ANCX Access National Corp.

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank (Bank), reported third quarter 2015 net income of $3.9 million, or $0.37 per common share. This represents the Corporation’s 61st consecutive quarterly profit over its 63 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 $0.15 per share for holders of record as of November 02, 2015 and payable on November 25, 2015. The routine dividend reflects Management’s favorable performance outlook and comfort with a favorable capital position.

Overall, third quarter 2015 pretax earnings increased $988 thousand or 20% when compared to third quarter 2014 when removing the two nonrecurring items which positively impacted third quarter 2014 pretax earnings by $2.5 million. The increase was primarily due to increases in pretax income for both the banking and mortgage segments from third quarter 2014 of $162 thousand and $717 thousand, respectively, when excluding a nonrecurring $3.25 million release in the mortgage segment’s loan loss reserve for the same period in 2014. The banking segment’s increase was due to an increase in net interest income over third quarter 2014 of $973 thousand, and was partially offset by an increase in salaries and benefits of $530 thousand and an increase in other operating expense of $309 thousand due largely to enhancements in the Bank’s online banking platform. The mortgage segment’s increase over third quarter 2014 was due to an increase in mortgage loan originations of $4.6 million or 4% as well as an increase in the secondary margins on mortgage loans held for sale. This resulted in an increase of $953 thousand in non-interest income which was partially offset by an increase in non-interest expense of $268 thousand over 2014 due to costs related to the increased production volume.

Net interest margin for the first nine months of 2015 decreased from 3.78% to 3.69% when compared to the same period in 2014. On a linked quarter basis, the margin increased to 3.70% for the three months ended September 30, 2015 compared to 3.67% for the three months ended June 30, 2015.

On a consolidated basis, the Corporation reported annualized return on average assets of 1.40% for the three and nine month periods ended September 30, 2015. Meanwhile, the annualized return on average equity was 15.09% and 14.94% for the three and nine months ended September 30, 2015, respectively.

Total assets were $1.1 billion at September 30, 2015 and grew $65 million when compared to December 31, 2014. An increase in loans held for investment of $72.4 million and $16.5 million of growth in investment securities were partially offset by a decrease of $12.4 million in interest-bearing balances and a decrease in loans held for sale of $9.1 million. Loan growth in all categories of the loans held for investment portfolio occurred during the first three quarters of 2015. Overall, the portfolio of loans held for investment grew at an annualized rate of 12.4% with commercial real estate – owner occupied loans increasing by the largest dollar amount.

Total deposits at September 30, 2015 increased $176.0 million from December 31, 2014 due mainly to an increase in demand deposits of $81.4 million, an increase in savings and money market of $40.5 million, an increase in time deposits of $27.0 million, and a net increase in wholesale funding deposits of $23.4 million. Management continues to focus on expanding business banking relationships as evidenced by the 32.2% year-to-date growth in demand deposits.

Non-performing assets (NPAs) increased to $6.6 million at September 30, 2015 from $1.6 million at December 31, 2014, representing 0.59% and 0.15% of total assets, respectively, but declined from $7.4 million, or 0.64% of total assets as of June 30, 2015. The increase in NPAs from year end was mainly impacted by the addition of one loan totaling $6.6 million to non-accrual status in the first quarter of 2015. The Bank did not have other real estate owned at September 30, 2015 while Access Real Estate, LLC had other real estate owned with a carrying value of $500 thousand. The allowance for loan loss was $13.5 million and $13.4 million at September 30, 2015 and December 31, 2014, respectively, and represented 1.59% and 1.73% of total loans held for investment, respectively.

Book value per common share increased from $9.45 at December 31, 2014 to $10.23 at September 30, 2015. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 9.6% at September 30, 2015, 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               (In Thousands Except for Share and Per Share Data)  

September 30,2015(Unaudited)

 

December 31,2014

 

September 30,2014(Unaudited)

  ASSETS   Cash and due from banks $ 11,085 $ 9,804 $ 8,227   Interest-bearing balances and federal funds sold 33,781 46,225 60,480   Investment securities: Available-for-sale, at fair value 141,572 125,080 127,422 Held-to-maturity, at amortized cost (fair value of $14,487, $14,378 and $14,153)   14,293   14,309     14,315   Total investment securities 155,865 139,389 141,737   Restricted Stock, at amortized cost 4,071 8,961 8,286   Loans held for sale - at fair value 35,904 45,026 42,283  

Loans held for investment net of allowance for loan losses of $13,474, $13,399 and $13,244, respectively

835,563 763,204 713,868   Premises, equipment and land, net 6,811 6,926 7,036   Other assets 35,149 33,345 33,176       Total assets $ 1,118,229 $ 1,052,880   $ 1,015,093     LIABILITIES AND SHAREHOLDERS' EQUITY   LIABILITIES Noninterest-bearing deposits $ 334,225 $ 252,875 $ 271,251   Savings and interest-bearing deposits 278,050 233,773 243,259   Time deposits   319,160   268,795     217,561     Total deposits 931,435 755,443 732,071   Short-term borrowings 59,699 185,635 175,592   Long-term borrowings 10,000 - -   Other liabilities and accrued expenses 9,466 12,898 7,690       Total Liabilities   1,010,600   953,976     915,353     SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,521,317, 10,469,569 and 10,448,819 shares, respectively

8,785 8,742 8,725   Additional paid in capital 19,588 18,538 18,260   Retained earnings 79,048 72,168 73,781   Accumulated other comprehensive income (loss), net 208 (544 ) (1,026 )       Total shareholders' equity   107,629   98,904     99,740         Total liabilities and shareholders' equity $ 1,118,229 $ 1,052,880   $ 1,015,093                     Access National Corporation Consolidated Statement of Operations                     Three Months Ended   Nine Months Ended September 30, 2015   September 30, 2014 September 30, 2015   September 30, 2014 (In Thousands Except for Share and Per Share Data)   (Unaudited)   (Unaudited)   INTEREST INCOME Interest and fees on loans $ 10,254 $ 9,133 $ 29,659 $ 26,446   Interest on federal funds sold and bank balances 34 27 95 72   Interest and dividends on securities   868   755   2,465   1,844 Total interest income 11,156 9,915 32,219 28,362   INTEREST EXPENSE Interest on deposits 990 757 2,590 2,272   Interest on other borrowings   69   74   283   202 Total interest expense   1,059   831   2,873   2,474 Net interest income 10,097 9,084 29,346 25,888   Provision for loan losses   -   -   150   - Net interest income after provision for loan losses 10,097 9,084 29,196 25,888   NONINTEREST INCOME Service charges and fees 236 167 651 525   Gain on sale of loans 5,834 4,799 15,110 10,314   Other Income   342   247   4,037   2,946 Total noninterest income 6,412 5,213 19,798 13,785   NONINTEREST EXPENSE Salaries and benefits 6,703 5,860 20,419 16,699   Occupancy and equipment 751 715 2,247 2,082   Other operating expense   3,025   108   8,713   4,777 Total noninterest expense   10,479   6,683   31,379   23,558 Income before income tax 6,030 7,614 17,615 16,115   Income tax expense   2,086   2,682   6,114   5,705 NET INCOME   3,944   4,932   11,501   10,410   Earnings per common share: Basic $ 0.37 $ 0.47 $ 1.09 $ 0.99 Diluted $ 0.37 $ 0.47 $ 1.09 $ 0.99   Average outstanding shares: Basic 10,519,954 10,440,986 10,504,086 10,414,384 Diluted 10,593,415 10,476,050 10,567,173 10,459,283                               Performance and Capital Ratios                          

(Dollars In Thousands)

 

Three MonthsEndedSeptember 30,2015

 

Three MonthsEndedJune 30,2015

  Three MonthsEndedMarch 31,2015   Nine MonthsEndedSeptember 30,2015   Nine MonthsEndedSeptember 30,2014   Twelve MonthsEndedDecember 31,2014             Return on average assets (annualized) 1.40 % 1.44 % 1.36 % 1.40 % 1.48 % 1.45 % Return on average equity (annualized) 15.09 % 15.54 % 14.19 % 14.94 % 14.65 % 14.47 % Net interest margin 3.70 % 3.67 % 3.72 % 3.69 % 3.78 % 3.80 % Efficiency ratio - Bank only 50.93 % 48.66 % 50.51 % 50.02 % 48.86 % 48.96 % Total average equity to earning assets 9.57 % 9.58 % 9.93 % 9.69 % 10.39 % 10.37 %   Averages Assets $ 1,129,074 $ 1,108,029 $ 1,050,296 $ 1,096,088 $ 940,934 $ 958,067 Loans held for investment 833,341 814,393 781,990 810,096 715,454 721,863 Loans held for sale 40,465 59,154 38,065 45,903 29,077 31,288 Interest-bearing deposits & federal funds sold 59,216 54,026 46,828 53,402 44,190 44,939 Investment securities 158,839 142,644 147,385 149,664 121,853 128,446 Earning assets 1,092,472 1,070,016 1,014,351 1,059,232 912,289 927,845 Interest-bearing deposits 600,854 535,671 499,467 545,702 480,599 477,267 Total deposits 925,617 839,035 760,105 842,192 710,077 715,385 Repurchase agreements & federal funds purchased 21,928 22,506 22,695 22,373 21,125 21,129 Short-term borrowings 58,207 125,736 157,555 113,469 104,707 115,471 Long-term borrowings 10,000 10,000 556 6,886 - - Equity $ 104,569 $ 102,560 $ 100,754 $ 102,642 $ 94,768 $ 96,227   Banking segment - income before taxes $ 5,228 $ 5,134 $ 4,930 $ 15,292 $ 13,951 $ 18,889 Mortgage segment - income before taxes $ 1,199 $ 1,383 $ 1,012 $ 3,594 $ 4,318 $ 5,043 Wealth Management segment - loss before taxes $ (36 ) $ (124 ) $ (132 ) $ (292 ) $ (264 ) $ (350 ) Other segments - loss before taxes $ (361 ) $ (309 ) $ (309 ) $ (979 ) $ (1,890 ) $ (2,072 )   Allowance for loan losses/loans held for investment 1.59 % 1.62 % 1.68 % 1.59 % 1.82 % 1.73 % Total NPA $ 6,616 $ 7,427 $ 6,784 $ 6,616 $ 1,826 $ 1,622 NPA to total assets 0.59 % 0.64 % 0.63 % 0.59 % 0.18 % 0.15 %   Mortgage loan originations and brokered loans $ 119,988 $ 145,223 $ 114,541 $ 379,752 $ 295,158 $ 408,346 Gain on sale of mortgage loans net hedging activity $ 5,220 $ 5,959 $ 3,058 $ 14,237 $ 8,723 $ 12,779 Allowance for losses on mortgage loans sold $ 1,179 $ 1,187 $ 1,187 $ 1,179 $ 1,193 $ 1,198   Wealth Management segment - assets under management $ 508,000 $ 546,000 $ 523,000 $ 508,000 $ 444,000 $ 450,372   Book value per common share $ 10.23 $ 9.94 $ 9.75 $ 10.23 $ 9.55 $ 9.45                               Composition of Loan Portfolio       September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014 (Dollars In Thousands)   Amount  

Percentage ofTotal

  Amount  

Percentage ofTotal

  Amount  

Percentage ofTotal

  Amount  

Percentage ofTotal

                Commercial real estate - owner occupied $ 223,801 26.36 % $ 222,012 26.61 % $ 210,131 26.46 % $ 199,442 25.68 % Commercial real estate - non-owner occupied 137,081 16.15 134,585 16.13 123,387 15.54 125,442 16.15 Residential real estate 196,580 23.15 198,418 23.79 191,914 24.16 194,213 25.01 Commercial 225,147 26.52 223,756 26.82 219,623 27.65 210,278 27.08 Real estate construction 57,664 6.79 47,037 5.64 43,290 5.45 41,080 5.29 Consumer   8,764   1.03     8,434   1.01     5,869   0.74     6,148   0.79   Total loans $ 849,037 100.00 % $ 834,242 100.00 % $ 794,214 100.00 % $ 776,603 100.00 % Less allowance for loan losses   13,474   13,509   13,331   13,399 $ 835,563 $ 820,733 $ 780,883 $ 763,204                     Composition of Deposits                                       September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014 (Dollars In Thousands)   Amount  

Percentage ofTotal

  Amount  

Percentage ofTotal

  Amount  

Percentage ofTotal

  Amount  

Percentage ofTotal

  Demand deposits $ 334,225 35.88 % $ 339,266 37.47 % $ 290,294 36.92 % $ 252,875 33.47 % Interest-bearing demand deposits 120,400 12.93 110,294 12.18 127,504 16.21 116,654 15.44 Savings and money market 141,953 15.24 113,909 12.58 103,460 13.16 101,409 13.42 CDARS-time deposit 67,213 7.22 90,523 10.00 127,669 16.24 148,142 19.61 CDARS-money market 15,501 1.66 15,647 1.73 15,632 1.99 15,497 2.06 Brokered deposits 117,598 12.63 113,402 12.53 13,213 1.68 13,344 1.77 Time deposits   134,545   14.44       122,361   13.51       108,547   13.80       107,522   14.23   Total Deposits $ 931,435   100.00 %   $ 905,402   100.00 %   $ 786,319   100.00 %   $ 755,443   100.00 %       Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities Three Months Ended       September 30, 2015   September 30, 2014 (Dollars In Thousands)  

AverageBalance

 

Income /Expense

 

Yield /Rate

 

AverageBalance

 

Income /Expense

 

Yield /Rate

            Assets: Interest-earning assets: Securities $ 159,450 $ 868 2.18 % $ 142,013 $ 755 2.13 % Loans held for sale 40,465 417 4.12 % 40,780 410 4.02 % Loans(1) 833,341 9,837 4.72 % 726,985 8,723 4.80 % Interest-bearing balances and federal funds sold   59,216       34   0.23 %   51,134       27   0.21 %

Total interest-earning assets

1,092,472 11,156 4.08 % 960,912 9,915 4.13 % Noninterest-earning assets: Cash and due from banks 10,765 9,499 Premises, land and equipment 6,893 8,232 Other assets 32,470 31,664 Less: allowance for loan losses   (13,526 )   (13,227 ) Total noninterest-earning assets   36,602     36,168   Total Assets $ 1,129,074   $ 997,080     Liabilities and Shareholders' Equity: Interest-bearing deposits: Interest-bearing demand deposits $ 112,776 $ 63 0.22 % $ 121,737 $ 69 0.23 % Money market deposit accounts 141,821 74 0.21 % 115,144 58 0.20 % Savings accounts 14,845 20 0.54 % 3,824 4 0.42 % Time deposits   331,412       833   1.01 %   259,262       626   0.97 % Total interest-bearing deposits 600,854 990 0.66 % 499,967 757 0.61 % Borrowings: FHLB short-term borrowings 58,207 32 0.22 % 121,141 69 0.23 % Securities sold under agreements to repurchase and federal funds purchased 21,928 5 0.09 % 19,955 5 0.10 % FHLB long-term borrowings   10,000       32   1.28 %   -       -   0.00 % Total borrowings   90,135       69   0.31 %   141,096       74   0.21 % Total interest-bearing deposits and borrowings 690,989 1,059 0.61 % 641,063 831 0.52 % Noninterest-bearing liabilities: Demand deposits 324,763 247,814 Other liabilities   8,753     11,341   Total liabilities 1,024,505 900,218 Shareholders' Equity   104,569     96,862   Total Liabilities and Shareholders' Equity $ 1,129,074   $ 997,080     Interest Spread(2) 3.47 % 3.61 %   Net Interest Margin(3) $ 10,097   3.70 % $ 9,084   3.78 %    

(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, 2015   September 30, 2014 (Dollars In Thousands)  

AverageBalance

 

Income /Expense

 

Yield /Rate

 

AverageBalance

 

Income /Expense

 

Yield /Rate

            Assets: Interest-earning assets: Securities $ 149,831 $ 2,465 2.19 % $ 123,301 $ 1,844 1.99 % Loans held for sale 45,903 1,343 3.90 % 29,077 909 4.17 % Loans(1) 810,096 28,316 4.66 % 715,454 25,537 4.76 % Interest-bearing balances and federal funds sold   53,402       95   0.24 %   44,190       72   0.22 % Total interest-earning assets 1,059,232 32,219 4.06 % 912,022 28,362 4.15 % Noninterest-earning assets: Cash and due from banks 10,642 8,784 Premises, land and equipment 6,921 8,331 Other assets 32,731 24,994 Less: allowance for loan losses   (13,438 )   (13,197 ) Total noninterest-earning assets   36,856     28,912   Total Assets $ 1,096,088   $ 940,934     Liabilities and Shareholders' Equity: Interest-bearing deposits: Interest-bearing demand deposits $ 114,885 $ 190 0.22 % $ 112,443 $ 189 0.22 % Money market deposit accounts 121,478 183 0.20 % 114,876 173 0.20 % Savings accounts 10,956 37 0.45 % 3,352 9 0.36 % Time deposits   298,383       2,180   0.97 %   249,928       1,901   1.01 % Total interest-bearing deposits 545,702 2,590 0.63 % 480,599 2,272 0.63 % Borrowings: FHLB short-term borrowings 113,469 203 0.24 % 104,707 186 0.24 % Securities sold under agreements to repurchase and federal funds purchased 22,373 16 0.10 % 21,125 16 0.10 % FHLB long-term borrowings   6,886       64   1.24 %   -       -   0.00 % Total borrowings   142,728       283   0.26 %   125,832       202   0.21 % Total interest-bearing deposits and borrowings 688,430 2,873 0.56 % 606,431 2,474 0.54 % Noninterest-bearing liabilities: Demand deposits 296,490 229,478 Other liabilities   8,526     10,257   Total liabilities 993,446 846,166 Shareholders' Equity   102,642     94,768   Total Liabilities and Shareholders' Equity $ 1,096,088   $ 940,934     Interest Spread(2) 3.50 % 3.60 %   Net Interest Margin(3) $ 29,346   3.69 % $ 25,888   3.78 %    

(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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Access National CorporationMichael Clarke, 703-871-2100