**UNITED
STATES**


**SECURITIES
AND EXCHANGE COMMISSION**
 **Washington,
D.C. 20549**
  **FORM
10 - K/A**
  **AMENDMENT
NO. 1 TO FORM 10-K**
  **ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D)**
 **OF
THE SECURITIES EXCHANGE ACT OF 1934**
  **For
the fiscal year ended December 31, 2004**
  Commission
File Number 000-50872
  **EUROBANCSHARES,
INC.**
 (Exact
name of registrant as specified in its charter)
  **Commonwealth
      of Puerto Rico**
    
    **66-0608955**(State
      or other jurisdiction of
    
    (I.R.S.
      Employerincorporation
      or organization)
    
    Identification
      No.)270
      Muñoz Rivera Avenue, San Juan, Puerto Rico 00918(Address
      of principal executive offices, including zip code)(787)
      751-7340(Registrant’s
      telephone number, including area code)Securities
      registered pursuant to Section 12(b) of the Act: NoneSecurities
      registered pursuant to Section 12(g) of the Act:Common
      Stock, par value$1.00
      per share
 Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 o
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment of this
Form 10-K. o
  Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act.)
 Yes o No x
  As of
June 30, 2004, the last business day of the registrant’s most recently completed
second fiscal quarter, the aggregate market value of the shares of Common Stock
held by non-affiliates, based on the estimated value of the Common Stock on our
records on such date, was approximately $47.6 million.
  The
number of shares outstanding of the issuer’s Common Stock as of March 28, 2005,
was 19,564,086 shares.
  **Documents
Incorporated by Reference**
  Portions
of the Company’s Proxy Statement relating to the 2005 Annual Meeting of
Stockholders, which will be filed within 120 days after December 31, 2004, are
incorporated by reference into Part III, Items 10-14 of this Form 10-K.
   
  **EUROBANCSHARES,
INC.**
  INDEX
  
 PAGEEXPLANATORY
      NOTE
    1PART
      II
    1ITEM
      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
    1PART
      IV
    1ITEM
      15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    1
 
 
 
    i
  **EXPLANATORY
NOTE**
  This
Amendment No. 1 on Form 10-K/A amends the registrants Annual Report on Form
10-K, as filed by the registrant with the Securities and Exchange Commission on
March 31, 2005, and is being filed solely to amend Part II, Item 8 “Financial
Statements and Supplementary Data” and Part IV, Item 15 “Exhibits and Financial
Statement Schedules” to correct a typographical error contained in the
notes to the registrant’s audited consolidated financial statements relating to
pro forma earnings per share of the registrant for the years ended December 31,
2003 and 2002 which were presented in Note 2(v), Summary of Significant
Accounting Policies - Stock Option Plan, to the Notes to Consolidated Financial
Statements without giving effect to the registrant’s two-for-one common stock
split effective on June 21, 2004. All other references in the registrant’s
Annual Report on Form 10-K relating to the earnings per share of the registrant
were accurately presented giving effect to the stock split.
  In
addition, we have filed the following exhibits herewith:
  **Exhibit
      Number**
    
    **Description
      of Exhibit**23.1
    
    Consent
      of KPMG LLP, independent registered public accounting
  firm31.1
    
    Rule
      13a-14(a) Certification of Chief Executive Officer31.2
    
    Rule
      13a-14(a) Certificate of Chief Financial Officer32.1
    
    Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  200232.2
    
    Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002
  Except as
otherwise stated herein, no other information contained in the Annual Report on
Form 10-K is amended by this Amendment No. 1 on Form 10-K/A.
  **PART
II**
  **ITEM
8. Financial Statements and Supplementary Data.**
  The
consolidated financial statements, the reports thereon, the notes thereto and
supplementary data commence at page F-1 of this Amendment No. 1 on Form
10-K/A.
  **PART
IV**
  **ITEM
15. Exhibits, Financial Statement Schedules**
  **Financial
Statements**
  Reference
is made to the consolidated financial statements, the reports thereon, the notes
thereto and supplementary data commencing at page F-1 of this Amendment No. 1 on
Form 10-K/A. Set forth below is a list of such financial
statements:
  Report of
Independent Registered Public Accounting Firm
 Consolidated
Balance Sheets as of December 31, 2004 and 2003
 Consolidated
Statements of Income for each of the years in the three-year period ended
December 31, 2004
 Consolidated
Statements of Changes in Stockholders’ Equity and Comprehensive Income for each
of the years in the three-year period ended December 31, 2004
 Consolidated
Statements of Cash Flows for each of the years in the three-year period ended
December 31, 2004
 Notes to
Consolidated Financial Statements
  **Financial
Statement Schedules**
  All
supplemental schedules are omitted as inapplicable or because the required
information is included in the consolidated financial statements or related
notes.
   1
 ****
 **Exhibits**
  **Exhibit
      Number**
    
    **Description
      of Exhibit**3.1
    
    Amended
      and Restated Certificate of Incorporation of EuroBancshares, Inc.
      (incorporated herein by reference to Exhibit 3.1 to the Registration
      Statement on Form S-1 (File No. 333-115510) previously filed by
      EuroBancshares, Inc. on May 5, 2004)3.2
    
    Amended
      and Restated Bylaws of EuroBancshares, Inc. (incorporated herein by
      reference to Exhibit 3.2 to the Registration Statement on Form S-1 (File
      No. 333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)3.3
    
    Certificate
      of Designation of EuroBancshares, Inc. Noncumulative Preferred Stock,
      Series A (incorporated herein by reference to Exhibit 3.3 to the
      Registration Statement on Form S-1 (File No. 333-115510) previously filed
      by EuroBancshares, Inc. on May 5, 2004)4.1
    
    Specimen
      stock certificate representing EuroBancshares, Inc. Common Stock
      (incorporated herein by reference to Exhibit 4.1 to the Registration
      Statement on Form S-1 (File No. 333-115510) previously filed by
      EuroBancshares, Inc. on August 2, 2004)4.2
    
    Specimen
      stock certificate representing EuroBancshares, Inc. Preferred Stock
      (incorporated herein by reference to Exhibit 4.2 to the Annual Report on
      Form 10-K previously filed by EuroBancshares, Inc. on March 31,
      2005)4.3
    
    Indenture,
      dated as of December 18, 2001, between EuroBancshares, Inc. and U.S. Bank
      National Association (f/k/a State Street Bank & Trust Company of
      Connecticut, National Association) (incorporated herein by reference to
      Exhibit 4.2 to the Registration Statement on Form S-1 (File No.
      333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)4.4
    
    Amended
      and Restated Declaration of Trust, dated as of December 18, 2001, by and
      among EuroBancshares, Inc. and U.S. Bank National Association (f/k/a State
      Street Bank & Trust Company of Connecticut, National Association), and
      Rafael Arrillaga-Torréns, Jr., Jorge Calderón Drowett, and William
      Torres-Torres, as Administrators (incorporated herein by reference to
      Exhibit 4.3 to the Registration Statement on Form S-1 (File No.
      333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)4.5
    
    Guarantee
      Agreement, dated as of December 18, 2001, between EuroBancshares, Inc. and
      U.S. Bank National Association (f/k/a State Street Bank & Trust
      Company of Connecticut, National Association) (incorporated herein by
      reference to Exhibit 4.4 to the Registration Statement on Form S-1 (File
      No. 333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)4.6
    
    Indenture,
      dated as of December 19, 2002, between EuroBancshares, Inc. and U.S. Bank
      National Association (f/k/a State Street Bank & Trust Company of
      Connecticut, National Association) (incorporated herein by reference to
      Exhibit 4.5 to the Registration Statement on Form S-1 (File No.
      333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)4.7
    
    Amended
      and Restated Declaration of Trust, dated as of December 19, 2002, by and
      among EuroBancshares, Inc. and U.S. Bank National Association (f/k/a State
      Street Bank & Trust Company of Connecticut, National Association), and
      Jose Martinez Recondo, Isabella Arrillaga, as Administrators (incorporated
      herein by reference to Exhibit 4.6 to the Registration Statement on Form
      S-1 (File No. 333-115510) previously filed by EuroBancshares, Inc. on May
      5, 2004)4.8
    
    Guarantee
      Agreement, dated as of December 19, 2002, between EuroBancshares, Inc. and
      U.S. Bank National Association (f/k/a State Street Bank & Trust
      Company of Connecticut, National Association) (incorporated herein by
      reference to Exhibit 4.7 to the Registration Statement on Form S-1 (File
      No. 333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)10.1†
    
    EuroBancshares,
      Inc. 2002 Stock Option Plan (incorporated herein by reference to Exhibit
      10.1 to the Registration Statement on Form S-1 (File No. 333-115510)
      previously filed by EuroBancshares, Inc. on May 5, 2004)
  2
  **Exhibit
      Number**
    
    **Description
      of Exhibit**
 10.2†
    
    Form
      of EuroBancshares, Inc. Incentive Stock Option Award Agreement
      (incorporated herein by reference to Exhibit 10.2 to the Registration
      Statement on Form S-1 (File No. 333-115510) previously filed by
      EuroBancshares, Inc. on May 5, 2004)10.3†
    
    Form
      of EuroBancshares, Inc. Non-Qualified Stock Option Award Agreement
      (incorporated herein by reference to Exhibit 10.3 to the Registration
      Statement on Form S-1 (File No. 333-115510) previously filed by
      EuroBancshares, Inc. on May 5, 2004)10.4†
    
    Executive
      Severance Compensation Agreement, dated as of April 12, 1999, between
      Eurobank and Ms. Yadira R. Mercado (incorporated herein by reference to
      Exhibit 10.4 to the Registration Statement on Form S-1 (File No.
      333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)10.5†
    
    Eurobank
      Master Trust Retirement Plan Program (incorporated herein by reference to
      Exhibit 10.5 to the Registration Statement on Form S-1 (File No.
      333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)10.6†
    
    Form
      of EuroBancshares, Inc. Restricted Stock Purchase Agreement (incorporated
      herein by reference to Exhibit 10.6 to the Registration Statement on Form
      S-1 (File No. 333-115510) previously filed by EuroBancshares, Inc. on May
      5, 2004)10.7
    
    Agreement
      and Plan of Merger, dated as of September 6, 2002, by and among
      EuroBancshares, Inc. and Banco Financiero de Puerto Rico (incorporated
      herein by reference to Exhibit 10.7 to the Registration Statement on Form
      S-1 (File No. 333-115510) previously filed by EuroBancshares, Inc. on May
      5, 2004)10.8
    
    Agreement
      and Plan of Merger, dated as of February 24, 2004, by and among
      EuroBancshares, Inc., Eurobank, and The Bank & Trust of Puerto Rico
      (incorporated herein by reference to Exhibit 2 to the Registration
      Statement on Form S-1 (File No. 333-115510) previously filed by
      EuroBancshares, Inc. on May 5, 2004)21
    
    List
      of Subsidiaries of EuroBancshares, Inc. (incorporated herein by reference
      to Exhibit 21 to the Registration Statement on Form S-1 (File No.
      333-115510) previously filed by EuroBancshares, Inc. on May 5,
      2004)23.1*
    
    Consent
      of KPMG LLP, independent registered public accounting firm31.1*
    
    Rule
      13a-14(a) Certification of Chief Executive Officer.31.2*
    
    Rule
      13a-14(a) Certification of Chief Financial Officer.32.1*
    
    Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.32.2*
    
    Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.
  
 * Filed
with this Amendment No. 1 on Form 10-K/A.
 †
Constitutes a management contract or compensatory plan or
arrangement.
 
  3
  **SIGNATURES**
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
 EUROBANCSHARES,
      INC.Date: April 12,
2005
    By:
    /s/ Rafael
      Arrillaga-Torrén, Jr.Rafael Arrillaga-Torrén, Jr.Chairman of the Board,
      President and Chief Executive Officer
 
 Pursuant
to the requirements of the Securities Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
  Date:
      April 12, 2005
    By:
    /s/
      Rafael Arrillaga-Torréns, Jr.Rafael
      Arrillaga Torréns, Jr.Chairman
      of the Board, President and ChiefExecutive
      Officer (principal executive officer)Date:
      April 12, 2005
    By:
    /s/
      Yadira R. MercadoYadira
      R. MercadoExecutive
      Vice President and Chief Financial Officer(principal
      financial officer and principal accounting officer)Date:
      April 12, 2005
    By:
    /s/
      Pedro Feliciano BenítezPedro
      Feliciano BenítezDirectorDate:
      April 12, 2005
    By:
    /s/
      Juan Ramón Gómez-Cuétara AguilarJuan
      Ramón Gómez-Cuétara AguilarDirectorDate:
      April 12, 2005
    By:
    /s/
      Antonio R. Pavía BibiloniAntonio
      R. Pavía BibiloniDirectorDate:
      April 12, 2005
    By:
    /s/
      Plácido González CórdovaPlácido
      González CórdovaDirectorDate:
      April 12, 2005
    By:
    /s/
      Jorge Calderón DrowettJorge
      Calderón DrowettDirectorDate:
      April 12, 2005
    By:
    /s/
      Ricardo Levy EcheandíaRicardo
      Levy EcheandíaDirectorDate:
      April 12, 2005
    By:
    /s/
      Diana López-FelicianoDiana
      López-FelicianoDirectorDate:
      April 12, 2005
    By:
    /s/
      William Torres TorresWilliam
      Torres TorresDirector
 
  4




EUROBANCSHARES, INC. AND SUBSIDIARIES
             
  
 
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL STATEMENTS
    PAGECONSOLIDATED
      FINANCIAL STATEMENTSREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    F-1CONSOLIDATED
      BALANCE SHEETS AS OF DECEMBER 31, 2004 AND 2003
    F-2CONSOLIDATED
      STATEMENTS OF INCOME FOR EACH OF THE YEARS INTHE
      THREE-YEAR PERIOD ENDED DECEMBER 31, 2004
    F-3CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY ANDCOMPREHENSIVE
      INCOME FOR EACH OF THE YEARS IN THE THREE-YEAR PERIODENDED
      DECEMBER 31, 2004
    F-4CONSOLIDATED
      STATEMENTS OF CASH FLOWS FOR EACH OF THE YEARS IN THETHREE-YEAR
      PERIOD ENDED DECEMBER 31, 2004
    F-5NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
    F-6
 
 
 
 
 
 **Report
of Independent Registered Public Accounting Firm**
 
  The Board
of Directors and Shareholders of
 Eurobancshares,
Inc.:
  We have
audited the accompanying consolidated balance sheets of EuroBancshares, Inc. and
subsidiaries (the Company) as of December 31, 2004 and 2003, and the
related consolidated statements of income, changes in stockholders’ equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended December 31, 2004. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of EuroBancshares, Inc. and
subsidiaries as of December 31, 2004 and 2003, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2004, in conformity with U.S. generally accepted accounting
principles.
 
 As
discussed in note 1, the Company adopted the provision of Financial
Accounting Standards Board’s Interpretation No. 46R, *Consolidation
of Variable Interest Entities* , as of
December 31, 2003.
  
  /s/ KPMG
LLP
  San Juan,
Puerto Rico
 March 30,
2005
  Stamp
No. 1988734 of the Puerto Rico
 Society
of Certified Public Accountants
 was
affixed to the record copy of this report.
  
 F-1
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 December 31, 2004 and 2003
  2004
    
    2003**ASSETS**Cash
      and due from banks
    
    $
    18,597,116
    
    $
    22,522,342Interest-bearing
      deposits
    
    
    3,271,377
    
    
    19,324,216Securities
      purchased under agreements to resell
    
    
    42,810,479
    
    
    20,483,736Investment
      securities available for sale, at fair value:Pledged
      securities with creditors’ right to repledge
    
    
    457,247,716
    
    
    213,355,417Other
      investment securities
    
    
    98,234,027
    
    
    111,582,625Investment
      securities held to maturity, at amortized cost:Pledged
      securities with creditors’ right to repledge
    
    
    34,390,675
    
    
    —Other
      investment securities
    
    
    15,113,768
    
    
    —Other
      investment securities, at cost
    
    
    8,715,600
    
    
    3,342,100Loans
      held for sale
    
    
    2,684,063
    
    
    6,846,330Loans,
      net of allowance for loan and lease losses of $19,038,836 in 2004 and
      $9,393,943 in 2003
    
    
    1,365,890,375
    
    
    883,151,891Accrued
      interest receivable
    
    
    11,167,973
    
    
    6,792,687Customers’
      liability on acceptances
    
    
    395,161
    
    
    558,085Premises
      and equipment, net
    
    
    11,261,213
    
    
    10,531,353Other
      assets
    
    
    33,009,509
    
    
    22,443,283Total
      assets
    
    $
    2,102,789,052
    
    $
    1,320,934,065**LIABILITIES
      AND STOCKHOLDERS' EQUITY**Deposits:Noninterest
      bearing
    
    $
    137,895,861
    
    $
    104,757,697Interest
      bearing
    
    
    1,271,140,575
    
    
    879,791,433Total
      deposits
    
    
    1,409,036,436
    
    
    984,549,130Securities
      sold under agreements to repurchase
    
    
    463,409,056
    
    
    207,523,000Acceptances
      outstanding
    
    
    395,161
    
    
    558,085Advances
      from Federal Home Loan Bank
    
    
    10,403,638
    
    
    10,700,000Notes
      payable to statutory trusts
    
    
    46,393,000
    
    
    46,393,000Accrued
      interest payable
    
    
    6,719,851
    
    
    2,868,130Accrued
      expenses and other liabilities
    
    
    8,130,222
    
    
    3,267,4641,944,487,364
    
    
    1,255,858,809Stockholders’
      equity:Preferred
      stock:Preferred
      stock Series A, $0.01 par value. Authorized 20,000,000 shares; issued and
      outstanding 430,537 in 2004
    
    
    4,305
    
    
    —Capital
      paid in excess of par value
    
    
    10,759,120
    
    
    —Common
      stock:Common
      stock, $0.01 par value. Authorized 150,000,000 shares; issued and
      outstanding 19,564,086 and 13,947,396 shares in 2004 and 2003,
      respectively
    
    
    195,641
    
    
    69,737Capital
      paid in excess of par value
    
    
    105,408,402
    
    
    42,943,014Retained
      earnings:Reserve
      fund
    
    
    4,721,756
    
    
    2,348,598Undivided
      profits
    
    
    40,369,955
    
    
    20,521,151Accumulated
      other comprehensive loss, net of tax
    
    
    (3,157,491
    )
    
    (807,244
    )Total
      stockholders’ equity
    
    
    158,301,688
    
    
    65,075,256Commitments
      and contingenciesTotal
      liabilities and stockholders’ equity
    
    $
    2,102,789,052
    
    $
    1,320,934,065
    
 F-2
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 Years Ended December 31, 2004, 2003, and
2002
  2004
    
    2003
    
    2002Interest
      income:Loans,
      including fees
    
    $
    90,873,069
    
    $
    64,952,274
    
    $
    48,958,689Investment
      securities:Available
      for sale
    
    
    11,887,768
    
    
    6,009,233
    
    
    5,341,882Held
      to maturity
    
    
    201,017
    
    
    —
    
    
    —Interest-bearing
      deposits, securities purchased under agreements to resell, and
      other
    
    
    514,602
    
    
    554,344
    
    
    667,158Total
      interest income
    
    
    103,476,456
    
    
    71,515,851
    
    
    54,967,729Interest
      expense:Deposits
    
    
    33,309,033
    
    
    27,384,400
    
    
    21,467,060Securities
      sold under agreements to repurchase, notes payable, and
    other
    
    
    8,172,239
    
    
    4,537,848
    
    
    3,656,508Total
      interest expense
    
    
    41,481,272
    
    
    31,922,248
    
    
    25,123,568Net
      interest income
    
    
    61,995,184
    
    
    39,593,603
    
    
    29,844,161Provision
      for loan and lease losses
    
    
    7,100,000
    
    
    6,451,000
    
    
    3,353,686Net
      interest income after provision for loan and lease losses
    
    
    54,895,184
    
    
    33,142,603
    
    
    26,490,475Noninterest
      income:Service
      charges - - fees and other
    
    
    8,056,482
    
    
    5,456,397
    
    
    4,331,341Net
      gain on sale of securities
    
    
    —
    
    
    707,155
    
    
    —Net
      loss on sale of other real estate owned, repossessed assets, and on
      disposition of other assets
    
    
    (358,890
    )
    
    (662,556
    )
    
    (310,567
    )Net
      gain on sale of loans
    
    
    1,395,105
    
    
    3,546,634
    
    
    —Total
      noninterest income
    
    
    9,092,697
    
    
    9,047,630
    
    
    4,020,774Noninterest
      expense:Salaries
      and employee benefits
    
    
    19,193,637
    
    
    15,434,082
    
    
    11,943,084Net
      occupancy
    
    
    6,942,603
    
    
    5,909,923
    
    
    4,592,442Professional
      services
    
    
    2,196,101
    
    
    1,402,283
    
    
    1,055,126Municipal
      and other taxes
    
    
    1,253,950
    
    
    725,474
    
    
    507,065Commissions
      and service fees
    
    
    1,206,119
    
    
    1,050,733
    
    
    764,348Office
      supplies
    
    
    1,032,576
    
    
    984,290
    
    
    746,458Insurance
    
    
    803,727
    
    
    627,540
    
    
    384,635Promotional
    
    
    545,128
    
    
    510,782
    
    
    356,823Other
    
    
    3,850,665
    
    
    2,229,940
    
    
    1,584,545Total
      noninterest expense
    
    
    37,024,506
    
    
    28,875,047
    
    
    21,934,526Income
      before income taxes and extraordinary item
    
    
    26,963,375
    
    
    13,315,186
    
    
    8,576,723Provision
      for income taxes
    
    
    8,662,633
    
    
    3,432,465
    
    
    2,723,852Income
      before extraordinary item
    
    
    18,300,742
    
    
    9,882,721
    
    
    5,852,871Extraordinary
      gain on acquisition of BankTrust in 2004 and Banco Financiero in 2002
      (note 3)
    
    
    4,419,118
    
    
    —
    
    
    1,080,983Net
      income
    
    $
    22,719,860
    
    $
    9,882,721
    
    $
    6,933,854
  Earnings
      per share:Basic:Income
      before extraordinary item
    
    $
    1.08
    
    $
    0.71
    
    $
    0.43Extraordinary
      item
    
    
    0.27
    
    
    —
    
    
    0.08Net
      income
    
    $
    1.35
    
    $
    0.71
    
    $
    0.51Diluted:Income
      before extraordinary item
    
    $
    1.04
    
    $
    0.69
    
    $
    0.42Extraordinary
      item
    
    
    0.26
    
    
    —
    
    
    0.08Net
      income
    
    $
    1.30
    
    $
    0.69
    
    $
    0.50
    
 F-3
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY
 AND COMPREHENSIVE INCOME
 Years Ended December 31, 2004, 2003, and
2002
  2004
    
    2003
    
    2002Preferred
      stock:Balance
      at beginning of year
    
    $
    —
    
    $
    —
    
    $
    —Issuance
      of preferred stock
    
    
    4,305
    
    
    —
    
    
    —Balance
      at end of year
    
    
    4,305
    
    
    —
    
    
    —Capital
      paid in excess of par value - preferred stock:Balance
      at beginning of year
    
    
    —
    
    
    —
    
    
    —Issuance
      of preferred stock
    
    
    10,759,120
    
    
    —
    
    
    —Balance
      at end of year
    
    
    10,759,120
    
    
    —
    
    
    —Common
      stock:Balance
      at beginning of year
    
    
    69,737
    
    
    69,397
    
    
    6,778,497Issuance
      of Eurobank common stock
    
    
    —
    
    
    —
    
    
    9,924Exchange
      as a result of the creation of the holding company
    
    
    —
    
    
    —
    
    
    (6,720,537
    )Purchase
      and retirement of common stock
    
    
    (10
    )
    
    —
    
    
    (97
    )Issuance
      of common stock before stock split
    
    
    7,928
    
    
    340
    
    
    1,610Stock
      split
    
    
    77,655
    
    
    —
    
    
    —Issuance
      of common stock after stock split
    
    
    40,331
    
    
    —
    
    
    —Balance
      at end of year
    
    
    195,641
    
    
    69,737
    
    
    69,397Capital
      paid in excess of par value - - common stock:Balance
      at beginning of year
    
    
    42,943,014
    
    
    42,675,749
    
    
    34,610,787Issuance
      of Eurobank common stock
    
    
    —
    
    
    —
    
    
    56,073Exchange
      as a result of the creation of the holding company
    
    
    —
    
    
    —
    
    
    6,720,537Purchase
      and retirement of common stock
    
    
    (8,684
    )
    
    —
    
    
    (87,319
    )Issuance
      of common stock before stock split
    
    
    12,290,548
    
    
    267,265
    
    
    1,375,671Stock
      split
    
    
    (77,655
    )
    
    —
    
    
    —Issuance
      of common stock after stock split
    
    
    50,261,179
    
    
    —
    
    
    —Balance
      at end of year
    
    
    105,408,402
    
    
    42,943,014
    
    
    42,675,749Reserve
      fund:Balance
      at beginning of year
    
    
    2,348,598
    
    
    1,299,469
    
    
    602,857Transfer
      from undivided profits
    
    
    2,373,158
    
    
    1,049,129
    
    
    696,612Balance
      at end of year
    
    
    4,721,756
    
    
    2,348,598
    
    
    1,299,469Undivided
      profits:Balance
      at beginning of year
    
    
    20,521,151
    
    
    11,687,559
    
    
    5,450,317Net
      income
    
    
    22,719,860
    
    
    9,882,721
    
    
    6,933,854Preferred
      stock dividends
    
    
    (497,898
    )
    
    —
    
    
    —Transfer
      to reserve fund
    
    
    (2,373,158
    )
    
    (1,049,129
    )
    
    (696,612
    )Balance
      at end of year
    
    
    40,369,955
    
    
    20,521,151
    
    
    11,687,559Accumulated
      other comprehensive income (loss), net of taxes:Balance
      at beginning of year
    
    
    (807,244
    )
    
    1,603,307
    
    
    363,467Unrealized
      net gain (loss) on investment securities available for sale
      and
      cash-flow
      hedges
    
    
    (2,350,247
    )
    
    (2,410,551
    )
    
    1,239,840Balance
      at end of year
    
    
    (3,157,491
    )
    
    (807,244
    )
    
    1,603,307Total
      stockholders’ equity
    
    $
    158,301,688
    
    $
    65,075,256
    
    $
    57,335,481Comprehensive
      income:Net
      income
    
    $
    22,719,860
    
    $
    9,882,721
    
    $
    6,933,854Other
      comprehensive income (loss), net of tax:Unrealized
      net gain (loss) on investment securities available for sale and cash-flow
      hedges
    
    
    (2,350,247
    )
    
    (1,880,185
    )
    
    1,239,840Reclassification
      adjustment for realized gains included in net income
    
    
    —
    
    
    (530,366
    )
    
    —Unrealized
      net gains (losses) on investment securities available for
sale
      and
      cash-flow hedges
    
    
    (2,350,247
    )
    
    (2,410,551
    )
    
    1,239,840Comprehensive
      income
    
    $
    20,369,613
    
    $
    7,472,170
    
    $
    8,173,694
 
 
 F-4
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31, 2004, 2003 and 2002
  2004
    
    2003
    
    2002Cash
      flows from operating activities:Net
      income
    
    $
    22,719,860
    
    $
    9,882,721
    
    $
    6,933,854Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
    
    
    3,706,507
    
    
    1,442,973
    
    
    1,243,089Provision
      for loan and lease losses
    
    
    7,100,000
    
    
    6,451,000
    
    
    3,353,686Deferred
      tax provision
    
    
    4,715,347
    
    
    473,178
    
    
    303,568Extraordinary
      gain on acquisitions (note 3)
    
    
    (4,419,118
    )
    
    —
    
    
    (1,080,983
    )Net
      gain on sale of securities
    
    
    —
    
    
    (707,155
    )
    
    —Net
      gain on sale of loans
    
    
    (1,395,105
    )
    
    (3,546,634
    )
    
    —Net
      loss on sale of other real estate owned, repossessed assets, and on
      disposition of other assets
    
    
    358,890
    
    
    662,556
    
    
    310,567Net
      amortization of premiums and accretion of discounts on investment
      securities
    
    
    6,784,807
    
    
    2,916,668
    
    
    337,728Increase
      in deferred loan costs
    
    
    (1,773,009
    )
    
    (1,688,506
    )
    
    (1,241,706
    )Origination
      of loans held for sale
    
    
    (28,941,128
    )
    
    (49,165,365
    )
    
    (32,634,629
    )Proceeds
      from sale of loans held for sale
    
    
    29,250,216
    
    
    48,284,312
    
    
    32,447,691Increase
      in accrued interest receivable
    
    
    (2,262,588
    )
    
    (1,309,044
    )
    
    (1,602,118
    )Net
      (increase) decrease in other assets
    
    
    (5,035,216
    )
    
    (5,930,458
    )
    
    9,258,004Increase
      (decrease) in accrued interest payable, accrued expenses, and other
      liabilities
    
    
    7,423,628
    
    
    (545,698
    )
    
    (404,516
    )Net
      cash provided by operating activities
    
    
    38,233,091
    
    
    7,220,548
    
    
    17,224,235Cash
      flows from investing actitivies:Net
      decrease (increase) in securities purchased under agreements to resell and
      federal funds sold
    
    
    785,044
    
    
    24,530,684
    
    
    (35,450,327
    )Net
      decrease (increase) in interest-bearing deposits
    
    
    19,324,216
    
    
    10,557,759
    
    
    (13,122,683
    )Proceeds
      from sale of investment securities available for sale
    
    
    —
    
    
    83,219,690
    
    
    —Purchases
      of investment securities available for sale
    
    
    (316,639,752
    )
    
    (400,874,835
    )
    
    (105,347,471
    )Proceeds
      from principal payments and maturities of investment securities available
      for sale
    
    
    134,869,775
    
    
    133,088,387
    
    
    52,692,672Purchases
      of investment securities held to maturity
    
    
    (59,086,330
    )
    
    (1,673,100
    )
    
    (1,188,900
    )Proceeds
      from principal payments, maturities, and calls of investment securities
      held to maturity
    
    
    4,172,230
    
    
    2,124,700
    
    
    260,100Net
      increase in loans
    
    
    (200,340,918
    )
    
    (194,890,697
    )
    
    (255,641,865
    )Proceeds
      from sale of loans
    
    
    35,555,732
    
    
    50,000,046
    
    
    —Proceeds
      from sale of other real estate owned, repossessed assets, and on
      disposition of other assets
    
    
    17,987,709
    
    
    17,160,959
    
    
    6,693,814Capital
      expenditures
    
    
    (2,465,055
    )
    
    (2,594,393
    )
    
    (1,947,741
    )Cash
      and due from banks received from the acquisitions of banks,
      net
    
    
    71,134,806
    
    
    —
    
    
    4,273,349Acquisition
      of Banco Financiero including direct costs
    
    
    —
    
    
    —
    
    
    (541,272
    )Net
      cash used in investing activities
    
    
    (294,702,543
    )
    
    (279,350,800
    )
    
    (349,320,324
    )Cash
      flows from financing activities:Net
      increase in deposits
    
    
    25,931,840
    
    
    141,504,053
    
    
    273,148,701Increase
      in securities sold under agreements to repurchase
    
    
    235,886,056
    
    
    143,410,313
    
    
    36,749,187Advances
      from Federal Home Loan Bank
    
    
    —
    
    
    —
    
    
    5,550,000Repayment
      to Federal Home Loan Bank
    
    
    (66,034,362
    )
    
    (8,150,000
    )
    
    (1,950,000
    )Proceeds
      from issuance of trust preferred capital securities
    
    
    —
    
    
    —
    
    
    20,000,000Dividends
      paid to preferred stockholders
    
    
    (480,879
    )
    
    —
    
    
    —Net
      proceeds from issuance of common stocks
    
    
    57,241,571
    
    
    267,605
    
    
    220,998Purchase
      and retirement of common stocks
    
    
    —
    
    
    —
    
    
    (87,416
    )Net
      cash provided by financing activities
    
    
    252,544,226
    
    
    277,031,971
    
    
    333,631,470Net
      (decrease) increase in cash and cash equivalents
    
    
    (3,925,226
    )
    
    4,901,719
    
    
    1,535,381Cash
      and cash equivalents beginning balance
    
    
    22,522,342
    
    
    17,620,623
    
    
    16,085,242Cash
      and cash equivalents ending balance
    
    $
    18,597,116
    
    $
    22,522,342
    
    $
    17,620,623
  
 F-5
  EUROBANCSHARES, INC. AND SUBSIDIARIES
     
 **(1)**
    **Organization**
        Consolidation of
Variable Interest Entities
  **(2)**
    **Summary
      of Significant Accounting Policies**
    ***(a)***
    ***Principles
      of Consolidation***
    *(**b)***
    ***Cash
      Equivalents***
     (Continued)
 F-6
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  *(c)*
    *Securities
      Purchased under Agreements to Resell*
    *(d)*
    *Investment
      Securities Available for Sale*
        *(e)*
    *Investment
      Securities Held to Maturity*
      *(f)*
    *Other
      Investments*
    *(g)*
    *Loans
      Held for Sale*
    (Continued)
 F-7
 EUROBANCSHARES, INC. AND SUBSIDIARIES
  *(h)*
    *Loans
      and Allowance for Loan and Lease Losses*
    Accounting for Contingencies Accounting by Creditors for Impairment of a
Loan Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures
            (Continued)
 F-8
  EUROBANCSHARES, INC. AND SUBSIDIARIES
     *(i)*
    *Lease
      Financing*
  Accounting for Leases
  *(j)*
    *Transfer
      of Financial Assets and Servicing Rights
Retained*
      ·
    Derecognizes
      all assets sold;
  ·
    Recognizes
      all assets obtained and liabilities incurred in consideration as proceeds
      of the sale;
  ·
    Initially
      measures, at fair value, assets obtained and liabilities incurred in a
      sale; and
  ·
    Recognizes
      in earnings any gain or loss on the sale.
    *(k)*
    *Servicing
      Assets*
    (Continued)
 F-9
 EUROBANCSHARES, INC. AND SUBSIDIARIES
    *(l)*
    *Premises
      and Equipment*
    *(m)*
    *Other
      Real Estate and Repossessed Assets*
    *(n)*
    *Trust
      Services*
    *(o)*
    *Securities
      Sold under Agreements to Repurchase*
    *(p)*
    *Income
      Taxes*
    *(q)*
    *Reserve
      Fund*
    (Continued)
 F-10
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 *(r)*
    *Interest
      Income*
    *(s)*
    *Loan
      Origination and Commitment Fees*
    *(t)*
    *Earnings
      Per Share*
     (Continued)
 F-11
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  *(u)*
    *Supplementary
      Cash Flow Information*
    **2004**
    
    **2003**
    
    **2002**Cash
      paid during the years for:Interest
    
    $
    37,630,000
    
    $
    32,494,000
    
    $
    23,939,000Income
      taxes
    
    
    2,533,000
    
    
    3,116,000
    
    
    2,037,000Noncash
      transactions:Repossessed
      assets acquired through foreclosure of loans
    
    $
    20,282,000
    
    $
    15,431,000
    
    $
    7,463,000Change
      in fair value of available-for-sale securities and cash-flow
      hedges
    
    
    (2,434,211
    )
    
    (3,214,069
    )
    
    1,653,120Tax
      effect of change in fair value of available-for-sale securities and
      cash-flow hedges
    
    
    (83,964
    )
    
    (803,518
    )
    
    413,280Capital
      contribution through issuance of EuroBancshares' stocks on acquisition of
      BankTrust (note 3):Common
      stocks
    
    
    5,551,845
    
    
    --
    
    
    --Preferred
      stocks
    
    
    10,763,425
    
    
    --
    
    
    --Capital
      contribution through issuance of EuroBancshares common stock on
      acquisition of Banco Financiero
      (note
      3)
    
    
    --
    
    
    --
    
    
    1,222,280
 
  *(v)*
    *Stock
      Option Plan*
  Accounting for Stock-Based
Compensation Accounting for
Stock-Based Compensation - Transition and Disclosure, an Amendment of FASB
Statement No. 123 Accounting for Stock
Issued to Employees
    (Continued)
 F-12
  EUROBANCSHARES, INC. AND SUBSIDIARIES
   **2004**
    
    **2003**
    
    **2002**Net
      income, as reported
    
    $
    22,719,860
    
    $
    9,882,721
    
    $
    6,933,854Deduct
      total stock-based employee compensation expense determined under fair
      value based method for all awards
    
    
    (370,143
    )
    
    (364,421
    )
    
    (270,832
    )Pro
      forma net income
    
    $
    22,349,717
    
    $
    9,518,300
    
    $
    6,663,022Earnings
      per share:Basic
      - as reported
    
    $
    1.35
    
    $
    0.71
    
    $
    0.51Basic
      - pro forma
    
    
    1.32
    
    
    0.69
    
    
    0.49Diluted
      - as reported
    
    
    1.30
    
    
    0.69
    
    
    0.50Diluted
      - pro forma
    
    
    1.27
    
    
    0.67
    
    
    0.49
    *(w)*
    *Comprehensive
      Income*
    *(x)*
    *Impairment
      of Long-Lived Assets*
      *(y)*
    *Derivative
      Instruments*
  Accounting for Derivative
Instruments and Certain Hedging Activities
  (Continued)
 F-13
  EUROBANCSHARES, INC. AND SUBSIDIARIES
          *(z)*
    *Reclassifications*
    (Continued)
 F-14
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  *(aa)*
    *Business
      Segments*
    *(ab)*
    *Recently
      Issued Accounting Standards*
  Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity
  Accounting for Certain Loans
or Debt Securities Acquired in a Transfer
  Loan Commitments
Accounted for as Derivative Instruments
  (Continued)
 F-15
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments Accounting
for Certain Investments in Debt and Equity Securities, The Equity Method
of Accounting for Investments in Common Stock
    **(3)**
    **Acquisitions**
    (Continued)
 F-16
  EUROBANCSHARES, INC. AND SUBSIDIARIES
    Cash
      and due from banks
    
    $
    78,476Interest-bearing
      deposits with banks
    
    
    3,271Investment
      securities
    
    
    80,140Loans,
      net
    
    
    336,275Other
      assets
    
    
    23,828Total
      assets acquired
    
    
    521,990Deposits
    
    
    (398,555
    )Borrowings
    
    
    (85,738
    )Other
      liabilities
    
    
    (8,632
    )Total
      liabilities assumed
    
    
    (492,925
    )Net
      assets acquired
    
    $
    29,065
 
        **Years
      Ended December 31****2004**
    
    **2003**Interest
      income
    
    $
    115,526
    
    $
    110,065Income
      before extraordinary item/ unusual recovery
    
    
    2,137
    
    
    2,479Net
      income
    
    
    6,556
    
    
    4,783Earnings
      per share:Basic
    
    
    0.35
    
    
    0.28Diluted
    
    
    0.34
    
    
    0.33
    (Continued)
 F-17
  EUROBANCSHARES, INC. AND SUBSIDIARIES
    **(4)**
    **Securities
      Purchased Under Agreements to Resell**
    **2004**
    
    **2003**
    
    **2002**Amount
      outstanding at year-end
    
    $
    42,810,479
    
    $
    20,483,736
    
    
    45,014,420Maximum
      aggregate balance outstanding at any month-end
    
    
    63,763,679
    
    
    49,314,518
    
    
    45,014,420Average
      monthly aggregate balance outstanding during the year
    
    
    26,607,444
    
    
    21,017,618
    
    
    20,232,036Weighted
      average interest rate for the year ended December 31
    
    
    1.30
    %
    
    1.19
    %
    
    1.68
    %Weighted
      average interest rate at year-end
    
    
    2.36
    %
    
    1.00
    %
    
    1.25
    %
      (Continued)
 F-18
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(5)**
    **Investment
      Securities Available for Sale**
    **2004****Amortized**
    
    **Gross
      unrealized**
    
    **Gross
      unrealized**
    
    **Fair****cost**
    
    **gains**
    
    **losses**
    
    **value**Commonwealth
      of Puerto Rico obligations:Less
      than one year
    
    $
    1,506,276
    
    $
    8,960
    
    $
    (905
    )
    $
    1,514,331One
      through five years
    
    
    6,264,714
    
    
    39,714
    
    
    (13,920
    )
    
    6,290,508More
      than ten years
    
    
    1,706,383
    
    
    15,429
    
    
    (12,819
    )
    
    1,708,993U.S.
      treasury obligations:Less
      than one year
    
    
    84,882,054
    
    
    --
    
    
    (489,884
    )
    
    84,392,170Federal
      Home Loan Bank notes:Less
      than one year
    
    
    37,517,099
    
    
    --
    
    
    (237,465
    )
    
    37,279,634One
      through five years
    
    
    41,391,666
    
    
    --
    
    
    (257,723
    )
    
    41,133,943Federal
      National Mortgage Association notes:One
      through five years
    
    
    7,461,983
    
    
    --
    
    
    (49,295
    )
    
    7,412,688Federal
      Home Loan Mortgage Corporation notes:One
      through five years
    
    
    3,005,088
    
    
    --
    
    
    (32,433
    )
    
    2,972,655Mortgage-backed
      securities
    
    
    374,320,227
    
    
    1,385,436
    
    
    (2,928,842
    )
    
    372,776,821Total
    
    $
    558,055,490
    
    $
    1,449,539
    
    $
    (4,023,286
    )
    $
    555,481,743
 
   (Continued)
 F-19
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **2003****Amortized**
    
    **Gross
      unrealized**
    
    **Gross
      unrealized**
    
    **Fair****cost**
    
    **gains**
    
    **losses**
    
    **value**Commonwealth
      of Puerto Rico obligations:One
      through five years
    
    $
    4,317,444
    
    $
    48,556
    
    $
    --
    
    $
    4,366,000More
      than five years
    
    
    201,685
    
    
    7,815
    
    
    --
    
    
    209,500U.S.
      corporate notes:Less
      than one year
    
    
    2,967,893
    
    
    26,442
    
    
    --
    
    
    2,994,335U.S.
      treasury obligations:One
      through five years
    
    
    84,748,443
    
    
    367,808
    
    
    --
    
    
    85,116,251Federal
      Home Loan Bank notes:Less
      than one year
    
    
    1,000,000
    
    
    6,347
    
    
    --
    
    
    1,006,347One
      through five years
    
    
    23,052,150
    
    
    24,598
    
    
    --
    
    
    23,076,748Five
      through ten years
    
    
    5,356,640
    
    
    12,474
    
    
    --
    
    
    5,369,114Federal
      National Mortgage Association notes:One
      through five years
    
    
    7,449,036
    
    
    21,951
    
    
    --
    
    
    7,470,987Federal
      Home Loan Mortgage Corporation notes:One
      through five years
    
    
    3,009,060
    
    
    --
    
    
    (2,324
    )
    
    3,006,736Mortgage-backed
      securities
    
    
    193,912,017
    
    
    400,923
    
    
    (1,990,916
    )
    
    192,322,024Total
    
    $
    326,014,368
    
    $
    916,914
    
    $
    (1,993,240
    )
    $
    324,938,042
 
          **Less
      than 12 months**
    
    **12
      months or more**
    
    **Total****Unrealized**
    
    **Fair**
    
    **Unrealized**
    
    **Fair**
    
    **Unrealized**
    
    **Fair****losses**
    
    **value**
    
    **losses**
    
    **value**
    
    **losses**
    
    **value**U.S.
      agency debt securities
    
    $
    (544,483
    )
    $
    38,161,288
    
    $
    (32,433
    )
    $
    2,972,655
    
    $
    (576,916
    )
    $
    41,133,943State
      and municipal obligations
    
    
    (27,644
    )
    
    2,679,081
    
    
    --
    
    
    --
    
    
    (27,644
    )
    
    2,679,081U.S.
      treasury obligations
    
    
    (489,884
    )
    
    84,882,054
    
    
    --
    
    
    --
    
    
    (489,884
    )
    
    84,882,054Mortgage-backed
      securities
    
    
    (2,141,723
    )
    
    183,629,377
    
    
    (787,119
    )
    
    53,218,529
    
    
    (2,928,842
    )
    
    236,847,906$
    (3,203,734
    )
    $
    309,351,800
    
    $
    (819,552
    )
    $
    56,191,184
    
    $
    (4,023,286
    )
    $
    365,542,984
  *U.S. Agency Debt Securities*
  (Continued)
 F-20
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  ·
    ***U.S.
      Treasury Obligations*** - The unrealized losses on investment
      in U.S. Treasury obligations were caused by interest rate increases. The
      contractual terms of these investments do not permit the issuer to settle
      the securities at a price less than the amortized cost of the investment.
      Because the Company has the ability and intent to hold these investments
      until a market price recovery or maturity, these investments are not
      considered other-than-temporarily impaired.
  ·
    ***Mortgage-Backed
      Securities*** - The unrealized losses on investments in
      mortgage-backed securities were caused by interest rate increases. The
      contractual cash flows of these securities are guaranteed by Federal
      National Mortgage Association (FNMA) and Federal Home Loan Mortgage
      Corporation (FHLMC). It is expected that the securities would not be
      settled at a price less than the amortized cost of the investment. Because
      the decline in fair value is attributable to changes in interest rates and
      not credit quality, and because the Company has the ability and intent to
      hold these investments until a market price recovery or maturity, these
      investments are not considered other-than-temporarily
      impaired.
  **(6)**
    **Investment
      Securities Held to Maturity**
    **Amortized**
    
    **Gross
      unrealized**
    
    **Gross
      unrealized**
    
    **Fair****cost**
    
    **gains**
    
    **losses**
    
    **value**Federal
      Home Loan Bank Notes:Five
      through ten years
    
    $
    4,813,645
    
    $
    --
    
    $
    (38,338
    )
    $
    4,775,307Mortgage-backed
      securities
    
    
    44,690,798
    
    
    183,194
    
    
    (342,738
    )
    
    44,531,254Total
    
    $
    49,504,443
    
    $
    183,194
    
    $
    (381,076
    )
    $
    49,306,561
    **(7)**
    **Other
      Investments**
    **2004**
    
    **2003**FHLB
      stock, at cost
    
    $
    7,330,100
    
    $
    1,953,600Investment
      in statutory trusts (notes 1 and 18)
    
    
    1,385,500
    
    
    1,388,500Other
      investments
    
    $
    8,715,600
    
    $
    3,342,100
 
  (Continued)
 F-21
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(8)**
    **Pledged
      Assets**
    **Carrying****Asset
      pledged**
    
    **value**
    
    **Items
      secured/collateralized**Securities
    
    $
    11,186,051
    
    
    Deposits
      of public fundsCommercial
      loansguaranteed by the SmallBusiness
      Administration
    
    
    2,869,473
    
    
    Deposits
      of public fundsSecurities
    
    
    10,183,548
    
    
    Advances
      from Federal Home Loan BankResidential
      mortgage loans
    
    
    965,097
    
    
    Advances
      from Federal Home Loan BankSecurities
    
    
    125,923
    
    
    Assets
      pledged with Commissioner ofFinancial
      Institutions of the Commonwealth ofPuerto
      Rico for IRA TrustSecurities
    
    
    52,565
    
    
    Assets
      for Eurobank IRA TrustSecurities
    
    
    438,384
    
    
    Assets
      pledged with Commissioner ofFinancial
      Institutions of the Commonwealth ofPuerto
      Rico for the Trust and the InternationalBanking
      Entity operationsSecurities
    
    
    295,725
    
    
    Assets
      pledged with the Federal Reserve Bankfor
      Treasury, tax, and loan accountSecurities
    
    
    2,168,652
    
    
    Assets
      pledged with the Federal Reserve Bankfor
      Discount WindowSecurities
    
    
    491,638,391
    
    
    Securities
      sold under agreements to repurchaseSecurities
    
    
    2,918,463
    
    
    Assets
      pledged with brokers for interest rate swaps
  **(9)**
    **Interest
      and Dividends on Investment Securities**
    **Year
      ended December 31****2004**
    
    **2003**
    
    **2002**Mortgage-backed
      securities:Taxable
    
    $
    381,436
    
    $
    —
    
    $
    —Exempt
    
    
    6,527,806
    
    
    2,506,807
    
    
    2,855,460$
    6,909,242
    
    $
    2,506,807
    
    $
    2,855,460Other
      investment securities:Taxable
    
    $
    358,917
    
    $
    89,044
    
    $
    361,328Exempt
    
    
    4,820,626
    
    
    3,413,382
    
    
    2,125,094$
    5,179,543
    
    $
    3,502,426
    
    $
    2,486,422
 
  (Continued)
 F-22
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 **(10)**
    **Loans,
      Net**
    **2004**
    
    **2003**Commercial
      and industrial secured by real estate
    
    $
    463,500,209
    
    $
    299,891,670Other
      commercial and industrial
    
    
    242,479,758
    
    
    176,854,219Construction
      secured by real estate
    
    
    79,334,108
    
    
    47,370,068Other
      construction
    
    
    1,123,435
    
    
    1,135,092Mortgage
    
    
    51,730,399
    
    
    15,941,467Consumer
      secured by real estate
    
    
    1,311,343
    
    
    1,657,682Other
      consumer
    
    
    74,755,008
    
    
    26,592,124Lease
      financing contracts
    
    
    459,250,841
    
    
    315,935,299Overdrafts
    
    
    6,133,558
    
    
    4,235,4861,379,618,659
    
    
    889,613,107Deferred
      loan costs, net
    
    
    6,479,782
    
    
    4,706,774Unearned
      finance charges
    
    
    (1,169,230
    )
    
    (1,774,047
    )Allowance
      for loan and lease losses
    
    
    (19,038,836
    )
    
    (9,393,943
    )Loans,
      net
    
    $
    1,365,890,375
    
    $
    883,151,891
    **2004**
    
    **2003**Minimum
      lease payments
    
    $
    395,318,044
    
    $
    285,444,407Guaranteed
      residual payments
    
    
    63,932,797
    
    
    30,490,892Deferred
      origination costs, net
    
    
    6,795,587
    
    
    4,932,656Less
      unearned income (equipment leases)
    
    
    (1,163,859
    )
    
    (1,734,141
    )Less
      allowance for lease losses
    
    
    (3,815,222
    )
    
    (1,950,090
    )$
    461,067,347
    
    $
    317,183,724
     (Continued)
 F-23
  EUROBANCSHARES, INC. AND SUBSIDIARIES
    Years
      ending December 31:2005
    
    $
    90,217,7852006
    
    
    91,353,3882007
    
    
    87,278,7382008
    
    
    72,265,5832009
    
    
    42,552,984Thereafter
    
    
    11,649,566$
    395,318,044
 
    **2004**
    
    **2003**Impaired
      loans with related allowance
    
    $
    14,230,000
    
    $
    7,187,000Impaired
      loans that did not require allowance
    
    
    9,429,000
    
    
    6,242,000Total
      impaired loans
    
    $
    23,659,000
    
    $
    13,429,000Allowance
      for impaired loans
    
    $
    924,000
    
    $
    451,000
 
  **2004**
    
    **2003**
    
    **2002**Average
      investment in impaired loans
    
    $
    21,317,000
    
    $
    13,246,000
    
    $
    10,210,000Interest
      income recognized onimpaired loans
    
    
    560,000
    
    
    547,000
    
    
    574,000Interest
      income recognized on a cashbasis on impaired
      loans
    
    
    560,000
    
    
    547,000
    
    
    574,000
        (Continued)
 F-24
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(11)**
    **Allowance
      for Loan and Lease Losses**
    **2004**
    
    **2003**
    
    **2002**Balance
      at beginning of year
    
    $
    9,393,943
    
    $
    6,918,141
    
    $
    4,512,932Provision
      for loan and lease losses
    
    
    7,100,000
    
    
    6,451,000
    
    
    3,353,686Loans
      charged-off
    
    
    (10,499,850
    )
    
    (5,065,207
    )
    
    (3,387,240
    )Recoveries
    
    
    2,143,197
    
    
    1,090,009
    
    
    420,764Allowance
      from the acquisition ofBanco Financiero
    
    
    --
    
    
    --
    
    
    2,017,999Allowance
      from the acquisition ofBankTrust
    
    
    10,901,546
    
    
    --
    
    
    --Balance
      at end of year
    
    $
    19,038,836
    
    $
    9,393,943
    
    $
    6,918,141
 
  **(12)**
    **Premises
      and Equipment, Net**
    **Estimated****useful
      lives****(years)**
    
    **2004**
    
    **2003**Building
    
    
    40
    
    $
    5,749,435
    
    $
    5,748,836Leasehold
      improvements
    
    
    5
      to 20
    
    
    6,389,119
    
    
    5,315,561Furniture,
      fixtures, and equipment
    
    
    2
      to 5
    
    
    10,008,632
    
    
    8,734,216Construction
      in progress
    
    
    
    
    
    --
    
    
    122,36222,147,186
    
    
    19,920,975Accumulated
      depreciation and amortization
    
    
    
    
    
    (10,885,973
    )
    
    (9,389,622
    )$
    11,261,213
    
    $
    10,531,353
    (Continued)
 F-25
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 **(13)**
    **Other
      Assets**
    **2004**
    
    **2003**Deferred
      tax assets, net (note 21)
    
    $
    12,523,726
    
    $
    4,010,050Merchant
      credit card items in process of collection
    
    
    1,845,113
    
    
    1,918,965Auto
      insurance claims receivable on repossessed vehicles
    
    
    1,228,858
    
    
    1,214,016Accounts
      receivable
    
    
    1,337,594
    
    
    806,545Other
      real estate, net of valuation allowance of $22,779 and$27,525 in
      2004 and 2003, respectively
    
    
    2,875,002
    
    
    2,774,124Other
      repossessed assets, net of valuation allowance of$1,493,305 and
      $885,135 in 2004 and 2003, respectively
    
    
    3,566,446
    
    
    3,642,886Servicing
      assets, net of valuation allowance of $1,003,618in 2004 (note
      20)
    
    
    3,554,276
    
    
    3,031,297Prepaid
      expenses and deposits
    
    
    5,615,626
    
    
    3,982,463Other
    
    
    462,868
    
    
    1,062,937$
    33,009,509
    
    $
    22,443,283
    **2004**
    
    **2003**
    
    **2002**Balance,
      beginning of year
    
    $
    885,135
    
    $
    824,473
    
    $
    402,114Provision
      for losses
    
    
    884,593
    
    
    522,660
    
    
    428,530Allowance
      from acquisition of BankTrust
    
    
    601,078
    
    
    —
    
    
    —Net
      charge-offs
    
    
    (877,501
    )
    
    (461,998
    )
    
    (6,171
    )Balance,
      end of year
    
    $
    1,493,305
    
    $
    885,135
    
    $
    824,473
 
  (Continued)
 F-26
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(14)**
    **Deposits**
    **2004**
    
    **2003**Savings
      deposits:Savings
      accounts
    
    $
    278,802,480
    
    $
    230,326,464Now
      and money market accounts
    
    
    118,076,729
    
    
    77,019,283396,879,209
    
    
    307,345,747Time
      deposits:Under
      $100,000
    
    
    185,897,292
    
    
    166,232,067$100,000
      and over
    
    
    688,364,074
    
    
    406,213,619874,261,366
    
    
    572,445,686$
    1,271,140,575
    
    $
    879,791,433
 
      2005
    
    $
    424,257,2852006
    
    
    168,203,3532007
    
    
    106,913,2392008
    
    
    60,458,9622009
    
    
    58,964,326Thereafter
    
    
    53,564,573872,361,738Net
      premiums on time deposits
    
    
    1,899,628$
    874,261,366
     (Continued)
 F-27
   **(15)**
    **Securities
      Sold Under Agreements to Repurchase**
    **2004**
    
    **2003**
    
    **2002**Amount
      outstanding at year-end
    
    $
    463,409,056
    
    $
    207,523,000
    
    $
    64,112,687Maximum
      aggregate balance outstanding at any month-end
    
    
    465,302,056
    
    
    207,523,000
    
    
    64,112,687Average
      aggregate balance outstanding during the year
    
    
    312,169,363
    
    
    92,068,813
    
    
    44,472,450Weighted
      average interest rate for the year
    
    
    1.70
    %
    
    1.71
    %
    
    2.60
    %Weighted
      average interest rate at year-end
    
    
    2.47
    %
    
    1.25
    %
    
    2.04
    %
    
 (Continued)
 F-28
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 
   **2004****Amortized**
    
    
    
    **Weighted****Borrowing**
    
    **cost
      of**
    
    **Fair
      value**
    
    **average****balance**
    
    **collateral**
    
    **of
      collateral**
    
    **interest
      rate**U.S.
      Treasury securities:Within
      30 days
    
    $
    84,650,000
    
    $
    84,882,054
    
    $
    84,392,170
    
    
    2.10
    %Obligation
      of U.S. governmentagencies and corporations:Within
      30 days
    
    
    10,572,056
    
    
    10,885,000
    
    
    10,885,000
    
    
    1.99
    %After
      30 to 90 days
    
    
    24,264,000
    
    
    25,138,586
    
    
    24,836,342
    
    
    2.38
    %After
      90 days
    
    
    13,981,000
    
    
    15,058,084
    
    
    14,968,750
    
    
    1.79
    %48,817,056
    
    
    51,081,670
    
    
    50,690,092Mortgage-backed
      securities:After
      30 to 90 days
    
    
    6,896,000
    
    
    7,412,815
    
    
    7,366,726
    
    
    2.40
    %After
      90 days
    
    
    27,192,000
    
    
    29,146,635
    
    
    29,413,054
    
    
    2.91
    %34,088,000
    
    
    36,559,450
    
    
    36,779,780Collateralized
      mortgage obligations:Within
      30 days
    
    
    3,421,000
    
    
    3,549,359
    
    
    3,575,061
    
    
    2.36
    %After
      30 to 90 days
    
    
    115,830,000
    
    
    124,127,363
    
    
    123,662,535
    
    
    2.30
    %After
      90 days
    
    
    176,603,000
    
    
    193,520,194
    
    
    192,538,753
    
    
    2.54
    %295,854,000
    
    
    321,196,916
    
    
    319,776,349$
    463,409,056
    
    $
    493,720,090
    
    $
    491,638,391
    
    
    2.37
    %
 
  (Continued)
 F-29
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **2003****Amortized**
    
    
    
    **Weighted****Borrowing**
    
    **cost
      of**
    
    **Fair
      value**
    
    **average****balance**
    
    **collateral**
    
    **of
      collateral**
    
    **interest
      rate**U.S.
      Treasury securities:Within
      30 days
    
    $
    84,975,000
    
    $
    84,748,443
    
    $
    85,116,251
    
    
    0.89
    %Obligation
      of U.S. governmentagencies and corporations:Within
      30 days
    
    
    4,450,000
    
    
    4,550,000
    
    
    4,551,283
    
    
    1.18
    %Mortgage-backed
      securities:After
      90 days
    
    
    19,979,554
    
    
    21,436,974
    
    
    21,440,930
    
    
    1.41
    %Collateralized
      mortgage obligations:Within
      30 days
    
    
    35,445,000
    
    
    36,860,804
    
    
    36,620,424
    
    
    1.47
    %After
      30 to 90 days
    
    
    7,034,000
    
    
    7,115,127
    
    
    7,052,649
    
    
    1.16
    %After
      90 days
    
    
    55,639,446
    
    
    59,239,196
    
    
    58,573,880
    
    
    1.65
    %98,118,446
    
    
    103,215,127
    
    
    102,246,953$
    207,523,000
    
    $
    213,950,544
    
    $
    213,355,417
    
    
    1.26
    %
 
  **(16)**
    **Advances
      from FHLB**
  At
December 31 the Company owes several advances to the FHLB as
follows:
 
 **Maturity**
    
    **Interest
      rate range**
    
    **2004**
    
    **2003**2004
    
    
    6.50%
      to 6.81%
    
    $
    —
    
    $
    2,500,0002005
    
    
    2.63%
    
    
    1,600,000
    
    
    —2006
    
    
    4.81%
      to 5.72%
    
    
    7,000,000
    
    
    7,000,0002007
    
    
    5.20%
    
    
    1,200,000
    
    
    1,200,0002014
    
    
    4.38%
    
    
    603,638
    
    
    —$
    10,403,638
    
    $
    10,700,000
    
 (Continued)
 F-30
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(17)**
    **Derivative
      Financial Instruments**
    **Notional****amount**
    
    **Fair
      value**
    
    **Tax
      effect**
    
    **Net
      effect**Cash-flow
      hedges:Interest
      rate swaps
    
    $
    52,500,000
    
    $
    (236,690
    )
    $
    92,309
    
    $
    (144,381
    )
    
    (1
    )Fair-value
      hedges:Interest
      rate swaps
    
    
    50,227,000
    
    
    (1,061,846
    )
    
    (414,120
    )
    
    (1,475,966
    )
    
    (2
    )$
    102,727,000
    
    $
    (1,298,536
    )
    $
    (321,811
    )
    $
    (1,620,347
    )
 
 (1)
    Included
      in other comprehensive income (loss).(2)
    Recorded
      in results of operations for the year together with the offsetting effect
      of the revaluation of hedged deposits of 1,475,966.
          **(18)**
    **Notes
      Payable to Statutory Trusts**
    (Continued)
 F-31
  EUROBANCSHARES, INC. AND SUBSIDIARIES
            (Continued)
 F-32
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 **(19)**
    **Commitments
      and Contingencies**
    **Minimum**
    
    **Estimated****rental**
    
    **rental****payments**
    
    **income**
    
    **Net**Year
      ending December 31:2005
    
    $
    2,199,000
    
    $
    248,000
    
    $
    1,951,0002006
    
    
    1,984,000
    
    
    265,000
    
    
    1,719,0002007
    
    
    1,654,000
    
    
    265,000
    
    
    1,389,0002008
    
    
    1,107,000
    
    
    285,000
    
    
    822,0002009
    
    
    881,000
    
    
    285,000
    
    
    596,000Thereafter
    
    
    8,277,000
    
    
    591,000
    
    
    7,686,000$
    16,102,000
    
    $
    1,939,000
    
    $
    14,163,000
        **(20)**
    **Sale
      of Receivables and Servicing Assets**
  Accounting for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities
    (Continued)
 F-33
  EUROBANCSHARES, INC. AND SUBSIDIARIES
         **2004**
    
    **2003**Balance,
      beginning of year
    
    $
    3,031,297
    
    $
    —Servicing
      assets from the acquisition ofBankTrust (note
      3)
    
    
    1,933,412
    
    
    —Servicing
      retained on loans sold
    
    
    1,522,453
    
    
    3,660,780Amortization
    
    
    (1,929,268
    )
    
    (629,483
    )Balance,
      end of year
    
    
    4,557,894
    
    
    3,031,297Less
      valuation allowance from acquisitionof BankTrust (note
      3)
    
    
    (789,561
    )
    
    —Less
      valuation allowance recorded forimpairment
    loss
    
    
    (214,057
    )
    
    —Total
      valuation allowance
    
    
    (1,003,618
    )
    
    —Balance,
      end of year, net
    
    $
    3,554,276
    
    $
    3,031,297
    **2004**
    
    **2003**Prepayment
      rate
    
    
    15.12
    %
    
    5.50
    %Weighted
      average life (in years)
    
    
    3.70
    %
    
    3.90%
      to 4.03
    %Discount
      rate
    
    
    8.68
    %
    
    9.35%
      to 9.95
    %
     (Continued)
 F-34
  EUROBANCSHARES, INC. AND SUBSIDIARIES
   2005
    
    $
    2,031,8912006
    
    
    1,052,5702007
    
    
    362,0402008
    
    
    60,4042009
    
    
    19,112Thereafter
    
    
    28,259$
    3,554,276
  **(21)**
    **Income
      Taxes**
            (Continued)
 F-35
 EUROBANCSHARES, INC. AND SUBSIDIARIES
    **2004**
    
    **2003**
    
    **2002**Income
      tax from operations
    
    $
    8,662,633
    
    $
    3,432,465
    
    $
    2,723,852Stockholders'
      equity for unrealized (losses)and gain on investment securities
      andcash-flow hedges
    
    
    (83,964
    )
    
    (803,518
    )
    
    413,280$
    8,578,669
    
    $
    2,628,947
    
    $
    3,137,132
    **2004**
    
    **2003**
    
    **2002**Current
      tax provision
    
    $
    3,947,286
    
    $
    2,959,287
    
    $
    2,420,284Deferred
      tax provision
    
    
    4,715,347
    
    
    473,178
    
    
    303,568Total
      income tax provision
    
    $
    8,662,633
    
    $
    3,432,465
    
    $
    2,723,852
    **2004**
    
    **2003**
    
    **2002****Amount**
    
    **Rate**
    
    **Amount**
    
    **Rate**
    
    **Amount**
    
    **Rate**Income
      tax at statutory rate
    
    $
    10,515,716
    
    
    39.00
    %
    $
    5,192,923
    
    
    39.00
    %
    $
    3,344,922
    
    
    39.00
    %Change
      in the beginning-of-the-yearbalance
      of valuation allowance
    
    
    —
    
    
    —
    
    
    (584,712
    )
    
    (4.40
    )
    
    —
    
    
    —Benefits
      of tax-exempt interestincome,
      net
    
    
    (191,492
    )
    
    (0.71
    )
    
    (175,070
    )
    
    (1.31
    )
    
    (146,381
    )
    
    (1.71
    )International
      banking entities
    
    
    (1,410,672
    )
    
    (5.25
    )
    
    (1,054,468
    )
    
    (7.92
    )
    
    (524,366
    )
    
    (6.11
    )Puerto
      Rico Treasury Departmentexamination
    
    
    495,005
    
    
    1.84
    
    
    —
    
    
    —
    
    
    —
    
    
    —(Allowance)
      disallowance ofcertain
      expenses for taxpurposes
      and other items
    
    
    (745,924
    )
    
    (2.78
    )
    
    53,792
    
    
    0.41
    
    
    49,677
    
    
    0.58$
    8,662,633
    
    
    32.10
    %
    $
    3,432,465
    
    
    25.78
    %
    $
    2,723,852
    
    
    31.76
    %
 
  (Continued)
 F-36
  EUROBANCSHARES, INC. AND SUBSIDIARIES
   **2004**
    
    **2003**Deferred
      tax assets:Allowance
      for loan and lease losses
    
    $
    7,425,146
    
    $
    3,663,638Net
      operating loss carryforward
    
    
    7,762,236
    
    
    2,297,665Unrealized
      loss on securities available-for-sale
    
    
    --
    
    
    269,082Unrealized
      loss on swaps designated as fair-value hedges
    
    
    414,120
    
    
    --Other
      temporary differences
    
    
    2,144,161
    
    
    662,269Gross
      deferred tax assets
    
    
    17,745,663
    
    
    6,892,654Less
      valuation allowance
    
    
    --
    
    
    --Deferred
      tax assets
    
    
    17,745,663
    
    
    6,892,654Deferred
      tax liabilities:Deferred
      loan costs, net
    
    
    (2,527,115
    )
    
    (1,835,642
    )Servicing
      assets
    
    
    (1,214,567
    )
    
    (854,261
    )Fair
      value adjustments on loans
    
    
    (1,057,790
    )
    
    (192,701
    )Unrealized
      gain on securities available-for-sale
    
    
    (8,345
    )
    
    --Discount
      on interest-bearing time deposits
    
    
    (414,120
    )
    
    --Deferred
      tax liabilities
    
    
    (5,221,937
    )
    
    (2,882,604
    )Net
      deferred tax assets
    
    $
    12,523,726
    
    $
    4,010,050
    
 (Continued)
 F-37
  EUROBANCSHARES, INC. AND SUBSIDIARIES
   **Net
      operating loss carryforwards******Expiration**Date**
    
    **BankTrust**
    
    **Banco
      Financiero**
    
    **Total**2006
    
    $
    --
    
    $
    334,132
    
    $
    334,1322007
    
    
    --
    
    
    452,822
    
    
    452,8222008
    
    
    --
    
    
    1,570,684
    
    
    1,570,6842009
    
    
    3,097,157
    
    
    2,853,184
    
    
    5,950,3412011
    
    
    11,595,189
    
    
    --
    
    
    11,595,189$
    14,692,346
    
    $
    5,210,822
    
    $
    19,903,168
  **(22)**
    **Stock
      Transactions**
    **Number
      of****Date**
    
    **shares**
    
    **Price**
    
    **Total**January-04
    
    
    50,000
    
    $
    5.000
    
    $
    250,000March-04
    
    
    30,000
    
    
    3.325
    
    
    99,750March-04
    
    
    35,250
    
    
    4.500
    
    
    158,625March-04
    
    
    50,000
    
    
    5.000
    
    
    250,000November-04
    
    
    32,776
    
    
    3.325
    
    
    108,980December-04
    
    
    32,776
    
    
    3.325
    
    
    108,980230,802
    
    
    
    
    $
    976,335
        (Continued)
 F-38
  EUROBANCSHARES, INC. AND SUBSIDIARIES
                 **(23)**
    **Stock
      Option Plan**
        (Continued)
 F-39
  EUROBANCSHARES, INC. AND SUBSIDIARIES
    **2004**
    
    **2003**
    
    **2002****Weighted**
    
    
    
    **Weighted**
    
    
    
    **Weighted****average**
    
    
    
    **average**
    
    
    
    **average****exercise**
    
    
    
    **exercise**
    
    
    
    **exercise****Shares**
    
    **price**
    
    **Shares**
    
    **price**
    
    **Shares**
    
    **price**Options
      outstanding January 1
    
    
    1,122,114
    
    $
    4.50
    
    
    616,140
    
    $
    3.97
    
    
    375,676
    
    $
    3.05Granted
    
    
    200,000
    
    
    8.13
    
    
    574,000
    
    
    5.00
    
    
    337,812
    
    
    4.50Exercised
    
    
    (230,802
    )
    
    4.23
    
    
    (68,026
    )
    
    3.94
    
    
    (97,348
    )
    
    2.27Options
      outstanding andexercisable December 31
    
    
    1,091,312
    
    $
    5.22
    
    
    1,122,114
    
    $
    4.50
    
    
    616,140
    
    $
    3.97
      **Options****outstanding**
    
    **Exercise****Date
      granted**
    
    **and
      exercisable**
    
    **price**
    
    **Exercisable
      date**
    
    **Expiration
      date**2001
    
    
    150,000
    
    $
    3.33
    
    
    February
      28, 2001
    
    
    February
      28, 20062002
    
    
    267,312
    
    
    4.50
    
    
    February
      26, 2002
    
    
    February
      26, 20072003
    
    
    474,000
    
    
    5.00
    
    
    March
      24, 2003
    
    
    March
      24, 20082004
    
    
    200,000
    
    
    8.13
    
    
    February
      23, 2004
    
    
    February
      23, 20091,091,312
  
 (Continued)
 F-40
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(24)**
    **Earnings
      Per Share**
   **2004**
    
    **2003**
    
    **2002**Net
      income before extraordinary itemand preferred stock
      dividends
    
    $
    18,300,742
    
    $
    9,882,721
    
    $
    5,852,871Dividend
      paid to preferred shareholders
    
    
    (497,898
    )
    
    —
    
    
    —Extraordinary
      gain on the acquisitionof Banco Financiero
    
    
    —
    
    
    —
    
    
    1,080,983Extraordinary
      gain on the acquisitionof BankTrust
    
    
    4,419,118
    
    
    —
    
    
    —Net
      income available tocommon shareholders
    
    $
    22,221,962
    
    $
    9,882,721
    
    $
    6,933,854Weighted
      average number of commonshares outstanding applicable tobasic
      earnings per share
    
    
    16,523,373
    
    
    13,881,272
    
    
    13,622,970Effect
      of dilutive securities
    
    
    628,888
    
    
    352,896
    
    
    101,278Adjusted
      weighted averagenumber of common shares outstanding
      applicable tooutstanding applicable to diluted earnings per
      share
    
    
    17,152,261
    
    
    14,234,168
    
    
    13,724,248Basic
      earnings per share:Income
      before extraordinary item
    
    $
    1.08
    
    $
    0.71
    
    $
    0.43Extraordinary
      item
    
    
    0.27
    
    
    —
    
    
    0.08Net
      income
    
    $
    1.35
    
    $
    0.71
    
    $
    0.51Diluted
      earnings per share:Income
      before extraordinary item
    
    $
    1.04
    
    $
    0.69
    
    $
    0.42Extraordinary
      item
    
    
    0.26
    
    
    —
    
    
    0.08Net
      income
    
    $
    1.30
    
    $
    0.69
    
    $
    0.50
    **(25)**
    **Employees’
      Benefit Plan**
     (Continued)
 F-41
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(26)**
    **Related-Party
      Transactions**
      **Executive**
    
    
    
    
    
    **Principal****officers**
    
    
    
    
    
    **shareholders****and
      related**
    
    **Directors
      and**
    
    
    
    **and
      related****parties**
    
    **related
      parties**
    
    **Employees**
    
    **parties**
    
    **Total**Balance
      at December 31, 2002
    
    $
    719,647
    
    $
    3,032,282
    
    $
    406,799
    
    $
    1,050
    
    $
    4,159,778Additions
    
    
    99,124
    
    
    678,485
    
    
    208,574
    
    
    573
    
    
    986,756Reductions
    
    
    (408,942
    )
    
    (408,360
    )
    
    (220,288
    )
    
    —
    
    
    (1,037,590
    )Balance
      at December 31, 2003
    
    
    409,829
    
    
    3,302,407
    
    
    395,085
    
    
    1,623
    
    
    4,108,944Additions
    
    
    134,418
    
    
    2,814,899
    
    
    43,364
    
    
    —
    
    
    2,992,681Reductions
    
    
    (126,100
    )
    
    (3,061,724
    )
    
    (104,954
    )
    
    (1,623
    )
    
    (3,294,401
    )Balance
      at December 31, 2004
    
    $
    418,147
    
    $
    3,055,582
    
    $
    333,495
    
    $
    —
    
    $
    3,807,224
    **(27)**
    **Financial
      Instruments with Off-Balance-Sheet Risk**
        (Continued)
 F-42
  EUROBANCSHARES, INC. AND SUBSIDIARIES
   **2004**
    
    **2003**Financial
      instruments whose contract amounts representcredit
      risk - stand-by and commercial letters of credit
    
    $
    12,331,000
    
    $
    3,674,000Commitments
      to extend credit, approved loans not yetdisbursed,
      and unused lines of credit:Variable
      rate
    
    
    213,623,000
    
    
    131,815,000Fixed
      rate
    
    
    43,406,000
    
    
    20,910,000
        **(28)**
    **Fair
      Value of Financial Instruments**
  Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments
  *(a)*
    *Cash
      and Due from Banks, Interest-Bearing Deposits, and Securities Purchased
      under Agreements to Resell*
    *(b)*
    *Investment
      Securities*
    *(c)*
    *Other
      Investment Securities*
    (Continued)
 F-43
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  *(d)*
    *Loans
      and Loans Held for Sale*
        *(e)*
    *Accrued
      Interest Receivable*
    *(f)*
    *Deposits*
    *(g)*
    *Security
      Sold under Agreements to Repurchase*
    *(h)*
    *Advances
      from Federal Home Loan Bank*
    *(i)*
    *Accrued
      Interest Payable, Accrued Expenses, and Other
Liabilities*
    *(j)*
    *Notes
      Payable to Statutory Trusts*
    *(k)*
    *Commitments
      to Extend Credit and Letters of Credit*
    *(l)*
    *Limitations*
    (Continued)
 F-44
  EUROBANCSHARES, INC. AND SUBSIDIARIES
      **2004**
    
    
    
    **2003****Carrying**
    
    
    
    **Carrying****amount**
    
    **Fair
      value**
    
    **amount**
    
    **Fair
      value**Financial
      assets:Cash
      and due from banks
    
    $
    18,597,116
    
    $
    18,597,116
    
    $
    22,522,342
    
    $
    22,522,342Interest-bearing
      deposits
    
    
    3,271,377
    
    
    3,271,377
    
    
    19,324,216
    
    
    19,324,216Securities
      purchased underagreements to resell
    
    
    42,810,479
    
    
    42,810,479
    
    
    20,483,736
    
    
    20,483,736Investment
      securitiesavailable for sale
    
    
    555,481,743
    
    
    555,481,743
    
    
    324,938,042
    
    
    324,938,042Investment
      securitiesheld to maturity
    
    
    49,504,443
    
    
    49,306,561
    
    
    —
    
    
    —Other
      investment securities
    
    
    8,715,600
    
    
    8,715,600
    
    
    3,342,100
    
    
    3,342,100Loans
      held for sale
    
    
    2,684,063
    
    
    2,684,063
    
    
    6,846,330
    
    
    6,846,330Loans,
      net
    
    
    1,365,890,375
    
    
    1,396,092,624
    
    
    883,151,891
    
    
    886,156,371Accrued
      interest receivable
    
    
    11,167,973
    
    
    11,167,973
    
    
    6,792,687
    
    
    6,792,687Financial
      liabilities:Deposits
    
    
    1,409,036,436
    
    
    1,442,098,693
    
    
    984,549,130
    
    
    1,008,458,089Securities
      sold underagreements to repurchase
    
    
    463,409,056
    
    
    460,677,355
    
    
    207,523,000
    
    
    207,649,425Advances
      from FHLB
    
    
    10,403,638
    
    
    10,604,869
    
    
    10,700,000
    
    
    11,543,272Notes
      payable to statutory trusts
    
    
    46,393,000
    
    
    46,388,754
    
    
    46,393,000
    
    
    46,395,250Accrued
      interest payable
    
    
    6,719,851
    
    
    6,719,851
    
    
    2,868,130
    
    
    2,868,130Accrued
      expenses andother liabilities
    
    
    8,130,222
    
    
    8,130,222
    
    
    3,267,464
    
    
    3,267,464
  **(29)**
    **Significant
      Group Concentrations of Credit Risk**
     (Continued)
 F-45
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
  **(30)**
    **Regulatory
      Matters**
          **2004****Well****Required**
    
    
    
    **Actual**
    
    
    
    **capitalized****amount**
    
    **Ratio**
    
    **amount**
    
    **Ratio**
    
    **ratio**Total
      Capital (to risk-weightedassets):Consolidated
    
    $
    126,564
    
    
    8.00
    %
    $
    220,585
    
    
    13.94
    %
    
    N/AEurobank
    
    
    127,286
    
    
    8.00
    %
    
    169,705
    
    
    10.67
    %
    
    >10.00
    %Tier
      I Capital (to risk-weightedassets):Consolidated
    
    
    63,282
    
    
    4.00
    %
    
    201,342
    
    
    12.73
    %
    
    N/AEurobank
    
    
    63,643
    
    
    4.00
    %
    
    130,461
    
    
    8.20
    %
    
    >6.00
    %Tier
      I Capital (to average assets):Consolidated
    
    
    81,303
    
    
    4.00
    %
    
    201,342
    
    
    9.91
    %
    
    N/AEurobank
    
    
    81,244
    
    
    4.00
    %
    
    130,461
    
    
    6.42
    %
    
    >5.00
    %
 
  
  
 (Continued)
 F-46
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
   **2003****Well****Required**
    
    
    
    **Actual**
    
    
    
    **capitalized****amount**
    
    **Ratio**
    
    **amount**
    
    **Ratio**
    
    **ratio**Total
      Capital (to risk-weightedassets):Consolidated
    
    $
    81,308
    
    
    8.00
    %
    $
    117,934
    
    
    11.60
    %
    
    N/AEurobank
    
    
    81,315
    
    
    8.00
    %
    
    117,614
    
    
    11.57
    %
    
    >10.00
    %Tier
      I Capital (to risk-weightedassets):Consolidated
    
    
    40,654
    
    
    4.00
    %
    
    84,400
    
    
    8.30
    %
    
    N/AEurobank
    
    
    40,657
    
    
    4.00
    %
    
    75,638
    
    
    7.44
    %
    
    >6.00
    %Tier
      I Capital (to average assets):Consolidated
    
    
    49,958
    
    
    4.00
    %
    
    84,400
    
    
    6.76
    %
    
    N/AEurobank
    
    
    49,958
    
    
    4.00
    %
    
    75,638
    
    
    6.06
    %
    
    >5.00
    %
 
  
 (Continued)
 F-47
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 **(31)**
    **Parent
      Company Financial Information**
    **Condensed
      Balance Sheets:****2004**
    
    **2003**(In
      thousands)**Assets**Notes
      receivable from Eurobank
    
    $
    20,000
    
    $
    32,500Interest
      receivable from Eurobank
    
    
    16
    
    
    38Interest
      receivable from other subsidiaries
    
    
    2
    
    
    2Due
      from Eurobank
    
    
    50,857
    
    
    331Investment
      in Eurobank
    
    
    132,421
    
    
    77,255Investment
      in other subsidiaries
    
    
    1,504
    
    
    1,412Prepaid
      expenses
    
    
    5
    
    
    3Total
      assets
    
    $
    204,805
    
    $
    111,541**Liabilities
      and Stockholders' Equity**Due
      to Eurobank
    
    $
    5
    
    $
    -Due
      to other subsidiary
    
    
    10
    
    
    10Dividends
      payable
    
    
    17
    
    
    -Notes
      payable to subsidiaries
    
    
    46,393
    
    
    46,393Accrued
      interest payable to other subsidiaries
    
    
    78
    
    
    63Total
      liabilities
    
    
    46,503
    
    
    46,466Stockholders'
      equity
    
    
    158,302
    
    
    65,075Total
      liabilities and stockholders' equity
    
    $
    204,805
    
    $
    111,541
 
  (Continued)
 F-48
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 **Condensed
      Statements of Income:****Year
      ended December 31****2004**
    
    **2003**
    
    **2002**(In
      thousands)Income:Interest
      on note receivable from Eurobank
    
    $
    1,160
    
    $
    1,513
    
    $
    1,412Dividend
      income from preferred stocks ofEurobank
    
    
    1,089
    
    
    610
    
    
    16Dividend
      income from other subsidiaries
    
    
    70
    
    
    66
    
    
    44Total
      interest income
    
    
    2,319
    
    
    2,189
    
    
    1,472Interest
      expense on notes payable tosubsidiaries
    
    
    2,319
    
    
    2,189
    
    
    1,472Net
      interest income
    
    
    --
    
    
    --
    
    
    --Equity
      in undistributed earnings of subsidiaries
    
    
    22,734
    
    
    9,891
    
    
    6,951Noninterest
      expense
    
    
    14
    
    
    8
    
    
    17Earnings
      before income taxes
    
    
    22,720
    
    
    9,883
    
    
    6,934Provision
      for income taxes
    
    
    --
    
    
    --
    
    
    --Net
      income
    
    $
    22,720
    
    $
    9,883
    
    $
    6,934
 
  (Continued)
 F-49
  EUROBANCSHARES, INC. AND SUBSIDIARIES
  **Condensed
      Statements of Cash Flows:****Year
      ended December 31****2004**
    
    **2003**
    
    **2002**(In
      thousands)Cash
      flows from operating activities:Net
      income
    
    $
    22,720
    
    $
    9,883
    
    $
    6,934Adjustments
      to reconcile net income to netcash used in operating
      activities:Equity
      in undistributed earnings ofsubsidiaries
    
    
    (22,734
    )
    
    (9,891
    )
    
    (6,951
    )Decrease
      (increase) in accrued interestreceivable from
      subsidiaries
    
    
    (21
    )
    
    29
    
    
    (15
    )Increase
      in prepaid expenses
    
    
    (2
    )
    
    (1
    )
    
    (2
    )Increase
      in due from Eurobank
    
    
    (57,242
    )
    
    (160
    )
    
    (171
    )Increase
      (decrease) in accrued interestpayable to
      subsidiaries
    
    
    15
    
    
    (128
    )
    
    30Increase
      in due to Eurobank
    
    
    5
    
    
    --
    
    
    --Increase
      in due to other subsidiary
    
    
    --
    
    
    --
    
    
    107Increase
      in dividends payable
    
    
    17
    
    
    --
    
    
    --Other
    
    
    --
    
    
    --
    
    
    (66
    )Net
      cash used in operating activities
    
    
    (57,242
    )
    
    (268
    )
    
    (134
    )Cash
      flows from financing activities:Proceeds
      from issuance of common stock
    
    
    57,242
    
    
    268
    
    
    221Purchase
      and retirement of common stock
    
    
    --
    
    
    --
    
    
    (87
    )Net
      cash provided in investing activities
    
    
    57,242
    
    
    268
    
    
    134Net
      increase (decrease) in cash andcash
    equivalents
    
    
    --
    
    
    --
    
    
    --Cash
      and cash equivalents, beginning of year
    
    
    --
    
    
    --
    
    
    --Cash
      and cash equivalents, end of year
    
    $
    --
    
    $
    --
    
    $
    --Supplemental
      disclosure:Issuance
      of Eurobancshares common stocks onacquisition of
      BankTrust
    
    $
    5,552
    
    $
    --
    
    $
    --Issuance
      of Eurobancshares preferred stocks onacquisition of
      BankTrust
    
    
    10,763
    
    
    --
    
    
    --Capital
      contributions through issuance ofEurobancshares' common stocks on
      acquisition of Banco Financiero
    
    
    --
    
    
    --
    
    
    1,222
 
  (Continued)
 F-50
 
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 **Condensed
      Statement of Cash Flows (continued):****Year
      ended December 31****2004**
    
    **2003**
    
    **2002**(In
      thousands)Issuance
      of Eurobancshares common stocks onacquisition
      of Banco Financiero
    
    $
    --
    
    $
    --
    
    $
    1,222Conversion
      of note receivable from Eurobank inEurobank's
      preferred stocks
    
    
    --
    
    
    --
    
    
    12,500Note
      receivable resulting from Trust PreferredCapital
      Securities issuance
    
    
    --
    
    
    -
    
    
    20,000Note
      payable to the Trust II in connection withits
      creation
    
    
    --
    
    
    --
    
    
    619Equity
      in other comprehensive income ofsubsidiaries
    
    
    (2,350
    )
    
    (2,411
    )
    
    1,240
 
  
 (Continued)
 F-51
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 **(32)**
    **Selected
      Quarterly Financial Data (Unaudited)**
    **Year
      ended December 31, 2004****Fourth**
    
    **Third**
    
    **Second**
    
    **First****quarter**
    
    **quarter**
    
    **quarter**
    
    **quarter**Interest
      income
    
    $
    30,484,569
    
    $
    28,565,698
    
    $
    25,419,848
    
    $
    19,006,342Interest
      expense
    
    
    12,171,282
    
    
    11,064,900
    
    
    9,897,769
    
    
    8,347,321Net
      interest income
    
    
    18,313,287
    
    
    17,500,798
    
    
    15,522,079
    
    
    10,659,021Provision
      for loan and lease losses
    
    
    1,250,000
    
    
    1,875,000
    
    
    2,475,000
    
    
    1,500,000Net
      interest incomeafter provision for loan and lease
      losses
    
    
    17,063,287
    
    
    15,625,798
    
    
    13,047,079
    
    
    9,159,021Total
      other income
    
    
    3,365,466
    
    
    2,341,494
    
    
    1,779,771
    
    
    1,593,122Total
      other expenses
    
    
    10,986,310
    
    
    9,786,176
    
    
    8,875,639
    
    
    7,363,537Income
      beforeincome taxes
    
    
    9,442,443
    
    
    8,181,116
    
    
    5,951,211
    
    
    3,388,606Income
      tax
    
    
    3,319,085
    
    
    2,804,423
    
    
    1,475,145
    
    
    1,063,981Extraordinary
      gain
    
    
    4,898
    
    
    --
    
    
    4,414,220
    
    
    --Net
      income
    
    $
    6,128,256
    
    $
    5,376,693
    
    $
    8,890,286
    
    $
    2,324,625Earnings
      per share:Basic
      earnings per share:Income
      before extraor-Income
      before extraordinary item
    
    $
    0.30
    
    $
    0.30
    
    $
    0.29
    
    $
    0.17Extraordinary
      item
    
    
    --
    
    
    --
    
    
    0.29
    
    
    --Net
      income
    
    $
    0.30
    
    $
    0.30
    
    $
    0.58
    
    $
    0.17Diluted
      earnings per share:Income
      before extraordinary item
    
    $
    0.29
    
    $
    0.28
    
    $
    0.28
    
    $
    0.16Extraordinary
      item
    
    
    --
    
    
    --
    
    
    0.29
    
    
    --Net
      income
    
    $
    0.29
    
    $
    0.28
    
    $
    0.57
    
    $
    0.16
  
 (Continued)
 F-52
  EUROBANCSHARES, INC. AND SUBSIDIARIES
 **Year
      ended December 31, 2003****Fourth**
    
    **Third**
    
    **Second**
    
    **First****quarter**
    
    **quarter**
    
    **quarter**
    
    **quarter**Interest
      income
    
    $
    18,735,453
    
    $
    18,113,546
    
    $
    17,398,785
    
    $
    17,268,067Interest
      expense
    
    
    8,050,132
    
    
    7,972,925
    
    
    7,944,189
    
    
    7,955,002Net
      interest income
    
    
    10,685,321
    
    
    10,140,621
    
    
    9,454,596
    
    
    9,313,065Provision
      for loan and lease losses
    
    
    1,330,000
    
    
    1,450,000
    
    
    1,577,000
    
    
    2,094,000Net
      interest incomeafter provision for loan and lease
      losses
    
    
    9,355,321
    
    
    8,690,621
    
    
    7,877,596
    
    
    7,219,065Total
      other income
    
    
    2,811,942
    
    
    1,843,708
    
    
    3,283,312
    
    
    1,108,668Total
      other expenses
    
    
    8,115,283
    
    
    7,082,156
    
    
    7,220,886
    
    
    6,456,722Income
      beforeincome taxes
    
    
    4,051,980
    
    
    3,452,173
    
    
    3,940,022
    
    
    1,871,011Income
      tax
    
    
    467,835
    
    
    1,001,042
    
    
    1,380,348
    
    
    583,240Net
      income
    
    $
    3,584,145
    
    $
    2,451,131
    
    $
    2,559,674
    
    $
    1,287,771Net
      income per share:Basic
    
    $
    0.26
    
    $
    0.17
    
    $
    0.19
    
    $
    0.09Diluted
    
    
    0.25
    
    
    0.17
    
    
    0.18
    
    
    0.09
 
 
 (Continued)
 F-53
 EUROBANCSHARES, INC. AND SUBSIDIARIES
 **Year
      ended December 31, 2002****Fourth**
    
    **Third**
    
    **Second**
    
    **First****quarter**
    
    **quarter**
    
    **quarter**
    
    **quarter**Interest
      income
    
    $
    15,675,155
    
    $
    14,347,000
    
    $
    13,289,878
    
    $
    11,655,696Interest
      expense
    
    
    7,189,114
    
    
    6,514,357
    
    
    6,023,986
    
    
    5,396,111Net
      interest income
    
    
    8,486,041
    
    
    7,832,643
    
    
    7,265,892
    
    
    6,259,585Provision
      for loan and lease losses
    
    
    1,034,462
    
    
    1,006,000
    
    
    540,224
    
    
    773,000Net
      interest incomeafter
      provisionfor
      loan and lease losses
    
    
    7,451,579
    
    
    6,826,643
    
    
    6,725,668
    
    
    5,486,585Total
      other income
    
    
    1,005,186
    
    
    956,305
    
    
    1,088,666
    
    
    970,617Total
      other expenses
    
    
    6,358,082
    
    
    5,092,489
    
    
    5,572,576
    
    
    4,911,379Income
      beforeincome
      taxes
    
    
    2,098,683
    
    
    2,690,459
    
    
    2,241,758
    
    
    1,545,823Income
      tax
    
    
    706,625
    
    
    841,416
    
    
    718,061
    
    
    457,749Extraordinary
      gain
    
    
    1,080,983
    
    
    --
    
    
    --
    
    
    --Net
      income
    
    $
    2,473,041
    
    $
    1,849,043
    
    $
    1,523,697
    
    $
    1,088,074Earnings
      per share:Basic
      earnings per share:Income
      before extraor-dinary
      item
    
    $
    0.10
    
    $
    0.13
    
    $
    0.12
    
    $
    0.08Extraordinary
      item
    
    
    0.08
    
    
    --
    
    
    --
    
    
    --Net
      income
    
    $
    0.18
    
    $
    0.13
    
    $
    0.12
    
    $
    0.08Diluted
      earnings per share:Income
      before extraor-dinary
      item
    
    $
    0.10
    
    $
    0.13
    
    $
    0.11
    
    $
    0.08Extraordinary
      item
    
    
    0.08
    
    
    --
    
    
    --
    
    
    --Net
      income
    
    $
    0.18
    
    $
    0.13
    
    $
    0.11
    
    $
    0.08
 
   F-54