Access National Earns $1.1 Million, YTD EPS Rise 13%

RESTON, Va.--(BUSINESS WIRE)--Access National Corporation (NASDAQ:ANCX), holding company for Access National Bank, reported net income for the second quarter of 2008 of $1.1 million, or $.10 per diluted share compared to $1.5 million or $.13 per diluted share for the same period of the prior year and $1.7 million or $.16 per diluted share in the first quarter of 2008. For the six months ended June 30, 2008, diluted earnings per share increased 13% to $0.26 compared to $0.23 in 2007. Although the company has experienced strong improvement in its net interest margin, 2008 earnings have been impacted by a cautionary approach to guard against credit risk. The company continues to exceed regulatory thresholds to be regarded as “Well Capitalized”.

During the second quarter, the allowance for loan losses was strengthened by charging $1.4 million to the provision for loan losses to increase the total allowance to $9.3 million, or 1.87% of loans held for investment. Although there have been no loan losses thus far in 2008, the company has taken this precautionary measure in light of continued uncertainties associated with the real estate market.

Non-performing assets (NPA) totaled $7.9 million or 1.46% of loans held for investment and loans held for sale plus real estate owned. NPA dollar volume was unchanged from the first quarter and consists of commercial real estate loans in the amounts of $6.2 million and $267 thousand, one commercial loan in the amount of $159 thousand, two residential real estate loans totaling $1.0 million and one foreclosed residential property in the amount of $187 thousand. Subsequent to June 30, 2008, one commercial loan in the amount of $267 thousand and the foreclosed residential property have liquidated, reducing NPA to $7.4 million. Following these transactions, the loan loss reserve coverage of NPAs is 125.7%.

Assets totaled $649 million at June 30, 2008 compared to $622 million at December 31, 2007. Loans held for investment increased approximately $19.9 million from $477.6 million at December 31, 2007 to $497.5 million at June 30, 2008.

Total interest bearing deposits at June 30, 2008 decreased from December 31, 2007 by $41.8 million and was partially offset by a $17.8 million increase in non-interest bearing deposits, driven by an expansion in the number of core business depositors. The remainder of the decrease in interest bearing deposits was offset by increases in both short and long term borrowings.

The 30% year to date increase in non-interest bearing deposits reversed a decline recorded in the second half of 2007 and was a major contributing factor to expansion of the net interest margin to 3.55% from 3.02% for the three months ended June 30, 2008 compared to 2007. For the 6 month period, the margin improved to 3.36% in 2008 compared to 3.11% in 2007.

The company’s mortgage banking segment reported year to date origination volume of $455 million, a 30% decline over volume of $653 million in the first six months of 2007. After having made substantive adjustments in 2007, the mortgage banking segment has been profitable in each of the first two quarters of 2008 and management believes that trend will continue.

During the first six months of 2008, the Corporation purchased 808,411 shares of its common stock under a share repurchase program. As of June 30, 2008 a total of 2,054,035 shares have been purchased under the share repurchase program that began on March 21, 2007 at an average cost of $7.47. Following the repurchase activity, the Corporation exceeds all regulatory standards to be regarded as “Well Capitalized”.

Access National Corporation is the parent company of Access National Bank, an independent nationally chartered bank. The Bank, established in December 1999, serves the business community in the greater DC Metropolitan area. Additional information is available on our website at www.AccessNationalBank.com. The shares of Access National Corporation are traded on the NASDAQ National 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 files.

Access National Corporation
Selected Financial Data
(In Thousands, Except for Share Data)
		June 30				June 30				Percent
		2008				2007				Change
Period end balances
Assets		$	648,954			$	687,807			-6	%
Loans held for investment			497,492				487,823			2	%
Loans held for sale			43,313				76,409			-43	%
Interest bearing deposits & federal funds sold			12,781				5,239			144	%
Investment Securities (at fair value)			63,298				95,182			-33	%
Earning assets			617,356				665,095			-7	%
Interest bearing deposits			372,163				397,900			-6	%
Deposits			449,383				477,293			-6	%
Shareholder's equity			54,774				65,075			-16	%
Mortgage loan originations			454,991				652,955			-30.3	%
Quarterly averages
Assets			606,881				671,378			-9.6	%
Loans held for investment			479,438				477,185			0.5	%
Loans held for sale			31,246				69,644			-55.1	%
Interest bearing deposits & federal funds sold			20,025				13,451			48.9	%
Investment Securities			62,298				93,165			-33.1	%
Earning assets			592,249				654,051			-9.4	%
Interest bearing deposits			366,625				373,144			-1.7	%
Deposits			429,869				438,146			-1.9	%
Repurchase agreements & federal funds			14,432				13,982			3.2	%
Commercial paper & other short term borrowings			23,897				18,916			26.3	%
FHLB borrowings			74,772				121,864			-38.6	%
Shareholders' equity			56,166				65,962			-14.9	%
Averages (TTM)
Assets			628,722				642,823			-2	%
Loans held for investment			478,766				440,039			9	%
Loans held for sale			31,155				67,972			-54	%
Interest bearing deposits & federal funds sold			23,984				11,100			116	%
Investment Securities			78,053				103,080			-24.3	%
Earning assets			611,705				623,253			-2	%
Interest bearing deposits			393,320				371,599			6	%
Total Deposits			453,829				438,695			3	%
Repurchase agreements & federal funds			13,994				9,301			50	%
Commercial paper & other short term borrowings			16,652				20,201			-18	%
FHLB borrowings			74,572				99,639			-25	%
Shareholders' equity			59,387				60,205			-1	%
Earnings
Net income (QTR)			1,062				1,508			-30	%
Net income (YTD)			2,753				2,833			-3	%
Net income (TTM)			3,622				6,997			-48	%
Banking segment - income before taxes			2,675				4,984			-46	%
Mortgage segment - income before taxes			2,341				(209	)		-1220	%
Other segments - income before taxes (1)			(724	)			(526	)		38	%
Consolidated - income before taxes			4,292				4,248			1	%
Common shares outstanding			10,117,717				11,966,460			-15.4	%
Book value		$	5.41			$	5.44			0	%
Basic EPS		$	0.26			$	0.24			8	%
Diluted EPS		$	0.26			$	0.23			13	%
Average outstanding shares
Basic			10,395,002				11,978,862			-13.2	%
Diluted			10,555,464				12,271,789			-14.0	%
Return on average assets (QTR annualized)			0.70	%			0.90	%		-22.1	%
Return on average equity (QTR annualized)			7.56	%			9.14	%		-17.3	%
Average assets (YTD)			612,637				659,678			-7.1	%
Return on average assets (YTD annualized)			0.90	%			0.86	%		4.6	%
Average shareholders equity (YTD)			57,551				65,028			-11.5	%
Return on average equity (YTD annualized)			9.57	%			8.71	%		9.8	%
Return on average assets (TTM)			0.58	%			1.09	%		-47	%
Return on average equity (TTM)			6.10	%			11.62	%		-48	%
Net Interest Margin (QTR annualized)			3.55	%			3.02	%		17.5	%
Net Interest Margin (YTD annualized)			3.36	%			3.11	%		8.0	%
Efficiency ratio - bank only			56.58	%			50.18	%		12.8	%
Efficiency ratio - consolidated			76.98	%			80.80	%		-4.7	%
Asset quality
Allowance for loan losses			9,310				6,211			50	%
Allowance for loan losses/loans held for investment			1.87	%			1.27	%		47.0	%
Allowance for loan losses-loans held for sale			640				736			-13.0	%
Non-performing assets			7,877				3,471			126.9	%
Non-performing assets/Total loans plus OREO			1.46	%			0.61	%		137.1	%
Net charge-offs to average loans (YTD)			0.79	%			0.00	%		0.0	%
(1)Access National Corp. & Access Real Estate LLC
(TTM - Trailing Twelve Months)

Access National Corporation
Consolidated Balance Sheet
		June 30			December 31
		2008			2007
(In Thousands)		(unaudited)
ASSETS
Cash and due from banks		$	21,225		$	6,238
Interest bearing balances and federal funds sold			12,781			13,266
Securities available for sale			63,298			73,558
Loans held for sale- Carried at fair value in 2008			43,313			39,144
Loans held for investment net of allowance for loan losses of $9,310 and $7,462 respectively			488,183			470,136
Premises, Equipment and Land			9,441			9,712
Other assets			10,713			10,322
Total assets		$	648,954		$	622,376
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Non-interest bearing deposits		$	77,220		$	59,416
Savings and interest bearing deposits			142,337			142,820
Time Deposits			229,826			271,182
Total deposits			449,383			473,418
Short-term borrowings			72,754			41,676
Long-term borrowings			60,905			39,524
Subordinated debentures			6,186			6,186
Other liabilities and accrued expenses			4,952			3,611
Total Liabilities			594,180			564,415
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 10,117,717 and 10,840,730 shares respectively			8,448			9,052
Surplus			16,879			21,833
Retained earnings			29,369			26,846
Accumulated other comprehensive income (loss)			78			230
Total shareholders' equity			54,774			57,961
Total liabilities and shareholders' equity		$	648,954		$	622,376

Access National Corporation
Consolidated Statement of Operations
		Three Months			Six Months			Six Months
		Ended 06/30/08			Ended 06/30/08			Ended 06/30/07
(In Thousands Except for Share Data)		(unaudited)			(unaudited)			(unaudited)
INTEREST INCOME
Interest and fees on loans		$	8,626		$	17,529		$	20,119
Interest on federal funds sold & bank balances			95			360			359
Interest on securities			790			1,641			2,212
Total interest income			9,511			19,530			22,690
INTEREST EXPENSE
Interest on deposits			3,301			7,569			8,446
Interest on other borrowings			961			1,930			4,258
Total interest expense			4,262			9,499			12,704
Net interest income			5,249			10,031			9,986
Provision for loan losses			1,399			1,807			756
Net interest income after provision for loan losses			3,850			8,224			9,230
NONINTEREST INCOME
Service charges and fees			113			216			185
Gain on sale of loans			6,239			13,093			10,564
Other Income			1,670			3,155			5,332
Total noninterest income			8,022			16,464			16,081
NONINTEREST EXPENSE
Salaries and benefits			5,508			11,438			10,519
Occupancy and equipment			568			1,204			1,229
Other operating expense			4,139			7,754			9,315
Total noninterest expense			10,215			20,396			21,063
Income before income tax			1,657			4,292			4,248
Income tax expense			595			1,539			1,415
NET INCOME		$	1,062		$	2,753		$	2,833
Earnings per common share:
Basic		$	0.10		$	0.26		$	0.24
Diluted		$	0.10		$	0.26		$	0.23
Average outstanding shares:
Basic			10,170,174			10,395,002			11,978,862
Diluted			10,315,127			10,555,464			12,271,789