Access National Increases Dividend, Reports Second Quarter Earnings

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank (Bank), reported second quarter 2014 net income of $3.1 million, or $0.29 per common share. This represents the Corporation’s 56 th consecutive quarterly profit over its 58 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 $0.13 per share for holders of record as of August 4, 2014 and payable on August 25, 2014. The increase in routine dividend reflects Management’s favorable performance outlook and comfort with a favorable capital position.

Overall, second quarter 2014 pretax earnings fell when compared to second quarter 2013 pretax earnings by $781 thousand due to a decrease in mortgage segment pretax earnings of $1.3 million. Positively offsetting the reduction in mortgage segment pretax earnings was an increase in the banking segment pretax earnings of 11.3% or $477 thousand during the second quarter of 2014 in comparison to the second quarter of 2013. Pretax earnings were also positively impacted by a $62 thousand reduction in pretax loss of the Wealth Management Segment for the second quarter of 2014 when compared to the second quarter of 2013.

Net interest margin for the first six months of 2014 decreased from 3.81% to 3.79% when compared to the same period in 2013. On a linked quarter basis, the margin increased slightly to 3.80% for the three months ended June 30, 2014 compared to 3.78% for the three months ended March 30, 2014.

On a consolidated basis, the Corporation reported annualized return on average assets of 1.30% and 1.20% for the three and six month periods ended June 30, 2014, respectively. Meanwhile, the annualized return on average equity was 12.93% and 11.69% for the three and six months ended June 30, 2014, respectively.

Total assets at June 30, 2014 amounted to $999.2 million compared to $847.2 million at December 31, 2013, an overall increase of $152.0 million. An increase in loans held for investment of $53.0 million, a $20.8 million increase in interest-bearing balances, a $33.8 million growth in investment securities, a growth in loans held for sale of $26.6 million, and a $17.4 million increase in other assets due to a $15 million BOLI purchase accounted for the majority of this increase. The second quarter of 2014 reflected loan growth in all categories of the loans held for investment portfolio with the exception of commercial real estate – owner occupied which experienced a slight decrease. Overall, the portfolio of loans held for investment grew at an annualized rate of 15.45% with commercial loans increasing by the largest dollar amount.

Total deposits at June 30, 2014 increased $218.8 million from December 31, 2013 due mainly to an increase in demand deposits of $81.3 million, an increase in interest-bearing demand deposits of $34.4 million, and an increase in Certificate of Deposit Account Registry Service (CDARS) deposits totaling $108.0 million. The deliberate increase in CDARS during the most recent period was to partially offset the increase in securities, the increase in loans held for sale from December 31, 2013, and reduce short-term borrowings. Management continues to focus on expanding business banking relationships as evidenced by the 42.82% year-to-date growth in demand deposits.

Non-performing assets (NPAs) decreased 26.2% to $1.9 million at June 30, 2014, from $2.5 million at December 31, 2013, representing 0.19% and 0.30% of total assets, respectively. The Corporation did not have other real estate owned at June 30, 2014. The allowance for loan losses remained at $13.2 million or 1.78% and 1.91% of total loans held for investment as of June 30, 2014 and December 31, 2013, respectively.

Book value per common share increased from $8.79 at December 31, 2013 to $9.22 at June 30, 2014. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 9.6% at June 30, 2014, within the Corporation’s target range of 8.00% to 10.50%.

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
             
June 30, December 31, June 30,
2014 2013 2013
(In Thousands Except for Share and Per Share Data)   (Unaudited)       (Unaudited)
 
ASSETS
 
Cash and due from banks $ 11,702 $ 8,117 $ 11,499
 
Interest-bearing balances and federal funds sold 36,119 15,302 35,123
 
Investment securities:
Available-for-sale, at fair value 114,227 76,552 69,427
Held-to-maturity, at amortized cost (fair value of $12,309, $15,662 and $15,530)   12,412     16,277     15,861  
Total investment securities 126,639 92,829 85,288
 
Restricted Stock, at amortized cost 5,361 8,559 4,284
 
Loans held for sale - at fair value 51,001 24,353 48,887
 

Loans held for investment net of allowance for loan losses of $13,211, $13,136 and $13,007, respectively
726,914 673,919 628,457
 
Premises, equipment and land, net 8,326 8,389 8,434
 
Other assets 33,125 15,714 19,711
     
Total assets $ 999,187   $ 847,182   $ 841,683  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 271,225 $ 189,908 $ 220,474
 
Savings and interest-bearing deposits 235,704 200,196 190,179
 
Time deposits   284,824     182,868     249,205  
 
Total deposits 791,753 572,972 659,858
 
Short-term borrowings 100,453 172,855 70,161
 
Subordinated debentures - - 6,186
 
Other liabilities and accrued expenses 10,845 10,221 10,898
     
Total Liabilities   903,051     756,048     747,103  
 
SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding,10,422,324, 10,369,420 and 10,285,212 shares, respectively
8,703 8,659 8,588
 
Additional paid in capital 17,994 17,320 16,719
 
Retained earnings 70,205 67,121 70,653
 
Accumulated other comprehensive income (loss), net (766 ) (1,966 ) (1,380 )
     
Total shareholders' equity   96,136     91,134     94,580  
     
Total liabilities and shareholders' equity $ 999,187   $ 847,182   $ 841,683  
     
Access National Corporation
Consolidated Statement of Operations
             
Three Months Ended Six Months Ended
June 30, 2014 June 30, 2014 June 30, 2013
(In Thousands Except for Share and Per Share Data)   (unaudited)   (unaudited)
 
INTEREST INCOME
Interest and fees on loans $ 8,854 $ 17,313 $ 17,206
 
Interest on federal funds sold and bank balances 27 45 54
 
Interest on securities   621   1,089   982
Total interest income 9,502 18,447 18,242
 
INTEREST EXPENSE
Interest on deposits 787 1,515 1,967
 
Interest on other borrowings   52   128   134
Total interest expense   839   1,643   2,101
Net interest income 8,663 16,804 16,141
 
Provision for loan losses   -   -   225
Net interest income after provision for loan losses 8,663 16,804 15,916
 
NONINTEREST INCOME
Service charges and fees 181 358 307
 
Gain on sale of loans 3,787 5,515 15,001
 
Other Income   1,348   2,699   3,559
Total noninterest income 5,316 8,572 18,867
 
NONINTEREST EXPENSE
Salaries and benefits 5,952 10,839 14,868
 
Occupancy and equipment 660 1,367 1,320
 
Other operating expense   2,606   4,669   7,000
Total noninterest expense   9,218   16,875   23,188
Income before income tax 4,761 8,501 11,595
 
Income tax expense   1,697   3,023   4,387
NET INCOME   3,064   5,478   7,208
 
Earnings per common share:
Basic $ 0.29 $ 0.52 $ 0.70
Diluted $ 0.29 $ 0.52 $ 0.69
 
Average outstanding shares:
Basic 10,411,085 10,401,083 10,314,592
Diluted 10,454,712 10,450,899 10,408,735
             
         
Performance and Capital Ratios
                     
Three Months Three Months Six Months Six Months Twelve Months
Ended Ended Ended Ended Ended
June 30, March 31, June 30, June 30 December 31,
(Dollars In Thousands Except for Share and Per Share Data)     2014       2014       2014       2013       2013  
 
Return on average assets (annualized) 1.30 % 1.10 % 1.20 % 1.66 % 1.55 %
Return on average equity (annualized) 12.93 % 10.43 % 11.69 % 15.41 % 14.00 %
Net interest margin 3.80 % 3.78 % 3.79 % 3.81 % 3.85 %
Efficiency ratio - Bank only 48.44 % 50.98 % 49.67 % 52.26 % 49.50 %
Total average equity to earning assets 10.38 % 10.75 % 10.56 % 11.04 % 11.28 %
 
Averages
Assets $ 944,452 $ 879,984 $ 912,396 $ 869,285 $ 854,572
Loans held for investment 720,634 698,429 709,593 636,129 648,744
Loans held for sale 27,502 18,708 23,129 62,222 42,667
Interest-bearing deposits & federal funds sold 42,055 39,251 40,661 48,567 46,217
Investment securities 121,080 102,398 111,791 100,317 97,260
Earning assets 912,889 861,170 887,172 847,411 836,129
Interest-bearing deposits 499,435 441,757 470,755 542,078 485,860
Total deposits 743,037 638,211 690,913 722,123 678,531
Repurchase agreements & federal funds purchased 20,082 23,374 21,719 26,807 25,524
Short term borrowings 76,978 115,944 96,354 11,066 43,077
Long-term borrowings - - - 6,186 3,135
Equity $ 94,800 $ 92,593 $ 93,703 $ 93,541 $ 94,352
 
Banking segment - income before taxes $ 4,704 $ 4,181 $ 8,885 $ 8,025 $ 17,330
Mortgage segment - income before taxes $ 583 $ 3 $ 586 $ 4,695 $ 4,879
Wealth Management segment - loss before taxes $ (148 ) $ (8 ) $ (156 ) $ (397 ) $ (751 )
Other segments - loss before taxes $ (378 ) $ (436 ) $ (814 ) $ (728 ) $ (1,017 )
 
Allowance for loan losses/loans held for investment 1.78 % 1.84 % 1.78 % 2.03 % 1.91 %
Total NPA 1,872 2,510 1,872 2,299 2,535
NPA to total assets 0.19 % 0.27 % 0.19 % 0.27 % 0.30 %
 
Mortgage loan originations and brokered loans $ 109,250 $ 70,570 $ 179,820 $ 389,107 $ 574,951
Gain on sale of mortgage loans net hedging activity $ 3,733 $ 2,293 $ 6,026 $ 13,886 $ 24,669
Allowance for losses on mortgage loans sold $ 4,633 $ 4,645 $ 4,633 $ 4,645 $ 4,645
 
Wealth Management segment - assets under management $ 454,000 $ 432,000 $ 454,000 $ 188,000 $ 257,000
 
Book value per common share $ 9.22 $ 9.00 $ 9.22 $ 9.20 $ 8.79
Dividends paid per share $ 0.12 $ 0.11 $ 0.23 $ 0.19 $ 1.11
           
Composition of Loan Portfolio
                         
    June 30, 2014   March 31, 2014   December 31, 2013
(Dollars In Thousands)   Amount  

Percentage of Total
  Amount  

Percentage of Total
  Amount  

Percentage of Total
Commercial real estate - owner occupied $ 190,895 25.79 % $ 204,725 28.56 % $ 196,804 28.65 %
 
Commercial real estate - non-owner occupied 110,968 14.99 93,366 13.02 90,676 13.20
Residential real estate 179,018 24.19 176,914 24.68 173,639 25.27
Commercial 211,742 28.61 192,890 26.91 182,220 26.52
Real estate construction 40,520 5.47 42,766 5.97 38,842 5.65
Consumer   6,982   0.95     6,196   0.86     4,874   0.71  
Total loans $ 740,125 100.00 % $ 716,857 100.00 % $ 687,055 100.00 %
Less allowance for loan losses   13,211   13,171   13,136
$ 726,914 $ 703,686 $ 673,919
           
Composition of Deposits
                         
    June 30, 2014   March 31, 2014   December 31, 2013
(Dollars In Thousands)   Amount  

Percentage of Total
  Amount  

Percentage of Total
  Amount  

Percentage of Total
 
Demand deposits $ 271,225 34.26 % $ 229,059 28.44 % $ 189,908 33.14 %
Interest-bearing demand deposits 120,122 15.17 116,195 14.43 85,735 14.96
Savings and money market 115,365 14.57 123,358 15.32 114,169 19.93
CDARS-time deposits 155,480 19.64 200,142 24.85 47,535 8.30
Brokered deposits 13,334 1.68 13,709 1.69 14,103 2.46
Time deposits   116,227   14.68       122,961   15.27       121,522   21.21  
Total Deposits $ 791,753   100.00 %   $ 805,424   100.00 %   $ 572,972   100.00 %
           
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
 
                         
    June 30, 2014   June 30, 2013
Average Income / Yield / Average Income / Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 122,698 $ 621 2.02 % $ 94,358 $ 447 1.90 %
Loans held for sale 27,502 297 4.32 % 49,814 430 3.45 %
Loans (1) 720,634 8,558 4.75 % 645,654 8,181 5.07 %
Interest-bearing balances and federal funds sold   42,055       27   0.26 %   38,310       29   0.30 %
Total interest-earning assets 912,889 9,502 4.16 % 828,136 9,087 4.39 %
Noninterest-earning assets:
Cash and due from banks 9,223 11,922
Premises, land and equipment 8,383 8,501
Other assets 27,139 14,576
Less: allowance for loan losses   (13,183 )   (12,936 )
Total noninterest-earning assets   31,562     22,063  
Total Assets $ 944,452   $ 850,200  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 109,602 $ 62 0.23 % $ 62,215 $ 25 0.16 %
Money market deposit accounts 115,355 58 0.20 % 122,468 73 0.24 %
Savings accounts 3,353 3 0.36 % 2,499 1 0.18 %
Time deposits   271,125       664   0.98 %   321,558       867   1.08 %
Total interest-bearing deposits 499,435 787 0.63 % 508,740 966 0.76 %
Borrowings:
FHLB Advances 76,978 47 0.24 % 17,011 11 0.26 %
Securities sold under agreements to repurchase and federal funds purchased 20,082 5 0.10 % 23,265 4 0.08 %
Subordinated Debentures   -       -   0.00 %   6,186       53   3.43 %
Total borrowings   97,060       52   0.21 %   46,462       68   0.59 %
Total interest-bearing deposits and borrowings 596,495 839 0.56 % 555,202 1,034 0.74 %
Noninterest-bearing liabilities:
Demand deposits 243,602 191,009
Other liabilities   9,555     9,254  
Total liabilities 849,652 755,465
Shareholders' Equity   94,800     94,735  
Total Liabilities and Shareholders' Equity $ 944,452   $ 850,200  

 
Interest Spread (2) 3.60 % 3.64 %
 
Net Interest Margin (3) $ 8,663   3.80 % $ 8,053   3.89 %
                         

(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, 2014   June 30, 2013
  Average  

Income /
  Yield /   Average   Income /   Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest earning assets:
Securities $ 113,789 $ 1,089 1.91 % $ 100,493 $ 982 1.95 %
Loans held for sale 23,129 499 4.31 % 62,222 1,044 3.36 %
Loans (1) 709,593 16,814 4.74 % 636,129 16,162 5.08 %
Interest-bearing balances and federal funds sold   40,661       45   0.22 %   48,567       54   0.22 %
Total interest earning assets 887,172 18,447 4.16 % 847,411 18,242 4.31 %
Noninterest earning assets:
Cash and due from banks 8,420 11,659
Premises, land and equipment 8,381 8,521
Other assets 21,604 14,466
Less: allowance for loan losses   (13,182 )   (12,773 )
Total noninterest earning assets   25,223     21,873  
Total Assets $ 912,396   $ 869,285  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 107,719 $ 120 0.22 % $ 73,571 $ 67 0.18 %
Money market deposit accounts 114,740 115 0.20 % 120,707 162 0.27 %
Savings accounts 3,112 5 0.32 % 2,472 2 0.16 %
Time deposits   245,184       1,275   1.04 %   345,328       1,736   1.01 %
Total interest-bearing deposits 470,755 1,515 0.64 % 542,078 1,967 0.73 %
Borrowings:
FHLB Advances 96,354 117 0.24 % 11,066 15 0.27 %
Securities sold under agreements to repurchase and federal funds purchased 21,719 11 0.10 % 26,807 13 0.10 %
Subordinated Debentures   -       -   0.00 %   6,186       105   3.39 %
Total borrowings   118,073       128   0.22 %   44,059       133   0.60 %
Total interest-bearing deposits and borrowings 588,828 1,643 0.56 % 586,137 2,101 0.72 %
Noninterest-bearing liabilities:
Demand deposits 220,158 180,045
Other liabilities   9,707     9,562  
Total liabilities 818,693 775,744
Shareholders' Equity   93,703     93,541  
Total Liabilities and Shareholders' Equity $ 912,396   $ 869,285  
 
Interest Spread (2) 3.60 % 3.59 %
 
Net Interest Margin (3) $ 16,804   3.79 % $ 16,141   3.81 %
                         

(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.

Copyright Business Wire 2010

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