• NASDAQ : ANCX

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Press Release

Access National Announces Record Earnings for Second Quarter 2018 and Dividend Increase

Company Release - 7/26/2018 4:15 PM ET

RESTON, Va.--(BUSINESS WIRE)-- Access National Corporation (NASDAQ: ANCX) (the “Corporation” or “Access”), parent company for Access National Bank (the “Bank”) and Middleburg Investment Group, reported second quarter 2018 net income of $9.0 million, or $0.43 per diluted share. This represents the Corporation’s 72nd consecutive quarterly profit over its 74 quarter history. Consistent with management’s objective of a 40% dividend payout ratio against level and sustainable earnings, the Board of Directors declared a dividend of $0.16 per share for common shareholders of record as of August 09, 2018 and payable on August 24, 2018. This dividend represents a $0.01 increase from the prior quarter.

Highlights

  • For the three month period ended June 30, 2018, net income increased 10.8% compared to the preceding period and 20.0% compared to the same period of the prior year (after a tax adjusted add back for merger costs in the prior year);
  • Loans held for investment increased $59.3 million (12.3% annualized) during the three-month period to $2.0 billion at June 30, 2018;
  • Tangible book value1 per common share was $11.99 at June 30, 2018, an increase of $0.34 from the linked quarter; and
  • Demand deposits of $1.2 billion at June 30, 2018 comprised 56% of total deposits, inclusive of $719.9 million of non-interest bearing demand deposits or 34% of the deposit portfolio. Non-interest bearing demand deposits increased $13.7 million during the three month period and $59.4 million during the twelve month period ended June 30, 2018.

According to CEO Michael Clarke, “Not only did we experience strong increases in nominal earnings during this period, we exceeded our strategic profitability measures with Return on Tangible Common Equity (ROTCE) of 13.74% compared to the target of 13.25%, and Return on Assets of 1.26% compared to the target of 1.25%. While modest margin compression was a drag on performance (down 3 basis points), our team focused this quarter on delivering solid loan growth and maintaining an attractive core deposit base. Non-interest bearing demand deposits, our largest and most valued source of funding, increased $13.7 million during the quarter and comprised 34% of total deposits. We place a priority focus on maintaining and expanding commercial checking accounts with businesses that value a trusted advisor relationship and sophisticated treasury management solutions.

Both fee income businesses, wealth management and mortgage, made meaningful contributions to deliver 17% of pre-tax income, up from 12% during the prior three months. Mr. Clarke concluded: “Our brand of relationship banking with complementary and valued-added fee income services resonates well with our target market and gives us the financial levers to deliver results and drive long term shareholder value.” For the wealth segment, pre-tax income rose to $1.0 million for the three months ended June 30, 2018 compared to $0.3 million for the prior period. This increase is primarily attributable to a one-time fee associated with an estate settlement. On a linked quarter basis, the mortgage segment margins decreased while origination volume increased, resulting in pretax earnings of $0.9 million for the three months ended June 30, 2018 compared to $0.9 million for the prior quarter. Mortgage originations were $123.2 million for the three months ended June 30, 2018, compared to $84.4 million for the three months ended March 31, 2018 and $117.0 million for the three months ended June 30, 2017. The Corporation’s efficiency ratio continues to improve and is within the stated strategic target threshold of 65% or better.

The net interest margin on a fully tax equivalent (non-GAAP) basis decreased to 3.67% from 3.70% when comparing second quarter 2018 to the linked quarter. This decrease is primarily attributed to changes in the Corporation’s funding mix. Net purchase mark accretion included in net interest income was $781 thousand for the second quarter 2018 and $773 thousand for the linked quarter.

Loans Held for Investment increased $59.3 million during the quarter to $2.0 billion at June 30, 2018. The growth experienced during the quarter reversed a decline during the prior quarter which was attributed to seasonal factors led by pay downs on lines of credit to commercial and industrial borrowers. During the recent quarter, many of those lines of credit have been re-drawn and new borrowers added to the portfolio. As of June 30, 2018, commercial and industrial loans as well as owner occupied commercial real estate loans combined to account for 48% of the loan portfolio reflecting the Corporation’s continued focus on lower-middle-market businesses. The Corporation’s priority focus is on expanding borrowers in these portfolios as a driver of future growth in the loan portfolio along with related core deposits.

Noninterest-bearing deposits at June 30, 2018 were $719.9 million, an increase of $13.7 million compared to the first quarter of 2018. Noninterest-bearing deposits remain the largest and most attractive source of funding for the Corporation, comprising 34% of the deposit portfolio. When combined with interest-bearing demand deposit accounts, total transaction accounts comprise 56% of the total deposit portfolio, reducing reliance of non-core and more price sensitive funding.

Total deposits at June 30, 2018 were $2.1 billion, down $70.2 million from the $2.2 billion at March 31, 2018. The decrease in interest-bearing deposits was most pronounced in the “rate sensitive” categories of brokered deposits and CDARS while all interest-bearing deposit categories experienced rate motivated runoff. Our strategy places a high priority on the maintenance and expansion of core deposits, particularly transaction accounts. Premium interest rates are targeted to existing high value core depositors and used offensively to acquire new accounts in selective market segments.

Short-term borrowings increased $146.5 million during the three months ended June 30, 2018. This increase is attributable primarily to a few large dollar deposit account balance fluctuations during the quarter.

Asset quality remains strong for the quarter. Non-performing assets (“NPAs”) decreased to $6.0 million at June 30, 2018 from $7.5 million at March 31, 2018, representing 0.21% and 0.26% of total assets, respectively. Included in the NPA total is $1.9 million in other real estate owned. The allowance for loan loss was $16.5 million and $15.8 million at June 30, 2018 and December 31, 2017, respectively, and represented 0.83% and 0.80% of total loans held for investment, respectively.

Tangible book value2 per common share increased to $11.99 at June 30, 2018 from $11.52 at December 31, 2017. The tangible common equity ratio for Access National Corporation and its subsidiary bank was 9.12% at June 30, 2018, 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".

Access National Corporation will hold a conference call on Friday, July 27, 2018 at 9:00 a.m. Eastern Time during which management will review earnings and performance trends. Callers wishing to participate may call toll-free by dialing (844) 348-3796; international callers wishing to participate may do so by dialing (213) 358-0951. The conference ID number is 8569152.

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 - Unaudited
                 
(In Thousands Except for Share and Per Share Data)   June 30,
2018
  March 31,
2018
  December 31,
2017
  June 30,
2017
       
ASSETS
 
Cash and due from banks $ 17,346 $ 17,084 $ 29,855 $ 19,772
 
Interest-bearing balances and federal funds sold 105,626 127,280 92,458 46,889
 
Investment securities:
Available-for-sale, at fair value 421,975 401,411 406,067 401,169
Marketable equity, at fair value 1,340 1,351 1,379 1,388
Held-to-maturity, amortized cost (fair value of $ 16,419, $15,657, $16,379, and $16,449, respectively)   16,350       15,676       15,721       15,786  
Total investment securities 439,665 418,438 423,167 418,343
 
Restricted Stock, at amortized cost 23,742 16,502 16,572 8,742
 
Loans held for sale - at fair value 51,365 30,008 31,999 34,954
 

Loans held for investment net of allowance for loan losses of $16,543, $15,928, $15,805, and $14,671, respectively

1,967,646 1,908,983 1,963,104 1,913,674
 
Premises, equipment and land, net 28,082 28,111 27,797 29,363
 
Goodwill and intangible assets, net 184,838 185,646 185,161 184,194
 
Other assets 102,275 101,796 103,781 101,059
             
Total assets $ 2,920,585     $ 2,833,848     $ 2,873,894     $ 2,756,990  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
LIABILITIES
Noninterest-bearing deposits $ 719,873 $ 706,128 $ 744,960 $ 660,481
 
Interest-bearing demand deposits 477,329 511,850 496,677 454,675
 
Savings and interest-bearing deposits 625,120 659,615 623,889 611,708
 
Time deposits   304,398       319,335       368,622       460,342  
 
Total deposits 2,126,720 2,196,928 2,234,148 2,187,206
 
Short-term borrowings 289,934 143,413 145,993 55,429
 
Long-term borrowings 45,000 40,000 40,000 80,000
 
Trust preferred debentures 3,922 3,903 3,883 3,843
 
Other liabilities and accrued expenses 20,727 22,951 28,246 15,644
             
Total Liabilities   2,486,303       2,407,195       2,452,270       2,342,122  
 
SHAREHOLDERS' EQUITY

Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 20,796,193, 20,695,946, 20,534,163, and 20,378,994, respectively

17,365 17,281 17,146 17,016
 
Additional paid in capital 314,367 311,675 307,670 303,997
 
Retained earnings 109,690 103,834 98,584 94,664
 
Accumulated other comprehensive (loss) income, net (7,140 ) (6,137 ) (1,776 ) (809 )
             
Total shareholders' equity   434,282       426,653       421,624       414,868  
             
Total liabilities and shareholders' equity $ 2,920,585     $ 2,833,848     $ 2,873,894     $ 2,756,990  
 
 
Access National Corporation
Consolidated Statement of Operations - Unaudited
 
  Three Months Ended   Six Months Ended
(In Thousands Except for Share and Per Share Data)   June 30, 2018   March 31, 2018   June 30, 2017   June 30, 2018   June 30, 2017
       
INTEREST INCOME
Interest and fees on loans $ 24,143 $ 23,411 $ 23,746 $ 47,554 $ 35,945
 
Interest on federal funds sold and bank balances 437 517 221 954 352
 
Interest and dividends on securities   2,642   2,680   3,172   5,322   4,396
Total interest income 27,222 26,608 27,139 53,830 40,693
 
INTEREST EXPENSE
Interest on deposits 3,017 2,798 2,419 5,815 3,921
 
Interest on other borrowings   1,190   565   545   1,755   907
Total interest expense   4,207   3,363   2,964   7,570   4,828
Net interest income 23,015 23,245 24,175 46,260 35,865
 
Provision for loan losses   652   750   900   1,402   2,300
Net interest income after provision for loan losses 22,363 22,495 23,275 44,858 33,565
 
NONINTEREST INCOME
Service charges and fees 494 477 669 971 949
 
Gain on sale of loans 4,196 2,792 6,046 6,988 9,391
 
Other Income   4,400   4,126   2,170   8,526   4,548
Total noninterest income 9,090 7,395 8,885 16,485 14,888
 
NONINTEREST EXPENSE
Salaries and benefits 12,529 11,728 12,660 24,257 20,700
 
Occupancy and equipment 1,640 2,241 1,981 3,881 2,801
 
Other operating expense   6,257   6,005   11,585   12,262   14,920
Total noninterest expense   20,426   19,974   26,226   40,400   38,421
Income before income tax 11,027 9,916 5,934 20,943 10,032
 
Income tax expense   2,065   1,830   2,088   3,895   3,579
NET INCOME   8,962   8,086   3,846   17,048   6,453
 
Earnings per common share:
Basic $ 0.43 $ 0.39 $ 0.19 $ 0.82 $ 0.42
Diluted $ 0.43 $ 0.39 $ 0.19 $ 0.82 $ 0.41
 
Average outstanding shares:
Basic 20,736,727 20,619,817 20,335,070 20,678,272 15,529,934
Diluted 20,822,853 20,715,188 20,453,991 20,769,020 15,655,613
 
 
Performance and Capital Ratios - Unaudited
                         
(Dollars In Thousands)   Three Months
Ended
June 30,
2018
  Three Months
Ended
March 31,
2018
  Three Months
Ended
June 30,
2017
  Six Months
Ended
June 30,
2018
  Six Months
Ended
June 30,
2017
  Twelve Months
Ended
December 31
2017
           
Return on average assets (annualized) 1.26% 1.06% 0.55% 1.17% 0.62% 0.67%
Return on average tangible equity (annualized) (1) 13.74% 13.57% 6.87% 13.93% 7.52% 7.72%
Net interest margin - fully tax equivalent basis (1) 3.67% 3.70% 3.98% 3.68% 3.81% 3.88%
Net interest margin 3.62% 3.65% 3.91% 3.64% 3.75% 3.81%
Cost of funds 0.98% 0.79% 0.69% 0.88% 0.73% 0.73%
Access National Bank efficiency ratio (2) 57.36% 59.65% 59.23% 58.20% 57.30% 55.72%
Access National Corporation efficiency ratio (2) 63.62% 65.19% 79.33% 64.39% 75.70% 69.61%
Total average equity to earning assets 16.86% 16.59% 16.68% 16.73% 13.95% 14.82%
Tangible common equity ratio (1) 9.12% 9.10% 8.97% 9.12% 8.97% 8.79%
 
Averages
Assets $ 2,848,307 $ 2,856,201 $ 2,789,088 $ 2,852,359 $ 2,096,372 $ 2,453,894
Loans held for investment 1,935,422 1,950,077 1,896,824 1,942,700 1,474,551 1,704,040
Loans held for sale 41,515 21,257 28,254 31,442 26,368 27,881
Interest-bearing deposits & federal funds sold 110,800 136,969 121,572 123,812 94,174 104,566
Investment securities 444,779 434,003 422,792 439,421 316,345 362,614
Earning assets 2,541,454 2,548,836 2,471,037 2,545,115 1,913,515 2,212,020
Interest-bearing deposits 1,440,998 1,517,030 1,523,996 1,478,811 1,143,566 1,327,262
Total deposits 2,114,617 2,215,222 2,163,566 2,164,723 1,631,078 1,922,249
Repurchase agreements & federal funds purchased 56,693 57,344 53,949 57,017 41,148 48,378
FHLB short term borrowings 180,348 91,002 57,824 135,922 71,934 67,907
FHLB long-term borrowings 42,088 40,000 79,892 41,050 69,698 66,329
Trust Preferred debt 3,911 3,891 3,824 3,901 1,919 2,691
Equity $ 428,590 $ 422,780 $ 412,146 $ 425,699 $ 266,951 $ 327,738
Tangible equity (1) $ 243,232 $ 238,381 $ 223,891 $ 240,803 $ 171,716 $ 213,756
 
Allowance for loan losses $ 16,543 $ 15,928 $ 14,671 $ 16,543 $ 14,671 $ 15,805
Allowance for loan losses/loans held for investment 0.83% 0.83% 0.76% 0.83% 0.76% 0.80%
Remaining purchase marks on performing loans $ 11,335 $ 10,415 $ 15,880 $ 11,335 $ 15,880 $ 11,241
Purchased credit impaired loans $ 4,632 $ 4,702 $ 7,237 $ 4,632 $ 7,237 $ 4,969
Remaining purchase marks on credit impaired loans $ 1,720 $ 1,749 $ 2,296 $ 1,720 $ 2,296 $ 1,175
Total NPA $ 6,049 $ 7,453 $ 8,954 $ 6,049 $ 8,954 $ 5,270
NPA to total assets 0.21% 0.26% 0.32% 0.21% 0.32% 0.18%
 
Mortgage loan originations and brokered loans $ 123,157 $ 84,411 $ 116,958 $ 207,568 $ 211,458 $ 432,678
Gain on sale of mortgage loans net hedging activity $ 4,251 $ 3,273 $ 5,421 $ 7,524 $ 8,837 $ 19,192
Allowance for losses on mortgage loans sold $ 953 $ 953 $ 1,029 $ 953 $ 1,029 $ 953
 
Wealth Services segment - assets under management $ 1,949,992 $ 1,942,526 $ 1,927,629 $ 1,949,992 $ 1,927,629 $ 1,955,720
 
Book value per common share $ 20.88 $ 20.62 $ 20.36 $ 20.88 $ 20.36 $ 20.53
 
Tangible book value per common share (1) $ 11.99 $ 11.65 $ 11.32 $ 11.99 $ 11.32 $ 11.52
                         
 
(1) Non-GAAP financial information. See "Reconciliation of Non-GAAP Financial Measures" at end of release.

(2) Efficiency ratio is non-interest expense divided by the sum of net interest income and non-interest income.

 
 
Composition of Loan Portfolio - Unaudited
 
    June 30, 2018   March 31, 2018   December 31, 2017   September 30, 2017   June 30, 2017
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

                   
Commercial real estate - owner occupied $ 478,928 24.13 % $ 462,298 24.02 % $ 467,082 23.60 % $ 443,128 22.50 % $ 401,853 20.84 %
Commercial real estate - non-owner occupied 457,940 23.08 419,139 21.77 436,083 22.04 435,181 22.09 377,037 19.55
Residential real estate 460,269 23.20 476,366 24.75 489,669 24.74 512,621 26.03 525,649 27.26
Commercial 464,270 23.40 437,287 22.72 463,652 23.43 449,450 22.82 476,055 24.69
Real estate construction 99,164 5.00 104,528 5.43 97,481 4.93 104,193 5.29 124,186 6.44
Consumer   23,618   1.19     25,293   1.31     24,942   1.26     25,087   1.27     23,565   1.22  
Total loans $ 1,984,189 100.00 % $ 1,924,911 100.00 % $ 1,978,909 100.00 % $ 1,969,660 100.00 % $ 1,928,345 100.00 %
Less allowance for loan losses   16,543   15,928   15,805   15,692   14,671
$ 1,967,646 $ 1,908,983 $ 1,963,104 $ 1,953,968 $ 1,913,674
 
 
Composition of Deposits - Unaudited
 
    June 30, 2018   March 31, 2018   December 31, 2017   September 30, 2017   June 30, 2017
(Dollars In Thousands)   Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

  Amount  

Percentage of
Total

                   
Demand deposits $ 719,873 33.85 % $ 706,128 32.14 % $ 744,960 33.34 % $ 710,691 31.09 % $ 660,481 30.20 %
Interest-bearing demand deposits 462,355 21.74 501,745 22.84 486,621 21.78 480,620 21.02 454,675 20.79
Savings and money market 585,673 27.54 616,879 28.08 580,827 26.00 616,596 26.97 562,581 25.72
CDARS time deposits 13,666 0.64 17,247 0.78 21,582 0.97 37,836 1.65 39,746 1.82
CDARS/ICS non-maturity deposits 53,233 2.50 50,233 2.29 48,011 2.15 47,219 2.07 44,009 2.01
Brokered deposits 17,590 0.83 23,244 1.06 51,028 2.28 71,090 3.11 101,419 4.64
Time deposits   274,330   12.90       281,452   12.81       301,119   13.48       322,160   14.09       324,295   14.82  
Total Deposits $ 2,126,720   100.00 %   $ 2,196,928   100.00 %   $ 2,234,148   100.00 %   $ 2,286,212   100.00 %   $ 2,187,206   100.00 %
 
 
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
Three Months Ended - Unaudited
                 
    June 30, 2018   March 31, 2018   June 30, 2017
Average Income / Yield / Average Income / Yield / Average Income / Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 453,717 $ 2,643 2.33 % $ 440,533 $ 2,679 2.43 % $ 424,387 $ 3,172 2.99 %
Loans held for sale 41,515 477 4.59 % 21,257 227 4.27 % 28,254 297 4.20 %
Loans(1) 1,935,422 23,663 4.89 % 1,950,077 23,187 4.76 % 1,896,824 23,449 4.94 %
Interest-bearing balances and federal funds sold   110,800       439   1.59 %     136,969       515   1.50 %   121,572       221   0.73 %
Total interest-earning assets   2,541,454   27,222 4.28 %   2,548,836   26,608 4.18 %   2,471,037   27,139 4.39 %
Noninterest-earning assets:
Cash and due from banks 15,953 18,261 17,131
Premises, land and equipment 28,087 28,333 29,459
Other assets 279,127 276,819 285,518
Less: allowance for loan losses   (16,314 )   (16,048 )   (14,057 )
Total noninterest-earning assets   306,853     307,365     318,051  
Total Assets $ 2,848,307   $ 2,856,201   $ 2,789,088  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 490,619 $ 680 0.55 % $ 502,621 $ 590 0.47 % $ 472,065 $ 345 0.29 %
Money market deposit accounts 466,538 1,047 0.90 % 494,707 930 0.75 % 367,590 478 0.52 %
Savings accounts 174,392 233 0.53 % 173,509 209 0.48 % 191,409 212 0.44 %
Time deposits   309,449       1,057   1.37 %     346,193       1,069   1.24 %   492,932       1,384   1.12 %
Total interest-bearing deposits 1,440,998 3,017 0.84 % 1,517,030 2,798 0.74 % 1,523,996 2,419 0.63 %
Borrowings:
FHLB short-term borrowings 180,348 866 1.92 % 91,002 350 1.54 % 57,825 221 1.53 %
Securities sold under agreements to repurchase and federal funds purchased 56,693 14 0.10 % 57,344 14 0.10 % 53,949 26 0.19 %
Subordinated debentures 3,911 84 8.63 % 3,891 75 7.71 % 3,824 111 11.61 %
FHLB long-term borrowings   42,088       226   2.14 %     40,000       126   1.26 %   79,892       188   0.94 %
Total borrowings   283,040       1,190   1.68 %     192,237       565   1.18 %   195,490       546   1.12 %
Total interest-bearing deposits and borrowings 1,724,038 4,207 0.98 % 1,709,267 3,363 0.79 % 1,719,486 2,965 0.69 %
Noninterest-bearing liabilities:
Demand deposits 673,619 698,192 639,570
Other liabilities   22,060     25,962     17,886  
Total liabilities 2,419,717 2,433,421 2,376,942
Shareholders' Equity   428,590     422,780     412,146  
Total Liabilities and Shareholders' Equity $ 2,848,307   $ 2,856,201   $ 2,789,088  
 
Interest Spread(2) 3.30 % 3.39 % 3.70 %
 
Net Interest Margin(3) $ 23,015   3.62 % $ 23,245   3.65 % $ 24,174   3.91 %
                                                 
 

(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 - Unaudited
                         
    June 30, 2018   June 30, 2017
Average   Income /   Yield / Average Income / Yield /
(Dollars In Thousands)   Balance   Expense   Rate   Balance   Expense   Rate
 
Assets:
Interest-earning assets:
Securities $ 447,161 $ 5,322 2.38 % $ 318,422 $ 4,396 2.76 %
Loans held for sale 31,442 704 4.48 % 26,368 547 4.15 %
Loans(1) 1,942,700 46,850 4.82 % 1,474,551 35,398 4.80 %
Interest-bearing balances and federal funds sold   123,812       954   1.54 %     94,174       352   0.75 %
Total interest-earning assets   2,545,115   53,830 4.23 %   1,913,515   40,693 4.25 %
Noninterest-earning assets:
Cash and due from banks 17,100 14,416
Premises, land and equipment 28,210 18,280
Other assets 278,116 164,945
Less: allowance for loan losses   (16,182 )   (14,784 )
Total noninterest-earning assets   307,244     182,857  
Total Assets $ 2,852,359   $ 2,096,372  
 
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits $ 496,587 $ 1,270 0.51 % $ 307,685 $ 498 0.32 %
Money market deposit accounts 480,551 1,977 0.82 % 313,339 823 0.53 %
Savings accounts 173,960 442 0.51 % 126,103 302 0.48 %
Time deposits   327,713       2,126   1.30 %   396,439       2,298   1.16 %
Total interest-bearing deposits 1,478,811 5,815 0.79 % 1,143,566 3,921 0.69 %
Borrowings:
FHLB short-term borrowings 135,922 1,216 1.79 % 71,934 387 1.35 %
Securities sold under agreements to repurchase and federal funds purchased 57,017 28 0.10 % 41,148 42 0.20 %
Subordinated debentures 3,901 159 8.17 % 1,919 111 11.57 %
FHLB long-term borrowings   41,050       352   1.71 %   69,698       368   1.06 %
Total borrowings   237,890       1,755   1.48 %   184,699       908   0.98 %
Total interest-bearing deposits and borrowings 1,716,701 7,570 0.88 % 1,328,265 4,829 0.73 %
Noninterest-bearing liabilities:
Demand deposits 685,912 487,511
Other liabilities   24,048     13,645  
Total liabilities 2,426,660 1,829,421
Shareholders' Equity   425,699     266,951  
Total Liabilities and Shareholders' Equity $ 2,852,359   $ 2,096,372  
 
Interest Spread(2) 3.35 % 3.53 %
 
Net Interest Margin(3) $ 46,260   3.64 % $ 35,864   3.75 %
                         
 
(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 - Unaudited
           
Three Months Ended Commercial Mortgage Trust & Wealth Consolidated
June 30, 2018   Banking Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 26,841 $ 477 $ 3 $ 6 $ (105 ) $ 27,222
Gain on sale of loans - 4,196 - - - 4,196
Other revenues   1,634   373     2,726   491     (330 )   4,894
Total revenues   28,475   5,046     2,729   497     (435 )   36,312
 
Expenses:
Interest expense 4,130 39 - 143 (105 ) 4,207
Salaries and employee benefits 8,324 3,130 1,075 - - 12,529
Other expenses   6,292   971     660   956     (330 )   8,549
Total operating expenses   18,746   4,140     1,735   1,099     (435 )   25,285
 
Income (loss) before income taxes $ 9,729 $ 906   $ 994 $ (602 ) $ -   $ 11,027
 
Total assets $ 2,871,045 $ 40,293   $ 12,301 $ 23,435   $ (26,489 ) $ 2,920,585
 
 
Three Months Ended Commercial Mortgage Trust & Wealth Consolidated
March 31, 2018   Banking Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 26,287 $ 227 $ 2 $ 6 $ 86 $ 26,608
Gain on sale of loans - 2,792 - - - 2,792
Other revenues   1,505   1,269     1,741   418     (330 )   4,603
Total revenues   27,792   4,288     1,743   424     (244 )   34,003
 
Expenses:
Interest expense 3,294 (152 ) - 135 86 3,363
Salaries and employee benefits 7,928 2,877 948 - (25 ) 11,728
Other expenses   7,285   706     482   828     (305 )   8,996
Total operating expenses   18,507   3,431     1,430   963     (244 )   24,087
 
Income (loss) before income taxes $ 9,285 $ 857   $ 313 $ (539 ) $ 0   $ 9,916
 
Total assets $ 2,781,867 $ 39,416   $ 11,078 $ 22,494   $ (21,007 ) $ 2,833,848
 
 
Three Months Ended Commercial Mortgage Trust & Wealth Consolidated

June 30, 2017

 

Banking

Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 26,917 $ 297 $ 3 $ 6 $ (84 ) $ 27,139
Gain on sale of loans - 6,046 - - - 6,046
Other revenues   1,703   (692 )   1,824   327     (323 )   2,839
Total revenues   28,620   5,651     1,827   333     (407 )   36,024
 
Expenses:
Interest expense 2,854 16 - 178 (84 ) 2,964
Salaries and employee benefits 8,240 3,193 1,227 - - 12,660
Other expenses   7,922   1,256     452   5,159     (323 )   14,466
Total operating expenses   19,016   4,465     1,679   5,337     (407 )   30,090
 
Income (loss) before income taxes $ 9,604 $ 1,186   $ 148 $ (5,004 ) $ -   $ 5,934
 
Total assets $ 2,685,238 $ 37,923   $ 41,437 $ 418,877   $ (426,485 ) $ 2,756,990
                     
Segment Reporting - Unaudited
           
Six Months Ended Commercial Mortgage Trust & Wealth Consolidated
June 30, 2018   Banking Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 53,128 $ 704 $ 5 $ 12 $ (19 ) $ 53,830
Gain on sale of loans - 6,988 - - - 6,988
Other revenues   3,139   1,642     4,467   909     (660 )   9,497
Total revenues   56,267   9,334     4,472   921     (679 )   70,315
 
Expenses:
Interest expense 7,424 (113 ) - 278 (19 ) 7,570
Salaries and employee benefits 16,252 6,007 2,023 - (25 ) 24,257
Other expenses   13,577   1,677     1,142   1,784     (635 )   17,545
Total operating expenses   37,253   7,571     3,165   2,062     (679 )   49,372
 
Income (loss) before income taxes $ 19,014 $ 1,763   $ 1,307 $ (1,141 ) $ -   $ 20,943
 
Total assets $ 2,871,045 $ 40,293   $ 12,301 $ 23,435   $ (26,489 ) $ 2,920,585
 
 
Six Months Ended Commercial Mortgage Trust & Wealth Consolidated
June 30, 2017   Banking Banking Management Other Eliminations Totals
(In Thousands)
Revenues:
Interest income $ 40,311 $ 547 $ 3 $ 12 $ (180 ) $ 40,693
Gain on sale of loans - 9,391 - - - 9,391
Other revenues   2,468   434     2,578   663     (646 )   5,497
Total revenues   42,779   10,372     2,581   675     (826 )   55,581
 
Expenses:
Interest expense 4,724 43 - 241 (180 ) 4,828
Salaries and employee benefits 12,658 6,224 1,818 - - 20,700
Other expenses   11,449   2,097     691   6,430     (646 )   20,021
Total operating expenses   28,831   8,364     2,509   6,671     (826 )   45,549
 
Income (loss) before income taxes $ 13,948 $ 2,008   $ 72 $ (5,996 ) $ -   $ 10,032
 
Total assets $ 2,685,238 $ 37,923   $ 41,437 $ 418,877   $ (426,485 ) $ 2,756,990
 

Reconciliation of Non-GAAP Financial Measures - Unaudited

 
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 performance measures that may be presented by other companies. 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 Six Months Six Months Twelve Months
Ended Ended Ended Ended Ended Ended
June 30, March 31, June 30, June 30, June 30, December 31,
(Dollars In Thousands)     2018       2018       2017       2018       2017       2017  
 
 
Book value per common share $ 20.88 $ 20.62 $ 20.36 $ 20.88 $ 20.36 $ 20.53
Effect of intangible assets $ (8.89 ) $ (8.97 ) $ (9.04 ) $ (8.89 ) $ (9.04 ) $ (9.01 )
Tangible book value per common share $ 11.99 $ 11.65 $ 11.32 $ 11.99 $ 11.32 $ 11.52
 
 
Common equity ratio 14.87 % 15.06 % 15.05 % 14.87 % 15.05 % 14.67 %
Effect of intangible assets   -5.75 %   -5.96 %   -6.08 %   -5.75 %   -6.08 %   -5.88 %
Tangible common equity ratio 9.12 % 9.10 % 8.97 % 9.12 % 8.97 % 8.79 %
 
 
Net interest margin 3.62 % 3.65 % 3.91 % 3.64 % 3.75 % 3.81 %
Effect of tax exempt securities and loans   0.05 %   0.05 %   0.07 %   0.04 %   0.06 %   0.07 %
Net interest margin - fully tax equivalent basis 3.67 % 3.70 % 3.98 % 3.68 % 3.81 % 3.88 %
 
 
Return on average equity 8.36 % 7.06 % 3.73 % 8.01 % 4.83 % 5.03 %
Effect of intangible assets   5.38 %   6.51 %   3.14 %   5.92 %   2.69 %   2.69 %
Return on average tangible equity 13.74 % 13.57 % 6.87 % 13.93 % 7.52 % 7.72 %
 
 
Average equity $ 428,590 $ 422,780 $ 412,146 $ 425,699 $ 266,951 $ 327,738
Effect of average intangible assets $ 185,358   $ 184,399   $ 188,255   $ 184,896   $ 95,235   $ 125,330  
Average tangible equity $ 243,232 $ 238,381 $ 223,891 $ 240,803 $ 171,716 $ 202,408
 

Access National Corporation
Michael W. Clarke
CEO
703-871-2100

Source: Access National Corporation