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




2


PART
I - FINANCIAL INFORMATION




Item 1. Financial
Statements.





HORIZON
BANCORPORATION, INC.


Consolidated
Balance Sheets





September 30,
                        2010
                        (Unaudited)
                      
                      
                      December 31,
                        2009ASSETSCash
      and cash equivalentsCash
      and due from banks
                      
                      $
                      193
                      
                      
                      $
                      9,719,,612Federal
      funds sold
                      
                      
                      —
                      
                      
                      
                      —Total
      cash and cash equivalents
                      
                      
                      193
                      
                      
                      
                      9,719,612Securities:Held
      to maturity, at amortized cost
                      
                      
                      —
                      
                      
                      
                      11,462,744Available-for-sale
      at fair value
                      
                      
                      —
                      
                      
                      
                      13,080,811Loans
      held for sale
                      
                      
                      —
                      
                      
                      
                      1,262,199Loans
      receivable, net
                      
                      
                      —
                      
                      
                      
                      151,127,759Property
      and equipment, net
                      
                      
                      1,272,588
                      
                      
                      
                      3,698,502Other
      real estate owned
                      
                      
                      —
                      
                      
                      
                      2,579,138Other
      assets
                      
                      
                      —
                      
                      
                      
                      6,568,241$
                      1,272,781
                      
                      
                      $
                      199,499,006LiabilitiesDepositsNoninterest-bearing
                      
                      $
                      —
                      
                      
                      $
                      9,686,614Interest-bearing
                      
                      
                      —
                      
                      
                      
                      164,889,658Total
      deposits
                      
                      
                      —
                      
                      
                      $
                      174,576,272Federal
      Home Loan Bank borrowings
                      
                      
                      —
                      
                      
                      
                      18,000,000Dividends
      Payable
                      
                      
                      —
                      
                      
                      
                      —Note
      Payable
                      
                      
                      969,066
                      
                      
                      
                      1,065,205Other
      liabilities
                      
                      
                      91,000
                      
                      
                      
                      190,368Total
      liabilities
                      
                      
                      1,060,066
                      
                      
                      
                      193,831,845Shareholders'
      equityPreferred
      stock, $.01 par value 1,000,000 shares authorized; none
      outstandingTreasury
      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
                      
                      
                      
                      18,099Additional
      paid in capital
                      
                      
                      10,428,214
                      
                      
                      
                      10,428,214Retained
      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
                  
                  
                  2009Interest
      incomeInterest
      and fees on loans
                  
                  $
                  —
                  
                  
                  $
                  7,870,732Interest
      on investment securities
                  
                  
                  —
                  
                  
                  
                  1,191,259Interest
      on federal funds
                  
                  
                  —
                  
                  
                  
                  3,455Total
      interest income
                  
                  
                  —
                  
                  
                  
                  9,065,446Interest
      expenseInterest
      on deposits
                  
                  
                  —
                  
                  
                  
                  3,635,155Interest
      on borrowings
                  
                  
                  42,037
                  
                  
                  
                  836,305Total
      interest expense
                  
                  
                  42,037
                  
                  
                  
                  4,471,460Net
      interest income
                  
                  
                  (42,037
                  )
                  
                  
                  4,593,986Provision
      for loan losses
                  
                  
                  —
                  
                  
                  
                  8,791,842Net
      interest income after provision for loan losses
                  
                  
                  (42,037
                  )
                  
                  
                  (4,197,856
                  )Noninterest
      incomeGain
      on sales of loans
                  
                  
                  —
                  
                  
                  
                  302,337Gain
      on sale of servicing
                  
                  
                  —
                  
                  
                  
                  200,392Gain/(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
                  
                  
                  
                  7,500Recognized
      impairment of bank owned real estate
                  
                  
                  —
                  
                  
                  
                  (394,279
                  )Recognized
      loss on securities available for sale
                  
                  
                  —
                  
                  
                  
                  (1,524,534
                  )Service
      charges on deposit accounts
                  
                  
                  —
                  
                  
                  
                  54,463Miscellaneous
      , other
                  
                  
                  —
                  
                  
                  
                  180,409Total
      noninterest income
                  
                  
                  (5,643,296
                  )
                  
                  
                  (1,177,913
                  )Noninterest
      expenseSalaries
      and benefits
                  
                  
                  —
                  
                  
                  
                  1,788,383Building
      and equipment expense
                  
                  
                  3,408
                  
                  
                  
                  704,966Professional
      fees
                  
                  
                  41,265
                  
                  
                  
                  229,425Data
      processing and software expense
                  
                  
                  —
                  
                  
                  
                  294,051Other
      noninterest expense
                  
                  
                  18,023
                  
                  
                  
                  876,847Total
      noninterest expense
                  
                  
                  62,696
                  
                  
                  
                  3,893,672Income/(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,
                    2009Cash
      flows from operating activitiesNet
      cash provided by operating activities
                  
                  $
                  (7,246,766
                  )
                  
                  $
                  499,639Cash
      flows from investing activitiesProceeds
      from sale of other assets
                  
                  
                  49,400
                  
                  
                  
                  162,969Proceeds
      from sale of loan servicing
                  
                  
                  —
                  
                  
                  
                  9,328,258Purchase
      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
                  
                  
                  —
                  
                  
                  
                  125,750Other
      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
                  )
                  
                  
                  1,015,902Cash
      flows from financing activitiesExercise
      of warrants and options
                  
                  
                  —
                  
                  
                  
                  9,312Increase
      in deposits
                  
                  
                  —
                  
                  
                  
                  7,140,343Increase/(decrease)
      in fed funds purchased
                  
                  
                  —
                  
                  
                  
                  —Increase/(decrease)
      in borrowings, net
                  
                  
                  —
                  
                  
                  
                  (3,000,000
                  )Increase/(decrease)
      in Note Payable by Parent
                  
                  
                  (96,139
                  )
                  
                  
                  240,868Net
      cash provided by financing activities
                  
                  
                  (96,139
                  )
                  
                  
                  4,390,523Net
      change in cash and cash equivalents
                  
                  
                  (9,719,419
                  )
                  
                  
                  5,906,064Cash
      and cash equivalents at beginning of period
                  
                  
                  9,719,612
                  
                  
                  
                  2,383,783Cash
      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





AccumulatedCommon
      Stock
                                                      
                                                      
                                                      Treasury
                                                      
                                                      
                                                      Paid
      in
                                                      
                                                      
                                                      Retained
                                                      
                                                      
                                                      OtherShares
                                                      
                                                      
                                                      Par Value
                                                      
                                                      
                                                      Stock
                                                      
                                                      
                                                      Capital
                                                      
                                                      
                                                      Earnings
                                                      
                                                      
                                                      Income
                                                      
                                                      
                                                      TotalBalance,
      December 31, 2008
                                                      
                                                      
                                                      1,768,446
                                                      
                                                      
                                                      $
                                                      18,082
                                                      
                                                      
                                                      
                                                      (479,393
                                                      )
                                                      
                                                      $
                                                      10,358,919
                                                      
                                                      
                                                      $
                                                      4,116,602
                                                      
                                                      
                                                      $
                                                      (1,219,680
                                                      )
                                                      
                                                      $
                                                      12,794,530Comprehensive 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
                                                      
                                                      
                                                      
                                                      979,275Total
      comprehensive income/(loss) net of tax
                                                      
                                                      
                                                      —
                                                      
                                                      
                                                      
                                                      —
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      —
                                                      
                                                      
                                                      
                                                      —
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (5,620,632
                                                      )Repurchase
      of common stock
                                                      
                                                      
                                                      1,693
                                                      
                                                      
                                                      
                                                      17
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      9,295
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      9,312Stock
      Based Compensation
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      45,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      45,000Balance,
      September 30, 2009
                                                      
                                                      
                                                      1,770,139
                                                      
                                                      
                                                      $
                                                      18,099
                                                      
                                                      
                                                      $
                                                      (479,393
                                                      )
                                                      
                                                      $
                                                      10,413,214
                                                      
                                                      
                                                      $
                                                      (2,483,305
                                                      )
                                                      
                                                      $
                                                      (240,405
                                                      )
                                                      
                                                      $
                                                      7,228,210Balance,
      December 31, 2009
                                                      
                                                      
                                                      1,770,139
                                                      
                                                      
                                                      $
                                                      18,099
                                                      
                                                      
                                                      $
                                                      (479,393
                                                      )
                                                      
                                                      $
                                                      10,428,214
                                                      
                                                      
                                                      $
                                                      (4,006,176
                                                      )
                                                      
                                                      $
                                                      (293,583
                                                      )
                                                      
                                                      $
                                                      5,667,161Comprehensive 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
                                                      
                                                      
                                                      
                                                      293,583Total
      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 Officer31.2
            Certification
      of Chief Financial Officer32.1
            Certification
      Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 200232.2
            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. ConoleyCharles
      S. ConoleyPresident
      and Chief Executive Officer(Principal
      Executive Officer)/s/ Kathleen M. JepsonKathleen
      M. JepsonActing
      Chief Financial Officer(Principal
      Financial and Accounting Officer)


Date:
November 22, 2010


11