**UNITED STATES SECURITIES ANDEXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**Form 10-QSB**

 

| **ý** | **QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                       |
|       | **FOR THE QUARTERLY PERIOD ENDED  JUNE 30, 2004**                                                                                                                                                                                                                                     |
|       | ** **                                                                                                                                                                                                                                                                                 |
| **o**      | **TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT**                                                                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                                                       |
|       | **FOR THE TRANSITION PERIOD FROM                        TO                      ** |

 

**CommissionFile Number 0-28894**

 

**Access Anytime Bancorp, Inc.**

(Name of smallbusiness issuer in its charter)

 
| **DELAWARE**                                                                                                                            | ** ** | **85-0444597**                        |
|-----------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization)                                                                        |       | (I.R.S. Employer  Identification No.) |
|                                                                                                                                    |       |                                  |
| **5210  Eubank, NE, Albuquerque, New Mexico 87111**                                                                                     |
| (Address of  principal executive offices)      (Zip Code)                                                 |
|                                                                                                                                    |
| Issuer’s  telephone number, including area code:   **(505) 299-0900**                                                         |
|                                                                                                                                    |
| SECURITIES  REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:**  None**                                                     |
|                                                                                                                                    |
| SECURITIES  REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE  ACT:            |
|                                                                                                                                    |
| **COMMON  STOCK $.01 PAR VALUE**                                                                                                        |
| (Title of class)                                                                                                                        |

 

Check whether the issuer(1) filed all reports required to be filed by Section 13 or 15(d) of theExchange Act during the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

 

Yes ý                                                             Noo

 

1,345,883 Sharesof Capital Stock $.01 par value

 

Outstanding as ofAugust 12, 2004

 

Transitional SmallBusiness Disclosure Format (check one): Yes o    No ý

 

 

----

 

**TABLE OFCONTENTS**

 
| **PART I – FINANCIAL  INFORMATION** | ** **                                                                                           |
|------------------------------------------|------------------------------------------------------------------------------------------------------|
|                                     |                                                                                                 |
|                                     | Item 1 – Financial  Statements                                                                  |   |
|                                     |                                                                                                 |   |   |
|                                     |                                                                                                 | Consolidated  Statements of Financial Condition (Unaudited as of June 30, 2004) |   |
|                                     |                                                                                                 |   |   |
|                                     |                                                                                                 | Consolidated  Statements of Operations (unaudited) |   |
|                                     |                                                                                                 |   |   |
|                                     |                                                                                                 | Consolidated  Statement of Stockholders’ Equity (unaudited) |   |
|                                     |                                                                                                 |   |   |
|                                     |                                                                                                 | Consolidated  Statements of Cash Flows (unaudited) |   |
|                                     |                                                                                                 |   |   |
|                                     |                                                                                                 | Notes to  Consolidated Financial Statements (unaudited) |   |
|                                     |                                                                                                 |   |   |
|                                     | Item 2 – Management’s Discussion and Analysis or  Plan of Operation                        |   |
|                                     |                                                                                                 |   |   |
|                                     | Item 3 – Controls and Procedures                                                                |   |
|                                     |                                                                                                 |   |   |
| **PART II – OTHER  INFORMATION**    | ** **                                                                                           |
|                                     |                                                                                                 |   |   |
|                                     | Item 1  – Legal Proceedings                                                                |   |
|                                     |                                                                                                 |   |   |
|                                     | Item  2  – Changes in Securities and Small  Business Issuer Purchases of Equity Securities |   |
|                                     |                                                                                                 |   |   |
|                                     | Item 3 – Defaults Upon Senior Securities                                                        |   |
|                                     |                                                                                                 |   |   |
|                                     | Item  4 – Submission of Matters to a Vote of Security Holders                                   |   |
|                                     |                                                                                                 |   |   |
|                                     | Item 5 –  Other Information                                                                     |   |
|                                     |                                                                                                 |   |   |
|                                     | Item 6 – Exhibits and  Reports on Form 8-K                                                      |   |
|                                     |                                                                                                 |   |   |
| **SIGNATURES**                           | ** **                                                                                           |

 

2

----

 

**PART I – FINANCIAL INFORMATION**

 

# **Item 1 – Financial Statements**

 

The following unauditedconsolidated financial statements include all adjustments, which in the opinionof management, are necessary in order to make such financial statements notmisleading.

 

# **ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY**

# **ConsolidatedStatements of Financial Condition**

(unaudited)

 
| ** **                                                                                                                                                                     | ** ** | **June 30,  2004** | ** **  | **December 31,  2003** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|-------------|-----------------------------|------------|
|                                                                                                                                                                           |       |                    |        |                        |       |
| ASSETS                                                                                                                                                                         |       |                    |        |                        |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Cash  and cash equivalents                                                                                                                                                     |       | $                       | 9,274,225   |                        | $          | 11,611,364 |   |
| Certificates  of deposit                                                                                                                                                       |       | 4,373,000               |        | 4,480,000                   |       |
| Securities  available-for-sale (amortized cost of $9,105,507 and $5,718,248)                                                                                                   |       | 9,089,600               |        | 5,814,701                   |       |
| Securities  held-to-maturity (aggregate fair value of $47,103,350 and $16,829,145)                                                                                             |       | 47,789,277              |        | 16,761,939                  |       |
| Loans  held-for-sale (aggregate fair value of $4,389,709 and $1,834,564)                                                                                                       |       | 4,303,416               |        | 1,797,290                   |       |
| Loans  receivable, net                                                                                                                                                         |       | 193,197,069             |        | 156,237,317                 |       |
| Interest  receivable, loans                                                                                                                                                    |       | 817,494                 |        | 732,964                     |       |
| Interest  receivable, securities                                                                                                                                               |       | 268,376                 |        | 125,994                     |       |
| Real  estate owned                                                                                                                                                             |       | 276,327                 |        | 565,159                     |       |
| Federal  Home Loan Bank stock                                                                                                                                                  |       | 2,066,400               |        | 1,167,200                   |       |
| Premises  and equipment, net                                                                                                                                                   |       | 6,385,445               |        | 3,556,833                   |       |
| Goodwill                                                                                                                                                                       |       | 4,786,298               |        | —                      |       |
| Other  intangible assets, net of accumulated amortization of $685,733 and $606,104                                                                                             |       | 1,906,354               |        | 1,577,984                   |       |
| Deferred  tax asset                                                                                                                                                            |       | 168,018                 |        | 388,573                     |       |
| Other  assets                                                                                                                                                                  |       | 639,237                 |        | 609,834                     |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Total  assets                                                                                                                                                                  |       | $                       | 285,340,536 |                        | $          | 205,427,152 |   |
|                                                                                                                                                                           |       |                    |        |                        |       |
| LIABILITIES  AND STOCKHOLDERS’ EQUITY                                                                                                                                     |       |                    |        |                        |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Liabilities:                                                                                                                                                                   |       |                    |        |                        |       |
| Deposits                                                                                                                                                                       |       | $                       | 234,921,961 |                        | $          | 162,846,107 |   |
| Federal  Home Loan Bank advances                                                                                                                                               |       | 24,357,431              |        | 17,066,654                  |       |
| Accrued  interest and other liabilities                                                                                                                                        |       | 1,696,303               |        | 1,794,005                   |       |
| Advanced  payments by borrowers for taxes and insurance                                                                                                                        |       | 323,511                 |        | 354,670                     |       |
| Trust  Preferred Securities – Notes Payable                                                                                                                               |       | 8,000,000               |        | 8,000,000                   |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Total  liabilities                                                                                                                                                             |       | 269,299,206             |        | 190,061,436                 |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Commitments  and contingencies                                                                                                                                                 |       |                    |        |                        |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Stockholders’  equity:                                                                                                                                                    |       |                    |        |                        |       |
| Preferred  stock, $.01 par value; 4,000,000 shares authorized; none issued                                                                                                     |       | —                  |        | —                      |       |
| Common  stock, $.01 par value; 6,000,000 shares authorized; 1,511,632 and 1,510,744  shares issued; 1,227,007 and 1,221,070 shares outstanding In 2004 and 2003,  respectively |       | 15,116                  |        | 15,107                      |       |
| Capital  in excess of par value                                                                                                                                                |       | 11,810,542              |        | 11,643,276                  |       |
| Retained  earnings                                                                                                                                                             |       | 6,443,796               |        | 5,831,295                   |       |
| Accumulated  other comprehensive (loss) income, net of tax (benefit) expense of ($6,363)  and $38,581                                                                          |       | (9,543                  | )           | 57,872                      |       |
|                                                                                                                                                                           |       | 18,259,911              |        | 17,547,550                  |       |
| Unallocated  Employee Stock Ownership Plan shares; 116,000 and 128,000 shares outstanding                                                                                      |       | (629,565                | )           | (690,000                    | )          |
| Treasury  stock, at cost; 168,625 and 161,674 shares                                                                                                                           |       | (1,589,016              | )           | (1,491,834                  | )          |
| Total  stockholders’ equity                                                                                                                                               |       | 16,041,330              |        | 15,365,716                  |       |
|                                                                                                                                                                           |       |                    |        |                        |       |
| Total  liabilities and stockholders’ equity                                                                                                                               |       | $                       | 285,340,536 |                        | $          | 205,427,152 |   |

 

# **Theaccompanying notes are an integral part of these unaudited consolidatedfinancial statements.**

 

3

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# **ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY**

# **ConsolidatedStatements of Operations**

(unaudited)

 
| ** **                                                    | ** ** | **Three Month Periods Ended  June 30,** | ** ** | **Six Month Periods Ended  June 30,** | ** ** |
|---------------------------------------------------------------|------------|----------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                    | ** ** | **2004**                                     | ** ** | **2003**                                   | ** ** | **2004** | ** ** | **2003** | ** ** |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Interest  income:                                             |       |                                         |       |                                       |       |   |   |   |   |
| Loans  receivable                                             |       | $                                            | 2,964,497  |                                       | $          | 2,673,288 |   | $ | 5,557,654 |   | $ | 5,375,445 |   |
| Equity  securities                                            |       | 160,585                                      |       | 36,757                                     |       | 288,350 |   | 76,034 |   |
| Mortgage-backed  securities                                   |       | 204,587                                      |       | 63,028                                     |       | 274,048 |   | 138,938 |   |
| Other  interest income                                        |       | 50,636                                       |       | 83,085                                     |       | 95,905 |   | 150,478 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Total  interest income                                        |       | 3,380,305                                    |       | 2,856,158                                  |       | 6,215,957 |   | 5,740,895 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Interest  expense:                                            |       |                                         |       |                                       |       |   |   |   |   |
| Deposits                                                      |       | 836,650                                      |       | 840,622                                    |       | 1,585,576 |   | 1,706,636 |   |
| Federal  Home Loan Bank advances                              |       | 106,886                                      |       | 106,500                                    |       | 208,647 |   | 199,236 |   |
| Other  borrowings                                             |       | 164,135                                      |       | 165,655                                    |       | 327,535 |   | 325,384 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Total  interest expense                                       |       | 1,107,671                                    |       | 1,112,777                                  |       | 2,121,758 |   | 2,231,256 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Net  interest income before provision for loan losses         |       | 2,272,634                                    |       | 1,743,381                                  |       | 4,094,199 |   | 3,509,639 |   |
| Provision  for loan losses                                    |       | 213,000                                      |       | 213,000                                    |       | 426,000 |   | 355,000 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Net  interest income after provision for loan losses          |       | 2,059,634                                    |       | 1,530,381                                  |       | 3,668,199 |   | 3,154,639 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Noninterest  income:                                          |       |                                         |       |                                       |       |   |   |   |   |
| Loan  servicing and other fees                                |       | 187,564                                      |       | 219,308                                    |       | 316,159 |   | 362,041 |   |
| Net  realized gains on sales of available-for-sale securities |       | —                                       |       | 8,995                                      |       | — |   | 8,995 |   |
| Gains  on sales of mortgage loans held-for-sale               |       | 269,584                                      |       | 610,727                                    |       | 494,198 |   | 1,008,865 |   |
| Other  income                                                 |       | 351,069                                      |       | 267,530                                    |       | 629,554 |   | 512,950 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Total  noninterest income                                     |       | 808,217                                      |       | 1,106,560                                  |       | 1,439,911 |   | 1,892,851 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Noninterest  expense:                                         |       |                                         |       |                                       |       |   |   |   |   |
| Salaries  and employee benefits                               |       | 1,101,696                                    |       | 1,045,435                                  |       | 2,062,391 |   | 2,098,691 |   |
| Occupancy  expense                                            |       | 296,978                                      |       | 211,984                                    |       | 524,958 |   | 441,097 |   |
| Deposit  insurance premium                                    |       | 20,243                                       |       | 19,685                                     |       | 40,325 |   | 39,661 |   |
| Advertising                                                   |       | 50,949                                       |       | 24,104                                     |       | 78,279 |   | 48,410 |   |
| Professional  fees                                            |       | 121,551                                      |       | 144,923                                    |       | 265,925 |   | 227,687 |   |
| Other  expense                                                |       | 527,737                                      |       | 451,388                                    |       | 1,011,731 |   | 980,454 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Total  noninterest expense                                    |       | 2,119,154                                    |       | 1,897,519                                  |       | 3,983,609 |   | 3,836,000 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Income  before income taxes                                   |       | 748,697                                      |       | 739,422                                    |       | 1,124,501 |   | 1,211,490 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Income  tax expense                                           |       | 317,066                                      |       | 278,482                                    |       | 512,000 |   | 483,329 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Net  income                                                   |       | $                                            | 431,631    |                                       | $          | 460,940 |   | $ | 612,501 |   | $ | 728,161 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Earnings  per common share-basic                              |       | $                                            | .34        |                                       | $          | .37 |   | $ | .49 |   | $ | .58 |   |
|                                                          |       |                                         |       |                                       |       |   |   |   |   |
| Earnings  per common share-assuming dilution                  |       | $                                            | .31        |                                       | $          | .35 |   | $ | .44 |   | $ | .54 |   |

 

The accompanyingnotes are an integral part of these unaudited consolidated financialstatements.

 

4

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# **ACCESS ANYTIME BANCORP, INC. AND SUBSIDIARY**

### **ConsolidatedStatement of Stockholders’ Equity**

(unaudited)

 
| ** **                                                                          | ** **         | **Comprehensive  Income** | ** **            | ** ** | ** ** | ** ** | ** ** | **Capital  in Excess  of Par  Value** | ** ** | **Retained  Earnings** | ** ** | **Accumulated  Other  Comprehensive  Income (Loss),  Net** | ** ** | **Unallocated  ESOP Shares** | ** ** | ** ** | ** ** | ** ** | ** ** | **Total** | ** ** |
|-------------------------------------------------------------------------------------|--------------------|---------------------------|-----------------------|------------|------------|------------|------------|---------------------------------------|------------|------------------------|------------|------------------------------------------------------------|------------|------------------------------|------------|------------|------------|------------|------------|-----------|------------|
| ** **                                                                          | ** **         | ** **                | ** **            | ** ** | ** ** |
| **Common Stock**                                                                    | **Treasury Stock** |
| **Number  of shares**                                                               | ** **         | **Amount**                | **Number  Of Shares** | ** ** | **Amount** |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Balance at December 31, 2003                                                   |               |                      |                  | 1,510,744  |       | $          | 15,107     |                                  | $          | 11,643,276             |       | $                                                          | 5,831,295  |                         | $          | 57,872     |       | $          | (690,000   | )         | 161,674    |   | $ | (1,491,834 | ) | $ | 15,365,716 |   |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Net income                                                                          |               | $                         | 612,501               |       | —     |       | —     |                                  | —     |                   | 612,501    |                                                       | —     |                         | —     |       | —     |       | —     |      | 612,501    |   |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Net change in unrealized depreciation on  available-for-sale securities, net of tax |               | (67,415                   | )                     | —     |       | —     |       | —                                |       | —                 |       | (67,415                                                    | )          | —                       |       | —     |       | —     |       | (67,415   | )          |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Total comprehensive income                                                          |               | $                         | 545,086               |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |   |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Common shares issued                                                                |               |                      |                  | 888        |       | 9          |       | 1,988                                 |       |                   |       |                                                       |       |                         |       |       |       |       |       | 1,997     |       |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Common stock rights awarded in lieu of directors’  cash compensation           |               |                      |                  | —     |       | —     |       | 57,250                                |       | —                 |       | —                                                     |       | —                       |       | —     |       | —     |       | 57,250    |       |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Purchases of treasury stock                                                         |               |                      |                  | —     |       | —     |       | —                                |       | —                 |       | —                                                     |       | —                       |       | 8,951      |       | (125,022   | )          | (125,022  | )          |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Sales of treasury stock                                                             |               |                      |                  | —     |       | —     |       | —                                |       | —                 |       | —                                                     |       | —                       |       | (2,000     | )          | 27,840     |       | 27,840    |       |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| ESOP shares allocated                                                               |               |                      |                  | —     |       | —     |       | 108,028                               |       | —                 |       | —                                                     |       | 60,435                       |       | —     |       | —     |       | 168,463   |       |
|                                                                                |               |                      |                  |       |       |       |       |                                  |       |                   |       |                                                       |       |                         |       |       |       |       |       |      |       |
| Balance at June 30, 2004                                                       |               |                      |                  | 1,511,632  |       | $          | 15,116     |                                  | $          | 11,810,542             |       | $                                                          | 6,443,796  |                         | $          | (9,543     | )          | $          | (629,565   | )         | 168,625    |   | $ | (1,589,016 | ) | $ | 16,041,330 |   |

 
| ** **                                                                | ** ** | **Six Months Ended  June 30, 2004** | ** ** | **Year Ended  December 31, 2003** | ** ** |
|---------------------------------------------------------------------------|------------|------------------------------------------|------------|----------------------------------------|------------|
|                                                                      |       |                                     |       |                                   |       |
| Disclosure  of reclassification amounts:                                  |       |                                     |       |                                   |       |
| Unrealized  holding losses arising during period                          |       | $                                        | (67,415    | )                                      | $          | (21,578 | ) |
| Reclassification  adjustment for gains included in net income             |       | —                                   |       | (10,747                                | )          |
| Net  unrealized depreciation on available-for-sale securities, net of tax |       | $                                        | (67,415    | )                                      | $          | (32,325 | ) |

 

The accompanyingnotes are an integral part of these unaudited consolidated financialstatements.

 

5

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**ACCESSANYTIME BANCORP, INC. AND SUBSIDIARY**

# **ConsolidatedStatements of Cash Flows**

(unaudited)

 
| ** **                                                                          | ** ** | **Six Month Periods Ended  June 30,** | ** ** |
|-------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                                          | ** ** | **2004**                                   | ** ** | **2003** | ** ** |
| Cash  flows from operating activities:                                              |       |                                       |       |   |   |
| Net  income                                                                         |       | $                                          | 612,501    |   | $ | 728,161 |   |
| Adjustments  to reconcile net income to cash from operating activities:             |       |                                       |       |   |   |
| Depreciation  and amortization                                                      |       | 215,392                                    |       | 216,642 |   |
| Deferred  income taxes                                                              |       | 220,555                                    |       | 322,434 |   |
| Provision  for loan losses                                                          |       | 426,000                                    |       | 355,000 |   |
| Amortization  of premiums on investment securities                                  |       | 6,357                                      |       | 21,107 |   |
| Amortization  of loan premiums, discounts and deferred fees, net                    |       | 226,610                                    |       | 155,577 |   |
| Amortization  of other intangible assets                                            |       | 79,630                                     |       | 72,830 |   |
| Non-cash  ESOP contribution                                                         |       | 168,463                                    |       | 152,000 |   |
| Net  realized gains on sales of available-for-sale securities                       |       | —                                     |       | (8,995 | ) |
| Gains  on sales of mortgage loans held-for-sale                                     |       | (494,198                                   | )          | (1,008,865 | ) |
| Proceeds  from sales of mortgage loans held-for-sale                                |       | 26,966,239                                 |       | 53,982,668 |   |
| Originations  of mortgage loans held-for-sale                                       |       | (28,978,167                                | )          | (60,305,255 | ) |
| Common  stock rights awarded in lieu of directors compensation                      |       | 57,250                                     |       | 44,000 |   |
| (Gain)  loss on sale of foreclosed real estate                                      |       | (39,099                                    | )          | 27,228 |   |
| Gain  on disposition of assets                                                      |       | —                                     |       | (1,877 | ) |
| Net  increase in accrued interest receivable and other assets                       |       | (416,061                                   | )          | (84,313 | ) |
| (Decrease)  increase in accrued interest and other liabilities                      |       | (562,229                                   | )          | 410,646 |   |
|                                                                                |       |                                       |       |   |   |
| Net  cash from operating activities                                                 |       | (1,510,757                                 | )          | (4,921,012 | ) |
|                                                                                |       |                                       |       |   |   |
| Cash  flows from investing activities:                                              |       |                                       |       |   |   |
| Purchases  of available-for-sale securities                                         |       | (3,971,360                                 | )          | — |   |
| Purchases  of held-to-maturity securities                                           |       | (33,012,977                                | )          | — |   |
| Proceeds  from maturities and principal repayments of available-for-sale securities |       | 692,557                                    |       | 1,268,408 |   |
| Proceeds  from sales of available-for-sale securities                               |       | —                                     |       | 108,995 |   |
| Proceeds  from maturities and principal repayments of held-to-maturity securities   |       | 1,983,186                                  |       | 310,526 |   |
| Purchase  of FHLB stock                                                             |       | (888,200                                   | )          | — |   |
| Net  increase in certificates of deposit                                            |       | 107,000                                    |       | 610,000 |   |
| Net  increase in loans                                                              |       | (18,488,432                                | )          | (1,200,163 | ) |
| Proceeds  from sales of foreclosed real estate                                      |       | 413,702                                    |       | 391,272 |   |
| Purchases  of premises and equipment                                                |       | (272,266                                   | )          | (210,178 | ) |
| Net  cash received in branch acquisition                                            |       | 51,907,522                                 |       | — |   |
|                                                                                |       |                                       |       |   |   |
| Net  cash from investing activities                                                 |       | (1,529,268                                 | )          | 1,278,860 |   |
|                                                                                |       |                                       |       |   |   |
| Cash  flows from financing activities:                                              |       |                                       |       |   |   |
| Net  (decrease) increase in deposits                                                |       | (6,461,547                                 | )          | 4,809,378 |   |
| Net  increase in Federal Home Loan Bank advances                                    |       | 7,290,777                                  |       | 8,280,784 |   |
| Net  decrease in advance payments by borrowers for taxes and insurance              |       | (31,159                                    | )          | (36,069 | ) |
| Purchase  of treasury stock                                                         |       | (125,022                                   | )          | (1,044,991 | ) |
| Sale  of treasury stock                                                             |       | 27,840                                     |       | — |   |
| Proceeds  from issuance of common stock                                             |       | 1,997                                      |       | 11,021 |   |
|                                                                                |       |                                       |       |   |   |
| Net  cash from financing activities                                                 |       | 702,886                                    |       | 12,020,123 |   |
|                                                                                |       |                                       |       |   |   |
| (Decrease)  increase in cash and cash equivalents                                   |       | (2,337,139                                 | )          | 8,377,971 |   |
| Cash  and cash equivalents at beginning of period                                   |       | 11,611,364                                 |       | 12,342,444 |   |
|                                                                                |       |                                       |       |   |   |
| Cash  and cash equivalents at end of six-months period ended June 30           |       | $                                          | 9,274,225  |   | $ | 20,720,415 |   |
|                                                                                |       |                                       |       |   |   |
| Supplemental  disclosures of cash flow information:                                 |       |                                       |       |   |   |
| Cash  paid during the period for:                                                   |       |                                       |       |   |   |
| Interest                                                                            |       | $                                          | 2,127,541  |   | $ | 2,239,877 |   |
| Income  taxes                                                                       |       | 100,150                                    |       | 150 |   |
| Supplemental  disclosure of non-cash investing and financing activities:            |       |                                       |       |   |   |
| Real  estate acquired in settlement of loans                                        |       | 76,708                                     |       | 246,115 |   |

 

The accompanyingnotes are an integral part of these unaudited consolidated financialstatements.

 

6

----

 

**ACCESSANYTIME BANCORP, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(unaudited)**

 

#### **NOTE1**                            Basis of Consolidation and Presentation

#### ** **

Access Anytime Bancorp,Inc. (the “Company”) is a thrift holding company for its wholly ownedsubsidiary AccessBank (the “Bank”) and the Bank’s wholly owned subsidiary,First Equity Development Corporation (“FEDCO”). The consolidated financial statements include the accounts andtransactions of the Company, Bank and FEDCO. All significant intercompany accounts and transactions have beeneliminated in consolidation.  Matrix Capital Bank branch facilities (the“Branches”) located at 277 E. Amador and 3090 Roadrunner Parkway in Las Cruces,New Mexico were purchased by the Bank on May 1, 2004.  The purchase of the Branches is included inconsolidated statements of operations from the date of acquisition.

 

The unaudited interimfinancial statements have been prepared by management of the Company, withoutaudit.  Certain information and footnotedisclosures normally included in consolidated financial statements prepared inaccordance with accounting principles generally accepted in the United Statesof America have been omitted pursuant to such rules and regulations, althoughmanagement believes that the disclosures included herein are adequate to makethe information presented not misleading. In the opinion of management, all adjustments (consisting of only normalrecurring accruals) considered necessary for a fair presentation of theinformation have been included.  TheDecember 31, 2003 consolidated statement of financial condition, aspresented herein, was derived from audited financial statements, but does notinclude all disclosures required by accounting principles generally accepted inthe United States of America and should be read in conjunction with the auditedconsolidated financial statements of the Company for the year endedDecember 31, 2003 included in the Company’s Annual Report on 10-KSB.

 

#### **NOTE2**                            Summary of Significant AccountingPolicies

#### ** **

***Impactof Recent Accounting Standards*** – In December 2002, the FASB issued Statement No. 148 (“Statement148”), *Accounting for Stock-Based Compensation-Transitionand Disclosure-an amendment of FASB Statement No. 123.*  This statement amends Statement 123 toprovide alternative methods of transition to a voluntary change to the fairvalue based method of accounting for stock-based employee compensation.  In addition, Statement 148 amends thedisclosure requirements to require prominent disclosures in both annual andinterim financial statements about the method of accounting for stock-basedemployee compensation and the effect of the method used on reported results.

 

7

----

 

Statement148 allows for the fair value based method under Statement 123, *Accounting for Stock Based Compensation*, or the intrinsic valuebased method under APB Opinion No. 25 (“Opinion 25”), *Accountingfor Stock Issued to Employees*. Under the fair value based method of accounting, compensation cost ismeasured at the grant date based on the value of the award and is recognizedover the service period, which is generally the vesting period.  Under the intrinsic value method ofaccounting, compensation cost is the excess, if any, of the quoted market priceof the stock at grant date or other measurement date over the amount anemployee must pay to acquire the stock. The Company has elected to continue to use the intrinsic value method ofaccounting under Opinion 25, and will disclose the pro forma effects of thefair value based method for the periods presented in its consolidated financialstatements.

 

#### **Hadcompensation cost for all grants of stock options and the director retainerplan shares during 2004 and 2003 been determined based on the fair value at thedate of grant, reported net income and earnings per share would have beenadjusted to the pro forma amounts shown below:**

 
| ** **                                                                                                                                          | ** ** | **Three Month Periods Ended  June 30,** | ** ** | **Six Month Periods Ended  June 30,** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                                                                                                          | ** ** | **2004**                                     | ** ** | **2003**                                   | ** ** | **2004** | ** ** | **2003** | ** ** |
|                                                                                                                                                |       |                                         |       |                                       |       |   |   |   |   |
| Net  income, as reported                                                                                                                            |       | $                                            | 431,631    |                                       | $          | 460,940 |   | $ | 612,501 |   | $ | 728,161 |   |
| Add:  Stock-based employee compensation expense Included in reported net income,  net of related tax effects                                        |       | —                                       |       | 4,043                                      |       | (82,178 | )(1) | 3,818 |   |
| Deduct:  Total stock-based employee compensation  expense determined under fair value based method for all awards, net of  related tax effects |       | (20,985                                      | )          | (137,051                                   | )          | (26,757 | ) | (141,852 | ) |
|                                                                                                                                                |       |                                         |       |                                       |       |   |   |   |   |
| Pro  forma net income                                                                                                                               |       | $                                            | 410,646    |                                       | $          | 327,932 |   | $ | 503,566 |   | $ | 590,127 |   |
|                                                                                                                                                |       |                                         |       |                                       |       |   |   |   |   |
| Earnings  per share-basic                                                                                                                           |       |                                         |       |                                       |       |   |   |   |   |
| As  reported                                                                                                                                        |       | $                                            | .34        |                                       | $          | .37 |   | $ | .49 |   | $ | .58 |   |
| Pro  forma                                                                                                                                          |       | $                                            | .33        |                                       | $          | .27 |   | $ | .40 |   | $ | .47 |   |
|                                                                                                                                                |       |                                         |       |                                       |       |   |   |   |   |
| Earnings  per share-assuming dilution                                                                                                               |       |                                         |       |                                       |       |   |   |   |   |
| As  reported                                                                                                                                        |       | $                                            | .31        |                                       | $          | .35 |   | $ | .44 |   | $ | .54 |   |
| Pro  forma                                                                                                                                          |       | $                                            | .29        |                                       | $          | .25 |   | $ | .36 |   | $ | .44 |   |

 

----

(1)Constitutes an adjustment to compensation expense on the Non-Employee DirectorRetainer Plan

 

8

----

 

InJanuary 2003, the FASB issued Interpretation No. 46 (“Interpretation 46”),*Consolidation of Variable Interest Entities, aninterpretation of ARB No. 51*. This interpretation of Accounting Research Bulletin No. 51, *Consolidated Financial Statements*, addresses consolidationby business enterprises of variable interest entities (selected entities withrelated contractual, ownership, voting or other monetary interests, includingcertain special purpose entities), and requires certain additional disclosurewith respect to these entities.  Theprovisions of Interpretation 46 are immediately applicable to variable interestentities created after January 31, 2003. In December 2003, the FASB issued a revision to Interpretation 46,commonly referred to as Interpretation No. 46R (“Interpretation 46R”).  The objective of Interpretation 46R was toprovide additional clarification to Interpretation 46 and require publicentities to identify those entities that are considered special purposeentities (SPEs) in which they have variable interests and to apply theprovisions of either Interpretation 46 or 46R at December 31, 2003.  The full provisions of Interpretation 46Rwill be required by the Company for the fiscal year ending December 31,2004.

 

TheCompany has business trusts for the purpose of issuing trust preferredsecurities.  We believe the continuedconsolidation of these trusts at December 31, 2003 was appropriate underInterpretation 46.  However, theapplication of Interpretation 46R will be required by the Company for thefiscal year end December 31, 2004, at which time the Company will berequired to deconsolidate the trusts. The deconsolidation of these trusts will not have a material impact onthe 2004 consolidated financial statements.

 

InMay 2003, the FASB issued Statement No. 150 (“Statement 150”), *Accounting for Certain Financial Instruments with Characteristics ofboth Liabilities and Equity*. Statement 150 establishes standards for how a business enterpriseclassifies, measures and discloses in its financial statements certainfinancial instruments with characteristics of both liabilities and equity.  Statement 150 requires that a business enterpriseclassify financial instruments that are within its scope as liabilities (or asassets in some circumstances).  Statement150 was effective for contracts entered into or modified after May 31, 2003,and was otherwise effective at the beginning of the first interim periodbeginning after June 15, 2003.

 

FASBStaff Position (FSP) 150-3 affects the accounting for mandatorily redeemablenon-controlling minority interests of all entities and for non-SEC registrants,defers the effective date of Statement 150 and eliminates the disclosure requirementsfor certain mandatorily redeemable instruments. The adoption of Statement 150 on July 1, 2003 did not have amaterial impact on the Company’s consolidated financial statements, and theadoption of deferred provisions at January 1, 2005 is not expected to havea material impact on the Company’s consolidated financial statements.

 

InNovember 2003 the FASB issued FSP FAS 150-4, Issuer’s Accounting forEmployee Stock Ownership Plans under FASB Statement No. 150, *Accounting for Certain Financial Instruments with Characteristics ofboth Liabilities and Equity*. The Company and the Bank have a profit sharing/employee stock ownershipplan (“ESOP”) for which substantially all employees are eligible.  Contributions, when made, may be made in theform of cash or in common stock of the Company. Since the Company accounts for its ESOP plan under AICPA Statement ofPosition (SOP) 93-6, *Employers’ Accounting forEmployee Stock Ownership Plans*, the ESOP shares of the plan are notwithin the scope of Statement 150.

 

9

----

 

**NOTE 3****                            SECURITIES**

 

Securities have beenclassified in the consolidated statements of financial condition according tomanagement’s intent.  The carrying amountof securities and their approximate fair value follow:

 
| ** **                         | ** ** | **Amortized  Cost** | ** ** | **Gross unrealized** | ** ** | **Fair  Value** | ** ** |
|------------------------------------|------------|---------------------|------------|----------------------|------------|-----------------|------------|
| **Gains**                          | ** ** | **Losses**          |
| **Available-for-sale securities:** |       |                |       |                 |       |            |       |   |   |
| June 30,  2004:               |       |                |       |                 |       |            |       |   |   |
| Mortgage-backed  securities:       |       |                |       |                 |       |            |       |   |   |
| GNMA  adjustable rate              |       | $                   | 2,100,036  |                 | $          | 12              |       | $ | 33,088 |   | $ | 2,066,960 |   |
| GNMA  fixed rate                   |       | 468,407             |       | 22,525               |       | —          |       | 490,932 |   |
| Equity  securities:                |       |                |       |                 |       |            |       |   |   |
| FNMA  common stock                 |       | 6,858               |       | 144                  |       | —          |       | 7,002 |   |
| FNMA  bonds                        |       | 1,000,000           |       | —               |       | 12,810          |       | 987,190 |   |
| FFCB  bonds                        |       | 1,000,000           |       | —               |       | 14,060          |       | 985,940 |   |
| US  treasury bonds                 |       | 3,975,206           |       | —               |       | —          |       | 3,975,206 |   |
| Trust  preferred securities        |       | 555,000             |       | 21,370               |       | —          |       | 576,370 |   |
|                               |       | $                   | 9,105,507  |                 | $          | 44,051          |       | $ | 59,958 |   | $ | 9,089,600 |   |
| December 31,  2003:           |       |                |       |                 |       |            |       |   |   |
| Mortgage-backed  securities:       |       |                |       |                 |       |            |       |   |   |
| GNMA  adjustable rate              |       | $                   | 2,476,208  |                 | $          | 9,837           |       | $ | 11,704 |   | $ | 2,474,342 |   |
| GNMA  fixed rate                   |       | 680,182             |       | 42,420               |       | —          |       | 722,602 |   |
| Equity  securities:                |       |                |       |                 |       |            |       |   |   |
| FNMA  common stock                 |       | 6,858               |       | 410                  |       | —          |       | 7,268 |   |
| FNMA  bonds                        |       | 1,000,000           |       | —               |       | —          |       | 1,000,000 |   |
| FFCB  bonds                        |       | 1,000,000           |       | 5,630                |       | —          |       | 1,005,630 |   |
| Trust  preferred securities        |       | 555,000             |       | 49,860               |       | —          |       | 604,860 |   |
|                               |       | $                   | 5,718,248  |                 | $          | 108,157         |       | $ | 11,704 |   | $ | 5,814,701 |   |

 

10

----

 
| ** **                       | ** ** | **Amortized  Cost** | ** ** | **Gross unrealized** | ** ** | **Fair  Value** | ** ** |
|----------------------------------|------------|---------------------|------------|----------------------|------------|-----------------|------------|
| **Gains**                        | ** ** | **Losses**          |
|                             |       |                |       |                 |       |            |       |   |   |
| **Held-to-maturity securities:** |       |                |       |                 |       |            |       |   |   |
| June 30,  2004:             |       |                |       |                 |       |            |       |   |   |
| Mortgage-backed  securities:     |       |                |       |                 |       |            |       |   |   |
| GNMA  adjustable rate            |       | $                   | 21,664,146 |                 | $          | 19,134          |       | $ | 304,752 |   | $ | 21,378,528 |   |
| FHLMC  adjustable rate           |       | 213,712             |       | 514                  |       | 604             |       | 213,622 |   |
| GNMA  fixed rate                 |       | 6,699,027           |       | —               |       | 139,858         |       | 6,559,169 |   |
| FHLB  bonds                      |       | 3,258,373           |       | —               |       | 33,112          |       | 3,225,261 |   |
| FHLMC  bonds                     |       | 1,000,936           |       | —               |       | 4,996           |       | 995,940 |   |
| US  treasury bonds               |       | 13,956,696          |       | —               |       | 188,876         |       | 13,767,820 |   |
| Corporate  bonds                 |       | 489,110             |       | —               |       | 15,078          |       | 474,032 |   |
| Municipal  bonds                 |       | 207,277             |       | —               |       | 30,899          |       | 176,378 |   |
| Trust  preferred securities      |       | 300,000             |       | 13,720               |       | 1,120           |       | 312,600 |   |
|                             |       |                |       |                 |       |            |       |   |   |
|                             |       | $                   | 47,789,277 |                 | $          | 33,368          |       | $ | 719,295 |   | $ | 47,103,350 |   |
| December 31,  2003:         | ** ** | ** **          | ** ** | ** **           | ** ** | ** **      | ** ** | ** ** | ** ** |
| Mortgage-backed  securities:     |       |                |       |                 |       |            |       |   |   |
| GNMA  adjustable rate            |       | $                   | 4,027,531  |                 | $          | —          |       | $ | 8,473 |   | $ | 4,019,059 |   |
| FHLMC  adjustable rate           |       | 287,414             |       | 2,227                |       | —          |       | 289,641 |   |
| FHLB  bonds                      |       | 4,256,383           |       | 35,488               |       | —          |       | 4,291,872 |   |
| FHLMC  bonds                     |       | 1,002,199           |       | 4,361                |       | —          |       | 1,006,560 |   |
| US  treasury bonds               |       | 6,017,687           |       | 16,073               |       | —          |       | 6,033,760 |   |
| Corporate  bonds                 |       | 870,725             |       | 3,871                |       | 1,941           |       | 872,655 |   |
| Trust  preferred securities      |       | 300,000             |       | 15,600               |       | —          |       | 315,600 |   |
|                             |       |                |       |                 |       |            |       |   |   |
|                             |       | $                   | 16,761,939 |                 | $          | 77,620          |       | $ | 10,414 |   | $ | 16,829,145 |   |

 

TheCompany’s unrealized losses on securities available-for-sale at June 30,2004 increased to $59,958 from $11,704 at December 31, 2003.  Unrealized losses on securitiesheld-to-maturity increased to $719,295 from $10,414 at December 31,2003.  The unrealized losses areprimarily temporary because of the annual adjustments on the GNMA adjustablerate mortgage-backed securities, and the short duration and a high probabilityof repayment on US treasury and agency bonds.

 

11

----

 

**NOTE 4****                            LOANSHELD-FOR-SALE**

 

The carrying amount ofloans held-for-sale and their estimated fair value, as determined on anaggregate basis, follow:

 
| ** **              | ** ** | ** **         | ** ** | **Gross unrealized** | ** ** | ** ** | ** ** |
|-------------------------|------------|--------------------|------------|----------------------|------------|------------|------------|
| ** **              | ** ** | **Amortized cost** | ** ** | **Gains**            | ** ** | **Losses** | ** ** | **Fair value** | ** ** |
|                    |       |               |       |                 |       |       |       |   |   |
| June 30,  2004     |       | $                  | 4,303,416  |                 | $          | 86,293     |       | $ | — |   | $ | 4,389,709 |   |
| December 31,  2003 |       | 1,797,290          |       | 37,274               |       | —     |       | 1,834,564 |   |
|                         |            |                    |            |                      |            |            |            |  |  |  |  |  |  |

 

**NOTE 5****                            LOANSRECEIVABLE**

 

The components of loansin the consolidated statements of financial condition were as follows:

 
| ** **                                         | ** ** | **June 30,  2004** | ** **  | **December 31,  2003** | ** ** |
|----------------------------------------------------|------------|-------------------------|-------------|-----------------------------|------------|
|                                               |       |                    |        |                        |       |
| First  mortgage loans:                             |       |                    |        |                        |       |
| Conventional                                       |       | $                       | 76,460,662  |                        | $          | 75,526,322 |   |
| FHA  insured and VA guaranteed                     |       | 10,604,749              |        | 8,741,925                   |       |
| Commercial  real estate loans                      |       | 55,361,323              |        | 36,527,727                  |       |
| Commercial  loans, other than mortgage             |       | 18,405,827              |        | 8,087,247                   |       |
| Consumer  and installment loans                    |       | 21,937,267              |        | 21,723,933                  |       |
| Construction  loans                                |       | 6,681,396               |        | 2,231,421                   |       |
| Other                                              |       | 6,966,239               |        | 6,524,285                   |       |
|                                               |       |                    |        |                        |       |
|                                               |       | 196,417,463             |        | 159,362,860                 |       |
|                                               |       |                    |        |                        |       |
| Less:                                              |       |                    |        |                        |       |
| Loans  in process                                  |       | 1,585,660               |        | 1,381,678                   |       |
| Unearned  discounts, deferred loan fees, and other |       | 336,303                 |        | 794,349                     |       |
| Allowance  for loan losses                         |       | 1,298,431               |        | 949,516                     |       |
|                                               |       |                    |        |                        |       |
|                                               |       | $                       | 193,197,069 |                        | $          | 156,237,317 |   |

 

12

----

 

The allowance for loanlosses is established by management of the Bank to incorporate a systematicmethodology, which is applied quarterly, to determine the elements of theallowance for loan losses and the resultant provisions for loan losses itconsiders adequate to provide for anticipated loan losses.  This methodology includes the followingelements:

 

• A systematic loan grading system

• A periodic review of the summary ofthe allowance for loan loss balance using historical loss factors

• Identification of loans to beevaluated on an individual basis for impairment

• Consideration of internal factorssuch as the Bank’s size, organizational structure, loan portfolio structure,loan administration procedures, past due and delinquency trends, and lossexperience

• Consideration of risks inherent indifferent kinds of lending

• Consideration of external factorssuch as local, regional, and national economic factors

• An overall evaluation of the qualityof the underlying collateral, and holding and disposition costs

 

Specific reserves areprovided for individual loans where ultimate collection is consideredquestionable by management after reviewing the current status of loans that arecontractually past due and considering the net realizable value of the securityand of the loan guarantees, if applicable. The following table is an analysis of changes in allowance for loanlosses:

 
| ** **                                       | ** ** | **Six Months Ended  June 30, 2004** | ** ** | **Six Months Ended  June 30, 2003** | ** ** |
|--------------------------------------------------|------------|------------------------------------------|------------|------------------------------------------|------------|
|                                             |       |                                     |       |                                     |       |
| Balance  at beginning of period                  |       | $                                        | 949,516    |                                     | $          | 824,985 |   |
|                                             |       |                                     |       |                                     |       |
| Loans  charged-off                               |       | (247,953                                 | )          | (236,584                                 | )          |
| Recoveries                                       |       | 868                                      |       | 45,138                                   |       |
|                                             |       |                                     |       |                                     |       |
| Net  loans charged-off                           |       | (247,085                                 | )          | (191,446                                 | )          |
| Provision  for loan losses charged to operations |       | 426,000                                  |       | 355,000                                  |       |
| Allowance  related to acquired loans             |       | 170,000                                  |       | —                                   |       |
|                                             |       |                                     |       |                                     |       |
| Balance  at end of period                        |       | $                                        | 1,298,431  |                                     | $          | 988,539 |   |

 

An analysis of thechanges of loans to directors, executive officers, and major stockholders is asfollows:

 
| ** **                                    | ** ** | **Six Months Ended  June 30, 2004** | ** ** | **Year Ended  December 31, 2003** | ** ** |
|-----------------------------------------------|------------|------------------------------------------|------------|----------------------------------------|------------|
|                                          |       |                                     |       |                                   |       |
| Balance  at beginning of period               |       | $                                        | 1,449,117  |                                   | $          | 1,523,636 |   |
| Loans  originated                             |       | 259,079                                  |       | 873,700                                |       |
| Loan  principal payments and other reductions |       | (19,054                                  | )          | (948,219                               | )          |
|                                          |       |                                     |       |                                   |       |
| Balance  at end of period                     |       | $                                        | 1,689,142  |                                   | $          | 1,449,117 |   |

 

13

----

 

**NOTE 6****                            NON-PERFORMINGASSETS**

 

The composition of theBank’s portfolio of non-performing assets is shown in the following table:

 
| ** **                                      | ** ** | **June 30, 2004** | ** ** | **December 31, 2003** | ** ** |
|-------------------------------------------------|------------|------------------------|------------|----------------------------|------------|
|                                            |       |                   |       |                       |       |
| Non-accruing  loans*                            |       | $                      | 546,662    |                       | $          | 1,054,289 |   |
| Past  due 90 days or more and still accruing    |       | —                 |       | —                     |       |
| Troubled  debt restructured                     |       | —                 |       | —                     |       |
| Other  real estate                              |       | 276,327                |       | 565,159                    |       |
|                                            |       |                   |       |                       |       |
|                                            |       | $                      | 822,989    |                       | $          | 1,619,448 |   |
|                                            |       |                   |       |                       |       |
| Ratio  of non-performing assets to total assets |       | 0.29                   | %          | 0.79                       | %          |

 

----

*                     Primarilyloans which are past due for 90 days or more

 

**NOTE 7****                            EARNINGSPER SHARE**

 

Basic earnings per commonshare has been computed by dividing net income for the period by the weightedaverage number of common shares outstanding during the period.  Diluted earnings per common share have beencomputed by dividing net income for the period by the weighted average numberof common shares outstanding during the period adjusted for the assumedexercise of outstanding stock options and other contingently issuable shares ofcommon stock.  Net income for basic anddiluted earnings per share are the same, as there are no contingently issuableshares of stock whose issuance would have impacted net income.

 

A reconciliation betweenbasic and diluted weighted average common shares outstanding follows:

 
| ** **                                               | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|----------------------------------------------------------|------------|---------------------------------------|------------|-------------------------------------|------------|
| ** **                                               | ** ** | **2004**                              | ** ** | **2003**                            | ** ** | **2004** | ** ** | **2003** | ** ** |
|                                                     |       |                                  |       |                                |       |   |   |   |   |
| Weighted  average common Shares – Basic             |       | 1,251,644                             |       | 1,230,936                           |       | 1,249,616 |   | 1,262,395 |   |
|                                                     |       |                                  |       |                                |       |   |   |   |   |
| Plus  effect of dilutive Securities:                     |       |                                  |       |                                |       |   |   |   |   |
| Stock  Options                                           |       | 80,509                                |       | 33,623                              |       | 79,579 |   | 33,729 |   |
| Shares  held by rabbi trust                              |       | 69,807                                |       | 53,050                              |       | 68,252 |   | 50,873 |   |
|                                                     |       |                                  |       |                                |       |   |   |   |   |
| Weighted  average common Shares – Assuming Dilution |       | 1,401,960                             |       | 1,317,609                           |       | 1,397,447 |   | 1,346,997 |   |

 

14

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**NOTE 8****                            OFF-BALANCESHEET ARRANGEMENTS**

 

TheBank may be a party to financial instruments with off-balance sheet risk in thenormal course of business to meet the financing needs of its customers and toreduce its own exposure to fluctuation in interest rates.  These financial instruments includecommitments to extend credit (including credit cards), standby letters ofcredit, and financial guarantees.  Theseinstruments involve, to varying degrees, elements of credit and interest raterisk in excess of the amount recognized in the consolidated statements offinancial condition.  The contract ornotional amounts of these instruments reflect the extent of involvement theBank has in particular classes of financial instruments.  The Bank uses the same credit policies inmaking commitments and conditional obligations as it does for the consolidatedstatements of financial condition instruments.

 

Thefollowing table details the amounts and expected maturities of significantcommitments as of June 30, 2004.

 
| ** **                          | ** ** | **Payments Due In**        | ** ** | ** **              | ** ** |
|-------------------------------------|------------|----------------------------|------------|-------------------------|------------|
| ** **                          | ** ** | **One Year  or Less**      | ** ** | **One to  Three Years** | ** ** | **Three to  Five Years** | ** ** | **Over Five  Years** | ** ** | **Total** | ** ** |
| ** **                          | ** ** | **(Dollars in Thousands)** | ** ** | ** **              | ** ** |
| Commitments  to extend credit:      |       |                       |       |                    |       |   |   |   |   |   |   |
| Residential  real estate loans      |       | $                          | 5,742      |                    | $          | — |   | $ | — |   | $ | — |   | $ | 5,742 |   |
| Construction  loans                 |       | 1,586                      |       | —                  |       | — |   | — |   | 1,586 |   |
| Lines  of credit                    |       | 17,531                     |       | —                  |       | — |   | — |   | 17,531 |   |
| Credit  cards                       |       | 2,359                      |       | —                  |       | — |   | — |   | 2,359 |   |
| Letters  of credit                  |       | 80                         |       | —                  |       | — |   | — |   | 80 |   |
| Commitments  to sell mortgage loans |       | 4,303                      |       | —                  |       | — |   | — |   | 4,303 |   |
|                                     |            |                            |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |

 

Commitments to extendcredit are agreements to lend to a customer as long as there is no violation ofany condition established in the contract. Commitments generally have fixed expiration dates or other terminationclauses and may require payment of a fee. Some of the commitments are expected to expire without being drawnupon.  The total commitment amounts donot necessarily represent future cash requirements.  The Bank evaluates each customer’screditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank uponextension of credit, is based on management’s credit evaluation of thecustomers.

 

Standby letters of creditand financial guarantees written are conditional commitments issued by the Bankto guarantee the performance of a customer to a third party.  The credit risk involved in issuing lettersof credit is essentially the same as that involved in extending loan facilitiesto customers.  The Bank holds collateraland personal guarantees as deemed necessary.

 

AtJune 30, 2004, the Bank had no open interest rate swaps, futures, options,or forward contracts.

 

15

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**NOTE 9****                            MATERIALBUSINESS COMBINATION**

 

MatrixCapital Bank branch facilities (the “Branches”) located at 277 E. Amador and3090 Roadrunner Parkway in Las Cruces, New Mexico were purchased by the Bank onMay 1, 2004.

 

TheBranches are engaged in the business of attracting deposits and loans from thegeneral public and businesses in the Las Cruces area.

 

Thefollowing table summarizes the estimated fair value of the assets acquired andliabilities assumed at the date of acquisition. The purchase price allocation has not been finalized pending valuationof certain assets.

 

| ** **                              | ** ** | **May 1,  2004** | ** ** |
|-----------------------------------------|------------|------------------|------------|
|                                    |       |             |       |
| ASSETS                                  |       |             |       |
|                                    |       |             |       |
| Cash  and cash equivalents              |       | $                | 51,558,441 |   |
| Loans  receivable                       |       | 19,612,838       |       |
| Interest  receivable, loans             |       | 95,691           |       |
| Premises  and equipment                 |       | 2,771,738        |       |
| Goodwill                                |       | 4,786,298        |       |
| Core  deposit intangible                |       | 408,000          |       |
| Other  assets                           |       | 2,288            |       |
|                                    |       |             |       |
| Total  assets acquired                  |       | $                | 79,235,294 |   |
|                                    |       |             |       |
| LIABILITIES                             |       |             |       |
|                                    |       |             |       |
| Liabilities:                            |       |             |       |
| Deposits                                |       | $                | 79,063,192 |   |
| Accrued  interest and other liabilities |       | 172,102          |       |
| Total  liabilities assumed              |       | $                | 79,235,294 |   |

 

Allthe acquired other intangible assets were assigned to core deposit premiumintangible subject to amortization.  Thecore deposit premium will be amortized over its estimated useful life of 10years.

 

The following tablereflects the pro forma results of operations for June 30, 2004 and 2003 asthough the business combination had been completed as of January 1,2003.  No earnings credit for the cashbalance of $52 million or any tax considerations are included in the table.

 
| ** **                                            | ** ** | **Three Months  Ended June 30,** | ** ** | **Six Months  Ended June 30,** | ** ** |
|-------------------------------------------------------|------------|---------------------------------------|------------|-------------------------------------|------------|
| ** **                                            | ** ** | **2004**                              | ** ** | **2003**                            | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                            | ** ** | ** **                            | ** ** | **(unaudited)**                     | ** ** | ** ** | ** ** |
| Net  Interest Income Before Provision for Loan Losses |       | $                                     | 2,293,487  |                                | $          | 1,979,623 |   | $ | 4,115,562 |   | $ | 3,974,231 |   |
| Net  Income                                           |       | 339,216                               |       | 291,267                             |       | 246,004 |   | 623,312 |   |
| Earnings  per share                                   |       |                                  |       |                                |       |   |   |   |   |
| Basic                                                 |       | .27                                   |       | .24                                 |       | .20 |   | .49 |   |
| Assuming  dilution                                    |       | .24                                   |       | .22                                 |       | .18 |   | .46 |   |
|                                                       |            |                                       |            |                                     |            |  |  |  |  |  |  |  |  |

 

16

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**NOTE 10****                     SUBSEQUENTEVENTS**

 

OnJuly 7, 2004, the Company filed a Form 8-K with the Securities andExchange Commission (“SEC”) announcing an agreement to acquire the Sun Citybranch from Matrix Capital Bank in Sun City, Arizona.  The acquisition is subject to regulatoryapproval.  Deposits to be assumed totaledapproximately $105 million.  The realestate and fixed assets associated with the branch and nominal loan balanceswill be transferred.  The new branch willoperate under the name AccessBank.

 

OnJuly 30, 2004, the Company’s Board of Directors approved the engagement ofan investment banking firm, Howe Barnes Investments, Inc., to serve as privateplacement agent in connection with a proposed private placement ofapproximately $3 million of newly issued common stock of the Company.  The proceeds from the sale of the stock areintended to be used for general corporate purposes.

 

Thesecurities to be issued in the proposed private placement of newly issuedCompany stock have not been registered under the Securities Act of 1933, asamended (the “Securities Act”), or any state securities laws and may not bereoffered or sold in the United States absent registration or an applicableexemption from the registration requirements of the Securities Act andapplicable state securities laws.  ThisQuarterly Report on Form 10-QSB does not constitute an offer to sell or thesolicitation of an offer to buy any securities.

 

17

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**Item 2****–Management’s Discussion and Analysis or Plan of Operation**

 

**Thefollowing discussion should be read in conjunction with Access Anytime Bancorp,Inc.’s (“the Company”) 2003 Annual Report on Form 10-KSB.**

 

**General**

 

The Company is a Delawarecorporation which was organized in 1996 for the purpose of becoming the thriftholding company of AccessBank (the “Bank”). The Bank is a federally chartered stock savings bank conducting businessfrom ten banking locations in Albuquerque, Clovis, Gallup, Las Cruces, andPortales, New Mexico.  The Bank has awholly owned subsidiary, FEDCO, which is currently inactive.

 

The Bank is principallyengaged in the business of attracting retail and commercial deposits from thegeneral public and investing those funds in first mortgage loans in owneroccupied, single-family residential loans, residential construction loans andcommercial real estate loans.  Inaddition, the Bank originates consumer loans, including loans for the purchaseof automobiles and home improvement loans, and commercial business loansincluding Small Business Administration loans.

 

The most significantoutside factors influencing the operations of the Bank and other financialinstitutions include general economic conditions, competition in the localmarket place and the related monetary****and fiscalpolicies of agencies that regulate financial institutions.  More specifically, the cost of funds,primarily consisting of deposits, is influenced by interest rates on competinginvestments and general market rates of interest.  Lending activities are influenced by thedemand for real estate financing and other types of loans, which in turn isaffected by the interest rates at which such loans may be offered and otherfactors affecting loan demand and funds availability.  The Company considers the state of New Mexicoas its primary trade area.  Federalgovernment outlays in research and development, defense, and agriculture representa significant portion of the New Mexico economy.

 

OnJuly 7, 2004 the Company filed a Form 8-K with the Securities and ExchangeCommission (“SEC”) announcing an Agreement to acquire the Sun City branch fromMatrix Capital Bank in Sun City, Arizona. The acquisition is subject to regulatory approval.  Deposits to be assumed totaled approximately$105 million.  The real estate and fixedassets associated with the branch and nominal loan balances will betransferred.  The new branch will operateunder the name AccessBank.

 

18

----

 

**FinancialCondition**

 

The Bank purchased twoMatrix Capital Bank branch facilities (the “Branches”) located in Las Cruces,New Mexico on May 1, 2004.  See Note 9 tothe consolidated financial statements in this Form 10-QSB.

 

Total assets for theCompany increased by $79,913,384 or 38.90%, from December 31, 2003 toJune 30, 2004.  The increase inassets was primarily due to the purchase of the Branches which increased assetsby approximately $79.4 million.  The netincrease in cash and cash equivalents of $51.9 million in the purchase of theBranches and a net $2.3 million decrease in cash and cash equivalents duringthe six month period ended June 30, 2004 allowed the Bank to increasesecurities available-for-sale by $3.3 million and securities held-to-maturityby $31.0 million.  Loans receivable alsoincreased by $37.0 million or 23.66%, primarily due to the purchase of theBranches and a net increase in loans of the Bank.  Goodwill also increased by $4.8 million whichwas an allocation of the net purchase premium paid in the purchase of theBranches.

 

Total liabilitiesincreased by $79,237,770 or 41.69% for the six-month period ended June 30,2004.  The increase in liabilities wasprimarily due to the purchase of the Branches which increased the liabilities $79.4million.  Deposits increased by$72,075,854 or 44.26% from December 31, 2003 to June 30, 2004,primarily due to the $79.0 million of deposits assumed in the purchase of theBranches.  Federal Home Loan Bank(“FHLB”) advances increased by $7.3 million for the six-month period endedJune 30, 2004.  The increase in FHLBadvances carried short term investments and deposit decreases in the quarterended June 30, 2004.

 

### **Capital Adequacyand Liquidity**

 

**Capital Adequacy -**Underthe Financial Institutions Reform, Recovery and Enforcement Act of 1989(“FIRREA”) and the implementation of Office of Thrift Supervision (“OTS”)regulations on December 7, 1989 the Bank must have:  (1) Tier 1 or core capital equal to 3% of adjustedtotal assets and (2) total capital equal to 8.0% of risk-weighted assets, whichincludes off-balance sheet items.

 

Under the Federal DepositInsurance Corporation Improvement Act (“FDICIA”), to be deemed “wellcapitalized” the minimum ratios the Bank must have are: (1) Tier 1 or corecapital of 5% of adjusted total assets, (2) Tier 1 risk-based capital of 6% ofrisk-weighted assets, and (3) total risk-based capital of 10% of risk weightedassets.

 

19

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The following table is areconciliation of the Bank’s capital for regulatory purposes at June 30,2004 as reported to the OTS.

 
| ** **                                                         | ** ** | **Tier 1-  Core  Capital** | ** **  | **Tier 1-  Risk-based  Capital** | ** **  | **Total  Risk-based  Capital** | ** ** |
|--------------------------------------------------------------------|------------|----------------------------|-------------|----------------------------------|-------------|--------------------------------|------------|
|                                                               |       |                       |        |                             |        |                           |       |
| Total  regulatory assets                                           |       | $                          | 283,833,789 |                             |        |                           |       |   |
| Net  unrealized depreciation on available-for-sale securities, net |       | 32,757                     |        |                             |        |                           |       |
| Less  intangible assets disallowed for regulatory purposes         |       | (6,692,652                 | )           |                             |        |                           |       |
|                                                               |       |                       |        |                             |        |                           |       |
| Adjusted  regulatory total assets                                  |       | $                          | 277,173,894 |                             |        |                           |       |   |
|                                                               |       |                       |        |                             |        |                           |       |
| Risk-based  assets                                                 |       |                       |        | $                                | 178,205,000 |                           | $          | 178,205,000 |   |
|                                                               |       |                       |        |                             |        |                           |       |
| Stockholder’s  equity                                         |       | $                          | 23,376,619  |                             | $           | 23,376,619                     |       | $ | 23,376,619 |   |
| Net  unrealized depreciation on available-for-sale securities, net |       | 19,654                     |        | 19,654                           |        | 19,654                         |       |
| General  valuation allowance                                       |       | —                     |        | —                           |        | 1,200,269                      |       |
| Less  intangible assets disallowed for regulatory purposes         |       | (6,692,652                 | )           | (6,692,652                       | )           | (6,692,652                     | )          |
|                                                               |       |                       |        |                             |        |                           |       |
| Regulatory  capital                                                |       | 16,703,621                 |        | 16,703,621                       |        | 17,903,890                     |       |
| Regulatory  capital required to be “well capitalized”    |       | 13,858,695                 |        | 10,692,300                       |        | 17,820,500                     |       |
|                                                               |       |                       |        |                             |        |                           |       |
| Excess  regulatory capital                                         |       | $                          | 2,844,926   |                             | $           | 6,011,321                      |       | $ | 83,390 |   |
|                                                               |       |                       |        |                             |        |                           |       |
| Bank’s  capital to adjusted regulatory assets                 |       | 6.03                       | %           |                             |        |                           |       |
|                                                               |       |                       |        |                             |        |                           |       |
| Bank’s  capital to risk-based assets                          |       |                       |        | 9.37                             | %           | 10.05                          | %          |

 

The Bank’s Tier 1 or corecapital, Tier 1 risk-based capital, and total risk-based capital ratios atJune 30, 2004 exceeded the OTS “well capitalized” minimum ratios, but werelower than the ratios were at March 31, 2004 (6.03%, 9.37% and 10.05% atJune 30, 2004 and 10.17%, 14.46% and 15.09% at March 31, 2004).  The decreases were primarily due to theBank’s recording for accounting purposes the $4,786,298 of goodwill and$408,000 of core deposit intangibles in connection with the purchase of theBranches described in Note 9 to the consolidated financial statements in thisForm 10-QSB.  The additional goodwill andcore deposit intangibles reduced regulatory capital and thereby loweredregulatory ratios.  Although theconsequences of falling below the OTS minimum ratios are not material, the Bankis committed to maintaining regulatory ratios that meet or exceed the OTS “wellcapitalized” minimum ratios.  Ifnecessary, the Company may contribute additional capital to the Bank.

 

**Liquidity**

 

Liquidity enables theBank to meet withdrawals of its deposits and the needs of its loancustomers.  The Bank maintains itsliquidity position through maintenance of cash resources and a core depositbase.  A further source is the Bank’sability to borrow funds.  The Bank is amember of the FHLB which provides a source of borrowings to the Bank for assetand asset/liability matching.  FHLBborrowings were $24.4 and $17.1 million at June 30, 2004 andDecember 31, 2003, respectively.

 

20

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Liquidityrisk results from the mismatching of assets and liability cash flows.  Management chooses asset/liability strategiesthat promote stable earnings and reliable funding.  Interest rate risk and funding positions are keptwithin limits established by the Board of Directors of the Bank to ensure thatrisk taking is not excessive and that liquidity is properly managed.  The Bank keeps a portion of itsinterest-bearing assets in adjustable-rate products to reduce interest ratesensitivity.  Therefore, if ratesincrease the Bank can retain its deposits by increasing rates paid on deposits,while limiting the impact on the Bank’s net interest margin.  A concentrated effort is made to retaindeposits associated with other intangible assets.  The primary additional source of funding isprovided by FHLB borrowings available to the Bank, of $96.3 and $52.0 millionat June 30, 2004 and December 31, 2003, respectively.

 

AtJune 30, 2004 and 2003, the Company had lines of credit totaling $400,000each year from other banks. The Company had no borrowings outstanding underthese arrangements at June 30, 2004 and June 30, 2003.  The lines of credit bear market rates ofinterest and borrowings thereunder are to be used for general purposes.

 

# **Results ofOperations**

# ** **

### **Three-MonthComparative Analysis for Periods June 30, 2004 and 2003**

### ** **

Net income for thethree-months ended June 30, 2004 was $431,631 or $.34 per basic sharecompared to $460,940 or $.37 per basic share for the three-months endedJune 30, 2003, a decrease of $29,309 or 6.36%.

 

*Net Interest Income.*  Net interest income before provision for loanlosses increased by 30.36% to $2,272,634 in the three-month period endedJune 30, 2004, compared to $1,743,381 for the same period in 2003.  The increase in net interest income beforeprovision for loan losses was primarily due to a increase in interest income of$524,147.  The increase in total interestincome for the quarter ended June 30, 2004 was primarily due to increasesin loans receivable, equity securities, and mortgage-backed securities interestincome of $291,209, $123,828, $141,559, respectively, as compared to the samequarter in 2003.  These increases wereprimarily due to increases in the underlying interest earning assets due to thepurchase of the Branches, see Note 9 to the consolidated financial statementsin this Form 10-QSB.

 

*Provision for Loan Losses.*  The level of the allowance for loan losses isbased on such factors as the amount of non-performing assets, historical lossexperience, general economic conditions, the estimated fair value of the underlyingcollateral, and other factors which may affect the collectibility ofloans.  The provision for loan losses was$213,000 the quarters ended June 30, 2004 and 2003, which was due tomanagement’s analysis of current conditions. Although management believes it uses the best information available tomake such determinations, future adjustments to the allowance may be necessary,and net income could be significantly affected, if circumstances differsubstantially from the assumptions used in making initial determinations.  See Note 5 to the consolidated financialstatements in this Form 10-QSB for additional discussion on the allowance forloan losses.

 

21

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*Noninterest Income.*  During the three-months ended June 30,2004, noninterest income decreased by $298,343 to $808,217 compared to$1,106,560 in 2003.  The decrease innoninterest income for the quarter ended June 30, 2004 as compared to thesame quarter in 2003 was primarily due to a decrease in gains on sales ofmortgage loans held-for-sale of $341,143.

 

*Noninterest Expense.*  Noninterest expense increased to $2,119,154from $1,897,519 for the quarter ended June 30, 2004 compared to the samequarter in 2003.  The increase wasprimarily due to the acquisition of the Branches, see Note 9 to theconsolidated financial statements of this Form 10-QSB.  The increase in noninterest expense was dueto increases in occupancy expense of $84,994, in other expense of $76,349, andsalaries and employee benefits of $56,261.

 

*Income Tax Expense.*  The income tax expense for the quarter endedJune 30, 2004 increased by $38,584 to $317,066 from $278,482 in thequarter ended June 30, 2003.  Theincrease is primarily due to a higher income tax rate for the quarter endedJune 30, 2004.

 

### **Six-MonthComparative Analysis for Periods June 30, 2004 and 2003**

### ** **

Net income for thesix-months ended June 30, 2004 was $612,501 or $.49 per basic sharecompared to $728,161 or $.58 per share for the six-months ended June 30,2003, a decrease of $115,660 or 15.88%.

 

*Net Interest Income.*  Net interest income before provision for loanlosses increased by 16.66% to $4,094,199 in the six-month period endedJune 30, 2004, compared to $3,509,639 for the same period in 2003.  The increase in total interest income for thesix-months ended June 30, 2004 was primarily due to increases in equitysecurities, loan receivable, and mortgage-backed securities interest income of$212,316, $182,209, $135,110, respectively, as compared to the same six-monthsin 2003.  These increases were primarilydue to increases in the underlying interest earning assets due to the purchaseof the Branches, see Note 9 to the consolidated financial statements of thisForm 10-QSB.

 

*Provision for Loan Losses.*  The level of the allowance for loan losses isbased on such factors as the amount of non-performing assets, historical lossexperience, general economic conditions, the estimated fair value of theunderlying collateral, and other factors which may affect the collectibility ofloans.  During the first six-months of2004, the provision for loan losses increased to $426,000 from $355,000 in thefirst six-months of 2003.  The increasewas due to management’s analysis of current conditions.  Although management believes it uses the bestinformation available to make such determinations, future adjustments to theallowance may be necessary, and net income could be significantly affected, ifcircumstances differ substantially from the assumptions used in making initialdeterminations.  See Note 5 to theconsolidated financial statements in this Form 10-QSB for additional discussionon the allowance for loan losses.

 

*Noninterest Income.*  During the first half of 2004, noninterestincome decreased by $452,940 to $1,439,911 compared to $1,892,851 in 2003.  The decrease in noninterest income for thesix-months ended June 30, 2004 as compared to the same period in 2003 wasprimarily due to a decrease in gains on sales of mortgage loans held-for-sale of$514,667.

 

22

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*Noninterest Expense.*  Noninterest expense increased to $3,983,609from $3,836,000 for the six-months ended June 30, 2004 compared to thesame period in 2003.  The $147,609increase in noninterest expense was primarily due to the acquisition of theBranches, see Note 9 to the consolidated financial statements of this Form10-QSB.  Occupancy expense increased by$83,861 for the six-months ended June 30, 2004 compared to 2003.

 

*Income Tax Expense.*  The income tax expense for the six-monthsended June 30, 2004 increased by $28,671 to $512,000 from $483,329 in thesix-months ended June 30, 2003.  Theincrease is primarily due to a higher income tax rate during 2004.

 

**Net Interest Income**

 

The Company’s operatingresults are impacted by many factors, the most important factor being theinterest spread between the yield on loans and investments and the cost offunds.  The following table presentsoperating results for the Company.  Thetable presents for the periods indicated the total dollar amount of interestincome from average interest-earning assets and the resultant yields, as wellas the interest expense on average interest-bearing liabilities, expressed bothin dollars and rates.  No tax equivalent adjustmentswere made and all average balances are monthly average balances.  Non-accruing loans have been included in thetable as loans carrying a zero yield.

 
| ** **                                                               | ** ** | **Three Months ended June 30,** | ** **  |
|--------------------------------------------------------------------------|------------|--------------------------------------|-------------|
| ** **                                                               | ** ** | **2004**                             | ** **  | **2003** | ** ** |
| ** **                                                               | ** ** | **Average  outstanding  balance**    | ** **  | **Interest  earned/  Paid** | ** ** | **Yield/  Rate** | ** ** | **Average  outstanding  balance** | ** ** | **Interest  earned/  Paid** | ** ** | **Yield/  rate** | ** ** |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Interest-earning  assets:                                                |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Loans  receivable (1)                                                    |       | $                                    | 190,409,199 |   | $ | 2,964,497 |   | 6.23 | % | $ | 162,591,918 |   | $ | 2,673,288 |   | 6.58 | % |
| Mortgage-backed  securities                                              |       | 21,515,059                           |        | 204,587 |   | 3.80 |   | 5,210,055 |   | 63,028 |   | 4.84 |   |
| Investment  securities                                                   |       | 23,089,244                           |        | 160,585 |   | 2.78 |   | 2,840,813 |   | 36,757 |   | 5.18 |   |
| Other  interest-earning assets                                           |       | 11,268,645                           |        | 50,636 |   | 1.80 |   | 21,751,060 |   | 83,085 |   | 1.53 |   |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Total  interest-earning assets (1)                                       |       | $                                    | 246,282,147 |   | $ | 3,380,305 |   | 5.49 | % | $ | 192,393,846 |   | $ | 2,856,158 |   | 5.94 | % |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing  liabilities:                                           |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                 |       | $                                    | 216,582,784 |   | $ | 836,650 |   | 1.55 | % | $ | 159,257,644 |   | $ | 840,622 |   | 2.11 | % |
| Federal  Home Loan Bank advances                                         |       | 18,443,486                           |        | 106,886 |   | 2.32 |   | 16,129,562 |   | 106,500 |   | 2.64 |   |
| Other  borrowings                                                        |       | 8,000,000                            |        | 164,135 |   | 8.21 |   | 8,000,000 |   | 165,655 |   | 8.28 |   |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Total  interest-bearing liabilities                                      |       | $                                    | 243,026,270 |   | $ | 1,107,671 |   | 1.82 | % | $ | 183,387,206 |   | $ | 1,112,777 |   | 2.43 | % |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Net  interest income                                                     |       |                                 |        | $ | 2,272,634 |   |   |   |   |   | $ | 1,743,381 |   |   |   |
| Net  interest rate spread                                                |       |                                 |        |   |   | 3.67 | % |   |   |   |   | 3.51 | % |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Net  interest-earning assets                                             |       | $                                    | 3,255,877   |   |   |   |   |   | $ | 9,006,640 |   |   |   |   |   |
| Net  yield on average interest-earning assets                            |       |                                 |        |   |   | 3.69 | % |   |   |   |   | 3.62 | % |
|                                                                     |       |                                 |        |   |   |   |   |   |   |   |   |   |   |
| Average  interest-earning assets to average interest-bearing liabilities |       |                                 |        | 101.34 | % |   |   |   |   | 104.91 | % |   |   |

 

----

(1) Calculated net ofloans in process

 

23

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| ** **                                                               | ** ** | **Six Months ended June 30,** | ** **  |
|--------------------------------------------------------------------------|------------|------------------------------------|-------------|
| ** **                                                               | ** ** | **2004**                           | ** **  | **2003** | ** ** |
| ** **                                                               | ** ** | **Average  outstanding  balance**  | ** **  | **Interest  earned/  paid** | ** ** | **Yield/  Rate** | ** ** | **Average  outstanding  balance** | ** ** | **Interest  earned/  Paid** | ** ** | **Yield/  Rate** | ** ** |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Interest-earning  assets:                                                |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Loans  receivable (1)                                                    |       | $                                  | 176,092,822 |   | $ | 5,557,654 |   | 6.31 | % | $ | 160,982,769 |   | $ | 5,375,445 |   | 6.68 | % |
| Mortgage-backed  securities                                              |       | 14,404,695                         |        | 274,048 |   | 3.80 |   | 5,558,581 |   | 138,938 |   | 5.00 |   |
| Investment  securities                                                   |       | 19,543,432                         |        | 288,350 |   | 2.95 |   | 2,883,818 |   | 76,034 |   | 5.27 |   |
| Other  interest-earning assets                                           |       | 10,988,408                         |        | 95,905 |   | 1.75 |   | 19,109,252 |   | 150,478 |   | 1.57 |   |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Total  interest-earning assets (1)                                       |       | $                                  | 221,029,357 |   | $ | 6,215,957 |   | 5.62 | % | $ | 188,534,420 |   | $ | 5,740,895 |   | 6.09 | % |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing  liabilities:                                           |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                 |       | $                                  | 190,940,042 |   | $ | 1,585,576 |   | 1.66 | % | $ | 158,057,740 |   | $ | 1,706,636 |   | 2.16 | % |
| Federal  Home Loan Bank advances                                         |       | 17,047,713                         |        | 208,647 |   | 2.45 |   | 14,721,234 |   | 199,236 |   | 2.71 |   |
| Other  borrowings                                                        |       | 8,000,000                          |        | 327,535 |   | 8.19 |   | 8,000,000 |   | 325,384 |   | 8.13 |   |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Total  interest-bearing liabilities                                      |       | $                                  | 215,987,755 |   | $ | 2,121,758 |   | 1.96 | % | $ | 180,778,974 |   | $ | 2,231,256 |   | 2.47 | % |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Net  interest income                                                     |       |                               |        | $ | 4,094,199 |   |   |   |   |   | $ | 3,509,639 |   |   |   |
| Net  interest rate spread                                                |       |                               |        |   |   | 3.66 | % |   |   |   |   | 3.62 | % |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Net  interest-earning assets                                             |       | $                                  | 5,041,602   |   |   |   |   |   | $ | 7,755,446 |   |   |   |   |   |
| Net  yield on average interest-earning assets                            |       |                               |        |   |   | 3.70 | % |   |   |   |   | 3.72 | % |
|                                                                     |       |                               |        |   |   |   |   |   |   |   |   |   |   |
| Average  interest-earning assets to average interest-bearing liabilities |       |                               |        | 102.33 | % |   |   |   |   | 104.29 | % |   |   |

 

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(1) Calculated net ofloans in process

 

24

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**Item 3****– Controlsand Procedures**

 

**Evaluation of Disclosure Controlsand Procedures**

** **

**The Company carried out anevaluation, under the supervision and with the participation of the Company’smanagement, including the Company’s Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of the design and operation of the Company’sdisclosure controls and procedures as of the end of the period covered by thisreport.  The Company’s disclosurecontrols and procedures are designed to ensure that information required to bedisclosed by the Company in its periodic Securities and Exchange Commission(“SEC”) filings is recorded, processed and reported within the time periodsspecified in the SEC’s rules and forms. Based on that evaluation, the Chief Executive Officer and ChiefFinancial Officer concluded that the Company’s disclosure controls andprocedures are effective in timely alerting them to material informationrelating to the Company (including its consolidated subsidiaries) required tobe included in the Company’s periodic SEC filings.  There was no change in the registrant’sinternal control over financial reporting that occurred during the registrant’smost recent fiscal quarter that has materially affected, or is reasonablylikely to materially affect, the Company’s internal control over financialreporting.**

** **

**Forward-Looking Statements**

 

When used in this Form10-QSB, certain words or phrases are intended to identify “forward-lookingstatements” within the meaning of the Private Securities Litigation Reform Actof 1995.  Such statements are subject tocertain risks and uncertainties, including regulatory action with respect tothe acquisition of a branch of Matrix Capital Bank in Sun City, Arizona, delaysin completing the acquisition, changes in economic conditions, includingchanges in governmental outlays in the Company’s market area, changes inpolicies by regulatory agencies, fluctuations in interest rates, demand forloans in the Company’s market area and competition, that could cause actualresults to differ materially from historical earnings and those presentlyanticipated or projected.  The Companywishes to caution readers not to place undue reliance on any suchforward-looking statements, which speak only as of the date made.  The Company wishes to advise readers that thefactors listed above could affect the Company’s financial performance and couldcause the Company’s actual results for future periods to differ materially fromany opinions or statements expressed with respect to future periods in anycurrent statements.

 

The Company does notundertake, and specifically disclaims any obligation, to publicly release theresults of any revisions which may be made to any forward-looking statements toreflect events or circumstances after the date of such statements or to reflectthe occurrence of anticipated or unanticipated events.

 

25

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##### **PART II  - OTHERINFORMATION**

##### ** **

# **Item 1 – Legal Proceedings**

 

# **None**

 

# **Item 2 – Changes in Securities and Small Business IssuerPurchases of Equity Securities**

# ** **

The Company has adeferred compensation plan for key officers known as the Executive SavingsPlan.  The participants may defer aportion of their compensation to the Executive Savings Plan, and the Companymay make matching contributions to the plan. All compensation deferrals and contributions are deposited in trust withan independent trustee for the benefit of the plan participants.  The trustee, REDW Trust Co., may invest thetrust assets in stocks (including Company stock), bonds, money markets, mutualfunds or U.S. Government securities.  The trust is known as a “Rabbi Trust” for income tax purposes.  The assets of a Rabbi Trust are available tosatisfy the claims of general creditors in the event of bankruptcy of theCompany.

 

# **REDW Trust Co. has invested trustassets in Company stock by purchasing Company stock on the open market fromtime to time.  Although the trust assetsare held by an independent trustee for the benefit of the plan participants,pursuant to FASB EITF 97-14, shares of Company common stock held in this RabbiTrust are classified as equity in a manner similar to the manner in whichtreasury stock is accounted for.**

 

# **The Company does not currently haveany publicly announced plan or program to repurchase its own common stock.  However, because the shares purchased by theRabbi Trust are treated as treasury stock for certain accounting purposes, thefollowing table summarizes the market purchases of the Company’s common stockfor the Rabbi Trust made by the plan trustee, REDW Trust Co., during thequarter ended June 30, 2004:**

 
| ** **                           | ** ** | **(a) Total  Number  of Shares** | ** ** | **(b) Average  Price Paid per  Share  (includes  commissions)** | ** ** | **(c) Total Number  of Shares  Purchased as  Part of Publicly  Announced Plan  or Program  (not applicable)** | ** ** | **(d) Maximum  Number of Shares  that May Yet Be  Purchased Under  the Plan or  Program  (not applicable)** | ** ** |
|--------------------------------------|------------|----------------------------------|------------|-----------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|
|                                 |       |                             |       |                                                            |       |                                                                                                          |       |                                                                                                        |       |
| April 1  to April 30, 2004 |       | 1,071                            |       | $                                                               | 14.28      |                                                                                                          |       |                                                                                                        |       |   |
| May  1 to May 31, 2004               |       | 400                              |       | 14.74                                                           |       |                                                                                                          |       |                                                                                                        |       |
| June 1  to June 30, 2004   |       | 360                              |       | 14.95                                                           |       |                                                                                                          |       |                                                                                                        |       |
| Total                                |       | 1,831                            |       |                                                            |       |                                                                                                          |       |                                                                                                        |       |
|                                      |            |                                  |            |                                                                 |            |                                                                                                               |            |                                                                                                             |            |  |

 

26

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# **As part of a plan to diversify planassets, REDW Trust Co. stopped purchasing any additional shares of Companycommon stock after June 18, 2004 and made the following described sales ofCompany common stock on the open market. On June 22, 2004, 100 shares were sold at a price (not includingcommissions) of $13.95 per share, and 1,900 shares were sold at a price of$13.98 per share.  REDW Trust Co. paidcommissions of $8.08 and $27.99 to Charles Schwab International (“Schwab”) forthe sale transactions.  As ofJune 30, 2004, the total number of shares of Company stock held in theRabbi Trust was 68,625.   In addition, REDWTrust Co. sold 1,000 shares at a price of $14.09 on July 12, 2004; 1,000shares at a price of $14.11 on July 13, 2004; and 395 shares at a price of$14.02 on July 20, 2004, and paid the following corresponding commissionsto Schwab:  $9.95, $9.95 and $9.95.  All proceeds from the sale transactions weredeposited into the Rabbi Trust and are being invested by the trustee for thebenefit of plan participants in accordance with the trust agreement.**

# ** **

The sales of Companystock held in the Rabbi Trust were made in reliance on Section 4(1) of theSecurities Act of 1933 because the sales were made by the trustee, REDW TrustCo., as a separate person from the Company.

 

# **Item 3 – Defaults Upon Senior Securities**

 

# **None**

# ** **

# **Item 4 – Submission of Matters to a Vote of SecurityHolders**

 

# **The Company held an annual meetingof stockholders on April 30, 2004. The following table sets forth certain information relating to each ofthe matters voted upon at the meeting.**

 

| ** ** | **Matters Voted Upon**                                                        | ** ** | **For**   | ** ** | **Against or  Withheld** | ** ** | **Abstentions** | ** ** | **Broker Non-  Votes** | ** ** |
|------------|-------------------------------------------------------------------------------|------------|-----------|------------|--------------------------|------------|-----------------|------------|------------------------|------------|
|       |                                                                          |       |      |       |                     |       |            |       |                   |       |
| 1.         | Election  of Directors                                                        |       |      |       |                     |       |            |       |                   |       |
|       | Richard  H. Harding                                                           |       | 1,220,995 |       | 14,641                   |       | *               |       | *                      |       |
|       | Ken  Huey, Jr.                                                                |       | 1,220,995 |       | 14,641                   |       | *               |       | *                      |       |
|       | Thomas  W. Martin, III                                                        |       | 1,220,992 |       | 14,644                   |       | *               |       | *                      |       |
| 2.         | Selection  of KPMG LLP as independent public accountants for the current year |       | 1,218,843 |       | 13,734                   |       | 3,059           |       | *                      |       |

 

----

* Not applicable or notreadily available

 

27

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# **Item 5 – Other Information**

 

# **None**

 

# **Item 6 – Exhibits and Reports on Form 8-K**

 

| (a)    | Exhibits                                                                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                         |
|   | 2.2.1  Addendum dated May 1, 2004 to Branch  Purchase and Deposit Assumption Agreement between Matrix Capital Bank and  FirstBank (predecessor to AccessBank) (incorporated by reference from Exhibit  2.21 to the Company’s Form 8-K/A filed July 13, 2004.) |
|   |                                                                                                                                                                                                                                                                         |
|   | 2.3 Branch Purchase and  Deposit Assumption Agreement dated July 7, 2004 between Matrix Capital  Bank, a federal savings bank, and AccessBank, a federal savings bank                                                                                                   |
|   |                                                                                                                                                                                                                                                                         |
|   | 10.3.7 Amendment Number  Seven to Profit Sharing and Employee Stock Ownership Plan of FirstBank                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                         |
|   | 10.6.4 Extension of  Employment Agreement with Kenneth J. Huey, Jr. dated July 30, 2004                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                         |
|   | 31.1 Certification of  Chief Executive Officer as adopted pursuant to section 302 of the  Sarbanes-Oxley Act of 2002                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                         |
|   | 31.2 Certification of  Chief Financial Officer as adopted pursuant to section 302 of the  Sarbanes-Oxley Act of 2002                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                         |
|   | 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                                                                                                           |
|   |                                                                                                                                                                                                                                                                         |
| (b)    | Reports on Form 8-K.                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                         |
|   | 1.  On April 30, 2004 the Company  furnished a Form 8-K to announce its unaudited results of operations for the  three months ended March 31, 2004.                                                                                                           |
|   |                                                                                                                                                                                                                                                                         |
|   | 2.  On April 30, 2004 the Company filed a  Form 8-K to announce the election of a new director by the board.                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                         |
|   | 3.  On May 14, 2004 the Company filed a Form  8-K to announce the consummation on May 1, 2004 of the acquisition of certain  assets by the Bank pursuant to a Branch Purchase and Deposit Assumption  Agreement.                                                        |

 

28

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|   | 4.  On July 7, 2004 the Company filed a  Form 8-K to announce that the Bank reached an agreement to acquire a Matrix  Capital Bank branch in Sun City, Arizona.                                                                                                                               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                    |
|   | 5.  On July 13, 2004 the Company filed an  amended Form 8-K/A to file financial statements and pro forma financial  information related to the consummation on May 1, 2004 of the acquisition of  certain assets by the Bank pursuant to a Branch Purchase and Deposit  Assumption Agreement. |
|   |                                                                                                                                                                                                                                                                                                    |
|   | 6.  On July 30, 2004, the Company  furnished a Form 8-K to announce its unaudited results of operations for the  six months ended June 30, 2004.                                                                                                                                         |

 

29

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# **SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the Registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.

 

 
|                             |                  | ACCESS ANYTIME BANCORP,  INC.                   |
|----------------------------------|-----------------------|-------------------------------------------------|
|                             |                  |                                            |
|                             |                  |                                            |
| Date:  August 12, 2004 | /s/ Norman R. Corzine |                                            |
|                             |                  | Norman  R. Corzine, Chairman of the Board,      |
|                             |                  | Chief  Executive Officer                        |
|                             |                  | *(Duly Authorized  Representative)*             |
|                             |                  |                                            |
|                             |                  |                                            |
| Date:  August 12, 2004 | /s/ Ken Huey, Jr.     |                                            |
|                             |                  | Ken Huey, Jr., Chief  Financial Officer         |
|                             |                  | Director                                        |
|                             |                  | *(Principal Financial and  Accounting Officer)* |
|                             |                  | *(Duly Authorized  Representative)*             |
|                             |                  |                                            |
| Date:  August 12, 2004 | /s/ Don K. Padgett    |                                            |
|                             |                  | Don K. Padgett,  President                      |
|                             |                  | Director                                        |
|                             |                  | *(Duly Authorized  Representative)*             |
|                                  |                       |                                                 |  |  |

 

30

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