,905       492   1.70 %   104,536       621   2.38 %
Total interest-bearing deposits and borrowings 530,852 1,682 1.27 % 602,690 2,003 1.33 % 635,978 2,670 1.68 %
Noninterest-bearing liabilities:
Demand deposits 94,179 80,181 73,409
Other liabilities   5,643     7,921     18,539  
Total liabilities 630,674 690,792 727,926
Shareholders' Equity   75,893     72,988     70,112  
Total Liabilities and Shareholders' Equity: $ 706,567   $ 763,780   $ 798,038  
 
Interest Spread(2) 3.72 % 3.31 % 2.90 %
 
Net Interest Margin(3) $ 6,847   4.00 % $ 6,567   3.55 % $ 5,988   3.17 %
 
(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
           
    Six Months Ended
    June 30, 2011     June 30, 2010
Average Income / Yield / Average Income / Yield /
    Balance   Expense   Rate     Balance   Expense   Rate
(Dollars In Thousands)
Assets:
Interest earning assets:
Securities, at amortized cost(1) $ 126,848 $ 1,213 1.91 % $ 83,596 $ 954 2.28 %
Loans held for sale 29,186 691 4.74 % 38,293 961 5.02 %
Loans(2) 501,501 15,123 6.03 % 472,897 14,888 6.30 %
Interest-bearing balances and federal funds sold   54,269       72   0.27 %   96,021       114   0.24 %
Total interest earning assets 711,804 17,099 4.80 % 690,807 16,917 4.90 %
Non-interest earning assets:
Cash and due from banks 11,529 8,157
Premises, land, and equipment 8,885 8,702
Other assets 13,423 26,981
Less: allowance for loan losses   (10,694 )   (9,213 )
Total noninterest earning assets   23,143     34,627  
Total Assets $ 734,947   $ 725,434  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 23,428 $ 53 0.45 % $ 30,531 $ 103 0.67 %
Money market deposit accounts 116,540 350 0.60 % 131,103 784 1.20 %
Savings accounts 2,876 3 0.21 % 4,038 19 0.94 %
Time deposits   294,013       2,284   1.55 %   300,868       3,111   2.07 %
Total interest-bearing deposits 436,857 2,690 1.23 % 466,540 4,017 1.72 %
Borrowings:
FHLB Advances 15,564 39 0.50 % 14,668 313 4.27 %
Securities sold under agreements to repurchase and federal fund purchased 36,583 37 0.20 % 24,834 58 0.47 %
Other short-term borrowings 34,643 105 0.61 % 18,906 89 0.94 %
FHLB long-term borrowings 6,741 117 3.47 % 10,652 171 3.21 %
FDIC term note 29,999 592 3.95 % 29,997 592 3.95 %
Subordinated Debentures   6,186       105   3.39 %   6,186       105   3.39 %
Total borrowings   129,716       995   1.53 %   105,243       1,328   2.52 %
Total interest-bearing liabilities   566,573       3,685   1.30 %   571,783       5,345   1.87 %
Noninterest-bearing liabilities:
Demand deposits 87,226 69,970
Other liabilities   6,631     13,583  
Total Liabilities 660,430 655,336
Shareholders' Equity   74,517     70,098  
Total Liabilities and Shareholders' Equity: $ 734,947   $ 725,434  
 
Interest spread(3) 3.50 % 3.03 %
 
Net interest margin(4) $ 13,414   3.77 % $ 11,572   3.35 %
                           
 
(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.

Copyright Business Wire 2010

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