Market Overview

Access National Finishes Year with Exceptional Loan Growth


Access National Corporation (NASDAQ:ANCX) (the "Corporation" or
"Access"), parent company for Access National Bank (the "Bank") and
Middleburg Investment Group, reported fourth quarter 2018 net income of
$8.7 million, or $0.41 per diluted share. This represents the
Corporation's 74th consecutive quarterly profit over its 76
quarter history. Due to the timing of the pending merger with Union
Bankshares ("Union"), the Access Board of Directors did not declare a
dividend for this reporting period.

On January 24, 2019, the Union Board of Directors declared a $0.23 per
share dividend for Union common shareholders of record as of February 8,
2019 and payable on February 22, 2019. At the exchange rate of 0.75 for
Access shares to Union shares, which will occur on February 1, 2019, the
dividend to be paid equates to a $0.1725 per share dividend for Access
common shareholders.


  • All shareholder and regulatory approvals are in place for the Union
    merger to close as expected in February, 2019;
  • For the three month period ended December 31, 2018, net income
    increased 186.6% compared to the same period of the prior year;
  • Gross loans held for investment increased $196.5 million during the
    twelve-month period ended December 31, 2018, inclusive of a growth of
    $81.2 million in the fourth quarter 2018;
  • Customer deposits increased $26.6 million during the twelve month
    period ended December 31, 2018 to $2.3 billion;
  • Demand deposits of $1.2 billion at December 31, 2018 comprised 53.3%
    of total deposits, inclusive of $731.4 million of non-interest bearing
    demand deposits or 32.4% of the deposit portfolio;
  • Merger related expenses totaled $1.5 million during the fourth quarter
    of 2018 accounting for a $0.07 decrease in fourth quarter earnings per
    share; and
  • Tangible book value1 per common share was $12.88 at
    December 31, 2018, an increase of $1.36 from the prior year ended
    December 31, 2017.

According to CEO Michael Clarke, "For the second consecutive quarter,
net loan growth exceeded our stated goal of annualized growth of $200
million per annum. On a linked quarter basis, net loans grew at an
annualized pace of 15.5% compared to an annualized rate of 22% in the
period ended September 30, 2018. The exceptional growth evidences the
enthusiasm our relationship managers and their clients have concerning
our pending combination with Union." Mr. Clarke continued, "The
convincing approval of the merger by our shareholders on January 15,
2019 made an equally strong statement concerning the anticipated
benefits of investing with Union to create Virginia's regional bank."

Gross loans held for investment increased $81.2 million during the
quarter to $2.2 billion at December 31, 2018 resulting in a total growth
of $196.5 million in 2018. As of December 31, 2018, commercial and
industrial loans as well as owner occupied commercial real estate loans
combined to account for 51.2% of the loan portfolio, reflecting the
Corporation's continued focus on lower-middle-market businesses. The
Corporation's priority focus remains on expanding borrowers in these
portfolios as a driver of future growth in the loan portfolio, along
with related core deposits.

Noninterest-bearing deposits at December 31, 2018 were $731.4 million, a
decrease of $13.5 million compared to December 31, 2017 and remain the
largest and most attractive source of funding for the Corporation,
comprising 32.4% of the deposit portfolio. When combined with
interest-bearing demand deposit accounts, total transaction accounts
comprise 53.3% of the total deposit portfolio, reducing reliance of
non-core and more price sensitive funding. Total deposits grew $26.6
million from December 31, 2017 to December 31, 2018 ending the year at
$2.3 billion.

The net interest margin on a fully tax equivalent (non-GAAP) basis was
3.69% at December 31, 2018 compared to 3.88% at December 31, 2017. Net
purchase mark accretion included in net interest income was $504
thousand for the fourth quarter 2018 and $2.7 million for the year.

Non-performing assets ("NPAs") increased to $7.1 million at December 31,
2018 from $6.1 million at September 30, 2018, representing 0.23% and
0.20% of total assets, respectively. Included in the NPA total is $585
thousand in other real estate owned. The provision for loan loss was
$1.5 million during the fourth quarter 2018 and was due mainly to the
growth in the loan portfolio. The allowance for loan loss represented
0.84% of total loans held for investment at December 31, 2018.

Tangible book value2 per common share increased to $12.88 at
December 31, 2018 from $12.33 at September 30, 2018 and $11.52 at
December 31, 2017. The tangible common equity ratio for Access National
Corporation and its subsidiary bank was 9.51% at December 31, 2018, at
the top of the Corporation's target range of 8.50% to 9.50%.

Access National Corporation is the parent company of Access National
Bank and Middleburg Investment Group serving Northern and Central
Virginia. Additional information is available on our website at
Shares of Access National Corporation are traded on the NASDAQ Global
Market under the symbol "ANCX".

Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, without
limitation, projections, predictions, expectations, or beliefs about
future events or results and are not statements of historical fact. Such
statements also include statements as to the anticipated impact of the
proposed Union acquisition of Access, including future financial and
operating results, ability to successfully integrate the combined
businesses, the amount of cost savings, overall operational efficiencies
and enhanced revenues and the expected closing date, as well as other
statements regarding the acquisition. Such forward-looking statements
are based on various assumptions as of the time they are made, and are
inherently subject to known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Forward-looking statements are often accompanied by words that convey
projected future events or outcomes such as "expect," "believe,"
"estimate," "plan," "project," "anticipate," "intend," "will," "may,"
"view," "opportunity," "potential," or words of similar meaning or other
statements concerning opinions or judgment of Access or its management
about future events. Although Access believes that its expectations with
respect to forward-looking statements are based upon reasonable
assumptions within the bounds of its existing knowledge of its business
and operations, there can be no assurance that actual results,
performance, or achievements of Access will not differ materially from
any projected future results, performance or achievements expressed or
implied by such forward-looking statements. Actual future results,
performance or achievements may differ materially from historical
results or those anticipated depending on a variety of factors,
including but not limited to, economic and financial market conditions
in the United States generally and particularly in the markets in which
Access operates and which its loans are concentrated including declines
in real estate values, the effects an increase in unemployment levels,
slowdowns in economic growth, and a prolonged federal government
shutdown, changes in asset quality and credit risk, changes in interest
rates and capital markets, competitive conditions, the quality or
composition of the loan or investment portfolios, the fact that the
businesses of Union and Access may not be integrated successfully or
such integration may be more difficult, time-consuming or costly than
expected, expected revenue synergies and cost savings from the proposed
acquisition may not be fully realized or realized within the expected
time frame, revenues following the proposed acquisition may be lower
than expected, customer and employee relationships and business
operations may be disrupted by the proposed acquisition, the diversion
of management time on merger-related issues, changes in Union's share
price before closing, risks relating to the potential dilutive effect of
shares of Union common stock to be issued in the proposed transaction,
the ability to close the proposed acquisition on the expected timeframe,
or at all, and that closing may be more difficult, time-consuming or
costly than expected, the reaction to the proposed acquisition of the
companies' customers, employees and counterparties, and other risk
factors, many of which are beyond the control of Access. We refer you to
the "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of Access's
Annual Report on Form 10-K for the year ended December 31, 2017 and
comparable "risk factors" sections of Access's Quarterly Reports on Form
10-Q and other filings, which have been filed with the Securities and
Exchange Commission (the "SEC") and are available on the SEC's website
All of the forward-looking statements made in this press release are
expressly qualified by the cautionary statements contained or referred
to herein. The actual results or developments anticipated may not be
realized or, even if substantially realized, they may not have the
expected consequences to or effects on Union, Access or its businesses
or operations. Readers are cautioned not to rely too heavily on the
forward-looking statements contained in this press release.
Forward-looking statements speak only as of the date they are made and
Access does not undertake any obligation to update, revise or clarify
these forward-looking statements, whether as a result of new
information, future events or otherwise.


1 Non-GAAP financial information. See "Reconciliation of
Non-GAAP Financial Measures" at end of release.
2 Non-GAAP financial information. See "Reconciliation of
Non-GAAP Financial Measures" at end of release.
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Access National Corporation
Consolidated Balance Sheet - Unaudited
  December 31,   December 31,
(In Thousands Except for Share and Per Share Data)     2018       2017  
Cash and due from banks $ 18,591 $ 29,855
Interest-bearing balances and federal funds sold 66,756 92,458
Investment securities:
Available-for-sale, at fair value 423,760 406,067
Marketable equity, at fair value - 1,379
Held-to-maturity, amortized cost (fair value of $ 22,474 and
$16,379, respectively)
  22,465       15,721  
Total investment securities 446,225 423,167
Restricted Stock, at amortized cost 22,935 16,572
Loans held for sale - at fair value 20,537 31,999

Loans held for investment net of allowance for loan losses of
$18,181 and $15,805, respectively

2,157,273 1,963,104
Premises, equipment and land, net 27,432 27,797
Goodwill and intangible assets, net 183,218 185,161