.In a large mixing bowl, stir together the flour, granulated sugar, baking powder, baking soda, salt, and nutmeg. Add banana, margarine, milk, and vanilla. Beat on low until combined. Add eggs and beat on medium for two minutes. Stir in the finely chopped nuts.
Pour batter into a greased 9x9x2 inch baking pan and bake at 350 degrees for 35-40 minutes or until a toothpick inserted near the center comes out clean.
Meanwhile, for frosting, in a small bowl, stir together sour cream and brown sugar. Spoon evenly over warm cake in pan. Sprinkle with broken nuts. Bake about 5 minutes more or until frosting is set. Cool on wire rack. Refrigerate leftovers within 2 hours.