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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001
[ ] 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 (I.R.S. Employer Identification No.)
incorporation or organization)
801 PILE STREET, CLOVIS, NEW MEXICO 88101
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (505) 762-4417
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 [X] No [ ]
1,267,510 Shares of Capital Stock $.01 par value
Outstanding as of October 26, 2001
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Unaudited Condensed Consolidated Statements of Financial Condition........ 3
Unaudited Condensed Consolidated Statements of Operations................. 4
Unaudited Condensed Consolidated Statement of Stockholders' Equity........ 5
Unaudited Condensed Consolidated Statements of Cash Flows................. 6-7
Notes to Condensed Consolidated Financial Statements (Unaudited).......... 8-14
Item 2 - Management's Discussion and Analysis or Plan of Operation.............. 15-20
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings..................................................... None
Item 2 - Changes in 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....................................... 21
SIGNATURES............................................................................ 22
2
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
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, December 31,
ASSETS 2001 2000
------------- -------------
Cash and cash equivalents $ 6,419,479 $ 7,145,268
Certificates of deposit 2,797,000 3,796,000
Securities available-for-sale (amortized cost of $10,881,752 and $7,706,714) 11,075,856 7,638,711
Securities held-to-maturity (aggregate fair value of $2,736,483 and $6,110,834) 2,689,454 6,090,761
Loans held-for-sale (aggregate fair value of $2,211,213 and $844,558) 2,164,138 821,180
Loans receivable, net 138,977,030 119,479,443
Interest receivable 996,607 1,047,801
Real estate owned 325,666 154,218
Federal Home Loan Bank stock 976,900 944,600
Premises and equipment, net 3,715,315 3,512,894
Goodwill, net 1,905,719 2,014,965
Deferred tax asset 751,645 1,112,875
Other assets 711,429 585,923
------------- -------------
Total assets $ 173,506,238 $ 154,344,639
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 144,254,640 $ 137,275,966
Federal Home Loan Bank advances 10,250,000 2,750,000
Accrued interest and other liabilities 786,400 1,134,847
Advanced payments by borrowers for taxes and insurance 348,720 157,778
Employee Stock Ownership Plan - Note Payable 1,183,156 1,289,739
Trust Preferred Security - Note Payable 4,000,000 --
------------- -------------
Total liabilities 160,822,916 142,608,330
------------- -------------
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; 1,495,633 and
1,489,116 shares issued; 1,267,510 and 1,241,173 outstanding in 2001 and
2000, respectively 14,956 14,891
Capital in excess of par value 11,128,368 11,054,201
Retained earnings 2,699,784 2,165,273
Accumulated other comprehensive gain (loss), net of tax expense of $62,765 and
tax benefit of $23,019 128,109 (44,684)
------------- -------------
13,971,217 13,189,681
Unallocated Employee Stock Ownership Plan shares (1,095,000) (1,289,739)
Treasury stock, at cost (192,895) (163,633)
------------- -------------
Total stockholders' equity 12,683,322 11,736,309
------------- -------------
Total liabilities and stockholders' equity $ 173,506,238 $ 154,344,639
============= =============
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
3
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Month Periods Ended Nine Month Periods Ended
September 30, September 30,
-------------------------- --------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Interest income:
Loans receivable $2,823,458 $2,346,715 $7,979,865 $6,712,219
U.S. government agency securities 54,134 57,775 166,337 184,690
Mortgage-backed securities 179,868 206,967 516,715 652,431
Other interest income 76,558 104,174 336,249 304,507
---------- ---------- ---------- ----------
Total interest income 3,134,018 2,715,631 8,999,166 7,853,847
---------- ---------- ---------- ----------
Interest expense:
Deposits 1,424,863 1,361,378 4,522,502 3,645,241
FHLB advances 83,243 116,677 172,672 437,257
Other borrowings 106,437 -- 162,504 --
---------- ---------- ---------- ----------
Total interest expense 1,614,543 1,478,055 4,857,678 4,082,498
---------- ---------- ---------- ----------
Net interest income before provision
for loan losses 1,519,475 1,237,576 4,141,488 3,771,349
Provision for loan losses 182,400 39,000 313,354 116,378
---------- ---------- ---------- ----------
Net interest income after provision for loan losses 1,337,075 1,198,576 3,828,134 3,654,971
---------- ---------- ---------- ----------
Noninterest income:
Loan servicing and other fees 71,640 58,806 226,071 172,157
Gains on sales of loans 46,829 105,661 232,295 194,280
Other income 213,343 184,548 648,439 549,084
---------- ---------- ---------- ----------
Total noninterest income 331,812 349,015 1,106,805 915,521
---------- ---------- ---------- ----------
Noninterest expense:
Salaries and employee benefits 723,275 720,362 2,036,382 2,005,912
Occupancy expense 189,484 212,201 589,218 610,044
Deposit insurance premium 32,396 27,412 91,808 77,938
Advertising 24,405 37,191 54,664 67,432
Real estate operations, net 3,066 4,301 5,816 16,726
Professional fees 56,768 73,154 206,860 191,306
Amortization of goodwill 36,415 36,270 109,245 108,652
Other expense 340,840 303,442 1,030,989 952,902
---------- ---------- ---------- ----------
Total noninterest expense 1,406,649 1,414,333 4,124,982 4,030,912
---------- ---------- ---------- ----------
Income before income taxes 262,238 133,258 809,957 539,580
Income tax expense 89,161 45,307 275,446 184,116
---------- ---------- ---------- ----------
Net income $ 173,077 $ 87,951 $ 534,511 $ 355,464
========== ========== ========== ==========
Earnings per common share $ .14 $ .07 $ .42 $ .29
========== ========== ========== ==========
Earnings per common share-assuming dilution $ .13 $ .07 $ .41 $ .28
========== ========== ========== ==========
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
4
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock Treasury Stock
--------------------------- --------------------------
Comprehensive Number Number Unallocated
Income of shares Amount of Shares Amount ESOP Shares
--------------- ------------ ------------- ---------- ------------- -------------
Balance at December 31, 2000 1,489,116 $ 14,891 23,943 $ (163,633) $ (1,289,739)
Net income $ 534,511 -- -- -- -- --
Net change in unrealized
depreciation on
available-for-sale
securities, net of tax 172,793 -- -- -- -- --
------------
Total comprehensive income $ 707,304
============
Common stock issued 6,517 65 -- -- --
Common stock rights
awarded in lieu of
directors' cash
compensation -- -- -- -- --
Purchases of treasury
stock -- -- 4,180 (29,262) --
ESOP shares allocated -- -- -- -- 194,739
--------- ------------ --------- ------------ ------------
Balance at September 30, 2001 1,495,633 $ 14,956 28,123 $ (192,895) $ (1,095,000)
========= ============ ========= ============ ============
Accumulated
Other
Capital Comprehensive
in Excess Income
of Par Retained (Loss)
Value Earnings Net Total
------------ ------------ -------------- -------------
Balance at December 31, 2000 $ 11,054,201 $ 2,165,273 $ (44,684) $ 11,736,309
Net income -- 534,511 -- 534,511
Net change in unrealized
depreciation on
available-for-sale
securities, net of tax -- -- 172,793 172,793
Total comprehensive income
Common stock issued 28,623 -- -- 28,688
Common stock rights
awarded in lieu of
directors' cash
compensation 26,200 -- -- 26,200
Purchases of treasury
stock -- -- -- (29,262)
ESOP shares allocated 19,344 -- -- 214,083
------------ ------------ ------------ ------------
Balance at September 30, 2001 $ 11,128,368 $ 2,699,784 $ 128,109 $ 12,683,322
============ ============ ============ ============
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
5
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Month Periods Ended
September 30,
-----------------------------------
2001 2000
------------ ------------
Cash flows from operating activities:
Net income $ 534,511 $ 355,464
Adjustments to reconcile net income to cash provided by
(used in) operating activities:
Depreciation 305,134 325,217
Deferred income taxes 275,446 179,116
Provision for loan losses 313,354 116,378
Amortization of premiums on investment securities 75,155 58,224
Amortization of loan premiums, discounts and deferred
fees, net 129,451 120,952
Amortization of goodwill 109,246 108,652
Non-cash ESOP contribution 194,739 29,917
Gains on sales of loans (232,295) (194,280)
Proceeds from sales of loans held-for-sale 14,086,474 9,186,605
Originations of loans held-for-sale (15,197,137) (10,098,777)
Common stock rights issued in lieu of directors
compensation 26,200 14,950
Loss on foreclosed real estate 2,533 --
(Gain) loss on disposition of assets (11,447) 4,791
Net (increase) decrease in accrued interest receivable
and other assets (389,361) 116,250
Increase (decrease) in accrued interest and other liabilities (275,290) 367,048
------------ ------------
Net cash provided by (used in) operating activities (53,287) 690,507
------------ ------------
Cash flows from investing activities:
Purchases of available-for-sale securities (3,555,000) --
Proceeds from maturities and principal repayments of
available-for-sale securities 1,917,339 1,092,477
Purchases of held-to-maturity securities -- (2,191,887)
Proceeds from maturities and principal repayments of
held-to-maturity securities 1,788,474 2,058,571
Purchase of FHLB stock (32,300) (49,642)
Net decrease in certificates of deposit 999,000 1,249,000
Net increase in loans (19,783,208) (10,926,909)
Purchases of premises and equipment (496,108) (1,488,964)
------------ ------------
Net cash used in investing activities (19,161,803) (10,257,354)
------------ ------------
Cash flows from financing activities:
Net increase in deposits 6,978,674 13,521,670
Net change in other borrowed funds 7,500,000 (4,000,000)
Net increase in advance payments by borrowers for taxes and
insurance 190,942 138,644
Repayment of debt (179,741) (29,917)
Issuance of trust preferred security 4,000,000 --
Purchase of treasury stock (29,262) (62,012)
Proceeds from issuance of common stock 28,688 1,367,738
------------ ------------
Net cash provided by financing activities 18,489,301 10,936,123
------------ ------------
Increase (decrease) in cash and cash equivalents (725,789) 1,369,276
Cash and cash equivalents at December 31 7,145,268 7,874,748
------------ ------------
Cash and cash equivalents at September 30 $ 6,419,479 $ 9,244,024
============ ============
(Continued)
6
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
Nine Month Periods Ended
September 30,
------------------------------
2001 2000
---------- ----------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $4,827,439 $3,271,517
Income taxes 150 20,000
Supplemental disclosure of non-cash investing and
financing activities
Real estate acquired in settlement of loans -- 409,568
Non-cash transfer of investment security pursuant to
FASB 133 1,607,997 --
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
7
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 BASIS 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, the
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 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 presentation of the
information have been included. The December 31, 2000 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, 2000.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
IMPACT OF NEW ACCOUNTING STANDARDS - In June 1998, the FASB issued Statement No.
133 ("SFAS 133"), ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.
In July 1999, the FASB issued Statement No. 137, DEFERRAL OF THE EFFECTIVE DATE
OF FASB STATEMENT NO. 133, which deferred the effective date of SFAS 133 to no
later than January 1, 2001 for the Company's financial statements. SFAS 133
requires companies to record derivatives on the consolidated statement of
financial condition at fair value. Changes in the fair values of those
derivatives would be reported in earnings or other comprehensive income
depending on the use of the derivative and whether it qualifies for hedge
accounting. The key criterion for hedge accounting is that the hedging
relationship must be highly effective in achieving offsetting changes in fair
value of assets or liabilities or cash flows from forecasted transactions. In
June 2000, the FASB issued Statement No. 138, ACCOUNTING FOR CERTAIN DERIVATIVE
INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES, an amendment of FASB Statement No.
133. The Company implemented SFAS 133 on January 1, 2001. The implementation did
not impact the Company's consolidated financial statements because the Bank did
not have any derivatives or hedging activities.
Upon implementation of FASB 133 the Company transferred $1,607,997 of securities
held-to-maturity to securities available-for-sale.
In September 2000, the FASB issued Statement No. 140 ("SFAS 140"), ACCOUNTING
FOR THE TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF
LIABILITIES, which replaces Statement No. 125 (of the same title). SFAS 140
revises certain standards in the accounting for securitizations and other
transfers of financial assets and collateral, and requires some disclosures
relating to securitization transactions and collateral, but it carries over most
of SFAS 125's provisions. The collateral and disclosure provisions of SFAS 140
were effective for year-end 2000 financial statements. The other provisions of
this Statement are effective for transfers and servicing of financial assets and
extinguishment of liabilities occurring after March 31, 2001. The implementation
did not impact the Company's consolidated financial statements.
8
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
In July 2001, the FASB issued Statement No. 141, BUSINESS COMBINATIONS, and
Statement No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS. Statement 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001 as well as all purchase method business
combinations completed after June 30, 2001. Statement 141 also specifies
criteria intangible assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill, noting that any
purchase price allocated to an assembled workforce may not be accounted for
separately. Statement 142 will require that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of Statement 142.
Statement 142 will also require that intangible assets with definite useful
lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment in accordance with SFAS
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED OF.
The Company is required to adopt the provisions of Statement 141 immediately and
Statement 142 effective January 1, 2002. Furthermore, any goodwill and any
intangible asset determined to have an indefinite useful life that are acquired
in a purchase business combination completed after June 30, 2001 will not be
amortized, but will continue to be evaluated for impairment in accordance with
the appropriate pre-Statement 142 accounting literature. Goodwill and intangible
assets acquired in business combinations completed before July 1, 2001 will
continue to be amortized prior to the adoption of Statement 142.
Statement 141 will require upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company will be required to test the intangible asset for impairment
in accordance with the provisions of Statement 142 within the first interim
period. Any impairment loss will be measured as of the date of adoption and
recognized as the cumulative effect of a change in accounting principle in the
first interim period.
In connection with the transitional goodwill impairment evaluation, Statement
142 will require the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this the Company must identify its reporting units and determine the carrying
value of each reporting unit by assigning the assets and liabilities, including
the existing goodwill and intangible assets, to those reporting units as of the
date of adoption. The Company will then have up to six months from the date of
adoption to determine the fair value of each reporting unit and compare it to
the reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the Company must perform the second step of the
transitional impairment test. In the second step, the Company must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of its assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with Statement 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's consolidated
statement of operations.
9
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
And finally, any unamortized negative goodwill existing at the date Statement
142 is adopted must be written off as the cumulative effect of a change in
accounting principle.
As of the date of adoption, January 1, 2002, the Company expects to have
unamortized goodwill in the amount of approximately $1,870,000, which will be
subject to the transition provisions of Statements 141 and 142. Amortization
expense related to goodwill was $145,067 and $109,246 for the year ended
December 31, 2000 and the nine months ended September 30, 2001, respectively.
Because of the extensive effort needed to comply with adopting Statements 141
and 142, it is not practicable to reasonably estimate the impact of adopting
these Statements on the Company's consolidated financial statements at the date
of this report, including whether any transitional impairment losses will be
required to be recognized as the cumulative effect of a change in accounting
principle.
10
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3 SECURITIES
Securities have been classified in the consolidated statements of financial
condition according to management's intent. The carrying amount of securities
and their approximate fair value follows:
Amortized Gross unrealized Fair
Cost Gains Losses Value
----------- ----------- ----------- -----------
AVAILABLE-FOR-SALE SECURITIES:
September 30, 2001:
Mortgage-backed securities:
GNMA adjustable rate $ 5,974,144 $ 48,241 $ 16,301 $ 6,006,084
GNMA fixed rate 4,345,750 147,358 -- 4,493,108
Equity securities:
FNMA common stock 6,858 1,006 -- 7,864
Trust preferred securities 555,000 13,800 -- 568,800
----------- ----------- ----------- -----------
$10,881,752 $ 210,405 $ 16,301 $11,075,856
=========== =========== =========== ===========
December 31, 2000:
Mortgage-backed securities:
GNMA adjustable rate $ 7,699,556 $ 2,564 $ 71,597 $ 7,630,523
Equity securities:
FNMA common stock 6,858 1,330 -- 8,188
=========== =========== =========== ===========
$ 7,706,414 $ 3,894 $ 71,597 $ 7,638,711
=========== =========== =========== ===========
Amortized Gross unrealized Fair
Cost Gains Losses Value
----------- ----------- ----------- -----------
HELD-TO-MATURITY SECURITIES:
September 30, 2001:
Mortgage-backed securities:
FHLMC adjustable rate $ 694,162 $ 1,671 $ 7 $ 695,826
US government agency bonds 1,000,000 1,471 -- 1,001,471
Corporate bonds 695,292 27,494 -- 722,786
Trust preferred securities 300,000 16,400 -- 316,400
----------- ----------- ----------- -----------
$ 2,689,454 $ 47,036 $ 7 $ 2,736,483
=========== =========== =========== ===========
December 31, 2000:
Mortgage-backed securities:
FNMA participation certificates $ 130,362 $ -- $ 886 $ 129,476
FHLMC participation certificates 972,584 -- 6,786 965,798
GNMA fixed rate 1,656,109 43,745 -- 1,699,854
FHLMC adjustable rate 838,859 -- 14,618 824,241
US government agency bonds 1,000,000 3,780 -- 1,003,780
Corporate bonds 1,192,847 6,497 659 1,198,685
Trust preferred securities 300,000 -- 11,000 289,000
----------- ----------- ----------- -----------
$ 6,090,761 $ 54,022 $ 33,949 $ 6,110,834
=========== =========== =========== ===========
11
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4 LOANS HELD-FOR-SALE
The carrying amount of loans held-for-sale and their estimated fair value, as
determined on an aggregate basis, follows:
Gross unrealized
---------------------------------
Amortized cost Gains Losses Fair value
---------------- ------------- ------------- --------------
September 30, 2001 $2,164,138 $ 47,075 $ -- $2,211,213
December 31, 2000 821,180 23,678 -- 844,858
NOTE 5 LOANS RECEIVABLE
The components of loans in the consolidated statements of financial condition
were as follows:
September 30, December 31,
2001 2000
------------- -------------
First mortgage loans:
Conventional $ 65,394,986 $ 61,062,423
FHA insured and VA guaranteed 9,395,281 7,720,504
Commercial real estate loans 29,108,553 25,144,372
Commercial loans, other than mortgage 9,845,718 6,958,873
Consumer loans 19,384,150 14,018,066
Construction loans 3,001,265 1,721,472
Other 6,105,398 4,928,708
------------- -------------
142,235,351 121,554,418
Less:
Loans in process 1,398,863 502,152
Unearned discounts, deferred loan fees, and other 1,020,787 891,337
Allowance for loan losses 838,671 681,486
------------- -------------
$ 138,977,030 $ 119,479,443
============= =============
An analysis of the changes in allowance for loan losses follows:
Nine Months Ended Year Ended
September 30, 2001 December 31, 2000
------------------- -------------------
Balance at beginning of year $ 681,486 $ 864,317
Loans charged-off (198,622) (150,873)
Recoveries 42,453 18,664
------------- -------------
Net loans charged-off (156,169) (132,209)
Provision for loan losses charged to operations 313,354 199,378
Acquired general valuation allowance -- (250,000)
------------- -------------
Balance at end of period $ 838,671 $ 681,486
============= =============
12
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 5 LOANS RECEIVABLE (CONTINUED)
An analysis of the changes of loans to directors, executive officers, and major
stockholders is as follows:
Nine Months Ended Year Ended
September 30, 2001 December 31, 2000
---------------------- --------------------
Balance at beginning of year $ 1,279,920 $ 1,300,285
Loans originated 124,680 98,114
Loan principal payments and other reductions (307,974) (118,479)
----------- -----------
Balance at end of period $ 1,096,626 $ 1,279,920
=========== ===========
NOTE 6 NON-PERFORMING ASSETS
The composition of the Bank's portfolio of non-performing assets is shown in the
following table:
September 30, 2001 December 31, 2000
-------------------- ---------------------
Non-accruing loans* $ 886,080 $ 279,774
Past due 90 days or more and still accruing -- --
Real estate owned 325,666 154,218
---------- ----------
Total non-performing assets $1,211,746 $ 433,992
========== ==========
Ratio of non-performing assets to total assets 0.70% 0.28%
========== ==========
* Primarily loans which are past due for 90 days or more
13
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 7 NET INCOME PER SHARE
Basic net income per share has been computed by dividing net income available to
common stockholders for the period by the weighted average number of common
shares outstanding during the period. Diluted net income per share has been
computed by dividing net income available to common stockholders 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 Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Weighted average common
shares - Basic* 1,274,488 1,248,047 1,263,708 1,244,032
Plus effect of dilutive Securities:
Stock Options 19,512 6,470 13,201 9,338
Shares held by Rabbi Trust 27,305 13,789 26,230 11,624
--------- --------- --------- ---------
Weighted average common
shares - Assuming Dilution 1,321,305 1,268,306 1,303,139 1,264,994
========= ========= ========= =========
* Includes shares awarded to directors under the Non-Employee Director Retainer
Plan
NOTE 8 OTHER BORROWED FUNDS
Federal Home Loan Bank advances increased by $7.5 million from December 31, 2000
to September 30, 2001. The Company also issued a $4 million Fixed Rate Capital
Trust Pass-through Security of Access Anytime Capital Trust I during the third
quarter of 2001 (see 8-K filed on July 17, 2001).
14
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") 2000 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 five
banking locations in Albuquerque, Clovis, Gallup, and Portales, New Mexico. The
Bank has a wholly-owned subsidiary 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 MONETARY and 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.
FINANCIAL CONDITION
Total assets for the Company increased by $19,161,599 or 12.41%, from December
31, 2000 to September 30, 2001. The increase in assets was primarily due to an
increase of approximately $19.5 million in loans receivable.
Total liabilities increased by $18,214,586 or 12.77% for the nine-month period
ended September 30, 2001. An increase of $7.5 million in Federal Home Loan Bank
advances, approximately $7 million in deposits, and $4 million in a note payable
were the cause of the increase in total liabilities. The increase in a note
payable was due to the issuance of Fixed Rate Capital Trust Pass-through
Securities of Access Anytime Capital Trust I on July 16, 2001, and approximately
$2.9 million of the note payable proceeds were injected into capital of the Bank
(see 8-K filed on July 17, 2001).
15
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-weighed 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 September 30, 2001 as reported to the OTS.
Tier 1- Tier 1- Total
Core Risk-based Risk-based
Capital Capital Capital
------------- ------------- -------------
Total regulatory assets $ 172,728,695
Net unrealized depreciation on available-for-sale
securities, net (121,839)
Less intangible assets disallowed for regulatory
purposes (1,905,719)
-------------
Adjusted regulatory total assets $ 170,701,137
=============
Risk-based assets $ 128,877,000 $ 128,877,000
============= =============
Stockholders' equity $ 17,126,762 $ 17,126,762 $ 17,126,762
Net unrealized depreciation on available-for-sale
securities, net (121,839) (121,839) (121,839)
General valuation allowance -- -- 838,671
Less intangible assets disallowed for
regulatory purposes (1,905,719) (1,905,719) (1,905,719)
------------- ------------- -------------
Regulatory capital 15,099,204 15,099,204 15,937,875
Regulatory capital required to be "well capitalized" 8,535,057 7,732,620 12,887,700
------------- ------------- -------------
Excess regulatory capital $ 6,564,147 $ 7,366,584 $ 3,050,175
============= ============= =============
Bank's capital to adjusted regulatory assets 8.85%
=============
Bank's capital to risk-based assets 11.72% 12.37%
============= =============
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
16
matching. FHLB borrowings were $2.75 million at December 31,
2000 and $10.25 million at September 30, 2001.
RESULTS OF OPERATIONS
THREE-MONTH COMPARATIVE ANALYSIS FOR PERIODS ENDED SEPTEMBER 30, 2001 AND
2000
Net income for the three-months ended September 30, 2001 was $173,077 or $.14
per share compared to $87,951 or $.07 per share for the three-months ended
September 30, 2000, resulting in an increase of $85,126 or 96.79% for the
quarter.
Net Interest Income. Net interest income before provision for loan losses
increased by $281,899 to $1,519,475 for the three-month period ended September
30, 2001 compared to $1,237,576 for the same period in 2000. Interest income for
the quarter ended September 30, 2001 increased by $418,387, as compared to the
quarter ended September 30, 2000. The increase in interest income was primarily
due to an increase in loan receivable interest income of $476,743. Interest
expense for the three-months ended September 30, 2001 increased by $136,488
compared to the three-months ended September 30, 2000. An interest expense
increase of $85,417 for the quarter ended September 30, 2001 was due to a $4
million issue of Fixed Rate Capital Trust Pass-through Securities of Access
Anytime Capital Trust I on July 16, 2001. Interest expense on deposits of the
Bank also increased $63,485 for the three-months ended 2001.
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, regulatory policies, general economic conditions, the estimated fair
value of the underlying collateral and other factors which may affect the
collectibility of loans. During the third quarter of 2001, the provision for
loan losses increased by $143,400 to $182,400 compared to $39,000 in the third
quarter of 2000. The increase in provision is due to the loan growth of the
entire loan portfolio plus management's assessment of uncertain economic
conditions and an increase in non performing assets of $777,754 from December
31, 2000.
Noninterest Income. During the three-months ended September 30, 2001,
noninterest income decreased by $17,203 to $331,812 compared to $349,015 in
2000. The decrease in noninterest income for the quarter ended September 30,
2001 was primarily due to an decrease in gains on sales of loans of $58,832 to
$46,829, as compared to $105,661 for the quarter ended September 30, 2000.
Noninterest Expense. Noninterest expense decreased to $1,406,649 from $1,414,333
for the quarter ended September 30, 2001 compared to the same quarter in 2000.
The $7,684 decrease in noninterest expense was primarily due to a decrease in
occupancy expense of $22,717. During the third quarter of 2001, the Company
purchased the Gallup Branch building from an outside investor and is leasing the
building to the Bank, which resulted in a decrease of $1,695 per month in
occupancy expense.
Provision for Income Taxes. The income tax expense for the quarter ended
September 30, 2001 was an expense of $89,161 compared to $45,307 in the quarter
ended September 30, 2000.
17
NINE-MONTH COMPARATIVE ANALYSIS FOR PERIODS ENDED SEPTEMBER 30, 2001 AND
2000
Net income for the nine-months ended September 30, 2001 was $534,511 or $.42 per
share compared to $355,464 or $.29 for the nine-months ended September 30, 2000.
Net Interest Income. Net interest income before provision for loan losses
increased by $370,139 to $4,141,488 for the nine-month period ended September
30, 2001 compared to $3,771,349 for the same period in 2000. The increase in net
interest income before provision for loan losses was primarily caused by an
increase in loan receivable interest income, which generated an additional
$1,267,646 for the nine-months ended September 30, 2001 as compared to the same
period from the prior year. The increase in net interest income was reduced by
an increase of $877,261 in deposits interest expense.
Provision for Loan Losses. During the first nine-months of 2001, the provision
for loan losses increased to $313,354 compared to $116,378 in the first
nine-months of 2000.
Noninterest Income. During the nine-months ended September 30, 2001, noninterest
income increased by $191,284 to $1,106,805 compared to $915,521 in 2000. The
increase in noninterest income was due to increases in other income, loan
servicing and other fees, and gains on sales of loans of $99,355, $53,914, and
$38,015, respectively.
Noninterest Expense. Noninterest expense increased $94,070 to $4,124,982 for the
nine-months ended September 30, 2001 compared to $4,030,912 for the same period
in 2000. The increase in noninterest expense was primarily due to an increase in
other expense of $78,087.
Provision for Income Taxes. The income tax expense for the first nine-months of
2001 was an expense of $275,446 compared to $184,116 in the nine-months ended
September 30, 2000.
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 Bank.
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.
18
Three Months ended September 30,
-----------------------------------------------------------------------------------
2001 2000
------------------------------------------- --------------------------------------
Average Interest Average Interest
outstanding earned/ Yield/ outstanding earned/ Yield/
balance paid rate balance paid rate
---------------- ------------ --------- ------------- ------------ --------
Interest-earning assets:
Loans receivable (1) $138,896,744 $ 2,823,458 8.13% $115,409,603 $ 2,346,715 8.13%
Mortgage-backed securities 11,390,895 179,868 6.32 13,069,049 206,967 6.33
Investment securities 3,534,875 54,134 6.13 3,412,330 57,775 6.77
Other interest-earning assets 5,874,760 76,558 5.21 6,541,112 104,174 6.37
------------ ------------ ------ ------------ ------------ ------
Total interest-earning assets (1) $159,697,274 $ 3,134,018 7.85% $138,432,094 $ 2,715,631 7.85%
============ ============ ====== ============ ============ ======
Interest-bearing liabilities:
Savings deposits $144,721,820 $ 1,424,863 3.94% $127,287,187 $ 1,361,378 4.28%
Federal Home Loan Bank advances 7,267,527 83,243 4.58 7,298,244 116,677 6.39
Other borrowings 4,500,420 106,437 9.46 -- -- --
------------ ------------ ------ ------------ ------------ ------
Total interest-bearing liabilities $156,489,767 $ 1,614,543 4.13% $134,585,431 $ 1,478,055 4.39%
============ ============ ====== ============ ============ ======
Net interest income $ 1,519,475 $ 1,237,576
============ ============
Net interest rate spread 3.72% 3.46%
====== ======
Net interest-earning assets $ 3,207,507 $ 3,846,663
============ ============
Net yield
on average interest-earning assets 3.81% 3.58%
====== ======
Average interest-earning assets to average
interest-bearing liabilities 102.05% 102.86%
============ ============
Nine Months ended September 30,
-----------------------------------------------------------------------------------
2001 2000
------------------------------------------- --------------------------------------
Average Interest Average Interest
outstanding earned/ Yield/ outstanding earned/ Yield/
balance paid rate balance paid rate
---------------- ------------ --------- ------------- ------------ --------
Interest-earning assets:
Loans receivable (1) $129,869,895 $ 7,979,865 8.19% $111,526,449 $ 6,712,219 8.02%
Mortgage-backed securities 10,804,905 516,715 6.38 14,198,843 652,431 6.13
Investment securities 3,486,604 166,337 6.36 3,382,292 184,690 7.28
Other interest-earning assets 8,051,576 336,249 5.57 6,805,114 304,507 5.97
------------ ------------ ------ ------------ ------------ ------
Total interest-earning assets (1) $152,212,980 $ 8,999,166 7.88% $135,912,698 $ 7,853,847 7.70%
============ ============ ====== ============ ============ ======
Interest-bearing liabilities:
Savings deposits $142,045,604 $ 4,522,502 4.25% $123,100,423 $ 3,645,241 3.95%
Federal Home Loan Bank advances 4,670,299 172,672 4.93 9,610,900 437,257 6.07
Other borrowings 2,346,180 162,504 9.24 -- -- --
------------ ------------ ------ ------------ ------------ ------
Total interest-bearing liabilities $149,062,083 $ 4,857,678 4.35% $132,711,323 $ 4,082,498 4.10%
============ ============ ====== ============ ============ ======
Net interest income $ 4,141,488 $ 3,771,349
============ ============
Net interest rate spread 3.53% 3.60%
====== ======
Net interest-earning assets $ 3,150,897 $ 3,201,375
============ ============
Net yield
on average interest-earning assets 3.63% 3.70%
====== ======
Average interest-earning assets to average
interest-bearing liabilities 102.11% 102.41%
============ ============
(1) Calculated net of loans in process
19
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 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.
20
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.6.3 Extension of Employment Agreement with Kenneth J. Huey, Jr.
dated August 23, 2001.
10.7.3 Extension of Employment Agreement with Norman R. Corzine
dated August 23, 2001.
(b) Reports on Form 8-K.
None
21
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: October 26, 2001 /s/ NORMAN R. CORZINE
------------------------------------
Norman R. Corzine, Chairman of
the Board, Chief Executive Officer
(DULY AUTHORIZED REPRESENTATIVE)
Date: October 26, 2001 /s/ KEN HUEY, JR.
-----------------------------------
Ken Huey, Jr., President, Chief
Financial Officer and Director
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER) (DULY AUTHORIZED
REPRESENTATIVE)
22