##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year endedDecember 31, 2006
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-49929
 Access National Corporation
 (Exact name of registrant as specified in its charter)
 Organized under the laws of Virginia
    
    82-0545425(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)
 1800 Robert Fulton Drive, Suite 310, Reston, Virginia 20191  (Address of principal executive office) (Zip Code)
 (703) 871-2100  (Registrants telephone number, including area code)
  Title of each class 
Common Stock $.835 par value
    
    Name of each exchange on which registered
The NASDAQ Stock Market LLC
 
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ




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Access National Corporation
FORM 10-K  INDEX
 PagePART IItem 1
    
    Business
    
    
    2Item 1A
    
    Risk Factors
    
    
    10Item 1B
    
    Unresolved Staff Comments
    
    
    13Item 2
    
    Properties
    
    
    13Item 3
    
    Legal Proceedings
    
    
    13Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    13PART IIItem 5
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer  Purchases of Equity Securities
    
    
    13Item 6
    
    Selected Financial Data
    
    
    15Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operation
    
    
    15Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 8
    
    Financial Statements and Supplementary Data
    
    
    36Item 9
    
    Changes in and Disagreements with Accountants On Accounting and Financial Disclosure
    
    
    71Item 9A
    
    Controls and Procedures
    
    
    71Item 9B
    
    Other Information
    
    
    71PART IIIItem 10
    
    Directors, Executive Officers and
Corporate Governance
    
    
    71Item 11
    
    Executive Compensation
    
    
    71Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    71Item 13
    
    Certain Relationships and Related
Transactions, and Director Independence
    
    
    72Item 14
    
    Principal Accountant Fees and Services
    
    
    72PART IVItem 15
    
    Exhibits, Financial Statement Schedules
    
    
    73Signatures
    
    
    
    
    75
 1




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PART I
  ITEM 1  BUSINESS
          2




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Our Strategy  historical and prospective
       3




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Lending Activities
     Loan Portfolio  Loans Held for Investment.
 Commercial Loans:
 Real Estate Construction Loans:
 Commercial Real Estate Loans:
 Residential Real Estate Loans:
 4




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Consumer Loans:
 Loans Held for Sale (LHFS)
  Brokered Loans
  Deposits
  Market Area
  5




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Competition
  Employees
  Supervision and Regulation
  General .
     6




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Governmental Policies and Legislation .
   Dividends .
 Capital Requirements .
  7




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Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA).
        8




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Deposit Insurance Assessments.
 Gramm-Leach-Bliley Act of 1999 .
    Community Reinvestment Act .
 Federal Home Loan Bank (FHLB) of Atlanta.
 Mortgage Banking Regulation .
 9




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USA PATRIOT Act .
 Reporting Terrorist Activities .
  Consumer Laws and Regulations .
 ITEM 1A  RISK FACTORS
 Our profitability depends on interest rates generally, and changes in monetary policy may impact
us
  Our performance depends substantially upon our credit quality.
  10




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Our allowance for loan losses could become inadequate.
  Our profitability depends significantly on local economic conditions.
  Our focus on commercial and real estate loans may increase the risk of credit losses
  Our small to medium-sized business target market may have fewer financial resources to weather
a downturn in the economy.
  We may be adversely affected by changes in government monetary policy.
  
    
    Engaging in open market transactions in United States government securities;
    
    Setting the discount rate on member bank borrowings; and
    
    Determining reserve requirements.
  11




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We may be adversely affected by unanticipated changes in government regulations.
  Our future success will depend on our ability to compete effectively in the highly competitive
financial services industry.
  We depend on the services of key personnel, and a loss of any of those personnel would disrupt
our operations and result in reduced revenues.
  Our common stock has substantially less liquidity than the average trading market for many
other publicly traded common stock.
  Although the Corporation commenced quarterly dividend payments beginning in the first quarter
of 2006, we cannot guarantee that we will continue to pay dividends to shareholders in the future.
  Virginia law and our charter documents contain anti-takeover provisions that may make it more
difficult or expensive to acquire us in the future or may adversely affect our stock price.
  12




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ITEM 1B  UNRESOLVED STAFF COMMENTS
  ITEM 2  PROPERTIES
   ITEM 3  LEGAL PROCEEDINGS
  ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  PART II
 ITEM 5  MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
   2006
    
    
    
    
    
    2005High
    
    Low
    
    Dividends
    
    High
    
    Low
    
    DividendsFirst Quarter
    
    $
    15.10
    
    
    $
    9.84
    
    
    $
    0.005
    
    
    $
    7.16
    
    
    $
    6.35
    
    
    $
    Second Quarter
    
    
    11.30
    
    
    
    8.40
    
    
    
    0.005
    
    
    
    7.19
    
    
    
    6.50
    
    
    
    Third Quarter
    
    
    10.39
    
    
    
    8.75
    
    
    
    0.005
    
    
    
    9.72
    
    
    
    7.10
    
    
    
    Fourth Quarter
    
    
    10.05
    
    
    
    9.10
    
    
    
    0.005
    
    
    
    14.25
    
    
    
    8.75
    
    
    
    
   13




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##### 



Issuer Purchases of Equity Securities for the Quarter Ended December 31, 2006
  Stock Performance
   Company, Headquarters
    
    Exchange
    
    Trading Symbol
    
    EstablishedCardinal Financial Corporation
    
    NASDAQ-NM
    
    CFNL
    
    1998Fairfax, VirginiaEagle Bancorp. Inc.
    
    NASDAQSC
    
    EGBN
    
    1998Bethesda, MarylandTowne Bank
    
    OTC-BB
    
    TOWN
    
    1999Portsmouth, VirginiaValley Financial Corp of VA
    
    OTC-BB
    
    VYFC
    
    1995Roanoke, VirginiaVirginia National Bank
    
    OTC-BB
    
    VABK
    
    1998Charlottesville, Virginia
 14




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##### 



Access
National Corp.
 
 Period EndingIndex
    
    
    12/31/01
    
    
    12/31/02
    
    
    12/31/03
    
    
    12/31/04
    
    
    12/31/05
    
    
    12/31/06Access National Corp.
    
    
    
    100.00
    
    
    
    
    102.08
    
    
    
    
    223.26
    
    
    
    
    209.48
    
    
    
    
    422.23
    
    
    
    
    283.82Peer Group Index*
    
    
    
    100.00
    
    
    
    
    117.67
    
    
    
    
    181.21
    
    
    
    
    232.90
    
    
    
    
    238.91
    
    
    
    
    240.71S&P 500
    
    
    
    100.00
    
    
    
    
    77.90
    
    
    
    
    100.24
    
    
    
    
    111.14
    
    
    
    
    116.59
    
    
    
    
    135.00
 
 *
    
    Access National Corporations peer group consists of the following: Cardinal Financial
Corporation (CFNL), Eagle Bancorp, Inc. (EGBN), Towne Bank (TOWN), Valley Financial Corporation
(VYFC), Virginia National Bank (VABK) ITEM 6  SELECTED FINANCIAL DATA
  ITEM 7  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF
OPERATION
  15




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Forward-Looking Statements
  CRITICAL ACCOUNTING POLICIES
 Allowance for Loan Losses
   Derivative Financial Instruments
   FINANCIAL CONDITION
 Summary
  16




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Cash and Cash Equivalents
  Investment Securities
  Loans
     17




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Allowance for Loan Losses
         18




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Nonperforming Loans And Past Due
   Deposits
     Borrowings
  Shareholders Equity
   19




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##### 



RESULTS OF OPERATIONS
 Summary
   Net Interest Income
     Provision for Loan Losses
  Non-Interest Income
    20




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##### 



Non Interest Expense
    Income Taxes
   Quarterly Results
  Liquidity Management
     21




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##### 



Contractual Obligations
 Payments Due By PeriodDecember 31, 2006Less Than
    
    
    1 - 3
    
    
    More Than1 Year
    
    
    Years
    
    
    3 Years
    
    
    Total(In Thousands)FHLB Advances
    
    $
    45,000
    
    
    $
    
    
    
    $
    
    
    
    $
    45,000Securities sold under agreements to repurchase
    
    
    14,541
    
    
    
    
    
    
    
    
    
    
    
    14,541FHLB long term Borrowings
    
    
    
    
    
    
    36,500
    
    
    
    6,071
    
    
    
    42,571Other short term borrowings
    
    
    20,599
    
    
    
    
    
    
    
    
    
    
    
    20,599Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    10,311
    
    
    
    10,311Leases
    
    
    308
    
    
    
    575
    
    
    
    689
    
    
    
    1,572Total interest-bearing liabilities
    
    $
    80,448
    
    
    $
    37,075
    
    
    $
    17,071
    
    
    $
    134,594
  Off Balance Sheet Items
   22




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##### 



Recent Accounting Pronouncements
      23




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##### 



Statistical Information
   Summary Financial Data
 Year Ended December 312006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In Thousands, Except Per Share Data)Income Statement Data:Net interest income
    
    $
    18,256
    
    
    $
    15,273
    
    
    $
    11,694
    
    
    $
    9,138
    
    
    $
    5,848Provision for loan losses
    
    
    232
    
    
    
    1,196
    
    
    
    1,462
    
    
    
    526
    
    
    
    841Non-interest income
    
    
    27,633
    
    
    
    30,955
    
    
    
    25,952
    
    
    
    33,765
    
    
    
    22,494Non-interest expense
    
    
    34,211
    
    
    
    35,830
    
    
    
    31,580
    
    
    
    36,432
    
    
    
    23,447Income taxes
    
    
    3,853
    
    
    
    3,305
    
    
    
    1,619
    
    
    
    2,129
    
    
    
    1,359Net income before extra-ordinary
items
    
    
    7,593
    
    
    
    5,897
    
    
    
    2,985
    
    
    
    3,816
    
    
    
    2,695Extra-ordinary income, net of income tax
    
    
    
    
    
    
    
    
    
    
    330
    
    
    
    
    
    
    
    Net Income
    
    $
    7,593
    
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816
    
    
    $
    2,695Per Share Data:Earnings per shareBasic, before extra-ordinary income
    
    $
    0.81
    
    
    $
    0.75
    
    
    $
    0.40
    
    
    $
    0.55
    
    
    $
    0.41Basic
    
    
    0.81
    
    
    
    0.75
    
    
    
    0.44
    
    
    
    0.55
    
    
    
    0.41Diluted, before extra-ordinary-income
    
    
    0.72
    
    
    
    0.63
    
    
    
    0.33
    
    
    
    0.44
    
    
    
    0.36Diluted
    
    
    0.72
    
    
    
    0.63
    
    
    
    0.36
    
    
    
    0.44
    
    
    
    0.36Cash dividends declared
    
    
    0.02
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Book value at period end
    
    
    5.27
    
    
    
    3.92
    
    
    
    3.29
    
    
    
    2.84
    
    
    
    2.32Balance Sheet Data:Total assets
    
    $
    644,782
    
    
    $
    537,050
    
    
    $
    420,098
    
    
    $
    257,390
    
    
    $
    240,348Loans held for sale
    
    
    65,320
    
    
    
    45,019
    
    
    
    36,245
    
    
    
    29,756
    
    
    
    93,852Total loans
    
    
    433,594
    
    
    
    369,733
    
    
    
    292,594
    
    
    
    189,320
    
    
    
    114,835Total securities
    
    
    105,163
    
    
    
    87,771
    
    
    
    51,378
    
    
    
    23,178
    
    
    
    15,637Total deposits
    
    
    438,932
    
    
    
    419,629
    
    
    
    317,393
    
    
    
    198,183
    
    
    
    178,251Shareholders equity
    
    
    62,295
    
    
    
    31,185
    
    
    
    25,998
    
    
    
    19,755
    
    
    
    16,291Average shares outstanding, basic
    
    
    9,429,074
    
    
    
    7,867,135
    
    
    
    7,509,536
    
    
    
    6,986,680
    
    
    
    6,594,000Average shares outstanding, diluted
    
    
    10,541,873
    
    
    
    9,423,087
    
    
    
    9,155,778
    
    
    
    8,822,372
    
    
    
    7,478,064Performance Ratios:Return on average assets
    
    
    1.29
    %
    
    
    1.29
    %
    
    
    0.97
    %
    
    
    1.45
    %
    
    
    1.64
    %Return on average equity
    
    
    17.15
    %
    
    
    20.63
    %
    
    
    14.48
    %
    
    
    20.48
    %
    
    
    20.17
    %Net interest margin (1)
    
    
    3.21
    %
    
    
    3.49
    %
    
    
    3.64
    %
    
    
    3.58
    %
    
    
    3.73
    %Efficiency Ratios:Access National Bank
    
    
    48.67
    %
    
    
    52.21
    %
    
    
    56.40
    %
    
    
    50.71
    %
    
    
    56.97
    %Access National Mortgage Corp.
    
    
    92.42
    %
    
    
    89.13
    %
    
    
    94.18
    %
    
    
    89.66
    %
    
    
    85.23
    %Access National Corporation
    
    
    75.06
    %
    
    
    80.09
    %
    
    
    87.61
    %
    
    
    84.26
    %
    
    
    82.20
    %Asset Quality Ratios:Allowance to period end loans
    
    
    1.26
    %
    
    
    1.41
    %
    
    
    1.37
    %
    
    
    1.35
    %
    
    
    1.78
    %Allowance to nonperforming loans
    
    
    1514
    %
    
    
    397.78
    %
    
    
    185.07
    %
    
    
    310.93
    %
    
    
    Net charge-offs to average loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital Ratios:Tier I risk-based capital
    
    
    15.01
    %
    
    
    10.78
    %
    
    
    10.97
    %
    
    
    12.54
    %
    
    
    12.09
    %Total risk-based capital
    
    
    16.18
    %
    
    
    12.11
    %
    
    
    12.80
    %
    
    
    15.47
    %
    
    
    13.33
    %Leverage capital ratio
    
    
    11.53
    %
    
    
    7.60
    %
    
    
    8.83
    %
    
    
    10.28
    %
    
    
    8.12
    %
 
 (1)
    
    Net interest income divided by total average earning assets. 24




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##### 



First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter(In Thousands, Except Per Share Data)2006Total interest income
    
    $
    8,645
    
    
    $
    9,776
    
    
    $
    10,570
    
    
    $
    10,947Total interest expense
    
    
    4,548
    
    
    
    5,371
    
    
    
    5,740
    
    
    
    6,023Net interest income
    
    
    4,097
    
    
    
    4,405
    
    
    
    4,830
    
    
    
    4,924Provision for loan losses
    
    
    124
    
    
    
    49
    
    
    
    
    
    
    
    59Net interest income after provision for loan losses
    
    
    3,973
    
    
    
    4,356
    
    
    
    4,830
    
    
    
    4,865Total noninterest income
    
    
    6,231
    
    
    
    6,486
    
    
    
    7,252
    
    
    
    7,664Total noninterest expense
    
    
    7,744
    
    
    
    8,065
    
    
    
    9,286
    
    
    
    9,117Income tax expense
    
    
    837
    
    
    
    971
    
    
    
    895
    
    
    
    1,150Net income
    
    $
    1,623
    
    
    $
    1,806
    
    
    $
    1,901
    
    
    $
    2,262Earnings Per Share:Basic
    
    $
    0.20
    
    
    $
    0.22
    
    
    $
    0.19
    
    
    $
    0.20Diluted
    
    
    0.17
    
    
    
    0.19
    
    
    
    0.17
    
    
    
    0.19
 First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter(In Thousands, Except Per Share Data)2005Total interest income
    
    $
    5,619
    
    
    $
    6,368
    
    
    $
    7,561
    
    
    $
    8,245Total interest expense
    
    
    2,435
    
    
    
    2,801
    
    
    
    3,350
    
    
    
    3,936Net interest income
    
    
    3,184
    
    
    
    3,567
    
    
    
    4,211
    
    
    
    4,309Provision for loan losses
    
    
    114
    
    
    
    383
    
    
    
    325
    
    
    
    374Net interest income after provision for loan losses
    
    
    3,070
    
    
    
    3,184
    
    
    
    3,886
    
    
    
    3,935Total noninterest income
    
    
    6,153
    
    
    
    9,147
    
    
    
    9,375
    
    
    
    6,792Total noninterest expense
    
    
    7,655
    
    
    
    10,000
    
    
    
    10,641
    
    
    
    8,044Income tax expense
    
    
    533
    
    
    
    827
    
    
    
    911
    
    
    
    1,034Net income
    
    $
    1,035
    
    
    $
    1,504
    
    
    $
    1,709
    
    
    $
    1,649Earnings Per Share:Basic
    
    $
    0.13
    
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.21Diluted
    
    
    0.12
    
    
    
    0.16
    
    
    
    0.18
    
    
    
    0.17
 25




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##### 



Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
 Period Ended December 31,2006
    
    
    2005
    
    
    2004Average
    
    
    Income /
    
    
    Yield /
    
    
    Average
    
    
    Income /
    
    
    Yield /
    
    
    Average
    
    
    Income /
    
    
    Yield /Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollars In Thousands)Assets:Interest earning assets:Securities
    
    $
    107,165
    
    
    $
    4,687
    
    
    
    4.37
    %
    
    $
    64,862
    
    
    $
    2,489
    
    
    
    3.84
    %
    
    $
    25,385
    
    
    $
    905
    
    
    
    3.57
    %Loans(3)
    
    
    454,146
    
    
    
    34,899
    
    
    
    7.68
    %
    
    
    364,126
    
    
    
    25,043
    
    
    
    6.88
    %
    
    
    289,225
    
    
    
    17,228
    
    
    
    5.96
    %Interest bearing deposits & federal funds sold
    
    
    8,193
    
    
    
    400
    
    
    
    4.88
    %
    
    
    8,739
    
    
    
    279
    
    
    
    3.19
    %
    
    
    6,715
    
    
    
    92
    
    
    
    1.37
    %Total interest earning assets
    
    
    569,504
    
    
    
    39,986
    
    
    
    7.02
    %
    
    
    437,727
    
    
    
    27,811
    
    
    
    6.35
    %
    
    
    321,325
    
    
    
    18,225
    
    
    
    5.67
    %Non-interest earning assets:Cash and due from banks
    
    
    10,546
    
    
    
    
    
    
    
    
    
    
    
    10,579
    
    
    
    
    
    
    
    
    
    
    
    8,169Premises, land and equipment
    
    
    9,616
    
    
    
    
    
    
    
    
    
    
    
    9,260
    
    
    
    
    
    
    
    
    
    
    
    8,466Other assets
    
    
    5,531
    
    
    
    
    
    
    
    
    
    
    
    4,118
    
    
    
    
    
    
    
    
    
    
    
    6,138Less: allowance for loan losses
    
    
    (5,363
    )
    
    
    
    
    
    
    
    
    
    
    (4,433
    )
    
    
    
    
    
    
    
    
    
    
    (2,945
    )Total non-interest earning assets
    
    
    20,330
    
    
    
    
    
    
    
    
    
    
    
    19,524
    
    
    
    
    
    
    
    
    
    
    
    19,828Total Assets
    
    $
    589,834
    
    
    
    
    
    
    
    
    
    
    $
    457,251
    
    
    
    
    
    
    
    
    
    
    $
    341,153Liabilities and Shareholders Equity:Interest bearing liabilities:Interest-bearing demand deposits
    
    $
    10,691
    
    
    $
    224
    
    
    
    2.10
    %
    
    $
    10,630
    
    
    $
    200
    
    
    
    1.88
    %
    
    $
    9,075
    
    
    $
    93
    
    
    
    1.02
    %Money market deposit accounts
    
    
    118,548
    
    
    
    4,859
    
    
    
    4.10
    %
    
    
    130,147
    
    
    
    4,256
    
    
    
    3.27
    %
    
    
    40,506
    
    
    
    838
    
    
    
    2.07
    %Savings accounts
    
    
    2,147
    
    
    
    88
    
    
    
    4.10
    %
    
    
    450
    
    
    
    4
    
    
    
    0.89
    %
    
    
    470
    
    
    
    4
    
    
    
    0.85
    %Time deposits
    
    
    230,896
    
    
    
    10,605
    
    
    
    4.59
    %
    
    
    129,314
    
    
    
    4,560
    
    
    
    3.53
    %
    
    
    109,453
    
    
    
    3,420
    
    
    
    3.12
    %Total interest-bearing deposits
    
    
    362,282
    
    
    
    15,776
    
    
    
    4.35
    %
    
    
    270,541
    
    
    
    9,020
    
    
    
    3.33
    %
    
    
    159,504
    
    
    
    4,355
    
    
    
    2.73
    %FHLB Advances
    
    
    61,066
    
    
    
    3,161
    
    
    
    5.18
    %
    
    
    43,375
    
    
    
    1,610
    
    
    
    3.71
    %
    
    
    44,598
    
    
    
    662
    
    
    
    1.48
    %Securities sold under agreements to repurchase
    
    
    4,643
    
    
    
    166
    
    
    
    3.58
    %
    
    
    925
    
    
    
    19
    
    
    
    2.05
    %
    
    
    2,290
    
    
    
    25
    
    
    
    1.09
    %Other short-term borrowings
    
    
    18,005
    
    
    
    738
    
    
    
    4.10
    %
    
    
    8,520
    
    
    
    250
    
    
    
    2.93
    %
    
    
    4,741
    
    
    
    121
    
    
    
    2.55
    %Long-term borrowings
    
    
    23,722
    
    
    
    962
    
    
    
    4.06
    %
    
    
    24,028
    
    
    
    917
    
    
    
    3.82
    %
    
    
    17,801
    
    
    
    854
    
    
    
    4.80
    %Subordinated Debentures
    
    
    10,311
    
    
    
    879
    
    
    
    8.52
    %
    
    
    10,311
    
    
    
    706
    
    
    
    6.85
    %
    
    
    10,311
    
    
    
    514
    
    
    
    4.98
    %Total interest-bearing liabilities
    
    
    480,029
    
    
    
    21,682
    
    
    
    4.52
    %
    
    
    357,700
    
    
    
    12,522
    
    
    
    3.50
    %
    
    
    239,245
    
    
    
    6,531
    
    
    
    2.73
    %Non-interest bearing liabilities:Demand deposits
    
    
    61,506
    
    
    
    
    
    
    
    
    
    
    
    66,862
    
    
    
    
    
    
    
    
    
    
    
    75,883Other liabilities
    
    
    4,029
    
    
    
    
    
    
    
    
    
    
    
    4,103
    
    
    
    
    
    
    
    
    
    
    
    3,124Total liabilities
    
    
    545,564
    
    
    
    
    
    
    
    
    
    
    
    428,665
    
    
    
    
    
    
    
    
    
    
    
    318,252Shareholders Equity
    
    
    44,270
    
    
    
    
    
    
    
    
    
    
    
    28,586
    
    
    
    
    
    
    
    
    
    
    
    22,901Total Liabilities and Shareholders Equity:
    
    $
    589,834
    
    
    
    
    
    
    
    
    
    
    $
    457,251
    
    
    
    
    
    
    
    
    
    
    $
    341,153Interest Spread(1)
    
    
    
    
    
    
    
    
    
    
    2.50
    %
    
    
    
    
    
    
    
    
    
    
    2.85
    %
    
    
    
    
    
    
    
    
    
    
    2.94
    %Net Interest Margin(2)*
    
    
    
    
    
    $
    18,304
    
    
    
    3.21
    %
    
    
    
    
    
    $
    15,289
    
    
    
    3.49
    %
    
    
    
    
    
    $
    11,694
    
    
    
    3.64
    %
 
 (1)
    
    Interest spread is the average yield earned on earning assets, less the average rate incurred on interest bearing liabilities.(2)
    
    Net interest margin is net interest income, expressed as a percentage of average earning assets.(3)
    
    Loans placed on nonaccrual status are included in loan balances*
    
    Note: Interest income and yields are presented on a fully taxable equivalent basis using 34% tax rate. 26




---



##### 



Volume and Rate Analysis
 2006 compared to 2005
    
    Years Ended December 31
2005 compared to 2004
    
    2004 compared to 2003Change Due To:
    
    Change Due To:
    
    Change Due To:Increase /
    
    
    
    
    
    
    
    
    
    Increase /
    
    
    
    
    
    
    
    
    
    Increase /(Decrease)
    
    Volume
    
    Rate
    
    (Decrease)
    
    Volume
    
    Rate
    
    (Decrease)
    
    Volume
    
    Rate(In Thousands)Interest Earning Assets:Investments
    
    $
    2,197
    
    
    
    1,814
    
    
    $
    383
    
    
    $
    1,584
    
    
    $
    1,511
    
    
    $
    73
    
    
    $
    527
    
    
    $
    369
    
    
    $
    158Loans
    
    
    9,856
    
    
    
    6,713
    
    
    
    3,143
    
    
    
    7,815
    
    
    
    4,897
    
    
    
    2,918
    
    
    
    3,706
    
    
    
    3,699
    
    
    
    7Interest bearing deposits
    
    
    121
    
    
    
    (18
    )
    
    
    139
    
    
    
    187
    
    
    
    35
    
    
    
    152
    
    
    
    (52
    )
    
    
    (93
    )
    
    
    41Federal funds sold
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    2Total Increase (Decrease) in Interest Income
    
    
    12,175
    
    
    
    8,510
    
    
    
    3,665
    
    
    
    9,586
    
    
    
    6,443
    
    
    
    3,143
    
    
    
    4,183
    
    
    
    3,976
    
    
    
    208Interest Bearing Liabilities:Interest-bearing demand deposits
    
    
    24
    
    
    
    0
    
    
    
    24
    
    
    
    107
    
    
    
    18
    
    
    
    89
    
    
    
    25
    
    
    
    30
    
    
    
    (5
    )Money market deposit accounts
    
    
    603
    
    
    
    (406
    )
    
    
    1,009
    
    
    
    3,418
    
    
    
    2,709
    
    
    
    709
    
    
    
    569
    
    
    
    410
    
    
    
    159Savings accounts
    
    
    84
    
    
    
    43
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Time deposits
    
    
    6,045
    
    
    
    4,376
    
    
    
    1,669
    
    
    
    1,140
    
    
    
    662
    
    
    
    478
    
    
    
    (206
    )
    
    
    (253
    )
    
    
    47Total interest-bearing deposits
    
    
    6,756
    
    
    
    4,013
    
    
    
    2,743
    
    
    
    4,665
    
    
    
    3,389
    
    
    
    1,276
    
    
    
    389
    
    
    
    187
    
    
    
    202FHLB Advances
    
    
    1,551
    
    
    
    785
    
    
    
    766
    
    
    
    948
    
    
    
    (19
    )
    
    
    967
    
    
    
    487
    
    
    
    503
    
    
    
    (16
    )Securities sold under agreements to repurchase
    
    
    147
    
    
    
    124
    
    
    
    23
    
    
    
    (6
    )
    
    
    (20
    )
    
    
    14
    
    
    
    16
    
    
    
    8
    
    
    
    8Other short-term borrowings
    
    
    488
    
    
    
    359
    
    
    
    129
    
    
    
    129
    
    
    
    109
    
    
    
    20
    
    
    
    82
    
    
    
    2
    
    
    
    80Long-term borrowings
    
    
    45
    
    
    
    (12
    )
    
    
    57
    
    
    
    63
    
    
    
    260
    
    
    
    (197
    )
    
    
    433
    
    
    
    147
    
    
    
    286Trust Preferred
    
    
    173
    
    
    
    1
    
    
    
    172
    
    
    
    192
    
    
    
    
    
    
    
    192
    
    
    
    220
    
    
    
    236
    
    
    
    (16
    )Total Increase (Decrease) in Interest Expense
    
    
    9,160
    
    
    
    5,270
    
    
    
    3,890
    
    
    
    5,991
    
    
    
    3,719
    
    
    
    2,272
    
    
    
    1,627
    
    
    
    1,083
    
    
    
    544Increase (Decrease) in Net Interest Income
    
    $
    3,015
    
    
    $
    3,240
    
    
    $
    (225
    )
    
    $
    3,595
    
    
    $
    2,724
    
    
    $
    871
    
    
    $
    2,556
    
    
    $
    2,892
    
    
    $
    (336
    )
 27




---



##### 



Investment Securities Available for Sale
 Year Ended December 31,2006
    
    
    2005
    
    
    2004(In Thousands)Investment Securities available for sale:US Treasury Securities
    
    $
    996
    
    
    $
    1,602
    
    
    $
    1,638US Government Agency Securities
    
    
    91,609
    
    
    
    75,260
    
    
    
    44,261Mortgage Backed Securities
    
    
    1,040
    
    
    
    1,393
    
    
    
    2,235Tax Exempt Municipals
    
    
    2,888
    
    
    
    2,840
    
    
    
    Taxable Municipals
    
    
    1,275
    
    
    
    1,466
    
    
    
    Mutual Fund
    
    
    1,468
    
    
    
    1,471
    
    
    
    Other
    
    
    5,887
    
    
    
    3,739
    
    
    
    3,244Total Securities
    
    $
    105,163
    
    
    $
    87,771
    
    
    $
    51,378
 Investment Securities Available for Sale 2006
  MaturingAfter One Year
    
    
    After Five Years
    
    
    After TenYearsWithin
    
    
    But Within
    
    
    But WithinOne Year
    
    
    Five Years
    
    
    Ten Years
    
    
   


    


    
    TotalAmount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield(In Thousands)Investment Securities Available for Sale (1)US Treasury Securities
    
    $
    
    
    
    
    
    
    
    $
    996
    
    
    
    4.99
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    996
    
    
    
    4.99
    %US Government Agency Securities
    
    
    34,690
    
    
    
    3.60
    %
    
    
    55,446
    
    
    
    4.65
    %
    
    
    1,473
    
    
    
    5.15
    %
    
    
    
    
    
    
    
    
    
    
    91,609
    
    
    
    4.26
    %Mortgage Backed Securities
    
    
    49
    
    
    
    4.64
    %
    
    
    991
    
    
    
    4.79
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,040
    
    
    
    4.78
    %Tax Exempt Municipals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,888
    
    
    
    5.34
    %
    
    
    
    
    
    
    
    
    
    
    2,888
    
    
    
    5.34
    %Taxable Municipals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,275
    
    
    
    4.30
    %
    
    
    
    
    
    
    
    
    
    
    1,275
    
    
    
    4.30
    %Total
    
    $
    34,739
    
    
    
    3.60
    %
    
    $
    57,433
    
    
    
    4.65
    %
    
    $
    5,636
    
    
    
    5.06
    %
    
    $
    
    
    
    
    
    
    
    $
    97,808
    
    
    
    4.30
    %
 
 (1)
    
    Excludes CRA Mutual Fund, Federal Reserve Bank Stock and FHLB Stock 28




---



##### 



Loan Portfolio
 Year Ended December 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Amount
    
    Percentage of Total
    
    Amount
    
    Percentage of Total
    
    Amount
    
    Percentage of Total
    
    Amount
    
    Percentage of Total
    
    Amount
    
    Percentage of Total(In Thousands)Commercial
    
    $
    51,825
    
    
    
    11.95
    %
    
    $
    38,516
    
    
    
    10.42
    %
    
    $
    48,427
    
    
    
    16.55
    %
    
    $
    31,759
    
    
    
    16.78
    %
    
    $
    17,324
    
    
    
    15.09
    %Commercial real estate
    
    
    159,996
    
    
    
    36.90
    %
    
    
    137,423
    
    
    
    37.17
    
    
    
    96,939
    
    
    
    33.13
    
    
    
    69,128
    
    
    
    36.51
    
    
    
    41,081
    
    
    
    35.77Real estate construction
    
    
    68,570
    
    
    
    15.81
    %
    
    
    37,054
    
    
    
    10.02
    
    
    
    33,073
    
    
    
    11.30
    
    
    
    13,766
    
    
    
    7.27
    
    
    
    10,057
    
    
    
    8.76Residential real estate
    
    
    152,648
    
    
    
    35.21
    %
    
    
    156,185
    
    
    
    42.24
    
    
    
    113,432
    
    
    
    38.77
    
    
    
    73,846
    
    
    
    39.01
    
    
    
    45,591
    
    
    
    39.70Consumer
    
    
    555
    
    
    
    0.13
    %
    
    
    555
    
    
    
    0.15
    
    
    
    723
    
    
    
    0.25
    
    
    
    821
    
    
    
    0.43
    
    
    
    782
    
    
    
    0.68Total loans
    
    $
    433,594
    
    
    
    100.00
    %
    
    $
    369,733
    
    
    
    100.00
    %
    
    $
    292,594
    
    
    
    100.00
    %
    
    $
    189,320
    
    
    
    100.00
    %
    
    $
    114,835
    
    
    
    100.00
    %
 Loan Maturity Distribution
  December 31, 2006Three Months or
    
    
    Over Three Months
    
    
    Over One Year
    
    
    OverLess
    
    
    Through One Year
    
    
    Through Five Years
    
    
    Five Years
    
    
    Total(In Thousands)Commercial
    
    $
    19,433
    
    
    $
    15,947
    
    
    $
    15,711
    
    
    $
    734
    
    
    $
    51,825Commercial real estate
    
    
    19,565
    
    
    
    22,860
    
    
    
    98,668
    
    
    
    18,903
    
    
    
    159,996Real estate construction
    
    
    16,834
    
    
    
    37,610
    
    
    
    10,182
    
    
    
    3,944
    
    
    
    68,570Residential real estate
    
    
    33,788
    
    
    
    19,399
    
    
    
    87,257
    
    
    
    12,204
    
    
    
    152,648Consumer
    
    
    39
    
    
    
    231
    
    
    
    214
    
    
    
    71
    
    
    
    555Total
    
    $
    89,659
    
    
    $
    96,047
    
    
    $
    212,032
    
    
    $
    35,856
    
    
    $
    433,594
 29




---



##### 



Allowance for Loan Losses
 Year Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In Thousands)Balance, beginning of period
    
    $
    5,215
    
    
    $
    4,019
    
    
    $
    2,565
    
    
    $
    2,048
    
    
    $
    1,192Provision for loan losses
    
    
    232
    
    
    
    1,196
    
    
    
    1,462
    
    
    
    526
    
    
    
    841Chargeoffs:Commerical
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    11
    
    
    
    Real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total chargeoffs
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    11
    
    
    
    Recoveries:Commerical
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    15Real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total recoveries
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    15Net chargeoffs
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    9
    
    
    
    (15
    )Balance, end of period
    
    $
    5,457
    
    
    $
    5,215
    
    
    $
    4,019
    
    
    $
    2,565
    
    
    $
    2,048
  Allocation of the Allowance for Loan Losses
 Year Ended December 31,2006
    
    Percentage of total
    
    2005
    
    Percentage 
of total
    
    2004
    
    Percentage 
of total
    
    2003
    
    Percentage 
of total
    
    2002
    
    Percentage 
of total(In Thousands)Commercial
    
    $
    802
    
    
    
    14.71
    %
    
    $
    1,546
    
    
    
    29.64
    %
    
    $
    1,475
    
    
    
    36.70
    %
    
    $
    508
    
    
    
    19.81
    %
    
    $
    311
    
    
    
    15.19
    %Commercial real estate
    
    
    2,296
    
    
    
    42.11
    
    
    
    1,896
    
    
    
    36.36
    
    
    
    1,235
    
    
    
    30.73
    
    
    
    1,054
    
    
    
    41.09
    
    
    
    797
    
    
    
    38.92Real estate construction
    
    
    1,055
    
    
    
    19.35
    
    
    
    499
    
    
    
    9.58
    
    
    
    438
    
    
    
    10.90
    
    
    
    220
    
    
    
    8.58
    
    
    
    158
    
    
    
    7.71Residential real estate
    
    
    1,293
    
    
    
    23.72
    
    
    
    1,267
    
    
    
    24.30
    
    
    
    862
    
    
    
    21.45
    
    
    
    772
    
    
    
    30.10
    
    
    
    768
    
    
    
    37.50Consumer
    
    
    6
    
    
    
    0.11
    
    
    
    6
    
    
    
    0.12
    
    
    
    9
    
    
    
    0.22
    
    
    
    11
    
    
    
    0.42
    
    
    
    14
    
    
    
    0.68Total
    
    $
    5,452
    
    
    
    8543.71
    %
    
    $
    5,215
    
    
    
    100.00
    %
    
    $
    4,019
    
    
    
    100.00
    %
    
    $
    2,565
    
    
    
    100.00
    %
    
    $
    2,048
    
    
    
    100.00
    %
 30




---



##### 



Average Deposits and Average Rates Paid
 Year Ended December 312006
    
    
    2005
    
    2004Average
    
    
    Income /
    
    
    Yield /
    
    
    Average
    
    
    Income /
    
    
    Yield /
    
    
    Average
    
    
    Income /
    
    
    Yield /Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateInterest bearing liabilities:Interest-bearing demand deposits
    
    $
    10,691
    
    
    $
    224
    
    
    
    2.10
    %
    
    $
    10,630
    
    
    $
    200
    
    
    
    1.88
    %
    
    $
    9,075
    
    
    $
    93
    
    
    
    1.02
    %Money market deposit accounts
    
    
    118,548
    
    
    
    4,859
    
    
    
    4.10
    %
    
    
    130,147
    
    
    
    4,256
    
    
    
    3.27
    %
    
    
    40,506
    
    
    
    838
    
    
    
    2.07
    %Savings accounts
    
    
    2,147
    
    
    
    88
    
    
    
    4.10
    %
    
    
    450
    
    
    
    4
    
    
    
    0.89
    %
    
    
    470
    
    
    
    4
    
    
    
    0.85
    %Time deposits
    
    
    230,896
    
    
    
    10,605
    
    
    
    4.59
    %
    
    
    129,314
    
    
    
    4,560
    
    
    
    3.53
    %
    
    
    109,453
    
    
    
    3,420
    
    
    
    3.12
    %Total interest-bearing deposits
    
    
    362,282
    
    
    
    15,776
    
    
    
    4.35
    %
    
    
    270,541
    
    
    
    9,020
    
    
    
    3.33
    %
    
    
    159,504
    
    
    
    4,354
    
    
    
    2.73
    %Non-interest bearing demand deposits
    
    
    61,506
    
    
    
    
    
    
    
    
    
    
    
    66,862
    
    
    
    
    
    
    
    
    
    
    
    75,883Total deposits
    
    $
    423,788
    
    
    
    
    
    
    
    
    
    
    $
    337,403
    
    
    
    
    
    
    
    
    
    
    $
    235,387
  Certificate of Deposit Maturity Distribution
 December 31, 2006Three months
    
    
    Over three months
    
    
    Over six through
    
    
    Overor less
    
    
    through six months
    
    
    twelve months
    
    
    twelve months
    
    
    Total(In Thousands)Less than $100,000
    
    $
    26,775
    
    
    $
    14,387
    
    
    $
    28,558
    
    
    $
    12,115
    
    
    $
    81,835Greater than or equal to $100,000
    
    
    32,407
    
    
    
    36,841
    
    
    
    39,100
    
    
    
    49,217
    
    
    
    157,565$
    59,182
    
    
    $
    51,228
    
    
    $
    67,658
    
    
    $
    61,332
    
    
    $
    239,400
 31




---



##### 



Return on Average Assets and Return on Average Equity
 Year Ended December 31,2006
    
    
    2005
    
    
    2004(In Thousands)Average total assets
    
    $
    589,834
    
    
    $
    457,251
    
    
    $
    341,153Average shareholders equity
    
    $
    44,270
    
    
    $
    28,586
    
    
    $
    22,901Net income
    
    $
    7,593
    
    
    $
    5,897
    
    
    $
    3,315Cash dividends declared
    
    $
    179
    
    
    $
    
    
    
    $
    Return on average assets
    
    
    1.29
    %
    
    
    1.29
    %
    
    
    0.97
    %Return on average shareholders equity
    
    
    17.15
    %
    
    
    20.63
    %
    
    
    14.48
    %Average shareholders equity to
average total assets
    
    
    7.51
    %
    
    
    6.25
    %
    
    
    6.71
    %
 32




---



##### 



Borrowed Funds Distribution
 Year Ended December 312006
    
    
    2005
    
    
    2004(Dollars In Thousands)At Period EndFHLB Advances
    
    $
    45,000
    
    
    $
    36,000
    
    
    $
    27,000Securities sold under agreements to repurchase
    
    
    14,541
    
    
    
    977
    
    
    
    2,862Other short term borrowings
    
    
    20,599
    
    
    
    11,219
    
    
    
    7,217FHLB Long Term Borrowings
    
    
    42,572
    
    
    
    21,786
    
    
    
    27,000Subordinated debentures
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311Fed Funds Purchased
    
    
    4,811Total at period end
    
    $
    137,834
    
    
    $
    80,293
    
    
    $
    74,390Average BalancesFHLB Advances
    
    $
    61,066
    
    
    $
    43,375
    
    
    $
    44,598Securities sold under agreements to repurchase
    
    
    4,644
    
    
    
    925
    
    
    
    2,290Other Short term borrowings
    
    
    17,586
    
    
    
    8,520
    
    
    
    4,741FHLB Long Term Borrowings
    
    
    23,722
    
    
    
    24,028
    
    
    
    17,801Subordinated debentures
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311Fed Funds Purchased
    
    
    419Total average balance
    
    $
    117,748
    
    
    $
    87,159
    
    
    $
    79,741Average rate paid on all borrowed funds
    
    
    5.02
    %
    
    
    4.02
    %
    
    
    2.73
    %
 33




---



##### 



Risk Based Capital Analysis
 Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Tier 1 Capital:Common stock
    
    $
    9,867
    
    
    $
    6,644
    
    
    $
    6,608Capital surplus
    
    
    29,316
    
    
    
    9,099
    
    
    
    9,067Retained earnings
    
    
    23,620
    
    
    
    16,227
    
    
    
    10,330Subordinated Debt (Trust Preferred Debenture)
    
    
    10,000
    
    
    
    10,000
    
    
    
    8,500Total tier 1 capital
    
    
    72,803
    
    
    
    41,970
    
    
    
    34,505Subordinated debt not included in Tier I
    
    
    
    
    
    
    311
    
    
    
    1,811Allowance for loan losses
    
    
    5,688
    
    
    
    4,874
    
    
    
    3,934Total Risk Based Capital
    
    $
    78,491
    
    
    $
    47,155
    
    
    $
    40,250Risk weighted assets
    
    $
    484,987
    
    
    $
    389,381
    
    
    $
    314,494Quarterly average assets
    
    $
    631,378
    
    
    $
    552,292
    
    
    $
    390,735Capital Ratios:Tier 1 risk based capital ratio
    
    
    15.01
    %
    
    
    10.78
    %
    
    
    10.97
    %Total risk based capital ratio
    
    
    16.18
    %
    
    
    12.11
    %
    
    
    12.80
    %Leverage ratio
    
    
    11.53
    %
    
    
    7.60
    %
    
    
    8.83
    %
 34




---



##### 



ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Sensitivity Management
  December 31, 2006Change in
    
    Hypothetical
    
    Hypothetical PercentageFederal Funds
    
    Percentage Change
    
    Change In EconomicTarget Rate
    
    In Earnings
    
    Value of Equity3.00%
    
    -9.55%
    
    -1.77%2.00%
    
    -6.34%
    
    -4.29%1.00%
    
    -3.16%
    
    -6.67%-1.00%
    
    2.79%
    
    3.17%-2.00%
    
    4.88%
    
    5.17%-3.00%
    
    4.66%
    
    6.76%
    35




---



##### 



Impact of Inflation and Changing Prices
  ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 36




---



##### 



Report of Independent Registered Public Accounting Firm
 
   ,
  
 37




---



##### 



ACCESS NATIONAL CORPORATION
Consolidated Balance Sheets
 2006
    
    
    2005AssetsCash and due from banks
    
    $
    11,974
    
    
    $
    9,854Interest-bearing deposits in other banks
    
    
    15,391
    
    
    
    13,329Securities available for sale, at fair value
    
    
    105,163
    
    
    
    87,771Loans held for sale
    
    
    65,320
    
    
    
    45,019Loans, net of allowance for loan losses 2006, $5,452; 2005, $5,215
    
    
    428,142
    
    
    
    364,518Premises and equipment, net
    
    
    9,598
    
    
    
    9,650Other assets
    
    
    9,194
    
    
    
    6,909Total assets
    
    $
    644,782
    
    
    $
    537,050Liabilities and Shareholders EquityLiabilitiesDepositsNoninterest-bearing demand deposits
    
    $
    79,223
    
    
    $
    81,034Savings and interest-bearing deposits
    
    
    120,309
    
    
    
    149,094Time deposits
    
    
    239,400
    
    
    
    189,501Total deposits
    
    
    438,932
    
    
    
    419,629Short term borrowings
    
    
    84,951
    
    
    
    48,196Long term borrowings
    
    
    42,572
    
    
    
    21,786Subordinated debentures
    
    
    10,311
    
    
    
    10,311Other liabilities and accrued expenses
    
    
    5,721
    
    
    
    5,943Total liabilities
    
    
    582,487
    
    
    
    505,865Shareholders EquityCommon stock, par value, $0.835, authorized 60,000,000 shares,
issued and outstanding, 11,816,929 in 2006 and 7,956,556 in 2005
    
    
    9,867
    
    
    
    6,644Surplus
    
    
    29,316
    
    
    
    9,099Retained earnings
    
    
    23,641
    
    
    
    16,227Accumulated other comprehensive income (loss), net
    
    
    (529
    )
    
    
    (785
    )Total shareholders equity
    
    
    62,295
    
    
    
    31,185Total liabilities and shareholders equity
    
    $
    644,782
    
    
    $
    537,050
  38




---



##### 



ACCESS NATIONAL CORPORATION
Consolidated Statements of Income
 Year Ended December 312006
    
    
    2005
    
    
    2004Interest and Dividend IncomeInterest and fees on loans
    
    $
    34,898
    
    
    $
    25,043
    
    
    $
    17,228Interest on deposits in other banks & federal funds sold
    
    
    400
    
    
    
    279
    
    
    
    92Interest and dividends on securities
    
    
    4,640
    
    
    
    2,471
    
    
    
    905Total interest and dividend income
    
    
    39,938
    
    
    
    27,793
    
    
    
    18,225Interest ExpenseInterest on deposits
    
    
    15,776
    
    
    
    9,018
    
    
    
    4,355Interest on short-term borrowings
    
    
    4,065
    
    
    
    1,879
    
    
    
    808Interest on long-term borrowings
    
    
    962
    
    
    
    917
    
    
    
    854Interest on trust preferred capital notes
    
    
    879
    
    
    
    706
    
    
    
    514Total interest expense
    
    
    21,682
    
    
    
    12,520
    
    
    
    6,531Net interest income
    
    
    18,256
    
    
    
    15,273
    
    
    
    11,694Provision for loan losses
    
    
    232
    
    
    
    1,196
    
    
    
    1,462Net interest income after provision for
loan losses
    
    
    18,024
    
    
    
    14,077
    
    
    
    10,232Noninterest IncomeService fees on deposit accounts
    
    
    359
    
    
    
    260
    
    
    
    145Gain on sale of loans
    
    
    19,309
    
    
    
    22,362
    
    
    
    17,768Mortgage broker fee income
    
    
    5,280
    
    
    
    5,634
    
    
    
    4,601Other income
    
    
    2,685
    
    
    
    2,699
    
    
    
    3,438Total noninterest income
    
    
    27,633
    
    
    
    30,955
    
    
    
    25,952Noninterest ExpenseSalaries and employee benefits
    
    
    19,403
    
    
    
    20,537
    
    
    
    18,627Occupancy expense
    
    
    845
    
    
    
    712
    
    
    
    1,367Furniture and equipment expense
    
    
    1,014
    
    
    
    1,204
    
    
    
    1,048Other operating expenses
    
    
    12,949
    
    
    
    13,377
    
    
    
    10,538Total noninterest expense
    
    
    34,211
    
    
    
    35,830
    
    
    
    31,580Income before income taxes
    
    
    11,446
    
    
    
    9,202
    
    
    
    4,604Income tax expense
    
    
    3,853
    
    
    
    3,305
    
    
    
    1,619Net income before extra-ordinary items
    
    
    7,593
    
    
    
    5,897
    
    
    
    2,985Extra-ordinary IncomeGain on acquisition of subsidiary, net of income tax
    
    
    
    
    
    
    
    
    
    
    330Net Income
    
    $
    7,593
    
    
    $
    5,897
    
    
    $
    3,315Earnings per common share:Basic, before extra-ordinary income
    
    $
    0.81
    
    
    $
    0.75
    
    
    $
    0.40Basic
    
    $
    0.81
    
    
    $
    0.75
    
    
    $
    0.44Diluted, before extra-ordinary income
    
    $
    0.72
    
    
    $
    0.63
    
    
    $
    0.33Diluted
    
    $
    0.72
    
    
    $
    0.63
    
    
    $
    0.36Average outstanding shares:Basic
    
    
    9,429,074
    
    
    
    7,867,135
    
    
    
    7,509,536Diluted
    
    
    10,541,873
    
    
    
    9,423,087
    
    
    
    9,155,778
  39




---



##### 



ACCESS NATIONAL CORPORATION
Consolidated Statements of Changes in Shareholders Equity
 AccumulatedOtherCompre-
    
    
    Compre-Common
    
    
    
    
    
    
    Retained
    
    
    hensive
    
    
    hensiveStock
    
    
    Surplus
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Income
    
    
    TotalBalance, December 31, 2003
    
    $
    5,796
    
    
    $
    6,856
    
    
    $
    7,015
    
    
    $
    88
    
    
    $
    
    
    
    $
    19,755Issuance of common stock
    
    
    854
    
    
    
    2,529
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,383Repurchase of common stock
    
    
    (42
    )
    
    
    (318
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (360
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,315
    
    
    
    
    
    
    
    3,315
    
    
    
    3,315Other comprehensive income,
unrealized holdings losses
arising during the period
(net of tax, $4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (95
    )
    
    
    (95
    )
    
    
    (95
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,220Balance, December 31, 2004
    
    
    6,608
    
    
    
    9,067
    
    
    
    10,330
    
    
    
    (7
    )
    
    
    
    
    
    
    25,998Issuance of common stock
    
    
    38
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93Repurchase of common stock
    
    
    (2
    )
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    5,897
    
    
    
    
    
    
    
    5,897
    
    
    
    5,897Other comprehensive income,
unrealized holdings losses
arising during the period
(net of tax, $405)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (778
    )
    
    
    (778
    )
    
    
    (778
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,119Balance, December 31, 2005
    
    
    6,644
    
    
    
    9,099
    
    
    
    16,227
    
    
    
    (785
    )
    
    
    
    
    
    
    31,185Issuance of common stock
    
    
    3,229
    
    
    
    20,262
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,491Repurchase of common stock
    
    
    (6
    )
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )Cash dividend
    
    
    
    
    
    
    
    
    
    
    (179
    )
    
    
    
    
    
    
    
    
    
    
    (179
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    7,593
    
    
    
    
    
    
    
    7,593
    
    
    
    7,593Other comprehensive income,
unrealized holdings gains
arising during the period
(net of tax, $132)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    256
    
    
    
    256
    
    
    
    256Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    7,849Balance, December 31, 2006
    
    $
    9,867
    
    
    $
    29,316
    
    
    $
    23,641
    
    
    $
    (529
    )
    
    
    
    
    
    $
    62,295
  40




---



##### 



ACCESS NATIONAL CORPORATION
Consolidated Statements of Cash Flows
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Cash Flows from Operating ActivitiesNet income
    
    $
    7,593
    
    
    $
    5,897
    
    
    $
    3,315Adjustments to reconcile net income to net cash (used in) provided by
operating activities:Provision for loan losses
    
    
    237
    
    
    
    1,196
    
    
    
    1,462Deferred tax benefit
    
    
    (576
    )
    
    
    (908
    )
    
    
    (538
    )Stock based compensation
    
    
    46
    
    
    
    
    
    
    
    Provision for hedging
    
    
    (24
    )
    
    
    30
    
    
    
    Net amortization on securities
    
    
    (5
    )
    
    
    
    
    
    
    71Depreciation and amortization
    
    
    846
    
    
    
    697
    
    
    
    553Loss on disposal of assets
    
    
    2
    
    
    
    81
    
    
    
    Changes in assets and liabilities:Increase in loans held for sale
    
    
    (20,065
    )
    
    
    (9,010
    )
    
    
    (6,489
    )Increase in other assets
    
    
    (1,922
    )
    
    
    (904
    )
    
    
    (932
    )Increase (decrease) in other liabilities
    
    
    (221
    )
    
    
    3,626
    
    
    
    (215
    )Net cash (used in) provided by operating activities
    
    
    (14,089
    )
    
    
    705
    
    
    
    (2,773
    )Cash Flows from Investing ActivitiesProceeds from maturities and calls of securities available for sale
    
    
    21,591
    
    
    
    25,523
    
    
    
    24,878Purchases of securities available for sale
    
    
    (38,590
    )
    
    
    (63,095
    )
    
    
    (53,294
    )Net increase in loans
    
    
    (64,098
    )
    
    
    (76,902
    )
    
    
    (103,282
    )Proceeds from sale of equipment
    
    
    
    
    
    
    7
    
    
    
    Purchases of premises and equipment
    
    
    (692
    )
    
    
    (1,793
    )
    
    
    (1,382
    )Net cash used in investing activities
    
    
    (81,789
    )
    
    
    (116,260
    )
    
    
    (133,080
    )Cash Flows from Financing ActivitiesNet increase (decrease) in demand, interest-bearing demand and savings deposits
    
    
    (30,596
    )
    
    
    32,746
    
    
    
    108,635Net increase in time deposits
    
    
    49,899
    
    
    
    69,490
    
    
    
    10,575Increase (decrease) in securities sold under agreement to repurchase
    
    
    13,564
    
    
    
    (1,885
    )
    
    
    1,059Net increase in other short-term borrowings
    
    
    24,191
    
    
    
    12,002
    
    
    
    24,964Net increase (decrease) in long term borrowings
    
    
    19,786
    
    
    
    (4,215
    )
    
    
    12,035Proceeds from issuance of common stock
    
    
    23,446
    
    
    
    93
    
    
    
    3,383Repurchase of common stock
    
    
    (51
    )
    
    
    (25
    )
    
    
    (360
    )Dividends paid
    
    
    (179
    )
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    100,060
    
    
    
    108,206
    
    
    
    160,291Increase (decrease) in cash and cash equivalents
    
    
    4,182
    
    
    
    (7,349
    )
    
    
    24,438Cash and Cash EquivalentsBeginning
    
    
    23,183
    
    
    
    30,532
    
    
    
    6,094Ending
    
    $
    27,365
    
    
    $
    23,183
    
    
    $
    30,532Supplemental Disclosures of Cash Flow InformationCash payments for interest
    
    $
    21,660
    
    
    $
    12,553
    
    
    $
    6,071Cash payments for income taxes
    
    $
    3,532
    
    
    $
    3,830
    
    
    $
    1,739Supplemental Disclosures of Noncash Investing ActivitiesUnrealized gain (loss) on securities available for sale
    
    $
    388
    
    
    $
    (1,180
    )
    
    $
    (145
    )
  41




---



##### 



ACCESS NATIONAL CORPORATION
Notes to Consolidated Financial Statements
 Note 1. Summary of Significant Accounting Policies
 Nature of Operations
  Principles of Consolidation
 Securities
  Loans
    Loans Held for Sale
 Allowance for Loan Losses
 42




---



##### 



Notes to Consolidated Financial Statements
     Derivative Financial Instruments
   Premises and Equipment
 43




---



##### 



Income Taxes
 Notes to Consolidated Financial Statements
 Goodwill and Other Intangibles
 44




---



##### 



Notes to Consolidated Financial Statements
 Stock-Based Compensation Plans
 (In Thousands, Except for Per Share Data)
    
    2005
    
    
    2004Net income, as reported
    
    $
    5,897
    
    
    $
    3,315Total stock-based compensation expense
determined under fair value
based method for all awards,
net of related tax effects
    
    
    (285
    )
    
    
    (209
    )Pro forma net income
    
    $
    5,612
    
    
    $
    3,106Earnings per share:Basic  as reported
    
    $
    0.75
    
    
    $
    0.44Basic  pro forma
    
    $
    0.71
    
    
    $
    0.41Diluted  as reported
    
    $
    0.63
    
    
    $
    0.36Diluted  pro forma
    
    $
    0.60
    
    
    $
    0.34
   Year Ended December 312005
    
    2004Expected life
    
    6.78 years
    
    7 yearsRisk-free interest rate
    
    
    4.70
    %
    
    
    3.52
    %Volatility
    
    
    18.37
    %
    
    
    19.50
    %Dividend yield
    
    
    
    
    
    
    
 45




---



##### 



Notes to Consolidated Financial Statements
 Earnings Per Share
  Cash and Cash Equivalents
 Advertising Costs
 Use of Estimates
 Shareholders Equity
 Recent Accounting Pronouncements 
 Currently Effective in Future Years
   46




---



##### 



Notes to Consolidated Financial Statements
    Reclassifications
 47




---



##### 



Notes to Consolidated Financial Statements
 Note 2. Securities
  December 31,2006Gross
    
    
    GrossUnrealized
    
    
    UnrealizedAmortized Cost
    
    
    Gains
    
    
    (Losses)
    
    
    Fair Value( In Thousands)U.S. Treasury Notes
    
    $
    990
    
    
    $
    6
    
    
    $
    
    
    
    $
    996U.S. Governmental Agencies
    
    
    92,352
    
    
    
    5
    
    
    
    (748
    )
    
    
    91,609Mortgage Backed Securities
    
    
    1,037
    
    
    
    4
    
    
    
    (1
    )
    
    
    1,040Tax Exempt Municipals
    
    
    2,893
    
    
    
    5
    
    
    
    (10
    )
    
    
    2,888Taxable Municipals
    
    
    1,305
    
    
    
    
    
    
    
    (30
    )
    
    
    1,275Mutual Fund
    
    
    1,500
    
    
    
    
    
    
    
    (32
    )
    
    
    1,468Restricted Stock -Federal Reserve Bank Stock
    
    
    873
    
    
    
    
    
    
    
    
    
    
    
    873FHLB Stock
    
    
    5,014
    
    
    
    
    
    
    
    
    
    
    
    5,014$
    105,964
    
    
    $
    20
    
    
    $
    (821
    )
    
    $
    105,163
 December 31,2005Gross
    
    
    GrossUnrealized
    
    
    UnrealizedAmortized Cost
    
    
    Gains
    
    
    (Losses)
    
    
    Fair Value( In Thousands)U.S. Treasury Notes
    
    $
    1,606
    
    
    $
    
    
    
    $
    (4
    )
    
    $
    1,602U.S. Governmental Agencies
    
    
    76,329
    
    
    
    
    
    
    
    (1,069
    )
    
    
    75,260Mortgage Backed Securities
    
    
    1,392
    
    
    
    3
    
    
    
    (2
    )
    
    
    1,393Tax Exempt Municipals
    
    
    2,895
    
    
    
    
    
    
    
    (55
    )
    
    
    2,840Taxable Municipals
    
    
    1,500
    
    
    
    
    
    
    
    (34
    )
    
    
    1,466Mutual Fund
    
    
    1,500
    
    
    
    
    
    
    
    (29
    )
    
    
    1,471Restricted Stock -Federal Reserve Bank Stock
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    300FHLB Stock
    
    
    3,439
    
    
    
    
    
    
    
    
    
    
    
    3,439$
    88,961
    
    
    $
    3
    
    
    $
    (1,193
    )
    
    $
    87,771
 48




---



##### 



Notes to Consolidated Financial Statements
  Amortized
    
    
    FairCost
    
    
    Value(In Thousands)US Treasury & AgenciesDue in one year or less
    
    $
    34,994
    
    
    $
    34,690Due after one through five years
    
    
    56,850
    
    
    
    56,442Due after five through ten years
    
    
    1,498
    
    
    
    1,473MunicipalsDue after one through five years
    
    
    
    
    
    
    Due after five through ten years
    
    
    4,198
    
    
    
    4,163Mortgage Backed Securities:Due in one year or less
    
    
    48
    
    
    
    49Due after one through five years
    
    
    989
    
    
    
    991Mutual Fund
    
    
    1,500
    
    
    
    1,468Restricted Stock:Federal Reserve Bank stock
    
    
    873
    
    
    
    873FHLB stock
    
    
    5,014
    
    
    
    5,014$
    105,964
    
    
    $
    105,163
   49




---



##### 



Notes to Consolidated Financial Statements
 
 December 31, 2006
    
    Securities in a loss
    
    
    Securities in a lossPosition for less than
    
    
    Position for 12 Months12 Months
    
    
    or Longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses(In Thousands)Investment securities
available
for sale:U.S. Treasury Security
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Mortgage Backed Security
    
    
    
    
    
    
    
    
    
    
    378
    
    
    
    (1
    )
    
    
    378
    
    
    
    (1
    )U.S. Government Agencies
    
    
    24,936
    
    
    
    (64
    )
    
    
    56,668
    
    
    
    (684
    )
    
    
    81,604
    
    
    
    (748
    )Municipals-Taxable
    
    
    
    
    
    
    
    
    
    
    1,275
    
    
    
    (30
    )
    
    
    1,275
    
    
    
    (30
    )Municipals-Tax Exempt
    
    
    458
    
    
    
    (2
    )
    
    
    1,408
    
    
    
    (9
    )
    
    
    1,866
    
    
    
    (11
    )CRA Mutual Fund
    
    
    
    
    
    
    
    
    
    
    1,468
    
    
    
    (32
    )
    
    
    1,468
    
    
    
    (32
    )Total
    
    $
    25,394
    
    
    $
    (66
    )
    
    $
    61,197
    
    
    $
    (756
    )
    
    $
    86,591
    
    
    $
    (822
    )
 December 31, 2005
    
    Securities in a loss
    
    
    Securities in a lossPosition for less than
    
    
    Position for 12 Months12 Months
    
    
    or Longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses(In Thousands)Investment securities
available
for sale:U.S. Treasury Security
    
    $
    1,602
    
    
    $
    (4
    )
    
    
    
    
    
    
    
    
    
    $
    1,602
    
    
    $
    (4
    )Mortgage Backed Security
    
    
    485
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    485
    
    
    
    (2
    )U.S. Government Agencies
    
    
    28,950
    
    
    
    (378
    )
    
    
    29,309
    
    
    
    (691
    )
    
    
    58,259
    
    
    
    (1,069
    )Municipals-Taxable
    
    
    1,465
    
    
    
    (34
    )
    
    
    
    
    
    
    
    
    
    
    1,465
    
    
    
    (34
    )Municipals-Tax Exempt
    
    
    2,840
    
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    2,840
    
    
    
    (55
    )CRA Mutual Fund
    
    
    1,471
    
    
    
    (29
    )
    
    
    
    
    
    
    
    
    
    
    1,471
    
    
    
    (29
    )Total
    
    $
    36,813
    
    
    $
    (502
    )
    
    $
    29,309
    
    
    $
    (691
    )
    
    $
    66,122
    
    
    $
    (1,193
    )
  50




---



##### 



Notes to Consolidated Financial Statements
 Note 3. Loans
  December 31,2006
    
    
    2005(In Thousands)Loans secured by real estate:Construction and land development
    
    $
    68,570
    
    
    $
    37,054Residential properties
    
    
    152,648
    
    
    
    156,185Secured by commercial properties
    
    
    159,996
    
    
    
    137,423Commercial and industrial loans
    
    
    51,825
    
    
    
    38,516Consumer loans
    
    
    555
    
    
    
    555Total loans
    
    
    433,594
    
    
    
    369,733Less allowance for loan losses
    
    
    5,452
    
    
    
    5,215Net loans
    
    $
    428,142
    
    
    $
    364,518
 Note 4. Allowance for Loan Losses
  December 31,2006
    
    
    2005
    
    
    2004(In Thousands)Balance at beginning of year
    
    $
    5,215
    
    
    $
    4,019
    
    
    $
    2,565Provision charged to operating expense
    
    
    232
    
    
    
    1,196
    
    
    
    1,462Loan recoveries
    
    
    5
    
    
    
    
    
    
    
    Loan charge-offs
    
    
    
    
    
    
    
    
    
    
    (8
    )Balance at end of year
    
    $
    5,452
    
    
    $
    5,215
    
    
    $
    4,019
  51




---



##### 



Notes to Consolidated Financial Statements
 Note 5. Premises and Equipment, net
  December 31,2006
    
    
    2005(In Thousands)Land
    
    $
    2,549
    
    
    $
    2,549Premises
    
    
    6,162
    
    
    
    6,162Leasehold improvements
    
    
    447
    
    
    
    386Furniture & Equipment
    
    
    2,772
    
    
    
    2,18211,930
    
    
    
    11,279Less accumulated depreciation
    
    
    (2,332
    )
    
    
    (1,629
    )$
    9,598
    
    
    $
    9,650
  52




---



##### 



Notes to Consolidated Financial Statements
 Note 6. Deposits
   Year
    
    Amount(In Thousands)2007
    
    $
    178,0672008
    
    
    35,2762009
    
    
    18,7652010
    
    
    4,0662011
    
    
    562Later years
    
    
    2,664$
    239,400
  Note 7. Borrowings
  December 31,2006
    
    
    2005(Dollars In Thousands)Securities sold under agreements to repurchase
    
    $
    14,541
    
    
    $
    977Commercial paper arrangements
    
    
    20,599
    
    
    
    11,219FHLB borrowings
    
    
    45,000
    
    
    
    36,000Fed Funds Purchased
    
    
    4,811
    
    
    
    Total
    
    $
    84,951
    
    
    $
    48,196Weighted interest rate
    
    
    4.84
    %
    
    
    4.21
    %Average for the year ended December 31:Outstanding
    
    $
    83,715
    
    
    $
    52,820Interest rate
    
    
    4.86
    %
    
    
    3.54
    %Maximum month-end outstanding
    
    $
    111,629
    
    
    $
    87,519
 53




---



##### 



Notes to Consolidated Financial Statements
    Amount(In Thousands)Due in 2008
    
    $
    6,500Due in 2009
    
    
    30,000Due in 2010
    
    
    2,322Due in 2014
    
    
    3,750Total Due
    
    $
    42,572
      54




---



##### 



Notes to Consolidated Financial Statements
  Note 8. Income Taxes
  2006
    
    
    2005(In Thousands)Deferred tax assets:Allowance for loan losses
    
    
    1,424
    
    
    
    1,344Accrual to cash basis adjustment
    
    
    
    
    
    
    28Securities Available for Sale
    
    
    273
    
    
    
    405Deferred fees
    
    
    426
    
    
    
    408Other
    
    
    937
    
    
    
    5883,060
    
    
    
    2,773Deferred tax liability:Depreciation
    
    
    135
    
    
    
    216135
    
    
    
    216Net deferred tax assets
included in other assets
    
    $
    2,925
    
    
    $
    2,557
  2006
    
    
    2005
    
    
    2004(In Thousands)Current tax expense
    
    $
    4,429
    
    
    $
    4,213
    
    
    $
    2,327Deferred tax (benefit)
    
    
    (576
    )
    
    
    (908
    )
    
    
    (538
    )$
    3,853
    
    
    $
    3,305
    
    
    $
    1,789
 55




---



##### 



Notes to Consolidated Financial Statements
  Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Computed expected tax expense
    
    $
    3,888
    
    
    $
    3,078
    
    
    $
    1,565Increase (decrease) in income taxes resulting from:State income taxes
    
    
    12
    
    
    
    150
    
    
    
    110Other
    
    
    (47
    )
    
    
    77
    
    
    
    (56
    )Increase due to tax resulting from gain on
acquisition of subsidiary
    
    
    
    
    
    
    
    
    
    
    170$
    3,853
    
    
    $
    3,305
    
    
    $
    1,789
 Note 9. Commitments and Contingent Liabilities
   Year
    
    Amount(In Thousands)2007
    
    
    3082008
    
    
    3162009
    
    
    2582010
    
    
    1832011
    
    
    158$
    1,223
   56




---



##### 



Notes to Consolidated Financial Statements
 Note 10. Derivatives
    57




---



##### 



Notes to Consolidated Financial Statements
 Note 11. Financial Instruments with Off-Balance-Sheet Risk
       58




---



##### 



Notes to Consolidated Financial Statements
 Note 12. Related Party Transactions
  Stock Option Plan
      59




---



##### 



Notes to Consolidated Financial Statements
 Year Ended December 312006
    
    2005
    
    2004Weighted
    
    
    
    
    
    
    
    
    
    Weighted

    
    
 
    WeightedAverage
    
    Aggregate
    
    
    
    
    
    Average
    
    
    
    AverageNumber of
    
    Exercise
    
    Intrinsic
    
    Number of
    
    Exercise
    
    Number of
    
    ExerciseOptions
    
    Price
    
    Value
    
    Options
    
    Price
    
    Options
    
    PriceOutstanding at beginning of year
    
    
    1,277,408
    
    
    $
    3.76
    
    
    
    
    
    
    
    1,121,818
    
    
    $
    2.85
    
    
    
    1,104,136
    
    
    $
    2.47Granted
    
    
    250
    
    
    
    8.95
    
    
    
    
    
    
    
    182,458
    
    
    
    9.52
    
    
    
    137,414
    
    
    
    7.35Exercised
    
    
    (446,286
    )
    
    
    1.70
    
    
    
    
    
    
    
    (13,854
    )
    
    
    2.91
    
    
    
    (51,500
    )
    
    
    3.12Forfeited
    
    
    (16,128
    )
    
    
    8.40
    
    
    
    
    
    
    
    (13,014
    )
    
    
    7.02
    
    
    
    (68,232
    )
    
    
    5.38Outstanding at end of year
    
    
    815,244
    
    
    $
    4.80
    
    
    $
    3,879,755
    
    
    
    1,277,408
    
    
    $
    3.76
    
    
    
    1,121,818
    
    
    $
    2.85Options exercisable at year-end
    
    
    727,020
    
    
    $
    4.63
    
    
    $
    3,587,439
    
    
    
    1,159,598
    
    
    $
    3.59
    
    
    
    777,174
    
    
    $
    2.43Weighted average fair value
per option granted during year
    
    
    
    
    
    $
    3.11
    
    
    
    
    
    
    
    
    
    
    $
    3.44
    
    
    
    
    
    
    $
    2.26
   WeightedAverageGrantDateNumber of
    
    FairNonvested Shares
    
    Options
    
    ValueNonvested at January 1, 2006
    
    
    117,810
    
    
    $
    1.70Granted
    
    
    250
    
    
    
    3.11Vested
    
    
    (22,336
    )
    
    
    0.65Forfeited
    
    
    (7,500
    )
    
    
    2.18Nonvested at December 31, 2006
    
    
    88,224
    
    
    $
    1.93
  60




---



##### 



Notes to Consolidated Financial Statements
 Note 13. Capital Requirements
    61




---



##### 



Notes to Consolidated Financial Statements
  MinimumTo Be WellCapitalized UnderMinimum Capital
    
    Prompt CorrectiveActual
    
    Requirement
    
    Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(In Thousands)December 31, 2006:Total Capital
(to Risk Weighted Assets)Corporation
    
    $
    78,491
    
    
    
    16.18
    %
    
    $
    38,799
    
    
    
    8.00
    %
    
    $
    48,499
    
    
    
    10.00
    %Bank
    
    $
    58,493
    
    
    
    12.09
    %
    
    $
    38,705
    
    
    
    8.00
    %
    
    $
    48,382
    
    
    
    10.00
    %Tier 1 Capital
(to Risk-Weighted Assets)Corporation
    
    $
    72,803
    
    
    
    15.01
    %
    
    $
    19,399
    
    
    
    4.00
    %
    
    $
    29,099
    
    
    
    6.00
    %Bank
    
    $
    52,805
    
    
    
    10.91
    %
    
    $
    19,353
    
    
    
    4.00
    %
    
    $
    29,029
    
    
    
    6.00
    %Tier 1 Capital
(to Average Assets)Corporation
    
    $
    72,803
    
    
    
    11.53
    %
    
    $
    25,255
    
    
    
    4.00
    %
    
    $
    31,569
    
    
    
    5.00
    %Bank
    
    $
    52,805
    
    
    
    8.37
    %
    
    $
    25,229
    
    
    
    4.00
    %
    
    $
    31,536
    
    
    
    5.00
    %December 31, 2005:Total Capital
(to Risk Weighted Assets)Corporation
    
    $
    47,155
    
    
    
    12.11
    %
    
    $
    31,151
    
    
    
    8.00
    %
    
    $
    38,939
    
    
    
    10.00
    %Bank
    
    $
    45,238
    
    
    
    11.63
    %
    
    $
    31,110
    
    
    
    8.00
    %
    
    $
    38,887
    
    
    
    10.00
    %Tier 1 Capital
(to Risk-Weighted Assets)Corporation
    
    $
    41,970
    
    
    
    10.78
    %
    
    $
    15,576
    
    
    
    4.00
    %
    
    $
    23,363
    
    
    
    6.00
    %Bank
    
    $
    40,371
    
    
    
    10.38
    %
    
    $
    15,555
    
    
    
    4.00
    %
    
    $
    23,332
    
    
    
    6.00
    %Tier 1 Capital
(to Average Assets)Corporation
    
    $
    41,970
    
    
    
    7.60
    %
    
    $
    22,092
    
    
    
    4.00
    %
    
    $
    27,615
    
    
    
    5.00
    %Bank
    
    $
    40,371
    
    
    
    7.32
    %
    
    $
    22,070
    
    
    
    4.00
    %
    
    $
    27,587
    
    
    
    5.00
    %December 31, 2004:Total Capital
(to Risk Weighted Assets)Corporation
    
    $
    40,250
    
    
    
    12.80
    %
    
    $
    25,160
    
    
    
    8.00
    %
    
    $
    31,449
    
    
    
    10.00
    %Bank
    
    $
    35,084
    
    
    
    11.17
    %
    
    $
    25,120
    
    
    
    8.00
    %
    
    $
    31,401
    
    
    
    10.00
    %Tier 1 Capital
(to Risk-Weighted Assets)Corporation
    
    $
    34,505
    
    
    
    10.97
    %
    
    $
    12,580
    
    
    
    4.00
    %
    
    $
    18,870
    
    
    
    6.00
    %Bank
    
    $
    31,156
    
    
    
    9.92
    %
    
    $
    12,560
    
    
    
    4.00
    %
    
    $
    18,841
    
    
    
    6.00
    %Tier 1 Capital
(to Average Assets)Corporation
    
    $
    34,505
    
    
    
    8.83
    %
    
    $
    15,629
    
    
    
    4.00
    %
    
    $
    19,537
    
    
    
    5.00
    %Bank
    
    $
    31,156
    
    
    
    7.99
    %
    
    $
    15,603
    
    
    
    4.00
    %
    
    $
    19,504
    
    
    
    5.00
    %
 62




---



##### 



Notes to Consolidated Financial Statements
 Note 14. Dividend Restrictions
  Note 15. Earnings Per Share
  Year Ended December 312006
    
    
    2005
    
    
    2004Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In Thousands, Except Per Share Data)Earnings per shareBasic, before extra-ordinary income
    
    $
    7,593
    
    
    
    9,429
    
    
    $
    0.81
    
    
    $
    5,897
    
    
    
    7,867
    
    
    $
    0.75
    
    
    $
    2,985
    
    
    
    7,510
    
    
    $
    0.40Basic
    
    $
    7,593
    
    
    
    
    
    
    $
    0.81
    
    
    $
    5,897
    
    
    
    
    
    
    $
    0.75
    
    
    $
    3,315
    
    
    
    
    
    
    $
    0.44Effect of dilutive securities:Stock options and warrants
    
    
    
    
    
    
    1,113
    
    
    
    
    
    
    
    
    
    
    
    1,556
    
    
    
    
    
    
    
    
    
    
    
    1,646Diluted, before extra-ordinary income
    
    
    
    
    
    
    
    
    
    $
    0.72
    
    
    
    
    
    
    
    
    
    
    $
    0.63
    
    
    
    
    
    
    
    
    
    
    $
    0.33Diluted
    
    
    
    
    
    
    
    
    
    $
    0.72
    
    
    
    
    
    
    
    
    
    
    $
    0.63
    
    
    
    
    
    
    
    
    
    
    $
    0.36Diluted earnings per share
    
    $
    7,593
    
    
    
    10,542
    
    
    $
    0.72
    
    
    $
    5,897
    
    
    
    9,423
    
    
    $
    0.63
    
    
    $
    3,315
    
    
    
    9,156
    
    
    $
    0.36
 Note 17. Employee Benefits
  63




---



##### 



Notes to Consolidated Financial Statements
 Note 18. Other Expenses
  Year Ended December 31,2006
    
    
    2005
    
    
    2004(In Thousands)Advertising and promotional expense
    
    $
    4,190
    
    
    $
    3,969
    
    
    $
    2,048Investor fees
    
    
    663
    
    
    
    864
    
    
    
    595Broker Fees
    
    
    2,688
    
    
    
    
    
    
    
    Other settlement fees
    
    
    164
    
    
    
    295
    
    
    
    718Management fees
    
    
    1,227
    
    
    
    1,957
    
    
    
    1,824Branch Expense
    
    
    (266
    )
    
    
    680
    
    
    
    327Business & Franchise Tax
    
    
    251
    
    
    
    120
    
    
    
    147Audit and Accounting
    
    
    402
    
    
    
    341
    
    
    
    120Consulting Fees
    
    
    416
    
    
    
    323
    
    
    
    288Early Payoff Penalties
    
    
    320
    
    
    
    431
    
    
    
    Other
    
    
    2,894
    
    
    
    4,397
    
    
    
    4,471$
    12,949
    
    
    $
    13,377
    
    
    $
    10,538
 Note 19. Fair Value of Financial Instruments and Interest Rate Risk
  Cash and Short-Term Investments
  Securities
  Loans Held for Sale
  Loan Receivables
  64




---



##### 



Notes to Consolidated Financial Statements
 Deposits and Borrowings
  Accrued Interest
  Off-Balance-Sheet Financial Instruments
   December 31,2006
    
    
    2005Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(In Thousands)Financial assets:Cash and short-term
investments
    
    $
    27,365
    
    
    $
    27,365
    
    
    $
    23,183
    
    
    $
    23,183Securities available for sale
    
    
    105,163
    
    
    
    105,163
    
    
    
    87,771
    
    
    
    87,771Loans held for sale
    
    
    65,320
    
    
    
    65,320
    
    
    
    45,019
    
    
    
    45,019Loans, net of allowance
    
    
    428,142
    
    
    
    431,043
    
    
    
    364,518
    
    
    
    365,911Total Financial Assets
    
    $
    625,990
    
    
    $
    628,891
    
    
    $
    520,491
    
    
    $
    521,884Financial liabilities:Deposits
    
    $
    438,932
    
    
    $
    435,823
    
    
    $
    419,629
    
    
    $
    418,249Short-term borrowings
    
    
    84,951
    
    
    
    84,961
    
    
    
    48,196
    
    
    
    48,196Long-term borrowings
    
    
    42,572
    
    
    
    42,657
    
    
    
    21,786
    
    
    
    21,410Subordinated debentures
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311Total Financial Liabilities
    
    $
    576,766
    
    
    $
    573,752
    
    
    $
    499,922
    
    
    $
    498,166
 65




---



##### 



Notes to Consolidated Financial Statements
  Note 20. Segment Reporting
   66




---



##### 



Notes to Consolidated Financial Statements
  2006
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated(In Thousands)
    
    Banking
    
    
    Mortgage
    
    
    Other
    
    
    Elimination
    
    
    TotalsRevenues:Interest income
    
    $
    39,526
    
    
    $
    3,972
    
    
    $
    250
    
    
    $
    (3,810
    )
    
    $
    39,938Gain on sale of loans
    
    
    
    
    
    
    19,361
    
    
    
    
    
    
    
    (52
    )
    
    
    19,309Other
    
    
    1,645
    
    
    
    7,938
    
    
    
    1,331
    
    
    
    (2,590
    )
    
    
    8,324Total operating income
    
    
    41,171
    
    
    
    31,271
    
    
    
    1,581
    
    
    
    (6,452
    )
    
    
    67,571Expenses:Interest expense
    
    
    20,092
    
    
    
    4,053
    
    
    
    1,352
    
    
    
    (3,815
    )
    
    
    21,682Salaries and employee benefits
    
    
    6,371
    
    
    
    13,032
    
    
    
    
    
    
    
    
    
    
    
    19,403Other
    
    
    4,120
    
    
    
    12,123
    
    
    
    1,434
    
    
    
    (2,637
    )
    
    
    15,040Total operating expenses
    
    
    30,583
    
    
    
    29,208
    
    
    
    2,786
    
    
    
    (6,452
    )
    
    
    56,125Income before income taxes
    
    $
    10,588
    
    
    $
    2,063
    
    
    $
    (1,205
    )
    
    $
    
    
    
    $
    11,446Total assets
    
    $
    591,973
    
    
    $
    69,749
    
    
    $
    9,876
    
    
    $
    (26,816
    )
    
    $
    644,782Capital Expenditures
    
    $
    248
    
    
    $
    444
    
    
    $
    
    
    
    $
    
    
    
    $
    692
 2005
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated(In Thousands)
    
    Banking
    
    
    Mortgage
    
    
    Other
    
    
    Elimination
    
    
    TotalsRevenues:Interest income
    
    $
    27,617
    
    
    $
    3,085
    
    
    $
    91
    
    
    $
    (3,000
    )
    
    $
    27,793Gain on sale of loans
    
    
    
    
    
    
    22,465
    
    
    
    
    
    
    
    (103
    )
    
    
    22,362Other
    
    
    1,570
    
    
    
    7,798
    
    
    
    1,132
    
    
    
    (1,907
    )
    
    
    8,593Total operating income
    
    
    29,187
    
    
    
    33,348
    
    
    
    1,223
    
    
    
    (5,010
    )
    
    
    58,748Expenses:Interest expense
    
    
    11,575
    
    
    
    2,760
    
    
    
    1,188
    
    
    
    (3,003
    )
    
    
    12,520Salaries and employee benefits
    
    
    5,798
    
    
    
    14,739
    
    
    
    
    
    
    
    
    
    
    
    20,537Other
    
    
    4,594
    
    
    
    12,525
    
    
    
    1,377
    
    
    
    (2,007
    )
    
    
    16,489Total operating expenses
    
    
    21,967
    
    
    
    30,024
    
    
    
    2,565
    
    
    
    (5,010
    )
    
    
    49,546Income before income taxes
    
    $
    7,220
    
    
    $
    3,324
    
    
    $
    (1,342
    )
    
    $
    
    
    
    $
    9,202Total assets
    
    $
    514,808
    
    
    $
    48,883
    
    
    $
    9,101
    
    
    $
    (35,743
    )
    
    $
    537,050Capital Expenditures
    
    $
    428
    
    
    $
    121
    
    
    $
    1,244
    
    
    $
    
    
    
    $
    1,793
 2004
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated(In Thousands)
    
    Banking
    
    
    Mortgage
    
    
    Other
    
    
    Elimination
    
    
    TotalsRevenues:Interest income
    
    $
    17,401
    
    
    $
    2,195
    
    
    $
    89
    
    
    $
    (1,460
    )
    
    $
    18,225Gain on sale of loans
    
    
    
    
    
    
    17,961
    
    
    
    
    
    
    
    (193
    )
    
    
    17,768Other
    
    
    1,013
    
    
    
    7,233
    
    
    
    1,081
    
    
    
    (1,634
    )
    
    
    7,693Total operating income
    
    
    18,414
    
    
    
    27,389
    
    
    
    1,170
    
    
    
    (3,287
    )
    
    
    43,686Expenses:Interest expense
    
    
    5,949
    
    
    
    1,050
    
    
    
    992
    
    
    
    (1,460
    )
    
    
    6,531Salaries and employee benefits
    
    
    3,959
    
    
    
    14,634
    
    
    
    34
    
    
    
    
    
    
    
    18,627Other
    
    
    4,533
    
    
    
    10,172
    
    
    
    1,046
    
    
    
    (1,827
    )
    
    
    13,924Total operating expenses
    
    
    14,441
    
    
    
    25,855
    
    
    
    2,072
    
    
    
    (3,287
    )
    
    
    39,082Income before income taxes
    
    $
    3,973
    
    
    $
    1,534
    
    
    $
    (902
    )
    
    $
    
    
    
    $
    4,604Total assets
    
    $
    398,739
    
    
    $
    62,180
    
    
    $
    35,465
    
    
    $
    (76,286
    )
    
    $
    420,098Capital Expenditures
    
    $
    616
    
    
    $
    492
    
    
    $
    274
    
    
    $
    
    
    
    $
    1,382
 67




---



##### 



Notes to Consolidated Financial Statements
 Note 21. Parent Only Statements
 ACCESS NATIONAL CORPORATION
(Parent Corporation Only)
Balance Sheets
 December 31,2006
    
    
    2005(In Thousands)AssetsCash
    
    $
    48
    
    
    $
    10Other investments
    
    
    19,339
    
    
    
    1,825Investment in subsidiaries
    
    
    52,297
    
    
    
    39,605Other assets
    
    
    1,182
    
    
    
    590Total assets
    
    $
    72,866
    
    
    $
    42,030LiabilitiesSubordinated debentures
    
    $
    10,311
    
    
    $
    10,311Other liabilities
    
    
    260
    
    
    
    53410,571
    
    
    
    10,845Shareholders EquityCommon stock
    
    
    9,867
    
    
    
    6,644Capital surplus
    
    
    29,316
    
    
    
    9,099Retained earnings
    
    
    23,641
    
    
    
    16,227Accumulated other comprehensive income (loss)
    
    
    (529
    )
    
    
    (785
    )Total shareholders equity
    
    
    62,295
    
    
    
    31,185Total liabilities and shareholders equity
    
    $
    72,866
    
    
    $
    42,030
 68




---



##### 



Notes to Consolidated Financial Statements
 ACCESS NATIONAL CORPORATION
(Parent Corporation Only)
Statements of Income
 Year Ended December 31,2006
    
    
    2005
    
    
    2004(In Thousands)IncomeDividends from subsidiaries
    
    $
    1,005
    
    
    $
    1,014
    
    
    $
    795Interest
    
    
    250
    
    
    
    91
    
    
    
    88Other
    
    
    95
    
    
    
    84
    
    
    
    801,350
    
    
    
    1,189
    
    
    
    963ExpensesInterest expense on subordinated debentures
    
    
    879
    
    
    
    706
    
    
    
    514Other expenses
    
    
    832
    
    
    
    845
    
    
    
    421Total expenses
    
    
    1,711
    
    
    
    1,551
    
    
    
    935Income (loss) before income taxes and undistributed income of subsidiaries
    
    
    (361
    )
    
    
    (362
    )
    
    
    28Income tax (benefit)
    
    
    (518
    )
    
    
    (525
    )
    
    
    (289
    )Income before undistributed
income of subsidiaries
    
    
    157
    
    
    
    163
    
    
    
    317Undistributed income of subsidiaries
    
    
    7,436
    
    
    
    5,734
    
    
    
    2,998Net income
    
    $
    7,593
    
    
    $
    5,897
    
    
    $
    3,315
 69




---



##### 



Notes to Consolidated Financial Statements
 ACCESS NATIONAL CORPORATION
(Parent Corporation Only)
Statements of Cash Flows
 Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Cash Flows from Operating ActivitiesNet income
    
    $
    7,593
    
    
    $
    5,897
    
    
    $
    3,315Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Undistributed income of subsidiaries
    
    
    (7,436
    )
    
    
    (5,734
    )
    
    
    (2,998
    )(Increase) decrease in other assets
    
    
    (593
    )
    
    
    1,142
    
    
    
    (730
    )Increase (decrease) in other liabilities
    
    
    (274
    )
    
    
    241
    
    
    
    (410
    )Stock Based Compensation
    
    
    46Net cash provided by (used in) operating activities
    
    
    (664
    )
    
    
    1,546
    
    
    
    (823
    )Cash Flows from Investing ActivitiesIncrease in investment in subsidiaries
    
    
    (5,000
    )
    
    
    (3,500
    )
    
    
    (Increase) decrease in other investments
    
    
    (17,514
    )
    
    
    1,888
    
    
    
    (2,191
    )Net cash (used in) investing activities
    
    
    (22,514
    )
    
    
    (1,612
    )
    
    
    (2,191
    )Cash Flows from Financing ActivitiesRepurchase of common stock
    
    
    (51
    )
    
    
    (25
    )
    
    
    (360
    )Net proceeds from issuance of common stock
    
    
    23,446
    
    
    
    92
    
    
    
    3,383Dividend Paid
    
    
    (179
    )
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    23,216
    
    
    
    67
    
    
    
    3,023Increase in cash and cash equivalents
    
    
    38
    
    
    
    1
    
    
    
    9Cash and Cash EquivalentsBeginning
    
    
    10
    
    
    
    9
    
    
    
    Ending
    
    $
    48
    
    
    $
    10
    
    
    $
    9
 70




---



##### 



ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
  ITEM 9A  CONTROLS AND PROCEDURES
    ITEM 9B  OTHER INFORMATION
  PART III
 ITEM
10  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  ITEM 11  EXECUTIVE COMPENSATION
  ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
  Equity Compensation Plan
  71




---



##### 



Equity Compensation Plan Information (1)
 (c)Number of securities(a)
    
    
    
    
    
    remaining available forNumber of securities to
    
    (b)
    
    future issuance underbe issued upon
    
    Weighted-average
    
    equity compensation plansexercise of
    
    exercise price of
    
    (excluding securitiesoutstanding options,
    
    outstanding options,
    
    reflectedPlan category
    
    warrants and rights
    
    warrants and rights
    
    in column (a))Equity compensation
plans approved by
security holders
(2)
    
    
    815,244
    
    
    $
    4.81
    
    
    
    622,916Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    815,244
    
    
    $
    4.81
    
    
    
    622,916
 
 (1)
    
    All share and dollar per share amounts have been adjusted to give effect to the 10-for-1
stock dividend distributed by the Corporation in April 2001, the 3-for-1 stock dividend
distributed June 2003, and the 2-for-1 stock dividend distributed December 2005.(2)
    
    All shares relate to the Corporations 1999 Stock Option Plan, as amended in 2003. ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDANCE
  ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES
  72




---



##### 



PART IV
 ITEM 15  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a) Exhibit Index
 Exhibit No.
    
    Description3.1
    
    Articles of Incorporation of Access National Corporation
(incorporated by reference to Exhibit 3.1 to form 8K dated July
18, 2006 (file number 000-49929))3.2
    
    Bylaws of Access National Corporation (incorporated by reference
to Exhibit 3.2 to Form 8-K dated August 1, 2005 (file number
000-49929))4
    
    Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.0 to Form 10-KSB filed March 31, 2003 (file number
000-49929))Certain instruments relating to
trust preferred securities not being registered have been omitted in
accordance with Item 601(b)(4)(iii) of Regulation S-K. The registrant
will furnish a copy of any such instrument to the Securities and
Exchange Commission upon its request.10.1+
    
    Employment Letter Agreement between Access National Bank and
Michael W. Clarke (incorporated by reference to Exhibit 10.1 to
Form 10-K filed March 31, 2005)10.2+
    
    Employment Letter Agreement between Access National Bank and
Robert C. Shoemaker (incorporated by reference to Exhibit 10.2
to Form 10-K filed March 31, 2005)10.3+
    
    Employment Letter Agreement between Access National Bank and
Charles Wimer (incorporated by reference to Exhibit 10.3 to Form
10-KSB filed March 31, 2003)10.4+
    
    Employment Agreement between Access National Mortgage
Corporation and Dean Hackemer (incorporated by reference to
Exhibit 10.4 to Form 10-K filed March 31, 2005)10.5*+
    
    Schedule of Non-Employee Directors Annual Compensation10.6*+
    
    Base Salaries for Named Executive Officers10.7+
    
    Access National Bank 1999 Stock Option Plan (incorporated by
reference to Exhibit 10.5 to Form 10-KSB filed March 31, 2003
(file number 000-49929))10.7.1+
    
    Form of Incentive Stock Option Agreement for Employee under 1999
Stock Option Plan (incorporated by reference to Exhibit 10.5.1
to Form 8-K filed January 31, 2007 (file number 000-49929))10.7.2+
    
    Form of Incentive Stock Option for Employee-Director under 1999
Stock Option Plan (incorporated by reference to Exhibit 10.5.2
to Form 8-K filed January 31, 2007 (file number 000-49929))10.7.3+
    
    Form of Non-Qualified Stock Option Agreement for Director under
1999 Stock Option Plan (incorporated by reference to Exhibit
10.5.3 to Form 8-K filed January 31, 2007 (file number
000-49929))10.8
    
    Lease agreement between Access National Bank and William and
Blanca Spencer (incorporated by reference to Exhibit 10.6 to
Form 10-KSB filed March 31, 2003 (file number 000-49929))10.9
    
    Lease agreement between Access National Mortgage Corporation and
WJG, LLC (incorporated by reference to Exhibit 10.7 to Form
10-KSB filed March 31, 2003 (file number 000-49929))14
    
    Code of Ethics (incorporated by reference to Exhibit 14 to Form
10-KSB filed March 30, 2004 (file number 333-109125))21*
    
    Subsidiaries of Access National Corporation23*
    
    Consent of BDO Seidman, LLP24
    
    Power of Attorney (included on the signature page of this report)31.1*
    
    CEO Certification Pursuant to Rule 13a-14(a)31.2*
    
    CFO Certification Pursuant to Rule 13a-14(a)32*
    
    CEO/CFO Certification Pursuant to § 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. § 1350)
 
 *
    
    filed herewith+
    
    indicates a management contract or compensatory plan or arrangement 73




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##### 



SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
 Access National Corporation
(Registrant)Date: March  28,  2007
    By:
    /s/ Michael W. ClarkeMichael W. ClarkePresident & CEO Date: March 28, 2007
    By:
    /s/ Charles WimerCharles WimerExecutive Vice President & CFO 74




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##### 



SIGNATURES
 POWER OF ATTORNEY
 Each person whose signature appears below constitutes and appoints Michael W. Clarke, his true and
lawful attorney-in-fact as agent with full power of substitution and re-substitution for him and in
his name, place and stead, in any and all capacities, to sign any or all amendments to this Form
10-K and to file the same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full
power and authority to do fully and to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and their
substitutes, may lawfully do or cause to be done by virtue hereof.
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
 Signature
    
    Title
    
    Date/s/ J. Randolph Babbitt

     J. Randolph Babbitt
    
    Director
    
    March 28, 2007/s/ Michael W. Clarke

     Michael W. Clarke
    
    President
/ CEO & Director

(Principal Executive Officer)
    
    March 28, 2007/s/ John W. Edgemond

     John W. (Skip) Edgemond
    
    Director
    
    March 28, 2007/s/ James L. Jadlos

     James L. Jadlos
    
    Director
    
    March 28, 2007/s/ Thomas M. Kody

     Thomas M. Kody
    
    Director
    
    March 28, 2007/s/ Jacques Rebibo

     Jacques Rebibo
    
    Chairman
of the Board of Directors
Director
    
    March 28, 2007/s/ Robert C. Shoemaker

     Robert C. Shoemaker
    
    Executive
Vice President,

Chief Credit Officer & Director
    
    March 28, 2007/s/ Charles Wimer

     Charles Wimer
    
    Executive
Vice President and
Chief Financial Officer

(Principal Financial and Accounting Officer)
    
    March 28, 2007
 75