##### 



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, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number000-49929
 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)
 Securities registered pursuant to Section 12(b) of the Act:Title of each class
n/a
    
    Name of each exchange on which registered
 n/aSecurities registered pursuant to Section 12 (g) of the Act:
 Common Stock $.835 par value
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ




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Access National Corporation
FORM 10-KINDEX
 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
    
    
    16Item 7 Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    16Item 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
    
    
    69Item 9A Controls and Procedures
    
    
    69Item 9B Other Information
    
    
    69PART IIIItem 10 Directors and Executive Officers of the Registrant
    
    
    70Item 11 Executive Compensation
    
    
    70Item 12 Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    70Item 13 Certain Relationships and Related Transactions
    
    
    70Item 14 Principal Accountant Fees and Services
    
    
    70PART IVItem 15 Exhibits, Financial Statement Schedules
    
    
    71Signatures
    
    
    72
 1




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PART I
  ITEM 1  BUSINESS
          2




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Our Strategy  historical and prospective
        Lending Activities
  3




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##### 



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 we have announced a policy of quarterly dividend payments commencing with the quarter
beginning January 1, 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
   2005
    
    2004High
    
    Low
    
    High
    
    LowFirst Quarter
    
    $
    7.16
    
    
    $
    6.35
    
    
    $
    8.00
    
    
    $
    7.00Second Quarter
    
    $
    7.19
    
    
    $
    6.50
    
    
    $
    8.00
    
    
    $
    7.00Third Quarter
    
    $
    9.72
    
    
    $
    7.10
    
    
    $
    7.48
    
    
    $
    6.38Fourth Quarter
    
    $
    14.25
    
    
    $
    8.75
    
    
    $
    7.14
    
    
    $
    6.51
   13




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##### 



14




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##### 



Issuer Purchases of Equity Securities for the Quarter Ended September 30 2005
 Total Number
    
    
    Maximum NumberTotal
    
    
    Average
    
    
    of Shares
    
    
    of Shares thatNumber
    
    
    Price
    
    
    Purchased as
    
    
    May Yet Beof Shares
    
    
    Paid Per
    
    
    Part of Publicly
    
    
    Purchased UnderPurchased (1)
    
    
    Share
    
    
    Announced Program
    
    
    the ProgramJuly 1-31, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    August 1-31, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 1-30, 2005
    
    
    2,666
    
    
    $
    9.38
    
    
    
    
    
    
    
    Total
    
    
    2,666
    
    
    $
    9.38
    
    
    
    
    
    
    
    
 
 (1)
    
    The Bank purchased 2,666 shares of the Corporations common stock in open-market transactions
that were not part of a publicly announced plan or program. The Bank purchased the shares in
conjunction with a restricted share award to a new employee as a signing bonus. The employee
subsequently forfeited the unvested restricted shares upon termination of his employment in
December 2005. No consideration was paid to the employee for the forfeiture of the unvested
restricted shares and, therefore, the forfeiture is not disclosed as an issuer purchase for the
quarter ended December 31, 2005. Issuer Purchases of Equity Securities for the Quarter Ended December 31, 2005
  15




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##### 



ITEM 6  SELECTED FINANCIAL DATA
  ITEM 7  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF
OPERATIONS
  Forward-Looking Statements
  CRITICAL ACCOUNTING POLICIES
 General
  Allowance for Loan Losses
   16




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##### 



Derivative Financial Instruments
   FINANCIAL CONDITION
 Asset Summary
     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
    19




---



##### 



Borrowings
  Shareholders Equity
   RESULTS OF OPERATIONS
 Summary
  Net Interest Income
    20




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##### 



Provision for Loan Losses
  Non Interest Income
   Non Interest Expense
   Income Taxes
   Quarterly Results
  Liquidity Management
  21




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##### 



Contractual Obligations
 Payments Due By PeriodDecember 31, 2005Less Than
    
    
    1 - 3
    
    
    More Than1 Year
    
    
    Years
    
    
    3 Years
    
    
    Total(In Thousands)FHLB advances
    
    $
    36,000
    
    
    $
    
    
    
    $
    
    
    
    $
    36,000Securities sold under agreements to repurchase
    
    
    977
    
    
    
    
    
    
    
    
    
    
    
    977FHLB long term borrowings
    
    
    
    
    
    
    7,500
    
    
    
    14,286
    
    
    
    21,786Other short-term borrowings
    
    
    11,219
    
    
    
    
    
    
    
    
    
    
    
    11,219Subordinated debentures
    
    
    10,311
    
    
    
    
    
    
    
    
    
    
    
    10,311Leases
    
    
    450
    
    
    
    337
    
    
    
    149
    
    
    
    936Total interest-bearing liabilities
    
    $
    58,957
    
    
    $
    7,837
    
    
    $
    14,435
    
    
    $
    81,229
  Off Balance Sheet Items
   22




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##### 



Recent Accounting Pronouncements
   The Meaning of
Other-Than-Temporary and Its Application to Certain Investments
 Accounting for Certain Loans or Debt Securities Acquired in a
Transfer
 23




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##### 



Statistical Information
  Table # 1
 Summary Financial Data
 Year Ended December 312005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In Thousands, Except Per Share Data)Income Statement Data:Net interest income
    
    $
    15,271
    
    
    $
    11,694
    
    
    $
    9,138
    
    
    $
    5,848
    
    
    $
    3,115Provision for loan losses
    
    
    1,196
    
    
    
    1,462
    
    
    
    526
    
    
    
    841
    
    
    
    720Non-interest income
    
    
    31,467
    
    
    
    25,952
    
    
    
    33,765
    
    
    
    22,494
    
    
    
    11,082Non-interest expense
    
    
    36,340
    
    
    
    31,580
    
    
    
    36,432
    
    
    
    23,447
    
    
    
    12,060Income taxes
    
    
    3,305
    
    
    
    1,619
    
    
    
    2,129
    
    
    
    1,359
    
    
    
    530Net income before extraordinary items
    
    
    5,897
    
    
    
    2,985
    
    
    
    3,816
    
    
    
    2,695
    
    
    
    887Extra-ordinary income, net of income tax
    
    
    
    
    
    
    330
    
    
    
    
    
    
    
    
    
    
    
    Net Income
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816
    
    
    $
    2,695
    
    
    $
    887Per Share Data:Earnings per shareBasic, before extraordinary income
    
    $
    0.75
    
    
    $
    0.40
    
    
    $
    0.55
    
    
    $
    0.41
    
    
    $
    0.15Basic
    
    
    0.75
    
    
    
    0.44
    
    
    
    0.55
    
    
    
    0.41
    
    
    
    0.15Diluted, before extraordinary income
    
    
    0.63
    
    
    
    0.33
    
    
    
    0.43
    
    
    
    0.36
    
    
    
    0.14Diluted
    
    
    0.63
    
    
    
    0.36
    
    
    
    0.43
    
    
    
    0.36
    
    
    
    0.14Cash dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Book value at period end
    
    
    3.92
    
    
    
    3.29
    
    
    
    2.84
    
    
    
    2.32
    
    
    
    1.75Balance Sheet Data:Total assets
    
    $
    537,050
    
    
    $
    420,098
    
    
    $
    257,390
    
    
    $
    240,348
    
    
    $
    132,069Loans held for sale
    
    
    45,019
    
    
    
    36,245
    
    
    
    29,756
    
    
    
    93,852
    
    
    
    38,615Total loans
    
    
    369,733
    
    
    
    292,594
    
    
    
    189,320
    
    
    
    114,835
    
    
    
    68,736Total securities
    
    
    87,771
    
    
    
    51,378
    
    
    
    23,178
    
    
    
    15,637
    
    
    
    10,582Total deposits
    
    
    419,629
    
    
    
    317,393
    
    
    
    198,183
    
    
    
    178,251
    
    
    
    104,876Shareholders equity
    
    
    31,185
    
    
    
    25,998
    
    
    
    19,755
    
    
    
    16,291
    
    
    
    10,465Average shares outstanding, basic
    
    
    7,867,135
    
    
    
    7,509,536
    
    
    
    6,986,680
    
    
    
    6,594,000
    
    
    
    6,000,000Average shares outstanding, diluted
    
    
    9,423,087
    
    
    
    9,155,778
    
    
    
    8,822,372
    
    
    
    7,478,064
    
    
    
    6,581,988Performance Ratios:Return on average assets
    
    
    1.29
    %
    
    
    0.97
    %
    
    
    1.45
    %
    
    
    1.64
    %
    
    
    0.98
    %Return on average equity
    
    
    20.63
    %
    
    
    14.48
    %
    
    
    20.48
    %
    
    
    20.17
    %
    
    
    8.75
    %Net interest margin (1)
    
    
    3.49
    %
    
    
    3.64
    %
    
    
    3.58
    %
    
    
    3.73
    %
    
    
    3.54
    %Asset Quality Ratios:Allowance to period end loans
    
    
    1.41
    %
    
    
    1.37
    %
    
    
    1.35
    %
    
    
    1.78
    %
    
    
    1.73
    %Allowance to nonperforming loans
    
    
    397.78
    %
    
    
    185.07
    %
    
    
    310.93
    %
    
    
    
    
    
    
    127.87
    %Net charge-offs to average loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01
    %Capital Ratios:Tier I risk-based capital
    
    
    10.78
    %
    
    
    10.97
    %
    
    
    12.54
    %
    
    
    12.09
    %
    
    
    10.96
    %Total risk-based capital
    
    
    12.11
    %
    
    
    12.80
    %
    
    
    15.47
    %
    
    
    13.33
    %
    
    
    12.20
    %Leverage capital ratio
    
    
    7.60
    %
    
    
    8.83
    %
    
    
    10.28
    %
    
    
    8.12
    %
    
    
    8.91
    %
 24




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##### 



Table # 1A
  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
    
    
    
    0.172004Total interest income
    
    $
    3,598
    
    
    $
    4,300
    
    
    $
    4,753
    
    
    $
    5,574Total interest expense
    
    
    1,180
    
    
    
    1,419
    
    
    
    1,810
    
    
    
    2,122Net interest income
    
    
    2,418
    
    
    
    2,881
    
    
    
    2,943
    
    
    
    3,452Provision for loan losses
    
    
    175
    
    
    
    204
    
    
    
    212
    
    
    
    871Net interest income after provision for loan losses
    
    
    2,243
    
    
    
    2,677
    
    
    
    2,731
    
    
    
    2,581Total noninterest income
    
    
    6,261
    
    
    
    6,781
    
    
    
    7,133
    
    
    
    5,777Total noninterest expense
    
    
    7,634
    
    
    
    7,937
    
    
    
    8,784
    
    
    
    7,225Income tax expense
    
    
    328
    
    
    
    513
    
    
    
    361
    
    
    
    417Net income before extra-ordinary items
    
    
    542
    
    
    
    1,008
    
    
    
    719
    
    
    
    716Extra-ordinary income
    
    
    
    
    
    
    
    
    
    
    330
    
    
    
    Net income
    
    $
    542
    
    
    $
    1,008
    
    
    $
    1,049
    
    
    $
    716Earnings Per Share:Basic, before extra-ordinary income
    
    $
    0.08
    
    
    $
    0.14
    
    
    $
    0.09
    
    
    $
    0.09Basic
    
    
    0.08
    
    
    
    0.14
    
    
    
    0.13
    
    
    
    0.09Diluted, before extra-ordinary-income
    
    
    0.06
    
    
    
    0.12
    
    
    
    0.07
    
    
    
    0.08Diluted
    
    
    0.06
    
    
    
    0.12
    
    
    
    0.10
    
    
    
    0.08
 25




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##### 



Table # 2
 Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities
 Period Ended December 31,2005
    
    
    2004
    
    
    2003Average
    
    
    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
    
    $
    64,862
    
    
    $
    2,489
    
    
    
    3.84
    %
    
    $
    25,385
    
    
    $
    905
    
    
    
    3.57
    %
    
    $
    14,160
    
    
    $
    378
    
    
    
    2.67
    %Loans(3)
    
    
    364,126
    
    
    
    25,043
    
    
    
    6.88
    %
    
    
    289,225
    
    
    
    17,228
    
    
    
    5.96
    %
    
    
    227,015
    
    
    
    13,522
    
    
    
    5.96
    %Interest bearing deposits & federal funds sold
    
    
    8,739
    
    
    
    279
    
    
    
    3.19
    %
    
    
    6,715
    
    
    
    92
    
    
    
    1.37
    %
    
    
    14,358
    
    
    
    142
    
    
    
    0.99
    %Total interest earning assets
    
    
    437,727
    
    
    
    27,811
    
    
    
    6.35
    %
    
    
    321,325
    
    
    
    18,225
    
    
    
    5.67
    %
    
    
    255,533
    
    
    
    14,042
    
    
    
    5.50
    %Non-interest earning assets:Cash and due from banks
    
    
    10,579
    
    
    
    
    
    
    
    
    
    
    
    8,169
    
    
    
    
    
    
    
    
    
    
    
    5,437Premises, land and equipment
    
    
    9,260
    
    
    
    
    
    
    
    
    
    
    
    8,466
    
    
    
    
    
    
    
    
    
    
    
    724Other assets
    
    
    4,118
    
    
    
    
    
    
    
    
    
    
    
    6,138
    
    
    
    
    
    
    
    
    
    
    
    4,084Less: allowance for loan losses
    
    
    (4,433
    )
    
    
    
    
    
    
    
    
    
    
    (2,945
    )
    
    
    
    
    
    
    
    
    
    
    (2,363
    )Total non-interest earning assets
    
    
    19,524
    
    
    
    
    
    
    
    
    
    
    
    19,828
    
    
    
    
    
    
    
    
    
    
    
    7,882Total Assets
    
    $
    457,251
    
    
    
    
    
    
    
    
    
    
    $
    341,153
    
    
    
    
    
    
    
    
    
    
    $
    263,415Liabilities and Shareholders Equity:Interest bearing liabilities:Interest-bearing demand deposits
    
    $
    10,630
    
    
    $
    200
    
    
    
    1.88
    %
    
    $
    9,075
    
    
    $
    93
    
    
    
    1.02
    %
    
    $
    6,212
    
    
    $
    68
    
    
    
    1.09
    %Money market deposit accounts
    
    
    130,147
    
    
    
    4,256
    
    
    
    3.27
    %
    
    
    40,506
    
    
    
    838
    
    
    
    2.07
    %
    
    
    18,748
    
    
    
    269
    
    
    
    1.43
    %Savings accounts
    
    
    450
    
    
    
    4
    
    
    
    0.89
    %
    
    
    470
    
    
    
    4
    
    
    
    0.85
    %
    
    
    539
    
    
    
    3
    
    
    
    0.56
    %Time deposits
    
    
    129,314
    
    
    
    4,560
    
    
    
    3.53
    %
    
    
    109,453
    
    
    
    3,420
    
    
    
    3.12
    %
    
    
    117,803
    
    
    
    3,626
    
    
    
    3.08
    %Total interest-bearing deposits
    
    
    270,541
    
    
    
    9,020
    
    
    
    3.33
    %
    
    
    159,504
    
    
    
    4,355
    
    
    
    2.73
    %
    
    
    143,302
    
    
    
    3,966
    
    
    
    2.77
    %FHLB Advances
    
    
    43,375
    
    
    
    1,610
    
    
    
    3.71
    %
    
    
    44,598
    
    
    
    662
    
    
    
    1.48
    %
    
    
    10,788
    
    
    
    175
    
    
    
    1.62
    %Securities sold under agreements to repurchase
    
    
    925
    
    
    
    19
    
    
    
    2.05
    %
    
    
    2,290
    
    
    
    25
    
    
    
    1.09
    %
    
    
    1,381
    
    
    
    9
    
    
    
    0.65
    %Other short-term borrowings
    
    
    8,520
    
    
    
    250
    
    
    
    2.93
    %
    
    
    4,741
    
    
    
    121
    
    
    
    2.55
    %
    
    
    4,510
    
    
    
    39
    
    
    
    0.86
    %Long-term borrowings
    
    
    24,028
    
    
    
    917
    
    
    
    3.82
    %
    
    
    17,801
    
    
    
    854
    
    
    
    4.80
    %
    
    
    13,762
    
    
    
    421
    
    
    
    3.06
    %Subordinated Debentures
    
    
    10,311
    
    
    
    706
    
    
    
    6.85
    %
    
    
    10,311
    
    
    
    514
    
    
    
    4.98
    %
    
    
    5,593
    
    
    
    294
    
    
    
    5.26
    %Total interest-bearing liabilities
    
    
    357,700
    
    
    
    12,522
    
    
    
    3.50
    %
    
    
    239,245
    
    
    
    6,531
    
    
    
    2.73
    %
    
    
    179,336
    
    
    
    4,904
    
    
    
    2.73
    %Non-interest bearing liabilities:Demand deposits
    
    
    66,862
    
    
    
    
    
    
    
    
    
    
    
    75,883
    
    
    
    
    
    
    
    
    
    
    
    60,538Other liabilities
    
    
    4,103
    
    
    
    
    
    
    
    
    
    
    
    3,124
    
    
    
    
    
    
    
    
    
    
    
    4,904Total liabilities
    
    
    428,665
    
    
    
    
    
    
    
    
    
    
    
    318,252
    
    
    
    
    
    
    
    
    
    
    
    244,778Shareholders Equity
    
    
    28,586
    
    
    
    
    
    
    
    
    
    
    
    22,901
    
    
    
    
    
    
    
    
    
    
    
    18,637Total Liabilities and Shareholders Equity:
    
    $
    457,251
    
    
    
    
    
    
    
    
    
    
    $
    341,153
    
    
    
    
    
    
    
    
    
    
    $
    263,415Interest Spread(1)
    
    
    
    
    
    
    
    
    
    
    2.85
    %
    
    
    
    
    
    
    
    
    
    
    2.94
    %
    
    
    
    
    
    
    
    
    
    
    2.77
    %Net Interest Margin(2)*
    
    
    
    
    
    $
    15,289
    
    
    
    3.49
    %
    
    
    
    
    
    $
    11,694
    
    
    
    3.64
    %
    
    
    
    
    
    $
    9,138
    
    
    
    3.58
    %
 
 (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




---



##### 



Table # 2A
 Volume and Rate Analysis
 Years Ended December 312005 compared to 2004
    
    
    2004 compared to 2003
    
    
    
    
    
    
    2003 compared to 2002Change 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
    
    $
    1,584
    
    
    $
    1,511
    
    
    $
    73
    
    
    $
    527
    
    
    $
    369
    
    
    $
    158
    
    
    $
    (15
    )
    
    $
    158
    
    
    $
    (173
    )Loans
    
    
    7,815
    
    
    
    4,897
    
    
    
    2,918
    
    
    
    3,706
    
    
    
    3,699
    
    
    
    7
    
    
    
    3,991
    
    
    
    5,464
    
    
    
    (1,473
    )Interest bearing deposits
    
    
    187
    
    
    
    35
    
    
    
    152
    
    
    
    (52
    )
    
    
    (93
    )
    
    
    41
    
    
    
    (2
    )
    
    
    69
    
    
    
    (71
    )Federal funds sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    2
    
    
    
    (17
    )
    
    
    (8
    )
    
    
    (9
    )Total Increase (Decrease) in Interest
Income
    
    
    9,586
    
    
    
    6,443
    
    
    
    3,143
    
    
    
    4,183
    
    
    
    3,975
    
    
    
    208
    
    
    
    3,957
    
    
    
    5,683
    
    
    
    (1,726
    )Interest Bearing Liabilities:Interest-bearing demand deposits
    
    
    107
    
    
    
    18
    
    
    
    89
    
    
    
    25
    
    
    
    30
    
    
    
    (5
    )
    
    
    (97
    )
    
    
    (23
    )
    
    
    (74
    )Money market deposit accounts
    
    
    3,418
    
    
    
    2,709
    
    
    
    709
    
    
    
    569
    
    
    
    410
    
    
    
    159
    
    
    
    (1
    )
    
    
    121
    
    
    
    (122
    )Savings accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    (2
    )
    
    
    1
    
    
    
    (3
    )Time deposits
    
    
    1,140
    
    
    
    662
    
    
    
    478
    
    
    
    (206
    )
    
    
    (253
    )
    
    
    47
    
    
    
    319
    
    
    
    1,395
    
    
    
    (1,076
    )Total interest-bearing deposits
    
    
    4,665
    
    
    
    3,389
    
    
    
    1,276
    
    
    
    389
    
    
    
    187
    
    
    
    202
    
    
    
    219
    
    
    
    1,494
    
    
    
    (1,275
    )FHLB Advances
    
    
    948
    
    
    
    (19
    )
    
    
    967
    
    
    
    487
    
    
    
    503
    
    
    
    (16
    )
    
    
    (32
    )
    
    
    40
    
    
    
    (72
    )Securities sold under agreements to
repurchase
    
    
    (6
    )
    
    
    (20
    )
    
    
    14
    
    
    
    16
    
    
    
    8
    
    
    
    8
    
    
    
    (15
    )
    
    
    (7
    )
    
    
    (8
    )Other short-term borrowings
    
    
    129
    
    
    
    109
    
    
    
    20
    
    
    
    82
    
    
    
    2
    
    
    
    80
    
    
    
    (118
    )
    
    
    1
    
    
    
    (119
    )Long-term borrowings
    
    
    63
    
    
    
    260
    
    
    
    (197
    )
    
    
    433
    
    
    
    147
    
    
    
    286
    
    
    
    421
    
    
    
    421
    
    
    
    Trust Preferred
    
    
    192
    
    
    
    0
    
    
    
    192
    
    
    
    220
    
    
    
    236
    
    
    
    (16
    )
    
    
    192
    
    
    
    208
    
    
    
    (16
    )Total Increase (Decrease) in Interest
Expense
    
    
    5,991
    
    
    
    3,719
    
    
    
    2,272
    
    
    
    1,627
    
    
    
    1,083
    
    
    
    544
    
    
    
    667
    
    
    
    2,157
    
    
    
    (1,490
    )Increase (Decrease) in Net Interest
Income
    
    $
    3,595
    
    
    $
    2,724
    
    
    $
    871
    
    
    $
    2,556
    
    
    $
    2,892
    
    
    $
    (336
    )
    
    $
    3,290
    
    
    $
    3,526
    
    
    $
    (236
    )
 27




---



##### 



Table # 3
 Investment Securities Available for Sale
 December 31,2005
    
    
    2004
    
    
    2003(In Thousands)Investment Securities available for sale:US Treasury Securities
    
    $
    1,602
    
    
    $
    1,638
    
    
    $
    1,692US Government Agency Securities
    
    
    75,260
    
    
    
    44,261
    
    
    
    15,776Mortgage Backed Securities
    
    
    1,393
    
    
    
    2,235
    
    
    
    3,912Tax Exempt Municipals
    
    
    2,840
    
    
    
    
    
    
    
    Taxable Municipals
    
    
    1,466
    
    
    
    
    
    
    
    Mutual Fund
    
    
    1,471
    
    
    
    
    
    
    
    Other
    
    
    3,739
    
    
    
    3,244
    
    
    
    1,798Total Securities
    
    $
    87,771
    
    
    $
    51,378
    
    
    $
    23,178
 Table # 3A
 Investment Securities Available for Sale
 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
    
    $
    
    
    
    
    
    
    
    $
    1,602
    
    
    
    3.49
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    1,602
    
    
    
    3.49
    %US Government Agency Securities
    
    
    1,968
    
    
    
    3.05
    %
    
    
    71,808
    
    
    
    4.02
    %
    
    
    1,484
    
    
    
    5.15
    %
    
    
    
    
    
    
    
    
    
    
    75,260
    
    
    
    4.02
    %Mortgage Backed Securities
    
    
    
    
    
    
    
    
    
    
    1,393
    
    
    
    4.88
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,393
    
    
    
    4.88
    %Tax Exempt Municipals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,330
    
    
    
    5.26
    %
    
    
    510
    
    
    
    5.69
    %
    
    
    2,840
    
    
    
    4.35
    %Taxable Municipals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,466
    
    
    
    4.30
    %
    
    
    
    
    
    
    
    
    
    
    1,466
    
    
    
    4.30
    %Total
    
    $
    1,968
    
    
    
    3.05
    %
    
    $
    74,803
    
    
    
    4.03
    %
    
    $
    5,280
    
    
    
    4.96
    %
    
    $
    510
    
    
    
    5.69
    %
    
    $
    82,561
    
    
    
    4.04
    %
 
 (1)Excludes CRA Mutual Fund, Federal Reserve Bank Stock and FHLB Stock 28




---



##### 



Table # 4
 Loan Portfolio
 December 312005
    
    
    
    
    
    
    2004
    
    
    
    
    
    
    2003
    
    
    
    
    
    
    2002
    
    
    
    
    
    
    2001Percentage of
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    PercentageAmount
    
    
    Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total(In Thousands)Commercial
    
    $
    38,516
    
    
    
    10.42
    %
    
    $
    48,427
    
    
    
    16.55
    %
    
    $
    31,759
    
    
    
    16.78
    %
    
    $
    17,324
    
    
    
    15.09
    %
    
    $
    9,115
    
    
    
    13.26
    %Commercial real estate
    
    
    137,423
    
    
    
    37.17
    
    
    
    96,939
    
    
    
    33.13
    
    
    
    69,128
    
    
    
    36.51
    
    
    
    41,081
    
    
    
    35.77
    
    
    
    26,184
    
    
    
    38.09Real estate construction
    
    
    37,054
    
    
    
    10.02
    
    
    
    33,073
    
    
    
    11.30
    
    
    
    13,766
    
    
    
    7.27
    
    
    
    10,057
    
    
    
    8.76
    
    
    
    10,821
    
    
    
    15.75Residential real estate
    
    
    156,185
    
    
    
    42.24        1
    
    
    
    13,432
    
    
    
    38.77
    
    
    
    73,846
    
    
    
    39.01
    
    
    
    45,591
    
    
    
    39.70
    
    
    
    20,724
    
    
    
    30.15Consumer
    
    
    555
    
    
    
    0.15
    
    
    
    723
    
    
    
    0.25
    
    
    
    821
    
    
    
    0.43
    
    
    
    782
    
    
    
    0.68
    
    
    
    1,892
    
    
    
    2.75Total loans
    
    $
    369,733
    
    
    
    100.00
    %
    
    $
    292,594
    
    
    
    100.00
    %
    
    $
    189,320
    
    
    
    100.00
    %
    
    $
    114,835
    
    
    
    100.00
    %
    
    $
    68,736
    
    
    
    100.00
    %
 Table # 4A
 Loan Maturity Distribution
 December 31, 2005Three Months or
    
    
    Over Three Months
    
    
    Over One Year
    
    
    OverLess
    
    
    Through One Year
    
    
    Through Five Years
    
    
    Five Years
    
    
    Total(In Thousands)Commercial
    
    $
    3,395
    
    
    $
    17,736
    
    
    $
    12,673
    
    
    $
    4,712
    
    
    $
    38,516Commercial real estate
    
    
    9,500
    
    
    
    13,663
    
    
    
    44,771
    
    
    
    69,489
    
    
    
    137,423Real estate construction
    
    
    7,384
    
    
    
    23,396
    
    
    
    2,912
    
    
    
    3,362
    
    
    
    37,054Residential real estate
    
    
    3,384
    
    
    
    15,854
    
    
    
    41,150
    
    
    
    95,797
    
    
    
    156,185Consumer
    
    
    
    
    
    
    287
    
    
    
    239
    
    
    
    29
    
    
    
    555Total
    
    $
    23,663
    
    
    $
    70,936
    
    
    $
    101,745
    
    
    $
    173,389
    
    
    $
    369,733
 29




---



##### 



Table # 5
 Allowance for Loan Losses
 Year Ended December 312005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In Thousands)Balance, beginning of period
    
    $
    4,019
    
    
    $
    2,565
    
    
    $
    2,048
    
    
    $
    1,192
    
    
    $
    489Provision for loan losses
    
    
    1,196
    
    
    
    1,462
    
    
    
    526
    
    
    
    841
    
    
    
    720Chargeoffs:Commercial
    
    
    
    
    
    
    8
    
    
    
    11
    
    
    
    
    
    
    
    17Real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total chargeoffs
    
    
    
    
    
    
    8
    
    
    
    11
    
    
    
    
    
    
    
    17Recoveries:Commercial
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    15
    
    
    
    Real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total recoveries
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    15
    
    
    
    Net chargeoffs
    
    
    
    
    
    
    8
    
    
    
    9
    
    
    
    (15
    )
    
    
    17Balance, end of period
    
    $
    5,215
    
    
    $
    4,019
    
    
    $
    2,565
    
    
    $
    2,048
    
    
    $
    1,192
 Table # 6
 Allocation of the Allowance for Loan Losses
 Year Ended December 31Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage
    
    
    
    
    
    
    Percentage2005
    
    
    of total
    
    
    2004
    
    
    of total
    
    
    2003
    
    
    of total
    
    
    2002
    
    
    of total
    
    
    2001
    
    
    of total(Dollars In Thousands)Commercial
    
    $
    1,546
    
    
    
    29.64
    %
    
    $
    1,475
    
    
    
    36.70
    %
    
    $
    508
    
    
    
    19.81
    %
    
    $
    311
    
    
    
    15.19
    %
    
    $
    244
    
    
    
    20.47
    %Commercial real estate
    
    
    1,896
    
    
    
    36.36
    
    
    
    1,235
    
    
    
    30.73
    
    
    
    1,054
    
    
    
    41.09
    
    
    
    797
    
    
    
    38.92
    
    
    
    467
    
    
    
    39.18Real estate construction
    
    
    500
    
    
    
    9.59
    
    
    
    438
    
    
    
    10.90
    
    
    
    220
    
    
    
    8.58
    
    
    
    158
    
    
    
    7.71
    
    
    
    229
    
    
    
    19.21Residential real estate
    
    
    1,267
    
    
    
    24.29
    
    
    
    862
    
    
    
    21.45
    
    
    
    772
    
    
    
    30.10
    
    
    
    768
    
    
    
    37.50
    
    
    
    172
    
    
    
    14.43Consumer
    
    
    6
    
    
    
    0.12
    
    
    
    9
    
    
    
    0.22
    
    
    
    11
    
    
    
    0.42
    
    
    
    14
    
    
    
    0.68
    
    
    
    80
    
    
    
    6.71$
    5,215
    
    
    
    100.00
    %
    
    $
    4,019
    
    
    
    100.00
    %
    
    $
    2,565
    
    
    
    100.00
    %
    
    $
    2,048
    
    
    
    100.00
    %
    
    $
    1,192
    
    
    
    100.00
    %
 30




---



##### 



Table # 7
 Average Deposits and Average Rates Paid
 Year Ended December 312005
    
    
    2004
    
    
    2003Average
    
    
    Income /
    
    
    Yield /
    
    
    Average
    
    
    Income /
    
    
    Yield /
    
    
    Average
    
    
    Income /
    
    
    Yield /Interest bearing liabilities:
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(In Thousands)Interest-bearing demand deposits
    
    $
    10,630
    
    
    $
    200
    
    
    
    1.88
    %
    
    $
    9,075
    
    
    $
    93
    
    
    
    1.02
    %
    
    $
    6,212
    
    
    $
    68
    
    
    
    1.09
    %Money market deposit accounts
    
    
    130,147
    
    
    
    4,256
    
    
    
    3.27
    %
    
    
    40,506
    
    
    
    838
    
    
    
    2.07
    %
    
    
    18,748
    
    
    
    269
    
    
    
    1.43
    %Savings accounts
    
    
    450
    
    
    
    4
    
    
    
    0.89
    %
    
    
    470
    
    
    
    4
    
    
    
    0.85
    %
    
    
    539
    
    
    
    3
    
    
    
    0.56
    %Time deposits
    
    
    129,314
    
    
    
    4,560
    
    
    
    3.53
    %
    
    
    109,453
    
    
    
    3,420
    
    
    
    3.12
    %
    
    
    117,803
    
    
    
    3,626
    
    
    
    3.08
    %Total interest-bearing deposits
    
    
    270,541
    
    
    
    9,020
    
    
    
    3.33
    %
    
    
    159,504
    
    
    
    4,354
    
    
    
    2.73
    %
    
    
    143,302
    
    
    
    3,966
    
    
    
    2.77
    %Non-interest bearing demand deposits
    
    
    66,862
    
    
    
    
    
    
    
    
    
    
    
    75,883
    
    
    
    
    
    
    
    
    
    
    
    60,538Total deposits
    
    $
    337,403
    
    
    
    
    
    
    
    
    
    
    $
    235,387
    
    
    
    
    
    
    
    
    
    
    $
    203,840
 Table # 7A
 Certificate of Deposit Maturity Distribution
 December 31, 2005Three months
    
    Over three
    
    Over six
    
    Overor less
    
    through six months
    
    through twelve months
    
    twelve months
    
    Total(In Thousands)Less than $100,000
    
    $
    20,622
    
    
    $
    9,540
    
    
    $
    13,513
    
    
    $
    16,602
    
    
    $
    60,277Greater than or equal to $100,000
    
    
    46,549
    
    
    
    17,084
    
    
    
    21,986
    
    
    
    43,605
    
    
    
    129,224$
    67,171
    
    
    $
    26,624
    
    
    $
    35,499
    
    
    $
    60,207
    
    
    $
    189,501
 31




---



##### 



Table # 8
 Return on Average Assets and Return on Average Equity
 Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Average total assets
    
    $
    457,251
    
    
    $
    341,153
    
    
    $
    263,415Average shareholders equity
    
    $
    28,586
    
    
    $
    22,901
    
    
    $
    18,637Net income
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816Cash dividends declared
    
    $
    
    
    
    $
    
    
    
    $
    Return on average assets
    
    
    1.29
    %
    
    
    0.97
    %
    
    
    1.45
    %Return on average
shareholders equity
    
    
    20.63
    %
    
    
    14.48
    %
    
    
    20.48
    %Average shareholders equity
to
average total assets
    
    
    6.25
    %
    
    
    6.71
    %
    
    
    7.08
    %
 32




---



##### 



Table # 9
 Borrowed Funds Distribution
 Year Ended December 312005
    
    
    2004
    
    
    2003(Dollars In Thousands)At Period EndFHLB Advances
    
    $
    36,000
    
    
    $
    27,000
    
    
    $
    5,000Securities sold under agreements to repurchase
    
    
    977
    
    
    
    2,862
    
    
    
    1,803Other short term borrowings
    
    
    11,219
    
    
    
    7,217
    
    
    
    4,253FHLB Long Term Borrowings
    
    
    21,786
    
    
    
    27,000
    
    
    
    14,965Subordinated debentures
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311Total at period end
    
    $
    80,293
    
    
    $
    74,390
    
    
    $
    36,332Average BalancesFHLB Advances
    
    $
    43,375
    
    
    $
    44,598
    
    
    $
    10,788Securities sold under agreements to repurchase
    
    
    925
    
    
    
    2,290
    
    
    
    1,381Other Short term borrowings
    
    
    8,520
    
    
    
    4,741
    
    
    
    4,510FHLB Long Term Borrowings
    
    
    24,028
    
    
    
    17,801
    
    
    
    13,762Subordinated debentures
    
    
    10,311
    
    
    
    10,311
    
    
    
    5,593Total average balance
    
    $
    87,159
    
    
    $
    79,741
    
    
    $
    36,034Average rate paid on all borrowed funds
    
    
    4.02
    %
    
    
    2.73
    %
    
    
    2.60
    %
 33




---



##### 



Table # 10
 Risk Based Capital Analysis
 Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Tier 1 Capital:Common stock
    
    $
    6,644
    
    
    $
    6,608
    
    
    $
    5,796Capital surplus
    
    
    9,099
    
    
    
    9,067
    
    
    
    6,856Retained earnings
    
    
    16,227
    
    
    
    10,330
    
    
    
    7,015Subordinated Debt (Trust Preferred Debenture)
    
    
    10,000
    
    
    
    8,500
    
    
    
    6,500Disallowed Goodwill & Intangibles
    
    
    
    
    
    
    
    
    
    
    Total tier 1 capital
    
    
    41,970
    
    
    
    34,505
    
    
    
    26,167Subordinated debt not included in Tier I
    
    
    311
    
    
    
    1,811
    
    
    
    3,500Allowance for loan losses
    
    
    4,874
    
    
    
    3,934
    
    
    
    2,608Total Risk Based Capital
    
    $
    47,155
    
    
    $
    40,250
    
    
    $
    32,275Risk weighted assets
    
    $
    389,381
    
    
    $
    314,494
    
    
    $
    208,622Quarterly average assets
    
    $
    552,292
    
    
    $
    390,735
    
    
    $
    254,539Capital Ratios:Tier 1 risk based capital ratio
    
    
    10.78
    %
    
    
    10.97
    %
    
    
    12.54
    %Total risk based capital ratio
    
    
    12.11
    %
    
    
    12.80
    %
    
    
    15.47
    %Leverage ratio
    
    
    7.60
    %
    
    
    8.83
    %
    
    
    10.28
    %
 34




---



##### 



ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Sensitivity Management
  Rate Shock Analysis
December 31, 2005
 Change in
    
    Hypothetical
    
    Hypothetical PercentageFederal Funds
    
    Percentage Change
    
    Change In EconomicTarget Rate
    
    In Earnings
    
    Value of Equity3.00%
    
    3.01%
    
    -18.14%2.00%
    
    2.06%
    
    -11.88%1.00%
    
    1.09%
    
    -6.01%-1.00%
    
    0.76%
    
    5.66%-2.00%
    
    -0.06%
    
    9.90%-3.00%
    
    -0.51%
    
    16.22%
    Impact of Inflation and Changing Prices
  35




---



##### 



ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 (BDO LOGO)
    
    BDO Seldom, LLP
Accountant and Consultants
    
    300 Arboretum Place Suite 520
Richmond Virginia 23236
Telephone: (804) 330-3092
Fax: (804) 330-7753
 Report of Independent Registered Public Accounting Firm
 
  s
  
 
 36




---



##### 



INDEPENDENT AUDITORS REPORT
 
    /s/ Yount, Hyde & Barbour, P.C.Winchester,Virginia
February 5, 2004
 37




---



##### 



ACCESS NATIONAL CORPORATION
Consolidated Balance Sheets
 Assets
    
    2005
    
    
    2004Cash and due from banks
    
    $
    9,854
    
    
    $
    10,998Interest-bearing deposits in other banks
    
    
    13,329
    
    
    
    19,534Securities available for sale, at fair value
    
    
    87,771
    
    
    
    51,378Loans held for sale
    
    
    45,019
    
    
    
    36,245Loans, net of allowance for loan losses 2005, $5,215; 2004, $4,019
    
    
    364,518
    
    
    
    288,575Premises and equipment, net
    
    
    9,650
    
    
    
    8,822Other assets
    
    
    6,909
    
    
    
    4,546Total assets
    
    $
    537,050
    
    
    $
    420,098Liabilities and Shareholders EquityLiabilitiesDepositsNoninterest-bearing demand deposits
    
    $
    81,034
    
    
    $
    94,108Savings and interest-bearing deposits
    
    
    149,094
    
    
    
    103,274Time deposits
    
    
    189,501
    
    
    
    120,011Total deposits
    
    
    419,629
    
    
    
    317,393Short term borrowings
    
    
    48,196
    
    
    
    37,079Long term borrowings
    
    
    21,786
    
    
    
    27,000Subordinated debentures
    
    
    10,311
    
    
    
    10,311Other liabilities and accrued expenses
    
    
    5,943
    
    
    
    2,317Total liabilities
    
    
    505,865
    
    
    
    394,100Shareholders EquityCommon stock, par value, $0.835, authorized 60,000,000 shares,
issued and outstanding, 7,956,556 in 2005 and 7,914,148 in 2004
    
    
    6,644
    
    
    
    6,608Surplus
    
    
    9,099
    
    
    
    9,067Retained earnings
    
    
    16,227
    
    
    
    10,330Accumulated other comprehensive income (loss), net
    
    
    (785
    )
    
    
    (7
    )Total shareholders equity
    
    
    31,185
    
    
    
    25,998Total liabilities and shareholders equity
    
    $
    537,050
    
    
    $
    420,098
  38
       ACCESS NATIONAL CORPORATION
Consolidated Statements of Income
 Year Ended December 312005
    
    
    2004
    
    
    2003Interest and Dividend IncomeInterest and fees on loans
    
    $
    25,043
    
    
    $
    17,228
    
    
    $
    13,522Interest on federal funds sold
    
    
    1
    
    
    
    2
    
    
    
    Interest on deposits in other banks
    
    
    278
    
    
    
    90
    
    
    
    142Interest and dividends on securities
    
    
    2,471
    
    
    
    905
    
    
    
    378Total interest and dividend income
    
    
    27,793
    
    
    
    18,225
    
    
    
    14,042Interest ExpenseInterest on deposits
    
    
    9,020
    
    
    
    4,355
    
    
    
    3,966Interest on short-term borrowings
    
    
    1,879
    
    
    
    808
    
    
    
    223Interest on long-term borrowings
    
    
    917
    
    
    
    854
    
    
    
    421Interest on trust preferred capital notes
    
    
    706
    
    
    
    514
    
    
    
    294Total interest expense
    
    
    12,522
    
    
    
    6,531
    
    
    
    4,904Net interest income
    
    
    15,271
    
    
    
    11,694
    
    
    
    9,138Provision for loan losses
    
    
    1,196
    
    
    
    1,462
    
    
    
    526Net interest income after provision for
loan losses
    
    
    14,075
    
    
    
    10,232
    
    
    
    8,612Noninterest IncomeService fees on deposit accounts
    
    
    260
    
    
    
    145
    
    
    
    266Gain on sale of loans
    
    
    24,095
    
    
    
    20,015
    
    
    
    27,818Mortgage broker fee income
    
    
    5,634
    
    
    
    4,601
    
    
    
    4,890Other income
    
    
    1,478
    
    
    
    1,191
    
    
    
    791Total noninterest income
    
    
    31,467
    
    
    
    25,952
    
    
    
    33,765Noninterest ExpenseSalaries and employee benefits
    
    
    20,537
    
    
    
    18,627
    
    
    
    21,398Occupancy expense
    
    
    1,222
    
    
    
    1,367
    
    
    
    1,291Furniture and equipment expense
    
    
    1,204
    
    
    
    1,048
    
    
    
    871Other operating expenses
    
    
    13,377
    
    
    
    10,538
    
    
    
    12,872Total noninterest expense
    
    
    36,340
    
    
    
    31,580
    
    
    
    36,432Income before income taxes
    
    
    9,202
    
    
    
    4,604
    
    
    
    5,945Income tax expense
    
    
    3,305
    
    
    
    1,619
    
    
    
    2,129Net income before extra-ordinary items
    
    
    5,897
    
    
    
    2,985
    
    
    
    3,816Extra-ordinary IncomeGain on acquisition of subsidiary, net of income tax
    
    
    
    
    
    
    330
    
    
    
    Net Income
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816Earnings per common share:Basic, before extra-ordinary income
    
    $
    0.75
    
    
    $
    0.40
    
    
    $
    0.55Basic
    
    $
    0.75
    
    
    $
    0.44
    
    
    $
    0.55Diluted, before extra-ordinary income
    
    $
    0.63
    
    
    $
    0.33
    
    
    $
    0.43Diluted
    
    $
    0.63
    
    
    $
    0.36
    
    
    $
    0.43Average outstanding shares:Basic
    
    
    7,867,135
    
    
    
    7,509,536
    
    
    
    6,986,680Diluted
    
    
    9,423,087
    
    
    
    9,155,778
    
    
    
    8,822,372
  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, 2002
    
    $
    5,850
    
    
    $
    7,148
    
    
    $
    3,199
    
    
    $
    94
    
    
    $
    
    
    
    $
    16,291Repurchase of common stock
    
    
    (54
    )
    
    
    (292
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (346
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,816
    
    
    
    
    
    
    
    3,816
    
    
    
    3,816Other comprehensive income,
unrealized holdings losses
arising during the period
(net of tax, $2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )
    
    
    (6
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,810Balance, 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, $49)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (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, $402)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (778
    )
    
    
    (778
    )
    
    
    (778
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,119Balance, December 31, 2005
    
    $
    6,644
    
    
    $
    9,099
    
    
    $
    16,227
    
    
    $
    (785
    )
    
    
    
    
    
    $
    31,185
  40




---



##### 



ACCESS NATIONAL CORPORATION
 Consolidated Statements of Cash Flows
 Year Ended December 312005
    
    
    2004
    
    
    2003Cash Flows from Operating ActivitiesNet income
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816Adjustments to reconcile net income to net cash provided by (used
in) operating activities:Provision for loan losses
    
    
    1,196
    
    
    
    1,462
    
    
    
    526Deferred tax benefit
    
    
    (908
    )
    
    
    (538
    )
    
    
    (55
    )Provision for hedging
    
    
    30
    
    
    
    
    
    
    
    Net amortization on securities
    
    
    
    
    
    
    71
    
    
    
    239Depreciation and amortization
    
    
    697
    
    
    
    553
    
    
    
    413Loss on disposal of assets
    
    
    81
    
    
    
    
    
    
    
    Changes in assets and liabilities:(Increase) decrease in loans held for sale
    
    
    (9,010
    )
    
    
    (6,489
    )
    
    
    64,096(Increase) decrease in other assets
    
    
    (904
    )
    
    
    (932
    )
    
    
    1,213Increase (decrease) in other liabilities
    
    
    3,626
    
    
    
    (215
    )
    
    
    (2,301
    )Net cash provided by (used in) operating activities
    
    
    705
    
    
    
    (2,773
    )
    
    
    67,947Cash Flows from Investing ActivitiesProceeds from maturities and calls of securities available for sale
    
    
    25,523
    
    
    
    24,878
    
    
    
    10,978Proceeds from sale of security available for sale
    
    
    
    
    
    
    
    
    
    
    Purchases of securities available for sale
    
    
    (63,095
    )
    
    
    (53,294
    )
    
    
    (18,750
    )Increase in federal funds sold
    
    
    
    
    
    
    
    
    
    
    19Net increase in loans
    
    
    (76,902
    )
    
    
    (103,282
    )
    
    
    (74,494
    )Proceeds from sale of equipment
    
    
    7
    
    
    
    
    
    
    
    Purchases of premises and equipment
    
    
    (1,793
    )
    
    
    (1,382
    )
    
    
    (7,632
    )Net cash used in investing activities
    
    
    (116,260
    )
    
    
    (133,080
    )
    
    
    (89,879
    )Cash Flows from Financing ActivitiesNet increase in demand, interest-bearing demand and savings deposits
    
    
    32,746
    
    
    
    108,635
    
    
    
    5,812Net increase in time deposits
    
    
    69,490
    
    
    
    10,575
    
    
    
    14,120Increase (decrease) in securities sold under agreement to repurchase
    
    
    (1,885
    )
    
    
    1,059
    
    
    
    (937
    )Net increase (decrease) in short-term borrowings
    
    
    12,002
    
    
    
    24,964
    
    
    
    (24,392
    )Net increase (decrease) in long term borrowings
    
    
    (4,215
    )
    
    
    12,035
    
    
    
    14,965Increase in trust preferred capital notes
    
    
    
    
    
    
    
    
    
    
    6,000Proceeds from issuance of common stock
    
    
    93
    
    
    
    3,383
    
    
    
    Repurchase of common stock
    
    
    (25
    )
    
    
    (360
    )
    
    
    (346
    )Net cash provided by financing activities
    
    
    108,206
    
    
    
    160,291
    
    
    
    15,222Increase (decrease) in cash and cash equivalents
    
    
    (7,349
    )
    
    
    24,438
    
    
    
    (6,710
    )Cash and Cash EquivalentsBeginning
    
    
    30,532
    
    
    
    6,094
    
    
    
    12,804Ending
    
    $
    23,183
    
    
    $
    30,532
    
    
    $
    6,094Supplemental Disclosures of Cash Flow InformationCash payments for interest
    
    $
    12,553
    
    
    $
    6,071
    
    
    $
    3,891Cash payments for income taxes
    
    $
    3,830
    
    
    $
    1,739
    
    
    $
    2,905Supplemental Disclosures of Noncash Investing ActivitiesUnrealized gain (loss) on securities available for sale
    
    $
    (1,180
    )
    
    $
    (145
    )
    
    $
    (8
    )
  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
 42




---



##### 



Notes to Consolidated Financial Statements
 Allowance for Loan Losses
     Derivative Financial Instruments
   Premises and Equipment
 43




---



##### 



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




---



##### 



Notes to Consolidated Financial Statements
 Stock-Based Compensation Plans
 Year Ended December 31(In Thousands, Except for Per Share Data)*
    
    2005
    
    
    2004
    
    
    2003Net income, as reported
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816Total stock-based compensation expense determined under fair value
based method for all awards, net of related tax effects
    
    
    (285
    )
    
    
    (209
    )
    
    
    (179
    )Pro forma net income
    
    $
    5,612
    
    
    $
    3,106
    
    
    $
    3,637Earnings per share:Basic - as reported
    
    $
    0.75
    
    
    $
    0.44
    
    
    $
    0.55Basic - pro forma
    
    $
    0.71
    
    
    $
    0.41
    
    
    $
    0.52Diluted - as reported
    
    $
    0.63
    
    
    $
    0.36
    
    
    $
    0.43Diluted - pro forma
    
    $
    0.60
    
    
    $
    0.34
    
    
    $
    0.41
 
 *

    Prior periods adjusted for stock split effective December 12, 2005  Year Ended December 312005
    
    2004
    
    2003Expected life
    
    6.78 years
    
    7 years
    
    7 yearsRisk-free interest rate
    
    
    4.70
    %
    
    
    3.52
    %
    
    
    3.69
    %Volatility
    
    
    18.37
    %
    
    
    19.50
    %
    
    
    22.82
    %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 
   The Meaning of
Other-Than-Temporary and Its Application to Certain Investments
 46




---



##### 



Notes to Consolidated Financial Statements
 Accounting for Certain Loans or Debt Securities Acquired in a
Transfer
 Reclassifications
 Note 2. Securities
  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
 December 31, 2004Gross
    
    
    GrossUnrealized
    
    
    UnrealizedAmortized Cost
    
    
    Gains
    
    
    (Losses)
    
    
    Fair Value(In Thousands)U.S. Treasury Notes
    
    $
    1,623
    
    
    $
    15
    
    
    $
    
    
    
    $
    1,638U.S. Governmental Agencies
    
    
    44,331
    
    
    
    33
    
    
    
    (103
    )
    
    
    44,261Mortgage Backed Securities
    
    
    2,191
    
    
    
    44
    
    
    
    
    
    
    
    2,235Restricted Stock -Federal Reserve Bank Stock
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    300FHLB Stock
    
    
    2,944
    
    
    
    
    
    
    
    
    
    
    
    2,944$
    51,389
    
    
    $
    92
    
    
    $
    (103
    )
    
    $
    51,378
 47




---



##### 



Notes to Consolidated Financial Statements
  Amortized
    
    
    FairCost
    
    
    Value(In Thousands)US Treasury & AgenciesDue in one year or less
    
    $
    3,606
    
    
    $
    3,570Due after one through five years
    
    
    71,831
    
    
    
    70,846Due after five through ten years
    
    
    2,498
    
    
    
    2,446MunicipalsDue after five through ten years
    
    
    3,880
    
    
    
    3,796Due after ten through fifteen years
    
    
    515
    
    
    
    510Mortgage Backed Securities:Due after one through five years
    
    
    1,392
    
    
    
    1,393Mutual Fund
    
    
    1,500
    
    
    
    1,471Restricted Stock:Federal Reserve Bank stock
    
    
    300
    
    
    
    300FHLB stock
    
    
    3,439
    
    
    
    3,439$
    88,961
    
    
    $
    87,771
    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
    
    
    $
    4Mortgage Backed Security
    
    
    485
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    485
    
    
    
    2U.S. Government Agencies
    
    
    28,950
    
    
    
    377
    
    
    
    29,309
    
    
    
    691
    
    
    
    58,259
    
    
    
    1,068Municipals-Taxable
    
    
    1,465
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    1,465
    
    
    
    35Municipals-Tax Exempt
    
    
    2,840
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    2,840
    
    
    
    55CRA Mutual Fund
    
    
    1,471
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    1,471
    
    
    
    29Total
    
    $
    36,813
    
    
    $
    502
    
    
    $
    29,309
    
    
    $
    691
    
    
    $
    66,122
    
    
    $
    1,193
  48




---



##### 



Notes to Consolidated Financial Statements
 Note 3. Loans
  December 312005
    
    
    2004(In Thousands)Loans secured by real estate:Construction and land development
    
    $
    37,054
    
    
    $
    33,073Residential properties
    
    
    156,185
    
    
    
    113,432Secured by commercial properties
    
    
    137,423
    
    
    
    96,939Commercial loans
    
    
    38,516
    
    
    
    48,427Consumer loans
    
    
    555
    
    
    
    723Total loans
    
    
    369,733
    
    
    
    292,594Less allowance for loan losses
    
    
    5,215
    
    
    
    4,019Net loans
    
    $
    364,518
    
    
    $
    288,575
 Note 4. Allowance for Loan Losses
  Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Balance at beginning of year
    
    $
    4,019
    
    
    $
    2,565
    
    
    $
    2,048Provision charged to operating expense
    
    
    1,196
    
    
    
    1,462
    
    
    
    526Loan recoveries
    
    
    
    
    
    
    
    
    
    
    2Loan charge-offs
    
    
    
    
    
    
    (8
    )
    
    
    (11
    )Balance at end of year
    
    $
    5,215
    
    
    $
    4,019
    
    
    $
    2,565
  49




---



##### 



Notes to Consolidated Financial Statements
 Note 5. Premises and Equipment, net
  December 312005
    
    
    2004(In Thousands)Land
    
    $
    2,549
    
    
    $
    1,341Premises
    
    
    6,162
    
    
    
    6,126Leasehold improvements
    
    
    386
    
    
    
    381Furniture & Equipment
    
    
    2,182
    
    
    
    2,21111,279
    
    
    
    10,059Less accumulated depreciation
    
    
    1,629
    
    
    
    1,237$
    9,650
    
    
    $
    8,822
  50




---



##### 



Notes to Consolidated Financial Statements
 Note 6. Deposits
   Year
    
    
    
    
    
    Amount(In Thousands)2006
    
    
    
    
    
    $
    129,2942007
    
    
    
    
    
    
    29,4552008
    
    
    
    
    
    
    14,4962009
    
    
    
    
    
    
    10,0362010
    
    
    
    
    
    
    3,344Later years
    
    
    
    
    
    
    2,876$
    189,501
  Note 7. Borrowings
  December 312005
    
    
    2004(Dollars In Thousands)Securities sold under agreements to repurchase
    
    $
    977
    
    
    $
    2,862Commercial paper arrangements
    
    
    11,219
    
    
    
    7,216FHLB borrowings
    
    
    36,000
    
    
    
    27,000Fed Funds Purchased
    
    
    
    
    
    
    1Total
    
    $
    48,196
    
    
    $
    37,079Weighted interest rate
    
    
    4.21
    %
    
    
    2.27
    %Average for the year ended December 31:Outstanding
    
    $
    52,820
    
    
    $
    51,629Interest rate
    
    
    3.54
    %
    
    
    1.56
    %Maximum month-end outstanding
    
    $
    87,519
    
    
    $
    61,862
 51




---



##### 



Notes to Consolidated Financial Statements
    Amount(In Thousands)Due in 2008
    
    $
    7,500Due in 2009
    
    
    7,000Due in 2010
    
    
    3,036Due in 2014
    
    
    4,250Total Due
    
    $
    21,786
      52




---



##### 



Notes to Consolidated Financial Statements
  Note 8. Income Taxes
  December 312005
    
    
    2004(In Thousands)Deferred tax assets:Allowance for loan losses
    
    $
    1,344
    
    
    $
    938Accrual to cash basis adjustment
    
    
    28
    
    
    
    56Securities available for sale
    
    
    405
    
    
    
    4Deferred fees
    
    
    408
    
    
    
    322Other
    
    
    588
    
    
    
    2182,773
    
    
    
    1,538Deferred tax liability:Depreciation
    
    
    216
    
    
    
    249Securities available for sale
    
    
    
    
    
    
    216
    
    
    
    249Net deferred tax assetsincluded in other assets
    
    $
    2,557
    
    
    $
    1,289
  Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Current tax expense
    
    $
    4,213
    
    
    $
    2,327
    
    
    $
    2,184Deferred tax (benefit)
    
    
    (908
    )
    
    
    (538
    )
    
    
    (55
    )$
    3,305
    
    
    $
    1,789
    
    
    $
    2,129
 53




---



##### 



Notes to Consolidated Financial Statements
  Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Computed expected tax expense
    
    $
    3,078
    
    
    $
    1,565
    
    
    $
    2,021Increase (decrease) in income taxes resulting from:State income taxes
    
    
    150
    
    
    
    110
    
    
    
    190Other
    
    
    77
    
    
    
    (56
    )
    
    
    (82
    )3,305
    
    
    
    1,619
    
    
    
    2,129Increase due to tax resulting from gain on
acquisition of subsidiary
    
    
    
    
    
    
    170
    
    
    
    $
    3,305
    
    
    $
    1,789
    
    
    $
    2,129
 Note 9. Commitments and Contingent Liabilities
   Year
    
    
    
    
    
    Amount(In Thousands)2006
    
    
    
    
    
    $
    4502007
    
    
    
    
    
    
    1912008
    
    
    
    
    
    
    1462009
    
    
    
    
    
    
    982010
    
    
    
    
    
    
    51$
    936
   54




---



##### 



Notes to Consolidated Financial Statements
 Note 10. Derivatives
    55




---



##### 



Notes to Consolidated Financial Statements
 Note 11. Financial Instruments with Off-Balance-Sheet Risk
       56




---



##### 



Notes to Consolidated Financial Statements
 Note 12. Related Party Transactions
  Stock Option Plan
   Year Ended December 312005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber of
    
    
    Exercise
    
    
    Number of
    
    
    Exercise
    
    
    Number of
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding at beginning of year
    
    
    1,121,818
    
    
    $
    2.85
    
    
    
    1,104,136
    
    
    $
    2.47
    
    
    
    990,528
    
    
    $
    2.21Granted
    
    
    182,458
    
    
    
    9.52
    
    
    
    137,414
    
    
    
    7.35
    
    
    
    120,148
    
    
    
    4.67Exercised
    
    
    (13,854
    )
    
    
    2.91
    
    
    
    (51,500
    )
    
    
    3.12
    
    
    
    
    
    
    
    Forfeited
    
    
    (13,014
    )
    
    
    7.02
    
    
    
    (68,232
    )
    
    
    5.38
    
    
    
    (6,540
    )
    
    
    3.43Outstanding at end of year
    
    
    1,277,408
    
    
    $
    3.76
    
    
    
    1,121,818
    
    
    $
    2.85
    
    
    
    1,104,136
    
    
    $
    2.47Options exercisable at year-end
    
    
    1,159,598
    
    
    $
    3.59
    
    
    
    777,174
    
    
    $
    2.43
    
    
    
    517,698
    
    
    $
    1.67Weighted average fair value
per option granted during year
    
    
    
    
    
    $
    3.44
    
    
    
    
    
    
    $
    2.26
    
    
    
    
    
    
    $
    1.66
 57




---



##### 



Notes to Consolidated Financial Statements
  Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    
    
    
    
    
    
    
    
    Weighted-Average
    
    
    Weighted
    
    
    
    
    
    
    Average
    
    
    WeightedRange of
    
    
    
    
    
    Remaining
    
    
    Average
    
    
    
    
    
    
    Remaining
    
    
    AverageExercise
    
    Number
    
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    Contractual
    
    
    ExercisePrice
    
    Outstanding
    
    
    Life (in yrs)
    
    
    Price
    
    
    Outstanding
    
    
    Life (in yrs)
    
    
    Price$1.67-1.85
    
    
    661,080
    
    
    
    1.1
    
    
    $
    1.68
    
    
    
    628,074
    
    
    
    1.1
    
    
    $
    1.682.84-3.45
    
    
    309,936
    
    
    
    3.6
    
    
    
    3.39
    
    
    
    309,936
    
    
    
    3.6
    
    
    
    3.396.55-6.94
    
    
    133,308
    
    
    
    5.3
    
    
    
    6.58
    
    
    
    75,238
    
    
    
    6.2
    
    
    
    6.557.36-7.54
    
    
    101,734
    
    
    
    4.6
    
    
    
    7.52
    
    
    
    75,000
    
    
    
    5.1
    
    
    
    7.5414.05
    
    
    71,350
    
    
    
    3.0
    
    
    
    14.05
    
    
    
    71,350
    
    
    
    3.0
    
    
    
    14.051,277,408
    
    
    
    2.5
    
    
    $
    3.76
    
    
    
    1,159,598
    
    
    
    2.4
    
    
    $
    3.59
 Note 13. Warrants
  58




---



##### 



Notes to Consolidated Financial Statements
 Note 14. Capital Requirements
    59




---



##### 



Notes to Consolidated Financial Statements
  MinimumTo Be WellCapitalized UnderMinimum Capital
    
    
    Prompt CorrectiveActual
    
    
    Requirement
    
    
    Action ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(In Thousands)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
    %
 60




---



##### 



Notes to Consolidated Financial Statements
 Note 15. Dividend Restrictions
  Note 16. Earnings Per Share
  Year Ended December 312005
    
    
    2004
    
    
    2003Net
    
    
    
    
    
    
    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
    
    $
    5,897
    
    
    
    7,867
    
    
    $
    0.75
    
    
    $
    2,985
    
    
    
    7,510
    
    
    $
    0.40
    
    
    $
    3,816
    
    
    
    6,987
    
    
    $
    0.55Basic
    
    $
    5,897
    
    
    
    
    
    
    $
    0.75
    
    
    $
    3,315
    
    
    
    
    
    
    $
    0.44
    
    
    $
    3,816
    
    
    
    
    
    
    $
    0.55Effect of dilutive securities:Stock options and warrants
    
    
    
    
    
    
    1,556
    
    
    
    
    
    
    
    
    
    
    
    1,646
    
    
    
    
    
    
    
    
    
    
    
    1,835Diluted, before extra-ordinary income
    
    
    
    
    
    
    
    
    
    $
    0.63
    
    
    
    
    
    
    
    
    
    
    $
    0.33
    
    
    
    
    
    
    
    
    
    
    $
    0.43Diluted
    
    
    
    
    
    
    
    
    
    $
    0.63
    
    
    
    
    
    
    
    
    
    
    $
    0.36
    
    
    
    
    
    
    
    
    
    
    $
    0.43Diluted earnings per share
    
    $
    5,897
    
    
    
    9,423
    
    
    $
    0.63
    
    
    $
    3,315
    
    
    
    9,156
    
    
    $
    0.36
    
    
    $
    3,816
    
    
    
    8,822
    
    
    $
    0.43
 Note 17. Employee Benefits
  61




---



##### 



Notes to Consolidated Financial Statements
 Note 18. Other Expenses
  Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Advertising and promotional expense
    
    $
    3,969
    
    
    $
    2,048
    
    
    $
    3,859Investor fees
    
    
    864
    
    
    
    595
    
    
    
    979Other settlement fees
    
    
    295
    
    
    
    718
    
    
    
    709Management fees
    
    
    1,957
    
    
    
    1,824
    
    
    
    2,542Provision for branch expenses
    
    
    680
    
    
    
    327
    
    
    
    Other
    
    
    5,612
    
    
    
    5,026
    
    
    
    4,783$
    13,377
    
    
    $
    10,538
    
    
    $
    12,872
 Note 19. Fair Value of Financial Instruments and Interest Rate Risk
  Cash and Short-Term Investments
  Securities
  Loans Held for Sale
  Loan Receivables
  62




---



##### 



Notes to Consolidated Financial Statements
 Deposits and Borrowings
  Accrued Interest
  Off-Balance-Sheet Financial Instruments
   December 312005
    
    
    2004Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(In Thousands)Financial assets:Cash and short-term
investments
    
    $
    23,183
    
    
    $
    23,183
    
    
    $
    30,532
    
    
    $
    30,532Securities
    
    
    87,771
    
    
    
    87,771
    
    
    
    51,378
    
    
    
    51,378Loans held for sale
    
    
    45,019
    
    
    
    45,019
    
    
    
    36,245
    
    
    
    36,245Loans, net of allowance
    
    
    364,518
    
    
    
    365,911
    
    
    
    288,575
    
    
    
    284,600Accrued interest receivable
    
    
    3,068
    
    
    
    3,068
    
    
    
    2,214
    
    
    
    2,214Financial liabilities:Deposits
    
    $
    419,629
    
    
    $
    418,249
    
    
    $
    317,393
    
    
    $
    316,749Short-term borrowings
    
    
    48,196
    
    
    
    48,196
    
    
    
    37,079
    
    
    
    37,061Long-term borrowings
    
    
    21,786
    
    
    
    21,410
    
    
    
    27,000
    
    
    
    25,982Subordinated debentures
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311
    
    
    
    10,311Accrued interest payable
    
    
    1
    
    
    
    1
    
    
    
    83
    
    
    
    83
 63




---



##### 



Notes to Consolidated Financial Statements
  Note 20. Segment Reporting
   64




---



##### 



Notes to Consolidated Financial Statements
  2005
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    Consolidated(In Thousands)
    
    Banking
    
    
    Mortgage
    
    
    Elimination
    
    
    TotalsRevenues:Interest income
    
    $
    27,708
    
    
    $
    3,085
    
    
    $
    (3,000
    )
    
    $
    27,793Gain on sale of loans
    
    
    
    
    
    
    24,198
    
    
    
    (103
    )
    
    
    24,095Other
    
    
    2,701
    
    
    
    6,065
    
    
    
    (1,394
    )
    
    
    7,372Total operating income
    
    $
    30,409
    
    
    $
    33,348
    
    
    $
    (4,497
    )
    
    $
    59,260Expenses:Interest expense
    
    $
    12,762
    
    
    $
    2,760
    
    
    $
    (3,000
    )
    
    $
    12,522Salaries and employee benefits
    
    
    5,798
    
    
    
    14,739
    
    
    
    
    
    
    
    20,537Other
    
    
    5,971
    
    
    
    12,525
    
    
    
    (1,497
    )
    
    
    16,999Total operating expenses
    
    $
    24,531
    
    
    $
    30,024
    
    
    $
    (4,497
    )
    
    $
    50,058Income before income taxes
    
    $
    5,878
    
    
    $
    3,324
    
    
    
    
    
    
    $
    9,202Total assets
    
    $
    523,910
    
    
    $
    48,883
    
    
    $
    (35,743
    )
    
    $
    537,050Capital Expenditures
    
    $
    1,672
    
    
    $
    121
    
    
    $
    
    
    
    $
    1,793
 2004
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    Consolidated(In Thousands)
    
    Banking
    
    
    Mortgage
    
    
    Elimination
    
    
    TotalsRevenues:Interest income
    
    $
    17,402
    
    
    $
    2,195
    
    
    $
    (1,372
    )
    
    $
    18,225Gain on sale of loans
    
    
    
    
    
    
    20,208
    
    
    
    (193
    )
    
    
    20,015Other
    
    
    2,094
    
    
    
    4,986
    
    
    
    (1,143
    )
    
    
    5,937Total operating income
    
    $
    19,496
    
    
    $
    27,389
    
    
    $
    (2,708
    )
    
    $
    44,177Expenses:Interest expense
    
    $
    6,854
    
    
    $
    1,049
    
    
    $
    (1,372
    )
    
    $
    6,531Salaries and employee benefits
    
    
    3,993
    
    
    
    14,634
    
    
    
    
    
    
    
    18,627Other
    
    
    5,579
    
    
    
    10,172
    
    
    
    (1,336
    )
    
    
    14,415Total operating expenses
    
    $
    16,426
    
    
    $
    25,855
    
    
    $
    (2,708
    )
    
    $
    39,573Income before income taxes
    
    $
    3,070
    
    
    $
    1,534
    
    
    $
    
    
    
    $
    4,604Total assets
    
    $
    407,597
    
    
    $
    61,252
    
    
    $
    (48,751
    )
    
    $
    420,098Capital Expenditures
    
    $
    890
    
    
    $
    492
    
    
    $
    
    
    
    $
    1,382
 2003
    
    Commercial
    
    
    Mortgage
    
    
    
    
    
    
    Consolidated(In Thousands)
    
    Banking
    
    
    Banking
    
    
    Elimination
    
    
    TotalsRevenues:Interest income
    
    $
    12,396
    
    
    $
    3,788
    
    
    $
    (2,142
    )
    
    $
    14,042Gain on sale of loans
    
    
    
    
    
    
    27,818
    
    
    
    
    
    
    
    27,818Other
    
    
    840
    
    
    
    5,107
    
    
    
    
    
    
    
    5,947Total operating income
    
    $
    13,236
    
    
    $
    36,713
    
    
    $
    (2,142
    )
    
    $
    47,807Expenses:Interest expense
    
    $
    4,812
    
    
    $
    2,234
    
    
    $
    (2,142
    )
    
    $
    4,904Salaries and employee benefits
    
    
    3,128
    
    
    
    18,270
    
    
    
    
    
    
    
    21,398Other
    
    
    2,915
    
    
    
    12,645
    
    
    
    
    
    
    
    15,560Total operating expenses
    
    $
    10,855
    
    
    $
    33,149
    
    
    $
    (2,142
    )
    
    $
    41,862Income before income taxes
    
    $
    2,381
    
    
    $
    3,564
    
    
    $
    
    
    
    $
    5,945Total assets
    
    $
    268,131
    
    
    $
    32,611
    
    
    $
    (43,352
    )
    
    $
    257,390Capital Expenditures
    
    $
    7,446
    
    
    $
    186
    
    
    $
    
    
    
    $
    7,632
 65




---



##### 



Notes to Consolidated Financial Statements
 Note 21. Parent Only Statements
 ACCESS NATIONAL CORPORATION
(Parent Corporation Only)
Balance Sheets
 December 312005
    
    
    2004(In Thousands)AssetsCash
    
    $
    10
    
    
    $
    9Other investments
    
    
    1,825
    
    
    
    3,713Investment in subsidiaries
    
    
    39,605
    
    
    
    31,150Other assets
    
    
    590
    
    
    
    1,641Total assets
    
    $
    42,030
    
    
    $
    36,513LiabilitiesSubordinated debentures
    
    $
    10,311
    
    
    $
    10,311Other liabilities
    
    
    534
    
    
    
    20410,845
    
    
    
    10,515Shareholders EquityCommon stock
    
    
    6,644
    
    
    
    6,608Capital surplus
    
    
    9,099
    
    
    
    9,067Retained earnings
    
    
    16,227
    
    
    
    10,330Accumulated other comprehensive income
    
    
    (785
    )
    
    
    (7
    )Total shareholders equity
    
    
    31,185
    
    
    
    25,998Total liabilities and shareholders equity
    
    $
    42,030
    
    
    $
    36,513
 66




---



##### 



Notes to Consolidated Financial Statements
 ACCESS NATIONAL CORPORATION
(Parent Corporation Only)
Statements of Income
 Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)IncomeDividends from subsidiaries
    
    $
    1,014
    
    
    $
    795
    
    
    $
    Interest
    
    
    91
    
    
    
    88
    
    
    
    54Management fees from subsidiaries
    
    
    
    
    
    
    
    
    
    
    422Other
    
    
    84
    
    
    
    80
    
    
    
    1,189
    
    
    
    963
    
    
    
    476ExpensesInterest expense on subordinated debentures
    
    
    706
    
    
    
    514
    
    
    
    294Other expenses
    
    
    845
    
    
    
    421
    
    
    
    197Total expenses
    
    
    1,551
    
    
    
    935
    
    
    
    491Income (loss) before income taxes and undistributed income of subsidiaries
    
    
    (362
    )
    
    
    28
    
    
    
    (15
    )Income tax (benefit)
    
    
    (525
    )
    
    
    (289
    )
    
    
    (6
    )Income (loss) before undistributed
income of subsidiaries
    
    
    163
    
    
    
    317
    
    
    
    (9
    )Undistributed income of subsidiaries
    
    
    5,734
    
    
    
    2,998
    
    
    
    3,825Net income
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816
 67




---



##### 



Notes to Consolidated Financial Statements
 ACCESS NATIONAL CORPORATION
(Parent Corporation Only)
Statements of Cash Flows
 Year Ended December 312005
    
    
    2004
    
    
    2003(In Thousands)Cash Flows from Operating ActivitiesNet income
    
    $
    5,897
    
    
    $
    3,315
    
    
    $
    3,816Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Undistributed income of subsidiaries
    
    
    (5,734
    )
    
    
    (2,998
    )
    
    
    (3,825
    )(Increase) decrease in other assets
    
    
    1,142
    
    
    
    (730
    )
    
    
    (569
    )Increase (decrease) in other liabilities
    
    
    241
    
    
    
    (410
    )
    
    
    76Net cash provided by (used in) operating
activities
    
    
    1,546
    
    
    
    (823
    )
    
    
    (502
    )Cash Flows from Investing ActivitiesIncrease in investment in subsidiaries
    
    
    (3,500
    )
    
    
    
    
    
    
    (3,209
    )(Increase) decrease in other investments
    
    
    1,888
    
    
    
    (2,191
    )
    
    
    (6,101
    )Net cash (used in) investing activities
    
    
    (1,612
    )
    
    
    (2,191
    )
    
    
    (9,310
    )Cash Flows from Financing ActivitiesRepurchase of common stock
    
    
    (25
    )
    
    
    (360
    )
    
    
    (346
    )Net proceeds from issuance of common stock
    
    
    92
    
    
    
    3,383
    
    
    
    Proceeds from subordinated debentures
    
    
    
    
    
    
    
    
    
    
    6,186Net cash provided by financing activities
    
    
    67
    
    
    
    3,023
    
    
    
    5,840Increase (decrease) in cash and cash equivalents
    
    
    1
    
    
    
    9
    
    
    
    (3,972
    )Cash and Cash EquivalentsBeginning
    
    
    9
    
    
    
    
    
    
    
    3,972Ending
    
    $
    10
    
    
    $
    9
    
    
    $
    
 68




---



##### 



ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
  ITEM 9A  CONTROLS AND PROCEDURES
    ITEM 9B  OTHER INFORMATION
 None.
 69




---



##### 



PART III
 ITEM 10  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  ITEM 11  EXECUTIVE COMPENSATION
  ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
  ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES
  70




---



##### 



PART IV
 ITEM 15  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a) Exhibit Index
 Exhibit No.
    
    Description3.1*
    
    Articles of Incorporation of Access National Corporation.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))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))10.8
    
    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 Corporation23.1*
    
    Consent of BDO Seidman, LLP23.2*
    
    Consent of Yount, Hyde and Barbour, P. C.24
    
    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 71




---



##### 



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, 2006
    
    By:
    
    /s/ Michael W. Clarke

Michael W. ClarkePresident & CEODate: March 28, 2006
    
    By:
    
    /s/ Charles Wimer

Charles WimerExecutive Vice President & CFO
 72




---



##### 



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,
2006/s/ Michael W. Clarke
Michael W. Clarke
    
    President / CEO & Director
(Principal Executive Officer)
    
    March 28,
2006/s/ John W. EdgemondJohn W. (Skip) Edgemond
    
    Director
    
    March 28, 2006/s/ James L. JadlosJames L. Jadlos
    
    Director
    
    March 28, 2006/s/ Thomas M. KodyThomas M. Kody
    
    Director
    
    March 28, 2006/s/ Jacques RebiboJacques Rebibo
    
    Chairman of the Board of Directors
    
    March 28, 2006Director/s/ Robert C. ShoemakerRobert C. Shoemaker
    
    Executive Vice President,
Chief Credit Officer & Director
    
    March 28, 2006/s/ Charles WimerCharles Wimer
    
    Executive Vice President & Chief
Financial Officer
(Principal Financial Officer)
    
    March 28, 2006
 73