Access Anytime Bancorp (AABC) 10QSB 2004 Q1 Quarterly report (small business)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-QSB

ý	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2004
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT FOR THE TRANSITION PERIOD FROM                 TO

Commission File Number 0-28894

Access Anytime Bancorp, Inc.

(Name of small business issuer in its charter)

DELAWARE	85-0444597
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5210 Eubank, NE, Albuquerque, New Mexico 87111
(Address of principal executive offices)         (Zip Code)
Issuer’s telephone number, including area code:  (505) 299-0900

SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:  None

SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:

COMMON STOCK $.01 PAR VALUE
(Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

1,341,767 Shares of Capital Stock $.01 par value

Outstanding as of April 30, 2004

Transitional Small Business Disclosure Format (check one):  Yes o    No ý

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
	Consolidated Statements of Financial Condition
	(Unaudited as of March 31, 2004)
	Unaudited Consolidated Statements of Operations
	Unaudited Consolidated Statement of Stockholders’ Equity
	Unaudited Consolidated Statements of Cash Flows
	Notes to Consolidated Financial Statements (Unaudited)
Item 2 – Management’s Discussion and Analysis or Plan of Operation
Item 3 – Controls and Procedures
PART II – OTHER INFORMATION
Item 1  – Legal Proceedings
Item 2  – Changes in Securities and Small Business Issuer Purchases of Equity Securities
Item 3 – Defaults Upon Senior Securities
Item 4 – Submission of Matters to a Vote of Security Holders
Item 5 – Other Information
Item 6 – Exhibits and Reports on Form 8-K
SIGNATURES

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PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

The following unaudited consolidated financial statements include all adjustments, which in the opinion of management, are necessary in order to make such financial statements not misleading.

ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

	Unaudited March 31, 2004			December 31, 2003
ASSETS
Cash and cash equivalents	$	7,113,000		$	11,611,364
Certificates of deposit	4,373,000			4,480,000
Securities available-for-sale (amortized cost of $5,430,659 and $5,718,248)	5,532,665			5,814,701
Securities held-to-maturity (aggregate fair value of $16,038,362  and $16,829,145)	15,815,443			16,761,939
Loans held-for-sale (aggregate fair value of $3,383,314 and $1,834,564)	3,318,279			1,797,290
Loans receivable, net	160,052,348			156,237,317
Interest receivable, loans	693,522			732,964
Interest receivable, securities	227,595			125,994
Real estate owned	410,114			565,159
Federal Home Loan Bank stock	1,171,500			1,167,200
Premises and equipment, net	3,522,429			3,556,833
Unidentifiable intangible asset, net of accumulated amortization of $642,519 and $606,104	1,541,569			1,577,984
Deferred tax asset	303,552			388,573
Other assets	599,822			609,834
Total assets	$	204,674,838		$	205,427,152
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits	$	164,645,385		$	162,846,107
Federal Home Loan Bank advances	14,538,935			17,066,654
Accrued interest and other liabilities	1,520,426			1,794,005
Advanced payments by borrowers for taxes and insurance	376,931			354,670
Trust Preferred Securities – Notes Payable	8,000,000			8,000,000
Total liabilities	189,081,677			190,061,436
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; 4,000,000 shares authorized; none issued	—			—
Common stock, $.01 par value; 6,000,000 shares authorized; 1,511,099 and 1,510,744 shares issued;  1,222,305 and 1,221,070 shares outstanding in 2004 and 2003, respectively	15,111			15,107
Capital in excess of par value	11,741,667			11,643,276
Retained earnings	6,012,165			5,831,295
Accumulated other comprehensive income, net of tax expense of $40,803 and $38,581	61,204			57,872
	17,830,147			17,547,550
Unallocated Employee Stock Ownership Plan shares; 120,000 and 128,000  shares outstanding	(645,000		)	(690,000		)
Treasury stock, at cost; 168,794 and 161,674 shares	(1,591,986		)	(1,491,834		)
Total stockholders’ equity	15,593,161			15,365,716
Total liabilities and stockholders’ equity	$	204,674,838		$	205,427,152

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Unaudited Consolidated Statements of Operations

	Three Month Periods Ended March 31,
	2004		2003
Interest income:
Loans receivable	$	2,593,157	$	2,702,157
Equity securities	127,765		39,277
Mortgage-backed securities	69,461		75,910
Other interest income	45,269		67,393
Total interest income	2,835,652		2,884,737
Interest expense:
Deposits	748,926		866,014
Federal Home Loan Bank advances	101,761		92,736
Other borrowings	163,400		159,729
Total interest expense	1,014,087		1,118,479
Net interest income before provision for loan losses	1,821,565		1,766,258
Provision for loan losses	213,000		142,000
Net interest income after provision for loan losses	1,608,565		1,624,258
Noninterest income:
Loan servicing and other fees	128,595		142,733
Gains on sales of mortgage loans held-for-sale	224,614		398,138
Other income	278,485		245,420
Total noninterest income	631,694		786,291
Noninterest expense:
Salaries and employee benefits	960,695		1,053,256
Occupancy expense	227,980		229,113
Deposit insurance premium	20,082		19,976
Advertising	27,330		24,306
Professional fees	144,374		82,764
Other expense	483,994		529,066
Total noninterest expense	1,864,455		1,938,481
Income before income taxes	375,804		472,068
Income tax expense	194,934		204,847
Net income	$	180,870	$	267,221
Earnings per common share-basic	$	0.14	$	0.21
Earnings per common share-assuming dilution	$	0.13	$	0.19

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Unaudited Consolidated Statement of Stockholders’ Equity

													Accumulated Other Comprehensive Income, Net
							Capital in Excess of Par Value
			Common Stock																	Treasury Stock
	Comprehensive Income		Number of shares	Amount						Retained Earnings						Unallocated ESOP Shares				Number Of Shares	Amount				Total
Balance at December 31, 2003			1,510,744	$		15,107	$		11,643,276	$		5,831,295	$		57,872	$		(690,000	)	161,674	$		(1,491,834	)	$	15,365,716
Net income	$	180,870	—	—			—			180,870			—			—				—	—				180,870
Net change in unrealized appreciation  on available-for-sale securities, net of tax	3,332		—	—			—			—			3,332			—				—	—				3,332
Total comprehensive income	$	184,202
																									1,997
Common shares issued			355	4			1,993
Common stock rights awarded in lieu of directors’ cash compensation			—	—			31,750			—			—			—				—	—				31,750
Purchases of  treasury stock			—	—			—			—			—			—				7,120	(100,152			)	(100,152			)
ESOP shares allocated			—	—			64,648			—			—			45,000				—	—				109,648
Balance at March 31, 2004			1,511,099	$	15,111		$	11,741,667		$	6,012,165		$	61,204		$	(645,000		)	168,794	$	(1,591,986		)	$		15,593,161

	Three Months Ended		Year Ended
	March 31, 2004		December 31, 2003
Disclosure of reclassification amounts:
Unrealized holding gains (losses) arising during period	$	3,332	$	(21,578	)
Reclassification adjustment for losses included in net income	—		(10,747		)
Net unrealized appreciation (depreciation) on available-for-sale securities,  net of tax	$	3,332	$	(32,325	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Unaudited Consolidated Statements of Cash Flows

	Three Month Periods Ended March 31,
	2004			2003
Cash flows from operating activities:
Net income	$	180,870		$	267,221
Adjustments to reconcile net income to cash from operating activities:
Depreciation	95,787			114,275
Deferred income taxes	85,021			(23,711		)
Provision for loan losses	213,000			142,000
Amortization of premiums on investment securities	7,633			10,181
Amortization of loan premiums, discounts and deferred fees, net	70,123			70,472
Amortization of unidentifiable intangible asset	36,415			36,415
Non-cash ESOP contribution	109,648			75,999
Gains on sales of mortgage loans held-for-sale	(224,614		)	(398,138		)
Proceeds from sales of mortgage loans held-for-sale	12,439,100			20,804,525
Originations of mortgage loans held-for-sale	(13,735,475		)	(26,069,502		)
Common stock rights awarded in lieu of directors compensation	31,750			16,000
(Gain) loss on sale of foreclosed real estate	(39,099		)	5,883
Gain on disposition of assets	—			(1,877		)
Net (increase) decrease in accrued interest receivable and other assets	(53,115		)	19,789
Decrease in accrued interest and other liabilities	(481,733		)	(116,505		)
Net cash flows from operating activities	(1,264,689		)	(5,046,973		)
Cash flows from investing activities:
Proceeds from maturities and principal repayments of available-for-sale securities	278,211			643,248
Purchases of held-to-maturity securities	(207,472		)	—
Proceeds from maturities and principal repayments of held-to-maturity securities	1,150,160			242,403
Net decrease in certificates of deposit	107,000			100,000
Net increase in loans	(4,098,154		)	(205,356		)
Proceeds from sales of foreclosed real estate	402,298			179,500
Purchases of premises and equipment	(61,383		)	(30,837		)
Net cash flows from investing activities	(2,429,340		)	928,958
Cash flows from financing activities:
Net increase (decrease) in deposits	1,799,278			(911,612		)
Net (decrease) increase in Federal Home Loan Bank advances	(2,527,719		)	6,203,654
Net increase in advance payments by borrowers for taxes and insurance	22,261			65,312
Purchase of treasury stock	(100,152		)	(1,022,216		)
Proceeds from issuance of common stock	1,997			2,998
Net cash flows from financing activities	(804,335		)	4,338,136
(Decrease) increase in cash and cash equivalents	(4,498,364		)	220,121
Cash and cash equivalents at beginning of period	11,611,364			12,342,444
Cash and cash equivalents at end of quarter ended March 31	7,113,000			12,562,565
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	1,117,201		$	1,221,198
Income taxes	150			150
Supplemental disclosure of non-cash investing and financing activities:
Real estate acquired in settlement of loans	176,633			124,434

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1Basis of Consolidation and Presentation

Access Anytime Bancorp, Inc. (the “Company”) is a thrift holding company for its wholly owned subsidiary FirstBank (the “Bank”) and the Bank’s wholly owned subsidiary, First Equity Development Corporation (“FEDCO”).  The consolidated financial statements include the accounts and transactions of the Company, Bank and FEDCO.  All significant intercompany accounts and transactions have been eliminated in consolidation.

The unaudited interim financial statements have been prepared by management of the Company, without audit.  Certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although management believes that the disclosures included herein are adequate to make the information presented not misleading.  In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the information have been included.  The December 31, 2003 consolidated statement of financial condition, as presented herein, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America and should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2003 included in the Company’s Annual Report on 10-KSB.

NOTE 2Summary of Significant Accounting Policies

Impact of New Accounting Standards – In December 2002, the FASB issued Statement No. 148 (“Statement 148”), Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123.  This statement amends Statement 123 to provide alternative methods of transition to a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, Statement 148 amends the disclosure requirements to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.

Statement 148 allows for the fair value based method under Statement 123, Accounting for Stock Based Compensation, or the intrinsic value based method under APB Opinion No. 25 (“Opinion 25”), Accounting for Stock Issued to Employees.  Under the fair value based method of accounting, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is generally the vesting period.  Under the intrinsic value method of accounting, compensation cost is the excess, if any, of the quoted market price of the stock at grant date or other measurement date over the amount an employee must pay to acquire the stock.  The Company has elected to continue to use the intrinsic value method of accounting under Opinion 25, and will disclose the proforma effects of the fair value based method for the periods presented in its consolidated financial statements.

7

Had compensation cost for all grants of stock options and the director retainer plan shares during 2004 and 2003 been determined based on the fair value at the date of grant, reported net income and earnings per share would have been adjusted to the pro-forma amounts shown below:

	Quarter Ended March 31,
	2004			2003
Net income, as reported	$	180,870		$	267,221
Deduct:  Stock-based employee compensation expense included in reported net income, net of related tax effects	(85,012		)	(450		)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	(5,971		)	(5,340		)
Pro forma net income	$	87,887		$	261,431
Earnings per share-basic
As reported	$	0.14		$	0.21
Pro-forma	0.07			0.20
Earnings per share-assuming dilution
As reported	$	0.13		$	0.19
Pro-forma	0.06			0.19

In January 2003, the FASB issued Interpretation No. 46 (“Interpretation 46”), Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.  This interpretation of Accounting Research Bulletin No. 51, Consolidated Financial Statements, addresses consolidation by business enterprises of variable interest entities (selected entities with related contractual, ownership, voting or other monetary interests, including certain special purpose entities), and requires certain additional disclosure with respect to these entities.  The provisions of Interpretation 46 are immediately applicable to variable interest entities created after January 31, 2003.  In December 2003, the FASB issued a revision to Interpretation 46, commonly referred to as Interpretation No. 46R (“Interpretation 46R”).  The objective of Interpretation 46R was to provide additional clarification to Interpretation 46 and require public entities to identify those entities that are considered special purpose entities (SPEs) in which they have variable interests and to apply the provisions of either Interpretation 46 of 46R at December 31, 2003.  The full provisions of Interpretation 46R will be required by the Company for the fiscal year end December 31, 2004.

The Company has business trusts for the purpose of issuing trust preferred securities.  We believe the continued consolidation of these trusts at December 31, 2003 was appropriate under Interpretation 46.  However, the application of Interpretation 46R will be required by the Company for the fiscal year end December 31, 2004, at which time, the Company will be required to deconsolidate the trusts.  The deconsolidation of these trusts will not have a material impact on the 2004 consolidated financial statements.

8

In May 2003, the FASB issued Statement No. 150 (“Statement 150”), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.  Statement 150 establishes standards for how a business enterprise classifies, measures and discloses in its financial statements certain financial instruments with characteristics of both liabilities and equity.  Statement 150 requires that a business enterprise classify financial instruments that are within its scope as liabilities (or as assets in some circumstances).  Statement 150 was effective for contracts entered into or modified after May 31, 2003, and was otherwise effective at the beginning of the first interim period beginning after June 15, 2003.  FASB Staff Position (FSP) 150-3 affects the accounting for mandatorily redeemable non-controlling minority interests of all entities and for non-SEC registrants, defers the effective date of Statement 150 and eliminates the disclosure requirements for certain mandatorily redeemable instruments.  The adoption of Statement 150 on July 1, 2003 did not have a material impact on the Company’s consolidated financial statements, and the adoption of deferred provisions at January 1, 2005 is not expected to have a material impact on the Company’s consolidated financial statements.

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NOTE 3SECURITIES

Securities have been classified in the consolidated statements of financial condition according to management’s ability and intent.  The carrying amount of securities and their approximate fair value follow:

	Amortized Cost		Gross unrealized				Fair Value
			Gains		Losses
Available-for-sale securities:
March 31, 2004:
Mortgage-backed securities:
GNMA adjustable rate	$	2,291,297	$	5,597	$	8,771	$	2,288,123
GNMA fixed rate	577,504		35,417		—		612,921
Equity securities:
FNMA common stock	6,858		493		—		7,351
FNMA bonds	1,000,000		6,560		—		1,006,560
FFCB bonds	1,000,000		11,250		—		1,011,250
Trust preferred securities	555,000		51,460		—		606,460
	$	5,430,659	$	110,777	$	8,771	$	5,532,665
December 31, 2003:
Mortgage-backed securities:
GNMA adjustable rate	$	2,476,208	$	9,837	$	11,704	$	2,474,342
GNMA fixed rate	680,182		42,420		—		722,602
Equity securities:
FNMA common stock	6,858		410		—		7,268
FNMA bonds	1,000,000		—		—		1,000,000
FFCB bonds	1,000,000		5,630		—		1,005,630
Trust preferred securities	555,000		49,860		—		604,860
	$	5,718,248	$	108,157	$	11,704	$	5,814,701
Held-to-maturity securities:
March 31, 2004:
Mortgage-backed securities:
GNMA adjustable rate	$	3,932,976	$	7,074	$	—	$	3,940,050
FHLMC adjustable rate	269,365		2,020		192		271,193
FHLB bonds	3,257,430		88,867		—		3,346,297
FHLMC bonds	1,001,573		5,927		—		1,007,500
US treasury bonds	6,017,165		93,455		—		6,110,620
Corporate bonds	829,474		10,268		—		839,742
Municipal bonds	207,460		—		—		207,460
Trust preferred securities	300,000		15,500		—		315,500
	$	15,815,443	$	223,112	$	192	$	16,038,362
December 31, 2003:
Mortgage-backed securities:
GNMA adjustable rate	$	4,027,531	$	—	$	8,473	$	4,019,059
FHLMC adjustable rate	287,414		2,227		—		289,641
FHLB bonds	4,256,383		35,488		—		4,291,872
FHLMC bonds	1,002,199		4,361		—		1,006,560
US treasury bonds	6,017,687		16,073		—		6,033,760
Corporate bonds	870,725		3,871		1,941		872,655
Trust preferred securities	300,000		15,600		—		315,600
	$	16,761,939	$	77,620	$	10,414	$	16,829,145

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NOTE 4LOANS HELD-FOR-SALE

The carrying amount of loans held-for-sale and their estimated fair value, as determined on an aggregate basis, follow:

			Gross unrealized
	Amortized cost		Gains		Losses		Fair value
March 31, 2004	$	3,318,279	$	65,035	$	—	$	3,383,314
December 31, 2003	1,797,290		37,274		—		1,834,564

NOTE 5LOANS RECEIVABLE

The components of loans in the consolidated statements of financial condition were as follows:

	March 31, 2004		December 31, 2003
First mortgage loans:
Conventional	$	72,282,104	$	75,526,322
FHA insured and VA guaranteed	9,243,809		8,741,925
Commercial real estate loans	38,405,576		36,527,727
Commercial loans, other than mortgage	8,312,673		8,087,247
Consumer and installment loans	21,539,578		21,723,933
Construction loans	6,653,169		2,231,421
Other	6,552,620		6,524,285
	162,989,529		159,362,860
Less:
Loans in process	1,124,054		1,381,678
Unearned discounts, deferred loan fees, and other	800,544		794,349
Allowance for loan losses	1,012,583		949,516
	$	160,052,348	$	156,237,317

11

The allowance for loan losses is established by management of the Bank to incorporate a systematic methodology, which is applied quarterly, to determine the elements of the allowance for loan losses and the resultant provisions for loan losses it considers adequate to provide for anticipated loan losses.  This methodology includes the following elements:

• A systematic loan grading system

• A periodic review of the summary of the allowance for loan loss balance using historical loss factors

• Identification of loans to be evaluated on an individual basis for impairment

• Consideration of internal factors such as the Bank’s size, organizational structure, loan portfolio structure, loan administration procedures, past due and delinquency trends, and loss experience

• Consideration of risks inherent in different kinds of lending

• Consideration of external factors such as local, regional, and national economic factors

• An overall evaluation of the quality of the underlying collateral, and holding and disposition costs

Specific allowances are provided for individual loans where ultimate collection is considered questionable by management after reviewing the current status of loans that are contractually past due as well as considering the net realizable value of the security and of the loan guarantees, if applicable.  The following table is an analysis of changes in allowance for loan losses:

	Three Months Ended March 31, 2004			Three Months Ended March 31, 2003
Balance at beginning of period	$	949,516		$	824,985
Loans charged-off	(150,801		)	(122,214		)
Recoveries	868			52,313
Net loans charged-off	(149,933		)	(69,901		)
Provision for loan losses charged to operations	213,000			142,000
Balance at end of period	$	1,012,583		$	897,084

An analysis of the changes of loans to directors, executive officers, and major stockholders is as follows:

	Three Months Ended March 31, 2004			Year Ended December 31, 2003
Balance at beginning of period	$	1,449,117		$	1,523,636
Loans originated	—			873,700
Loan principal payments and other reductions	(9,101		)	(948,219		)
Balance at end of period	$	1,440,016		$	1,449,117

12

NOTE 6NON-PERFORMING ASSETS

The composition of the Bank’s portfolio of non-performing assets is shown in the following table:

	March 31, 2004			December 31, 2003
Non-accruing loans*	$	524,013		$	1,054,289
Past due 90 days or more and still accruing	—			—
Troubled debt restructured	—			—
Other real estate	410,114			565,159
	$	934,127		$	1,619,448
Ratio of non-performing assets to total assets	0.46		%	0.79		%

*  Primarily loans which are past due for 90 days or more

NOTE 7EARNINGS PER SHARE

Basic earnings per common share has been computed by dividing net income for the period by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share has been computed by dividing net income for the period by the weighted average number of common shares outstanding during the period adjusted for the assumed exercise of outstanding stock options and other contingently issuable shares of common stock.  Net income for basic and diluted earnings per share are the same, as there are no contingently issuable shares of stock whose issuance would have impacted net income.

A reconciliation between basic and diluted weighted average common shares outstanding follows:

	Three Months Ended March 31,
	2004	2003
Weighted average common Shares – Basic	1,247,587	1,294,204
Plus effect of dilutive securities:
Stock Options	78,988	33,968
Shares held as Treasury Stock	66,700	48,672
Weighted average common Shares - Assuming Dilution	1,393,275	1,376,844

13

NOTE 8OFF-BALANCE SHEET ARRANGEMENTS

The Bank may be a party to financial instruments with off-statement of financial condition risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuation in interest rates.  These financial instruments include commitments to extend credit (including credit cards), standby letters of credit, and financial guarantees.  These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition.  The contract or notional amounts of these instruments reflect the extent of involvement the Bank has in particular classes of financial instruments.  The Bank uses the same credit policies in making commitments and conditional obligations as it does for the consolidated statements of financial condition instruments.

The following table details the amounts and expected maturities of significant commitments as of March 31, 2004.

	Payments Due In
	One Year or Less		One to Three Years		Three to Five Years		Over Five Years		Total
			(Dollars in Thousands)
Commitments to extend credit:
Residential real estate loans	$	3,318	$	—	$	—	$	—	$	3,318
Lines of credit	11,705		—		—		—		11,705
Credit cards	2,371		—		—		—		2,371
Letters of credit	80		—		—		—		80
Commitments to sell mortgage loans	5,863		—		—		—		5,863

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Some of the commitments are expected to expire without being drawn upon.  The total commitment amounts do not necessarily represent future cash requirements.  The Bank evaluates each customer’s creditworthiness on a case-by-case basis.  The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customers.

Standby letters of credit and financial guarantees written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.  The Bank holds collateral and personal guarantees as deemed necessary.

At March 31, 2004, the Bank had no open interest rate swaps, futures, options, or forward contracts.

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NOTE 9SUBSEQUENT EVENT

The Bank announced on January 30, 2004, that it had reached a definitive agreement with Matrix Capital Bank, a wholly owned subsidiary of Matrix BanCorp, Inc., to acquire two branches of Matrix Capital Bank located in Las Cruces, New Mexico.  The acquisition was subject to regulatory approval and was approved April 7, 2004, the acquisition is expected to be completed on May 1, 2004.  As of January 30, 2004, deposits of the two Las Cruces branches to be acquired totaled about $80 million and loans that would be transferred totaled about $23 million.  The new branches will operate under the name AccessBank.

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Item 2 – Management’s Discussion and Analysis or Plan of Operation

The following discussion should be read in conjunction with Access Anytime Bancorp, Inc.’s (“the Company”) 2003 Annual Report on Form 10-KSB.

General

The Company is a Delaware corporation which was organized in 1996 for the purpose of becoming the thrift holding company of FirstBank (the “Bank”).  The Bank is a federally chartered stock savings bank conducting business from eight banking locations in Albuquerque, Clovis, Gallup, and Portales, New Mexico.  The Bank has a wholly owned subsidiary, FEDCO, which is currently inactive.

The Bank is principally engaged in the business of attracting retail and commercial deposits from the general public and investing those funds in first mortgage loans in owner occupied, single-family residential loans, residential construction loans and commercial real estate loans.  In addition, the Bank originates consumer loans, including loans for the purchase of automobiles and home improvement loans, and commercial business loans including Small Business Administration loans.

The most significant outside factors influencing the operations of the Bank and other financial institutions include general economic conditions, competition in the local market place and the related monetaryand fiscal policies of agencies that regulate financial institutions.  More specifically, the cost of funds, primarily consisting of deposits, is influenced by interest rates on competing investments and general market rates of interest.  Lending activities are influenced by the demand for real estate financing and other types of loans, which in turn is affected by the interest rates at which such loans may be offered and other factors affecting loan demand and funds availability.  The Company considers the state of New Mexico as its primary trade area.  Federal government outlays in research and development, defense, and agriculture represent a significant portion of the New Mexico economy.

The Bank announced on January 30, 2004, that it had reached a definitive agreement with Matrix Capital Bank, a wholly owned subsidiary of Matrix BanCorp, Inc., to acquire two branches of Matrix Capital Bank located in Las Cruces, New Mexico.  The acquisition was subject to regulatory approval and was approved April 7, 2004, the acquisition is expected to be completed on May 1, 2004.  As of January 30, 2004, deposits of the two Las Cruces branches to be acquired totaled about $80 million and loans that would be transferred totaled about $23 million.  The new branches will operate under the name AccessBank.

Financial Condition

Total assets for the Company decreased by $752,314 or 0.37%, from December 31, 2003 to March 31, 2004.  The decrease in assets was primarily due to a decrease of approximately $4.5 million in cash and cash equivalents and $1.0 million in securities held-to-maturity.  In addition, loans receivable increased by $3.8 million and loans held-for-sale were up by $1.5 million.

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Total liabilities decreased by $979,759 or 0.52% during the three-month period ended March 31, 2004.  A decrease of approximately $2.5 million in Federal Home Loan Bank advances was the primary reason for the decrease in total liabilities; the decrease in Federal Home Loan Bank advances was due to an increase in deposits of $1.8 million.

Capital Adequacy and Liquidity

Capital Adequacy - Under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) and the implementation of Office of Thrift Supervision (“OTS”) regulations on December 7, 1989, the Bank must have:  (1) Tier 1 or core capital equal to 3% of adjusted total assets and (2) total capital equal to 8.0% of risk-weighted assets, which includes off-balance sheet items.

Under the Federal Deposit Insurance Corporation Improvement Act (“FDICIA”), to be deemed “well capitalized” the minimum ratios the Bank must have are: (1) Tier 1 or core capital of 5% of adjusted total assets, (2) Tier 1 risk-based capital of 6% of risk-weighted assets, and (3) total risk-based capital of 10% of risk weighted assets.

The following table is a reconciliation of the Bank’s capital for regulatory purposes at March 31, 2004, as reported to the OTS.

	Tier 1- Core Capital			Tier 1- Risk-based Capital			Total Risk-based Capital
Total regulatory assets	$	203,190,094
Net unrealized appreciation on available-for-sale securities, net	(67,227		)
Less intangible assets disallowed for regulatory purposes	(1,541,569		)
Adjusted regulatory total assets	$	201,581,298
Risk-based assets				$	141,790,000		$	141,790,000
Stockholder’s equity	$	22,078,666		$	22,078,666		$	22,078,666
Net unrealized appreciation on available-for-sale securities, net	(40,336		)	(40,336		)	(40,336		)
General valuation allowance	—			—			894,748
Less intangible assets disallowed for regulatory purposes	(1,541,569		)	(1,541,569		)	(1,541,569		)
Regulatory capital	20,496,761			20,496,761			21,391,509
Regulatory capital required to be “well capitalized”	10,079,065			8,507,400			14,179,000
Excess regulatory capital	$	10,417,696		$	11,989,361		$	7,212,509
Bank’s capital to adjusted regulatory assets	10.17		%
Bank’s capital to risk-based assets				14.46		%	15.09		%

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Liquidity

Liquidity enables the Bank to meet withdrawals of its deposits and the needs of its loan customers.  The Bank maintains its liquidity position through maintenance of cash resources and a core deposit base.  A further source is the Bank’s ability to borrow funds.  The Bank is a member of the Federal Home Loan Bank (“FHLB”) which provides a source of borrowings to the Bank for asset and asset/liability matching.  FHLB borrowings were $14.5 and $17.1 million at March 31, 2004 and December 31, 2003, respectively.

Liquidity risk results from the mismatching of assets and liabilities cash flows.  Management chooses asset/liability strategies that promote stable earnings and reliable funding.  Interest rate risk and funding positions are kept within limits established by the Board of Directors of the Bank to ensure that risk taking is not excessive and that liquidity is properly managed.  The Bank keeps a portion of its interest-bearing assets in adjustable-rate products to reduce interest rate sensitivity.  Therefore, if rates increase the Bank can retain its deposits by increasing rates paid on deposits, while limiting the impact on the Bank’s net interest margin.  A concentrated effort is made to retain deposits associated with an unidentifiable intangible asset.  The primary additional source of funding is provided by FHLB borrowings available to the Bank, of $71.0 and $52.0 million at March 31, 2004 and December 31, 2003, respectively.

At March 31, 2004 and 2003, the Company had lines of credit totaling $400,000 each year from other banks. The Company had no borrowings outstanding under these arrangements at March 31, 2004 and March 31, 2003.  The lines of credit bear market rates of interest and borrowings thereunder are to be used for general purposes.

Results of Operations

Three-Month Comparative Analysis for Periods March 31, 2004 and 2003

Net income for the quarter ended March 31, 2004 was $180,870 or $.14 per basic share compared to $267,221 or $.21 per basic share for the three-months ended March 31, 2003, a decrease of $86,351 or 32.31%.

Net Interest Income.  Net interest income before provision for loan losses increased by 3.13% to $1,821,565 for the quarter ended March 31, 2004, compared to $1,766,258 for the same period in 2003.  The increase in net interest income before provision for loan losses was primarily due to a decrease in interest expense of $104,392.  The decrease in total interest expense for the quarter ended March 31, 2004 was due to a decrease in interest expense on deposits of $117,088, as compared to the same quarter in 2003.

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Provision for Loan Losses.  The level of the allowance for loan losses is based on such factors as the amount of non-performing assets, historical loss experience, general economic conditions, the estimated fair value of the underlying collateral, and other factors which may affect the collectibility of loans.  During the first quarter of 2004, the provision for loan losses increased to $213,000 from $142,000 in the same quarter of 2003.  Provisions made in 2004 increased the related allowance by $63,067, due to generally increasing loans receivable.  Based on management’s analysis of current conditions and changes in the loan mix, as indicated by increases in commercial real estate, automobile, and credit card loans, the allowance is considered adequate.  Although management believes it uses the best information available to make such determinations, future adjustments to the allowance may be necessary, and net income could be significantly affected, if circumstances differ substantially from the assumptions used in making initial determinations.  See Note 5 to the Consolidated Financial Statements in this Form 10-QSB for additional discussion on the allowance for loan losses.

Noninterest Income.  During the quarter ended March 31, 2004, noninterest income decreased by $154,597 to $631,694 compared to $786,291 in 2003.  The decrease in noninterest income for the quarter ended March 31, 2004 as compared to the same quarter in 2003 was primarily due to a decrease in gains on sales of mortgage loans held-for-sale of $173,524.  The gains on sales of mortgage loans held-for-sale for the 2004 quarter were $224,614; gains on sales of mortgage loans in 2004 are expected to continue to be lower, as compared to 2003.

Noninterest Expense.  Noninterest expense decreased to $1,864,455 from $1,938,481 for the quarter ended March 31, 2004 compared to the same quarter in 2003.  The $74,026 decrease in noninterest expense was primarily due to a decrease in sales incentives as shown in salaries and employee benefits of $92,561.  The decrease in salaries and employee benefits is primarily due to the decrease in sales incentives based on loan production in the first quarter of 2004, as compared to 2003.

Income Tax Expense.  The income tax expense for the quarter ended March 31, 2004 decreased by $9,913 to $194,934 from $204,847 in the quarter ended March 31, 2003.  The decrease in income tax expense is primarily due to a decrease in income before income taxes of $96,264 for the quarter ended March 31, 2004 as compared to the same quarter in 2003.

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Net Interest Income

The Company’s operating results are impacted by many factors, the most important factor being the interest spread between the yield on loans and investments and the cost of funds.  The following table presents operating results for the Company.  The table presents for the periods indicated the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates.  No tax equivalent adjustments were made and all average balances are monthly average balances.  Non-accruing loans have been included in the table as loans carrying a zero yield.

	Quarter ended March 31,
	2004							2003
	Average outstanding balance		Interest earned/ Paid			Yield/ Rate		Average outstanding balance		Interest earned/ Paid			Yield/ Rate
Interest-earning assets:
Loans receivable (1)	$	161,763,717	$	2,593,157		6.41	%	$	159,369,585	$	2,702,157		6.78	%
Mortgage-backed securities	7,294,080		69,461			3.81		5,907,254		75,910			5.14
Investment securities	15,994,590		127,765			3.20		3,028,342		39,277			5.19
Other interest-earning assets	10,704,891		45,269			1.69		16,404,681		67,393			1.64
Total interest-earning assets (1)	$	195,757,278	$	2,835,652		5.79	%	$	184,709,862	$	2,884,737		6.25	%
Interest-bearing liabilities:
Deposits	$	165,282,240	$	748,926		1.81	%	$	156,857,502	$	866,014		2.21	%
Federal Home Loan Bank advances	15,655,587		101,761			2.60		13,283,211		92,736			2.79
Other borrowings	8,000,000		163,400			8.17		8,000,000		159,729			7.99
Total interest-bearing liabilities	$	188,937,827	$	1,014,087		2.15	%	$	178,140,713	$	1,118,479		2.51	%
Net interest income before provision for loan losses			$	1,821,565						$	1,766,258
Net interest rate spread						3.64	%						3.74	%
Net interest-earning assets	$	6,819,451						$	6,569,149
Net yield on average interest-earning assets						3.72	%						3.82	%
Average interest-earning assets to average interest-bearing liabilities			103.61		%					103.69		%

(1) Calculated net of loans in process

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Item 3 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report.  The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in its periodic Securities and Exchange Commission (“SEC”) filings is recorded, processed and reported within the time periods specified in the SEC’s rules and forms.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.  There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Forward-Looking Statements

When used in this Form 10-QSB, certain words or phrases are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are subject to certain risks and uncertainties, including changes in economic conditions, including changes in governmental outlays in the Company’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company’s market area and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected.  The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

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PART II - OTHER INFORMATION

Item 1 – Legal Proceedings

None

Item 2 – Changes in Securities and Small Business Issuer Purchases of Equity Securities

None

Item 3 – Defaults Upon Senior Securities

None

Item 4 – Submission of Matters to a Vote of Security Holders

None

Item 5 – Other Information

None

Item 6 – Exhibits and Reports on Form 8-K

(a)Exhibit

2.2 Branch Purchase and Deposit Assumption Agreement dated January 30, 2004 between Matrix Capital Bank, a federal savings bank, and FirstBank, a federal savings bank

10.3.6 Amendment Number Six to Profit Sharing and Employee Stock Ownership Plan of FirstBank

31.1 Certification of Chief Executive Officer as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

22

Item 6 – Exhibits and Reports on Form 8-K (continued)

(b)Reports on Form 8-K.

1.  On January 30, 2004 the Company filed a Form 8-K to announce that the Bank reached an agreement to acquire two Matrix Capital Banks branches in Las Cruces, New Mexico.

2.  On January 30, 2004 the Company furnished a Form 8-K to announce its unaudited results of operations for the twelve months ended December 31, 2003.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ACCESS ANYTIME BANCORP, INC.
Date:  April 30, 2004	/s/ Norman R. Corzine
		Norman R. Corzine, Chairman of the Board,
		Chief Executive Officer
		(Duly Authorized Representative)
Date:  April 30, 2004	/s/ Ken Huey, Jr.
		Ken Huey, Jr., Chief Financial Officer
		Director
		(Principal Financial and Accounting Officer)
		(Duly Authorized Representative)
Date:  April 30, 2004	/s/ Don K. Padgett
		Don K. Padgett, President
		Director
		(Duly Authorized Representative)

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