Earnings estimates for Access National Corporation ( ANCX - Snapshot Report ) have advanced since this regional bank delivered its 10th straight positive earnings surprise and saw record earnings in the third quarter of 2012. In addition to this earnings surprise history, the company has a long-term expected earnings growth rate of 8%.

With a P/B multiple of just 1.4, this Zacks #1 Rank (Strong Buy) is an attractive pick for value investors.

Remarkable 3Q Results

On Oct 23, Access National Corp reported third quarter earnings of 40 cents per share, outpacing the Zacks Consensus Estimate by 14.3% and year-ago earnings by 33.3%. Better-than-expected results were mainly driven by growth in revenue, partially offset by higher operating expenses.

Net interest income rose 10.7% from the year-ago quarter to $8.0 million and was driven primarily by lower funding costs and changes in earning assets mix. Moreover, non-interest income jumped 18.9% to $12.7 million. Yet, non-interest expenses rose 13.7% to $14.1 million, as a result of higher salaries and employee benefit costs.

Access National Corp witnessed continued improvement in its asset quality during the quarter as non-performing assets (NPAs) fell to $3.6 million, or just 0.43% of total assets, down from $5.2 million or 0.62% of assets at June 30, 2012. Further, as of Sep 30, 2012, net recoveries were of $1.0 million compared with net charge offs of $0.075 million as of Sep 30, 2011.

Dividend Update

On Oct 23, the company raised its quarterly dividend 2 cents to 8 cents per share based on strong capital and a favorable outlook which upped the yield to 2.3%.

On Nov 11, 2012, Access National also announced a special cash dividend of 70 cents per share which it paid out to shareholders due to possible changes in the tax rates. The dividend was paid on Dec 17 to shareholders of record as on Dec 3.

Moreover, the company updated its dividend payout ratio target. The company now targets a dividend payout of 40% of its core earnings, exclusive of this special dividend. The earlier payout ratio was 20% of the core earnings.

Earnings Estimates Advancing

Over the last 60 days, the Zacks Consensus Estimate for 2012 advanced 6.5% to $1.47 per share with both estimates revised upward. This implies year-over-year growth of 33.6%. For 2013, the Zacks Consensus Estimate improved 6.0% to $1.23 with the same number of estimates revising upward over the same time frame.

Reasonable Valuation

Along with an attractive P/B multiple, Access National Corp has a forward P/E ratio of 8.9 (a P/E ratio under 15.0 and P/B ratio below 3.0 generally indicate value).

Headquartered in Reston, Virginia, Access National Corp is a financial holding company for Access National Bank. The company provides credit, deposit and mortgage services to businesses and professionals in the northern Virginia region and the Greater Washington, D.C. metropolitan area. The company has a market capitalization of about $142.5 million.

Other Zacks #1 Rank (Strong Buy) banks include Cardinal Financial Corp. (CFNL) and IberiaBank Corp. (IBKC).