Access National Reports 91% Increase in Fourth Quarter Earnings, Dividend Increased

RESTON, Va.--(BUSINESS WIRE)--Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank, reported record fourth quarter net income of $6.3 million, a $3.0 million increase over the $3.3 million recorded in the fourth quarter of 2011. This represents the company’s 7^th consecutive record quarterly earnings and its 50^th consecutive quarterly profit over its 13 year history. Net income per diluted common share was $0.60, an increase of 87.5% over the $0.32 reported in the fourth quarter of 2011.

Based on record earnings, strong capital and favorable outlook, the Board of Directors declared a cash dividend of $0.09 per share for holders of record as of February 11, 2013 and payable on February 25, 2013. This dividend is in addition to the $0.70 non-routine dividend paid in the fourth quarter of 2012 and represents a 1 cent increase from the prior quarter and an 8 cent cumulative increase over the past 2 years.

The $3.0 million increase in net income between the fourth quarter of 2012 and 2011 is mainly attributable to activity in our mortgage division. Net income increased 55.6% for the year ended December 31, 2012 totaling $17.7 million compared to $11.4 million for the year 2011. Net interest margin was 3.94% for 2012 compared to 3.82% for 2011. Diluted earnings per share were $1.71 compared to $1.10 in 2011.

Annualized return on average assets was 2.97% for the fourth quarter of 2012 compared to 1.61% for the same quarter of 2011. Annualized return on average equity was 26.80% for the quarter ended December 31, 2012 compared to 15.87% for last year.

Total assets amounted to $863.9 million compared to $809.8 million at December 31, 2011. The increase in assets is mainly attributable to a $46.8 million or 8% growth in net loans held for investment as well as a $16.4 million or 17% growth in loans held for sale. The growth in loans held for investment was driven by a 13.3% growth in commercial and industrial loans to the bank’s target market. The asset growth was funded by a 4% growth in total deposits as well as short-term borrowings from the Federal Home Loan Bank.

Total deposits at December 31, 2012 increased $26.5 million from December 31, 2011. As a result of management’s continued focus on expanding business banking relationships, noninterest-bearing deposits increased $50.3 million or 44.1% from December 31, 2011, and comprised 24.5% of the deposit portfolio, up from 17.66% at December 31, 2011.

Non-performing assets (NPAs) decreased to $2.7 million or 0.32% of total assets at December 31, 2012, down from $3.6 million or 0.43% of assets at September 30, 2012. The Corporation did not have other real estate owned at December 31, 2012. The allowance for loan losses totaled $12.5 million or 2.03% of total loans held for investment as of December 31, 2012.

Net of the $0.95 in dividends paid during the year, book value per common share increased 8.9% at December 31, 2012 to $8.85, compared to $8.13 at December 31, 2011. The ratio of total equity to total assets for Access National Corporation was 10.56% at December 31, 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

	December 31,		December 31,
	2012		2011
(In Thousands)	(unaudited)

ASSETS

Cash and due from banks	$	15,735	$	5,362

Interest-bearing balances and federal funds sold		22,206		38,547

Investment securities:
Available-for-sale, at fair value		35,759		45,837
Held-to-maturity, at amortized cost (fair value of $45,308 and $39,978)		44,952		39,987
Total investment securities		80,711		85,824

Restricted Stock, at amortized cost		4,237		3,665

Loans held for sale - at fair value		111,542		95,126

Loans held for investment net of allowance for loan losses of $12,500 and $11,738, respectively		604,478		557,662

Premises, equipment and land, net		8,517		8,671

Other assets		16,488		14,901

Total assets	$	863,914	$	809,758

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Noninterest-bearing deposits	$	164,161	$	113,885

Savings and interest-bearing deposits		187,997		182,005

Time deposits		319,338		349,123

Total deposits		671,496		645,013

Short-term borrowings		83,091		59,904

Long-term borrowings		-		4,821

Subordinated debentures		6,186		6,186

Other liabilities and accrued expenses		11,874		11,019

Total Liabilities		772,647		726,943

SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,317,767 and 10,192,649 shares, respectively		8,615		8,511

Additional paid in capital		17,155		16,716

Retained earnings		65,404		57,529

Accumulated other comprehensive income (loss), net		93		59

Total shareholders' equity		91,267		82,815

Total liabilities and shareholders' equity	$	863,914	$	809,758


Access National Corporation
Consolidated Statement of Operations

	Three Months Ended		Twelve Months Ended
	December 31, 2012		December 31, 2012			December 31, 2011
(In Thousands Except for Share and Per Share Data)	(unaudited)		(unaudited)

INTEREST INCOME
Interest and fees on loans	$	8,699	$	34,371		$	32,808

Interest on federal funds sold and bank balances		17		79			143

Interest on securities		475		2,266			2,216
Total interest income		9,191		36,716			35,167

INTEREST EXPENSE
Interest on deposits		1,017		4,529			5,204

Interest on other borrowings		202		636			1,846
Total interest expense		1,219		5,165			7,050
Net interest income		7,972		31,551			28,117

Provision for loan losses		175		1,515			1,149
Net interest income after provision for loan losses		7,797		30,036			26,968

NONINTEREST INCOME
Service charges and fees		179		666			693

Gain on sale of loans		12,588		55,749			35,345

Other Income		3,469		(1,621	)		391
Total noninterest income		16,236		54,794			36,429

NONINTEREST EXPENSE
Salaries and benefits		7,655		31,481			25,415

Occupancy and equipment		781		2,722			2,931

Other operating expense		5,725		22,196			17,376
Total noninterest expense		14,161		56,399			45,722
Income before income tax		9,872		28,431			17,675

Income tax expense		3,609		10,708			6,287
NET INCOME	$	6,263	$	17,723		$	11,388

Earnings per common share:
Basic	$	0.61	$	1.73		$	1.11
Diluted	$	0.60	$	1.71		$	1.10

Average outstanding shares:
Basic		10,305,209		10,253,656			10,277,801
Diluted		10,400,568		10,363,267			10,344,325


Performance and Capital Ratios

	Three Months			Three Months			Twelve Months			Twelve Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
(Dollars In Thousands)	2012			2011			2012			2011

Return on average assets (annualized)		2.97	%		1.61	%		2.15	%		1.50	%
Return on average equity (annualized)		26.80	%		15.87	%		19.68	%		14.80	%
Net interest margin		3.92	%		3.77	%		3.94	%		3.82	%
Efficiency ratio - Bank only		47.79	%		53.85	%		51.71	%		52.92	%
Total average equity to earning assets		11.49	%		10.52	%		11.24	%		10.46	%

Averages
Assets	$	844,174		$	822,190		$	826,233		$	758,994
Loans held for investment		601,240			549,245			583,724			520,062
Loans held for sale		88,799			91,962			78,543			51,774
Interest-bearing deposits & federal funds sold		24,826			73,338			33,272			58,128
Investment securities		99,075			80,670			105,520			105,042
Earning assets		813,787			795,129			800,917			735,928
Interest-bearing deposits		507,445			523,958			526,346			465,301
Total deposits		682,781			648,856			672,693			565,450
Repurchase agreements & federal funds purchased		26,825			35,655			26,744			36,612
Commercial paper & other short term borrowings		20,429			30,326			14,748			59,220
Long-term borrowings		7,314			11,592			9,201			12,382
Equity	$	93,470		$	83,614		$	90,047		$	76,969

Banking segment - income before taxes	$	4,252		$	3,516		$	14,730		$	13,972
Mortgage segment - income before taxes	$	5,790		$	2,530		$	15,656		$	6,358
Other segments - income before taxes	$	(170	)	$	(888	)	$	(1,955	)	$	(2,655	)
Mortgage loan originations and brokered loans	$	322,364		$	279,681		$	1,130,089		$	831,564

Book value per common share	$	8.85		$	8.13		$	8.85		$	8.13


Composition of Loan Portfolio

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

Commercial real estate-Owner Occupied	$	182,655	29.60	%	$	171,599	30.14	%
Commercial real estate-Income Producing		107,213	17.38			104,976	18.44
Residential real estate		144,521	23.43			128,485	22.56
Commercial		149,389	24.21			131,816	23.15
Real estate construction		30,038	4.87			29,705	5.22
Consumer		3,162	0.51			2,819	0.49
Total loans	$	616,978	100.00	%	$	569,400	100.00	%
Less allowance for loan losses		12,500				11,738
	$	604,478			$	557,662


Composition of Deposits

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

Demand deposits	$	164,161	24.45	%	$	113,885	17.66	%
Interest-bearing demand deposits		71,015	10.58			59,798	9.27
Savings and money market		116,554	17.36			121,252	18.80
CDARS-reciprocal time deposits		170,835	25.44			192,326	29.82
Brokered deposits		29,277	4.36			31,228	4.84
Time deposits		119,654	17.82			126,524	19.61
Total Deposits	$	671,496	100.00	%	$	645,013	100.00	%


Asset Quality Trend Profile

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

Total assets	$	863,914		$	849,348		$	841,709		$	804,755		$	809,758
Total loans held for investment	$	616,978		$	590,619		$	582,600		$	573,315		$	569,400

Allowance for loan losses - beginning balance	$	11,738		$	11,738		$	11,738		$	11,738		$	10,527
Charge offs		(2,165	)		(1,829	)		(1,425	)		(984	)		(1,232	)
Recoveries		1,412			799			528			469			1,295
Net charge offs		(753	)		(1,030	)		(897	)		(515	)		63
Provision for loan losses		1,515			1,340			1,190			718			1,149
Allowance for loan losses - ending balance	$	12,500		$	12,048		$	12,031		$	11,941		$	11,738

Allowance for loan losses/loans held for investment		2.03	%		2.04	%		2.06	%		2.08	%		2.06	%

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

Non-accrual loans	$	2,743		$	3,626		$	5,209		$	5,350		$	6,703
OREO	$	-		$	-		$	-		$	-		$	-
Total NPA	$	2,743		$	3,626		$	5,209		$	5,350		$	6,703
NPA to total assets		0.32	%		0.43	%		0.62	%		0.66	%		0.83	%
Allowance for loan losses/NPA		455.71	%		332.27	%		230.97	%		223.20	%		175.12	%

OREO Expense	$	6		$	1		$	1		$	2		$	523
Gain on Sale of OREO	$	-		$	-		$	-		$	-		$	1,452
OREO expense net	$	6		$	1		$	1		$	2		$	(929	)

Allowance for losses on mortgage loans sold	$	4,376		$	4,802		$	4,216		$	2,874		$	2,616
Provision for losses on mortgage loans sold	$	2,510		$	2,186		$	1,600		$	258		$	966


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

	December 31, 2012							December 31, 2011
	Average			Income /		Yield /		Average			Income /		Yield /
(Dollars In Thousands)	Balance			Expense		Rate		Balance			Expense		Rate

Assets:
Interest earning assets:
Securities	$	98,922		$	475	1.92	%	$	80,584		$	506	2.51	%
Loans held for sale		88,799			774	3.49	%		91,962			894	3.89	%
Loans⁽¹⁾		601,240			7,925	5.27	%		549,245			7,746	5.64	%
Interest-bearing balances and federal funds sold		24,826			17	0.27	%		73,338			46	0.25	%
Total interest earning assets		813,787			9,191	4.52	%		795,129			9,192	4.62	%
Noninterest earning assets:
Cash and due from banks		16,877							13,648
Premises, land and equipment		8,503							8,715
Other assets		17,124							16,553
Less: allowance for loan losses		(12,117	)						(11,855	)
Total noninterest earning assets		30,387							27,061
Total Assets	$	844,174						$	822,190

Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits	$	82,543		$	45	0.22	%	$	73,529		$	89	0.48	%
Money market deposit accounts		110,919			99	0.36	%		105,739			132	0.50	%
Savings accounts		2,512			1	0.16	%		2,697			2	0.30	%
Time deposits		311,471			872	1.12	%		341,993			1,056	1.24	%
Total interest-bearing deposits		507,445			1,017	0.80	%		523,958			1,279	0.98	%
Borrowings:
FHLB Advances		20,429			26	0.51	%		-			-	0.00	%
Securities sold under agreements to repurchase and federal funds purchased		26,825			10	0.15	%		35,655			14	0.16	%
Other short-term borrowings		-			-	0.00	%		-			-	0.00	%
FHLB Long-term borrowings		1,128			112	39.72	%		5,406			48	3.55	%
FDIC Term Note		-			-	0.00	%		30,326			299	3.94	%
Subordinated Debentures		6,186			54	3.49	%		6,186			55	3.56	%
Total borrowings		54,568			202	1.48	%		77,573			416	2.15	%
Total interest-bearing deposits and borrowings		562,013			1,219	0.87	%		601,531			1,695	1.13	%
Noninterest-bearing liabilities:
Demand deposits		175,335							124,898
Other liabilities		13,356							12,147
Total liabilities		750,704							738,576
Shareholders' Equity		93,470							83,614
Total Liabilities and Shareholders' Equity:	$	844,174						$	822,190

Interest Spread⁽²⁾						3.65	%						3.50	%

Net Interest Margin⁽³⁾				$	7,972	3.92	%				$	7,497	3.77	%

⁽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, 2012							December 31, 2011
	Average			Income /		Yield /		Average			Income /		Yield /
(Dollars In Thousands)	Balance			Expense		Rate		Balance			Expense		Rate

Assets:
Interest-earning assets:
Securities	$	105,378		$	2,266	2.15	%	$	105,964		$	2,216	2.09	%
Loans held for sale		78,543			2,953	3.76	%		51,774			2,176	4.20	%
Loans⁽¹⁾		583,724			31,418	5.38	%		520,062			30,632	5.89	%
Interest-bearing balances and federal funds sold		33,272			79	0.24	%		58,128			143	0.25	%
Total interest-earning assets		800,917			36,716	4.58	%		735,928			35,167	4.78	%
Noninterest-earning assets:
Cash and due from banks		11,848							12,066
Premises, land and equipment		8,548							8,819
Other assets		16,914							13,304
Less: allowance for loan losses		(11,994	)						(11,123	)
Total noninterest-earning assets		25,316							23,066
Total Assets	$	826,233						$	758,994

Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits	$	63,203		$	171	0.27	%	$	48,349		$	227	0.47	%
Money market deposit accounts		119,621			484	0.40	%		111,090			628	0.57	%
Savings accounts		2,587			4	0.15	%		2,853			6	0.21	%
Time deposits		340,935			3,870	1.14	%		303,009			4,343	1.43	%
Total interest-bearing deposits		526,346			4,529	0.86	%		465,301			5,204	1.12	%
Borrowings:
FHLB Advances		11,141			65	0.58	%		8,458			42	0.50	%
Securities sold under agreements to repurchase and federal funds purchased		26,744			38	0.14	%		36,612			67	0.18	%
Other short-term borrowings		-			-	0.00	%		20,681			114	0.55	%
FHLB Long-term borrowings		3,015			212	7.03	%		6,196			219	3.53	%
FDIC Term Note		3,607			98	2.72	%		30,081			1,191	3.96	%
Subordinated Debentures		6,186			223	3.60	%		6,186			213	3.44	%
Total borrowings		50,693			636	1.25	%		108,214			1,846	1.71	%
Total interest-bearing deposits and borrowings		577,039			5,165	0.90	%		573,515			7,050	1.23	%
Noninterest-bearing liabilities:
Demand deposits		146,347							100,149
Other liabilities		12,800							8,361
Total liabilities		736,186							682,025
Shareholders' Equity		90,047							76,969
Total Liabilities and Shareholders' Equity:	$	826,233						$	758,994

Interest Spread⁽²⁾						3.69	%						3.55	%

Net Interest Margin⁽³⁾				$	31,551	3.94	%				$	28,117	3.82	%