Access National Reports 33% Increase in Third Quarter Earnings, Dividend Increased

RESTON, Va.--(BUSINESS WIRE)--Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported record third quarter net income of $4.1 million, a $1.0 million increase over the $3.1 million recorded in the third quarter of 2011. This represents the company’s 5^th consecutive quarterly earnings in excess of $3 million and its 49^th consecutive quarterly profit over its 12¾ year history. Net income per diluted common share was $0.40, an increase of 33.3% over the $0.30 reported in the third quarter of 2011.

Based on record earnings, strong capital and favorable outlook, the Board of Directors declared a cash dividend of $0.08 per share for holders of record as of November 07, 2012 and payable on November 23, 2012. This dividend represents a 2 cent increase from the prior quarter and a 7 cent cumulative increase over the past 2 years.

Net income increased 42% for the nine months ended September 30, 2012 totaling $11.5 million compared to $8.1 million for the same period in 2011. Net interest margin remained steady at 3.95% for the nine month period ended September 30, 2012 as compared to 3.85% for the same period in 2011. Diluted earnings per share were $1.11 compared to $0.78 in 2011.

Annualized return on average assets was 1.98% for the third quarter of 2012 compared to 1.69% for the same quarter of 2011. Annualized return on average equity was 17.93% for the quarter ended September 30, 2012 compared to 15.92% for the same period last year.

Total assets amounted to $849.3 million compared to $809.8 million at December 31, 2011. The increase in assets is mainly attributable to an increase in both loans held for investment and investment securities, and was funded by a significant increase in core deposits.

Total deposits at September 30, 2012 increased $60.8 million or 9.42% from December 31, 2011. As a result of management’s continued focus on expanding business banking relationships, noninterest bearing deposits increased $78.9 million or 69.31% from December 31, 2011 and comprised 27.32% of the deposit portfolio, up from 17.66% at December 31, 2011. The overall increase in deposits allowed the Company to decrease its borrowings which, coupled with other factors, contributed to the increase in net interest margin.

Non-performing assets (NPAs) decreased to $3.6 million or 0.43% of total assets, down from $5.2 million or 0.62% of assets at June 30, 2012. The Corporation did not have other real estate owned at September 30, 2012. The allowance for loan losses totaled $12.0 million or 2.04% of total loans held for investment as of September 30, 2012.

Book value per common share increased 15.2% at September 30, 2012 to $9.03, compared to $7.84 at September 30, 2011. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 10.92% at September 30, 2012 and continued to exceed standards of being “Well Capitalized” as set forth under banking regulations.

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

	September 30,		December 31,		September 30,
	2012		2011		2011
(In Thousands)	(Unaudited)				(Unaudited)

ASSETS

Cash and due from banks	$	13,090	$	5,362	$	10,909

Interest-bearing balances and federal funds sold		43,360		38,547		32,017

Investment securities:
Available-for-sale, at fair value		36,719		45,837		55,920
Held-to-maturity, at amortized cost (fair value of $65,454, $39,978 and $9,978)		64,939		39,987		10,000
Total investment securities		101,658		85,824		65,920

Restricted Stock, at amortized cost		2,824		3,665		4,367

Loans held for sale - at fair value		84,011		95,126		96,764

Loans held for investment net of allowance for loan losses of $12,048, $11,738 and $11,537, respectively		578,571		557,662		531,045

Premises, equipment and land, net		8,425		8,671		8,720

Other assets		17,409		14,901		15,725

Total assets	$	849,348	$	809,758	$	765,467

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Noninterest-bearing deposits	$	192,813	$	113,885	$	115,110

Savings and interest-bearing deposits		193,840		182,005		167,673

Time deposits		319,129		349,123		314,119

Total deposits		705,782		645,013		596,902

Short-term borrowings		26,770		59,904		65,015

Long-term borrowings		2,661		4,821		5,375

Subordinated debentures		6,186		6,186		6,186

Other liabilities and accrued expenses		15,167		11,019		11,813

Total Liabilities		756,566		726,943		685,291

SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,277,267, 10,192,649 and 10,224,742 shares, respectively		8,582		8,511		8,538

Additional paid in capital		16,896		16,716		16,900

Retained earnings		67,189		57,529		54,637

Accumulated other comprehensive income (loss), net		115		59		101

Total shareholders' equity		92,782		82,815		80,176

Total liabilities and shareholders' equity	$	849,348	$	809,758	$	765,467


Access National Corporation
Consolidated Statement of Operations

	Three Months Ended			Nine Months Ended
	September 30, 2012			September 30, 2012			September 30, 2011
(In Thousands Except for Share Data)	(unaudited)			(unaudited)			(unaudited)

INTEREST INCOME
Interest and fees on loans	$	8,632		$	25,672		$	24,168

Interest on federal funds sold and bank balances		12			62			97

Interest on securities		528			1,791			1,710
Total interest income		9,172			27,525			25,975

INTEREST EXPENSE
Interest on deposits		1,089			3,512			3,925

Interest on other borrowings		104			434			1,430
Total interest expense		1,193			3,946			5,355
Net interest income		7,979			23,579			20,620

Provision for loan losses		150			1,340			936
Net interest income after provision for loan losses		7,829			22,239			19,684

NONINTEREST INCOME
Service charges and fees		150			487			519

Gain on sale of loans		17,479			43,161			24,719

Other Income		(4,904	)		(5,090	)		(597	)
Total noninterest income		12,725			38,558			24,641

NONINTEREST EXPENSE
Salaries and benefits		8,017			23,826			18,220

Occupancy and equipment		711			1,941			1,982

Other operating expense		5,336			16,471			11,606
Total noninterest expense		14,064			42,238			31,808
Income before income tax		6,490			18,559			12,517

Income tax expense		2,358			7,099			4,446
NET INCOME	$	4,132		$	11,460		$	8,071

Earnings per common share:
Basic	$	0.40		$	1.12		$	0.78
Diluted	$	0.40		$	1.11		$	0.78

Average outstanding shares:
Basic		10,271,246			10,236,472			10,303,840
Diluted		10,389,441			10,350,833			10,365,793


Performance and Capital Ratios

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	September 30,			September 30,			September 30,			September 30,
(Dollars In Thousands)	2012			2011			2012			2011

Return on average assets (annualized)		1.98	%		1.69	%		1.86	%		1.46	%
Return on average equity (annualized)		17.93	%		15.92	%		17.19	%		14.20	%
Net interest margin		3.95	%		4.02	%		3.95	%		3.85	%
Efficiency ratio - Bank only		54.26	%		52.38	%		53.03	%		52.61	%
Total average equity to earning assets		11.40	%		10.90	%		11.16	%		10.62	%

Averages
Assets	$	835,130		$	738,925		$	820,292		$	736,426
Loans held for investment		586,060			527,258			578,014			510,177
Loans held for sale		87,355			49,641			74,929			36,068
Interest-bearing deposits & federal funds sold		30,303			50,509			36,108			53,002
Investment securities		104,901			90,258			107,545			114,517
Earning assets		808,619			717,666			796,596			713,764
Interest-bearing deposits		529,086			454,558			532,692			442,822
Total deposits		689,873			562,304			669,306			537,119
Repurchase agreements & federal funds purchased		26,946			37,627			26,717			36,935
Commercial paper & other short term borrowings		5,557			40,117			12,841			66,696
Long-term borrowings		9,135			12,099			9,835			12,648
Equity	$	92,206		$	78,212		$	88,897		$	75,774

Banking segment - income before taxes	$	3,736		$	2,982		$	10,478		$	10,456
Mortgage segment - income before taxes	$	3,318		$	2,369		$	9,865		$	3,828
Other segments - income before taxes	$	(564	)	$	(531	)	$	(1,784	)	$	(1,767	)
Mortgage loan originations and brokered loans	$	284,326		$	236,566		$	807,952		$	551,883
Allowance for losses on mortgage loans sold	$	4,802		$	2,395		$	4,802		$	2,395

Book value per common share	$	9.03		$	7.84		$	9.03		$	7.84


Composition of Loan Portfolio

	September 30, 2012				December 31, 2011
(Dollars In Thousands)	Amount		Percentage of Total		Amount		Percentage of Total

Commercial real estate - owner occupied	$	182,825	30.95	%	$	171,599	30.14	%
Commercial real estate - non-owner occupied		104,420	17.68			104,976	18.44
Residential real estate		137,304	23.25			128,485	22.56
Commercial		134,475	22.77			131,816	23.15
Real estate construction		27,836	4.71			29,705	5.22
Consumer		3,759	0.64			2,819	0.50
Total loans	$	590,619	100.00	%	$	569,400	100.00	%
Less allowance for loan losses		12,048				11,738
	$	578,571			$	557,662


Composition of Deposits
	September 30, 2012				December 31, 2011
			Percentage of				Percentage of
(Dollars In Thousands)	Amount		Total		Amount		Total
Noninterest bearing deposits	$	192,813	27.32	%	$	113,885	17.66	%
Interest-bearing demand deposits		83,153	11.78			59,798	9.27
Savings and money market		100,143	14.19			121,252	18.80
CDARS-reciprocal deposits		177,443	25.14			192,326	29.82
Brokered deposits		28,209	4.00			31,228	4.84
Time deposits		124,021	17.57			126,524	19.62
Total Deposits	$	705,782	100.00	%	$	645,013	100.00	%


Asset Quality Trend Profile

	Nine Months			Six Months			Three Months			Nine Months			Twelve Months
	Ended			Ended			Ended			Ended			Ended
(Dollars In Thousands)	September 30, 2012			June 30, 2012			March 31, 2012			September 30, 2011			December 31, 2011

Total assets	$	849,348		$	841,709		$	804,755		$	765,467		$	809,758
Total loans held for investment	$	590,619		$	582,600		$	573,315		$	542,582		$	569,400

Allowance for loan losses - beginning balance	$	11,738		$	11,738		$	11,738		$	10,527			10,527
Charge offs		(1,829	)		(1,425	)		(984	)		(944	)		(1,232	)
Recoveries		799			528			469			1,019			1,295
Net charge offs		(1,030	)		(897	)		(515	)		75			63
Provision for loan losses		1,340			1,190			718			935			1,149
Allowance for loan losses - ending balance	$	12,048		$	12,031		$	11,941		$	11,537			11,738

Allowance for loan losses/loans held for investment		2.04	%		2.06	%		2.08	%		2.13	%		2.06	%

Delinquent 30 - 90 days	$	-		$	614		$	-		$	4,226			271
Percentage of loans delinquent		0.00	%		0.11	%		0.00	%		0.78	%		0.05	%

Non-accrual loans	$	3,626		$	5,209		$	5,350		$	7,077		$	6,703
OREO	$	-		$	-		$	-		$	590		$	-
Total NPA	$	3,626		$	5,209		$	5,350		$	7,667		$	6,703
NPA to total assets		0.43	%		0.62	%		0.66	%		1.00	%		0.83	%
Allowance for loan losses/NPA		332.27	%		230.97	%		223.20	%		150.48	%		175.12	%

OREO Expense	$	1		$	1		$	2		$	420		$	523
Gain on Sale of OREO	$	-		$	-		$	-		$	1,325		$	1,452
OREO expense net	$	1		$	1		$	2		$	(905	)	$	(929	)

Allowance for losses on mortgage loans sold	$	4,802		$	4,216		$	2,874		$	2,395		$	2,616
Provision for losses on mortgage loans sold	$	2,186		$	1,600		$	258		$	527		$	966

Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended

	September 30, 2012							September 30, 2011
	Average			Income /		Yield /		Average			Income /		Yield /
	Balance			Expense		Rate		Balance			Expense		Rate
	(Dollars In Thousands)
Assets:
Interest earning assets:
Securities	$	104,901		$	528	2.01	%	$	90,258		$	497	2.20	%
Loans held for sale		87,355			818	3.75	%		49,641			591	4.76	%
Loans⁽¹⁾		586,060			7,814	5.33	%		527,258			7,763	5.89	%
Interest-bearing balances and federal funds sold		30,303			12	0.16	%		50,509			25	0.20	%
Total interest earning assets		808,619			9,172	4.54	%		717,666			8,876	4.95	%
Noninterest earning assets:
Cash and due from banks		12,110							10,373
Premises, land and equipment		8,486							8,747
Other assets		18,018							13,374
Less: allowance for loan losses		(12,103	)						(11,235	)
Total noninterest earning assets		26,511							21,259
Total Assets	$	835,130						$	738,925

Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits	$	70,637		$	35	0.20	%	$	64,155		$	85	0.53	%
Money market deposit accounts		118,330			115	0.39	%		105,718			146	0.55	%
Savings accounts		2,600			1	0.15	%		2,962			1	0.14	%
Time deposits		337,519			938	1.11	%		281,723			1,003	1.42	%
Total interest-bearing deposits		529,086			1,089	0.82	%		454,558			1,235	1.09	%
Borrowings:
FHLB Advances		5,557			11	0.79	%		2,935			3	0.41	%
Securities sold under agreements to repurchase and federal funds purchased		26,946			9	0.13	%		37,627			17	0.18	%
Other short-term borrowings		-			-	0.00	%		7,183			9	0.50	%
FHLB Long-term borrowings		2,949			28	3.80	%		5,913			54	3.65	%
FDIC Term Note		-			-	0.00	%		29,999			299	3.99	%
Subordinated Debentures		6,186			56	3.62	%		6,186			53	3.43	%
Total borrowings		41,638			104	1.00	%		89,843			435	1.94	%
Total interest-bearing deposits and borrowings		570,724			1,193	0.84	%		544,401			1,670	1.23	%
Noninterest-bearing liabilities:
Demand deposits		160,787							107,746
Other liabilities		11,413							8,566
Total liabilities		742,924							660,713
Shareholders' Equity		92,206							78,212
Total Liabilities and Shareholders' Equity:	$	835,130						$	738,925

Interest Spread⁽²⁾						3.70	%						3.72	%

Net Interest Margin⁽³⁾				$	7,979	3.95	%				$	7,206	4.02	%


⁽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, 2012							September 30, 2011
	Average			Income /		Yield /		Average			Income /		Yield /
	Balance			Expense		Rate		Balance			Expense		Rate
	(Dollars In Thousands)
Assets:
Interest-earning assets:
Securities	$	107,545		$	1,791	2.22	%	$	114,517		$	1,710	1.99	%
Loans held for sale		74,929			2,179	3.88	%		36,068			1,282	4.74	%
Loans⁽¹⁾		578,014			23,493	5.42	%		510,177			22,886	5.98	%
Interest-bearing balances and federal funds sold		36,108			62	0.23	%		53,002			97	0.24	%
Total interest-earning assets		796,596			27,525	4.61	%		713,764			25,975	4.85	%
Noninterest-earning assets:
Cash and due from banks		10,159							11,297
Premises, land and equipment		8,563							8,847
Other assets		16,926							13,394
Less: allowance for loan losses		(11,952	)						(10,876	)
Total noninterest-earning assets		23,696							22,662
Total Assets	$	820,292						$	736,426

Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits	$	65,805		$	126	0.26	%	$	37,153		$	138	0.50	%
Money market deposit accounts		122,543			385	0.42	%		112,893			496	0.59	%
Savings accounts		2,612			3	0.15	%		2,905			4	0.18	%
Time deposits		341,732			2,998	1.17	%		289,871			3,287	1.51	%
Total interest-bearing deposits		532,692			3,512	0.88	%		442,822			3,925	1.18	%
Borrowings:
FHLB Advances		8,023			39	0.65	%		11,308			42	0.50	%
Securities sold under agreements to repurchase and federal funds purchased		26,717			28	0.14	%		36,935			53	0.19	%
Other short-term borrowings		-			-	0.00	%		25,389			114	0.60	%
FHLB Long-term borrowings		3,649			100	3.65	%		6,462			171	3.53	%
FDIC Term Note		4,818			98	2.71	%		29,999			892	3.96	%
Subordinated Debentures		6,186			169	3.64	%		6,186			158	3.41	%
Total borrowings		49,393			434	1.17	%		116,279			1,430	1.64	%
Total interest-bearing deposits and borrowings		582,085			3,946	0.90	%		559,101			5,355	1.28	%
Noninterest-bearing liabilities:
Demand deposits		136,614							94,297
Other liabilities		12,696							7,254
Total liabilities		149,310							101,551
Shareholders' Equity		88,897							75,774
Total Liabilities and Shareholders' Equity:	$	820,292						$	736,426

Interest Spread⁽²⁾						3.70	%						3.58	%

Net Interest Margin⁽³⁾				$	23,579	3.95	%				$	20,620	3.85	%


⁽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.