SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-QSB/A
(Mark One)
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X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2006
OR
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the transition period from __________to__________.
Commission File No. 0-24621
Farnsworth Bancorp, Inc. .
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(Exact name of Small Business Issuer as Specified in Its Charter)
New Jersey 22-3591051 .
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(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
789 Farnsworth Avenue, Bordentown, New Jersey 08505
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(Address of Principal Executive Offices)
(609) 298-0723 .
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Issuer's Telephone Number, Including Area Code
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 was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X . NO
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Indicate by check mark whether the registrant is a shell company as defined in
Rule 12b-2 of the Exchange Act
YES NO X
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Number of shares of Common Stock outstanding as of July 31, 2006: 650,530
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Transitional Small Business Disclosure Format (check one)
YES . NO X .
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Explanatory Note
This Form 10-QSB/A is being filed to revise and correct the Company's
results of operations and financial condition at and for the period ended June
30, 2006 to appropriately account for the expenses incurred by the Company
during such period in connection with the previously-announced pending merger
with Sterling Banks, Inc. and Sterling Bank (the "Merger"). Previously, the
Company had not been expensing costs incurred in connection with the Merger.
This amendment to the Company's Quarterly Report on Form 10-QSB reflects the
impact of such Merger expenses on the Company's results of operations and
financial condition for the periods presented.
Contents
PART 1 - FINANCIAL INFORMATION Page(s)
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Item 1. Financial Statements
Consolidated Statements of Financial Condition at June 30, 2006
(unaudited) and September 30, 2005 (audited)............................................ 1
Consolidated Statements of Income and Comprehensive Income for the three
and nine months ended June 30, 2006, and 2005 (unaudited)............................... 2
Consolidated Statements of Cash Flows for the nine months ended
June 30, 2006 and 2005 (unaudited)...................................................... 3
Notes to Unaudited Consolidated Interim Financial Statements............................ 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................................... 6
Item 3. Controls and Procedures................................................................. 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................................... 10
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds............................. 10
Item 3. Defaults upon Senior Securities......................................................... 10
Item 4. Submission of Matters to a Vote of Security Holders..................................... 10
Item 5. Other Information....................................................................... 10
Item 6. Exhibits ............................................................................... 10
Signatures ........................................................................................ 11
Certifications..................................................................................... 12
FARNSWORTH BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, SEPTEMBER 30,
2006 2005
------------- -------------
ASSETS (UNAUDITED) (AUDITED)
Cash and due from banks $ 8,946,270 $ 10,278,409
Securities available for sale 19,699,623 19,418,925
Securities held to maturity 663,291 969,864
Loans receivable, net 73,955,490 70,005,215
Accrued interest receivable 448,086 438,935
Federal Home Loan Bank of New York (FHLB) stock
at cost substantially restricted 206,800 520,200
Deferred income taxes 795,986 216,990
Premises and equipment 2,139,544 2,211,706
Other assets 214,970 85,247
------------- -------------
Total assets $ 107,070,060 $ 104,145,491
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 96,834,354 $ 93,583,060
Borrowings from FHLB 532,045 654,696
Advances by borrowers for taxes and insurance 301,115 404,956
Accrued income taxes 189,386 26,586
Accrued interest payable 111,483 84,606
Accounts payable and other accrued
expenses 365,012 154,816
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Total liabilities 98,333,395 94,908,720
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Preferred stock $.10 par value, 1,000,000
shares authorized; none issued and
outstanding
Common stock $.10 par value, 5,000,000 shares authorized;
662,693 shares issued, at June 30 2006 and September
30, 2005; shares outstanding 650,530 and 650,316 at
June 30, 2006 and September 30, 2005 respectively 66,270 66,270
Additional paid in capital 8,483,529 8,481,669
Retained earnings substantially restricted 1,316,896 1,339,579
Treasury stock at cost 12,163 shares at June 30, 2006
and 12,382 shares at September 30, 2005 (118,521) (120,658)
Common stock aquired by
employee stock ownership plan (ESOP) (222,896) (240,021)
Accumulated other comprehensive income , unrealized
depreciation on available for sale securities,
net of taxes (788,613) (290,068)
------------- -------------
Total stockholders' equity 8,736,665 9,236,771
------------- -------------
Total liabilities and
stockholders' equity $ 107,070,060 $ 104,145,491
============= =============
SEE NOTES TO FINANCIAL STATEMENTS
1
FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE LOSS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Interest income:
Loans receivable $ 1,249,417 $ 1,158,299 $ 3,736,233 $ 3,448,205
Securities 242,051 222,702 738,141 646,107
Federal funds sold 76,485 48,194 198,878 118,171
----------- ----------- ----------- -----------
Total interest income 1,567,953 1,429,195 4,673,252 4,212,483
----------- ----------- ----------- -----------
Interest expense:
Deposits 653,532 484,168 1,827,422 1,357,119
Federal Home Loan Bank advances 8,068 10,456 26,027 33,086
----------- ----------- ----------- -----------
Total interest expense 661,600 494,624 1,853,449 1,390,205
----------- ----------- ----------- -----------
Net interest income 906,353 934,571 2,819,803 2,822,278
Provision for loan losses 28,146 8,930 118,146 75,821
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses 878,207 925,641 2,701,657 2,746,457
----------- ----------- ----------- -----------
Noninterest income:
Fees and other service charges 52,540 57,473 185,733 203,095
Net realized gain on available for sale:
Loans -- 7,838 1,526 16,146
Securities -- 4,162 5,859 15,921
----------- ----------- ----------- -----------
Total noninterest income 52,540 69,473 193,118 235,162
----------- ----------- ----------- -----------
Noninterest expense:
Compensation and benefits 513,524 464,882 1,455,786 1,363,497
Occupancy and equipment 112,062 116,270 364,481 391,951
Merger expenses 167,326 -- 167,326 --
Professional fees 41,857 72,901 191,736 184,073
Service fees 76,078 75,759 222,514 163,478
Other 81,364 113,534 283,762 365,359
----------- ----------- ----------- -----------
Total noninterest expense 992,211 843,346 2,685,605 2,468,358
----------- ----------- ----------- -----------
(Loss) Income before provision for income
tax expense (61,464) 151,768 209,170 513,261
Provision for income tax expense 51,000 63,000 166,800 207,800
----------- ----------- ----------- -----------
Net (loss) income (112,464) 88,768 42,370 305,461
Other Comprehensive (loss) Income, net of taxes
Unrealized loss on Securities
Available for Sale (183,683) 283,146 (495,030) (9,793)
Reclassification adjustments for gains
included in net income -- (2,497) (3,515) (9,553)
----------- ----------- ----------- -----------
Comprehensive (loss) income $ (296,147) $ 369,417 $ (456,175) $ 286,115
=========== =========== =========== ===========
Net (loss) income per common share:
Basic $ (0.18) $ 0.14 $ 0.07 $ 0.52
Diluted $ (0.18) $ 0.13 $ 0.06 $ 0.50
Weighted average number of shares
outstanding during the period:
Basic 627,732 621,317 627,732 585,217
Diluted 627,732 659,440 669,622 616,969
SEE NOTES TO FINANCIAL STATEMENTS
2
FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED JUNE 30
2006 2005
------------ ------------
Cash flows from operating activities:
Net income $ 42,370 $ 305,461
------------ ------------
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 111,773 127,818
Stock compensation 21,122 83,770
Provision for loan losses 118,146 75,821
Net gain on sale of AFS securities (5,859) (15,921)
Net gain loans sold (1,526) (16,146)
Change in:
Accrued interest receivable (9,151) 33,463
Other assets (129,723) 26,628
Advances from borrowers (103,841) 82,441
Accrued and deferred income taxes (83,832) (146,194)
Accrued interest payable 26,877 14,468
Other accrued liabilities 210,196 2,080
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Total adjustments 154,182 268,228
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Net cash provided by operating
activities 196,552 573,689
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Cash flows from investing activities:
Net increase in loans receivable (4,068,421) (3,405,424)
Redemption of securities, held to maturity 1,787,947 537,268
Redemption of securities, available for sale 872,418 2,208,617
Purchase of securities, held to maturity (1,481,374) (1,997,517)
Proceeds from sale of securities available for sale 4,926,328 10,365,596
Purchase of securities, available for sale net (6,902,968) (12,444,661)
Redemption of FHLB stock 313,400 (22,710)
Purchase of premises and equipment (39,611) (30,000)
------------ ------------
Net cash used in investing
activities (4,592,281) (4,788,831)
------------ ------------
Cash flows from financing activities:
Net increase in deposits 3,251,294 6,423,058
Repayment of Federal Home Loan Bank Borrowings (122,651) (115,626)
Proceeds from sale of stock, net -- 1,785,691
Dividends paid (65,053) (65,030)
------------ ------------
Net cash provided by financing
activities 3,063,590 8,028,093
------------ ------------
Net change in cash (1,332,139) 3,812,951
Cash at beginning of period 10,278,409 6,009,330
------------ ------------
Cash at end of period $ 8,946,270 $ 9,822,281
============ ============
Supplemental disclosure:
Cash paid during the period for:
Interest $ 1,880,326 $ 1,375,737
============ ============
Income taxes $ 250,750 $ 285,000
============ ============
Unrealized loss on securities available
for sale, net of deferred income taxes $ (498,545) $ (19,346)
============ ============
Non cash items
Common stock aquired by Restricted Stock Plan $ 20,131
============
Loan to ESOP $ 172,500
============
SEE NOTES TO FINANCIAL STATEMENTS
3
FARNSWORTH BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1. Presentation of Financial Information
-------------------------------------
The accompanying unaudited consolidated interim financial statements include the
accounts of Farnsworth Bancorp, Inc. (the "Company") and its subsidiaries
Peoples Savings Bank (the "Bank") and Peoples Financial Services, Inc. The
accompanying unaudited consolidated interim financial statements have been
prepared in accordance with the 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. The accounting
and reporting policies of the Company conform in all material respects to
generally accepted accounting principles and to general practice within the
thrift industry. It is the opinion of management that the accompanying unaudited
consolidated interim financial statements reflect all adjustments, which are
considered necessary to report fairly the financial position as of June 30,
2006, the Consolidated Statements of Income and Comprehensive Income for the
three and nine months ended June 30, 2006 and 2005, and the Consolidated
Statements of Cash Flows for the nine months ended June 30, 2006 and 2005. The
results of operations for the three and nine months ended June 30, 2006 are not
necessarily indicative of results that may be expected for the entire year
ending September 30, 2006, or for any other period. The accompanying unaudited
consolidated interim financial statements should be read in conjunction with the
Company's September 30, 2005 consolidated financial statements, including the
notes thereto, which are included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended September 30, 2005.
In preparing the financial statements, management is required to make estimates
and assumptions that affect the reported amount of assets and liabilities, the
disclosure of contingent assets and liabilities and the reported revenues and
expenses. Actual results could differ significantly from those estimates. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses and foreclosed
real estate. Such agencies may require the Bank to recognize additions to the
allowance for loan losses or additional write-downs on foreclosed real estate
based on their judgments about information available to them at the time of
their examination.
Nature of Operations
The Company is a unitary savings and loan holding company. The Bank operates
four branches in Burlington County, New Jersey. The Bank offers customary
banking services, including accepting checking, savings and time deposits and
the making of commercial, real-estate and consumer loans, to customers who are
predominantly small and middle-market businesses and middle-income individuals.
The Company also offers brokerage, investment advisory services and insurance
services to the general public through Peoples Financial Services, Inc., a
subsidiary organized for the sale of mutual funds and insurance through a third
party networking agreement.
4
NOTE 2. Net (Loss) Income Per Common Share
----------------------------------
Basic net (loss) income per common share is calculated by dividing net (loss)
income by the number of shares of common stock outstanding, less shares that
have not been committed to be released. Diluted net (loss) income per share for
2005 is calculated by adjusting the number of shares of common stock outstanding
to include the effect of stock options, stock-based compensation grants and
other securities, if dilutive, generally, using the treasury stock method.
Unexercised stock options to purchase Company common stock for the three months
ended June 30, 2006 were excluded in the computation of diluted earnings per
share as the computation would be anti-dilutive.
For the three months ended June 30
----------------------------------
2006 2005
---- ----
Weighted Per- Weighted Per-
Average Share Average Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
Net (loss) income available
To common shareholders $(112,464) 650,530 $88,768 650,311
ESOP Shares, not
Committed to be released (22,798) (27,508)
RSP Shares (1,486)
--------- ------- ------ ------- ------- ------
Basic (loss) income per share (112,464) 627,732 $(0.18) $88,768 621,317 $ 0.14
Common Stock equivalents 38,123
--------- ------- ------ ------- ------- ------
Diluted (loss) income per share $(112,464) 627,732 $(0.18) $88,768 659,440 $ 0.13
========= ======= ====== ======= ======= ======
NOTE 3. Investment Securities
---------------------
The Bank's investments in securities are classified in two categories and
accounted for as follows:
Securities Held to Maturity. Mortgage backed securities for which the Bank has
the positive intent and ability to hold to maturity are reported at cost,
adjusted for amortization of premiums and accretion of discounts which are
recognized in interest income using the interest method over the period to
maturity.
Securities Available for Sale. Securities available for sale are reported at
market value and consist of certain debt and equity securities not classified as
trading or securities to be held to maturity.
Declines in the fair value of individual held to maturity and available for sale
securities below their cost that are other than temporary will result in
write-downs of the individual securities to their fair value. The related
write-downs will be included in earnings as realized losses.
Unrealized holding gains and losses, net of tax, on securities available for
sale are reported as a net amount in a separate component of equity until
realized.
Gains and losses on the sale of securities available for sale are determined
using the specific-identification method.
5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company may from time to time make written or oral "forward-looking
statements," including statements contained in the Company's filings with the
Securities and Exchange Commission (including this Quarterly Report of Form
10-QSB/A), in its reports to stockholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such
as statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economy in which the Company conducts operations;
the effects of, and changes in, trade, monetary and fiscal policies and laws,
including interest rate policies of the board of governors of the federal
reserve system, inflation, interest rate, market and monetary fluctuations; the
impact of changes in financial services' laws and regulations (including laws
concerning taxes, banking securities and insurance); technological changes; and
the success of the Company at managing the risks involved in the foregoing.
The Company cautions that the foregoing list of important factors is
not exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.
Financial Condition
Total assets were $107.1 million at June 30, 2006, an increase of $2.9
million compared to $104.1 million at September 30, 2005. The increase was due
to an increase in loans receivable net of $4.0 million and an increase in
deferred taxes of $579,000, partially offset by a decrease in cash and due from
banks of $1.3 million. The Company's total liabilities increased by $3.4 million
to $98.3 million at June 30, 2006 compared to $94.9 million at September 30,
2005, the increase was primarily due to an increase in deposits .
Stockholders' equity was $8.7 million or 8.2% of total assets at June
30, 2006, as compared to $9.2 million or 8.9% of total assets at September 30,
2005. The decrease in stockholders' equity is primarily attributable to an
increase in the unrealized depreciation on available for sale securities net of
taxes of $498,000 and dividends paid of $65,000, partially offset by net income
of $42,000.
6
Results of Operations
Net Income. The Company's net income decreased $201,000 for the quarter
ended June 30, 2006 to a net loss of $112,000 as compared to net income of
$89,000 for the quarter ended June 30, 2005. The decrease in net income was
mostly attributable to merger expenses of $167,000, a decrease in net interest
income after provisions for loan losses of $48,000, and a decrease in
non-interest income of $16,000 partially offset by a decrease in other
non-interest expense of $18,000 (excluding the impact of Merger expenses) and a
decrease in provision for income taxes of $12,000. For the nine months ended
June 30, 2006, net income decreased $263,000 to $42,000 from net income of
$305,000 for the same period in 2005 which was attributable to the same factors
discussed with respect to the quarterly period.
Net Interest Income. Net interest income is the most significant
component of the Company's income from operations. Net interest income is the
difference between interest the Company receives on its interest earning assets,
primarily loans and investments, and interest the Company pays on its
interest-bearing liabilities, deposits and borrowings. Net interest income
depends on the volume of and rates earned on interest-earning assets and the
volume of and rates paid on interest-bearing liabilities.
Net interest income after provision for loan losses decreased $48,000,
or 5.2%, to $878,000 for the quarter ended June 31, 2006 as compared to $926,000
for the quarter ended June 30, 2005. The decrease resulted from an increase in
interest expenses of $167,000 and an increase in the provision for loan losses
of $9,000 partially offset by an increase in interest income of $139,000. Net
interest income after provision for loan losses for the nine months ended June
30, 2006 was $2.7 million, which was comparable to the same period in 2005.
Provision for Loan Losses. Provision for loan losses was $28,000 for
the three months ended June 30, 2006, compared to $9,000 for the three months
ended June 31, 2005. The increase reflects management's assessment of the credit
risks in the loan portfolio and the level of charge-offs and non-performing
loans. For the nine months ended June 30, 2006, the provision for loan losses
was $118,000 compared to $76,000 for the same period in 2005.
Management believes the allowance for loan losses is at a level that is
adequate to provide for estimated losses. However, there can be no assurance
that further additions will not be made to the allowance and that such losses
will not exceed the estimated amount.
Non-Interest Income. Non-interest income decreased $16,000 or 23.2% to
$53,000 for the quarter ended June 30, 2006 from $69,000 for the same quarter in
2005. The decrease was partially due to a decrease in fees and other charges of
$5,000 and a decrease in gains on sale of securities and loans available for
sale of $11,000 compared to the same period in 2005. For the nine months ended
June 30, 2006, non-interest income decreased 425,000 compared to the same period
in 2005.
Non-Interest Expense. Non-interest expense increased $149,000 to
$992,000 for the quarter ended June 30, 2006 compared to $843,000 for the
quarter ended June 30, 2005. The increase was due to Merger expenses of $167,000
and an increase in compensation and benefits of $48,000 partially offset by a
decrease in professional fees of $31,000 and a decrease in other expenses of
$33,000. For the nine months ended June 30, 2006 non-interest expense increased
by $217,000 compared to the same period in 2005. The increase in the nine months
was due to an increase in compensation and benefits of $93,000 and an increase
of $89,000 in professional fees and Merger expenses of $167,000 , partially
offset by a decrease in occupancy and equipment of $28,000 a decrease in service
fees of $17,000 and a decrease in other expenses of $163,000.
Income Tax Expense. Income tax expense decreased by $12,000 for the
quarter ended June 30, 2006 compared to $63,000 for the quarter ended June 30,
2005. This decrease attributed to the decrease in taxable income of $46,000. For
the nine months ended June 30, 2006, income tax expense decreased by $41,000 due
to the decrease in taxable income.
7
Liquidity and Capital Resources
The Bank is required to maintain levels of liquid assets considered
necessary for its safe and sound operations.
The Company's primary sources of funds are deposits, repayment of loans
and mortgage-backed securities, maturities of investment securities and
interest-bearing deposits with other banks, advances from the FHLB of New York,
and funds provided from operations. While scheduled repayments of loans and
mortgage-backed securities and maturities of investment securities are
predictable sources of funds, deposit flows, and loan prepayments are greatly
influenced by the general level of interest rates, economic conditions and
competition. The Company uses its liquidity resources principally to fund
existing and future loan commitments, maturing certificates of deposit and
demand deposit withdrawals, to invest in other interest-earning assets, to
maintain liquidity, and meet operating expenses.
Net cash provided by the Company's operating activities (the cash
effects of transactions that enter into the Company's determination of net
income e.g., non-cash items, amortization and depreciation, provision for loan
losses) for the nine months ended June 30, 2006 was $197,000, a decrease of
$377,000 compared to the same period in 2005. The decrease in 2006 was primarily
due to a decrease in net income of $263,000, a change in advances from borrowers
of $185,000 and a change in other assets of $156,000 and a decrease in stock
compensation of $63,000.
Net cash used by the Company's investing activities (i.e., cash
disbursements, primarily for the purchase of investment securities and
mortgage-backed securities and for the funding of loans) for the nine months
ended June 30, 2006, totaled $4.6 million compared to $4.8 million for the same
period in 2005. The use of funds is mainly attributed to an increase in loans
receivable, net of $4.1 million and an increase in investments of $796,000.
Net cash provided for Company's financing activities (i.e., cash
receipts primarily from net increases in deposits and net decreases in FHLB
advances) for the nine months ended June 30, 2006, totaled $3.1 million,
compared to net cash provided by financing activities of $8.2 million for the
same period in 2005. The change is attributed to an increase in deposits of $3.2
million for the nine months ending June 30, 2006 compared to an increase in
deposits of $6.4 million for the same period in 2005 and the proceeds from the
sale of common stock of $1.8 million net in 2005 versus none in 2006.
Office of Thrift Supervision ("OTS") capital regulations applicable to
the Bank require savings institutions to meet three capital standards: (1)
tangible capital equal to 1.5% of total adjusted assets, (2) a leverage ratio
(core capital) equal to at least 3% of total adjusted assets, and (3) a
risk-based capital requirement equal to 8.0% of total risk-weighted assets. In
addition, the OTS prompt corrective action regulation provides that a savings
institution that has a leverage capital ratio of less than 4% (3% for
institutions receiving the highest examination rating) will be deemed to be
"undercapitalized" and may be subject to certain restrictions. The Bank was in
compliance with these requirements at March 31, 2006, with tangible, core and
risk based capital ratios of 7.85%, 7.85% and 13.18%, respectively.
8
Item 3. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Based on
their evaluation of the Company's disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange
Act")), the Company's principal executive officer and principal financial
officer have concluded that as of the end of the period covered by this
Quarterly Report on Form 10-QSB such disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.
(b)......Changes in internal control over financial reporting. During
the quarter under report, there was no change in the Company's internal control
over financial reporting that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.
9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
The Registrant was not engaged in any material legal proceedings at
June 30, 2006. From time to time, the Bank is a party to legal proceedings
within the normal course of business wherein it enforces its security interests
in loans made by it, and other similar matters.
Item 2. Changes in 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
- ------------------------------------------------------------
Not Applicable
Item 5. Other Information
- --------------------------
Not applicable.
Item 6. Exhibits
- -----------------
(a) Exhibits:
31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FARNSWORTH BANCORP, INC.
Date: January 10, 2007 By: /s/Gary N. Pelehaty
--------------------------------------------
Gary N. Pelehaty
President and Chief Executive Officer
(Principal Executive Officer)
Date: January 10, 2007 By: /s/Charles Alessi
--------------------------------------------
Charles Alessi
Vice President, Chief Financial Officer,
Secretary and Treasurer
(Principal Financial and Accounting Officer)