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GlobalPhone opens $500,000 line of credit with Access National Bank of Reston Virginia

A history of mistakes and poor service at the hands of M&T Bank.

January 19 2007: GlobalPhone www.gphone.com is pleased to announce it has opened a $500,000 bank line of credit with Access National Bank of Reston Virginia. GlobalPhone terminated its relationship with M&T bank.

GlobalPhone became a customer of M&T when M&T Bank acquired Allfirst Bank of Baltimore in 2003, GlobalPhone Corp. began its relationship with AllFirst Bank back in 2001. Allfirst provided GlobalPhone with a mortgage loan on GlobalPhone’s office building, and a $400,000 Standby Letter of Credit facility to issue to various long distance suppliers as guarantees of payment from GlobalPhone. The Standby Letter of Credit facility was guaranteed by the Small Business Administration.

After M&T acquired Allfirst, the personnel changed and our account was taken up by Al Garcia, Bank Manager and Chris Scott, VP at the local M&T Bank, McLean, Virginia office and Karen Schonfeld, the Regional M&T Bank Manager. GlobalPhone had discussions with M&T in 2005 about expanding its line of credit, but M&T would not make any decisions. After a year of inaction with M&T, GlobalPhone turned to Access National Bank of Reston VA and was promptly issued an additional line of credit, properly subordinated to M&T and the SBA credit lines.

This year GlobalPhone was forced to close its account with M&T Bank because of mistakes and poor service. In 2006 our controller, David Hartig, took notice that M&T had not billed GlobalPhone for its annual standby letter of credit and SBA fees. In fact, these fees were nine months overdue. Hartig informed M&T. After some research, M&T unexpectedly demanded a payment of $15,000 to renew the credit line. This was more than ten times the fee that GlobalPhone had historically paid for the standby credit. M&T then misrepresented that the SBA had changed its pricing and blamed the SBA. GlobalPhone inquired with the SBA to see if somehow the rules or pricing had changed. The SBA stated that GlobalPhone was in excellent standing, but that M&T had not renewed several of its SBA guarantees, not just for GlobalPhone but for several other clients. SBA said M&T was simply disorganized and had forgotten to renew the credit lines because of the personnel turnover at Allfirst.

M&T’s mistake caused an exposure to $400,000 in Standby Letters of Credit guarantees with no underlying SBA guarantee. The credit alarm were triggered and M&T asked GlobalPhone to pay $15,000 for its risk and additional reserve requirements. The problem was caused by errors at M&T Bank and the terms were vastly different from the original agreement, so GlobalPhone refused to pay the new fee..

Rather than fix the problem in a constructive manner, M&T simply made the decision to stand firm and decided to shut down the banking relationship. M&T was vindictive because GlobalPhone had opened a line of credit with Access Bank.

Chris Scott introduced Gregory Barnes, VP of the Special Assets for M&T Bank, who came to GlobalPhone offices and announced that our account was being turned over to Special Assets. Mr. Barnes proceeded to declare GlobalPhone legally in default of its loans based on a vague “material change” clause in the loan documents. GlobalPhone had never missed any payment, was in fine financial condition and experienced no material change to its balance sheet or operating statements.

Greg. Barnes claimed the Access National bank credit line had changed GlobalPhone’s financial condition, even though the line was unused. Mr. Barnes demanded that we retrieve the letters of credit and demanded prepayment of the mortgage loan, even though there were only six months left on the term. Greg Barnes then charged GlobalPhone a $4,200 prepayment penalty for prepaying the loan.

After several months of work and around $12,000 in refinancing fees and the M&T prepayment penalty, GlobalPhone shut down its M&T relationship, refinanced its mortgage and re-established its SBA guarantees through Access National Bank.

M&T Bank was incompetent by not renewing the SBA guarantees and then became arrogant and abusive as it tried to resolve its self-inflicted problem. By contrast, GlobalPhone has been extremely please at the level of service provided by Access National Bank.

Access National Corporation is the parent company of Access National Bank, an independent nationally chartered bank. The Bank, established in December, 1999, serves the business community in the greater DC Metropolitan area. Its wholly owned subsidiary, Access National Mortgage Corporation, provides residential mortgage loans to bank clients and consumers in the same area and other select markets. Additional information is available on our website at www.AccessNationalBank.com. The shares of Access National Corporation are traded on the NASDAQ National Market under the symbol "ANCX".