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Access National Q1 Earnings Rise 13%, Declares Dividend

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RESTON, Va.--(BUSINESS WIRE)--

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank (Bank), reported first quarter 2016 net income of $4.1 million, or $0.39 per common share. This represents the Corporation's 63rd consecutive quarterly profit over its 65 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 May 2, 2016 and payable on May 25, 2016. The routine dividend reflects Management's favorable performance outlook and comfort with a favorable capital position.

First quarter 2016 pretax earnings rose by $739 thousand or 13.4% when compared to first quarter 2015 pretax earnings. First quarter 2016 pretax income for the banking segment rose $563 thousand from first quarter 2015 due to increases in net interest income of $1.1 million and other income of $217 thousand due largely to returns on the Bank's investments in Small Business Investment Companies. These increases were partially offset by an increase in salaries and benefits of $696 thousand due to addition of staffing throughout the third and fourth quarters of 2015. The mortgage segment's pretax earnings increase of $104 thousand over first quarter 2015 was due mainly to an increase in gains recorded on secondary mortgage activity due to more favorable gain on sale margins.

The net interest margin decreased from 3.72% to 3.61% when comparing first quarter 2015 to first quarter 2016. On a linked quarter basis, the margin decreased from 3.63% for the three months ended December 31, 2015 when compared to 3.61% for the three months ended March 31, 2016.

On a consolidated basis, the Corporation reported annualized return on average assets of 1.35% and 1.36% for the three month periods ended March 31, 2016 and 2015, respectively. Meanwhile, the annualized return on average equity was 14.75% and 14.19% for the three month periods ended March 31, 2016 and 2015, respectively.

Total assets were $1.2 billion at March 31, 2016 and grew $38.5 million and $147.8 million when compared to December 31, 2015 and March 31, 2015, respectively. The $38.5 million growth in assets since December 31, 2015 was due mainly to an increase in loans held for investment of $27.2 million and a $5.8 million increase in loans held for sale. An increase in loans held for investment of $120.5 million and a $35.7 million growth in investment securities was partially offset by a decrease of $7.2 million in loans held for sale when comparing first quarter 2016 to first quarter 2015. Commercial loan growth continues to remain the leading driver of a year over year growth rate of loans held for investment of 15.2%.

Total deposits at March 31, 2016 were $960.5 million, an increase of $46.7 million and $174.1 million when compared to December 31, 2015 and March 31, 2015, respectively. At March 31, 2016, non-interest bearing deposits were $335.2 million, an increase of $27.4 million from the December 31, 2015 figure and an increase of $44.9 million from the March 31, 2015 figure. The year-over-year growth rate in non-interest bearing deposits of 15.5% was due to management's continued focus on expanding business banking relationships. Interest bearing deposits increased to $625.2 million at March 31, 2016, an increase of $19.3 million since December 31, 2015 and an increase of $129.2 million when compared to the March 31, 2015 balances. A targeted marketing campaign was the majority of the reason for growth in this category which saw a year-over-year increase in savings and money market accounts of $46.2 million and an increase in time deposits of $34.2 million. The remainder of the year-over-year increase is attributable to increased funding in the wholesale market of $52.4 million.

Non-performing assets (NPAs) increased to $7.3 million at March 31, 2016 from $6.8 million at March 31, 2015, representing 0.60% and 0.63% of total assets, respectively. Reflected in the NPA figure at March 31, 2016 is other real estate owned totaling $129 thousand. Access Real Estate, LLC also had other real estate owned with a carrying value of $500 thousand at March 31, 2016. The allowance for loan loss was $13.6 million and $13.3 million at March 31, 2016 and March 31, 2015, respectively, and represented 1.49% and 1.68% of total loans held for investment at March 31, 2016 and 2015, respectively.

Book value per common share increased from $9.75 at March 31, 2015 to $10.79 at March 31, 2016. The tangible common equity ratio for Access National Corporation and its subsidiary bank was 9.23% at March 31, 2016, 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
             
March 31, December 31, March 31,
2016 2015 2015
(In Thousands Except for Share and Per Share Data)   (Unaudited)   (Audited)   (Unaudited)
 
ASSETS
 
Cash and due from banks $ 14,522 $ 11,291 $ 11,324
 
Interest-bearing balances and federal funds sold 27,110 24,598 33,602
 
Investment securities:
Available-for-sale, at fair value 162,720 160,162 122,027
Held-to-maturity, at amortized cost (fair value of $9,487, $14,314 and $14,524)   9,295   14,287     14,304
Total investment securities 172,015 174,449 136,331
 
Restricted Stock, at amortized cost 7,159 7,259 8,321
 
Loans held for sale - at fair value 49,977 44,135 57,151
 

Loans held for investment net of allowance for loan losses of $13,614, $13,563 and $13,331, respectively

901,068 873,915 780,883
 
Premises, equipment and land, net 6,852 6,689 6,889
 
Other assets 38,332 36,212 34,701
     
Total assets $ 1,217,035 $ 1,178,548   $ 1,069,202
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 335,219 $ 307,797 $ 290,294
 
Savings and interest-bearing deposits 308,986 293,711 246,806
 
Time deposits   316,252   312,236     249,219
 
Total deposits 960,457 913,744 786,319
 
Short-term borrowings 77,467 91,129 160,529
 
Long-term borrowings 55,000 55,000 10,000
 
Other liabilities and accrued expenses 10,070 9,537 9,764
     
Total Liabilities   1,102,994   1,069,410     966,612
 
SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,570,056, 10,544,751 and 10,517,876, respectively

8,826 8,805 8,782
 
Additional paid in capital 20,386 19,953 19,378
 
Retained earnings 83,897 81,385 74,276
 
Accumulated other comprehensive income (loss), net 932 (1,005 ) 154
     
Total shareholders' equity   114,041   109,138     102,590
     
Total liabilities and shareholders' equity $ 1,217,035 $ 1,178,548   $ 1,069,202
             
 
 
Access National Corporation
Consolidated Statement of Operations
         
  Three Months Ended
March 31, 2016   March 31, 2015
(In Thousands Except for Share and Per Share Data)   (unaudited)
 
INTEREST INCOME
Interest and fees on loans $ 10,876 $ 9,434
 
Interest on federal funds sold and bank balances 70 27
 
Interest and dividends on securities   1,035   815
Total interest income 11,981 10,276
 
INTEREST EXPENSE
Interest on deposits 1,150 733
 
Interest on other borrowings   281   101
Total interest expense   1,431   834
Net interest income 10,550 9,442
 
Provision for loan losses   -   -
Net interest income after provision for loan losses 10,550 9,442
 
NONINTEREST INCOME
Service charges and fees 260 197
 
Gain on sale of loans 3,830 3,571
 
Other Income   2,729   2,537
Total noninterest income 6,819 6,305
 
NONINTEREST EXPENSE
Salaries and benefits 7,668 6,717
 
Occupancy and equipment 761 754
 
Other operating expense   2,700   2,775
Total noninterest expense   11,129   10,246
Income before income tax 6,240 5,501
 
Income tax expense   2,145   1,928
NET INCOME   4,095   3,573
 
Earnings per common share:
Basic $ 0.39 $ 0.34
Diluted $ 0.39 $ 0.34
 
Average outstanding shares:
Basic 10,553,150 10,473,366
Diluted 10,606,359 10,517,222
       

 

 
           
Performance and Capital Ratios
                         
Three Months Three Months Three Months Three Months Three Months Twelve Months
Ended Ended Ended Ended Ended Ended
March 31, December 31, September 30, June 30, March 31, December 31,
(Dollars In Thousands)   2016   2015   2015   2015   2015   2015
 
Return on average assets (annualized) 1.35 % 1.35 % 1.40 % 1.44 % 1.36 % 1.39 %
Return on average equity (annualized) 14.75 % 14.53 % 15.09 % 15.54 % 14.19 % 14.83 %
Net interest margin 3.61 % 3.63 % 3.70 % 3.67 % 3.72 % 3.68 %
Efficiency ratio - Bank only 51.20 % 51.51 % 50.93 % 48.66 % 50.51 % 50.41 %
Total average equity to earning assets 9.50 % 9.60 % 9.57 % 9.58 % 9.93 % 9.67 %
Tangible common equity ratio 9.23 % 9.12 % 9.50 % 8.85 % 9.47 % 9.12 %
 
Averages
Assets $ 1,208,864 $ 1,161,080 $ 1,129,074 $ 1,108,029 $ 1,050,296 $ 1,112,470
Loans held for investment 905,382 866,402 833,341 814,393 781,990 824,288
Loans held for sale 34,607 30,719 40,465 59,154 38,065 42,076
Interest-bearing deposits & federal funds sold 52,862 50,678 59,216 54,026 46,828 52,716
Investment securities 176,448 174,838 158,839 142,644 147,385 156,010
Earning assets 1,169,183 1,122,915 1,092,472 1,070,016 1,014,351 1,075,284
Interest-bearing deposits 612,021 614,775 600,854 535,671 499,467 563,112
Total deposits 920,528 939,403 925,617 839,035 760,105 866,695
Repurchase agreements & federal funds purchased 17,442 20,961 21,928 22,506 22,695 22,017
FHLB short term borrowings 86,429 28,261 58,207 125,736 157,555 91,992
FHLB long-term borrowings 64,615 54,511 10,000 10,000 556 18,890
Equity $ 111,068 $ 107,823 $ 104,569 $ 102,560 $ 100,754 $ 103,948
 
Allowance for loan losses/loans held for investment 1.49 % 1.53 % 1.59 % 1.62 % 1.68 % 1.53 %
Total NPA $ 7,349 $ 7,417 $ 6,616 $ 7,427 $ 6,784 $ 7,417
NPA to total assets 0.60 % 0.63 % 0.59 % 0.64 % 0.63 % 0.63 %
 
Mortgage loan originations and brokered loans $ 106,622 $ 105,128 $ 119,855 $ 145,223 $ 114,541 $ 484,747
Gain on sale of mortgage loans net hedging activity $ 3,235 $ 4,291 $ 5,220 $ 5,959 $ 3,058 $ 18,528
Allowance for losses on mortgage loans sold $ 1,029 $ 1,029 $ 1,179 $ 1,187 $ 1,187 $ 1,029
 
Wealth Management segment - assets under management $ 611,000 $ 611,000 $ 508,000 $ 546,000 $ 523,000 $ 611,000
 
Book value per common share $ 10.79 $ 10.35 $ 10.23 $ 9.94 $ 9.75 $ 10.35
                                                 
 
                 
Composition of Loan Portfolio
                                         
    March 31, 2016   December 31, 2015   September 30, 2015   June 30, 2015   March 31, 2015
(Dollars In Thousands)   Amount   Percentage of Total   Amount   Percentage of Total   Amount   Percentage of Total   Amount   Percentage of Total   Amount   Percentage of Total
 
Commercial real estate - owner occupied $ 217,954 23.83 % $ 219,877 24.77 % $ 223,801 25.22 % $ 222,012 26.61 % $ 210,131 26.46 %
Commercial real estate - non-owner occupied 153,433 16.77 147,580 16.63 137,081 15.45 134,585 16.13 123,387 15.54
Residential real estate 202,858 22.18 201,447 22.70 196,580 23.15 198,418 23.79 191,914 24.16
Commercial 258,520 28.26 242,527 27.33 225,147 25.37 223,756 26.82 219,623 27.65
Real estate construction 72,055 7.88 66,003 7.44 57,664 6.50 47,037 5.64 43,290 5.45
Consumer   9,862   1.08     10,044   1.13     8,764   0.99     8,434   1.01     5,869   0.74  
Total loans $ 914,682 100.00 % $ 887,478 100.00 % $ 849,037 96.67 % $ 834,242 100.00 % $ 794,214 100.00 %
Less allowance for loan losses   13,614   13,563   13,474   13,509   13,331
$ 901,068 $ 873,915 $ 835,563 $ 820,733 $ 780,883
                                         
 
                   
Composition of Deposits
                                         
    March 31, 2016   December 31, 2015   September 30, 2015   June 30, 2015   March 31, 2015
(Dollars In Thousands)   Amount   Percentage of Total   Amount   Percentage of Total   Amount   Percentage of Total   Amount   Percentage of Total   Amount   Percentage of Total
 
Demand deposits $ 335,219 34.90 % $ 307,797 33.69 % $ 334,225 35.88 % $ 339,266 37.47 % $ 290,294 36.92 %
Interest-bearing demand deposits 123,876 12.90 127,980 14.00 120,400 12.93 110,294 12.18 127,504 16.21
Savings and money market 149,679 15.59 150,021 16.42 141,953 15.24 113,909 12.58 103,460 13.16
CDARS-time deposit 67,540 7.03 73,017 7.99 67,213 7.22 90,523 10.00 127,669 16.24
CDARS-non maturity deposits 35,238 3.67 15,517 1.70 15,501 1.66 15,647 1.73 15,632 1.99
Brokered deposits 106,150 11.05 103,390 11.31 117,598 12.63 113,402 12.53 13,213 1.68
Time deposits   142,755   14.86       136,022   14.89       134,545   14.44       122,361   13.51       108,547   13.80  
Total Deposits $ 960,457   100.00 %   $ 913,744   100.00 %   $ 931,435   100.00 %   $ 905,402   100.00 %   $ 786,319   100.00 %
                                                             
 
   
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended
                         
    March 31, 2016   March 31, 2015
Average Income /   Yield /   Average   Income /   Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 176,332 $ 1,035 2.35 % $ 147,468 $ 815 2.21 %
Loans held for sale 34,607 344 3.98 % 38,065 362 3.80 %
Loans(1) 905,382 10,532 4.65 % 781,990 9,072 4.64 %
Interest-bearing balances and federal funds sold   52,862       70   0.53 %   46,828       27   0.23 %
Total interest-earning assets 1,169,183 11,981 4.10 % 1,014,351 10,276 4.05 %
Noninterest-earning assets:
Cash and due from banks 11,707 9,906
Premises, land and equipment 6,676 6,898
Other assets 34,878 32,478
Less: allowance for loan losses   (13,580 )   (13,337 )
Total noninterest-earning assets   39,681     35,945  
Total Assets $ 1,208,864   $ 1,050,296  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 124,982 $ 107 0.34 % $ 120,685 $ 65 0.22 %
Money market deposit accounts 142,221 98 0.28 % 110,503 54 0.20 %
Savings accounts 34,698 47 0.54 % 7,848 7 0.36 %
Time deposits   310,120       898   1.16 %   260,431       607   0.93 %
Total interest-bearing deposits 612,021 1,150 0.75 % 499,467 733 0.59 %
Borrowings:
FHLB short-term borrowings 86,429 123 0.57 % 157,555 94 0.24 %
Securities sold under agreements to repurchase and federal funds purchased 17,442 4 0.09 % 22,695 5 0.09 %
FHLB long-term borrowings   64,615       154   0.95 %   556       2   1.44 %
Total borrowings   168,486       281   0.67 %   180,806       101   0.22 %
Total interest-bearing deposits and borrowings 780,507 1,431 0.73 % 680,273 834 0.49 %
Noninterest-bearing liabilities:
Demand deposits 308,507 260,638
Other liabilities   8,782     8,631  
Total liabilities 1,097,796 949,542
Shareholders' Equity   111,068     100,754  
Total Liabilities and Shareholders' Equity $ 1,208,864   $ 1,050,296  
 
Interest Spread(2) 3.37 % 3.56 %
 
Net Interest Margin(3) $ 10,550   3.61 % $ 9,442   3.72 %
                         
 

(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.

 
 
 
Segment Reporting
           
Three Months Ended Commercial Mortgage Wealth Consolidated
March 31, 2016   Banking Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 11,756 $ 344 $ - $ 4 $ (123 ) $ 11,981
Gain on sale of loans - 3,830 - - - 3,830
Other revenues   936   1,247   778     347     (319 )   2,989
Total revenues   12,692   5,421   778     351     (442 )   18,800
 
Expenses:
Interest expense 1,436 51 - 67 (123 ) 1,431
Salaries and employee benefits 3,923 3,185 560 - - 7,668
Other expenses   1,840   1,069   291     580     (319 )   3,461
Total operating expenses   7,199   4,305   851     647     (442 )   12,560
 
Income (loss) before income taxes $ 5,493 $ 1,116 $ (73 ) $ (296 ) $ -   $ 6,240
 
Total assets $ 1,185,681 $ 32,716 $ 2,686   $ 17,283   $ (21,331 ) $ 1,217,035
 
 
Three Months Ended Commercial Mortgage Wealth Consolidated
March 31, 2015   Banking Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 10,080 $ 362 $ - $ 3 $ (169 ) $ 10,276
Gain on sale of loans - 3,571 - - - 3,571
Other revenues   719   1,425   545     346     (301 )   2,734
Total revenues   10,799   5,358   545     349     (470 )   16,581
 
Expenses:
Interest expense 838 95 - 64 (169 ) 828
Salaries and employee benefits 3,227 3,026 464 - - 6,717
Other expenses   1,804   1,225   213     594     (301 )   3,535
Total operating expenses   5,869   4,346   677     658     (470 )   11,080
 
Income (loss) before income taxes $ 4,930 $ 1,012 $ (132 ) $ (309 ) $ -   $ 5,501
 
Total assets $ 1,010,045 $ 60,042 $ 1,284   $ 15,741   $ (17,910 ) $ 1,069,202
 

Access National Corporation
Michael Clarke, 703-871-2100

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