<PAGE>
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 June 30, 2000.
[ ] 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, Towson, Maryland 21204
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)
410-823-0500
--------------------------------------------------------------------------------
(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 June 30, 2000, there
were 496,000 shares of Issuer's $.01 par value common stock outstanding.
Traditional 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 JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
(unaudited) (unaudited)
----------- -----------
<S> <C> <C>
Assets
------
Cash and cash equivalents:
On-hand and due from banks $ 164,000 $ 758,000
Federal funds sold 2,735,000 3,008,000
Loans receivable, net 12,809,000 8,456,000
Loans held for sale 0 0
Investments - held-to-maturity 890,000 998,000
Investments - available-for-sale 1,526,000 497,000
Investment in restricted stocks 212,000 306,000
Accrued interest receivable 111,000 69,000
Property and equipment, net 775,000 808,000
Other assets, net 176,000 201,000
----------- -----------
Total assets $19,398,000 $15,101,000
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Noninterest-bearing 1,234,000 $ 735,000
Interest-bearing 14,221,000 10,089,000
Mortgage escrow deposits 192,000 101,000
Accounts payable and accrued expenses 154,000 287,000
----------- -----------
Total Liabilities $15,801,000 $11,212,000
----------- -----------
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
issued and outstanding 5,000 5,000
Capital Surplus 4,958,000 4,958,000
Accumulated deficit (1,366,000) (1,069,000)
Accumulated other comprehensive income (loss) 0 (5,000)
----------- -----------
Total stockholders' equity 3,597,000 3,889,000
----------- -----------
Total liabilities and stockholders' equity $19,398,000 $15,101,000
=========== ===========
</TABLE>
2
<PAGE>
AMERICASBANK CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ending Six Months Ending
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
----------- ------------ ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Interest Income:
Interest and fee income on loans $ 276,000 $ 152,000 $ 489,000 $ 303,000
Interest income on
investment securities 97,000 71,000 190,000 135,000
--------- --------- --------- ---------
Total interest income 373,000 223,000 679,000 438,000
Interest expense on deposits 187,000 100,000 339,000 199,000
--------- --------- --------- ---------
Net interest income 186,000 123,000 340,000 239,000
Provision for Loan Losses 39,000 28,000 58,000 30,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 147,000 95,000 282,000 209,000
--------- --------- --------- ---------
Noninterest Income:
Service fees and charges 10,000 8,000 20,000 18,000
Other income 18,000 - 23,000 -
--------- --------- --------- ---------
Total noninterest income 28,000 8,000 43,000 18,000
--------- --------- --------- ---------
Noninterest Expenses:
Salaries and benefits 181,000 98,000 331,000 158,000
Depreciation and amortization 32,000 27,000 64,000 55,000
Occupancy expense 2,000 9,000 10,000 20,000
Data processing 20,000 15,000 43,000 32,000
Professional fees 29,000 59,000 48,000 89,000
Marketing 16,000 22,000 30,000 34,000
Office supplies 6,000 13,000 13,000 17,000
Other operating expenses 43,000 45,000 83,000 80,000
--------- --------- --------- ---------
Total other operating expenses 329,000 288,000 622,000 485,000
--------- --------- --------- ---------
Net Income (Loss) before
provision for income taxes (154,000) (185,000) (297,000) (258,000)
Provision for Income Taxes - - - -
--------- --------- --------- ---------
Net Income (Loss) $(154,000) $(185,000) $(297,000) $(258,000)
========= ========= ========= =========
Net Income (Loss) per common share:
Basic and Diluted (0.31) (0.37) (0.60) (0.57)
Weighted Average Shares
Outstanding 496,000 496,000 496,000 454,000
</TABLE>
3
<PAGE>
AMERICASBANK CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
2000 1999
(unaudited) (unaudited)
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (297,000) $ (258,000)
Adjustments to reconcile net loss to
net cash from operating activities-
Provision for loan losses 58,000 30,000
Depreciation and amortization 66,000 55,000
Accretion of premium on mortgage
backed securities 4,000 0
Decrease (increase) in accrued
interest receivable (42,000) 0
Decrease (increase) in other assets 12,000 32,000
Decrease in accrued interest on
deposits 0 0
Disbursements for loans held for sale (2,390,000) 0
Proceeds from loans held for sale 2,390,000 0
Increase (decrease) accounts payable
and accrued expenses (133,000) 49,000
----------- -----------
Net cash (used in) provided by
operating activities (332,000) (92,000)
----------- -----------
Cash Flows from Investing Activities:
Purchase of investments - HTM 0 (1,616,000)
Principal repayments of investments - HTM 105,000 361,000
Purchase of investments - AFS (1,100,000) (1,315,000)
Principal repayments and sales of
investments - AFS 75,000 0
Purchases of investments in restricted
stocks (45,000) (2,000)
Principal repayments of investments in
restricted stocks 139,000 0
Loan principal disbursements (6,413,000) (2,362,000)
Loan repayments on loans receivable 1,986,000 1,436,000
Purchase of property and equipment (4,000) (45,000)
----------- -----------
Net cash (used in) provided by
investing activities (5,257,000) (3,543,000)
----------- -----------
Cash Flows from Financing Activities:
Increase (decrease) in time deposits 1,841,000 (164,000)
Increase (decrease) in all other
deposits 2,790,000 645,000
Increase in mortgage escrow deposits 91,000 91,000
Increase in other borrowings 0 0
Proceeds from common stock offering 0 2,352,000
Stock offering costs 0 (207,000)
----------- -----------
Net cash (used in) provided by
financing activities 4,722,000 2,717,000
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (867,000) (918,000)
Cash and Cash Equivalents, beginning of
period 3,766,000 3,088,000
----------- -----------
Cash and Cash Equivalents, end of period $ 2,899,000 $ 2,170,000
=========== ===========
</TABLE>
4
<PAGE>
AMERICASBANK CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE QUARTER ENDING JUNE 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Accumulated
Other
Additional Accumulated Comprehensive
Common Stock Paid-in Capital Deficit Loss Total
------ ---------- --------------- ------------- -----
<S> <C> <C> <C> <C> <C> <C>
December 31, 1999 $5,000 $4,958,000 $(1,069,000) $(5,000) $3,889,000
----------
Net Loss (297,000) (297,000)
Other comprehensive
Income (Loss):
Net unrealized holding
gains (losses) on
available-for-sale
securities 5,000 5,000
----------
Total comprehensive
Income (Loss) (292,000)
-----------------------------------------------------------------------------------------------------------
Balance
June 30, 2000 $5,000 $4,958,000 $(1,366,000) $ 0 $3,597,000
====== ========== =========== ======= ==========
</TABLE>
5
<PAGE>
AMERICASBANK CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Item 1. 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, 1999, 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 six
months ended June 30, 2000 and 1999. The results of the interim periods are not
necessarily indicative of the results expected for the full fiscal year.
Comprehensive Income
--------------------
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income" (SFAS
No. 130). SFAS No. 130 establishes standards for reporting and the display of
comprehensive income and its components. Comprehensive income is defined as the
change in equity of a business enterprise during a period from transactions and
other events and circumstances from nonowner sources. The Company's
comprehensive income (loss) consists of net earnings (loss) and unrealized gains
(losses) on securities available for sale and is presented as a separate
component of stockholders' equity.
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 June 30, 2000.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
General
-------
The following discussion and related financial data for the Company
provides an overview of the financial condition and results of operations of the
Company and its wholly owned subsidiary, which is presented on a consolidated
basis. The principal subsidiary is AmericasBANK. For the three months ending
June 30, 2000 and June 30, 1999 the Company reported a loss of $(154,000) and
$(185,000). For the first six months, the Company reported a loss of $(297,000)
in 2000 and $(258,000) in 1999.
Return on average assets and return on average equity are key measures of
earnings performance. Return on average assets measures the ability of a bank to
utilize its assets in generating income. Annualized return (loss) on average
assets for the three months ended June 30, 2000 and June 30, 1999 was (3.25%)
and (5.20%), respectively. Annualized return (loss) on average assets for the
six months ended June 30, 2000 was (3.29)% compared to (3.75)% for the same
period in 1999. The annualized return (loss) on average shareholder's equity,
which measures the income earned on the capital invested, for the three months
ended June 30, 2000, was (16.83)% compared to (17.72)% for the three months
ended June 30, 1999. For the six months ended June 30, 2000 and June 30, 1999,
the annualized return (loss) on average shareholder's equity was (15.88%) and
(13.55%), respectively.
Net Interest Income
-------------------
Net interest income represents the Company's gross profit from lending and
investment activities, and is the most significant component of the Company's
earnings. Net interest income is the difference between interest and related fee
income on earning assets (primarily loans and investments) and the cost of funds
(primarily deposits and short-term borrowings) supporting them. To facilitate
the analysis of net interest income, the attached table ("Average Balances -
Yields and Rates") is presented.
Net interest income for the first three months of 2000 totaled $186,000,
increasing 51.2% from the $123,000 recorded for the same period in 1999. Net
interest income for the first six months of 2000 totaled $340,000, increasing
42.3% from the $239,000 recorded for the same period in 1999. The Company's
average interest-earning assets for the three months ending June 30, 2000,
increased 36.3%, to $17,950,000, from $13,171,000 for the three months ended
June 30, 1999. The Company's average interest-earning assets for the six months
ending June 30, 2000, increased 34.7%, to $16,719,000, from $12,408,000 for the
six months ended June 30, 1999. This increase in primarily funded by strong
deposit growth for the Towson Branch generating an additional $4,416,000 in the
first six months of 2000.
The Company's net interest margin was 4.17% and 3.75% for the three months
ended June 30, 2000 and June 30, 1999 respectively. For the first six months,
the net interest margin was 4.08% and 3.89% for 2000 and 1999 respectively. The
net interest margin is impacted by the change in the spread between yields on
earning assets and rates paid on interest-bearing liabilities. This spread
increased by 49 basis points in the three months ended June 30, 2000 when
compared to the same period in the prior year. This
7
<PAGE>
spread increased by 5 basis points in the first six months of 2000 when compared
to the same period in the prior year. For the three months ended June 30, 2000
and June 30, 1999, the yield on earning assets increased from 6.78% to 8.32%
respectively. Rates paid on interest-bearing liabilities increased 105 basis
points to 5.47% for the three months ended June 30, 2000 when compared to the
same period in the prior year. The yield on earning assets increased from 7.12%
to 8.14%, while rates paid on interest-bearing liabilities increased 97 basis
points to 5.45% for the six months ended June 30, 2000 when compared to the same
period in the prior year.
The Company's refocused lending strategy has been to concentrate primarily
on commercial and construction products since the conversion in September 1999
from a thrift to a commercial bank. This strategy has served to balance the
Company's loan portfolio between mortgages and commercial products. For the
quarter ended June 30, 2000, the loan portfolio consisted of approximately 49.0%
mortgages and 35.2% commercial loans. As of June 30, 1999 the loan portfolio
consisted of approximately 61.7% mortgages and 21.8% commercial loans. This
change in the mix has afforded the Company the opportunity to generate higher
yielding loans, many of which will adjust with prime. The yield on investments
improved 173 basis points as management sought to take advantage of what was
deemed a favorable market in the first six months of 2000. Excess liquidity was
generated by the stronger than anticipated deposit growth of the Towson Branch
which management has deemed core deposits. These funds were moved into
investments of moderate term maturity that were offering higher than average
yields. The remainder of the excess liquidity from the first six months of
deposit growth has remained in federal funds which experienced an increase in
yield of 123 basis points over the same period for 1999.
Competition and increasing interest rates have caused a significant
increase in the rate paid on interest-bearing liabilities. The Company operates
within a competitive market with many competitors of significantly larger size.
As the Federal Reserve moved to curb a robust economy throughout 1999 and 2000,
several interest rate hikes have cause upward pressure on deposit rates. Many of
the Bank's competitors have been very aggressive in an attempt to gain market
share. The Company is currently implementing several strategies to offer
competitively priced products to its current and prospective customers.
Additionally, management has begun implementing several service enhancements
which it feels will sustain the Bank's deposit growth.
Noninterest Income
------------------
Noninterest income increased $25,000, or 138.9% for the six months ended
June 30, 2000, when compared to the same period in 1999. For the three months
ending June 30, 2000, noninterest income increased $20,000 when compared to the
same period for 1999. This is primarily due to loan fee income generated by
loans held for sale activity. Beginning February 2000, the Bank has associated
with a mortgage company to fund a mortgage wholesale line. The Bank realized
$13,000 in fee income in the first six months of 2000, and $10,000 was
recognized in gains as pools of mortgages were sold.
The Company's management is committed to developing and offering
innovative, market-driven products and services that will generate additional
sources of noninterest income. However, the future results of any of these
products or services cannot be predicted at this time.
8
<PAGE>
Noninterest Expenses
--------------------
Noninterest expenses increased 28.2% or $137,000 for the six months ended
June 30, 2000 when compared to the first six months of 1999. For the three
months ending June 30, 2000, noninterest expenses increased $41,000 when
compared to the same period prior year.
Total salaries and benefits increased $173,000 or 109.5% when the first six
months of 2000 are compared to the first six months of 1999. The Bank added two
senior officers including a senior lending officer and a chief financial
officer, in addition to staffing up the Towson Branch which opened in September
1999. The Branch maintains a staff of six.
Allowance for Credit Losses and Problem Assets
----------------------------------------------
The allowance for loan losses represents a reserve for potential losses in
the loan portfolio. The adequacy of the allowance for loan losses is evaluated
periodically based on a review of all significant loans, with a particular
emphasis on non-accruing, past-due, impaired, and other loans that management
believes require attention. The determination of the reserve level rests upon
management's judgment about factors affecting loan quality and assumptions about
the economy. Management considers the quarter-end allowance appropriate and
adequate to cover possible losses in the loan portfolio; however, management's
judgment is based upon a number of assumptions about future events, which are
believed to be reasonable, but which may or may not prove valid. Thus, there can
be no assurance that charge-offs in future periods will not exceed the allowance
for loan loss or that additional increases in the loan loss allowance will not
be required.
The Bank uses a loan grading system where all loans are graded based on
management's evaluation of the risk associated with each loan. Based on the
loan grading, a factor is applied to the loan balance to reserve for potential
losses. The overall evaluation of the adequacy of the total allowance for loan
losses is based on an analysis of historical loss ratios, loan charge-offs,
delinquency trends, and previous collection experience, along with an assessment
of the effects of external economic conditions.
At June 30, 2000, the allowance for loan losses was 1.51% of total loans,
which is considered by management to be sufficient to address the credit risk in
the current loan portfolio.
The following table sets forth an analysis of the Bank's allowance for loan
losses for the periods indicated.
9
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
---------------- ----------------
<S> <C> <C>
Allowance for loan losses, beginning of period $ 138,000 $ 85,000
Loans charged off --- ---
Recoveries --- ---
Net loans charged off --- ---
Provision for loan losses 58,000 30,000
----------- ----------
Allowance for loan losses, end of period $ 196,000 $ 115,000
=========== ==========
Loans (net of premiums and discounts):
Period-end balance $13,005,000 $7,603,000
Average balance during period $10,607,000 $7,072,000
Allowance as percentage of period-end loan balance 1.51% 1.51%
Percent of average loans:
Provision for loan losses 0.55% 0.42%
Net charge-offs -- --
</TABLE>
The following table summarizes the allocation of allowance by loan type at
the dates indicated. The allocation of the allowance to each category is not
necessarily indicative of future losses and does not restrict the use of the
allowance to absorb losses in any category.
10
<PAGE>
<TABLE>
<CAPTION>
As of June 30, 2000 As of June 30, 1999
------------------------- -------------------------
Percent of Percent of
Amount Total Amount Total
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Commercial - real estate secured $ 65,000 33.2% $ 24,000 20.9%
Real estate - first mortgages 96,000 49.0 71,000 61.7
Real estate - second mortgages 19,000 9.7 2,000 1.7
and home equity
Consumer 11,000 5.6 5,000 4.3
Real estate construction 1,000 0.5 12,000 10.4
Commercial - not real estate 4,000 2.0 1,000 0.9
secured -------- ----- -------- -----
Total $196,000 100.0% $115,000 100.0%
======== ===== ======== =====
</TABLE>
<TABLE>
<CAPTION>
Average Balances - Yields and Rates(1)
--------------------------------------
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
--------------------------------- ------------------------------
Average Income/ Yield/ Average Income/ Yield/
Assets: Balance Expense Rate Balance Expense Rate
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Loans receivable (net of unearned income)(2) 10,607,000 476,000 9.00% 7,072,000 303,000 8.64%
Loans held for sale 312,000 13,000 8.36% - -
Federal funds sold 3,363,000 101,000 6.02% 3,244,000 77,000 4.79%
Investments 2,437,000 89,000 7.32% 2,092,000 58,000 5.59%
---------- ------- ---- ---------- ------- ----
Total earning assets(3) 16,719,000 679,000 8.14% 12,408,000 438,000 7.12%
Non interest earning assets 1,319,000 1,348,000
Total assets 18,038,000 13,756,000
========== ==========
Liabilities and stockholders' equity:
Interest bearing deposits 12,470,000 339,000 5.45% 8,951,000 199,000 4.48%
---------- ------- ---- ---------- ------- ----
Total interest-bearing liabilities 12,470,000 339,000 5.45% 8,951,000 199,000 4.48%
Non-interest bearing deposits 1,596,000 646,000 -
---------- ------- ---- ---------- ------- ----
Total Deposits 14,066,000 339,000 4.83% 9,597,000 199,000 4.18%
Non-interest bearing liabilities 232,000 350,000
Stockholders' equity 3,740,000 3,809,000
---------- ----------
Total liabilities and stockholders' equity 18,038,000 13,756,000
========== ==========
Interest rate spread 2.69% 2.64%
Net interest income 340,000 239,000
======= =======
Net interest margin 4.08% 3.89%
</TABLE>
(1) For the quarter ended June 30, 2000, average balances were calculated
using daily averages. For the quarter ended June 30, 1999, average
balances were calculated using month end averages, as daily averages were
not available.
(2) Loans on non-accrual status are included in the calculation of average
balances.
(3) From inception to June 30, 2000, the Bank has made no loans or investments
that qualify for tax-exempt treatment and, had no tax-exempt income.
11
<PAGE>
Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------
Asset/liability management involves the funding and investing strategies
necessary to maintain an appropriate balance between interest sensitive assets
and liabilities. It also involves providing adequate liquidity while sustaining
stable growth in net interest income. Regular review and analysis of deposit and
loan trends, cash flows in various categories of loans, and monitoring of
interest spread relationships are vital to this process.
The conduct of our banking business requires that we maintain adequate
liquidity to meet changes in the composition and volume of assets and
liabilities due to seasonal, cyclical, or other reasons. Liquidity describes the
ability of the Company to meet financial obligations that arise during the
normal course of business. Liquidity is primarily needed to meet the borrowing
and deposit withdrawal requirements of the customers of the Company, as well as
for meeting current and future planned expenditures. This liquidity is typically
provided by the funds received through customer deposits, investment securities,
loan repayments, borrowings, and income. Management considers the current
liquidity position to be adequate to meet the needs of the Company and its
customers.
The Company seeks to limit the risks associated with interest rate
fluctuations by managing the balance between interest sensitive assets and
liabilities. Managing to mitigate interest rate risk is, however, not an exact
science. Not only does the interval until repricing of interest rates on assets
and liabilities change from day to day as the assets and liabilities change, but
for some assets and liabilities, contractual maturity and the actual maturity
experienced are not the same. For example, mortgage-backed securities may have
contractual maturities well in excess of five years but, depending upon the
interest rate carried by the specific underlying mortgages and the current
prevailing rate of interest, these securities may be repaid in a shorter time
period. Accordingly, management must make certain underlying assumptions with
regard to the true interest rate sensitivity of an asset or liability if the
actual volatility experienced differs from the contractual rate changes or
maturities.
Interest rate sensitivity is an important factor in the management of the
composition and maturity configurations of the Company's earning assets and
funding sources. Management manages the interest rate sensitivity position in
order to maintain an appropriate balance between the maturity and repricing
characteristics of assets and liabilities that is consistent with the Company's
liquidity analysis, growth, and capital adequacy goals.
12
<PAGE>
The Company employs computer model simulations for monitoring interest rate
sensitivity. Interest rate risk ("IRR") management has various sources and it is
not simply the risk from rates rising and falling. In fact, there are four
sources of IRR: repricing risk, basis risk, yield curve risk, and option risk.
Gap modeling only focuses on repricing risk. Income simulations that incorporate
cash flow analysis: (1) measure the size and direction of interest rate exposure
under a variety of interest rate and yield curve shape scenarios; (2) provides
the opportunity to capture all critical elements such as volume, maturity dates,
repricing dates, and repayment volumes; (3) utilizes the data to clearly focus
attention on critical variables; (4) are dynamic; and (5) reflect changes in
prevailing interest rates which affect different assets and liabilities in
different ways. These simulations are run on a quarterly basis using an interest
rate ramping technique to determine the effects on the Company's net interest
income, assuming a gradual increase or decrease in interest rates over four
successive quarters. The Company has an interest rate risk management policy
that limits the amount of deterioration in net change in interest income to no
more than 10.0% (+/-100), 12.0% (+/-200), 15.0% (+/-300) of net interest income.
The model results for June 30, 2000 are as follows:
Change in Interest Rate Assumption (000's omitted)
--------------------------------------------------------------------------------
+100bp +200bp +300bp -100bp -200bp -300bp
--------------------------------------------------------------------------------
Net interest income
Increase (decrease) $16 $30 $44 ($20) ($44) ($70)
Net interest income
% Change 2.1% 3.9% 5.7% (2.6%) (5.7%) (9.0%)
--------------------------------------------------------------------------------
Capital Resources
-----------------
The following table shows the risk-based capital and the leverage ratios
for the Company as of June 30, 2000:
<TABLE>
<CAPTION>
To Be Well-Capitalized
For Capital Adequacy Under Prompt Corrective
Purposes Action Provisions
Actual --------------------- -----------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Total Risk-Based
Capital
(to risk-weighted
assets) $3,793,000 30.1% $1,007,000 8.0% $1,259,000 10.0%
Tier I Capital
(to risk-weighted
assets) $3,597,000 28.6% $ 504,000 4.0% $ 755,0000 6.0%
Tier I Capital
(to average assets) $3,597,000 19.9% $ 722,000 4.0% $ 902,000 5.0%
</TABLE>
13
<PAGE>
Contingency Planning
--------------------
The Company has in place a Disaster Recovery Plan for its computer
operations facility and a business resumption plan for its various departments.
The mission-critical and support operations have been tested and proven
satisfactory. In the event the Company cannot perform its own core business
processes, the existing Disaster Recovery Plan would be followed to maintain
critical core functions of the Bank.
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, 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; AND DEVELOPMENTS IN TECHNOLOGY. 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.
None.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
as amended, the registrant caused this report to be singed on its behalf by the
undersigned, thereunto duly authorized.
AmericasBANK CORP.
Date: August 3, 2000 By: ________________________________________
Kenneth D. Pezzulla
President and Chairman of the Board of Directors
(Principal Executive Officer)
Date: August 3, 2000 By: _______________________________________
Steven T. Hudson
Chief Financial Officer
(Principal Financial and Accounting Officer)
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