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Manasota Group, Inc. – ‘10-Q’ for 9/30/10

On:  Monday, 11/22/10, at 10:45am ET   ·   For:  9/30/10   ·   Accession #:  1144204-10-62650   ·   File #:  0-50748

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/22/10  Manasota Group, Inc.              10-Q        9/30/10    5:358K                                   Vintage/FA

Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    184K 
 2: EX-31.1     Certification per Sarbanes-Oxley Act (Section 302)  HTML     15K 
 3: EX-31.2     Certification per Sarbanes-Oxley Act (Section 302)  HTML     15K 
 4: EX-32.1     Certification per Sarbanes-Oxley Act (Section 906)  HTML      8K 
 5: EX-32.2     Certification per Sarbanes-Oxley Act (Section 906)  HTML      8K 


10-Q   —   Quarterly Report


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC20549
 
Form 10-Q

x
Quarterly report under section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2010
 
¨
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from ______ to ______
 
Commission file number 333-71773

Horizon Bancorporation, Inc.
(Exact Name ofRegistrant as Specified in Its Charter)

Florida
65-0840545
(State or Other Jurisdiction of
(IRS Employer
Incorporation or Organization)
Identification No.)
 
2504 64th Street Court East
Bradenton, Florida 34208
(Address of Principal Executive Offices)
 
941-745-2101
(Registrant's Telephone Number, Including Area Code)
 
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Yes x No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act) (Check one):

Large Accelerated Filer ¨
Accelerated Filer ¨
Non-Accelerated Filer ¨
Smaller reporting company ¨
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
 
Yes ¨ No x
 
Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
 
Common Stock $0.01 Par Value as of November15, 2010: Issued 1,808,912 Shares; Outstanding: 1,770,139 Shares

 

 

Index
Part I. Financial Information
 
   
Item 1. Financial Statements (unaudited)
3
   
Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009
3
   
Consolidated Statements of Income for the Nine Months Ended
 
4
   
Consolidated Statements of Cash Flows for the Nine Months Ended
 
5
   
Consolidated Statements of Changes in Shareholders' Equity for the Nine
 
Months Ended September 30, 2010 and 2009
6
   
Notes to Consolidated Financial Statements
7
   
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations
8
   
Item 3.Quantitative and Qualitative DisclosuresAbout Market Risk
9
   
Item 4T. Controls and Procedures
9
   
Part II. Other Information
 
   
Item 1. Legal Proceedings
10
   
Item 1A. Risk Factors
10
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
10
   
Item 3. Defaults Upon Senior Securities
10
   
Item 4. Submission of Matters to a Vote of Security Holders
10
   
Item 5. Other Information
10
   
Item 6. Exhibits
10
 
 
2

 

PART I - FINANCIAL INFORMATION
 
Item 1. Financial Statements.

HORIZON BANCORPORATION, INC.
Consolidated Balance Sheets

   
(Unaudited)
     
ASSETS
           
Cash and cash equivalents
           
Cash and due from banks
  $ 193     $ 9,719,,612  
Federal funds sold
           
Total cash and cash equivalents
    193       9,719,612  
Securities:
               
Held to maturity, at amortized cost
          11,462,744  
Available-for-sale at fair value
          13,080,811  
Loans held for sale
          1,262,199  
Loans receivable, net
          151,127,759  
Property and equipment, net
    1,272,588       3,698,502  
Other real estate owned
          2,579,138  
Other assets
          6,568,241  
                 
    $ 1,272,781     $ 199,499,006  
                 
Liabilities
               
Deposits
               
Noninterest-bearing
  $     $ 9,686,614  
Interest-bearing
          164,889,658  
Total deposits
        $ 174,576,272  
Federal Home Loan Bank borrowings
          18,000,000  
Dividends Payable
           
Note Payable
    969,066       1,065,205  
Other liabilities
    91,000       190,368  
Total liabilities
    1,060,066       193,831,845  
                 
Shareholders' equity
               
Preferred stock, $.01 par value 1,000,000 shares authorized; none outstanding
               
Treasury stock outstanding 39,733 shares at September 30, 2010 and  39,773 shares at December 31, 2009
    (479,393 )     (479,393 )
Common stock, $.01 par value 25,000,000 shares authorized; 1,809,912 Issued and 1,770,139 outstanding at September 30, 2010 and at December 31, 2009
    18,099       18,099  
                 
Additional paid in capital
    10,428,214       10,428,214  
Retained earnings
    (9,754,205 )     (4,006,176 )
Accumulated other comprehensive income (loss), net of tax
          (293,583 )
Total shareholders' equity
    212,715       5,667,161  
                 
    $ 1,272,781     $ 199,499,006  

See accompanying notes to the financial statements

 
3

 

HORIZON BANCORPORATION, INC.
Consolidated Statements of Income (Unaudited)

   
Nine Months Ended September 30,
 
       
2009
 
Interest income
           
Interest and fees on loans
  $     $ 7,870,732  
Interest on investment securities
          1,191,259  
Interest on federal funds
          3,455  
Total interest income
          9,065,446  
Interest expense
               
Interest on deposits
          3,635,155  
Interest on borrowings
    42,037       836,305  
Total interest expense
    42,037       4,471,460  
Net interest income
    (42,037 )     4,593,986  
Provision for loan losses
          8,791,842  
Net interest income after provision for loan losses
    (42,037 )     (4,197,856 )
Noninterest income
               
Gain on sales of loans
          302,337  
Gain on sale of servicing
          200,392  
Gain/(loss) on sale of repossessed assets
          (4,201 )
Loss on closure of subsidiary
    (5,692,696 )        
Gain on sale of other assets, net
    49,400       7,500  
Recognized impairment of bank owned real estate
          (394,279 )
Recognized loss on securities available for sale
          (1,524,534 )
Service charges on deposit accounts
          54,463  
Miscellaneous , other
          180,409  
Total noninterest income
    (5,643,296 )     (1,177,913 )
Noninterest expense
               
Salaries and benefits
          1,788,383  
Building and equipment expense
    3,408       704,966  
Professional fees
    41,265       229,425  
Data processing and software expense
          294,051  
Other noninterest expense
    18,023       876,847  
Total noninterest expense
    62,696       3,893,672  
Income/(loss) before income taxes
    (5,748,029 )     (9,269,441 )
Income tax expense
          (2,669,534 )
Net Income/(loss)
  $ (5,748,029 )   $ (6,599,907 )
Basic earnings/(loss) per share
  $ (3.25 )   $ (3.73 )
Diluted earnings per share
  $ (3.25 )   $ (3.71 )

See accompanying notes to the financial statements

 
4

 

HORIZON BANCORPORATION, INC.
Consolidated Statements of Cash Flows (Unaudited)

   
For the nine months
   
For the nine months
 
Cash flows from operating activities
           
Net cash provided by operating activities
  $ (7,246,766 )   $ 499,639  
Cash flows from investing activities
               
Proceeds from sale of other assets
    49,400       162,969  
Proceeds from sale of loan servicing
          9,328,258  
Purchase of securities held to maturity
          (1,019,875 )
Purchase of securities available for sale
          (500,000 )
Proceeds from maturities and principal repayments of securities available for sale
          2,508,836  
(Purchase)/Repayment of Federal Home Loan Bank Stock
          125,750  
Other real estate owned
          (155,970 )
Increase in funded loans held for sale
          (6,825,529 )
Loan originations, net
          (2,392,428 )
Property and equipment expenditures, net
    (2,425,914 )     (216,109 )
Net cash provided (used) by investing activities
    (2,376,514 )     1,015,902  
Cash flows from financing activities
               
Exercise of warrants and options
          9,312  
Increase in deposits
          7,140,343  
Increase/(decrease) in fed funds purchased
           
Increase/(decrease) in borrowings, net
          (3,000,000 )
Increase/(decrease) in Note Payable by Parent
    (96,139 )     240,868  
                 
Net cash provided by financing activities
    (96,139 )     4,390,523  
Net change in cash and cash equivalents
    (9,719,419 )     5,906,064  
Cash and cash equivalents at beginning of period
    9,719,612       2,383,783  
Cash and cash equivalents at end of period
  $ 193     $ 8,289,847  

See accompanying notes to the financial statements

 
5

 

HORIZON BANCORPORATION, INC.
Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
for the nine-month periods ended September 30, 2010 and 2009

                           
Accumulated
       
   
Common Stock
   
Treasury
   
Paid in
   
Retained
   
Other
       
   
Shares
   
Par Value
   
Stock
   
Capital
   
Earnings
   
Income
   
Total
 
    1,768,446     $ 18,082       (479,393 )   $ 10,358,919     $ 4,116,602     $ (1,219,680 )   $ 12,794,530  
Comprehensive Income:
                                                       
Net income, nine-month period ended September 30, 2009
                              (6,599,907 )           (6,599,907 )
Net unrealized loss on securities, nine-month period ended September 30, 2009
                                      979,275       979,275  
Total comprehensive income/(loss) net of tax
                                            (5,620,632 )
                                                         
Repurchase of common stock
    1,693       17       -       9,295                       9,312  
Stock Based Compensation
                            45,000                       45,000  
    1,770,139     $ 18,099     $ (479,393 )   $ 10,413,214     $ (2,483,305 )   $ (240,405 )   $ 7,228,210  
                                                         
    1,770,139     $ 18,099     $ (479,393 )   $ 10,428,214     $ (4,006,176 )   $ (293,583 )   $ 5,667,161  
Comprehensive Income:
                                                       
Net income, nine-month period ended September 30, 2010
                              (5,748,029           (5,748,029 )
Net unrealized gain on securities, nine-month period ended September 30, 2010
                                      293,583       293,583  
Total comprehensive income/(loss) net of tax
                                            (5,454,446 )
                                                         
Stock Based Compensation
                                                   
    1,770,139     $ 18,099     $ (479,393 )   $ 10,428,214     $ (9,754,205 )   $     $ 212,715  
 
 
6

 

HORIZON BANCORPORATION, INC.
Notes to the Consolidated Financial Statements (Unaudited)

NOTE 1 – SUMMARY OF ORGANIZATION

Horizon Bancorporation, Inc., Bradenton, Florida (the "Company"), acted as a one-bank holding company with respect to Horizon Bank, Bradenton, Florida (the "Bank"), from October 25, 1999 when the Bank commenced operations, until September 10, 2010, when the Florida Office of Financial Regulation (the “OFR”) declared the Bank to be insolvent and closed the Bank and the FDIC was appointed as receiver therefor.

The Company is authorized to issue up to 25.0 million shares of its $.01 par value per share common stock. Each share is entitled to one vote and shareholders have no preemptive or conversion rights. As of September 30, 2010, and December 31, 2009, there were 1,809,912shares issued.As of September 30, 2010and December 31, 2009 there were1,770,139shares outstanding. Additionally, the Company has authorized the issuance of up to 1.0 million shares of its $.01 par value per share preferred stock. The Company's Board of Directors may, without further action by the shareholders, direct the issuance of preferred stock for any proper corporate purpose with preferences, voting powers, conversion rights, qualifications, special or relative rights and privileges which could adversely affect the voting power or other rights of shareholders of common stock. Effective October 22, 2009, the Board of Directors did designate, by amending the Company’s Articles of Incorporation, a series of preferred stock. The series, designated as Series A Preferred Stock, consists of 5,000 shares with a liquidation preference of $1,000 per share. As of September 30, 2010, and December 31, 2009, there were no shares of the Company's preferred stock issued or outstanding.

NOTE 2 - GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future, and do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets, and the amounts of classification of liabilities that may result from the outcome of any regulatory action including being placed

 
7

 

Item 2: Management's Discussion and Analysis of Financial Condition and Operations
Forward Looking Statements
 
This Quarterly Report on Form 10-Q contains or incorporates by reference statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “anticipate,” “assume,” “believe,” “continue,” “could,” “would,” “endeavor,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and other similar words and expressions of future intent.
 
The cautionary statements in this Quarterly Report on Form 10-Q also identify important factors and possible events that involve risk and uncertainties that could cause our actual results to differ materially from those contained in the forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made. We do not intend, and undertake no obligation, to update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.
 
Readers should carefully review all disclosures we file from time to time with the SEC.

Overview

Until September 10, 2010 the Company served as the holding company for the Bank. The Bank’s business activities consisted of attracting deposits from the general public and using these funds to originate consumer, commercial, and real estate loans, from its four offices, two in Bradenton, Florida, one in Brandon, Florida and one in Palmetto, Florida.

On September 10, 2010, the OFRclosed the Bank and the FDIC was appointed a receiver for the Bank’s assets and liabilities.

The Company’s sole significant asset is the building at 900 53rd Avenue East, Bradenton, Florida, containing its former head office and the Bank’s main branch. The building is subject to an approximately $969,000 mortgage held by 1stManatee Bank securing a promissory note. Management’s immediate plan is to sell the building and pay off the 1st Manatee loan.

The Company has filed for, but has not yet received, approximately $1.6 million in income tax refunds from the Internal Revenue Service. The FDIC as the receiver for the Bank has claimed that the refunds belong to the Bank. The Company believes that only a portion, if any, of such refunds should inure to the benefit of the Bank and intends to assert its rights thereto. In addition, the Company’s net loss in 2010 is expected to result in an income tax refund which would clearly inure to the benefit of the Company. The amount of such refund, if any, will be determined in 2011.

In the short run, management intends to maintain the Company’s status as a reporting public company and engage in a transaction with an operating company. There is no assurance that we will be able to maintain such status and consummate any such transaction.

Results of Operations

Overall Net Income/Loss

For the nine months ended September 30, 2010, the Company reported a net loss of $5,748,000, compared to a net loss of $6,600,000 for the same period in 2009. Basic and diluted loss per share were $3.25 for the nine months ended September 30, 2010, compared to losses of $3.73 and $3.71, respectively, for the nine months ended September 30, 2009. The loss is attributable almost entirely, to the extent of $5,693,000, to the closure of the Bank.

 
8

 

Balance Sheet Analysis

Total Assets

As of September 30, 2010, total assets of the Company were$1,272,781, compared to $199,499,006 at December 31, 2009, a decrease of $198.2 million. The decrease is primarily due to the closure of the Bank.

Item 3: Quantitative and Qualitative Disclosure About Market Risk

Not applicable.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon management’s evaluation of those controls and procedures performed within the 90 days preceding the filing of this Report, the Chief Executive Officer and Chief Financial Officer of the Company concluded that, subject to the limitations noted below, the Company’s disclosure controls and procedures (as defined in Rule 13a-14 under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
 
Changes in Internal ControlsOver Financial Reporting.
 
There have been no changes in the Company’s internal control over financial reporting during the first nine months of 2010 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Limitations on the Effectiveness of Controls
 
Our management (including our Chief Executive Officer and Chief Financial Officer) does not expect that our financial reporting, disclosure controls and other internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override or the control.
 
The design of the system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 
9

 

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes to the pending legal proceedings to which the Company or the Bank is a party since the filing of the Registrant’s Form 10-K for the year ended December 31, 2009.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
Not Applicable.
 
Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

31.1
Certification of Chief Executive Officer
   
31.2
Certification of Chief Financial Officer
   
32.1
Certification 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 the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
10

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
Charles S. Conoley
 
President and Chief Executive Officer
 
(Principal Executive Officer)
   
 
 
Kathleen M. Jepson
 
Acting Chief Financial Officer
 
(Principal Financial and Accounting Officer)
Date: November 22, 2010

 
11

 

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
Filed on:11/22/10
For Period End:9/30/10NT 10-Q
9/10/108-K
12/31/0910-K,  NT 10-K
10/22/09
9/30/0910-Q
12/31/0810-K
10/25/99
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