Access National Corporation, parent company for Access National Bank, reported third quarter 2015 net income of $3.9 million, or $0.37 per common share.
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This represents the corporation’s 61st consecutive quarterly profit over its 63 quarter history. Consistent with management’s stated objective of a 40%-50% payout ratio against core earnings, the board declared a cash dividend of $0.15 per share for holders of record as of November 02, 2015 and payable on November 25, 2015.
The routine dividend reflects Management’s favorable performance outlook and comfort with a favorable capital position.
Overall, third quarter 2015 pretax earnings increased $988 thousand or 20% when compared to third quarter 2014 when removing the two nonrecurring items which positively impacted third quarter 2014 pretax earnings by $2.5 million.
The increase was primarily due to increases in pretax income for both the banking and mortgage segments from third quarter 2014 of $162 thousand and $717 thousand, respectively, when excluding a nonrecurring $3.25 million release in the mortgage segment’s loan loss reserve for the same period in 2014.
The banking segment’s increase was due to an increase in net interest income over third quarter 2014 of $973 thousand, and was partially offset by an increase in salaries and benefits of $530 thousand and an increase in other operating expense of $309 thousand due largely to enhancements in the Bank’s online banking platform.
The mortgage segment’s increase over third quarter 2014 was due to an increase in mortgage loan originations of $4.6 million or 4% as well as an increase in the secondary margins on mortgage loans held for sale. This resulted in an increase of $953 thousand in non-interest income which was partially offset by an increase in non-interest expense of $268 thousand over 2014 due to costs related to the increased production volume.
Net interest margin for the first nine months of 2015 decreased from 3.78% to 3.69% when compared to the same period in 2014. On a linked quarter basis, the margin increased to 3.70% for the three months ended September 30, 2015 compared to 3.67% for the three months ended June 30, 2015.
On a consolidated basis, the corporation reported annualized return on average assets of 1.40% for the three and nine month periods ended September 30, 2015. Meanwhile, the annualized return on average equity was 15.09% and 14.94% for the three and nine months ended September 30, 2015, respectively.
Total assets were $1.1 billion at September 30, 2015 and grew $65 million when compared to December 31, 2014. An increase in loans held for investment of $72.4 million and $16.5 million of growth in investment securities were partially offset by a decrease of $12.4 million in interest-bearing balances and a decrease in loans held for sale of $9.1 million.
Loan growth in all categories of the loans held for investment portfolio occurred during the first three quarters of 2015. Overall, the portfolio of loans held for investment grew at an annualized rate of 12.4% with commercial real estate – owner occupied loans increasing by the largest dollar amount.
Total deposits at September 30, 2015 increased $176.0 million from December 31, 2014 due mainly to an increase in demand deposits of $81.4 million, an increase in savings and money market of $40.5 million, an increase in time deposits of $27.0 million, and a net increase in wholesale funding deposits of $23.4 million. Management continues to focus on expanding business banking relationships as evidenced by the 32.2% year-to-date growth in demand deposits.
Non-performing assets (NPAs) increased to $6.6 million at September 30, 2015 from $1.6 million at December 31, 2014, representing 0.59% and 0.15% of total assets, respectively, but declined from $7.4 million, or 0.64% of total assets as of June 30, 2015. The increase in NPAs from year end was mainly impacted by the addition of one loan totaling $6.6 million to non-accrual status in the first quarter of 2015.
The Bank did not have other real estate owned at September 30, 2015 while Access Real Estate, LLC had other real estate owned with a carrying value of $500 thousand. The allowance for loan loss was $13.5 million and $13.4 million at September 30, 2015 and December 31, 2014, respectively, and represented 1.59% and 1.73% of total loans held for investment, respectively.
Book value per common share increased from $9.45 at December 31, 2014 to $10.23 at September 30, 2015. The ratio of total equity to total assets for Access National corporation and its subsidiary bank was 9.6% at September 30, 2015, within the corporation’s target range of 8.00% to 10.50%. ■