U.S. 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, 1999.
[_] Transition report under Section 13 or 15(d) of the Exchange Act of 1934.
For the transition period from to .
------------ ------------
Commission file number 000-22925
AMERICASBANK CORP.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Maryland 52-1948980
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
500 York Road, Baltimore, Maryland 21204
--------------------------------------------------
(Address of Principal Executive Offices)
(410) 342-8303
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(Issuer's Telephone Number, Including Area Code)
3621 East Lombard Street, Baltimore, Maryland 21224
---------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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: As of September 30, 1999,
there were 496,000 shares of Issuer's $0.01 par value common stock outstanding.
Transitional Small Business Disclosure Format (check one):
Yes X No
----- -----
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICASBANK CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(unaudited)
<S> <C> <C>
Assets
- ------
Cash and cash equivalents:
On-hand and due from banks $ 477,000 $ 625,000
Federal funds sold 4,209,000 2,463,000
Investment securities, available-for-sale 82,000 586,000
Mortgage-backed securities, held-to-maturity 1,559,000 442,000
Loans receivable, net 7,255,000 6,603,000
Investment in Federal Home Loan Bank stock, at cost 57,000 54,000
Federal Reserve Stock 249,000 -
Accrued interest receivable 57,000 49,000
Property and equipment, net 807,000 755,000
Other assets, net 206,000 500,000
----------- -----------
Total assets $14,958,000 $12,077,000
=========== ===========
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing $ 653,000 $ 463,000
Interest-bearing 9,612,000 8,799,000
Mortgage escrow deposits 101,000 95,000
Accounts payable and accrued expenses 288,000 341,000
Other borrowings 220,000 -
----------- ----------
Total liabilities $10,874,000 $9,698,000
----------- ----------
Stockholders' Equity:
Preferred stock, par value $0.01 per share,
5,000,000 shares authorized, 0 shares issued
and outstanding - -
Common stock, par value $0.01 per share,
5,000,000 shares authorized, 496,000 shares
and 300,000 shares, respectively, issued
and outstanding 5,000 3,000
Additional paid-in capital 4,958,000 2,847,000
Accumulated deficit (876,000) (471,000)
Accumulated other comprehensive loss (3,000) --
----------- -----------
Total stockholders' equity 4,084,000 2,379,000
----------- -----------
Total liabilities and stockholders' equity $14,958,000 $12,077,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
2
<PAGE>
AMERICASBANK CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30, Three Months ended Sept. 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income:
Interest income on loans $ 470,000 $ 455,000 $ 167,000 $ 144,000
Interest income on
investment securities 220,000 137,000 85,000 53,000
----------- ---------- ----------- ----------
Total interest income 690,000 592,000 252,000 197,000
Interest expense on deposits 307,000 276,000 108,000 96,000
---------- ---------- ----------- ----------
Net interest income 383,000 316,000 144,000 101,000
Provision for loan losses 41,000 22,000 11,000 4,000
---------- ---------- ----------- ----------
Net interest income after
provision for loan losses 342,000 294,000 133,000 97,000
Non-interest income fees and
service charges 29,000 14,000 11,000 7,000
---------- ---------- ----------- ----------
Net interest income after
service fees and charges 371,000 308,000 144,000 104,000
---------- ---------- ----------- ----------
Other operating expenses:
Salaries and benefits 286,000 96,000 128,000 34,000
Depreciation and amortization 84,000 85,000 29,000 28,000
Occupancy expense 33,000 22,000 13,000 12,000
Data processing 50,000 42,000 18,000 14,000
Professional fees 115,000 112,000 26,000 43,000
Office supplies 24,000 14,000 7,000 4,000
Other operating expenses 184,000 70,000 70,000 24,000
---------- ---------- ----------- ----------
Total other operating
expenses 776,000 441,000 291,000 159,000
---------- ---------- ----------- ----------
Loss before provision for
income taxes (405,000) (133,000) (147,000) (55,000)
Provision for Income Taxes - - - -
---------- ---------- ----------- ----------
Net loss before cumulative
effect of change in
accounting principle (405,000) (133,000) (147,000) (55,000)
Cumulative effect of change in
accounting principle - (133,000) - -
---------- ---------- ---------- ---------
Net loss $(405,000) $ (266,000) $ (147,000) $ (55,000)
========== ========== ========== =========
Other comprehensive loss
net of tax-unrealized
loss on securities available
for sale (3,000) - (3,000) -
---------- ---------- ---------- ---------
Comprehensive loss $(408,000) $ (266,000) $ (150,000) $ (55,000)
========== ========== ========== =========
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net loss per common share -
Both basic and diluted
Loss before cumulative effect of
change in accounting principle (.87) $ (.44) $ (.30) $ (.18)
Loss from change in accounting
principle (-) (.44) (-) (-)
---------- ---------- ---------- ----------
Net loss per share $ (.87) $ (.88) $ (.30) $ (.18)
========== ========== ========== =========
Weighted average shares
outstanding 468,000 300,000 496,000 300,000
========== ========== ========== =========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
AMERICASBANK CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30,
1999 1998
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $(405,000) $ (154,000)
Adjustments to reconcile net loss
to net cash from operating activities-
Provision for loan losses 41,000 22,000
Depreciation and amortization 84,000 118,000
Increase in accrued interest receivable (8,000) (3,000)
Decrease (increase) in other assets 14,000 (195,000)
Decrease in accrued interest on deposits - (32,000)
Increase in accounts payable and accrued expenses 152,000 128,000
----------- ---------
Net cash used in operating activities (122,000) (116,000)
----------- ---------
Cash Flows from Investing Activities:
Sale (purchase) of investment securities, net 504,000 49,000
Purchase mortgage backed securities (1,616,000) -
Principal repayments on mortgaged backed
securities 494,000 -
Loan principal disbursements (3,889,000) (1,436,000)
Loan repayments on loans receivable 3,197,000 1,504,000
Purchase of equity securities (252,000) -
Purchase of property and equipment (92,000) (27,000)
----------- ---------
Net cash used in investing activities (1,654,000) (90,000)
----------- ----------
Cash Flows from Financing Activities:
Increase (decrease) in savings deposits 1,003,000 664,000)
Increase (decrease) in mortgage escrow deposits 6,000 (56,000)
Proceeds from borrowings 220,000 -
Proceeds from common stock offering 2,352,000 -
Stock offering costs (207,000) -
----------- ----------
Net cash provided by financing
activities 3,374,000 608,000)
----------- ----------
Increase In Cash and Cash Equivalents 1,598,000 582,000
Cash and Cash Equivalents, beginning of period 3,088,000 3,337,000
----------- ----------
Cash and Cash Equivalents, end of period $ 4,686,000 $ 3,919,000
=========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
AMERICASBANK CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Organization and Business
AmericasBank Corp. (the Company) was incorporated under the laws of the State of
Maryland on June 4, 1996 primarily to hold all the outstanding shares of capital
stock of AmericasBank (the "Bank"), a federal stock savings bank. Effective as
of 9:00 a.m. September 20, 1999, the Bank converted from a federal stock savings
bank to a Maryland commercial bank and the Company became a bank holding
company. The Bank is a member of the Federal Reserve System and the Federal Home
Loan Bank System, and its deposits are insured by the Federal Deposit Insurance
Corporation.
As the Bank is a start-up operation, there can be no assurance that the Bank can
attract sufficient depositors or issue sufficient quality loans to operate at a
profit. The Bank is subject to other risks and uncertainties, including interest
rate risk. The interest rate risk related to interest rates is significant to
the Bank as its deposits have relatively short maturities, while the loans have
much longer maturities at fixed rates. Without a significant change in the
Bank's investment, deposit or loan portfolio, an increase in interest rates
could have a significant negative effect on the Bank's net interest income and
results of operations.
(2) Summary of Significant Accounting Policies:
Basis of Presentation
- ---------------------
The financial statements included herein have been prepared by 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 condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures are adequate to
make the information presented not misleading. These condensed financial
statements should be read in conjunction with the financial statements and notes
thereto for the year ended December 31, 1998, included in the Company's Annual
Report on Form 10-KSB.
The unaudited condensed financial statements included herein reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of management, necessary to state fairly the results for the nine months
and three months ended September 30, 1999 and 1998. The results of the interim
periods are not necessarily indicative of the results expected for the full
fiscal year.
Organizational Costs
- --------------------
In April 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of
6
<PAGE>
Position 98-5 (the "SOP") regarding financial reporting on the costs of start-up
activities. Under the SOP, organizational costs are considered start-up costs
and, commencing with fiscal years beginning after December 15, 1998, entities
are required to expense such costs as they are incurred. As a result of the SOP,
the Company was required to write off its unamortized organizational costs as a
cumulative change in an accounting principle.
On December 31, 1998, the Company elected to adopt the SOP, effective January 1,
1998, resulting in the write-off of $133,000 of organizational costs as a
cumulative effect of a change in accounting principle. Prior to January 1, 1998,
organizational costs were being amortized over a five-year period using the
straight-line method, commencing upon the purchase of the Bank.
Earnings Per Share
- ------------------
As a result of Common Stock equivalents being anti-dilutive, the Company's basic
and diluted loss per common share are equal at September 30, 1999.
(3) Stock Options and Warrants
On June 1, 1998, the Company adopted a stock option plan for the granting of
stock options to employees and non-employee directors. The plan was amended as
of May 27, 1999 to increase the number of shares issuable upon the exercise of
options granted under the plan from 45,000 to 74,400. In the event of
termination without cause, the stock options expire in three months from the
date of termination. Options granted to directors expire on the first
anniversary of the effective date of termination as a director. All options
expire on the 10th anniversary of the grant date.
As of September 30, 1999, under the plan, 41,680 stock options had been granted
at an option price of $10.00 per share, and 16,700 stock options had been
granted at an option price of $12.00 per share, which prices approximate
management's estimate of the fair value of the Company's common stock on the
date of grant. No options have been exercised as of September 30, 1999.
On September 2, 1998, the Company issued to the holders of record of its Common
Stock on September 1, 1998, a dividend of one common stock purchase warrant for
each share of Common Stock then held by the stockholders (the "Dividend
Warrants"). Each Dividend Warrant entitles the holder thereof to purchase one
share of Common Stock at an exercise price of $10.00 per share, subject to
adjustment for certain events, beginning any time after April 1, 2000, until the
Dividend Warrant's expiration on September 1, 2008. As of September 30, 1999,
there were 300,000 Dividend Warrants outstanding.
(4) Secondary Offering of Common Stock
On August 13, 1998, the Company filed a Registration Statement on Form SB-1 with
the Securities and Exchange Commission, which became
7
<PAGE>
effective on October 9, 1998, in connection with the offering by the Company of
a minimum of 125,000 units and a maximum of 312,500 units, each unit consisting
of one share of common stock and one common stock purchase warrant, at a price
of $12.00 per unit.
The offering terminated by its terms on March 31, 1999. The Company sold 196,000
units in the offering and, after payment of all expenses associated with the
offering, received approximately $2,113,000 of net offering proceeds.
8
<PAGE>
Item 2. Plan of Operation
General
- -------
AmericasBank Corp. (the "Company") was incorporated under the laws of the
State of Maryland on June 4, 1996, primarily to own all of the outstanding
shares of capital stock of a federal stock savings bank to be named AmericasBank
(the "Bank"). On April 15, 1997, the Office of Thrift Supervision (the "OTS")
granted the Company the necessary approvals to acquire the capital stock of the
Bank and to become a savings and loan holding company of the Bank. The Company
acquired all of the Bank's capital stock and the Bank opened on December 1,
1997.
Effective as of December 1, 1997, the Bank also purchased certain assets
and assumed certain deposit liabilities primarily related to the Baltimore,
Maryland branch office of Rushmore Trust and Savings, FSB ("Rushmore"), located
at 3621 East Lombard Street, Baltimore, Maryland 21224 (the "Baltimore Branch").
On September 15, 1999, the Commissioner of Financial Regulation of the
State of Maryland (the "Bank Commissioner") approved, effective as of 9:00 a.m.
September 20, 1999, the conversion of the Bank from a federal stock savings bank
to a Maryland commercial bank (the "Conversion"). The Commissioner also approved
the Bank's opening of an office in Towson, Maryland, with that office becoming
the Bank's headquarters, and the Baltimore Branch becoming a branch office. On
September 2, 1999, Board of Governors of the Federal Reserve System (the
"Federal Reserve") approved the Company's application to become a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "Holding
Company Act") and the Bank's application to become a member bank upon its
conversion from a federal stock savings bank to a Maryland commercial bank.
As a result of the Conversion, effective as of September 20, 1999, the
Company became a bank holding company under the Holding Company Act and the Bank
commenced operations as a Maryland commercial bank with its headquarters located
at 500 York Road, Towson, Maryland 21204 and a branch office located at 3621
East Lombard Street, Baltimore, Maryland 21224.
As a result of the Conversion, William A. Fogle, Jr. and Norman H. Katz
resigned as directors of the Company and the Bank and Baldev Singh resigned as a
director of the Company, pending approval from the Federal Reserve of their
service as directors. The Company and the Bank intend to re-appoint these
persons as directors once regulatory approvals are received. Effective as of
October 21, 1999, Mr. Fogle was reappointed as a director of the Company and the
Bank. Effective as of November 8, 1999, Mr. Katz was approved by the Federal
Reserve and he will be reappointed as a director of the Company and the Bank at
the Company and the Bank's November 1999 meeting of the board of directors.
To date, there has been no established active public trading market for the
Company's Common Stock, although the Common Stock is quoted on
9
<PAGE>
the OTC Bulletin Board and reported in the National Daily Quotation Bureau "Pink
Sheets" under the symbol "AMBB."
Business Conducted and to be Conducted by the Bank
- --------------------------------------------------
The Bank is a community-oriented financial institution. Its business has
been to attract retail deposits and, prior to the Conversion, to seek to invest
those deposits, together with funds generated from operations and borrowings, in
one-to four-family mortgage loans. As a result of the Conversion, management has
refocused the Bank's lending strategy. Pursuant to this refocused strategy,
while continuing to originate mortgage loans for the purpose of financing and
refinancing one-to-four family residential properties, the Bank will gradually
expand its commercial real estate, commercial business, construction and
consumer lending.
The Bank's deposit base is comprised of various deposit products including
checking accounts, insured investment accounts, statement savings accounts,
passbook deposit accounts, money market accounts, certificates of deposit and
individual retirement accounts.
The Bank offers direct deposit of payroll and social security checks and
automatic drafts for various accounts to its customers. The Bank also offers its
customers travelers checks and, from its Towson location, safe deposit boxes.
The Bank participates in the HONOR Automatic Teller Machine Network at locations
throughout the United States through which Bank customers can gain access to
their accounts at any time. The Bank currently owns one automatic teller
machine, in Towson, Maryland. As of September 30, 1999, approximately 21
automatic teller machines owned by Network Processing, LLC ("Network") were
branded with the Bank's name through an agreement between the Bank and Network.
Although the Bank receives no revenues from the branded machines, Bank customers
are able to use the branded machines for no charge. Baldev Singh, who will be
reappointed as a director of the Company upon receipt of Federal Reserve
approval, is a member of Network. The Bank also intends to offer its customers
cash management services, online telephone banking and Internet banking, subject
to regulatory approvals.
Strategy
- --------
As indicated above, management has refocused the Bank's lending strategy
and the Bank will gradually expand its commercial real estate, commercial
business, construction and consumer lending. This refocused strategy resulted
from management's determination that, because of recent consolidations of
financial institutions, the Bank's current and potential market areas were not
being adequately served by existing financial institutions and that there was an
increasing local demand for commercial real estate, commercial business,
construction and consumer loans offered by a truly community-oriented financial
institution. The Bank's conversion from a federal stock savings bank to a
Maryland commercial bank will permit the Bank to pursue the refocused lending
strategy as Maryland commercial banks, unlike federal stock savings banks, are
not limited in the number and amount of non-mortgage loans that they are
permitted to make.
10
<PAGE>
The Bank intends to pursue a strategy of long term growth by competing for
loans and deposits in its market area and by opening additional branches, either
through internal growth or through acquisitions of existing financial
institutions or branches thereof. Management anticipates that the Bank will draw
most of its customer deposits and conduct most of its lending transactions from
within the area surrounding its offices as well as from within the Baltimore
metropolitan area.
The Bank's ability to expand internally by establishing new branch offices
will be dependent on the ability to identify advantageous locations for such
branches and to fund the development of new branches. The ability to grow
through selective acquisitions of other financial institutions or branches of
such institutions will be dependent on successfully identifying, acquiring and
integrating such institutions or branches. Furthermore, the success of the
branch expansion strategy will be dependent upon the Bank's access to capital,
its ability to attract and train or retain qualified employees and its ability
to obtain regulatory approvals. The branch expansion strategy anticipates losses
from branch operations until such time as branch deposits and the volume of
other banking business reach the levels necessary to support profitable branch
operations.
There can be no assurance that the Bank will be able to generate internal
growth or identify attractive acquisition candidates, acquire such candidates on
favorable terms, or successfully integrate any acquired institutions or branches
into its operations. In addition, the Bank's inability to implement the branch
expansion strategy could negatively impact the Bank's long term ability to
successfully compete in the marketplace.
At this time, the Company and the Bank have no specific plans regarding new
branch offices or acquisitions of existing financial institutions or branches
thereof.
The Company executive offices are located at 500 York Road, Towson,
Maryland 21204.
Liquidity and Capital Resources
- -------------------------------
The Company's principal sources of liquidity are cash and assets that can
be readily converted into cash, including investment securities maturing within
one year and available for sale securities. As of September 30, 1999 and
December 31, 1998, the Company had $4,686,000 and $3,088,000 in cash and short
term investments, respectively, and had $82,000 and $586,000 in available for
sale securities, respectively. Fluctuations in the deposit levels of the Bank's
customers will result in corresponding fluctuations in the Company and the
Bank's liquidity position. Although the Bank has not done so to date, the Bank
is eligible to borrow funds from the Federal Home Loan Bank of Atlanta, which
serves as a reserve credit capacity for its members.
11
<PAGE>
The Company's consolidated stockholders' equity was $4,084,000 and
$2,379,000 as of September 30, 1999 and December 31, 1998, respectively.
Stockholders' equity as of December 31, 1998 was primarily a result of the
Company's 1997 initial public offering of 300,000 shares of Common Stock at an
offering price of $10.00 per share (the "Initial Public Offering").
Stockholders' equity as of September 30, 1999 was primarily a result of the
Initial Public Offering and the Company's second public offering of
a minimum of 125,000 units and a maximum of 312,500 units at a price of $12.00
per unit, each unit consisting of one share of the Company's Common
Stock and one Common Stock purchase warrant (the "Second Public Offering").
The Company sold 196,000 units in the Second Public Offering and, after
payment of all expenses associated with the offering, received approximately
$2,113,000 of net offering proceeds.
Summary of Financial Condition and Results of Operations
- --------------------------------------------------------
The Bank commenced operations as of December 1, 1997, and its activities
have primarily consisted of accepting deposits, making loans and servicing the
deposits and loans acquired from Rushmore.
As of September 30, 1999 and December 31, 1998, the Company had total
assets of approximately $14,958,000 and $12,077,000, respectively, total loans
of approximately $7,255,000 and $6,603,000, respectively, and total deposits of
approximately $10,265,000 and $9,262,000, respectively. The Company experienced
a loss of approximately $405,000 for the nine months ended September 30, 1999
as compared to a loss of approximately $266,000 for the nine months ended
September 30, 1998. The increase in loss is primarily related to increased costs
associated with employee salaries and benefits. During 1999, the Bank hired
three new management employees, including a senior credit officer and a chief
financial officer, and hired five new employees to staff the Towson branch.
The increase in total assets is primarily the result of the Company's
receipt of offering proceeds. Management attributes the Bank's slow loan growth
to the limitations placed on the types of loans that the Bank was able to make
as a result of its thrift charter, and the focus placed by management during the
first half of 1999 on the Offering and the actions necessary to effect the
Conversion and establish a Towson branch.
12
<PAGE>
Net interest income for the third quarter of 1999 was approximately
$144,000, an increase of approximately $43,000 from the third quarter of 1998.
Net interest income, which is the difference between the interest expense
incurred in connection with the Company and the Bank's interest-bearing
liabilities, such as interest on deposit accounts, and the interest income
received from interest-earning assets, such as loans and investment securities,
is the most significant component of the Company's earnings. Volatility in
interest rates could cause the Bank to pay increased interest rates to obtain
deposits and, if the Bank is not able to increase the interest rate on its loans
and the rate of return on its investment portfolio, net interest income will
suffer. Management has sought to reduce the effect of the decrease in net
interest income through the Bank's investment in mortgage-backed securities.
The Bank currently maintains a liquidity ratio and a level of
capitalization in excess of the minimum standards required by the Bank's primary
regulator, the Maryland Division of Financial Regulation.
Year 2000 Compliance
- --------------------
The much publicized Year 2000 Issue is the result of computer programs
being written using two digits rather than four to define an applicable year.
Computer programs with date-sensitive software may recognize a date using "00"
as the year 1900 rather than the year 2000. With respect to software used for
bank operations, mistakes of this nature could cause disruptions of operations,
including, among other things, the temporary inability to process transactions
or engage in similar normal business activities. In addition, the Year 2000
Issue increases transaction risk with third parties, including customers.
The Bank contracts with an outside firm to provide data and transaction
processing services. The Bank's contract with this firm is scheduled to expire
on December 1, 2000. In February 1999, the Bank and the data processing firm
tested the Bank's data and transaction processing for Year 2000 compliance using
a January 3, 2000 transaction date. During the test, the Bank's data and
transaction processing successfully performed all processing functions.
On March 1, 1999, the data processing firm advised the Bank that all of the
data processing firm's hardware, system and application code changes related to
the Year 2000 Issue had been made, and that the data processing firms's systems
and operations had been tested to determine that date sensitive calculations and
functions can be accurately performed using 20th and 21st century dates.
In April 1999 and July 1999, the Bank monitored a test of the data
processing firm's data and transaction processing system for Year 2000
compliance. During that test, the data processing firm's system successfully
performed all processing functions.
The Bank does not anticipate incurring any extra costs from the data
processing firm in connection with the Year 2000 Issue.
13
<PAGE>
In light of the foregoing, the Bank does not believe that its operations
will be materially impacted by the Year 2000 Issue. However, there can be no
assurance that the data and transaction processing system will be Year 2000
compliant, and such failure may have a material adverse effect on the Company
and the Bank's earnings, cash flows and overall financial condition. If the data
and transaction processing system failed, the Bank would process its
transactions manually, until a new system could be placed online. Although the
Bank has not estimated the cost of manually processing transactions, the Bank
has successfully tested its ability to process transactions manually.
In addition to risks relating to internal Year 2000 compliance, the Bank
may be vulnerable to the failure of customers or other third parties with which
the Bank conducts business to remedy their own Year 2000 issues. For example, a
customer's failure to remedy its Year 2000 issues could impact the customer's
ability to pay its obligations to the Bank, which failure could have a material
adverse effect on the Company and the Bank's earnings, cash flows and overall
financial condition.
In accordance with requirements of the Maryland Division of Financial
Regulation and the Federal Reserve, the Bank has appointed a Year 2000 Committee
and has adopted a written plan detailing the procedures to be followed by
management to identify and solve potential problems and to monitor the progress
made by the Bank and the data processing firm to avoid Year 2000 problems. The
Year 2000 Committee had completed the evaluation and assessment phases of the
plan. Management has completed the contingency phase of the plan and has begun
its implementation, which will continue through the end of 1999 and the first
part of 2000.
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 SUCH AS
STATEMENTS OF THE COMPANY'S PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS THAT
INVOLVE RISKS AND UNCERTAINTIES. THESE RISKS AND UNCERTAINTIES INCLUDE, AMONG
OTHERS, THE COMPANY'S LIMITED OPERATING HISTORY AND HISTORY OF LOSSES; RISKS
RELATED TO COMMERCIAL, CONSTRUCTION AND CONSUMER LENDING; RISKS RELATED TO NEW
MANAGEMENT; IMPACT OF INTEREST RATE VOLATILITY ON DEPOSITS; INTEREST RATE,
LENDING AND OTHER RISKS ASSOCIATED WITH THE LOANS ACQUIRED FROM RUSHMORE; RISK
OF LOAN LOSSES; RISK OF BRANCH EXPANSION STRATEGY; IMPACT OF GOVERNMENT
REGULATION ON OPERATING RESULTS; RISKS OF COMPETITIVE MARKET; IMPACT OF MONETARY
POLICY AND OTHER ECONOMIC FACTORS ON OPERATING RESULTS; UNCERTAINTY AS TO
EFFECTS OF FEDERAL LEGISLATION; DEVELOPMENTS IN TECHNOLOGY; AND YEAR 2000
ISSUES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
DISCUSSED HEREIN.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
The following exhibit is being filed herewith:
EXHIBIT 27 Financial Data Schedule
(b) Reports on Form 8-K.
The Company filed with the SEC a Current Report on
Form 8-K, Item 5, dated September 24, 1999, to report
the consummation of the conversion of the Company's
wholly owned subsidiary, AmericasBank, from a federal
stock savings bank to a Maryland commercial bank, and
the Company's becoming a bank holding company under
the Bank Holding Company Act of 1956, as amended.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AMERICASBANK CORP.
Date: November 12, 1999 By: /s/ J. Clarence Jameson, III
------------------------------
J. Clarence Jameson, III,
President and Chairman of the
Board of Directors
(Principal Executive Officer)
Date: November 12, 1999 By: /s/ Steven T. Hudson
---------------------------
Steven T. Hudson,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
16
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
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0
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<INCOME-PRETAX> (405,000)
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