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Access National Corp (ANCX) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 31, 2017

Access National Corp

CIK: 1176316 Ticker: ANCX

Exhibit 99.1

Access National Announces Fourth Quarter 2017 Earnings

RESTON, Va.--(BUSINESS WIRE)--January 30, 2018--

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.
 

The following information was filed by Access National Corp (ANCX) on Friday, February 2, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets [parenthetical]
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Shareholders' Equity
Consolidated Statements Of Changes In Shareholders' Equity [parenthetical]
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Income
Bank-owned Life Insurance
Bank-owned Life Insurance (details Textual)
Borrowings
Borrowings (advances From Fhlb) (details)
Borrowings (details Textual)
Borrowings (repurchase Agreements And Fed Funds) (details)
Borrowings (scheduled Maturity And Interest Rates For Fhlb Advances) (details)
Borrowings (tables)
Capital Requirements
Capital Requirements (details)
Capital Requirements (tables)
Commitments And Contingent Liabilities
Commitments And Contingent Liabilities (allowance For Losses On Mortgage Loans Sold) (details)
Commitments And Contingent Liabilities (details Textual)
Commitments And Contingent Liabilities (operating Leases) (details)
Commitments And Contingent Liabilities (tables)
Deposits
Deposits (composition Of Deposits) (details)
Deposits (details Textual)
Deposits (scheduled Maturities) (details)
Deposits (tables)
Derivatives
Derivatives - Narrative (details)
Derivatives - Derivatives Designated As Cash Flow Hedges (details)
Derivatives - Interest Rate Cap Agreement (details)
Derivatives - Two-way Client Interest Rate Swaps Not Designated As Either Fair Value Or Cash Flow Hedges (details)
Derivatives (tables)
Earnings Per Share
Earnings Per Share (details)
Earnings Per Share (tables)
Employee Benefits
Employee Benefits (details Textual)
Fair Value Measurements
Fair Value Measurements (assets And Liabilities Measured At Fair Value) (details)
Fair Value Measurements (carrying Amounts And Estimated Fair Value) (details)
Fair Value Measurements (fair Value, Asc 825-10) (details)
Fair Value Measurements (level 3 Assets And Liabilities, Recurring Basis) (details)
Fair Value Measurements (level 3 Fair Value Measurements- Qualitative) (details)
Fair Value Measurements (tables)
Financial Instruments With Off-balance-sheet Risk
Financial Instruments With Off-balance-sheet Risk (details Textual)
Goodwill And Intangible Assets
Goodwill And Intangible Assets (tables)
Goodwill And Intangible Assets - Narrative (details)
Goodwill And Intangible Assets - Schedule Of Changes In Carrying Amount Of Goodwill (details)
Goodwill And Intangible Assets - Summary Of Carrying Amount Of Intangible Assets (details)
Goodwill And Intangible Assets - Summary Of Expected Intangible Amortization (details)
Income Taxes
Income Taxes (narrative) (details)
Income Taxes (net Deferred Tax Assets) (details)
Income Taxes (provision For Income Taxes) (details)
Income Taxes (tables)
Income Taxes (tax Rate Reconciliation) (details)
Loans And The Allowance For Loan Losses
Loans And The Allowance For Loan Losses (age Analysis Of Past Due Loans) (details)
Loans And The Allowance For Loan Losses (allowance For Loan Losses And Recorded Investment) (details)
Loans And The Allowance For Loan Losses (changes In Accretable Yield For Purchased Impaired Loans) (details)
Loans And The Allowance For Loan Losses (composition Of Net Loans) (details)
Loans And The Allowance For Loan Losses (details Textual)
Loans And The Allowance For Loan Losses (impaired Loans) (details)
Loans And The Allowance For Loan Losses (loan Portfolio By Risk Rating) (details)
Loans And The Allowance For Loan Losses (recorded Investment For Impaired Loans) (details)
Loans And The Allowance For Loan Losses (risk Portfolio Based On Payment Activity) (details)
Loans And The Allowance For Loan Losses (tables)
Loans And The Allowance For Loan Losses (troubled Debt Restructuring) (details)
Merger With Middleburg Financial Corporation
Merger With Middleburg Financial Corporation (tables)
Merger With Middleburg Financial Corporation - Loans Identified As Impaired At Acquisition Date (details)
Merger With Middleburg Financial Corporation - Narrative (details)
Merger With Middleburg Financial Corporation - Pro Forma Information (details)
Merger With Middleburg Financial Corporation - Schedule Of Fair Value Of Identifiable Assets Acquired And Liabilities Assumed (details)
Other Expenses (details)
Other Income And Other Operating Expenses
Other Income And Other Operating Expenses (tables)
Other Income And Other Operating Expenses Other Income (details)
Parent Corporation Only Statements
Parent Corporation Only Statements (balance Sheet) (details)
Parent Corporation Only Statements (statement Of Cash Flows) (details)
Parent Corporation Only Statements (statement Of Income) (details)
Parent Corporation Only Statements (statements Of Comprehensive Income) (details)
Parent Corporation Only Statements (tables)
Premises And Equipment
Premises And Equipment (details Textual)
Premises And Equipment (details)
Premises And Equipment (tables)
Related Party Transactions
Related Party Transactions (details Textual)
Securities
Securities (amortized Cost And Fair Value By Contractual Maturities) (details)
Securities (amortized Cost And Fair Value Of Afs And Htm Securities) (details)
Securities (details Textual)
Securities (investment Securities In Unrealized Loss Position) (details)
Securities (restricted Stock) (details)
Securities (tables)
Segment Reporting
Segment Reporting (details)
Segment Reporting (tables)
Share Based Compensation Plans
Share Based Compensation Plans (changes In Stock Options Outstanding) (details)
Share Based Compensation Plans (details Textual)
Share Based Compensation Plans (options Outstanding, Range Of Exercise Price) (details)
Share Based Compensation Plans (tables)
Share Based Compensation Plans (valuation Assumptions) (details)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (details Textual)
Summary Of Significant Accounting Policies (policies)
Ticker: ANCX
CIK: 1176316
Form Type: 10-K Annual Report
Accession Number: 0001628280-18-004021
Submitted to the SEC: Wed Apr 04 2018 6:29:42 PM EST
Accepted by the SEC: Thu Apr 05 2018
Period: Sunday, December 31, 2017
Industry: Savings Institution Federally Chartered

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