Americasbank (AMAB) 10QSB 2005 Q2 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005.

Commission file number: 000-22925

AmericasBank Corp.

(Exact name of small business issuer as specified in its charter)

Maryland	52-2090433
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

500 York Road, Towson, Maryland 21204

Address of principal executive offices

(410) 823-0500

Issuer’s telephone number

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  x    No  ¨

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

At August 10, 2005, the issuer had 3,766,810 shares of Common Stock outstanding.

Transitional Small Business Disclosure Format (Check one):    Yes  ¨    No  x

AmericasBank Corp. and Subsidiary

Consolidated Balance Sheets

	June 30, 2005			December 31, 2004 (1)
	(Unaudited)
Assets
Cash and due from banks	$	2,527,005		$	866,960
Federal funds sold and Federal Home Loan Bank deposit		16,786,693			4,356,587
Securities available for sale		30,000			348,182
Federal Home Loan Bank and Federal Reserve Bank stock at cost		238,500			132,550
Loans held for sale		1,857,454			1,617,048
Loans and leases, less allowance of$335,067 and $315,127		39,087,278			31,245,162
Premises and equipment		935,253			963,560
Accrued interest receivable		163,314			140,898
Goodwill		266,985			266,985
Intangible assets		26,222			28,222
Other assets		111,964			165,945
	$	62,030,668		$	40,132,099
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	10,083,031		$	2,226,222
Interest-bearing		46,691,837			32,344,071
Total deposits		56,774,868			34,570,293
Other liabilities		100,288			166,002
		56,875,156			34,736,295
Stockholders’ equity
Common stock, par value $.01 per share; 30,000,000 shares authorized, issued and outstanding3,766,810 and 3,766,810 shares		37,668			37,668
Additional paid-in capital		11,502,385			11,420,940
Accumulated deficit		(6,384,541	)		(6,080,564	)
Accumulated other comprehensive income		—			17,760
		5,155,512			5,395,804
	$	62,030,668		$	40,132,099

(1) The December 31, 2004 balance sheet has been restated for retroactive adoption of the fair value recognition provisions of SFAS 123, “Accounting for Stock Based Compensation,” as amended, as discussed in Note 2.

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

2

AmericasBank Corp. and Subsidiary

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2005			June 30, 2004 (1)			June 30, 2005			June 30, 2004 (1)
Interest revenue
Loans and leases, including fees	$	656,803		$	307,886		$	1,257,362		$	605,770
Federal funds sold and Federal Home Loan Bank deposit		107,562			29,304			152,737			50,794
Preferred trust securities		—			7,500			7,417			15,000
Mortgage-backed securities		—			24			—			137
Other		3,143			2,179			5,936			4,904
Total interest revenue		767,508			346,893			1,423,452			676,605
Interest expense
Deposits		380,763			169,705			664,922			342,024
Net interest income		386,745			177,188			758,530			334,581
Provision for loan and lease losses		20,000			7,500			20,000			12,500
Net interest income after provision for loan and lease losses		366,745			169,688			738,530			322,081
Noninterest revenue
Service charges on deposit accounts and other fees		19,621			13,003			32,269			23,720
Mortgage banking gains and fees		107,125			41,181			226,423			64,794
Total noninterest revenue		126,746			54,184			258,692			88,514
Noninterest expenses
Salaries		264,263			280,678			551,819			603,164
Employee benefits		84,348			62,141			164,854			118,631
Occupancy		43,904			32,448			90,270			64,184
Furniture and equipment		29,722			23,810			60,223			45,139
Other		222,724			187,596			434,033			347,121
Total noninterest expenses		644,961			586,673			1,301,199			1,178,239
Loss before income taxes		(151,470	)		(362,801	)		(303,977	)		(767,644	)
Income taxes		—			—			—			—
Net loss	$	(151,470	)	$	(362,801	)	$	(303,977	)	$	(767,644	)
Loss per common share - basic and diluted	$	(0.04	)	$	(0.10	)	$	(0.08	)	$	(0.30	)

(1) Results for the three and six months ended June 30, 2004, have been restated for retroactive adoption of the fair value recognition provisions of SFAS 123, “Accounting for Stock Based Compensation,” as amended, as discussed in Note 2

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

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AmericasBank Corp. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

	Common stock			Additional paid-in capital		Accumulated deficit			Accumulated other comprehensive income			Comprehensive income
	Shares	Par value
Balance, December 31, 2003	791,060	$	7,911	$	6,005,696	$	(4,498,676	)	$	17,706
Retroactive restatement for stock-based compensation (see note 2)	—		—		48,553		(48,553	)		—
Balance, December 31, 2003, as restated	791,060		7,911		6,054,249		(4,547,229	)		17,706
Net loss	—		—		—		(767,644	)		—		$	(767,644	)
Unrealized loss on investment securities available for sale, net	—		—		—		—			27			27
Comprehensive income												$	(767,617	)
Stock-based compensation expense	—		—		83,565		—			—
Common stock issued, net	2,875,000		28,750		4,998,426		—			—
Balance, June 30, 2004	3,666,060	$	36,661	$	11,136,240	$	(5,314,873	)	$	17,733
Balance, December 31, 2004	3,766,810	$	37,668	$	11,134,030	$	(5,793,654	)	$	17,760
Retroactive restatement for stock-based compensation (see note 2)	—		—		286,910		(286,910	)		—
Balance, December 31, 2004, as restated	3,766,810		37,668		11,420,940		(6,080,564	)		17,760
Net loss	—		—		—		(303,977	)		—		$	(303,977	)
Unrealized gain on investment securities available for sale, net	—		—		—		—			(17,760	)		(17,760	)
Comprehensive income												$	(321,737	)
Stock-based compensation expense	—		—		81,445		—			—
Balance, June 30, 2005	3,766,810	$	37,668	$	11,502,385	$	(6,384,541	)	$	—

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

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AmericasBank Corp. and Subsidiary

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30, 2005			June 30, 2004 (1)
Cash flows from operating activities
Interest received	$	1,343,988		$	700,656
Fees and commissions received		32,269			19,716
Interest paid		(643,294	)		(342,030	)
Proceeds from sales of loans held for sale		12,923,388			8,864,718
Originations of loans held for sale		(12,937,371	)		(7,721,859	)
Cash paid to suppliers and employees		(1,184,869	)		(1,080,766	)
		(465,889	)		440,435
Cash flows from investing activities
Proceeds from maturity and call of investment securities Available for sale		300,422			15,400
Purchase of Federal Home Loan Bank and Federal Reserve Bank stock		(105,950	)		—
Redemption of Federal Reserve Bank stock		—			19,400
Loans and leases made, net of principal collected		(7,805,068	)		(2,786,866	)
Proceeds from sale of foreclosed real estate					23,453
Purchase of premises and equipment		(37,939	)		(49,460	)
		(7,648,535	)		(2,778,073	)
Cash flows from financing activities
Net increase (decrease) in time deposits		10,172,587			(895,700	)
Net increase (decrease) in other deposits		12,031,988			(402,400	)
Proceeds from issuance of common stock		—			5,027,091
		22,204,575			3,728,991
Net increase in cash and cash equivalents		14,090,151			1,391,353
Cash and cash equivalents at beginning of year		5,223,547			8,738,746
Cash and cash equivalents at end of year	$	19,313,698		$	10,130,099

(1) The Statement of Cash Flows for six months ended June 30, 2004, has been restated for retroactive adoption of the fair value recognition provisions of SFAS 123, “Accounting for Stock Based Compensation,” as amended, as discussed in Note 2.

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

5

AmericasBank Corp. and Subsidiary

Consolidated Statements of Cash Flows

(Unaudited) (Continued)

	Six Months Ended
	June 30, 2005			June 30, 2004 (1)
Reconciliation of net loss to net cash provided by operating activities
Net loss	$	(303,977	)	$	(767,644	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		85,407			69,870
Provision for loan and lease losses		20,000			12,500
Amortization of security premiums		—			134
Stock-based compensation		81,445			83,565
Gain on sale of foreclosed real estate					(4,004	)
Amortization of loan premium and other intangible assets		2,000			1,667
Increase (decrease) in
Deferred loan fees and costs, net		(57,048	)		34,229
Accrued interest payable		21,628			(6	)
Other liabilities		(87,342	)		18,122
Decrease (increase) in
Loans held for sale		(240,406	)		965,941
Accrued interest receivable		(22,416	)		(11,979	)
Other assets		34,820			38,040
	$	(465,889	)	$	440,435

(1) The Statement of Cash Flows for six months ended June 30, 2004, has been restated for retroactive adoption of the fair value recognition provisions of SFAS 123, “Accounting for Stock Based Compensation,” as amended, as discussed in Note 2.

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

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AMERICASBANK CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying consolidated financial statements include the activity of AmericasBank Corp. and its wholly owned subsidiary, AmericasBank. All significant intercompany transactions and balances have been eliminated in consolidation.

The foregoing consolidated financial statements are unaudited; however, in the opinion of management, all adjustments (comprising only normal recurring accruals) necessary for a fair presentation of the results of the interim period have been included. These statements should be read in conjunction with the financial statements and accompanying notes included in AmericasBank Corp.’s 2004 Annual Report on Form 10-KSB. There have been no significant changes to the Company’s Accounting Policies as disclosed in the 2004 Annual Report. The results shown in this interim report are not necessarily indicative of results to be expected for the full year 2005.

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America.

Reclassifications

Certain reclassifications have been made to amounts previously reported to conform to the current presentation. These reclassifications had no effect on previously reported results of operations or retained earnings except as noted below.

Beginning in July 2004, we established a cost basis for originating or acquiring loans and leases and deferred these costs in accordance with Statement of Financial Accounting Standards No. 91,Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.

We changed our accounting method for expensing commissions paid to loan originators on loans originated and held for sale. Previously, commissions paid to loan originators were recorded as salary expense. We now record these commissions as a reduction to mortgage banking gains and fees. All periods presented in this quarterly report were adjusted to show the effect of this accounting change.

2. STOCK-BASED COMPENSATION

Effective January 1, 2005, AmericasBank Corp. began recognizing expense for stock-based compensation using the fair value based method of accounting described in Statement of Financial Accounting Standards (“SFAS”) No. 123,Accounting for Stock-Based Compensation, as amended. As a result, salaries and employee benefits expense for the three and six months ended June 30, 2005 included $40,722 and $81,445, respectively, of stock-based compensation. We have chosen the retroactive restatement method described in SFAS No. 148,Accounting for Stock-Based Compensation — Transition and Disclosure, which amended SFAS No. 123. As a result, financial information for all prior periods presented have been restated to reflect the salaries and employee benefits expense that would have been recognized had the recognition provisions of SFAS No. 123 been applied to all awards granted to employees. The use of the retroactive restatement method resulted in the restatement of previously reported balances of additional paid-in capital and accumulated deficit. As of December 31, 2004, previously reported additional paid-in capital was increased by $286,910 and accumulated deficit was increased by the same amount. As of December 31, 2003, previously reported additional paid-in capital was increased by $48,553, and accumulated deficit was increased by the same amount.

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As a result of using the retroactive restatement method, salaries expense for the three and six months ended June 30, 2004, increased from the amount previously reported by $41,782 and $83,565, respectively. The impact of our decision to recognize expense for stock-based compensation on our previously reported net loss, basic loss per common share and diluted loss per common share is as follows:

	Three Months Ended June 30, 2004			Six Months Ended June 30, 2004
Net loss, as reported	$	(321,019	)	$	(684,079	)
Add: Stock-based compensation expense included in reported net income		—			—
Deduct: Total stock-based compensation expense determined under fair value for all awards		(41,782	)		(83,565	)
Net loss, as restated	$	(362,801	)	$	(767,644	)
Loss per common share - basic and diluted
As reported	$	(0.09	)	$	(0.27	)
As restated	$	(0.10	)	$	(0.30	)

3. REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. The Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios.

4. LOSS PER SHARE

Loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the period. The Company’s common stock equivalents were not considered in the computation of diluted earnings per share because the result would have been anti-dilutive. The weighted average common shares outstanding were 3,766,810 for the three and six months ended June 30, 2005, and 3,666,060 and 2,560,291 for the three and six months ended June 30, 2004, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Some of the matters discussed below include forward-looking statements. Forward-looking statements often use words such as “believe,” “expect,” “plan,” “may,” “will,” “should,” “project,” “contemplate,” “anticipate,” “forecast,” “intend” or other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. Our actual results and the actual outcome of our expectations and strategies could be different from those anticipated or estimated for the reasons discussed below and the reasons under the heading “Information Regarding Forward Looking Statements.”

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Because AmericasBank Corp. has no material operations and conducts no business on its own other than owning its subsidiary, AmericasBank, this discussion primarily concerns the business of AmericasBank. However, for ease of reading and because our financial statements are presented on a consolidated basis, unless the context requires otherwise, references to “we” or “our” refers to both AmericasBank Corp. and AmericasBank.

General

AmericasBank Corp. was incorporated as a Maryland corporation on June 4, 1996, to become a one-bank holding company by acquiring all of the capital stock of AmericasBank, a federal stock savings bank, upon its formation. AmericasBank commenced operations on December 1, 1997. On March 20, 1999, AmericasBank converted from a federal stock savings bank to a Maryland chartered trust company exercising the powers of a commercial bank.

AmericasBank has incurred losses in every year since its inception. AmericasBank Corp. and AmericasBank are operating under a Written Agreement with the Federal Reserve Bank of Richmond and the Maryland Division of Financial Regulation (the “Written Agreement”).

Overview

Our annual meeting of stockholders was held on June 16, 2005, and Mark H. Anders, Mark D. Noar, M.D., and A. Gary Rever were elected for three-year terms expiring at the 2008 annual meeting. On April 5, 2005, we received notice from J. Clarence Jameson, III, asking not to be re-nominated for another three year term when his current term expired at the 2005 annual meeting of stockholders, thereby reducing the total number of directors to ten for both AmericasBank Corp. and AmericasBank. We will continue to seek to expand our boards by pursuing individuals whose experience and talents complement those of our current directors. At our annual meeting, the stockholders also approved an increase in our authorized number of common shares from 10,000,000 to 30,000,000.

We reduced the net loss for the three months ended June 30, 2005, to $151,470, which was $211,331 less than the $362,801 loss for the three months ended June 30, 2004. The net loss for the six months ended June 30, 2005 was $303,977, which was $463,667 less than the $767,644 loss for the six months ended June 30, 2004. The net loss in each reported period included a charge to salary expense for stock-based compensation as we voluntarily adopted SFAS No. 123,Accounting for Stock-Based Compensation, as amended (see Note 2 to the Notes to Financial Statements).

We continue to look for opportunities to add to our mortgage loan origination team and expect to add additional loan originators in the second half of 2005. We added one loan originator in the second quarter of 2005, and hired another originator in July bringing our total loan origination team to six. The combined efforts of this sales team resulted in an increase in mortgage banking fees and gains of $65,944 or 160.1% from $41,181 for the three months ended June 30, 2004, to $107,125 for the three months ended June 30, 2005. In the first half of 2005, these fees increased $161,629 or 249.5% from $64,794 for the six months ended June 30, 2004, to $226,423 for the six months ended June 30, 2005. We originated and sold loans as a correspondent lender and as a broker. This team also provided numerous loan opportunities for us to consider that resulted in our extending credit to borrowers for portfolio loans.

As anticipated, our noninterest expenses increased in 2005 compared to 2004. Noninterest expenses increased $58,288 or 9.9% from $586,673 for the three months ended June 30, 2004, to $644,961 for the three months ended June 30, 2005, and increased $122,960 or 10.4% from $1,178,239 for the six months ended June 30, 2004, to $1,301,199 for the six months ended June 30, 2005. We believe that we have substantially implemented the operational infrastructure necessary to support our growth. We anticipate that we will need to add additional staff incrementally to support future growth which will result in further increases in noninterest expenses.

We continue to work on resolving the regulatory issues raised in the Written Agreement. Our primary challenge is to demonstrate that our business plan can continue to produce the balance sheet growth and operating margins to achieve profitability. Remedying all outstanding deficiencies and having the Written Agreement terminated are important to our future success because the Written Agreement imposes restrictions on our operations. We continue to work closely with Federal Reserve Bank of Richmond and the Maryland Division of Financial Regulation to remedy all outstanding deficiencies.

Summary of Recent Performance

We incurred a net loss of $151,470 or $(0.04) per basic and diluted common share for the three months ended June 30, 2005, a decrease of $211,331 compared to our net loss of $362,801 or $(0.10) per basic and diluted common

9

share for the three months ended June 30, 2004. Our net loss for the six months ended June 30, 2005 was $303,977 or $(0.08) per basic and diluted common share, a decrease of $463,667 compared to our net loss of $767,644 or $(0.30) per basic and diluted common share for the six months ended June 30, 2004.

Total assets increased by $21,898,569 or 54.6%, to $62,030,668 at June 30, 2005, compared to $40,132,099 at December 31, 2004.

Loans and leases, net of allowance, at June 30, 2005 were $39,087,278, or 25.1% above the $31,245,162 reported at December 31, 2004. The majority of this growth was in our commercial and residential real estate products.

The allowance for loan losses was $335,067 or 0.85% of loans at June 30, 2005, compared to $315,127 or 0.99% of loans at December 31, 2004. Our non-performing assets were $622,761 or 1.58% of loans at June 30, 2005, compared to $175,742 or 0.55% of loans at December 31, 2004. The substantial increase in nonaccrual loans was related to one loan in which we held an approximately 10% participation. Our loan balance to this borrower was $587,761 at June 30, 2005.

This non-performing loan is to a land developer for the purchase and development of raw land that was under contract for sale as developed lots to a national homebuilder. The project ran into delays during the permitting process related primarily to storm water management. As a result of the delays, the interest reserve was exhausted, causing the loan to go into interest payment default. The borrower has been in prolonged negotiations with a national homebuilder to sell the land undeveloped, at record plat, for a price considerably higher than the balance on the bank debt. The lead bank and the participants are in agreement that this process has taken too long, and are contemplating taking collection action against the borrower. We continue to believe that the project is viable and that the land value provides adequate collateral protection. Ultimately, we believe we will receive all interest and principal on this loan, although there can be no assurance that that will be the case.

Total deposits were $56,774,868 at June 30, 2005, which represents a $22,204,575 or 64.2% increase from $34,570,293 of total deposits at December 31, 2004. The growth in deposits is the result of offering premium rate certificates of deposit through an Internet-based service and through print advertising in local newspapers. In addition, our non interest bearing checking accounts increased $7,856,809 or 352.9% from $2,226,222 at December 31, 2004, to $10,083,031 at June 30, 2005 reflecting our efforts to reduce our reliance on certificates of deposit as a funding source.

Our net interest margin was 3.31% for the six months ended June 30, 2005, compared to 2.47% for the six months ended June 30, 2004. This increase in our net interest margin is due primarily to the 110.5% increase in average loans in the first half of 2005 compared to the first half of 2004. Market interest rates increased between the comparable six month periods ended June 30, 2005 and June 30, 2004, resulting in an increase in our yield on our interest earning assets from 5.00% for the first six months of 2004 to 6.21% for the first six months of 2005. Correspondingly, our rate on interest bearing deposits increased to 3.43% in the six months ended June 30, 2005, from 3.02% for the six months ended June 30, 2004. Also contributing to the higher costs of interest bearing deposits was our successful marketing of higher cost certificates of deposit that represented nearly half of the growth in deposits.

Subsequent Event

On August 1, 2005, the board of directors authorized a one for four (1:4) reverse stock split of outstanding common shares, options and warrants held by stockholders of record on August 22, 2005.

Upon the effective date of the reverse split, which will be 12:01 a.m. on August 23, 2005, four shares of common stock shall be converted into one share of common stock (or each one share of common stock shall be converted into 1/4 of one share of common stock), with a proportionate increase in the par value of the common stock but without any change in the aggregate stated capital of the Company (i.e., par value * number of shares outstanding) except as a result of the elimination of fractional shares. AmericasBank Corp. will purchase for cash all fractional interests in the shares of common stock after giving effect to the reverse stock split for the fair market value thereof as determined by AmericasBank Corp.

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Results of Operations

Net Interest Income

Net interest income is the difference between interest revenue on assets and the cost of funds supporting those assets. Earning assets are comprised primarily of loans, investments and federal funds sold; interest-bearing deposits make up the cost of funds. Noninterest bearing deposits and capital are also funding sources. Changes in the volume and mix of earning assets and funding sources along with changes in associated interest rates determine changes in net interest income.

Net interest income for the three and six months ended June 30, 2005, increased 118.3% and 126.7%, respectively, to $386,745 from $177,188 for the three months ended June 30, 2004, and to $758,530 from $334,581 for the six months ended June 30, 2004.

Total interest revenue increased for the three months and six months ended June 30, 2005, from $346,893 for the three months ended June 30, 2004, to $767,508 for the three months ended June 30, 2005, and from $676,605 for the six months ended June 30, 2004, to $1,423,452 for the six months ended June 30, 2005. The increases are primarily attributable to an increase in interest revenue from loans and leases and from federal funds sold. Interest revenue from loans and leases increased for the three and six months ended June 30, 2005 by $348,917 or 113.3% and $651,592 or 107.6%, respectively. Interest revenue from federal funds sold and Federal Home Loan Bank deposits increased for the three and six months ended June 30, 2005 by $78,258 or 267.1% and $101,943 or 200.7%, respectively.

Increases in average balances and market interest rates were the primary factors contributing to the significant increases in interest revenue between the comparable periods. Average loans increased by $19,495,960 or 118.7% for the three months ended June 30, 2005, to $35,917,343 from $16,421,383 for the three months ended June 30, 2004. Average loans increased by $17,719,042 or 110.5% for the six months ended June 30, 2005 to $33,754,305 from $16,035,263 for the six months ended June 30, 2004. The yield on loans increased from 7.09% for the six months ended June 30, 2004, to 7.22% for six months ended June 30, 2005. Average federal funds sold and Federal Home Loan Bank deposit increased by $1,026,723 or 10.6% for the six months ended June 30, 2005, to $10,682,063 from $9,655,340 for the six months ended June 30, 2004. The yield on these funds increased from 1.06% for the six months ended June 30, 2004, to 2.88% for six months ended June 30, 2005. The increase in yields on earning assets was due to an increase in market interest rates in response to actions by the Federal Reserve to increase the target for the federal funds rate from 1.00% as of March 31, 2004 to its current target rate of 3.25% as of June 30, 2005.

Interest expense increased by $211,058 or 124.4% for the three months ended June 30, 2005, to $380,763 from $169,705 for the three months ended June 30, 2004. Interest expense increased by $322,898 or 94.4% for the six months ended June 30, 2005, to $664,922 from $342,024 for the six months ended June 30, 2004. The increase in interest expense was due to our growth in average interest-bearing deposits and an increase in the rates paid on deposits as a result of the rise in market interest rates.

Average interest bearing deposits increased by $20,673,067 or 92.6% and $16,356,444 or 72.1% for the three and six months ended June 30, 2005, respectively. The rate on interest-bearing deposits increased from 3.02% for the six months ended June 30, 2004, to 3.43% for the six months ended June 30, 2005. The majority of the increase in average interest-bearing deposits was attributable to our growth in certificates of deposit and money market accounts resulting from our marketing efforts and the use of a web based service to offer certificates of deposit.

Average noninterest-bearing deposits increased by $3,790,216 or 179.0% for the three months ended June 30, 2005, to $5,907,660 from $2,117,444 for the three months ended June 30, 2004. Average noninterest-bearing deposits increased by $2,048,184 or 105.6% for the six months ended June 30, 2005 to $3,987,900 from $1,939,716 for the six months ended June 30, 2004. The increase in average noninterest-bearing deposits contributed to the increase in the net margin on earning assets from 2.47% for the six months ended June 30, 2004 to 3.31% for the six months ended June 30, 2005.

The following table illustrates average balances of total interest earning assets and total interest bearing liabilities for the periods indicated, showing the average distribution of assets, liabilities, stockholders’ equity and related revenue, expense and corresponding weighted average yields and rates. The average balances used in this table and other statistical data were calculated using average daily balances.

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Average Balances, Interest, and Yields/Rates

	Six Months Ended June 30,
	2005							2004
	Average balance			Interest		Yield/ Rate		Average balance			Interest		Yield/ Rate
Assets:
Federal Funds Sold and FHLB deposit	$	10,682,063		$	152,737	2.88	%	$	9,655,340		$	50,794	1.06	%
FHLB and FRB dividends		212,431			5,548	5.27	%		149,104			3,743	5.03	%
Investment Securities
Mortgage backed		70			—	0.00	%		10,284			137	2.67	%
Preferred trust		147,514			7,417	10.14	%		300,000			15,000	10.03	%
Equity security		30,000			388	2.61	%		30,000			1,161	7.76	%
Total investment securities		177,584			7,805	8.86	%		340,284			16,298	9.61	%
Loans held for sale		1,386,094			49,130	7.15	%		941,687			39,122	8.33	%
Loans and leases
Residential real estate		15,448,789			570,517	7.45	%		3,438,383			142,587	8.32	%
Construction and land development		4,212,670			124,154	5.94	%		896,511			21,779	4.87	%
Commercial, including real estate		7,120,391			283,800	8.04	%		6,003,662			211,341	7.06	%
Commercial finance leases		3,282,830			115,314	7.08	%		4,522,781			162,102	7.19	%
Home equity		3,318,912			101,540	6.17	%		919,007			19,584	4.27	%
Installment		370,713			12,907	7.02	%		254,919			9,255	7.28	%
Total loans and leases		33,754,305			1,208,232	7.22	%		16,035,263			566,648	7.09	%
Total interest earning assets		46,212,477			1,423,452	6.21	%		27,121,678			676,605	5.00	%
Allowance for loan and lease losses		(315,197	)						(295,744	)
Noninterest-bearing cash		1,090,221							1,007,232
Premises and equipment		952,745							855,715
Other assets		484,704							237,645
Total assets		48,424,950							28,926,526
Liabilities and Stockholders’ Equity
Interest-bearing Deposits
Savings		5,661,507			53,323	1.90	%		5,473,476			24,137	0.88	%
NOW, money market and escrow		3,150,571			42,817	2.74	%		1,173,419			6,102	1.04	%
Certificates of deposit		30,228,277			568,782	3.79	%		16,037,016			311,785	3.90	%
Total interest-bearing deposits		39,040,355			664,922	3.43	%		22,683,911			342,024	3.02	%
Noninterest-bearing deposits		3,987,900			—				1,939,716			—
		43,028,255			664,922	3.12	%		24,623,627			342,024	2.79	%
Other liabilities		153,260							179,534
Stockholders’ equity		5,243,435							4,123,365
Total Liabilities and Stockholders’ Equity	$	48,424,950						$	28,926,526
Net interest spread						3.09	%						2.21	%
Net interest income				$	758,530						$	334,581
Net margin on earning assets						3.31	%						2.47	%

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Provision for Loan and Lease Losses and Analysis of Allowance for Loan and Lease Losses

Lending involves a risk that our loans and leases may not be repaid in full and a credit loss will result. Credit losses occur in varying amounts according to, among other factors, the type of loans being made, the credit-worthiness of the borrowers over the term of the loans, the quality of the collateral for the loan, if any, as well as general economic conditions. We maintain a reserve account for credit losses called the allowance for loan and lease losses, and charge all probable credit losses against this account in accordance with regulatory guidance, industry standards, and generally accepted accounting principles. We charge a provision for loan and lease losses to earnings to maintain our allowance for loan and lease losses at a level that we consider to represent our best estimate of the losses known and inherent in the portfolio that are both probable and reasonable to estimate, based on, among other factors, prior loss experience, volume and type of lending conducted, industry standards, economic conditions (particularly as such conditions relate to AmericasBank’s market area), regulatory guidance, the financial condition of the borrower, historical payment performance and the collateral securing the loans and leases. Recoveries on loans previously charged off are added back to the allowance.

The provision for loan and lease losses was $20,000 for the three and six months ended June 30, 2005, compared to $7,500 and $12,500 for the three and six months ended June 30, 2004, respectively. The determination to provide a provision in the second quarter of 2005 was based on our risk assessment of the portfolio and the growth in loan and leases balances outstanding. During the first six months of 2005, we had nominal chargeoffs and no recoveries compared to no chargeoffs and $16,907 in recoveries for the first six months of 2004.

We have developed a methodology for evaluating the adequacy of the allowance for loan and lease losses that distinguishes between credits evaluated as a group by either loan or risk rating category and those evaluated individually. We have predetermined allowance percentages based on credit types and for each risk rating category. All loans and leases are assigned a risk rating when they are made. This risk rating is reassessed by management periodically using the various evaluation factors mentioned above. Loans and leases that exhibit an acceptable level of risk per our internal risk grading system are grouped by category and assigned a standard reserve percentage when assessing the adequacy of the allowance for loan and lease losses. Loans and leases that are adversely risk-rated, or exhibit characteristics that suggest we have a heightened risk of default, are evaluated separately from non-adversely risk rated credits. Each adversely risk rated credit is assigned a standard reserve based on its risk rating or a special reserve based on an assessment of the specific risk factors related to that credit, which may be greater or lesser than the standard reserve for that risk rating.

The predetermined percentages that we use are based on management’s judgment as to appropriate reserve percentages for various categories of loans, and adjusting those values based on the following: historical losses in each category, historical and current delinquency in each category, underwriting standards in each category, comparison of our losses and delinquencies to peer group performance and an assessment of the likely impact of economic and other external conditions on the performance of each category.

A test of the adequacy of the allowance for loan and lease losses is performed and reported to the Board of Directors on a monthly basis by our senior lending officer. Our senior lending officer will recommend an increase or decrease in the provision and the board will approve or disapprove the recommendation based on a discussion of the risk factors. We believe that we use the most reliable information available to us to make a determination with respect to the allowance for loan and lease losses, recognizing that the determination is inherently subjective and that future adjustments may be necessary depending upon, among other factors, a change in economic conditions of specific borrowers or generally in the economy, and new information that becomes available to us. However, there are no assurances that the allowance for loan and lease losses will be sufficient to absorb losses on nonperforming assets, or that the allowance will be sufficient to cover losses on nonperforming assets in the future.

The allowance for loan and lease losses represented 0.85% and 0.99% of total loans at June 30, 2005, and December 31, 2004, respectively. AmericasBank has no exposure to foreign countries or foreign borrowers. Management believes that the current allowance for loan and lease losses is adequate.

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The changes in the allowance for loan and lease losses are presented in the following table:

	Six Months Ended June 30,						Year Ended December 31,
	2005			2004			2004
Balance, beginning of year	$	315,127		$	275,077		$	275,077
Provision charged to operations		20,000			12,500			20,000
Recoveries		—			16,907			20,407
		335,127			304,484			315,484
Loans charged off		60			125			357
Balance, end of year	$	335,067		$	304,359		$	315,127
Allowance for loan and lease losses to total loans		0.85	%		1.65	%		0.99	%
Loans past due 90 days or more and still accruing interest	$	—		$	—		$	121,616

Noninterest Revenue

Noninterest revenue consisted primarily of mortgage banking gains and fees from the sale of mortgage loans, and service charges on deposit accounts, which includes debit card fees and ATM fees. Noninterest revenues increased $72,562 and $170,178 for the three and six months ended June 30, 2005, respectively, to $126,746 and $258,692 respectively, from $54,184 and $88,514 for the three and six months ended June 30, 2004, respectively. The increase for the six months ended June 30, 2005, was primarily from a $161,629 increase in mortgage banking gains and fees from $64,794 for the six months ended June 30, 2004 to $226,423 for the six months ended June 30, 2005. We have expanded our mortgage business to originate and sell loans as either a correspondent or broker and had five mortgage loan originators at June 30, 2005, compared to one during the first six months of 2004. Service charges on deposit accounts and other fees increased to $19,621 and $32,269 for the three and six months ended June 30, 2005, respectively, from $13,003 and $23,720 for the three and six months ended June 30, 2004, respectively. The increase was primarily from fees on business accounts and ATM service charges.

Noninterest Expenses

Noninterest expenses for the three and six months ended June 30, 2005, were $644,961 and $1,301,199, respectively, compared to $586,673 and $1,178,239 for the same periods in 2004. The increase for the six months ended June 30, 2005 was $122,960 or 10.4%. Employee benefits increased $46,223 to $164,854 for the six months ended June 30, 2005 compared to $118,631 for the six months ended June 30, 2004. The increase was mainly in payroll taxes, our IRA match, and health care benefits. Occupancy increased $26,086 to $90,270 for the six months ended June 30, 2005 compared to $64,184 for the six months ended June 30, 2004. This increase is primarily from additional rent associated with our Towson mortgage office. Furniture and equipment increased $15,084 to $60,223 for the six months ended June 30, 2005 compared to $45,139 for the six months ended June 30, 2004. Certain expenses associated with our renovation of 500 York Road were expensed in the first quarter of 2005. Other expense increased $86,912 to $434,033 for the six months ended June 30, 2005 compared to $347,121 for the six months ended June 30, 2004. Increases in this expense category were associated with software depreciation, data processing fees, loan expenses, and professional services.

Salaries decreased $51,345 to $551,819 for the six months ended June 30, 2005 compared to $603,164 for the six months ended June 30, 2004. Beginning in December 2004, we re-evaluated our cost basis for originating or acquiring loans and leases to include the deferral of direct salaries. Approximately $118,955 in direct salary expenses was deferred in the first half of 2005 compared to none in 2004. Also, in the first half of 2004 we expensed approximately $60,000 to provide severance benefits associated with our restructuring of certain staff positions.

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Analysis of Financial Condition

Investment Securities

AmericasBank’s portfolio has consisted primarily of U.S. government agency securities, mortgage-backed securities and certain equity securities. The portfolio provides a source of liquidity and a means of diversifying AmericasBank’s earning assets. While we generally intend to hold the investment portfolio assets until maturity, we classify the entire portfolio as available for sale. We account for securities so classified at fair value and report the unrealized appreciation and depreciation as a separate component of stockholders’ equity. In the past, we held securities classified as held to maturity, which we accounted for at amortized cost. AmericasBank invests in securities for the yield they produce and not to profit from trading the securities. There are no trading securities in the portfolio.

The investment portfolio at June 30, 2005, amounted to $30,000, a decrease of $318,182, from $348,182 at December 31, 2004. All securities at June 30, 2005, and December 31, 2004, were classified as available for sale. The majority of the decrease was related to the redeemable preferred trust investment security issued by Provident Trust II, a subsidiary of Provident Bankshares Corporation. On March 31, 2005, the security was redeemed at par. We invested the proceeds from this security in federal funds pending their use to fund loan growth.

Loan Portfolio

Loans and leases, net of allowance, unearned fees and origination costs increased $7,842,116 or 25.1% to $39,087,278 at June 30, 2005, from $31,245,162 at December 31, 2004.

Residential real estate loans increased by $2,023,515 (12.9%), construction and land development loans increased by $629,605 (15.8%), commercial loans including commercial real estate loans increased by $3,639,978 (64.0%), home equity loans increased by $2,398,656 (110.5%) and installment loans increased by $46,584 (12.6%) from their respective balances at December 31, 2004. Commercial finance leases have decreased by $933,330 (24.9%) from the balance at December 31, 2004, from payoffs and principal amortization. We have reduced our efforts to grow the lease portfolio. Going forward, we expect to continue to see wide changes in our loan categories as we experience scheduled payoffs and as we grow our loan portfolio.

Loans secured by real estate comprise the majority of the loan portfolio. AmericasBank’s loan customers are generally located in the greater Baltimore metropolitan area.

The following table summarizes the composition of the loan portfolio by dollar amount and percentages:

	Loan Portfolio
	June 30 2005			%		December 31, 2004			%
Residential real estate	$	17,767,513		44.98	%	$	15,743,998		49.67	%
Construction and land development		4,605,420		11.66	%		3,975,815		12.54	%
Commercial, including real estate		9,328,295		23.61	%		5,688,317		17.94	%
Commercial finance leases		2,818,277		7.13	%		3,751,607		11.84	%
Home equity		4,570,317		11.57	%		2,171,661		6.85	%
Installment		415,735		1.05	%		369,151		1.16	%
		39,505,557		100.00	%		31,700,549		100.00	%
Deferred loan origination fees, net of cost		(83,212	)				(140,260	)
Allowance for loan and lease losses		(335,067	)				(315,127	)
	$	39,087,278				$	31,245,162

We perform monthly reviews of all delinquent loans and leases and relationship officers are charged with working with customers to resolve potential credit issues and payment delinquency in a timely manner. We generally classify loans and leases as nonaccrual when collection of full principal and interest under the original terms of the credit is not expected or payment of principal or interest has become 90 days past due. Classifying a credit as nonaccrual results in us no longer accruing interest on such loan or lease and reversing any interest previously accrued but not collected. We will generally restore a nonaccrual loan or lease to accrual status when delinquent principal and interest

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payments are brought current and we expect to collect future monthly principal and interest payments in a timely manner and in accordance with the original repayment schedule. Generally, we credit all interest payments received on nonaccruing credits to the principal balance of the loan or lease to reduce our credit exposure. If we have collateral that mitigates our credit exposure, we may recognize interest as income when received.

Loans classified as nonaccrual and the associated unrecorded interest is as follows:

	June 30,				December 31,
	2005		2004		2004
Nonaccrual loans	$	622,761	$	35,000	$	54,126
Unrecorded interest on nonaccrual loans		27,994		3,334		6,521

The substantial increase in nonaccrual loans was related to one loan in which we held an approximately 10% participation. Our loan balance to this borrower was $587,761 at June 30, 2005. This non-performing loan is to a land developer for the purchase and development of raw land that was under contract for sale as developed lots to a national homebuilder. The project ran into delays during the permitting process related primarily to storm water management. As a result of the delays, the interest reserve was exhausted, causing the loan to go into interest payment default. The borrower has been in prolonged negotiations with a national homebuilder to sell the land undeveloped, at record plat, for a price considerably higher than the balance on the bank debt. The lead bank and the participants are in agreement that this process has taken too long, and are contemplating taking collection action against the borrower. We continue to believe that the project is viable and that the land value provides adequate collateral protection. Ultimately, we believe we will receive all interest and principal on this loan, although there can be no assurance that that will be the case.

We apply the provisions of Statement of Financial Accounting Standards No. 114 (“SFAS No. 114”),Accounting by Creditors for Impairment of a Loan, as amended by Statement of Financial Accounting Standards No. 118 (“SFAS No. 118”),Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosure. SFAS No. 114 and SFAS No. 118 require that impaired loans, which consist of all modified loans and other loans for which collection of all contractual principal and interest is not probable, be measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. If the measure of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through a valuation allowance and corresponding provision for loan and lease losses. We write off impaired loans when collection of the loan is doubtful. We generally classify nonaccrual loans and leases as impaired. As of June 30, 2005, and December 31, 2004, no credit had been identified as impaired other than the nonaccrual loans and leases described above.

We classify any property acquired as a result of foreclosure on a mortgage loan as foreclosed real estate and record it at the lower of the unpaid principal balance or fair value at the date of acquisition and subsequently carry the property at the lower of cost or net realizable value. We charge any required write-down of the loan to its net realizable value against the allowance for loan and lease losses at the time of foreclosure. We charge to expense any subsequent adjustments to net realizable value. Upon foreclosure, we generally require an appraisal of the property and, thereafter, appraisals of the property on at least an annual basis and external inspections on at least a quarterly basis. As of June 30, 2005, and December 31, 2004, we had no foreclosed real estate.

Deposits

We seek deposits within our market area by paying competitive interest rates and offering high quality customer service. In conjunction with our growth strategy, we offer premium rate certificates of deposit to support loan growth.

In the third quarter of 2004, we began using a web-based service to offer our certificates of deposit. The interest rate offered on these certificates of deposit is higher than what we would typically pay within our market. We have employed this service as an interim strategy to support our loan growth plans and view it as a cost effective and efficient process to raise deposits for specific terms.

At June 30, 2005, our total deposits have increased by $22,204,575 or 64.2% to $56,774,868 from $34,570,293 at December 31, 2004. Interest-bearing deposits increased $14,347,766 or 44.4% to $46,691,837 at June 30, 2005, from $32,344,071 at December 31, 2004. In addition, our non interest bearing deposits increased $7,856,809 or $352.9% from $2,226,222 at December 31, 2004, to $10,083,031 at June 30, 2005.

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A majority of the increase in our interest bearing deposits was in certificates of deposit and money market accounts. The growth in these accounts was due to our utilization of the web-based service and the use of print advertising in local newspapers to offer certificates of deposit and other interest bearing core deposit products. During the first six months of 2005, we issued $5,102,344 in certificates of deposit through the web-based service at an average cost of approximately 4.23%. Deposits from this source represented 28.5% of our interest bearing deposits as of June 30, 2005. We increased our money market account by $4,189,656 or 325.0% from $1,289,164 at December 31, 2004 to $5,478,820 at June 30, 2005.

The increase in noninterest bearing deposits was primarily from new accounts opened for title companies. We have focused our marketing efforts toward these businesses and feel that our mortgage loan business will further provide us with opportunities to sell our deposits services to more of these businesses.

Total checking, money market and savings deposits, which includes both interest and noninterest bearing accounts, increased $11,947,234 since December 31, 2004, reflecting our strategy to reduce the bank’s reliance on certificates of deposit as a funding source.

Due to our current financial condition, we were advised by our regulators that, without regulatory approval, we should limit the use of brokered deposits to $3,200,000. We do not believe that this regulatory restriction will adversely impact our ability to grow deposits as we believe we can offer competitively priced certificates of deposit, including certificates of deposit with premium rates, which would not be considered brokered deposits by our regulators. However, paying premium rates on certificates of deposit will likely increase our interest expense and negatively impact our net interest margin.

Borrowings

On July 12, 2002, the Federal Home Loan Bank of Atlanta rescinded our line of credit because of our financial condition. During 2004, we initiated discussions with the Federal Home Loan Bank of Atlanta to re-establish our line of credit. The line was not re-established due to our continuing operating losses. When we achieve breakeven profitability, we hope to be successful in reinstating our line of credit with the Federal Home Loan Bank, but there can be no assurance that we will be successful in our efforts.

Liquidity

Our overall asset/liability strategy takes into account our need to maintain adequate liquidity to fund asset growth and deposit runoff. We monitor our federal funds sold position on a daily basis in that this is our primary source of liquidity. From time to time we may sell or participate out loans to create additional liquidity as required. Additional liquidity is also available from our loans held for sale, which amounted to $1,857,454 at June 30, 2005. We have no other sources of liquidity, such as lines of credit or correspondent relationships with other financial institutions.

Our immediate sources of liquidity are cash and due from banks and short term investments. As of June 30, 2005, we had $2,527,005 in cash and due from banks, and $16,786,693 in federal funds sold and Federal Home Loan Bank deposit. Management has made a decision to maintain liquidity instead of investing in investment securities in order to ensure that funds are readily available to fund the growth of the loan portfolio. In addition, our recent increase in deposits from title companies represents a deposit that is subject to more volatility, thereby increasing our need to have funds available. We believe that our ability to manage the volatility of these deposits will improve as we add more of this type of account to our customer base.

We have sufficient liquidity to meet our loan commitments as well as fluctuations in deposits. We usually retain maturing certificates of deposit as we offer competitive rates on certificates of deposit. We are not aware of any demands, trends, commitments, or events that would result in our inability to meet anticipated or unexpected liquidity needs. Although we do not have a line of credit and are limited in our use of brokered certificates of deposit, because of our large relative amount of federal funds sold, we believe that we can adequately satisfy all of our commitments.

Capital

Our stockholders’ equity amounted to $5,155,512 at June 30, 2005, a decrease of $240,292 from the $5,395,804 reported at December 31, 2004.

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The following table shows our regulatory capital ratios and the minimum capital ratios currently required by our banking regulator to be “well capitalized” and “adequately capitalized.” The table provides information for AmericasBank Corp.

	Risk Based Capital Analysis
(dollars in thousands)	June 30, 2005			December 31, 2004
Tier 1 Capital:
Common stock	$	38		$	38
Capital surplus		11,502			11,421
Retained earnings		(6,385	)		(6,081	)
Less: disallowed assets		(293	)		(295	)			��
Total Tier 1 Capital		4,862			5,083
Tier 2 Capital:
Allowance for loan and lease losses		335			315
Total Risk Based Capital	$	5,197		$	5,398
Risk weighted assets	$	36,163		$	27,075
							Regulatory Minimum to be
							Well Capitalized			Adequately Capitalized
Capital Ratios:
Total risk based capital ratio		14.37	%		19.94	%	10.00	%		8.00	%
Tier 1 risk based capital ratio		13.45	%		18.77	%	6.00	%		4.00	%
Leverage ratio		9.02	%		13.19	%	5.00	%		4.00	%

Impact of Adoption of SFAS No. 123

Effective January 1, 2005, AmericasBank Corp. began recognizing expense for stock-based compensation using the fair value based method of accounting described in Statement of Financial Accounting Standards (“SFAS”) No. 123,Accounting for Stock-Based Compensation, as amended, and has elected the retroactive restatement method described in SFAS No. 148,Accounting for Stock-Based Compensation — Transition and Disclosure. We voluntarily adopted the standard in 2005. The following table provides a reconciliation of our losses with and without application of SFAS No. 123 for the three and six months ended June 30, 2005 and June 30, 2004, respectively. We believe this information is useful to investors as other small business issuers are not required to adopt SFAS No. 123 until 2006.

	Three Months Ended June 30, 2005			Three Months Ended June 30, 2004
Losses without adopting SFAS No. 123	$	(110,747	)	$	(321,019	)
Additional expense as a result of adoption of SFAS No. 123		(40,723	)		(41,782	)
Losses with adoption of SFAS No. 123	$	(151,470	)	$	(362,801	)
	Six Months Ended June 30, 2005			Six Months Ended June 30, 2004
Losses without adopting SFAS No. 123	$	(222,532	)	$	(684,079	)
Additional expense as a result of adoption of SFAS No. 123		(81,445	)		(83,565	)
Losses with adoption of SFAS No. 123	$	(303,977	)	$	(767,644	)

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Application of Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the industry in which we operate. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when available.

The allowance for loan and lease losses represents management’s best estimate of losses known and inherent in the loan and lease portfolio that are both probable and reasonable to estimate, based on, among other factors, prior loss experience, volume and type of lending conducted, industry standards, economic conditions (particularly as such conditions relate to AmericasBank’s market area), regulatory guidance, the financial condition of the borrower, historical payment performance and the collateral securing the loans and leases. Determining the amount of the allowance for loan and lease losses is considered a critical accounting estimate because it requires significant estimates, assumptions and judgment. The loan and lease portfolio also represents the largest asset type on the balance sheets.

We have developed a methodology for evaluating the adequacy of the allowance for loan and lease losses that distinguishes between credits evaluated as a group by either loan or risk rating category and those evaluated individually. We have predetermined allowance percentages based on credit types and for each risk rating category. All loans and leases are assigned a risk rating when they are made. This risk rating is reassessed by management periodically using the various evaluation factors mentioned above. Loans and leases that exhibit an acceptable level of risk per our internal risk grading system are grouped by category and assigned a standard reserve percentage when assessing the adequacy of the allowance for loan and lease losses. Loans and leases that are adversely risk-rated, or exhibit characteristics that suggest we have a heightened risk of collection, are evaluated separately from non-adversely risk rated credits. Each adversely risk rated credit is assigned a standard reserve based on its risk rating or a special reserve based on an assessment of the specific risk factors related to that credit, which may be greater or lesser than the standard reserve for that risk rating.

Management has significant discretion in making the judgments inherent in the determination of the provision and allowance for loan and lease losses, including in connection with the valuation of collateral and the financial condition of the borrower, and in establishing allowance percentages and risk ratings. The establishment of allowance factors is a continuing exercise and allowance factors may change over time, resulting in an increase or decrease in the amount of the provision or allowance based upon the same volume and classification of loans.

Changes in allowance factors or in management’s interpretation of those factors will have a direct impact on the amount of the provision, and a corresponding effect on income and assets. Also, errors in management’s perception and assessment of the allowance factors could result in the allowance not being adequate to cover losses in the portfolio, and may result in additional provisions or charge-offs, which would adversely affect income and capital. For additional information regarding the allowance for loan and lease losses, see the “Provision for Loan and Lease Losses and Analysis of Allowance for Loan and Lease Losses” section of this financial review.

The Financial Accounting Standards Board encourages use of a fair value based method of accounting for stock options. In prior periods AmericasBank Corp. had elected to use the intrinsic value method to account for stock-based employee compensation plans in accordance with Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees for 2004. Under this method, compensation cost is recognized for awards of shares of common stock to employees only if the quoted market price of the stock at any measurement date is greater than the amount the employee must pay to acquire the stock. As permitted, AmericasBank Corp. elected to adopt the disclosure-only provisions of SFAS No. 123,Accounting for Stock-Based Compensation.

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Effective January 1, 2005, AmericasBank Corp. began recognizing expense for stock-based compensation using the fair value based method of accounting described in Statement of Financial Accounting Standards (“SFAS”) No. 123,Accounting for Stock-Based Compensation, as amended. We have chosen the retroactive restatement method described in SFAS No. 148,Accounting for Stock-Based Compensation — Transition and Disclosure, which amended SFAS No. 123. As a result, financial information for all prior periods presented have been restated to reflect the salaries and employee benefits expense that would have been recognized had the recognition provisions of SFAS No. 123 been applied to all awards granted to employees. The use of the retroactive restatement method resulted in the restatement of previously reported balances of additional paid-in capital and accumulated deficit. As of December 31, 2004, previously reported additional paid-in capital was increased by $286,910 and accumulated deficit was increased by the same amount. As of December 31, 2003, previously reported additional paid-in capital was increased by $48,553, and accumulated deficit was increased by the same amount.

The value of the options was estimated using the Black-Scholes option pricing model with the option life estimated at 10 years. There were no modifications made to outstanding share options prior to the adoption of the fair value method. The compensation expense not yet recognized as of June 30, 2005, was approximately $434,900.

AmericasBank Corp. has recorded a 100% valuation allowance against the net deferred tax asset since it is more likely than not that it will not be realized. At December 31, 2004 and 2003, AmericasBank Corp. has net operating loss carryforwards of approximately $5,225,558 and $4,058,011 available to offset future taxable income. The current carryforwards will expire beginning in 2017.

Goodwill represents the cost in excess of the fair value of net assets acquired (including identifiable intangibles) in transactions accounted for as purchases. SFAS No. 142,Goodwill and Other Intangible Assets, requires that goodwill no longer be amortized over an estimated useful life, but rather be tested at least annually for impairment. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is the amount determined by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit to which goodwill has been allocated from the estimated fair value of the reporting unit. If the recorded value of goodwill exceeds its implied value, an impairment charge is recorded for the excess. Goodwill of $266,985 was recorded when we acquired certain assets and assumed certain liabilities of uvm Mortgage Marketing in October 2004. The goodwill will be tested at least annually for impairment.

Off-Balance Sheet Arrangements

AmericasBank is a party to financial instruments with off-balance sheet risk in the normal course of business. These financial instruments primarily include loan commitments, lines of credit, including home-equity lines and commercial lines, and letters of credit. AmericasBank uses these financial instruments to meet the financing needs of its customers. These financial instruments involve, to varying degrees, elements of credit, interest rate, and liquidity risk. These do not represent unusual risks and management does not anticipate any accounting losses which would have a material effect on AmericasBank.

Outstanding loan commitments and lines and letters of credit at June 30, 2005, are as follows:

Loan commitments	$	4,449,335
Held for sale loan commitments	$	4,865,050
Unused lines of credit	$	5,821,737
Letters of credit	$	65,713

Loan commitments and held for sale loan commitments are agreements to lend to a customer as long as there is no violation of any condition established in the contract. AmericasBank generally requires collateral to support financial instruments with credit risk on the same basis as it does for on-balance sheet instruments. The collateral is based on management’s credit evaluation of the counter party. Loan commitments generally have interest rates at current market amounts, fixed expiration dates or other termination clauses and may require payment of a fee. Loan held for sale are usually sold to the investor within 30 days. Unused lines of credit represent the amount of credit available to the customer so long as there is no violation of any contractual condition. These lines generally have variable interest rates. Since many of the commitments are expected to expire without being drawn upon, and since it is unlikely that customers will draw upon their lines of credit in full at any time, the total commitment amount or line of credit amount does not necessarily represent future cash requirements. The Company is not aware of any loss it would incur by funding its commitments or lines of credit.

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Letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. AmericasBank’s exposure to credit loss in the event of nonperformance by the customer is the contract amount of the commitment. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

In general, loan commitments, credit lines and letters of credit are made on the same terms, including with respect to collateral, as outstanding loans. Each customer’s credit-worthiness and the collateral required is evaluated on a case-by-case basis.

Information Regarding Forward-Looking Statements

In addition to the historical information contained in Part I of this Quarterly Report on Form 10-QSB, the discussion in Part I of this Quarterly Report on Form 10-QSB contains certain forward-looking statements. The statements presented herein with respect to, among other things, AmericasBank Corp.’s plans, objectives, expectations and intentions, including statements regarding profitability, liquidity, allowance for loan and lease losses, interest rate sensitivity, market risk and financial and other goals are forward looking. These statements are based on AmericasBank Corp.’s beliefs, assumptions and on information available to AmericasBank Corp. as of the date of this filing, and involve risks and uncertainties. These risks and uncertainties include, among others, those discussed in this Quarterly Report on Form 10-QSB; risk that we may continue to incur losses; the need for additional capital; risks related to the inability to implement strategic initiatives; the dependence on key personnel; operating restrictions as a result of the Written Agreement with the Federal Reserve Bank of Richmond and the Maryland Division of Financial Regulation; possible action by U.S. Department of Housing and Urban Development as a result of RESPA violations; risks related to operating as a correspondent lender; inability to use brokered deposits without regulatory approval; fluctuations in market rates of interest and the effect on loan and deposit pricing; effect on operations of a low lending limit; effect on operations of a lack of a credit facility; sufficiency of the allowance for loan and lease losses; credit risk related to the leasing companies with which we have extended credit; reliance on third party vendors; adverse economic conditions in our market area; competitive factors within the financial services industry; changes in regulatory requirements and/or restrictive banking legislation; and the effect of developments in technology on our business.

For a more complete discussion of some of these risks and uncertainties see the discussion under the caption “Factors Affecting Future Results” in AmericasBank Corp.’s Annual Report on Form 10-KSB.

AmericasBank Corp.’s actual results could differ materially from those discussed herein and you should not put undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this filing, and AmericasBank Corp. undertakes no obligation to make any revisions to the forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.

Item 3. Controls and Procedures

As of the end of the period covered by this quarterly report on Form 10-QSB, AmericasBank Corp.’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness AmericasBank Corp.’s disclosure controls and procedures. Based upon that evaluation, AmericasBank Corp.’s Chief Executive Officer and Chief Financial Officer concluded that AmericasBank Corp.’s disclosure controls and procedures are effective. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by AmericasBank Corp. in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

In addition, there were no changes in AmericasBank Corp.’s internal controls over financial reporting (as defined in Rule 13a-15 or Rule 15d-15 under the Securities Act of 1934, as amended) during the quarter ended June 30, 2005, that have materially affected, or are reasonably likely to materially affect, AmericasBank Corp.’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Securities Holders.

(a) AmericasBank Corp. held its annual meeting of stockholders on June 16, 2005.

(b) At the annual meeting, Mark H. Anders, Mark D. Noar, M.D., and A. Gary Rever were elected to serve a three-year term expiring upon the date of AmericasBank Corp.’s 2008 Annual Meeting. The term of office of the following directors continued after the meeting: Nicholas J. Belitsos, M.D., Savas J. Karas, Kenneth D. Pezzulla, Ramon F. Roig, Jr., M.D., Graylin E. Smith, Lee W. Warner, and John C. Weiss, III.

(c) 1. The following individuals were nominees for the Board of Directors for a term to expire at the 2008 annual meeting of stockholders. The number of votes for or withheld for each nominee is as follows:

	For	Withheld	Total
Mark H. Anders	2,764,192	229,385	2,993,577
Mark D. Noar, M.D.	2,765,192	228,385	2,993,577
A. Gary Rever	2,765,092	228,485	2,993,577

2. The approval of Articles of Amendment to AmericasBank Corp.’s charter:

For	Against	Abstain	Broker Non- Votes	Total
2,737,276	256,201	100	0	2,993,577

3. The ratification of the appointment of Rowles & Company, LLP as independent public accountants to audit the financial statements of AmericasBank Corp. for 2005:

For	Against	Abstain	Broker Non- Votes	Total
2,953,317	38,460	1,800	0	2,993,577

Item 5. Other Information.

None.

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Item 6. Exhibits.

(a) Exhibits.

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AmericasBank Corp.
Date: August 11, 2005	By:	/s/ Mark H. Anders
		Mark H. Anders, President
		(Principal Executive Officer)
Date: August 11, 2005	By:	/s/ A. Gary Rever
		A. Gary Rever, Chief Financial Officer
		(Principal Accounting and Financial Officer)

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