UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 

Form 10-Q

 

☒	Quarterly report under section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2014

 

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from ______ to ______

 

Commission file number 333-71773

 

MANASOTA GROUP, INC
(Exact Name of Registrant as Specified in Its Charter)

 

Florida (State or Other Jurisdiction of Incorporation or Organization)

65-0840565 (IRS Employer Identification No.)

 

P. O. Box 14302

Bradenton, Florida 34280
(Address of Principal Executive Offices)

 

941-462-1640
(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 ☐  No ☒

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporation Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232,405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐  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 ☒

 

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 June 30, 2016: Issued 1,809,912 Shares; Outstanding: 1,770,139 Shares

 

Index

 

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013(audited)	3
	Statements of Income (Unaudited) for the Six Months Ended June 30, 2014 and 2013 and Three Months Ended June 30, 2014 and 2013	4
	Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2014 and 2013	5
	Notes to Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4.	Controls and Procedures	10
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	11
Item 1A.	Risk Factors	11
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3.	Defaults Upon Senior Securities	11
Item 4.	Mine Safety Disclosures	11
Item 5.	Other Information	11
Item 6.	Exhibits	11

 

PART I - FINANCIAL INFORMATION

 

Item 1.  Financial Statements.

 

MANASOTA GROUP, INC.

F/K/A HORIZON BANCORPORATION, INC.

Balance Sheets

 

		June 30, 2014 (Unaudited)				December 31, 2013 (Audited)
Cash		$	4,348			$	758
Property (net of accumulated depreciation of $365,469 and $351,524 respectively)			1,134,517				1,148,462
Other assets			50				10,002
Deferred tax asset, net			377,383				377,383
Total Assets		$	1,516,298			$	1,536,605
LIABILITIES & SHAREHOLDERS’(DEFICIT)
Liabilities:
Accrued expenses		$	17,826			$	41,584
Note payable			1,463,440				1,470,101
Line of Credit			16,560				23,560
Advances from related parties			50,000				50,000
Total Liabilities			1,547,826				1,585,245
Shareholders’ (Deficit):
Preferred stock, $.01 par value, 1,000,000 shares authorized; zero shares issued and outstanding			—				—
Common stock, $.01 par value, 25,000,000 shares authorized; 1,809,912 issued and 1,770,139 outstanding at June 30, 2014 and December 31, 2013.			18,099				18,099
Paid-in-capital			10,428,214				10,428,214
Accumulated (deficit)			(9,998,448	)			(10,015,560	)
			447,865				431,753
Less Treasury stock: 39,773 shares			(479,393	)			(479,393	)
Total Shareholders’ (Deficit)			(31,528	)			(48,640	)
Total Liabilities and Shareholders’ (Deficit)		$	1,516,298			$	1,536,605

 

The accompanying notes are an integral part of these financial statements

 

MANASOTA GROUP, INC.

F/K/A HORIZON BANCORPORATION, INC.

Statements of Income (Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Operating Income
Rental income		$	36,960			$	43,680			$	74,704			$	87,360
Other miscellaneous income			60				71				116				142
Total operating income			37,020				43,751			$	74,820				87,502
Operating Expenses
Interest expense on note			20,633				20,733				36,130				41,123
General administrative expenses			9,912				57,155				21,578				74,393
Total operating expenses			30,545				77,888				57,708				115,516
INCOME/(LOSS) BEFORE INCOME TAX PROVISION			6,475				(34,137	)			17,112				(28,014	)
Income tax provision/(benefit)			0				0				0				0
NET INCOME/(LOSS)		$	6,475			$	(34,137	)		$	17,112			$	(28,014	)
NET EARNINGS/(LOSS) PER BASIC AND DILUTED SHARE		$	(0.00	)		$	(0.02	)		$	0.01			$	(0.02	)
Weighted average number of shares outstanding:
Basic and Diluted			1,779,139				1,779,139				1,779,139				1,779,139

 

The accompanying notes are an integral part of these financial statements

 

MANASOTA GROUP, INC.

F/K/A HORIZON BANCORPORATION, INC

Statements of Cash Flows (Unaudited)

 

		Six Months ended June 30
		2014				2013
Cash flow from operating activities:
Net cash provided/(used) by operating activities		$	15,251			$	(4,597	)
Cash flow from investing activities:
Net cash provided by investing activities			0				0
Cash flow from financing activities:
Payment on note payable			(6,661	)			(15,092	)
Payment on related party advances			0				0
Line of credit advance/(repayment)			(5,000	)			9,040
Net cash (used) by financing activities			(11,661	)			(6,052	)
Net change in cash			3,590				(10,649	)
Cash beginning of period			758				24,135
Cash end of period		$	4,348			$	13,486
Supplemental disclosure of cash flow information:		$	36,130			$	41,123
Interest paid

 

The accompanying notes are an integral part of these financial statements

 

MANASOTA GROUP, INC.

F/K/A HORIZON BANCORPORATION, INC.

Note 1 – Basis of Presentation

 

The financial information for MANASOTA GROUP, Inc. f/k/a HORIZON BANCORPORATION, Inc, Bradenton, Florida (the “Company”) as of June 30, 2014 and for the six and three months ended June 30, 2014 and 2013 is unaudited but includes all adjustments, which, in the opinion of management are necessary in order to make the financial statements not misleading at such dates and for those periods. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and ,therefore, do not include all information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10K for the year ended December 31, 2013. Operating results for the six and three months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the entire year.

 

Note 2 - Organization and Summary of Significant Accounting Policies

 

MANASOTA GROUP, Inc. f/k/a HORIZON BANCORPORATION, Inc, Bradenton, Florida (the “Company” or “we”) was a one-bank holding company with respect to Horizon Bank, Bradenton, Florida (the “Bank”).  The Company commenced banking operations on October 25, 1999 when the Bank opened for business.  On September 10, 2010, the Company ceased to be a bank holding company when the Florida Office of Financial Regulation (the “OFR”) closed the Bank and the Federal Deposit Insurance Corporation (the “FDIC”) was appointed as receiver. The FDIC sold the Bank to the Bank of the Ozarks. The Bank was primarily engaged in the business of obtaining deposits and providing commercial, consumer, and real estate loans to the general public.  Bank deposits were each insured up to $250,000 by the FDIC subject to certain limitations. After September 10, 2010, the Company’s business consisted of owning, maintaining and holding for lease its sole asset, an approximately 7,000 square foot office building located at 900 53^rd Ave E, Bradenton, FL (the “Building”). The Building was leased to Bank of the Ozarks under a 3-year lease which expired on September 10, 2013. Subsequently the Building was leased to 1^st Manatee Bank in December of 2013 under a three year lease with an option to purchase.

 

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 June 30, 2014 and December 31, 2013, there were 1,809,912 shares Company’s common stock issued outstanding, 39,773 shares of which were held as treasury stock.  Additionally, the Company is authorized to issue up to 1.0 million shares of its $.01 par value per share preferred stock, which may be designated by the Company’s Board, without further action by the shareholders, 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.   As of June 30, 2014 and December 31, 2013, there was no designated preferred stock and no shares issued or outstanding.

 

Use of Estimates.  The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ significantly from those estimates.

 

Concentration of Credit Risk. Cash is maintained at a major financial institution and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on the accounts. As of June 30, 2014, all non-interest bearing checking accounts were FDIC insured to a limit of $250,000. The Company did not have any interest-bearing accounts at June 30, 2014 or December 31, 2013, respectively.

 

Property. The Company’s property consists of land, the Building and building improvements, and is stated at cost. The straight-line method is used in computing depreciation over the estimated useful lives of the building and improvements of 10 to 40 years. Expenditures which significantly increase values or extend useful lives are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in the current earnings.

 

The Company follows the provisions of FASB ASC Topic 360, Property, Plant and Equipment, which establishes accounting standards for the impairment of long-lived assets such as property and equipment. The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset group is less than its carrying amount, the asset is considered to be impaired. An impairment loss is recognized when management’s estimate of fair value, through outside consultation or internal assessment of value is less than its carrying amount. There were no impairment charges for the periods ended June 30, 2014 and December 31, 2013 related to these long-lived assets.

 

Line of Credit. The Company secured private financing of a $25,000 line of credit, to cover legal and administrative costs. The rate of interest associated with this line of credit is Prime Rate, as such rate is published from time to time. The line of credit matured on May 8, 2014.

 

Income Taxes. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company is no longer subject to examination by U.S. taxing authorities for years prior to 2010.

 

Sales Taxes. Amounts collected on behalf of governmental authorities for sales taxes and other similar taxes are reported on a net basis.

 

Revenue Recognition. The Company recognizes its rental revenues based on the terms on its signed lease with tenant on a straight-line basis.

 

Earnings Per Share.  Basic earnings per share are determined by dividing net income by the weighted-average number of common shares outstanding.  Diluted income per share is determined by dividing net income by the weighted average number of common shares outstanding increased by the number of common shares that would be issued assuming exercise of stock options.  This also assumes that only options with an exercise price below the existing market price will be exercised.  In computing net income per share, the Company uses the treasury stock method.

 

Subsequent Events. Management has evaluated subsequent events through October 7, 2016, the date the financial statements were issued.

 

Note 3 – Recently Issued Accounting Pronouncements

 

The Company’s management does not believe that any recent codified pronouncements by the Financial Accounting Standards Board (“FASB”) will have a material impact on the Company’s financial statements.

 

Note 4 – Going Concern

 

The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.

 

The Company sold its significant operating asset and has had no operating activity subsequent to September 29, 2015. There are no assurances that the Company will be able. in the next twelve months, to either (1) consummate a business combination transaction with a privately-owned business seeking to become a public company and, if successful in such consummation, achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) otherwise obtain additional financing through either private placements, public offerings and/or bank financing necessary to support the Company’s current working capital requirements and to retire existing liabilities and obligations, if any, on a timely basis.  To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient to support the Company, the Company will have to raise additional working capital.  No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company.

 

If, during the next twelve months, a business combination is not consummated and no additional operating capital is received, the Company will be forced to rely on existing cash on hand and upon additional funds loaned by management and/or significant stockholders to preserve the integrity of the corporate entity.  In the event, the Company is unable to acquire advances from management and/or significant stockholders, who have no legal obligation to provide any further funding, the Company may not continue its operations.

 

Note 5 – Subsequent Events

 

On September 29, 2015, the Company completed the sale of the Building and land to the lessee for a total sale price of $2,100,000. The Company recognized a gain on the sale of approximately $1.0 million. At the time of the sale, the Company paid off the principal balance of the mortgage note secured by the property and accrued interest totaling approximately $1,432,000.

 

In October 2015, the Board of Directors declared a dividend of $0.27 per share totaling approximately $490,000. The dividend was paid in November 2015.

 

Effective March 21, 2016, we issued 2,000,000 shares of the Company’s Common Stock, $.01 par value, to each of four existing shareholders for the purchase price of $.01 per share. The total consideration received by the Company was $20,000 in cash.

 

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report.

 

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Except as required by federal securities laws, we undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report.

 

Item 2: Management’s Discussion and Analysis of Financial Condition and Operations.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included in this report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results may differ materially from those anticipated in these forward-looking statements.

 

Overview.

 

The Registrant was incorporated in the State of Florida on May 27, 1998, for the purpose of becoming a bank holding company owning all of the outstanding capital stock of Horizon Bank, a commercial bank chartered under the laws of Florida and a member of the Federal Reserve System (the “Bank”). The Bank opened for business on October 25, 1999.

 

As previously reported, during October 25, 1999 through September 10, 2010, the Company acted as a one-bank holding company with respect to the Bank. On September 10, 2010, due to significant losses incurred by the Bank during 2008-2010, the Florida Office of Financial Regulation (the “OFR”) declared the Bank to be “imminently insolvent.” The Bank was closed, with the Federal Deposit Insurance Corporation (the “FDIC”) being appointed as receiver therefor, and sold to Bank of the Ozarks.

 

Pursuant to a settlement agreement with the FDIC and a three-year lease (the “Initial Building Lease”), both entered into July 11, 2011, but effective September 11, 2010, we have owned, maintained and held for rent the Building under a lease to Bank of the Ozarks for the last two years. On September 6, 2013, we entered into a new three-year lease with 1^st Manatee Bank (the “New Lease”). 1^st Manatee Bank intended to operate a branch at the Building, its establishment of the branch being subject to approval by the FDIC and the OFR. 1^st Manatee filed an application for regulatory approval on October 6, 2013, and received such approval as of December 6, 2013. Under the New Lease, the initial three-year term, and the tenant’s obligation to pay rent, began December 6, 2013. 1^st Manatee retroactively made its December rent payment in January 2014.

 

As of June 30, 2014, the Building was subject to an approximately $1.463 million first lien mortgage in favor of 1st Manatee (the “Building Note”). As of June 30, 2014, we also owed $50,000 to certain current and former directors for unsecured, payable on demand for advances made by them to the Company in 2010 (the “Advances”). The monthly rental income under the New Lease did exceed the monthly debt service under the Building Note during this three-month period, as well as through the rest of 2014 and through September 2015, when the Building was sold.

 

Subsequent to June 30, 2014, as of the date of this Report, the following events are hereby reported:

 

•

The Building was sold in September 2015. Using the approximately $538,000 in net proceeds from the sale of the Building, we (a) declared and paid, on November 2, 2015, a cash dividend of $0.27 per share of Common Stock for a total of approximately $490,000 and (b) repaid the Advances and all other outstanding accounts payable. As a result, we began fiscal year 2016 with approximately $47,000 in cash.

 

•

Effective March 21, 2016, we sold 2,000,000 shares of Common Stock to three members of our Board of Directors (Charles S. Conoley, M. Shannon Glasgow and Barclay Kirkland, D.D.S.) and Daniel D. Dinur, for the purchase price of $.01 per share in a private placement. We intend to use the proceeds from such sale, as well as any remaining proceeds from the sale of the Building, to defray the costs of restoring the Company’s compliance with the reporting requirements under the Exchange Act.

 

In the wake of the Company’s sale of the Building and the subsequent distribution of the special dividend, management began to consider the future of the Company as a viable entity. In early March 2016, management decided that it would not be in the best interest of the Company and its shareholders to cease all operations and allow the Company to become defunct, similar to the overwhelming majority of the other community bank holding companies which lost their bank subsidiaries in the Great Recession. Instead, the conclusion was reached that the Company could serve as the surviving entity in a merger or other combination with an operating company, the management of which was desirous of attaining public company status for the operating company. Such combination with the right operating company would, management believed, give our shareholders a chance to recover at least some portion of their original investment in the Company by participating in the future financial results of the chosen operating company.

 

Because any such operating company would by definition require that, at the time of the merger, the Company is a fully-reporting public company, management resolved to undertake the effort and the expense of restoring the Company’s compliance with its reporting obligations under the Exchange Act. In the absence of cash on hand or borrowing capacity to defray the cost of such restoration, the Board of Directors inquired whether any of its members would be willing to take the risk of investing in the Company cash sufficient to effect such restoration and to keep the Company compliant through fiscal 2016, there being no assurance that the Company would be able to find the right operating company and complete a merger during 2016. Three of the members of the Board of Directors, and Daniel D. Dinur, the Company’s outside corporate counsel, did then, in March 2016, invest $20,000 in the Company by purchasing shares of Common Stock at a purchase per share which exceeded the then trading price of such stock by over 200%. Mr. Conoley also agreed to continue to serve as our President and CEO without compensation through the end of 2016.

 

As of the date of this Report, management is continuing in its efforts to identify a potential merger partner whose prospects for growth and other attributes would give our shareholders the optimal chance for recovering, over time, some portion of their original investment in the Company. There is no assurance that we will identify the appropriate operating company, negotiate a fair merger deal and consummate the transaction in the near future.

 

Results of Operations.

 

Overall Net Income.

 

The Company reported net income of $17,112 for the six months ended June 30, 2014, compared to a net loss of $28,014 for the six months ended June 30, 2013. During the six months ended June 30, 2014 the Company reported decreases in legal expense of $14,919; accounting expenses of $25,950 and other professional fees of $9,618. These decreases were offset by a decrease of $12,656 in rental income. The aforementioned increases and decreases were primarily responsible for the approximately $45,000 of decrease in results for the period. Basic and diluted losses per share were $0.01 for the six months ended June 30, 2014. Basic and diluted earnings per share for the six months ended June 30, 2013 were ($0.02).

 

The Company reported net income of $6,475 for the three months ended June 30, 2014, compared to a net loss of $34,137 for the three months ended June 30, 2013 During the three months ended June 30, 2014, the Company reported decreases in legal expense of $16,040; accounting expenses of $20,000 and other professional fees of $9,618. These decreases offset by decreased rental resulted in an increase of approximately $41,000 in results for the period. Basic and diluted losses per share for the three months ended June 30, 2014 were negligible. Basic and diluted earnings per share were ($0.02) for the three months ended June 30, 2013.

 

Total Assets.

 

As of June 30, 2014, total assets of the Company were $1,516,298 compared to $1,536,650 at December 31, 2013, a decrease of $20,307.

 

Liquidity & Capital Resources

 

As of June 30, 2014, we had a working capital deficiency (total current liabilities -- which included $1,463,440 of the principal of the Building Note -- in excess of total current assets) of $1,525,741. We realized net income of $17,112 for the six months ended June 30, 2014, compared to a net loss of $28,014 for the six months ended June 30, 2013.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.

 

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (Principal Financial Officer) as appropriate, to allow timely decisions regarding required disclosure. Within the 90 days preceding the filing of this Report, we carried out an evaluation, under the supervision and with the participation of our management, including the Principal Executive Officer and the Acting Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the Exchange Act. Based on this evaluation, because of lack of segregation of duties attributable to limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of June 30, 2014.

  

Limitations on Effectiveness of Controls and Procedures.

 

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and procedures or our 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, but are not limited to, 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 of the control. The design of any system of controls also is 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.

 

Changes in Internal Controls.

 

There have been no changes in the Company’s internal control over financial reporting during the second quarter of 2014 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

 

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, 2013.

 

Item 1A.  Risk Factors.

 

Not applicable.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosure.

 

Not Applicable

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

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

 

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: October 7, 2016