AmericasBank Corp. Increases Loan Loss Allowance in Third Quarter 2006
17 October 2006 - 6:30AM
Business Wire
AmericasBank Corp. (NASDAQ:AMAB), the parent company of
AmericasBank, today announced it took a provision for loan and
lease losses of $470,000 in its quarter ending September 30, 2006.
The provision boosts the Towson-based Bank�s allowance for loan and
lease losses from $454,000 at June 30, 2006 to $916,000 at
September 30, 2006. This increases the allowance for loans and
leases as a percent of loans from 0.71% at June 30, 2006 to
approximately 1.15% at September 30, 2006. Mark H. Anders,
President and CEO of the Company said: �Our provision for loan and
lease losses in the third quarter should not be interpreted as a
significant weakening in the asset quality of the bank. There were
no new non-performing assets for the quarter. The loan loss
provision for the third quarter includes $123,000 for the nearly
$16 million in loan growth during the third quarter and $112,000 to
increase the allowance percentage on residential investment
properties to reflect the softness in the local real estate market.
The loan loss provision for the quarter also included a special
provision of $167,000 on a $588,000 land development loan that has
been on nonaccrual status since March 2005, and $68,000 for the
downgrade in the risk rating on several loans in the portfolio.�
�With respect to the land development loan on nonaccrual status,
negotiations between the contract purchaser of the property and the
municipality where the land is located have broken down, which
exposes the bank to increased risks, including the risk of our
borrower filing for bankruptcy protection and a possible
foreclosure action. Increasing our reserves at this time is prudent
in light of current events. The loans that have had been downgraded
include a commercial finance lease of $153,000 and three loans to
one borrower aggregating $600,000 secured by residential investment
properties With regard to the latter, the borrower is actively
marketing the properties securing our loans and we believe that the
proceeds from these sales should repay the debt in full. The
additional allowance on these loans reflects the heightened risk
that our loans may not be fully repaid from the sale,� said Anders.
AmericasBank Corp. plans to release its full financial results for
the three and nine months ended September 30, 2006 before the end
of October. About AmericasBank Corp. AmericasBank Corp. is the
parent company of AmericasBank, a Maryland-chartered commercial
bank headquartered in Towson, Maryland. AmericasBank is dedicated
to contributing to the growth and prosperity of the communities it
serves, with a special focus on serving the needs of the business
community and promoting home ownership. The statements in this
press release that are not historical facts constitute
"forward-looking statements" as defined by Federal Securities laws.
Such statements, regarding AmericasBank Corp.'s anticipated future
results of operations, are subject to risks and uncertainties that
could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. Potential
risks and uncertainties include, but are not limited to: the risk
that AmericasBank Corp. may continue to incur losses; the possible
loss of key personnel; the inability to successfully implement
strategic initiatives; risk of changes in interest rates, deposit
flows and loan demand; risks associated with AmericasBank�s lending
limit; risks associated with the lack of a credit facility; risk
associated with having a large percentage of residential real
estate loans secured by investment properties; risk of an industry
concentration with respect to deposits; risk of credit losses;
risks associated with residential mortgage lending, including
acting as a correspondent lender; risk associated with a slowdown
in the housing market or high interest rates; the allowance for
loan and lease losses may not be sufficient; operational risks of
the leasing companies to which AmericasBank has extended credit in
connection with the lease portfolio; dependence on third party
vendors; risk of insufficient capital; risk of possible future
regulatory action as a result of past violations of the Real Estate
Settlement Procedures Act; as well as changes in economic,
competitive, governmental, regulatory, technological and other
factors that may affect AmericasBank Corp. or AmericasBank
specifically or the banking industry generally. Forward-looking
statements speak only as of the date they are made. AmericasBank
Corp. will not update forward-looking statements to reflect factual
assumptions, circumstances or events that have changed after a
forward-looking statement was made. For further information, please
refer to the AmericasBank Corp.'s filings with the U.S. Securities
and Exchange Commission and available at their web site
www.sec.gov. AmericasBank Corp. (NASDAQ:AMAB), the parent company
of AmericasBank, today announced it took a provision for loan and
lease losses of $470,000 in its quarter ending September 30, 2006.
The provision boosts the Towson-based Bank's allowance for loan and
lease losses from $454,000 at June 30, 2006 to $916,000 at
September 30, 2006. This increases the allowance for loans and
leases as a percent of loans from 0.71% at June 30, 2006 to
approximately 1.15% at September 30, 2006. Mark H. Anders,
President and CEO of the Company said: "Our provision for loan and
lease losses in the third quarter should not be interpreted as a
significant weakening in the asset quality of the bank. There were
no new non-performing assets for the quarter. The loan loss
provision for the third quarter includes $123,000 for the nearly
$16 million in loan growth during the third quarter and $112,000 to
increase the allowance percentage on residential investment
properties to reflect the softness in the local real estate market.
The loan loss provision for the quarter also included a special
provision of $167,000 on a $588,000 land development loan that has
been on nonaccrual status since March 2005, and $68,000 for the
downgrade in the risk rating on several loans in the portfolio."
"With respect to the land development loan on nonaccrual status,
negotiations between the contract purchaser of the property and the
municipality where the land is located have broken down, which
exposes the bank to increased risks, including the risk of our
borrower filing for bankruptcy protection and a possible
foreclosure action. Increasing our reserves at this time is prudent
in light of current events. The loans that have had been downgraded
include a commercial finance lease of $153,000 and three loans to
one borrower aggregating $600,000 secured by residential investment
properties With regard to the latter, the borrower is actively
marketing the properties securing our loans and we believe that the
proceeds from these sales should repay the debt in full. The
additional allowance on these loans reflects the heightened risk
that our loans may not be fully repaid from the sale," said Anders.
AmericasBank Corp. plans to release its full financial results for
the three and nine months ended September 30, 2006 before the end
of October. About AmericasBank Corp. AmericasBank Corp. is the
parent company of AmericasBank, a Maryland-chartered commercial
bank headquartered in Towson, Maryland. AmericasBank is dedicated
to contributing to the growth and prosperity of the communities it
serves, with a special focus on serving the needs of the business
community and promoting home ownership. The statements in this
press release that are not historical facts constitute
"forward-looking statements" as defined by Federal Securities laws.
Such statements, regarding AmericasBank Corp.'s anticipated future
results of operations, are subject to risks and uncertainties that
could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. Potential
risks and uncertainties include, but are not limited to: the risk
that AmericasBank Corp. may continue to incur losses; the possible
loss of key personnel; the inability to successfully implement
strategic initiatives; risk of changes in interest rates, deposit
flows and loan demand; risks associated with AmericasBank's lending
limit; risks associated with the lack of a credit facility; risk
associated with having a large percentage of residential real
estate loans secured by investment properties; risk of an industry
concentration with respect to deposits; risk of credit losses;
risks associated with residential mortgage lending, including
acting as a correspondent lender; risk associated with a slowdown
in the housing market or high interest rates; the allowance for
loan and lease losses may not be sufficient; operational risks of
the leasing companies to which AmericasBank has extended credit in
connection with the lease portfolio; dependence on third party
vendors; risk of insufficient capital; risk of possible future
regulatory action as a result of past violations of the Real Estate
Settlement Procedures Act; as well as changes in economic,
competitive, governmental, regulatory, technological and other
factors that may affect AmericasBank Corp. or AmericasBank
specifically or the banking industry generally. Forward-looking
statements speak only as of the date they are made. AmericasBank
Corp. will not update forward-looking statements to reflect factual
assumptions, circumstances or events that have changed after a
forward-looking statement was made. For further information, please
refer to the AmericasBank Corp.'s filings with the U.S. Securities
and Exchange Commission and available at their web site
www.sec.gov.
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