##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION  FORM 10-QSB [X]
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004[  ]
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934FOR THE TRANSITION REPORT
FROMTO
 Commission file number 0-23619 Tarpon Coast Bancorp,
Inc.   Florida
    
    65-0772718(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 1490 Tamiami Trail
Port Charlotte, FL
33948   941-629-8111   Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant, as required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
[X] No [  ] State the number of shares outstanding of each of the issuers classes of
common equity as of the latest practicable date. Class
    
    Outstanding as of October 25, 2004Common Stock, $.01 par value
    
    
    1,182,151
 Transitional Small Business
Disclosure
Format:          Yes
[  ] No [X]




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TARPON COAST BANCORP, INC. INDEX PART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsBalance Sheets as of September 30, 2004 and December 31, 2003
    
    
    1Statements of Operations for the Three Months
Ended September 30, 2004 and 2003
    
    
    2Statements of Operations for the Nine Months
Ended September 30, 2004 and 2003
    
    
    3Statements of Cash Flows for the Nine Months
Ended September 30, 2004 and 2003
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis
    
    
    7Item 3. Controls and Procedures
    
    
    11PART II  OTHER INFORMATIONItem 4. Submission of Matters to a Vote of Security Holders
    
    
    12Item 6. Exhibits and Reports on Form 8-K
    
    
    12SIGNATURES
    
    
    13EXHIBITS
    
    
    14Ex-31.1 Section 302 CEO CertificationEx-31.2 Section 302 President CertificationEx-31.3 Section 302 CFO CertificationEx-32.1 Section 906 CEO CertificationEx-32.2 Section 906 President CertificationEx-32.3 Section 906 CFO Certification




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##### Table of Contents



PART I  FINANCIAL INFORMATION TARPON COAST BANCORP, INC. AND SUBSIDIARIES 
   September 30, 2004
    
    December 31, 2003(Unaudited)ASSETSCash and due from banks
    
    $
    6,383
    
    
    $
    8,039Federal funds sold
    
    
    8,204
    
    
    
    4,425Total cash and cash equivalents
    
    
    14,587
    
    
    
    12,464Securities available for sale
    
    
    17,386
    
    
    
    20,437Loans
    
    
    101,064
    
    
    
    83,708Less allowance for loan losses
    
    
    (1,102
    )
    
    
    (1,007
    )Net loans
    
    
    99,962
    
    
    
    82,701Premises and equipment, net
    
    
    5,366
    
    
    
    5,320Accrued interest & other assets
    
    
    1,649
    
    
    
    1,635Total assets
    
    $
    138,950
    
    
    $
    122,557LIABILITIES AND SHAREHOLDERS EQUITYDeposits:Non-interest bearing
    
    $
    26,247
    
    
    $
    17,279Interest bearing
    
    
    97,742
    
    
    
    94,673Total deposits
    
    
    123,989
    
    
    
    111,952Retail Repurchase Agreements
    
    
    4,245
    
    
    
    624Accrued interest & other liabilities
    
    
    267
    
    
    
    83Total liabilities
    
    
    128,501
    
    
    
    112,659Shareholders equity:Common stock, par value $.01 per share,
10,000,000 shares authorized; 1,182,151 shares
issued and outstanding
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    10,941
    
    
    
    10,941Deficit
    
    
    (531
    )
    
    
    (970
    )Unrealized gain (loss) on securities available for sale
    
    
    27
    
    
    
    (85
    )Total shareholders equity
    
    
    10,449
    
    
    
    9,898Total liabilities and shareholders equity
    
    $
    138,950
    
    
    $
    122,557
 See accompanying notes to financial statements. 1




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TARPON COAST BANCORP, INC. AND SUBSIDIARIES 
    Three months ended September 30,2004
    
    2003Interest income:Interest and fees on loans
    
    $
    1,516
    
    
    $
    1,321Interest on securities
    
    
    226
    
    
    
    192Interest on federal funds sold
    
    
    12
    
    
    
    14Total interest income
    
    
    1,754
    
    
    
    1,527Interest expense:Interest on deposits
    
    
    287
    
    
    
    399Interest on repurchase agreements
    
    
    6
    
    
    
    5Total interest expense
    
    
    293
    
    
    
    404Net interest income
    
    
    1,461
    
    
    
    1,123Provision for loan losses
    
    
    33
    
    
    
    22Net interest income after
provision for loan losses
    
    
    1,428
    
    
    
    1,101Non-interest income
    
    
    278
    
    
    
    418Non-interest expense:Salaries and benefits
    
    
    791
    
    
    
    768Occupancy and equipment expense
    
    
    208
    
    
    
    200Other expense
    
    
    493
    
    
    
    347Total non-interest expense
    
    
    1,492
    
    
    
    1,315Income before income taxes
    
    
    214
    
    
    
    204Income (taxes) benefit
    
    
    (85
    )
    
    
    65Net income
    
    
    129
    
    
    
    269Other comprehensive income (loss)
    
    
    642
    
    
    
    (171
    )Comprehensive income (loss)
    
    $
    771
    
    
    $
    98Earnings per share:Basic
    
    $
    0.11
    
    
    $
    0.23Diluted
    
    $
    0.11
    
    
    $
    0.22Weighted average shares outstanding:Basic
    
    
    1,182,151
    
    
    
    1,182,151Diluted
    
    
    1,225,974
    
    
    
    1,199,322
 See accompanying notes to financial statements. 2




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TARPON COAST BANCORP, INC. AND SUBSIDIARIES 
    Nine months ended September 30,2004
    
    2003Interest income:Interest and fees on loans
    
    $
    4,223
    
    
    $
    3,891Interest on securities
    
    
    692
    
    
    
    562Interest on federal funds sold
    
    
    20
    
    
    
    32Total interest income
    
    
    4,935
    
    
    
    4,485Interest expense:Interest on deposits
    
    
    834
    
    
    
    1,242Interest on repurchase agreements
    
    
    14
    
    
    
    13Total interest expense
    
    
    848
    
    
    
    1,255Net interest income
    
    
    4,087
    
    
    
    3,230Provision for loan losses
    
    
    97
    
    
    
    191Net interest income after
provision for loan losses
    
    
    3,990
    
    
    
    3,039Non-interest income
    
    
    959
    
    
    
    1,346Non-interest expense:Salaries and benefits
    
    
    2,337
    
    
    
    2,331Occupancy and equipment expense
    
    
    646
    
    
    
    601Other expense
    
    
    1,238
    
    
    
    1,016Total non-interest expense
    
    
    4,221
    
    
    
    3,948Income before income taxes
    
    
    728
    
    
    
    437Income (taxes) benefit
    
    
    (289
    )
    
    
    265Net income
    
    
    439
    
    
    
    702Other comprehensive income (loss)
    
    
    112
    
    
    
    (226
    )Comprehensive income (loss)
    
    $
    551
    
    
    $
    476Earnings per share:Basic
    
    $
    0.37
    
    
    $
    0.59Diluted
    
    $
    0.36
    
    
    $
    0.59Weighted average shares outstanding:Basic
    
    
    1,182,151
    
    
    
    1,182,151Diluted
    
    
    1,225,974
    
    
    
    1,199,322
 See accompanying notes to financial statements. 3




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TARPON COAST BANCORP, INC. AND SUBSIDIARIES 
    Nine months ended september 30,2004
    
    2003Cash flows from operating activities:Net income
    
    $
    439
    
    
    $
    702Adjustments to reconcile net income to net
cash provided by (used in) operating activities:Depreciation
    
    
    247
    
    
    
    285Provision for loan losses
    
    
    97
    
    
    
    191Deferred tax provision (benefit)
    
    
    289
    
    
    
    (265
    )(Increase) Decrease in accrued interest
and other assets
    
    
    (197
    )
    
    
    (160
    )Increase (Decrease) in accrued interest
and other liabilities
    
    
    184
    
    
    
    (340
    )Total adjustments
    
    
    620
    
    
    
    (289
    )Net cash provided by operating activities
    
    
    1,059
    
    
    
    413Cash flows from investing activities:Net increase in loans
    
    
    (17,358
    )
    
    
    (11,590
    )Purchases of securities available for sale
    
    
    (963
    )
    
    
    (16,834
    )Maturities of securities available for sale
    
    
    4,185
    
    
    
    9,145Purchase of restricted securities
    
    
    (165
    )Purchases of premises and equipment
    
    
    (293
    )
    
    
    (32
    )Net cash used in investing activities
    
    
    (14,594
    )
    
    
    (19,311
    )Cash flows from financing activities:Increase in deposits
    
    
    12,037
    
    
    
    23,328Increase in retail repurchase agreements
    
    
    3,621
    
    
    
    914Net cash provided by financing activities
    
    
    15,658
    
    
    
    24,242Increase (Decrease) in cash and cash equivalents
    
    
    2,123
    
    
    
    5,344Cash and cash equivalents, beginning of period
    
    
    12,464
    
    
    
    8,053Cash and cash equivalents, end of period
    
    $
    14,587
    
    
    
    13,397Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    857
    
    
    $
    1,260Cash paid during the period for income taxes
    
    $
    
    
    
    $
    
 See accompanying notes to financial statements. 4




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TARPON COAST BANCORP, INC. AND SUBSIDIARIES 
   NOTE A  ORGANIZATION AND BASIS OF PRESENTATION: Organization: Tarpon Coast Bancorp, Inc. (the Company) was incorporated under the laws
of the state of Florida on August 7, 1997. Effective June 1, 1998, the
Companys wholly owned subsidiary, Tarpon Coast National Bank (the Bank)
received federal regulatory approval to commence its banking operations.
Contemporaneously, the Company became a registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Also effective June 1, 1998,
the Bank received approval from the Federal Deposit Insurance Corporation (the
FDIC) for deposit insurance. In 2000, the Company formed Tarpon Coast
Financial Services, Inc. as a wholly owned subsidiary of the Bank for the
purpose of selling insurance and investment products. Basis of Presentation: The accompanying unaudited consolidated financial statements include the
accounts of the Company and its subsidiaries. All inter-company accounts and
transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary have been made for the fair presentation of the
Companys consolidated financial position and results of operations. Operating
results for the three-month and nine-month periods ended September 30, 2004 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2004. Earnings per Share: Basic earnings per common share are net income divided by the weighted
average number of common shares outstanding during the period. Diluted earnings
per common share include the dilutive effect of additional potential common
shares issuable under stock options and warrants. 5




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##### Table of Contents



NOTE B  STOCK-BASED COMPENSATION: Employee compensation expense under stock options is reported using the
intrinsic value method. No stock-based compensation cost is reflected in net
income, as all options granted had an exercise price equal to or greater than
the market price of the underlying common stock at date of grant. The
following table illustrates the effect on net income and earnings per share if
expense was measured using the fair value recognition provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation. Three Months
    
    Nine MonthsEnded Sept. 30,
    
    Ended Sept. 30,2004
    
    2003
    
    2004
    
    2003(Dollars in thousands, except per share data)Net income as reported
    
    $
    129
    
    
    $
    269
    
    
    $
    439
    
    
    $
    702Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards
net of related tax effects
    
    $
    11
    
    
    $
    9
    
    
    $
    33
    
    
    $
    32Pro forma net income
    
    $
    118
    
    
    $
    260
    
    
    $
    406
    
    
    $
    670Basic income per share as reported
    
    $
    0.11
    
    
    $
    0.23
    
    
    $
    0.37
    
    
    $
    0.59Basic pro forma income per share
    
    $
    0.10
    
    
    $
    0.22
    
    
    $
    0.34
    
    
    $
    0.57Diluted income per share as reported
    
    $
    0.11
    
    
    $
    0.22
    
    
    $
    0.36
    
    
    $
    0.59Diluted pro forma income per share
    
    $
    0.10
    
    
    $
    0.22
    
    
    $
    0.33
    
    
    $
    0.56
 6




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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations General The following is a discussion of the Companys financial condition and results
of operations for the period ended September 30, 2004. Except for historical
information contained herein, this quarterly report contains comments or
information that constitutes forward-looking statements, within the meaning of
the Private Securities Litigation Reform Act of 1995, which involves
significant risks and uncertainties. Actual results may differ materially from
the results discussed in the forward-looking statements. Impact of Hurricane Season: The 2004 hurricane season provided the Company a challenge as Hurricane
Charley, a category 4 storm, made a direct hit on our primary market area and
Hurricanes Frances and Jeanne further impacted the communities we serve. The
following summarizes the impacts that have been experienced to date: Facilities  While there was no appreciable damage to any of the Companys
facilities, power, communication, and security links were down for four
business days, restricting the Banks ability to conduct business, other than
accepting deposits and cashing checks through our drive through windows. The
storms also had the effect of deferring our ability to open our temporary
modular banking facility in Punta Gorda that was planned for September, but
will now open in November of this year. Lending Activities  The conduct of business in the wake of Hurricane Charley,
together with the threats brought by subsequent storms, has been significantly
impacted. In many instances, plans for the development and expansion of
commerce have been replaced with plans for recovery and redevelopment.
Permitting activity has since focused on repairing and rebuilding. As a
consequence, new housing and commercial building starts have since slowed.
Accordingly, in the third quarter, fee income from the sale of residential
loans in the secondary market declined disproportionately compared to
historical demand and loan demand overall has slowed. Management believes these
conditions to be near-term issues and expects demand for these products to
rebound by early in 2005 as the redevelopment process takes hold. Credit Quality  In the aftermath of Hurricane Charley, management of the
Company evaluated all significant lending relationships and, in order to grant
some relief, offered to defer principal payments (while continuing to collect
interest) for up to six months in those cases where the underlying businesses
or homes sustained heavy damage. At September 30, 2004, the Company has not
experienced any payment defaults and had no loans delinquent as to the payment
of principal or interest in excess of 30 days that have not been brought
current. While it is premature to conclude the ultimate impact of the
hurricanes on the credit quality of the loan portfolio, management believes
that it has identified potential problem loans and has adequate reserves to absorb any
risks introduced as a result of the storms. 7




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Retail Activities  Retail banking customers have since focused on maintaining
liquid funds. As such, consumer interest in insurance and investment products
has also been negatively impacted, resulting in reduced commission income in
the third quarter when compared to historical levels. It is managements belief
that once repairs and replacements have been completed, consumers will refocus
on investment alternatives. Liquidity  The Company has seen a recent surge in demand deposit account
balances largely as a consequence of the influx of insurance and FEMA damage
remittances. Management recognizes that these funds are temporary and is
placing these balances in short-term, principally overnight, investments to
ensure it can meet the demand for these funds as repairs and reconstruction
commence. Management believes that the Company has ample liquidity to meet this
demand together with the likelihood of increasing loan demand. See Liquidity
and Capital Resources below. Financial Condition At September 30, 2004, the Company had $124 million in deposits and $4.2
million in customer repurchase agreements as compared to $112 million and $0.6
million, respectively, at December 31, 2003. Stockholders equity was $10.4
million at September 30, 2004 and $9.9 million at December 31, 2003, the change
comprising net income for the period of $439,000 together with unrealized gains
in the Companys investment portfolio of $112,000. To September 30, 2004, the Company used these funds to generate $101.1 million
in outstanding loans ($83.7 million at December 31, 2003). At September 30,
2004 the Company also had approximately $42.7 million in unfunded loan
commitments. Non-performing assets totaled $150,000 at September 30, 2004 and
are comprised of one junior lien on a residential property. Non-performing
assets at December 31, 2003 totaled $227,000. The Company continues to experience significant demand for lending and deposit
relationships due largely to the continuing growth in the areas population and
the consequential demand for property, goods and services. Accordingly, the
Company has realized substantial increases in loans and deposits outstanding
and anticipates that, except for the near-term conditions discussed
above under the caption "Impact of Hurricane Season," such demand will
continue. At September 30, 2004 the Company held approximately $17.4 million ($20.4
million at December 31, 2003) in investment securities and carried premises and
equipment of approximately $5.3 million at both September 30, 2004 and December
31, 2003. The Companys remaining liquidity at September 30, 2004, less current
cash reserve requirements, was invested in overnight federal funds of $8.2
million($4.4 million at December 31, 2003). In December of 2003, the Company acquired a site in Punta Gorda, Florida to
construct and house its fourth full-service banking center. The Company anticipates opening in a modular banking facility in the fourth
quarter of 2004 while the permanent facility is being readied. 8




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Results of Operations For the three-month period ended September 30, 2004, the Company reported net
income of $129,000, compared to net income of $269,000 for the comparable
period in 2003. Pre-tax income for the three-month period ending September 30,
2004 was $214,000 compared to $204,000 for the same period in 2003. Net income
for the current period reflects a tax provision of $85,000 or that amount that
is proportionate with current federal and state income tax rates applied to
pre-tax income, while net income for the three month period ended September 30,
2003 was favorably and disproportionately impacted by the recognition of
$65,000 in previously unrecognized net operating loss carry-forward deferred
tax benefits. Net income for the nine-month periods ended September 30, 2004 and 2003 of
$439,000 and $702,000 also bear disproportionate results to pre-tax incomes of
$728,000 and $437,000, respectively, as a consequence of the recognition of
loss carry-forward deferred tax benefits of $265,000 in 2003. All such net
operating loss carry-forward deferred tax benefits were fully recognized at
December 31, 2003. Accordingly, current year and future pre-tax income will
bear tax provisions at rates of tax consistent with that applied to the most
current reporting period. Interest income for the comparable three-month periods ended September 30 was
$1,754,000 in 2004 and $1,527,000 in 2003 or a yield on average earning assets
of 5.82% and 5.77%, respectively. Net interest income was $1,461,000 in 2004
and $1,123,000 in 2003 (net interest margins of 4.84% and 4.24%, respectively)
after deducting interest expense of $293,000 in 2004 and $404,000 in 2003 or an
average rate paid on interest-bearing funds of 1.20% and 1.69%, respectively.
Rate variances between the comparable three-month periods of 2004 and 2003
increased net interest income approximately $182,000 while corresponding volume
variances contributed another $156,000. For the comparable nine-month periods ended September 30, interest income was
$4,935,000 in 2004 and $4,485,000 in 2003 or an average yield of 5.81% and
6.10%, respectively. Net interest income was $4,087,000 in 2004 and $3,230,000
in 2003 (net interest margins of 4.81% and 4.39%, respectively) after deducting
interest expense of $848,000 in 2004 and $1,255,000 in 2003 or an average
interest-bearing funds rate of 1.19% and 1.91%, respectively. The yield on interest-earning assets for the most recent quarter increased
marginally over that of the corresponding period of 2003 as interest-sensitive
assets priced up as a result of rate increases imposed by the Federal Reserve
commencing the end of June 2004. Rates paid on interest-bearing funds for the
quarter continue to be below those of last year as deposit accounts have yet to
price up in response to the Federal Reserves recently adopted rate policy.
Yields on interest-earning assets and rates paid on interest-bearing
liabilities for the corresponding nine-month periods continue to reflect the
aggressive rate cutting posture maintained by the Federal Reserve since 2001
and until the summer of 2003. For the three and nine-month periods ended
September 30, 2004, net interest margins continued to experience improvement over the corresponding periods of a year ago as the Bank generated
larger savings from decreasing rates paid on interest-bearing funds than income
given up from declining yields on interest-earning 9




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assets. While the Federal
Reserve has adopted a policy to tighten rates, management does not anticipate
this policy decision will have a significant negative impact on the Companys
net interest margins unless markets rates were to increase precipitously. Provisions for loan losses of $33,000 and $97,000 for the three and nine-month
periods ended September 30, 2004, respectively, were based on the Banks loss
experience together with its assessment of the potential impacts of current
economic conditions on the credit quality of the portfolio, including the
analysis of potential problem credits for impairment, supplemented with peer
industry loss data of comparably sized and positioned commercial banks. Non-interest income is comprised principally of service charges on deposit
accounts, fees on residential lending secondary market activities and fees and
commissions from the sale of insurance and investment products. Non-interest
income aggregated $278,000 and $418,000 for the three-month periods ended
September 30, 2004 and 2003, respectively, and $959,000 and $1,346,000 for the
comparable nine-month periods. Amounts for the three-month periods ended
September 30, 2004 and 2003 include commission and fee income from the sales of
insurance and investment products aggregating $105,000 and $127,000,
respectively, and $372,000 and $417,000 for the comparable nine-month periods.
Residential lending secondary market activities generated fee income of $90,000
for the three month period ending September 30, 2004 compared with $194,000 for
the corresponding period in 2003, and $340,000 for the first nine months of
2004 compared to $624,000 in 2003. While an active refinancing market had aided
fee income from residential secondary market activities in 2003 and 2004, the
demand for such has declined with rising rates together with the saturation in
the potential market for refinancing. This condition is expected to continue
however it is not anticipated to have a material adverse impact, as most
expenses associated with this activity are incremental and direct in nature.
The balance of the increase in non-interest income is generally consistent with
the increase in the volume of deposit activity. Non-interest expenses for the comparable three-month periods ended September
30, 2004 and 2003 were $1,492,000 and $1,315,000 comprised principally of
salaries and benefits ($791,000 in 2004 and $768,000 in 2003) and occupancy
costs ($208,000 in 2004 and $200,000 in 2003). For the comparable nine-month
periods ended September 30, 2004 and 2003, non-interest expenses were
$4,221,000 and $3,948,000, respectively, comprised principally of salaries and
benefits ($2,337,000 in 2004 and $2,331,000 in 2003) and occupancy costs
($646,000 in 2004 and $601,000 in 2003). At September 30, 2004 the Company had
59 employees compared to 54 employees a year earlier, and at both period ends
had three full-service banking offices, a residential mortgage center and an
operations center. Included in non-interest expense in the third quarter of
2004 is the charge-off of an overdraft for $125,000 from a customer that fell
prey to a foreign counterfeit check scheme. The Company is pursuing all
remedies available to attempt to effect recovery. The expansion in facilities and personnel is in accordance with the Companys
strategic growth and expansion initiative that is designed to fully leverage
the Companys capital position and attain critical mass. 10




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Additional incremental
expenditures associated with the Companys expansion activities may have the
effect of limiting the Companys profitability until such time as the Bank can
generate volumes of loans and deposits, and other fee generating services,
sufficient to cover these additional costs. Liquidity and Capital Resources The Company utilizes its investment portfolio principally as a source of
liquidity. Deposit growth, to the extent not necessary to maintain liquidity,
is generally utilized to fund loan demand. At September 30, 2004, the Company
had unencumbered overnight liquidity aggregating approximately $20.2 million to
meet its current liquidity needs. In addition, if needed, the Company has $12.5
million in credit facilities available through correspondent banks and
maintains outlets for the sale and/or participation of loans from its
portfolio. Management of the Company strives to maintain capital at levels sufficient to
be considered well capitalized under regulatory guidelines. At September 30,
2004, capital levels were sufficient for this purpose. When planning its growth
and expansion strategies, the Companys practice is to ensure its well
capitalized position is maintained at all times, taking into account current
capital levels together with the reinvestment of earnings. 
 Item 3. Controls and Procedures  a.
    
    Evaluation of Disclosure Controls and Procedures. The Companys
management is responsible for establishing and maintaining 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 the effectiveness of those disclosure controls and
procedures, as of the end of the period covered by this report, the
Chief Executive Officer, President, and Chief Financial Officer of the
Company have concluded that the Companys disclosure controls and
procedures were adequate for such purposes.b.
    
    Changes in Internal Controls. The Company made no changes in its
internal control over financial reporting that occurred during the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, its internal control over
financial reporting. 11




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PART II  OTHER INFORMATION 
 Item 4. Submission of Matters to a Vote of Security Holders None. 
 Item 6. Exhibits and Reports on Form 8-K  1.
    
    Exhibits  31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley
act of 200231.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley
act of 200231.3
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley
act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as added by
section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as added by
section 906 of the Sarbanes-Oxley Act of 200232.3
    
    Certification pursuant to 18 U.S.C. Section 1350, as added by
section 906 of the Sarbanes-Oxley Act of 2002  2.
    
    Reports on Form 8-KForm 8-K Current Report dated July 23, 2004 announcing Results of
Operations and Financial Condition for the three-month period ended June
30, 2004. 12




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##### Table of Contents



SIGNATURES In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized. Date: October 25, 2004
    
    /s/ George E. Cline, III
George E. Cline, III
Chief Financial Officer
 Date: October 25, 2004
    
    /s/ Todd H. Katz
Todd H. Katz
President
 Date: October 25, 2004
    
    /s/ Lewis S. Albert
Lewis S. Albert
Chief Executive Officer
 13