Access National Corp. has a market cap of $66 million; its shares were traded at around $6.3 with a P/E ratio of 9.2 and P/S ratio of 0.7. The dividend yield of Access National Corp. stocks is 0.6%. Access National Corp. had an annual average earning growth of 7.8% over the past 5 years.
Highlight of Business Operations:At September 30, 2010 and December 31, 2009, the Bank had approximately $128.7 million and $125.6 million respectively, in unfunded lines of credit and letters of credit. These lines of credit, if drawn upon, would be funded from routine cash flows and short-term borrowings.
The Bank maintains a reserve for potential off-balance sheet credit losses that is included in other liabilities on the balance sheet. At September 30, 2010 and December 31, 2009 the balance in this account totaled $297 thousand. The Mortgage Corporation maintains a similar reserve, the Allowance for Losses on Loans Sold for potential liability under standard representations and warranties issued in connection with loans sold. This reserve totaled $4.5 million at September 30, 2010 and $3.3 million at December 31, 2009 and is included in other liabilities on the balance sheet. During the first nine months of 2010 the Mortgage Corporation charged $1.2 million to the allowance for losses on loans sold. The following table shows the changes to the Allowance for Losses on Mortgage Loans Sold.
At September 30, 2010, the Corporation s assets totaled $804.8 million, up from $666.9 million at December 31, 2009, an increase of $138.0 million. Securities available for sale increased from $47.8 million at December 31, 2009 to $152.8 at September 30, 2010. The Corporation increased the size of its securities portfolio to allocate excess liquidity provided by increased deposits from its customers. Loans held for investment totaled $478.3 million at September 30, 2010 compared to $486.6 million at year end 2009, a decrease of $8.3 million. The decrease in loans is attributable to a $13.1 million decrease in residential loans and a $4.4 million decrease in real estate construction loan that was partially offset by a $5.9 million increase in commercial loans and a $3.3 million increase in commercial real estate loans. At September 30, 2010, loans secured by real estate collateral comprised 83.3% of our total loan portfolio, with loans secured by commercial real estate contributing 46.7% of our total loan portfolio, loans secured by residential real estate contributing 28.8% and construction loans contributing 7.8%. Loans held for sale totaled $123.0 million, compared to $76.2 million at December 31, 2009, an increase of $46.8 million. Loans held for sale fluctuates with the volume of loans originated during any given month and the length of time the loans are held prior to selling them in the secondary market. Total deposits increased $140.4 million to $607.0 million at September 30, 2010, compared to $466.6 million at December 31, 2009.
Net income for the third quarter of 2010 totaled $2.4 million compared to $2.2 million for the same period in 2009. Earnings per diluted share were $0.23 for the third quarter of 2010, compared to $0.21 per diluted share in the same period of 2009. Net income for the nine months ended September 30, 2010 totaled $5.3 million or $0.50 per diluted share, compared to net income of $7.6 million or $0.73 per diluted share for the nine months ended September 30, 2009. The decrease in earnings is primarily due to a $14.2 million decrease in gains on the sale of loans as a result of a 49.9% decrease in mortgage loan originations. The decrease in gains on the sale of loans was partially offset by a $4.8 million decrease in salaries and benefits and a $7.8 million decrease in other operating expenses. Non-performing assets (“NPAs”) totaled approximately $10.2 million or 1.27% of total assets at September 30, 2010 down from $15.8 million or 2.28% of total assets at September 30, 2009. NPAs are comprised of $7.0 million in non-accrual loans and $3.3 million in other real estate owned. Subsequent to September 30, 2010, non-performing assets has been reduced to $8.7 million from a foreclosure on a non-accrual loan and sale of the property. Senior lending officers meet on a bi-weekly basis to review the status of non-performing assets and to develop action plans designed to minimize any future losses. At times, these action plans included loan re-structuring, foreclosure and legal actions. The Corporation believes that management of non-performing loans will continue to be a high priority for the remainder of 2010
The loans portfolio constitutes the largest component of earning assets and is comprised of commercial real estate loans, residential real estate, commercial loans, real estate construction loans, and consumer loans. All lending activities of the Bank and its subsidiaries are subject to the regulations and supervision of the Comptroller. The loan portfolio does not have any pay option adjustable rate mortgages, loans with teaser rates or subprime loans or any other loans considered “high risk loans”. Loans totaled $478.3 million at September 30, 2010 compared to $486.6 million at December 31, 2009, a decrease of $8.3 million. Commercial real estate loans increased $3.3 million, residential real estate loans decreased $13.1 million and real estate construction loans decreased $4.4 million. Commercial loans increased approximately $5.9 million. The decrease in total loans reflects weak loan demand as a result of current economic conditions and our conservative underwriting standards given our economic outlook. See Note 5 of the accompanying notes to the consolidated financial statements for a table that summarizes the composition of the Corporation s loan portfolio. The following is a summary of the loans portfolio at September 30, 2010.
LHFS are residential mortgage loans originated by the Mortgage Corporation to consumers and underwritten in accordance with standards set forth by an institutional investor to whom we expect to sell the loans for a profit. Loan proceeds are used for the purchase or refinance of the property securing the loan. Loans are sold with the servicing released to the investor. The LHFS loans are closed by the Mortgage Corporation and held on average fifteen to thirty days pending their sale primarily to mortgage banking subsidiaries of large financial institutions. The Mortgage Corporation is also approved to sell loans directly to Fannie Mae and Freddie Mac and is able to securitize loans that are insured by the Federal Housing Administration. In certain circumstances, the Bank will purchase adjustable rate mortgage loans in the Bank s market area directly from the Mortgage Corporation to supplement loan growth in the Bank s portfolio. These circumstances are infrequent and totaled $40 thousand in the first nine months of 2010. Loans that are held in the Bank s portfolio resulting from the Mortgage Corporation s inability to sell the loan to a third party total less than $800 thousand. In the nine months ended September 30, 2010 we originated $561.1 million of loans processed in this manner, compared to $1.2 billion of mortgage loan originations during the nine months ended September 30, 2009. Loans are sold without recourse and subject to industry standard representations and warranties that may require the repurchase, by the Mortgage Corporation, of loans previously sold. The repurchase risks associated with this activity center around early payment defaults and borrower fraud. During the first nine months of 2010 the Mortgage Corporation paid $1.2 million to counter parties in lieu or repurchasing loans previously sold that have defaulted. There is also a risk that loans originated may not be purchased by our investors. The Mortgage Corporation attempts to manage these risks by the on-going maintenance of an extensive quality control program, an internal audit and verification program, and a selective approval process for investors and programs offered. At September 30, 2010, LHFS at fair value totaled $123.0 million compared to $76.2 million at December 31, 2009.
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