Access National Corporation (NASDAQ: ANCX) (the
“Corporation” or “Access”), parent company for Access National Bank
(the “Bank”) and Middleburg Investment Group, reported fourth
quarter 2017 net income of $3.0 million, or $0.15 per diluted
share. Excluding a one-time tax adjustment related to the Tax Cuts
and Jobs Act of 2017 and provision expense related to one large
commercial credit, net income was $8.6 million or $0.42 per diluted
share. This represents the Corporation’s 70th consecutive quarterly
profit over its 72 quarter history. Consistent with management’s
renewed objective of a 40% dividend payout of sustainable core
earnings, the Board of Directors declared a dividend of $0.15 per
share for common shareholders of record as of February 12, 2018 and
payable on February 23, 2018.
Highlights
- Reported fourth quarter earnings of
$3.0 million or $0.15 per diluted share. Excluding $3.1 million in
pre-tax ($2.1 million after tax) provision expense related to one
large commercial credit and $3.5 million in tax expense related to
the Tax Cuts and Jobs Act of 2017 (“Act”), earnings were $8.6
million after tax or $0.42 per diluted share;
- Tangible book value1 per common share
was $11.52 at December 31, 2017, a decrease of $0.12 from the prior
period. Excluding the $3.5 million tax expense related to the Act,
tangible book value per common share was $11.69;
- Loans held for investment were $1.98
billion at December 31, 2017 compared to $1.05 billion at December
31, 2016, a year-over-year growth of 88.5%. Organic loan growth
from the linked quarter was $34.8 million prior to the strategic
sale of $17.2 million of non-core residential real estate loans and
the disposition of a deteriorating commercial loan of $8.5 million;
and
- Non-interest bearing demand deposits of
$745.0 million were 33.3% of total deposits at December 31, 2017
compared to $362.0 million at December 31, 2016, a year-over-year
growth of 105.8%.
The transformative combination of Access National with
Middleburg Financial continues on a successful progression. “We
continue to work on putting acquisition distractions behind us and
believe the stage is set for a promising 2018. In spite of the
noise this quarter with the tax adjustment and loan portfolio
repositioning, we remain on target with the financial objectives of
our merger. Furthermore, we continue to implement a program of
enhanced focus on our target markets that is producing results in
the most desirable segments of the deposit and loan portfolios. We
are confident in our ability to meet our renewed growth targets in
2018 of $200 million per annum in net deposit and loan growth.”
Fourth quarter 2017 pre-tax earnings were $9.0 million, down
from the $9.4 million reported in the third quarter of 2017 due
mainly to an impaired credit loss of $3.1 million pre-tax. The
commercial banking segment’s net interest income declined $636
thousand from the linked quarter, from $24.4 million to $23.7
million. The commercial banking segment’s other expense reflected
an increase of $101 thousand when compared to the third quarter of
2017 and included a $3.1 million pre-tax provision expense.
The net interest margin on a fully tax equivalent (non-GAAP)
basis decreased to 3.83% from 3.86% when comparing fourth quarter
to third quarter 2017. Fourth quarter net interest margin exclusive
of the $1.2 million credit mark accretion for the acquired loan
portfolio and the $3 thousand in liability discount amortization
was 3.77% for the three months ended December 31, 2017.
Total deposits at December 31, 2017 were $2.2 billion, down
slightly from the $2.3 billion at September 30, 2017 while
non-interest bearing deposits increased $34.3 million from the
linked quarter, to $745.0 million. While non-interest bearing
demand deposits remain the largest and most attractive source of
funding for the Corporation, the combination of legacy Middleburg’s
significant low cost interest-bearing demand deposits and legacy
Access’ non-interest bearing demand deposits accounted for $1.2
billion or 55.6% of total deposits at December 31, 2017.
Interest-bearing deposits decreased to $1.5 billion at December 31,
2017 when compared to $1.6 billion from the prior quarter. Brokered
deposits as a percentage of the deposit portfolio decreased quarter
over quarter, from 3.1% of the portfolio at September 30, 2017 to
2.3% at December 31, 2017, a decrease of $20.1 million. The
go-forward strategy places a high priority on the maintenance and
expansion of core deposits, particularly high value demand deposit
relationships.
Prior to the strategic sale and disposition of $25.7 million in
loans, organic loan growth during the fourth quarter was $34.8
million. Organic loan growth net of run-off totaled $116 million
for the three quarters since the acquisition of Middleburg
Financial Corporation. Acquired non-core residential real estate
loans in the amount $17.2 million were sold to mitigate interest
rate risk and provide portfolio capacity for relationship focused
credits. A gain on the sale of this portfolio was recognized in the
amount of $136 thousand pre-tax as well as the recognition of $481
thousand in pre-tax credit and fair value marks. Separately, a
deteriorating commercial loan relationship in the amount $8.5
million was sold for $4.9 million, creating a loss of $3.6 million
charged to the reserve. This charge accounted for the majority of
the $3.7 million provision expense during the quarter. In careful
analysis in reaching the decision to exit this relationship,
management concluded the credit was destined to become a
non-accrual loan in the very near term and generate losses over a
prolonged work out or liquidation at a level well beyond the
incurred charge.
Non-performing assets (“NPAs”) decreased to $5.3 million at
December 31, 2017 from $7.8 million at September 30, 2017,
representing 0.18% and 0.27% of total assets, respectively.
Included in the NPAs total is $643 thousand in other real estate
owned, a reduction of $1.4 million over the prior quarter. The
allowance for loan loss was $15.8 million and $15.7 million at
December 31, 2017 and September 30, 2017, respectively, and
represented 0.80% of total loans held for investment at December
31, 2017 and September 30, 2017. The remaining credit and fair
value marks on the loans acquired in the merger totaled $12.4
million at December 31, 2017.
Tangible book value2 per common share decreased from $11.64 at
September 30, 2017 to $11.52 at December 31, 2017. The tangible
common equity ratio for Access National Corporation and its
subsidiary bank was 8.79% at December 31, 2017, within 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 www.AccessNationalBank.com. Shares of Access National
Corporation are traded on the NASDAQ Global Market under the symbol
"ANCX".
Forward-Looking Statements
The information presented herein contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 regarding expectations or predictions of future
financial or business performance or conditions. Forward-looking
statements may be identified by words such as "may," "could,"
"will," "expect," "believe," "anticipate," "forecast," "intend,"
"plan," "prospects," "estimate," "potential," or by variations of
such words or by similar expressions. These forward-looking
statements are subject to numerous assumptions, risks and
uncertainties which change over time. Forward-looking statements in
this report may include, but are not limited to, statements about
projected impacts of and financial results generated by the merger
of Access and Middleburg Financial Corporation (“Middleburg”).
Forward-looking statements speak only as of the date they are made
and Access assumes no duty to update forward-looking
statements.
In addition to factors previously disclosed in Access's reports
filed with the SEC and those identified elsewhere in this release,
the following factors, among others, could cause actual results to
differ materially from the results expressed in or implied by
forward-looking statements and historical performance: changes in
asset quality and credit risk; changes in interest rates and
capital markets; the introduction, timing and success of business
initiatives; competitive conditions; and the inability to recognize
cost savings or revenues or to implement integration plans
associated with the merger of Access and Middleburg.
__________
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.
Access
National Corporation Consolidated Balance Sheet
December 31, December 31, 2017 2016 (In
Thousands Except for Share and Per Share Data) (Unaudited)
ASSETS Cash and due from banks $
29,855 $ 9,186 Interest-bearing balances and federal funds
sold 92,458 81,873 Investment securities:
Available-for-sale, at fair value 407,446 194,090 Held-to-maturity,
at amortized cost (fair value of $16,379 and $9,293, respectively)
15,721 9,200 Total investment
securities 423,167 203,290 Restricted Stock, at amortized
cost 16,572 10,092 Loans held for sale - at fair value
31,999 35,676
Loans held for investment net of allowance
for loan losses of $15,805 and $16,008, respectively
1,963,104 1,033,690 Premises, equipment and land, net 27,797
7,084 Goodwill and intangible assets 185,161 1,833
Other assets 103,781 47,984 Total assets $ 2,873,894
$ 1,430,708
LIABILITIES AND SHAREHOLDERS'
EQUITY LIABILITIES Noninterest-bearing deposits $
744,960 $ 362,036 Interest-bearing demand deposits 496,677
126,189 Savings and interest-bearing deposits 623,889
314,396 Time deposits 368,622 251,706
Total deposits 2,234,148 1,054,327 Short-term
borrowings 145,993 186,009 Long-term borrowings 40,000
60,000 Trust preferred debentures 3,883 - Other
liabilities and accrued expenses 28,246 9,842 Total
Liabilities 2,452,270 1,310,178
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000
authorized; issued and outstanding, 20,534,163 and 10,636,242 ,
respectively
17,146 8,881 Additional paid in capital 307,614 21,779
Retained earnings 98,584 91,439 Accumulated other
comprehensive income (loss), net (1,720 ) (1,569 )
Total shareholders' equity 421,624 120,530
Total liabilities and shareholders' equity $
2,873,894 $ 1,430,708
Access
National Corporation Consolidated Statement of
Operations Three Months Ended Twelve
Months Ended December 31, 2017 December 31, 2016 December
31, 2017 December 31, 2016 (In Thousands Except for Share
and Per Share Data) (unaudited) (unaudited)
INTEREST INCOME Interest and fees on loans $
24,321 $ 11,762 $ 84,572 $ 45,639 Interest on federal funds
sold and bank balances 453 73 1,199 337 Interest and
dividends on securities 2,321 1,085 9,709
4,039 Total interest income 27,095 12,920 95,480 50,015
INTEREST EXPENSE Interest on deposits 2,714 1,376
9,274 5,150 Interest on other borrowings 468
287 1,834 1,154 Total interest expense 3,182
1,663 11,108 6,304 Net interest income 23,913
11,257 84,372 43,711 Provision for loan losses 3,719
1,250 6,919 2,120 Net interest income after
provision for loan losses 20,194 10,007 77,453 41,591
NONINTEREST INCOME Service charges and fees 489 223 1,998
971 Gain on sale of loans 5,095 5,745 20,080 25,164
Other Income 3,097 1,158 10,014 5,668
Total noninterest income 8,681 7,126 32,092 31,803
NONINTEREST EXPENSE Salaries and benefits 12,115 7,495
43,915 31,778 Occupancy and equipment 1,058 766 6,878 3,044
Other operating expense 6,681 3,928
30,275 12,968 Total noninterest expense 19,854
12,189 81,068 47,790 Income before income tax 9,021
4,944 28,477 25,604 Income tax expense 5,976
1,938 11,977 9,200
NET INCOME $ 3,045 $ 3,006
$ 16,500 $ 16,404 Earnings per common share: Basic $ 0.15 $
0.28 $ 0.92 $ 1.55 Diluted $ 0.15 $ 0.28 $ 0.92 $ 1.54
Average outstanding shares: Basic 20,485,116 10,620,312 17,988,670
10,586,394 Diluted 20,601,740 10,775,553 18,076,304 10,677,561
Performance and Capital Ratios
Three Months Three Months
Three Months Three Months
Twelve Months Twelve Months Ended
Ended Ended Ended Ended Ended
December 31, September 30, June 30, March
31, December 31, December 31, (Dollars In
Thousands)
2017 2017 2017
2017 2017 2016
Return on average assets (annualized) 0.43 % 0.96 % 0.55 % 0.74 %
0.67 % 1.27 % Return on average equity (annualized) 3.09 % 6.69 %
3.73 % 8.57 % 5.03 % 14.11 % Return on tangible average equity
(annualized) (1) 5.06 % 11.89 % 6.73 % 8.70 % 7.72 % 14.33 % Net
interest margin - fully tax equivalent basis (1) 3.83 % 3.86 % 3.97
% 3.52 % 3.88 % 3.55 % Net interest margin 3.77 % 3.76 % 3.91 %
3.46 % 3.81 % 3.52 % Efficiency ratio - Bank only 51.48 % 57.56 %
59.23 % 53.26 % 55.72 % 49.59 % Total average equity to earning
assets 15.55 % 16.00 % 16.68 % 8.99 % 14.82 % 9.36 % Tangible
common equity ratio (1) 8.79 % 8.85 % 8.97 % 8.65 % 8.79 % 8.31 %
Averages Assets $ 2,837,834 $ 2,922,105 $ 2,789,088 $
1,401,652 $ 2,453,894 $ 1,288,582 Loans held for investment
1,965,608 2,002,842 1,896,824 1,052,167 1,704,040 939,837 Loans
held for sale 30,006 28,734 28,254 24,461 27,881 47,060
Interest-bearing deposits & federal funds sold 102,095 136,222
121,572 64,628 104,565 67,457 Investment securities 420,218 437,628
422,792 209,533 362,614 189,585 Earning assets 2,535,999 2,617,443
2,471,036 1,353,360 2,212,019 1,242,923 Interest-bearing deposits
1,528,133 1,566,286 1,523,997 761,075 1,327,261 662,271 Total
deposits 2,247,225 2,277,759 2,163,567 1,096,309 1,922,249
1,021,624 Repurchase agreements & federal funds purchased
54,702 58,149 53,949 28,369 48,378 16,270 FHLB short term
borrowings 68,300 59,697 57,824 86,200 67,907 56,522 FHLB long-term
borrowings 46,304 82,790 79,892 59,556 66,329 68,525 Trust
Preferred debt 3,871 3,029 3,824 - 2,692 - Equity $ 394,319 $
418,678 $ 412,146 $ 121,724 $ 327,738 $ 116,296 Tangible Equity(1)
$ 240,754 $ 235,526 $ 228,480 $ 119,896 $ 202,408 $ 114,437
Allowance for loan losses $ 15,805 $ 15,692 $ 14,671 $ 13,727 $
15,805 $ 16,008 Allowance for loan losses/loans held for investment
0.80 % 0.80 % 0.76 % 1.28 % 0.80 % 1.53 % Remaining fair value
marks on purchased performing loans $ 11,241 $ 12,444 $ 13,584 NA $
11,241 NA Purchased credit impaired loans $ 4,969 $ 5,184 $ 7,237
NA $ 4,969 NA Remaining fair value marks on purchased credit
impaired loans $ 1,175 $ 694 $ 2,296 NA $ 1,175 NA Total NPA $
5,270 $ 7,817 $ 8,954 $ 5,244 $ 5,270 $ 6,922 NPA to total assets
0.18 % 0.27 % 0.32 % 0.37 % 0.18 % 0.48 % Mortgage loan
originations and brokered loans $ 113,513 $ 107,706 $ 116,958 $
94,500 $ 432,678 $ 544,866 Gain on sale of mortgage loans net
hedging activity $ 4,984 $ 5,371 $ 10,792 $ 3,416 $ 19,192 $ 23,835
Allowance for losses on mortgage loans sold $ 953 $ 987 $ 1,029 $
1,029 $ 953 $ 1,029 Wealth Services segment - assets under
management $ 1,955,720 $ 1,935,780 $ 1,927,629 $ 676,865 $
1,955,720 $ 667,300 Book value per common share $ 20.53 $
20.55 $ 20.36 $ 11.40 $ 20.53 $ 11.33 Tangible book value
per common share (1) $ 11.52 $ 11.64 $ 11.32 $ 11.23 $ 11.52 $
11.16
(1) Non-GAAP financial
information. See "Reconciliation of Non-GAAP Financial Measures" at
end of release.
Composition of Loan Portfolio
December 31, 2017 September
30, 2017 June 30, 2017 March 31,
2017 December 31, 2016 (Dollars In Thousands)
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Commercial real estate - owner occupied $ 467,082 23.60 % $
443,128 22.50 % $ 401,853 20.84 % $ 262,431 24.46 % $ 250,440 23.87
% Commercial real estate - non-owner occupied 436,083 22.04 435,181
22.09 377,037 19.55 205,452 19.15 184,688 17.59 Residential real
estate 489,669 24.74 512,621 26.03 525,649 27.26 212,007 19.76
204,413 19.47 Commercial 463,652 23.43 449,450 22.82 476,055 24.69
294,451 27.45 311,486 29.67 Real estate construction 97,481 4.93
104,193 5.29 124,186 6.44 91,614 8.54 91,822 8.75 Consumer
24,942 1.26 25,087 1.27
23,565 1.22 6,836 0.64
6,849 0.65
Total loans $ 1,978,909 100.00 % $
1,969,660 100.00 % $ 1,928,345 100.00 % $ 1,072,791 100.00 % $
1,049,698 100.00 % Less allowance for loan losses 15,805
15,692 14,671 13,727 16,008 $ 1,963,104
$ 1,953,968 $ 1,913,674 $ 1,059,064 $ 1,033,690
Composition of Deposits December 31,
2017 September 30, 2017 June 30,
2017 March 31, 2017 December 31,
2016 (Dollars In Thousands)
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Amount
Percentage ofTotal
Demand deposits $ 744,960 33.34 % $ 710,691 31.09 % $
660,481 30.20 % $ 376,674 32.56 % $ 362,036 34.34 %
Interest-bearing demand deposits 486,621 21.78 480,620 21.02
454,675 20.79 141,981 12.27 126,189 11.97 Savings and money market
580,827 26.00 616,596 26.97 562,581 25.72 284,182 24.56 270,310
25.64 CDARS time deposits 21,582 0.97 37,836 1.65 39,746 1.82
41,369 3.58 34,290 3.25 CDARS/ICS non-maturity deposits 48,011 2.15
47,219 2.07 44,009 2.01 42,960 3.71 40,925 3.88 Brokered deposits
51,028 2.28 71,090 3.11 101,419 4.64 110,254 9.53 57,389 5.44 Time
deposits 301,119 13.48 322,160
14.09 324,295 14.82
159,570 13.79 163,188
15.48 Total Deposits $ 2,234,148 100.00 %
$ 2,286,212 100.00 % $ 2,187,206 100.00
% $ 1,156,990 100.00 % $ 1,054,327
100.00 %
Yield on Average Earning Assets and
Rates on Average Interest-Bearing Liabilities
Three Months Ended
December 31, 2017 December
31, 2016 Average Income /
Yield / Average Income /
Yield / (Dollars In Thousands)
Balance
Expense Rate Balance
Expense Rate Assets:
Interest-earning assets: Securities $ 438,290 $ 2,321 2.12 %
$ 204,612 $ 1,085 2.12 % Loans held for sale 30,006 297 3.96 %
44,454 412 3.71 % Loans(1) 1,965,608 24,024 4.89 % 990,517 11,350
4.58 % Interest-bearing balances and federal funds sold
102,095 453 1.77 % 60,300
73 0.48 %
Total interest-earning assets
2,535,999 27,095 4.27 %
1,299,883 12,920 3.98 %
Noninterest-earning
assets: Cash and due from banks 18,784 13,442 Premises, land
and equipment 26,156 6,989 Other assets 272,877 46,418 Less:
allowance for loan losses (15,982 ) (15,110 )
Total noninterest-earning assets 301,835
51,739 Total Assets $
2,837,834 $ 1,351,622
Liabilities and Shareholders' Equity: Interest-bearing
deposits: Interest-bearing demand deposits $ 480,147 $ 499 0.42
% $ 135,342 $ 126 0.37 % Money market deposit accounts 483,416
691
0.57
% 261,656 324 0.50 % Savings accounts 175,123
322
0.74
% 46,596 59 0.51 % Time deposits 389,447
1,202
1.23
% 258,666 867 1.34 %
Total
interest-bearing deposits 1,528,133 2,714 0.71 %
702,260 1,376 0.78 %
Borrowings: FHLB
short-term borrowings 68,300 231 1.35 % 50,728 106 0.84 %
Securities sold under agreements to repurchase and federal funds
purchased 54,702 10 0.07 % 18,765 5 0.11 % Subordinated debentures
3,871 73 7.54 % - - 0.00 % FHLB long-term borrowings 46,304
154 1.33 % 60,163
176 1.17 %
Total borrowings
173,177 468 1.08 %
129,656 287 0.89 %
Total interest-bearing deposits and borrowings
1,701,310 3,182 0.75 %
831,916 1,663
0.80 %
Noninterest-bearing liabilities: Demand deposits
719,093 389,171 Other liabilities 23,112 9,894
Total liabilities 2,443,515 1,230,981
Shareholders' Equity 394,319 120,641
Total Liabilities and Shareholders' Equity $
2,837,834 $ 1,351,622
Interest Spread(2) 3.53 % 3.18 % Net Interest Margin(3) $
23,913 3.77 % $ 11,257 3.46 %
(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 Twelve Months Ended
December 31, 2017
December 31, 2016 Average
Income / Yield / Average
Income / Yield / (Dollars In Thousands)
Balance Expense Rate
Balance Expense Rate
Assets: Interest-earning assets: Securities $ 375,533
$ 9,709 2.59 % $ 188,569 $ 4,039 2.14 % Loans held for sale 27,881
1,143 4.10 % 47,060 1,767 3.75 % Loans(1) 1,704,040 83,429 4.90 %
939,837 43,872 4.67 % Interest-bearing balances and federal funds
sold 104,565 1,199 1.15 %
67,457 337 0.50 %
Total
interest-earning assets 2,212,019
95,480 4.32 %
1,242,923 50,015
4.02 %
Noninterest-earning assets: Cash and due from banks
20,859 12,732 Premises, land and equipment 22,683 6,834 Other
assets 213,337 40,172 Less: allowance for loan losses
(15,004 ) (14,079 )
Total noninterest-earning assets
241,875 45,659 Total
Assets $ 2,453,894 $
1,288,582 Liabilities and Shareholders'
Equity: Interest-bearing deposits: Interest-bearing
demand deposits $ 386,046 $ 1,409 0.36 % $ 132,734 $ 486 0.37 %
Money market deposit accounts 386,786 2,335 0.60 % 204,897 846 0.41
% Savings accounts 153,769 714 0.46 % 37,950 196 0.52 % Time
deposits 400,660 4,816 1.20 %
286,690 3,622 1.26 %
Total
interest-bearing deposits 1,327,261 9,274 0.70 %
662,271 5,150 0.78 %
Borrowings: FHLB
short-term borrowings 67,907 822 1.21 % 56,522 386 0.68 %
Securities sold under agreements to repurchase and federal funds
purchased 48,378 68 0.14 % 16,270 16 0.10 % Subordinated debentures
2,692 221 8.21 % - - 0.00 % FHLB long-term borrowings 66,329
723 1.09 % 68,525
752 1.10 %
Total borrowings
185,306 1,834 0.99 %
141,317 1,154 0.82
%
Total interest-bearing deposits and borrowings
1,512,567 11,108 0.73 %
803,588 6,304
0.78 %
Noninterest-bearing liabilities: Demand deposits
594,987 359,352 Other liabilities 18,602 9,346
Total liabilities 2,126,156 1,172,286
Shareholders' Equity 327,738 116,296
Total Liabilities and Shareholders' Equity $
2,453,894 $ 1,288,582
Interest Spread(2) 3.58 % 3.24 % Net Interest Margin(3) $
84,372 3.81 % $ 43,711 3.52 %
(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 Trust & Wealth
Consolidated December 31, 2017 Banking
Banking Management Other Eliminations
Totals (In Thousands) Revenues: Interest income $ 26,837 $
295 $ - $ 8 $ (45 ) $ 27,095 Gain on sale of loans 136 4,959 - - -
5,095 Other revenues 1,825 (1 ) 1,793
478 (509 ) 3,586 Total revenues
28,798 5,253 1,793 486
(554 ) 35,776 Expenses: Interest expense 3,116
(24 ) - 135 (45 ) 3,182 Salaries and employee benefits 8,116 2,836
1,163 - - 12,115 Other expenses 8,825 1,092
919 1,131 (509 ) 11,458
Total operating expenses 20,057 3,904
2,082 1,266 (554 ) 26,755
Income (loss) before income taxes $ 8,741 $ 1,349 $ (289 ) $
(780 ) $ - $ 9,021 Total assets $ 2,827,041 $ 31,999
$ 10,967 $ 21,727 $ (17,840 ) $ 2,873,894
Three Months Ended Commercial
Mortgage Wealth Consolidated December 31,
2016 Banking Banking Management
Other Eliminations Totals (In Thousands)
Revenues: Interest income $ 12,684 $ 412 $ - $ 5 $ (181 ) $ 12,920
Gain on sale of loans - 5,745 - - - 5,745 Other revenues 985
(477 ) 765 423 (315 )
1,381 Total revenues 13,669 5,680
765 428 (496 ) 20,046
Expenses: Interest expense 1,668 109 - 67 (181 ) 1,663
Salaries and employee benefits 3,950 2,978 567 - - 7,495 Other
expenses 2,947 1,227 251
1,834 (315 ) 5,944 Total operating expenses
8,565 4,314 818 1,901
(496 ) 15,102 Income (loss) before
income taxes $ 5,104 $ 1,366 $ (53 ) $ (1,473 ) $ - $
4,944 Total assets $ 1,394,061 $ 39,356 $ 2,841
$ 18,037 $ (23,587 ) $ 1,430,708
Segment Reporting
Twelve Months Ended Commercial Mortgage
Trust & Wealth Consolidated December 31,
2017 Banking Banking Management
Other Eliminations Totals (In Thousands)
Revenues: Interest income $ 94,577 $ 1,141 $ 7 $ 25 $ (270 ) $
95,480 Gain on sale of loans 136 19,944 - - - 20,080 Other revenues
6,270 (307 ) 5,988 1,453
(1,392 ) 12,012 Total revenues 100,983
20,778 5,995 1,478 (1,662
) 127,572 Expenses: Interest expense 10,912 (6 ) -
472 (270 ) 11,108 Salaries and employee benefits 28,108 11,958
3,849 - - 43,915 Other expenses 28,998 4,338
3,460 8,668 (1,392 )
44,072 Total operating expenses 68,018 16,290
7,309 9,140 (1,662 )
99,095 Income (loss) before income taxes $ 32,965 $ 4,488
$ (1,314 ) $ (7,662 ) $ - $ 28,477 Total
assets $ 2,827,041 $ 31,999 $ 10,967 $ 21,727
$ (17,840 ) $ 2,873,894
Twelve Months Ended
Commercial Mortgage Wealth Consolidated
December 31, 2016 Banking Banking
Management Other Eliminations Totals
(In Thousands) Revenues: Interest income $ 49,063 $ 1,767 $ - $ 20
$ (835 ) $ 50,015 Gain on sale of loans - 25,164 - - - 25,164 Other
revenues 3,893 (424 ) 3,034
1,401 (1,265 ) 6,639 Total revenues
52,956 26,507 3,034 1,421
(2,100 ) 81,818 Expenses: Interest expense
6,324 548 - 267 (835 ) 6,304 Salaries and employee benefits 16,015
13,541 2,222 - - 31,778 Other expenses 9,232 5,354
1,034 3,777 (1,265 )
18,132 Total operating expenses 31,571 19,443
3,256 4,044 (2,100 )
56,214 Income (loss) before income taxes $ 21,385 $
7,064 $ (222 ) $ (2,623 ) $ - $ 25,604 Total
assets $ 1,394,061 $ 39,356 $ 2,841 $ 18,037 $
(23,587 ) $ 1,430,708
Reconciliation of Non-GAAP Financial Measures
The press release contains certain financial information
determined by methods other than in accordance with generally
accepted accounting policies in the United States (GAAP). These
non-GAAP financial measures are “tangible book value per common
shares”, “tangible common equity ratio”, and “net interest margin
on a fully tax equivalent basis.” This non-GAAP disclosure has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for analysis of the Corporation’s
results as reported under GAAP, nor is it necessarily comparable to
non-GAAP per performance measures that may be presented by other
companies. Out management uses these non-GAAP measures in its
analysis of our performance because it believes these measures are
material and will be used as a measure of our performance by
investors.
Three Months
Three Months Three Months Three Months
Twelve Months Twelve Months Ended Ended
Ended Ended Ended Ended December
31, September 30, June 30, March 31,
December 31, December 31, (Dollars In Thousands)
2017 2017
2017 2017
2017 2016
Book value per common share $ 20.53 $ 20.55 $ 20.36 $
11.40 $ 20.53 $ 11.33 Effect of intangible assets $ (9.01 ) $ (8.91
) $ (9.04 ) $ (0.17 ) $ (9.01 ) $ (0.17 ) Tangible book value per
common share $ 11.52 $ 11.64 $ 11.32 $ 11.23 $ 11.52 $ 11.16
Common equity ratio 14.67 % 14.62 % 15.05 % 8.77 % 14.67 %
8.42 % Effect of intangible assets -5.88 % -5.77 % -6.08 % -0.12 %
-5.88 % -0.11 % Tangible common equity ratio 8.79 % 8.85 % 8.97 %
8.65 % 8.79 % 8.31 % Net interest margin 3.77 % 3.76
% 3.91 % 3.46 % 3.81 % 3.52 % Effect of tax exempt securities and
loans 0.06 % 0.10 % 0.06 % 0.06 % 0.07 % 0.03 % Net interest margin
- fully tax equivalent basis 3.83 % 3.86 % 3.97 % 3.52 % 3.88 %
3.55 % Return on average equity 3.09 % 6.69 % 3.73 %
8.57 % 5.03 % 14.11 % Effect of intangible assets 1.97 % 5.20 %
3.00 % 0.13 % 2.69 % 0.22 % Return on average tangible equity 5.06
% 11.89 % 6.73 % 8.70 % 7.72 % 14.33 % Average equity
$ 394,319 $ 418,678 $ 412,146 $ 121,724 $ 327,738 $ 116,296 Effect
of average intangible assets $ 153,565 $ 183,152 $ 183,666 $ 1,828
$ 125,330 $ 1,859 Average tangible equity $ 240,754 $ 235,526 $
228,480 $ 119,896 $ 202,408 $ 114,437
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Access National CorporationMichael Clarke, 703-871-2100
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