UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________________ TO ___________________
COMMISSION FILE NUMBER: 0-28894
ACCESS ANYTIME BANCORP, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 85-0444597
- ------------------------------------ ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
801 PILE STREET, CLOVIS, NEW MEXICO 88101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (505) 762-4417
----------------------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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
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1,193,076 Shares of Capital Stock $.01 par value
(Without giving effect to common stock dividend
declared on October 30, 1997 and payable on
December 1, 1997.)
Outstanding as of November 10, 1997
Transitional Small Business Disclosure Format (check one):
Yes No X
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Unaudited Consolidated Statements of Financial Condition . . . . . . . 3
Unaudited Consolidated Statements of Operations. . . . . . . . . . . . 4
Unaudited Consolidated Statements of Stockholders' Equity. . . . . . . 5
Unaudited Consolidated Statements of Cash Flows. . . . . . . . . . . . 6
Notes to Consolidated Financial Statements (Unaudited) . . . . . 7 - 12
Item 2 - Managements' Discussion and Analysis or Plan of Operation . 13 - 18
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 19
Item 6 - Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . 20
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, December 31,
1997 1996
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ASSETS
- ------
Cash and cash equivalents $ 5,566,991 $ 2,199,227
Certificates of deposit 1,095,000 380,570
Securities available-for-sale
(amortized cost of $15,963,723 and $23,838,281) 15,997,931 23,639,686
Securities held-to-maturity
(aggregate fair value of $21,760,688 and
$28,470,335) 21,939,029 29,113,430
Loans held-for-sale
(aggregate fair value of $590,490 and $576,994) 579,226 564,361
Loans receivable 54,186,076 45,596,212
Interest receivable 591,937 598,327
Real estate owned 62,215 86,114
FHLB stock 1,642,734 1,572,334
Premises and equipment 1,832,811 1,924,405
Servicing rights 349,490 345,554
Organizational cost, net of accumulated amortization
of $37,628 and $9,814 167,466 163,373
Deferred tax asset 1,404,650 188,650
Other assets 223,426 481,114
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Total assets $105,638,982 $106,853,357
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------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits $ 95,559,350 $ 98,164,001
Federal Home Loan Bank advances -- 3,000,000
Accrued interest and other liabilities 373,949 351,135
Advance payments by borrowers for taxes and
insurance 572,010 252,099
------------ ------------
Total liabilities 96,505,309 101,767,235
------------ ------------
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; 1,216,852 and 732,198 shares issued
and outstanding at September 30, 1997 and
December 31, 1996, respectively 12,169 7,322
Capital in excess of par value 9,471,622 7,019,577
Accumulated deficit (372,325) (1,742,182)
Net unrealized appreciation (depreciation) on
available-for-sale securities, net 22,207 (198,595)
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Total stockholders' equity 9,133,673 5,086,122
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Total liabilities and stockholders' equity $105,638,982 $106,853,357
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See accompanying notes to unaudited consolidated financial statements.
3
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Month Periods Ended Nine Month Periods Ended
September 30, September 30,
1997 1996 1997 1996
---------- ----------- ---------- ----------
Interest income:
Loans receivable $1,167,873 $ 897,037 $3,285,662 $2,505,568
U.S. government agency securities 25,951 74,032 75,051 268,099
Mortgage-backed securities 567,616 819,766 1,870,984 2,646,128
Other interest income 62,871 57,850 193,203 218,180
---------- ---------- ---------- ----------
Total interest income 1,824,311 1,848,685 5,424,900 5,637,975
---------- ---------- ---------- ----------
Interest expense:
Deposits 1,035,806 1,139,153 3,109,911 3,607,581
FHLB advances 193 11,624 13,007 11,624
---------- ---------- ---------- ----------
Total interest expense 1,035,999 1,150,777 3,122,918 3,619,205
---------- ---------- ---------- ----------
Net interest income before provision for loan losses 788,312 697,908 2,301,982 2,018,770
Provision for loan losses charged (credited) 25,881 28,967 93,320 (6,775)
---------- ---------- ---------- ----------
Net interest income after provision for
loan losses 762,431 668,941 2,208,662 2,025,545
---------- ---------- ---------- ----------
Noninterest income:
Loan servicing and other fees 85,473 88,963 257,129 260,610
Net realized gains on sales of available-for-sale
securities -- -- 20,637 --
Net realized gains on sales of loans 47,775 34,402 109,491 98,411
Other income 94,271 79,848 278,905 233,082
---------- ---------- ---------- ----------
Total other income 227,519 203,213 666,162 592,103
---------- ---------- ---------- ----------
Noninterest expenses:
Salaries and employee benefits 440,339 401,192 1,281,373 1,188,944
Occupancy expense 99,031 100,403 298,089 269,639
Deposit insurance premium 65,261 856,644 194,470 1,051,752
Advertising 14,567 7,918 39,388 17,290
Real estate operations, net 663 327 303 37,983
Professional fees 29,275 56,537 (2,739) 142,479
Other expense 250,272 197,162 726,882 609,685
---------- ---------- ---------- ----------
Total other expenses 899,408 1,620,183 2,537,766 3,317,772
---------- ---------- ---------- ----------
Income (loss) before income taxes 90,542 (748,029) 337,058 (700,124)
Income tax benefit 1,228,000 -- 1,228,000 --
---------- ---------- ---------- ----------
Net income (loss) $1,318,542 $ (748,029) $1,565,058 $(700,124)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income (loss) per share of common stock:
Primary $ 1.08 $ (1.02) $ 1.40 $ (0.98)
Fully diluted $ 1.08 $ (1.02) $ 1.40 $ (0.98)
Average shares outstanding:
Primary 1,216,818 731,985 1,115,707 717,078
Fully diluted 1,216,818 731,985 1,115,707 717,078
See accompanying notes to unaudited consolidated financial statements.
4
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Net
Unrealized
Appreciation
(Depreciation)
On
Common Stock Available-
----------------- Capital In For-Sale
Number of Excess of Accumulated Securities,
Shares Amount Par Value Deficit Net Total
--------- ------ --------- ------- ----------- -----
Balance at December 31, 1996 732,198 $ 7,322 $7,019,577 $(1,742,182) $(198,595) $5,086,122
Net income -- -- -- 1,565,058 -- 1,565,058
Common stock issued 460,878 4,609 2,250,582 -- -- 2,255,191
Common stock rights issued
in lieu of directors cash
compensation -- -- 6,500 -- -- 6,500
2% common stock dividend
declared on
October 30, 1997 23,776 238 194,963 (195,201) -- --
Net changes in unrealized
appreciation (depreciation)
on available-for-sale
securities, net -- -- -- -- 220,802 220,802
--------- ------- ---------- ----------- --------- ----------
Balance at September 30, 1997 1,216,852 $12,169 $9,471,622 $ (372,325) $ 22,207 $9,133,673
--------- ------- ---------- ----------- --------- ----------
--------- ------- ---------- ----------- --------- ----------
See accompanying notes to unaudited consolidated financial statements.
5
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Month Periods Ended
September 30,
------------------------------
1997 1996
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Cash flows from operating activities:
Net Income (loss) $ 1,565,058 $ (700,124)
Adjustments to reconcile net income (loss) to
cash provided by operating activities:
Depreciation 105,817 101,313
Deferred income taxes (1,228,000) --
Provision for loan losses charged (credited) 93,320 (6,775)
Amortization of premiums on investment securities 256,746 217,466
Amortization of organizational costs 27,814 --
Gain on sale of available-for-sale securities (20,637) --
Gain on sale of loans held-for-sale (109,491) (98,411)
Proceeds from sales of loans held-for-sale 6,575,665 6,469,597
Originations of loans held-for-sale (6,531,543) (6,053,045)
(Gain) loss on sale of REO (813) 1,469
Net (increase) decrease in accrued interest receivable and
other assets 195,581 (152,926)
Increase accrued expense, other liabilities, and other 22,814 642,046
----------- -----------
Net cash provided by operating activities 952,331 420,610
----------- -----------
Cash flows form investing activities:
Proceeds from maturities and principal repayments of
available-for-sale securities 2,350,283 8,631,364
Purchases of held-to-maturity securities -- (5,000,000)
Proceeds from maturities and principal repayments
of held-to-maturity securities 7,086,282 9,787,663
Proceeds from sales of available-for-sale securities 5,376,284 --
Net decrease in certificates of deposit (714,430) (489,359)
Net increase in loans (8,632,680) (7,548,806)
Proceeds from sales of foreclosed real estate 19,600 23,338
Purchases of premises and equipment (14,950) (62,463)
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Net cash provided by investing activities 5,470,389 5,341,737
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Cash flows from financing activities:
Net decrease in deposits (2,604,651) (8,241,948)
Net change in other borrowed funds (3,000,000) --
Net increase in advance payments by
borrowers for taxes and insurance 319,911 175,048
Organizational costs incurred (31,907) --
Rights offering costs incurred (160,919) --
Net proceeds from issuance of common stock 2,422,610 193,500
----------- -----------
Net cash used in financing activities (3,054,956) (7,873,400)
----------- -----------
Increase (decrease) in cash and cash equivalents 3,367,764 (2,111,053)
Cash and cash equivalents at beginning of period 2,199,227 6,752,606
----------- -----------
Cash and cash equivalents at end of period $ 5,566,991 $ 4,641,553
----------- -----------
----------- -----------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 3,134,589 $ 2,533,108
Income taxes -- 100
Supplemental disclosure of non-cash investing activities:
Real estate acquired in settlement of loans -- --
Loans to facilitate the sale of real estate owned -- 21,000
See accompanying notes to unaudited consolidated financial statements.
6
ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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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"), formerly known as First Savings
Bank, F.S.B., and the Bank's wholly-owned subsidiary, First Equity Development
Corporation ("FEDCO"). The Company was formed in 1996 and, through an agreement
and plan of reorganization by and between the Company and the Bank, became the
holding company for the Bank under a stock-for-stock exchange. 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, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles 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, 1996 consolidated statement of financial
condition, as presented herein, was derived from audited financial statements,
but does not include all disclosures required by generally accepted accounting
principles and should be read in conjunction with the audited consolidated
financial statements of the Company for the year ended December 31, 1996.
7
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NOTE 2 - SECURITIES
The carrying amount of the Bank's securities follows:
Amortized Gross unrealized Fair
Cost Gains Losses Value
--------- ---------------- -----
AVAILABLE-FOR-SALE SECURITIES:
September 30, 1997:
Mortgage-backed securities:
GNMA adjustable-rate $ 15,963,723 $ 97,396 $ 63,188 $ 15,997,930
------------ -------- --------- ------------
$ 15,963,723 $ 97,396 $ 63,188 $ 15,997,930
------------ -------- --------- ------------
------------ -------- --------- ------------
December 31, 1996:
Mortgage-backed securities:
GNMA adjustable-rate $ 23,838,281 $ 18,365 $ 216,960 $ 23,639,686
------------ -------- --------- ------------
$ 23,838,281 $ 18,365 $ 216,960 $ 23,639,686
------------ -------- --------- ------------
------------ -------- --------- ------------
Amortized Gross unrealized Fair
Cost Gains Losses Value
--------- ---------------- -----
HELD-TO-MATURITY SECURITIES:
September 30, 1997:
Mortgage-backed securities:
FNMA participation
certificates $ 4,609,827 $ -- $ 70,571 $ 4,539,256
FHLMC participation
certificates 15,614,017 7,904 77,554 15,544,367
FHLMC adjustable rates 1,715,185 -- 38,120 1,677,065
------------ -------- --------- ------------
$ 21,939,029 $ 7,904 $ 186,245 $ 21,760,688
------------ -------- --------- ------------
------------ -------- --------- ------------
December 31, 1996:
Mortgage-backed securities:
FNMA participation
certificates $ 5,355,122 $ -- $ 162,192 $ 5,192,930
FHLMC participation
certificates 21,896,565 4,818 453,206 21,448,177
FHLMC adjustable rates 1,861,743 -- 32,515 1,829,228
------------ -------- --------- ------------
$ 29,113,430 $ 4,818 $ 647,913 $ 28,470,335
------------ -------- --------- ------------
------------ -------- --------- ------------
8
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NOTE 3 - LOANS HELD-FOR-SALE
The amortized cost of the Bank's loans held-for-sale and their estimated fair
value follows:
Gross unrealized
----------------
Amortized cost Gains Losses Fair Value
-------------- ----- ------ ----------
September 30, 1997 $579,226 $11,264 $ -- $590,490
December 31, 1996 564,361 12,633 -- 576,994
NOTE 4 - LOANS RECEIVABLE
The components of the Bank's loans receivable in the consolidated statements of
financial condition were as follows:
September 30, 1997 December 31, 1996
------------------ -----------------
First mortgage loans:
Conventional $37,318,766 $31,513,687
FHA insured and VA guaranteed 4,571,106 4,326,093
Consumer and installment loans 11,348,662 9,047,776
Consumer timeshare loans 61,564 179,494
Construction loans 1,463,400 1,975,000
Other 838,819 387,600
----------- -----------
55,602,317 47,429,650
Less:
Loans in process 450,813 1,077,121
Unearned discounts, deferred loans fees,
and other 442,225 327,076
Allowance for loan losses 523,203 429,241
----------- -----------
$54,186,076 $45,596,212
----------- -----------
----------- -----------
9
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NOTE 4 - LOANS RECEIVABLE (CONTINUED)
An analysis of the changes in allowance for loan losses follows:
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
------------------ -----------------
Balance at beginning of year $ 429,241 $427,889
Loans charged-off (30,755) (17,882)
Recoveries 31,397 5,595
--------- --------
Net loans recovered (charged-off) 642 (12,287)
Provision for loan losses charged to
operations 93,320 13,639
--------- --------
Balance at end of period $ 523,203 $429,241
--------- --------
--------- --------
An analysis of the changes in loans to directors and executive officers is as
follows:
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
------------------ -----------------
Balance at beginning of period $ 315,605 $262,180
Loans originated 430,446 110,623
Loan principal payments and other reductions (210,293) (57,198)
--------- --------
Balance at end of period $ 535,758 $315,605
--------- --------
--------- --------
10
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NOTE 5 - NON-PERFORMING ASSETS
The composition of the Bank's portfolio of non-performing assets is shown in the
following table.
September 30, 1997 December 31, 1996
------------------ -----------------
(Dollars in Thousands)
Non-accrual loans (1) $ 73 $ 53
Past due 90 days or more and still
accruing -- --
Renegotiated loans (2) 1,533 1,573
Real estate owned (3) 62 86
------ ------
Total non-performing assets $1,668 $1,712
------ ------
------ ------
Ratio of non-performing assets to total assets 1.58% 1.60%
------ ------
------ ------
(1) Generally refers to loans that are contractually delinquent (i.e., payments
were due and unpaid for more than 90 days).
(2) Renegotiated loans are those for which the interest rate or other terms
were renegotiated because of the inability of borrowers to service the
obligation under the original terms of the agreements and loans to
facilitate the sale of real estate.
(3) Refers to real estate acquired by the Bank through foreclosure or voluntary
deed.
NOTE 6 - INCOME TAXES
During the third quarter of 1997, the Company revised its estimates relative to
the realization of the future benefits of its deferred tax assets. In light of
the Company's capital infusion resulting from equity offerings completed in the
first and second quarters of 1997 and recent historical earnings, management has
determined that it is more likely than not that the Company will realize a
significant portion of the benefits provided by those assets which primarily
consist of net operating loss carryforwards. Accordingly, the Company has
reduced previously recorded valuation allowances against its net deferred tax
assets and recognized a deferred tax benefit of $1,373,000 during that quarter.
NOTE 7 - SUBSEQUENT EVENTS
Effective as of June 17, 1996, the Board of Directors of the Bank and the Office
of Thrift Supervision (OTS) signed a Supervisory Agreement which stated that it
was of mutual benefit for the Bank to do the following:
1. Complete and submit a revised business and capital plan which would:
a. Increase core capital to 6% as of December 31, 1996 (which was
later waived by the OTS), and
11
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NOTE 7 - SUBSEQUENT EVENTS (CONTINUED)
b. Increase core capital to 7% as of June 30, 1997.
2. Create an asset/liability and investment committee of the Board to
oversee and review pricing activities, investment selection and
interest rate risk.
3. Report quarterly on the Bank's operating results and explain variances
of actual results to budgeted projections.
The Bank has complied with the requirements of the Supervisory Agreement,
unless waived by the OTS, and met the 7% core capital requirement on April
30, 1997. The Bank continues to meet the 7% core capital requirement.
Subsequent to September 30, 1997, a 2% stock dividend was declared on
October 30, 1997 by the Board of Directors for shareholders of record on
October 31, 1997. The stock dividend is payable on December 1, 1997 and the
effect of the dividend has been reflected in the September 30, 1997 Consolidated
Statement of Financial Condition and the Consolidated Statement of Stockholders'
Equity for the nine months then ended. The dividend will not apply to holders
of fractional shares and no fractional shares will be issued in connection with
the payment of the dividend. Per share data has been adjusted for the stock
dividend for all periods presented.
On October 30, 1997, 40,000 previously unissued stock options were issued to
various key employees and 32,000 previously unissued stock options were issued
to outside directors of the Company, all of which have an exercise price of
$8.375 each.
12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
Access Anytime Bancorp, Inc. (the "Company") is a Delaware corporation which
was organized in 1996 for the purpose of becoming the thrift holding company
of FirstBank (the "Bank"), formerly known as First Savings Bank, F.S.B. The
Bank is a federally chartered stock savings bank conducting business from
three banking locations in Clovis and Portales, New Mexico and a loan
production office in Rio Rancho, New Mexico. The Bank has a wholly-owned
subsidiary which is currently inactive.
The Bank is principally engaged in the business of attracting retail deposits
from the general public and investing those funds in first mortgage loans in
owner occupied, single-family residential loans and mortgage-backed
securities. To a lesser extent, the Bank originates residential construction
loans and commercial real estate loans. The Bank also originates consumer
loans, including loans for the purchase of automobiles and home improvement
loans, and commercial 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 decreased by $1,214,375 or 1.14% from December
31, 1996 to September 30, 1997, and total liabilities decreased by $5,261,926
or 5.17% during the same period. The reduction in assets occurred primarily
during the first quarter of 1997 because of a reduction in securities
available-for-sale and securities held-to-maturity, which was approximately
$7.9 and $7.2 million, respectively, the funds of which were used to 1)
pay-off outstanding advances from the Federal Home Loan Bank ($3,000,000), 2)
fund additional loans ($8,589,864 or 18.84%), and 3) fund a decline in
deposits ($2,604,651 or 2.65%). All of these changes were the result of the
Bank's strategy to enhance earnings through changes in the overall
asset/liability mix of the Bank's interest earning assets as they relate to
its interest bearing liabilities. In addition, the net proceeds from equity
offerings completed in the first and second quarters of 1997 generated
approximately $2.3 million.
13
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, effective date of the new
capital standards, the Bank must have: (1) core capital equal to 3% of adjusted
total assets; (2) tangible capital equal to 1.5% of adjusted total assets; and
(3) total capital equal to 8.0% of risk-weighted assets, which includes off-
balance sheet items.
The following table is a reconciliation of the BANK'S capital for regulatory
purposes at September 30, 1997 as reported to the OTS.
Tangible Core Risk-based
Assets capital capital capital
------------ ------------ ---------- ----------
Total assets $105,370,531
Unrealized gain on securities
available-for-sale, net (22,207)
Less intangible assets disallowed
for regulatory purposes (1,181,000)
------------
Adjusted regulatory total assets $104,167,324
------------
------------
Risk-based assets $ 48,684,000
------------
------------
Stockholders' equity $ 8,855,904 $ 8,855,904 $ 8,855,904
Unrealized gain on securities
available-for-sale, net (22,207) (22,207) (22,207)
General valuation allowance -- -- 523,202
Less intangible assets disallowed
for regulatory purposes (1,181,000) (1,181,000) (1,181,000)
----------- ----------- -----------
Regulatory capital 7,652,697 7,652,697 8,175,899
Regulatory capital required 1,562,510 3,125,020 3,894,720
----------- ----------- -----------
Excess regulatory capital $ 6,090,187 $ 4,527,677 $ 4,281,179
----------- ----------- -----------
----------- ----------- -----------
Bank's capital to adjusted
regulatory assets 7.35% 7.35%
----------- -----------
----------- -----------
Bank's capital to risk-based assets 16.79%
-----------
-----------
At September 30, 1997 and December 31, 1996, the Bank met the foregoing
minimum tangible, core and risk-based capital levels. A supervisory
agreement between the Board of Directors of the Bank and OTS required that
the Bank achieve core capital of 7% as of June 30, 1997. This requirement
was met on April 30, 1997 and has been maintained through September 30, 1997.
14
LIQUIDITY - Liquidity enables the Bank to meet withdrawals of its deposits
and the needs of its loan customers. The Bank maintains its liquidity
position through maintenance of cash resources and a core deposit base. A
further source is the Bank's ability to borrow funds. The Bank is a member
of the Federal Home Loan Bank (FHLB) which provides a source of borrowings to
the Bank for asset and asset/liability matching. As of September 30, 1997,
the Bank had no FHLB borrowings.
INFLATION - The general rate of inflation over the past three years, as
measured by the Consumer Price Index, has not changed significantly.
Therefore, management does not consider the effects of inflation on the
Bank's financial position and results of operations to be material.
STOCK DIVIDEND - On October 30, 1997, the Board of Directors of the Company
declared a 2% stock dividend for shareholders of record on October 31, 1997.
The stock dividend totalling 23,776 shares is payable on December 1, 1997.
The dividend will not apply to holders of fractional shares and no fractional
shares will be issued in connection with the payment of the dividend.
15
RESULTS OF OPERATIONS
THREE-MONTH COMPARATIVE ANALYSIS FOR PERIODS ENDED SEPTEMBER 30, 1996 AND 1997
The Company had net income of $1,318,542 or $1.08 primary earnings per share
for the three months ended September 30, 1997 compared to a net loss of
$748,029 or $1.02 primary loss per share for the same period in 1996.
Net interest income before provision for loan losses increased by $90,404 or
12.95% for the quarter ended September 30, 1997 compared to the quarter ended
September 30, 1996. The increase was primarily the result of interest
expense decreasing by $114,778 which was partially offset by an interest
income decline of $24,374. The decrease in interest expense was primarily
because of a $103,347 or 9.07% reduction in interest expense on deposits. The
decrease in interest income was primarily a result of a $48,081 or 64.95%
decrease in investment security interest income. The provision for loan
losses decreased by $3,086 for the quarter ended September 30, 1997 compared
to the quarter ended September 30, 1996.
Total other income increased by $24,306 or 11.96% comparing September 30,
1997 and the September 30, 1996 quarters. The increase in total other income
was attributable to an increase in net gains on sales of loans of $13,373 and
an increase in other income of $14,423. Total other expenses decreased by
$720,775 for the quarter ended September 30, 1997 compared to the quarter
ended September 30, 1996. The decrease in total other expenses were
primarily due to a one-time charge of $761,686 for the Savings Association
Insurance Fund (SAIF) Special Assessment charged on September 30, 1996. The
one-time charge was the primary cause for a $791,383 reduction in deposit
insurance premium expense for the quarter ended September 30, 1997 compared
to the quarter ended September 30, 1996. Management of the bank anticipates
a further reduction in deposit insurance premium expenses in the future,
primarily because capital raised in the first and second quarter of 1997 will
result in a lower SAIF deposit insurance assessment rate. Salaries and
employee benefits expense increased by $39,147 or 9.76% comparing quarters
ended September 30, 1997 and September 30, 1996. Management anticipates a
further increase in salaries and employee benefits expense as the loan
department is increased to increase new loan production. Professional fees
decreased $27,262, while other expense increased by $53,110 for the quarter
ended September 30, 1997 compared to the quarter ended September 30, 1996.
See Income Taxes below for a discussion of the income tax benefit recognized
during the three months ended September 30, 1997.
NINE-MONTH COMPARATIVE ANALYSIS FOR PERIODS ENDED SEPTEMBER 30, 1996 AND 1997
The Company had net income of $1,565,058 or $1.40 primary earnings per share
for the nine months ended September 30, 1997 compared to a net loss of
$700,124 or $0.98 primary loss per share for the same period in 1996.
Net interest income before provision for loan losses increased by $283,212 or
14.03% for the nine months ended September 30, 1997 compared to the nine
months ended September 30, 1996. The
16
increase was primarily the result of interest expense decreasing by $496,287
which was partially offset by an interest income decline of $213,075. The
decrease in interest expense was because of a $497,670 or 13.80% reduction in
interest expense on deposits. The decrease in interest income was primarily a
result of a $193,048 or 13.80% decrease in investment security interest
income. The provision for loan losses increased by $100,095 for the nine
months ended September 30, 1997 compared to the same period from 1996.
Total other income increased by $74,059 or 12.51% comparing the first nine
months of 1997 and 1996. The increase in total other income was attributable
to an increase in net gains on sales of available-for-sale securities of
$20,637 and an increase in other income of $45,823. Total other expenses
decreased by $780,006 for the nine months ended September 30, 1997 compared
to the nine months ended September 30, 1996. The decrease in total other
expenses were primarily due to a one-time charge of $761,686 for the SAIF
Special Assessment charged on September 30, 1996. The one-time charge was
the primary cause for a $857,282 reduction in deposit insurance premium
expense for the nine months ended September 30, 1997 compared to the nine
months ended September 30, 1996. Salaries and employee benefits expense
increased by $92,429 or 7.77% comparing the nine months ended September 30,
1997 and September 30, 1996. Professional fees decreased $145,218, while
other expense increased by $117,197 for the nine months ended September 30,
1997 compared to the nine months ended September 30, 1996.
See Income Taxes below for a discussion of the income tax benefit recognized
during the nine months ended September 30, 1997.
INCOME TAXES
During the third quarter of 1997, the Company revised its estimates relative
to the realization of the future benefits of its deferred tax assets,
particularly the net operating loss carryforwards. In light of additional
capital raised in the first and second quarters of 1997 and the Company's
recent historical earnings, management has determined that it is more likely
than not that the Company will realize substantial benefits provided by its
net operating loss carryforwards and certain other deferred tax assets. As
such, the Company recognized a deferred tax benefit during the three and nine
months ended September 30, 1997. As a result of the Company's recognizing
the benefit of its deferred income taxes, in the future, as these benefits
are utilized, the Company will accrue deferred income tax expenses in a like
amount.
IMPACT OF NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share." Statement 128 is effective for years ending
after December 15, 1997, for both interim and annual periods, and replaces
the presentation of primary and fully diluted earnings per share with a
presentation of basic and diluted earnings per share. The adoption of
Statement 128 is not expected to have a material impact on earnings per share
reported by the Company.
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In February 1997, the Financial Accounting Standards Board issued Statement
No. 129, "Disclosure of Information about Capital Structure." Statement 129
is effective for financial statements for periods ending after December 15,
1997. Statement 129 consolidates the existing requirements to disclose
certain information about an entity's capital structure. The Company does
not anticipate a change in its disclosures as a result of its adoption of
Statement 129.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income." Statement 130 is effective for financial statements for fiscal
years beginning after December 15, 1997, with earlier application permitted.
Statement 130 defines comprehensive income as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. The Company does not anticipate a
change in its disclosures as a result of its adoption of Statement 130.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
Statement 131 is effective for fiscal years beginning after December 15,
1997, with earlier application encouraged. Statement 131 specifies revised
guidelines for determining an entity's operating segments and the type and
level of financial information to be disclosed. The Company does not
anticipate a change in its disclosures as a result of its adoption of
Statement 131.
FORWARD-LOOKING STATEMENTS
When used in this Form 10-QSB, the words or phrases such as "does not
anticipate", "is not expected to", "anticipates" or similar expressions 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.
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
As previously reported, on February 1, 1996, an Order of Dismissal was
entered by the court with respect to a certain derivative lawsuit
("Derivative Lawsuit") which had been filed in the State District Court in
Curry County, New Mexico on May 19, 1994 and amended on November 2, 1994.
The Derivative Lawsuit was filed by two stockholders, one of whom was a
former director of the Bank, alleging a number of intentional and negligent
acts and omissions in the management of the Bank which allegedly resulted in
damages and losses suffered by the Bank. The court dismissed, with
prejudice, all claims against all defendants, except a former president, who
was also chief executive officer and a director (the "Former President") of
the Bank. A dismissal with prejudice means that the charges cannot be
refiled. The court also ordered plaintiffs to pay reasonable expenses,
including attorney's fees, to the Bank's former independent auditors. The
plaintiffs appealed to the New Mexico Court of Appeals. On July 3, 1997, the
Court of Appeals affirmed the trial court's dismissal of the amended
complaint. On July 18, 1997 the plaintiffs filed a motion for rehearing in
the Court of Appeals. The motion for rehearing was denied, and the New
Mexico Supreme Court has denied the plaintiffs' petition for a writ of
certiorari.
With respect to the Former President, the trial court had dismissed the
claims in the Derivative Lawsuit without prejudice in order to allow the Bank
to pursue such claims in Federal Court. In May 1995, the Bank filed a
lawsuit against the Former President in the United States District Court for
the District of New Mexico. The Bank's lawsuit against the Former President
has been settled, and the lawsuit was dismissed with prejudice on July 9,
1997.
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
**3.1 Certificate of Amendment of Certificate of Incorporation and
Certificate of Incorporation of the Company
**3.2 Amended Bylaws of the Company
*11.1 Statement re computation of per share earnings
*27.1 Financial Data Schedule
* Filed herewith
** Previously Filed
(b) Reports on Form 8-K.
None
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SIGNATURES
Pursuant to the requirements 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: November 10, 1997 /s/ Norman R. Corzine
----------------------------------------------
Norman R. Corzine, Chief Executive Officer,
and Chairman of the Board of Directors
(DULY AUTHORIZED REPRESENTATIVE)
Date: November 10, 1997 /s/ Ken Huey, Jr.
----------------------------------------------
Ken Huey, Jr., President, Chief Financial
Officer and Director
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
(DULY AUTHORIZED REPRESENTATIVE)
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