There was so much competition in the crowded Manatee market that Horizon Bank took risks it might otherwise have avoided.
Daryl L. Brown, a Manatee County deputy, got multiple loans from 2002 to 2006 and eventually defaulted on 10 totaling $1.9 million.
After the real estate market had begun stumbling, Horizon gambled on a speedy recovery. It lent money to distressed property buyers and bought debt securities from other banks across the country.
One borrower, Peter Arguelles, did not have good enough credit to borrow money in his own name, so his wife applied for loans with the bank. Arguelles told the Herald-Tribune in 2008 that Horizon was the only bank in this region willing to lend him the money he needed.
"Horizon is the only bank I've gone to so far that operates under logic rather than fear," he said.
Arguelles ended up defaulting on a $460,000 loan.
Horizon also invested in banks in a bid to boost profits.
Documents filed with the SEC show that Horizon lost $1.2 million from those investments in 2008 and $2.2 million the following year.
In their last state examination in December 2009, regulators criticized Horizon for failing to write down bad loans, and for not setting aside enough money to cover its bad bets.
Regulators also noted that nearly $2 million in loans to one of Horizon's directors — Elizabeth L. Thomason — had to be classified as nonperforming.
Thomason and her business partners borrowed the money to build office condos. In April 2009, she was supposed to begin paying the principal and interest, yet the bank allowed her to pay interest only because of "cash flow shortfalls," regulators found.
Thomason, who could not be reached for comment, ultimately got hit with foreclosure judgments totaling just over $2 million.