Access National Corporation (NASDAQ: ANCX), parent company for Access National Bank (Bank), reported first quarter 2014 net income of $2.4 million, or $0.23 per share. This represents the Corporation’s 55th consecutive quarterly profit over its 57 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 $0.12 per share for holders of record as of May 5, 2014 and payable on May 23, 2014. The increase in routine dividend reflects Management’s favorable performance outlook and comfort with a favorable capital position.
Overall, first quarter 2014 pretax earnings fell when compared to first quarter 2013 pretax earnings by $2.3 million due to the significant decrease in mortgage segment pretax earnings of $2.8 million. Positively offsetting the reduction in mortgage segment pretax earnings was an increase in banking segment pretax earnings of 10% or $383 thousand during the first quarter of 2014 in comparison to the first quarter of 2013. Even with the drastic reduction in volume, the mortgage division was able to reduce its overhead during 2013 to allow for a break-even performance in the first quarter 2014. Pretax earnings were also positively impacted by a $178 thousand reduction in pretax loss of the Wealth Management Segment that resulted in near break-even performance for the first quarter of 2014 when compared to the first quarter of 2013.
Net interest margin for the first quarter 2014 increased to 3.78% from 3.73% for the same period in 2013. On a linked quarter basis, the margin decreased from 3.89% for the three months ended December 31, 2013 due to decreased yields in the investment and loan portfolios.
On a consolidated basis, the Corporation reported annualized return on average assets of 1.10% and 1.66% for the three month periods ended March 31, 2014 and 2013, respectively. Meanwhile, the annualized return on average equity was 10.43% and 15.95% for the three month periods ended March 31, 2014 and 2013, respectively.
Total assets at March 31, 2014 amounted to $926.8 million compared to $847.2 million at December 31, 2013, an overall increase of $79.6 million. Growth in loans held for investment of $29.8 million along with a $36.1 million increase in interest-bearing balances as well as a $9.0 million growth in investment securities accounted for the majority of the increase. The first quarter of 2014 reflected loan growth in all categories of the loans held for investment portfolio. Overall, the portfolio of loans held for investment grew at an annualized rate of 17.35%.
The increase in total deposits at March 31, 2014 of $232.5 million when compared to December 31, 2013 was due mainly to an increase in demand deposits of $39.2 million, an increase in interest-bearing demand deposits of $30.5 million, an increase in savings and money market deposits of $9.2 million, and an increase in Certificate of Deposit Account Registry Service (CDARS) deposits totaling $152.6 million. The deliberate increase in CDARS during the most recent period was to retire the elevated level of short-term borrowings as of December 31, 2013. Management continues to focus on expanding business banking relationships as evidenced by the growth in demand deposits.
Non-performing assets (NPAs) remained stable at $2.5 million at March 31, 2014 as well as December 31, 2013, representing 0.27% and 0.30% of total assets, respectively. The Corporation did not have other real estate owned at March 31, 2014. The allowance for loan losses totaled $13.2 million or 1.84% of total loans held for investment as of March 31, 2014.
Effective February 1, 2014, the Corporation completed the acquisition of accounts from two local wealth management practices that added $167 million of assets under management (AUM) and ended the period with consolidated AUM of $432 million. Leadership of the two acquired practices is being assimilated within the Corporation's current Wealth Management Segment leadership and is expected to remain long-term with the Corporation. In connection with these transactions, the Corporation issued 24,017 shares of restricted stock and recorded $1.5 million of goodwill that is reported under other assets on the consolidated balance sheet. The accounts acquired in these transactions are consistent in geography and style of the Corporation’s existing book of business and target market and are expected to create opportunities for synergistic growth. The Corporation plans to continue efforts on growing the Wealth Management Segment to further enhance the client value proposition and deliver a meaningful and stable source of non-interest income.
Book value per common share increased from $8.79 at December 31, 2013 to $9.00 at March 31, 2014. The ratio of total equity to total assets for Access National Corporation and its subsidiary bank was 10.10% at March 31, 2014 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 | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2014 | 2013 | 2013 | ||||||||||
| (In Thousands Except for Share and Per Share Data) | (Unaudited) | (Unaudited) | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 10,816 | $ | 8,117 | $ | 8,780 | ||||||
| Interest-bearing balances and federal funds sold | 51,354 | 15,302 | 43,241 | |||||||||
| Investment securities: | ||||||||||||
| Available-for-sale, at fair value | 90,595 | 76,552 | 68,538 | |||||||||
Held-to-maturity, at amortized cost (fair value of $10,938, $15,659 and $31,096) | 11,273 | 16,277 | 30,854 | |||||||||
| Total investment securities | 101,868 | 92,829 | 99,392 | |||||||||
| Restricted Stock, at amortized cost | 1,761 | 8,559 | 2,034 | |||||||||
| Loans held for sale - at fair value | 27,217 | 24,353 | 69,587 | |||||||||
| Loans held for investment | ||||||||||||
net of allowance for loan losses of $13,171, $13,136 and $12,860, respectively | 703,686 | 673,919 | 626,836 | |||||||||
| Premises, equipment and land, net | 8,368 | 8,389 | 8,539 | |||||||||
| Other assets | 21,730 | 15,714 | 17,952 | |||||||||
| Total assets | $ | 926,800 | $ | 847,182 | $ | 876,361 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| LIABILITIES | ||||||||||||
| Noninterest-bearing deposits | $ | 229,059 | $ | 189,908 | $ | 184,785 | ||||||
| Savings and interest-bearing deposits | 239,795 | 200,196 | 187,223 | |||||||||
| Time deposits | 336,570 | 182,868 | 361,159 | |||||||||
| Total deposits | 805,424 | 572,972 | 733,167 | |||||||||
| Short-term borrowings | 17,646 | 172,855 | 32,258 | |||||||||
| Subordinated debentures | - | - | 6,186 | |||||||||
| Other liabilities and accrued expenses | 10,153 | 10,221 | 10,777 | |||||||||
| Total Liabilities | 833,223 | 756,048 | 782,388 | |||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||
Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,402,324, 10,369,420 and 10,329,104 shares, respectively | 8,686 | 8,659 | 8,625 | |||||||||
| Additional paid in capital | 17,814 | 17,320 | 17,270 | |||||||||
| Retained earnings | 68,392 | 67,121 | 68,159 | |||||||||
| Accumulated other comprehensive income (loss), net | (1,315 | ) | (1,966 | ) | (81 | ) | ||||||
| Total shareholders' equity | 93,577 | 91,134 | 93,973 | |||||||||
| Total liabilities and shareholders' equity | $ | 926,800 | $ | 847,182 | $ | 876,361 | ||||||
| Access National Corporation | ||||||
| Consolidated Statement of Operations | ||||||
| Three Months Ended | ||||||
| March 31, 2014 | March 31, 2013 | |||||
| (In Thousands Except for Share and Per Share Data) | (unaudited) | (unaudited) | ||||
| INTEREST INCOME | ||||||
| Interest and fees on loans | $ | 8,459 | $ | 8,596 | ||
| Interest on federal funds sold and bank balances | 18 | 25 | ||||
| Interest on securities | 468 | 535 | ||||
| Total interest income | 8,945 | 9,156 | ||||
| INTEREST EXPENSE | ||||||
| Interest on deposits | 728 | 1,001 | ||||
| Interest on other borrowings | 76 | 66 | ||||
| Total interest expense | 804 | 1,067 | ||||
| Net interest income | 8,141 | 8,089 | ||||
| Provision for loan losses | - | 225 | ||||
| Net interest income after provision for loan losses | 8,141 | 7,864 | ||||
| NONINTEREST INCOME | ||||||
| Service charges and fees | 177 | 169 | ||||
| Gain on sale of loans | 1,728 | 7,881 | ||||
| Other Income | 1,351 | 2,794 | ||||
| Total noninterest income | 3,256 | 10,844 | ||||
| NONINTEREST EXPENSE | ||||||
| Salaries and benefits | 4,887 | 8,069 | ||||
| Occupancy and equipment | 707 | 704 | ||||
| Other operating expense | 2,063 | 3,882 | ||||
| Total noninterest expense | 7,657 | 12,655 | ||||
| Income before income tax | 3,740 | 6,053 | ||||
| Income tax expense | 1,326 | 2,369 | ||||
| NET INCOME | 2,414 | 3,684 | ||||
| Earnings per common share: | ||||||
| Basic | $ | 0.23 | $ | 0.36 | ||
| Diluted | $ | 0.23 | $ | 0.35 | ||
| Average outstanding shares: | ||||||
| Basic | 10,391,080 | 10,322,623 | ||||
| Diluted | 10,447,085 | 10,437,600 | ||||
| Performance and Capital Ratios | ||||||||||||||||
| Three Months | Three Months | Twelve Months | Twelve Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| March 31, | March 31, | December 31, | December 31, | |||||||||||||
| (Dollars In Thousands Except for Share and Per Share Data) | 2014 | 2013 | 2013 | 2012 | ||||||||||||
| Return on average assets (annualized) | 1.10 | % | 1.66 | % | 1.55 | % | 2.15 | % | ||||||||
| Return on average equity (annualized) | 10.43 | % | 15.95 | % | 14.00 | % | 19.68 | % | ||||||||
| Net interest margin | 3.78 | % | 3.73 | % | 3.85 | % | 3.94 | % | ||||||||
| Efficiency ratio - Bank only | 50.98 | % | 53.22 | % | 49.50 | % | 51.71 | % | ||||||||
| Total average equity to earning assets | 10.75 | % | 10.66 | % | 11.28 | % | 11.24 | % | ||||||||
| Averages | ||||||||||||||||
| Assets | $ | 879,984 | $ | 888,589 | $ | 854,572 | $ | 826,233 | ||||||||
| Loans held for investment | 698,429 | 626,504 | 648,744 | 583,724 | ||||||||||||
| Loans held for sale | 18,708 | 74,768 | 42,667 | 78,543 | ||||||||||||
| Interest-bearing deposits & federal funds sold | 39,251 | 58,935 | 46,217 | 33,272 | ||||||||||||
| Investment securities | 102,398 | 106,644 | 97,260 | 105,520 | ||||||||||||
| Earning assets | 861,170 | 866,906 | 836,129 | 800,917 | ||||||||||||
| Interest-bearing deposits | 441,757 | 575,786 | 485,860 | 526,346 | ||||||||||||
| Total deposits | 638,211 | 744,843 | 678,531 | 672,693 | ||||||||||||
| Repurchase agreements & federal funds purchased | 23,374 | 30,389 | 25,524 | 26,744 | ||||||||||||
| Commercial paper & other short term borrowings | 115,944 | 5,056 | 43,077 | 14,748 | ||||||||||||
| Long-term borrowings | - | 6,186 | 3,135 | 9,201 | ||||||||||||
| Equity | $ | 92,593 | $ | 92,397 | $ | 94,352 | $ | 90,047 | ||||||||
| Banking segment - income before taxes | $ | 4,181 | $ | 3,798 | $ | 17,330 | $ | 14,730 | ||||||||
| Mortgage segment - income before taxes | $ | 3 | $ | 2,808 | $ | 4,879 | $ | 15,656 | ||||||||
| Wealth Management segment - loss before taxes | $ | (8 | ) | $ | (186 | ) | $ | (751 | ) | $ | (838 | ) | ||||
| Other segments - income before taxes | $ | (436 | ) | $ | (367 | ) | $ | (1,017 | ) | $ | (1,117 | ) | ||||
| Mortgage loan originations and brokered loans | $ | 70,570 | $ | 217,680 | $ | 574,951 | $ | 1,130,089 | ||||||||
| Gain on sale of mortgage loans net hedging activity | $ | 2,293 | $ | 10,367 | $ | 24,669 | $ | 50,161 | ||||||||
| Allowance for losses on mortgage loans sold | $ | 4,645 | $ | 4,475 | $ | 4,645 | $ | 4,376 | ||||||||
| Wealth Management segment - assets under management | $ | 432,000 | $ | 183,000 | $ | 257,000 | $ | 190,000 | ||||||||
| Book value per common share | $ | 9.00 | $ | 9.10 | $ | 8.79 | $ | 8.85 | ||||||||
| Composition of Loan Portfolio | ||||||||||||
| March 31, 2014 | December 31, 2013 | |||||||||||
| (Dollars In Thousands) | Percentage of | Percentage of | ||||||||||
Amount | Total | Amount | Total | |||||||||
| Commercial real estate - owner occupied | $ | 204,725 | 28.56 | % | $ | 196,804 | 28.65 | % | ||||
| Commercial real estate - non-owner occupied | 93,366 | 13.02 | 90,676 | 13.20 | ||||||||
| Residential real estate | 176,914 | 24.68 | 173,639 | 25.27 | ||||||||
| Commercial | 192,890 | 26.91 | 182,220 | 26.52 | ||||||||
| Real estate construction | 42,766 | 5.97 | 38,842 | 5.65 | ||||||||
| Consumer | 6,196 | 0.86 | 4,874 | 0.71 | ||||||||
| Total loans | $ | 716,857 | 100.00 | % | $ | 687,055 | 100.00 | % | ||||
| Less allowance for loan losses | 13,171 | 13,136 | ||||||||||
| $ | 703,686 | $ | 673,919 | |||||||||
| Composition of Deposits | ||||||||||||
| March 31, 2014 | December 31, 2013 | |||||||||||
| (Dollars In Thousands) | Percentage of | Percentage of | ||||||||||
| Amount | Total | Amount | Total | |||||||||
| Demand deposits | $ | 229,059 | 28.44 | % | $ | 189,908 | 33.14 | % | ||||
| Interest-bearing demand deposits | 116,195 | 14.43 | 85,735 | 14.96 | ||||||||
| Savings and money market | 123,358 | 15.32 | 114,169 | 19.93 | ||||||||
| CDARS-time deposits | 200,142 | 24.85 | 47,535 | 8.30 | ||||||||
| Brokered deposits | 13,709 | 1.69 | 14,103 | 2.46 | ||||||||
| Time deposits | 122,961 | 15.27 | 121,522 | 21.21 | ||||||||
| Total Deposits | $ | 805,424 | 100.00 | % | $ | 572,972 | 100.00 | % | ||||
| Asset Quality Trend Profile | ||||||||||||||||||||
| Three Months | Twelve Months | Nine Months | Six Months | Three Months | ||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
| (Dollars In Thousands) | March 31, 2014 | December 31, 2013 | September 30, 2013 | June 30, 2013 | March 31, 2013 | |||||||||||||||
| Total assets | $ | 926,800 | $ | 847,182 | $ | 846,564 | $ | 841,683 | $ | 876,361 | ||||||||||
| Total loans held for investment | $ | 716,857 | $ | 687,055 | $ | 654,807 | $ | 641,464 | $ | 639,696 | ||||||||||
| Allowance for loan losses - beginning balance | $ | 13,136 | $ | 12,500 | $ | 12,500 | $ | 12,500 | $ | 12,500 | ||||||||||
| Charge offs | (16 | ) | (541 | ) | (476 | ) | - | - | ||||||||||||
| Recoveries | 51 | 502 | 326 | 282 | 135 | |||||||||||||||
| Net charge offs | 35 | (39 | ) | (150 | ) | 282 | 135 | |||||||||||||
| Provision for loan losses | - | 675 | 675 | 225 | 225 | |||||||||||||||
| Allowance for loan losses - ending balance | $ | 13,171 | $ | 13,136 | $ | 13,025 | $ | 13,007 | $ | 12,860 | ||||||||||
| Allowance for loan losses/loans held for investment | 1.84 | % | 1.91 | % | 1.99 | % | 2.03 | % | 2.01 | % | ||||||||||
| Delinquent 30 - 90 days | $ | - | $ | - | $ | - | $ | 1,070 | $ | 671 | ||||||||||
| Percentage of loans delinquent | 0.00 | % | 0.00 | % | 0.00 | % | 0.17 | % | 0.10 | % | ||||||||||
| Non-accrual loans | $ | 2,510 | $ | 2,535 | $ | 2,902 | $ | 2,299 | $ | 1,738 | ||||||||||
| OREO | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Total NPA | $ | 2,510 | $ | 2,535 | $ | 2,902 | $ | 2,299 | $ | 1,738 | ||||||||||
| NPA to total assets | 0.27 | % | 0.30 | % | 0.34 | % | 0.27 | % | 0.20 | % | ||||||||||
| Allowance for loan losses/NPA | 524.74 | % | 518.19 | % | 448.83 | % | 565.77 | % | 739.93 | % | ||||||||||
| OREO Expense | $ | - | $ | 40 | $ | 40 | $ | 40 | $ | 39 | ||||||||||
| Gain on Sale of OREO | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| OREO expense net | $ | - | $ | 40 | $ | 40 | $ | 40 | $ | 39 | ||||||||||
| Allowance for losses on mortgage loans sold | $ | 4,645 | $ | 4,645 | $ | 4,645 | $ | 4,645 | $ | 4,475 | ||||||||||
| Provision for losses on mortgage loans sold | $ | - | $ | 388 | $ | 388 | $ | 388 | $ | 218 | ||||||||||
| Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities | |||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||
| March 31, 2014 | March 31, 2013 | ||||||||||||||||||||
| Average | Income / | Yield / | Average | Income / | Yield / | ||||||||||||||||
| (Dollars In Thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||
| Assets: | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Securities | $ | 104,782 | $ | 468 | 1.79 | % | $ | 106,697 | $ | 535 | 2.00 | % | |||||||||
| Loans held for sale | 18,708 | 202 | 4.32 | % | 74,768 | 614 | 3.28 | % | |||||||||||||
| Loans(1) | 698,429 | 8,257 | 4.73 | % | 626,504 | 7,982 | 5.10 | % | |||||||||||||
| Interest-bearing balances and federal funds sold | 39,251 | 18 | 0.18 | % | 58,937 | 25 | 0.17 | % | |||||||||||||
| Total interest-earning assets | 861,170 | 8,945 | 4.15 | % | 866,906 | 9,156 | 4.22 | % | |||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||
| Cash and due from banks | 7,609 | 11,386 | |||||||||||||||||||
| Premises, land and equipment | 8,379 | 8,544 | |||||||||||||||||||
| Other assets | 16,007 | 14,361 | |||||||||||||||||||
| Less: allowance for loan losses | (13,181 | ) | (12,608 | ) | |||||||||||||||||
| Total noninterest-earning assets | 18,814 | 21,683 | |||||||||||||||||||
| Total Assets | $ | 879,984 | $ | 888,589 | |||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||
| Interest-bearing demand deposits | $ | 105,816 | 58 | 0.22 | % | $ | 85,053 | 42 | 0.20 | % | |||||||||||
| Money market deposit accounts | 114,119 | 57 | 0.20 | % | 118,927 | 89 | 0.30 | % | |||||||||||||
| Savings accounts | 2,868 | 2 | 0.28 | % | 2,444 | 1 | 0.14 | % | |||||||||||||
| Time deposits | 218,954 | 611 | 1.12 | % | 369,362 | 869 | 0.94 | % | |||||||||||||
| Total interest-bearing deposits | 441,757 | 728 | 0.66 | % | 575,786 | 1,001 | 0.70 | % | |||||||||||||
| Borrowings: | |||||||||||||||||||||
| FHLB Advances | 115,944 | 70 | 0.24 | % | 5,056 | 4 | 0.32 | % | |||||||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 23,374 | 6 | 0.10 | % | 30,389 | 9 | 0.11 | % | |||||||||||||
| Subordinated Debentures | - | - | 0.00 | % | 6,186 | 53 | 3.43 | % | |||||||||||||
| Total borrowings | 139,318 | 76 | 0.22 | % | 41,631 | 66 | 0.63 | % | |||||||||||||
| Total interest-bearing deposits and borrowings | 581,075 | 804 | 0.55 | % | 617,417 | 1,067 | 0.69 | % | |||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||
| Demand deposits | 196,454 | 169,056 | |||||||||||||||||||
| Other liabilities | 9,861 | 9,719 | |||||||||||||||||||
| Total liabilities | 787,390 | 796,192 | |||||||||||||||||||
| Shareholders' Equity | 92,594 | 92,397 | |||||||||||||||||||
| Total Liabilities and Shareholders' Equity: | $ | 879,984 | $ | 888,589 | |||||||||||||||||
| Interest Spread(2) | 3.60 | % | 3.53 | % | |||||||||||||||||
| Net Interest Margin(3) | $ | 8,141 | 3.78 | % | $ | 8,089 | 3.73 | % | |||||||||||||
(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. | ||
Contacts:
Michael Clarke, 703-871-2100
