ANCX Access National Corp.

Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank (Bank), reported second quarter 2015 net income of $4.0 million, or $0.38 per common share. This represents the Corporation’s 60th consecutive quarterly profit over its 62 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 August 03, 2015 and payable on August 25, 2015. The routine dividend reflects Management’s favorable performance outlook and comfort with a favorable capital position.

Overall, second quarter 2015 pretax earnings increased $1.3 million or 28% when compared to second quarter 2014. The increase was primarily due to increases in pretax income for both the banking and mortgage segments from second quarter 2014 of $430 thousand and $800 thousand, respectively. The banking segment’s increase was due to an increase in net interest income over second quarter 2014 of $1.0 million partially offset by an increase in provision for loan losses of $150 thousand, an increase in salaries and benefits of $334 thousand, and an increase in other operating expense of $222 thousand due largely to enhancements in the Bank’s online banking platform. The mortgage segment’s increase over second quarter 2014 was due to an increase in mortgage loan originations of $36 million or 33%. This resulted in an increase of $1.5 million in non-interest income which was partially offset by an increase in non-interest expense of $778 thousand over 2014 due to costs related to the increased production volume.

Net interest margin for the first six months of 2015 decreased from 3.79% to 3.69% when compared to the same period in 2014. On a linked quarter basis, the margin decreased to 3.67% for the three months ended June 30, 2015 compared to 3.72% for the three months ended March 31, 2015.

On a consolidated basis, the Corporation reported annualized return on average assets of 1.44% and 1.40% for the three and six month periods ended June 30, 2015, respectively. Meanwhile, the annualized return on average equity was 15.54% and 14.87% for the three and six months ended June 30, 2015, respectively.

Total assets at June 30, 2015 amounted to $1.2 billion compared to $1.1 billion at December 31, 2014, an overall increase of $113.2 million. An increase in loans held for investment of $57.5 million, a $33.0 million increase in interest-bearing balances, a $13.5 million growth in investment securities, and a growth in loans held for sale of $5.3 million accounted for the majority of this increase. Loan growth in all categories of the loans held for investment portfolio has occurred during the first half of 2015. Overall, the portfolio of loans held for investment grew at an annualized rate of 14.8% with commercial real estate-owner occupied loans increasing by the largest dollar amount.

Total deposits at June 30, 2015 increased $150.0 million from December 31, 2014 due mainly to an increase in demand deposits of $86.4 million and an increase in brokered deposits of $100.1 million. The deliberate increase in brokered deposits during the most recent period was to partially offset the increase in securities, and the increase in loans held for sale from December 31, 2014, as well as reduce short-term borrowings. Management continues to focus on expanding business banking relationships as evidenced by the 34.2% year-to-date growth in demand deposits.

Non-performing assets (NPAs) increased to $7.4 million at June 30, 2015 from $1.6 million at December 31, 2014, representing 0.64% and 0.15% of total assets, respectively. The increase in NPA’s was mainly due to the addition of two loans totaling $6.6 million to non-accrual status. The Bank did not have other real estate owned at June 30, 2015, while Access Real Estate, LLC had other real estate owned with a carrying value of $500 thousand. The allowance for loan loss had a slight increase from $13.4 million at December 31, 2014 to $13.5 million at June 30, 2015 or 1.62% and 1.73% of total loans held for investment as of June 30, 2015 and December 31, 2014, respectively.

Book value per common share increased from $9.45 at December 31, 2014 to $9.94 at June 30, 2015. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 9.0% at June 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   June 30, December 31, June 30, 2015 2014 2014 (In Thousands Except for Share and Per Share Data)     (Unaudited)           (Unaudited)   ASSETS   Cash and due from banks $ 12,314 $ 9,804 $ 11,702   Interest-bearing balances and federal funds sold 79,186 46,225 36,119   Investment securities: Available-for-sale, at fair value 138,617 125,080 114,227 Held-to-maturity, at amortized cost (fair value of $14,319, $14,378 and $12,308)   14,299     14,309     12,412   Total investment securities 152,916 139,389 126,639   Restricted Stock, at amortized cost 7,471 8,961 5,361   Loans held for sale - at fair value 50,297 45,026 51,001  

Loans held for investment net of allowance for loan losses of $13,509, $13,399 and $13,211, respectively

820,733 763,204 726,914   Premises, equipment and land, net 6,909 6,926 8,326   Other assets 36,296 33,345 33,125                   Total assets $ 1,166,122   $ 1,052,880   $ 999,187     LIABILITIES AND SHAREHOLDERS' EQUITY   LIABILITIES Noninterest-bearing deposits $ 339,266 $ 252,875 $ 271,225   Savings and interest-bearing deposits 240,060 233,773 235,704   Time deposits   326,076     268,795     284,824     Total deposits 905,402 755,443 791,753   Short-term borrowings 138,079 185,635 100,453   Long-term borrowings 10,000 - -   Other liabilities and accrued expenses 8,126 12,898 10,845                   Total Liabilities   1,061,607     953,976     903,051     SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding,10,519,376, 10,469,569 and 10,422,324 shares, respectively

8,783 8,742 8,703   Additional paid in capital 19,491 18,538 17,994   Retained earnings 76,682 72,168 70,205   Accumulated other comprehensive income (loss), net (441 ) (544 ) (766 )                   Total shareholders' equity   104,515     98,904     96,136                     Total liabilities and shareholders' equity $ 1,166,122   $ 1,052,880   $ 999,187                     Access National Corporation Consolidated Statement of Operations   Three Months Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 (In Thousands Except for Share and Per Share Data)     (unaudited)     (unaudited)   INTEREST INCOME Interest and fees on loans $ 9,971 $ 8,854 $ 19,405 $ 17,313   Interest on federal funds sold and bank balances 34 27 61 45   Interest and dividends on securities   782   621   1,597   1,089 Total interest income 10,787 9,502 21,063 18,447   INTEREST EXPENSE Interest on deposits 867 787 1,600 1,515   Interest on other borrowings   113   52   214   128 Total interest expense   980   839   1,814   1,643 Net interest income 9,807 8,663 19,249 16,804   Provision for loan losses   150   -   150   - Net interest income after provision for loan losses 9,657 8,663 19,099 16,804   NONINTEREST INCOME Service charges and fees 218 181 415 358   Gain on sale of loans 5,705 3,787 9,276 5,515   Other Income   1,158   1,348   3,695   2,699 Total noninterest income 7,081 5,316 13,386 8,572   NONINTEREST EXPENSE Salaries and benefits 6,999 5,952 13,716 10,839   Occupancy and equipment 742 660 1,496 1,367   Other operating expense   2,913   2,606   5,688   4,669 Total noninterest expense   10,654   9,218   20,900   16,875 Income before income tax 6,084 4,761 11,585 8,501   Income tax expense   2,100   1,697   4,028   3,023 NET INCOME   3,984   3,064   7,557   5,478   Earnings per common share: Basic $ 0.38 $ 0.29 $ 0.72 $ 0.52 Diluted $ 0.38 $ 0.29 $ 0.72 $ 0.52   Average outstanding shares: Basic 10,518,939 10,411,085 10,496,152 10,401,083 Diluted 10,590,882 10,454,712 10,554,052 10,450,899                                                       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)     2015     2015     2015     2014     2014   Return on average assets (annualized) 1.44 % 1.36 % 1.40 % 1.20 % 1.45 % Return on average equity (annualized) 15.54 % 14.19 % 14.87 % 11.69 % 14.47 % Net interest margin 3.67 % 3.72 % 3.69 % 3.79 % 3.80 % Efficiency ratio - Bank only 48.66 % 50.51 % 49.54 % 49.67 % 48.96 % Total average equity to earning assets 9.58 % 9.93 % 9.75 % 10.56 % 10.37 %   Averages Assets $ 1,108,029 $ 1,050,296 $ 1,079,322 $ 912,396 $ 958,067 Loans held for investment 814,393 781,990 798,281 709,593 721,863 Loans held for sale 59,154 38,065 48,667 23,129 31,288 Interest-bearing deposits & federal funds sold 54,026 46,828 50,447 40,661 44,939 Investment securities 142,644 147,385 145,001 111,791 128,446 Earning assets 1,070,016 1,014,351 1,042,337 887,172 927,845 Interest-bearing deposits 535,671 499,467 517,669 470,755 477,267 Total deposits 839,035 760,105 799,788 690,913 715,385 Repurchase agreements & federal funds purchased 22,506 22,695 22,600 21,719 21,129 Short term borrowings 125,736 157,555 141,558 96,354 115,471 Long-term borrowings 10,000 556 5,304 - - Equity $ 102,560 $ 100,754 $ 101,662 $ 93,703 $ 96,227   Banking segment - income before taxes $ 5,134 $ 4,930 $ 10,064 $ 8,885 $ 18,889 Mortgage segment - income before taxes $ 1,383 $ 1,012 $ 2,395 $ 586 $ 5,043 Wealth Management segment - loss before taxes $ (124 ) $ (132 ) $ (256 ) $ (156 ) $ (350 ) Other segments - loss before taxes $ (309 ) $ (309 ) $ (618 ) $ (814 ) $ (2,072 )   Allowance for loan losses/loans held for investment 1.62 % 1.68 % 1.62 % 1.78 % 1.73 % Total NPA 7,427 6,784 7,427 1,872 1,622 NPA to total assets 0.64 % 0.63 % 0.64 % 0.19 % 0.15 %   Mortgage loan originations and brokered loans $ 145,223 $ 114,541 $ 259,764 $ 179,820 $ 408,346 Gain on sale of mortgage loans net hedging activity $ 5,959 $ 3,058 $ 9,017 $ 6,026 $ 12,779 Allowance for losses on mortgage loans sold $ 1,187 $ 1,187 $ 1,187 $ 4,633 $ 1,198   Wealth Management segment - assets under management $ 546,000 $ 523,000 $ 546,000 $ 454,000 $ 450,372   Book value per common share $ 9.94 $ 9.75 $ 9.94 $ 9.22 $ 9.45                           Composition of Loan Portfolio         June 30, 2015     March 31, 2015     December 31, 2014 (Dollars In Thousands)     Amount    

Percentage

of Total

    Amount    

Percentage

of Total

    Amount    

Percentage

of Total

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

Percentage

of Total

    Amount    

Percentage

of Total

    Amount    

Percentage

of Total

  Demand deposits $ 339,266 37.47 % $ 290,294 36.92 % $ 252,875 33.47 % Interest-bearing demand deposits 110,294 12.18 127,504 16.21 116,654 15.44 Savings and money market 113,909 12.58 103,460 13.16 101,409 13.42 CDARS-time deposits 90,523 10.00 127,669 16.24 148,142 19.61 CDARS-money market 15,647 1.73 15,632 1.99 15,497 2.06 Brokered deposits 113,402 12.53 13,213 1.68 13,344 1.77 Time deposits   122,361     13.51         108,547     13.80         107,522     14.23   Total Deposits $ 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         June 30, 2015     June 30, 2014     Average     Income /     Yield /     Average     Income /     Yield / (Dollars In Thousands)     Balance     Expense     Rate     Balance     Expense     Rate   Assets: Interest-earning assets: Securities $ 142,443 $ 782 2.20 % $ 122,698 $ 621 2.02 % Loans held for sale 59,154 564 3.81 % 27,502 297 4.32 % Loans(1) 814,393 9,407 4.62 % 720,634 8,557 4.75 % Interest-bearing balances and federal funds sold   54,026         34     0.25 %   42,055         27     0.26 % Total interest-earning assets 1,070,016 10,787 4.03 % 912,889 9,502 4.16 % Noninterest-earning assets: Cash and due from banks 11,244 9,223 Premises, land and equipment 6,971 8,383 Other assets 33,246 27,140 Less: allowance for loan losses   (13,448 )   (13,183 ) Total noninterest-earning assets   38,013     31,563   Total Assets $ 1,108,029   $ 944,452     Liabilities and Shareholders' Equity: Interest-bearing deposits: Interest-bearing demand deposits $ 111,282 $ 62 0.22 % $ 109,602 $ 62 0.23 % Money market deposit accounts 111,765 55 0.20 % 115,355 58 0.20 % Savings accounts 10,098 10 0.40 % 3,353 3 0.36 % Time deposits   302,526         740     0.98 %   271,125         664     0.98 % Total interest-bearing deposits 535,671 867 0.65 % 499,435 787 0.63 % Borrowings: FHLB short-term borrowings 125,736 77 0.24 % 76,978 47 0.24 % Securities sold under agreements to repurchase and federal funds purchased 22,506 6 0.11 % 20,082 5 0.10 % FHLB long-term borrowings   10,000         30     1.20 %   -         -     0.00 % Total borrowings   158,242         113     0.29 %   97,060         52     0.21 % Total interest-bearing deposits and borrowings 693,913 980 0.56 % 596,495 839 0.56 % Noninterest-bearing liabilities: Demand deposits 303,364 243,602 Other liabilities   8,192     9,555   Total liabilities 1,005,469 849,652 Shareholders' Equity   102,560     94,800   Total Liabilities and Shareholders' Equity $ 1,108,029   $ 944,452     Interest Spread(2) 3.47 % 3.60 %   Net Interest Margin(3) $ 9,807     3.67 % $ 8,663     3.80 %                                                        

(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, 2015     June 30, 2014     Average     Income /     Yield /     Average     Income /     Yield / (Dollars In Thousands)     Balance     Expense     Rate     Balance     Expense     Rate   Assets: Interest-earning assets: Securities $ 144,942 $ 1,597 2.20 % $ 113,789 $ 1,089 1.91 % Loans held for sale 48,667 926 3.81 % 23,129 499 4.31 % Loans(1) 798,281 18,479 4.63 % 709,593 16,814 4.74 % Interest-bearing balances and federal funds sold   50,447         61     0.24 %   40,661         45     0.22 % Total interest-earning assets 1,042,337 21,063 4.04 % 887,172 18,447 4.16 % Noninterest-earning assets: Cash and due from banks 10,579 8,420 Premises, land and equipment 6,935 8,381 Other assets 32,864 21,604 Less: allowance for loan losses   (13,393 )   (13,182 ) Total noninterest-earning assets   36,985     25,223   Total Assets $ 1,079,322   $ 912,396     Liabilities and Shareholders' Equity: Interest-bearing deposits: Interest-bearing demand deposits $ 115,958 $ 127 0.22 % $ 107,719 $ 120 0.22 % Money market deposit accounts 111,137 109 0.20 % 114,740 115 0.20 % Savings accounts 8,979 17 0.38 % 3,112 5 0.32 % Time deposits   281,595         1,347     0.96 %   245,184         1,275     1.04 % Total interest-bearing deposits 517,669 1,600 0.62 % 470,755 1,515 0.64 % Borrowings: FHLB short-term borrowings 141,558 171 0.24 % 96,354 117 0.24 % Securities sold under agreements to repurchase and federal funds purchased 22,600 11 0.10 % 21,719 11 0.10 % FHLB long-term borrowings   5,304         32     1.21 %   -         -     0.00 % Total borrowings   169,462         214     0.25 %   118,073         128     0.22 % Total interest-bearing deposits and borrowings 687,131 1,814 0.53 % 588,828 1,643 0.56 % Noninterest-bearing liabilities: Demand deposits 282,119 220,158 Other liabilities   8,410     9,707   Total liabilities 977,660 818,693 Shareholders' Equity   101,662     93,703   Total Liabilities and Shareholders' Equity $ 1,079,322   $ 912,396     Interest Spread(2) 3.51 % 3.60 %   Net Interest Margin(3) $ 19,249     3.69 % $ 16,804     3.79 %    

(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