Attached files
file | filename |
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EX-31.2 - Manasota Group, Inc. | v203595_ex31-2.htm |
EX-31.1 - Manasota Group, Inc. | v203595_ex31-1.htm |
EX-32.2 - Manasota Group, Inc. | v203595_ex32-2.htm |
EX-32.1 - Manasota Group, Inc. | v203595_ex32-1.htm |
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
|
|
September
30, 2010 and 2009
|
4
|
Consolidated
Statements of Cash Flows for the Nine Months Ended
|
|
September
30, 2010 and 2009
|
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
September 30,
2010
(Unaudited)
|
December 31,
2009
|
|||||||
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,
|
||||||||
2010
|
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
ended September 30,
2010
|
For the nine months
ended September 30,
2009
|
|||||||
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
|
||||||||||||||||||||||
Balance,
December 31, 2008
|
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 | ||||||||||||||||||||||||||
Balance,
September 30, 2009
|
1,770,139 | $ | 18,099 | $ | (479,393 | ) | $ | 10,413,214 | $ | (2,483,305 | ) | $ | (240,405 | ) | $ | 7,228,210 | ||||||||||||
Balance,
December 31, 2009
|
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
|
— | — | ||||||||||||||||||||||||||
Balance,
September 30, 2010
|
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.
/s/ Charles S. Conoley
|
|
Charles
S. Conoley
|
|
President
and Chief Executive Officer
|
|
(Principal
Executive Officer)
|
|
/s/ Kathleen M. Jepson
|
|
Kathleen
M. Jepson
|
|
Acting
Chief Financial Officer
|
|
(Principal
Financial and Accounting Officer)
|
Date:
November 22, 2010
11