SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB
(Mark One)

[X]               QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998

                                       OR

|_|               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.
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as Specified in Its Charter)


         New Jersey                                               22-3591051
--------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation                (I.R.S. Employer
 or Organization)                                           Identification No.)

               789 Farnsworth Avenue, Bordentown, New Jersey 08505
               ---------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (609) 298-0723
--------------------------------------------------------------------------------
                 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                       NO   X
                         ---                       ---

   Number of shares of Common Stock outstanding as of October 3, 1998: 379,858

Transitional Small Business Disclosure Format (check one)

                     YES                       NO   X
                         ---                       ---


<PAGE>

                             FARNSWORTH BANCORP INC.

                                    Contents
                                    --------

                                                                         Page(s)
                                                                         -------
PART I - FINANCIAL INFORMATION

     Item 1.  Financial Statements.............................................3

     Item 2.  Management's Discussion and Analysis or Plan of Operation........3


PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings................................................8

     Item 2.  Changes in Securities and Use of Proceeds........................8

     Item 3.  Defaults upon Senior Securities..................................8

     Item 4.  Submission of Matters to a Vote of Security Holders..............8

     Item 5.  Other Information................................................8

     Item 6.  Exhibits and Reports on Form 8-K.................................8

     Signatures................................................................9

                                      - 2 -

<PAGE>



                          PART I. FINANCIAL INFORMATION

Items 1 and 2

         Farnsworth  Bancorp  Inc.  is a savings  and loan  holding  company for
Peoples  Savings  Bank  (the  "Bank"),   the  wholly  owned  subsidiary  of  the
registrant.  The  conversion  of the Bank  from  the  mutual  to  stock  form of
ownership and simultaneous  issuance of shares of common stock of the registrant
(the  "Conversion"),  as described in the  registration  statement filed on Form
SB-2 (File No. 333-56689) with the Securities and Exchange Commission,  occurred
after June 30,  1998.  The  Conversion  was  completed  on  September  29, 1998.
Management's  discussion  and  analysis  is not  provided  due to its  extremely
limited utility with respect to the financial statements presented.


                                      - 3 -

<PAGE>



                             Farnsworth Bancorp Inc.

                        Statements of Financial Condition
                                   (Unaudited)

                                                                At June 30, 1998
ASSETS:

         Total Assets                                              $         --
                                                                    ===========


LIABILITIES AND STOCKHOLDERS' EQUITY

         Liabilities                                               $         --
                                                                    -----------

         Stockholders' Equity:

                  Preferred Stock, $0.10 par value per share,
                  Authorized - 1,000,000 shares;
                  Issued and Outstanding - None                              --

                  Common Stock, $.10 par value per share,
                  Authorized - 5,000,000 shares;
                  Issued and Outstanding - None                              --

                  Additional Paid-in Capital                       $         --
                                                                    -----------

                  Total Stockholders' Equity                       $         --
                                                                    -----------

                  Total Liabilities and Stockholders' Equity       $         --
                                                                    ===========


                                      - 4 -

<PAGE>



                             Farnsworth Bancorp Inc.

                               STATEMENT OF INCOME



                     For the period beginning April 1, 1998
                                to June 30, 1998
                                   (Unaudited)



Net Income                                                              $    --
                                                                         ======

                                      - 5 -

<PAGE>



                             Farnsworth Bancorp Inc.

                             STATEMENT OF CASH FLOWS



                     For the period beginning April 1, 1998
                                to June 30, 1998
                                   (Unaudited)



Cash flows from operating, financing and investing activities       $         --
                                                                     ===========

                  Net cash provided by operation,
                    financing and investing activities              $         --
                                                                     ===========

Cash and cash equivalents at beginning of period                    $         --
                                                                     -----------

Cash and cash equivalents at end of period                          $         --
                                                                     ===========

                                      - 6 -

<PAGE>



                             Farnsworth Bancorp Inc.

                          NOTES TO FINANCIAL STATEMENTS



Note 1.  Incorporation and Organization
         ------------------------------

         Farnsworth  Bancorp Inc.  ("Registrant")  was incorporated in May 1998,
solely for the purpose of becoming a savings and loan holding company of Peoples
Savings Bank (the "Bank").  Accordingly, no information is provided for the nine
months  ended  June  30,  1998.  As of June 30,  1998,  the  Registrant  had not
conducted  any business.  Information  is not provided at the fiscal year end of
September 30, 1997 as the Registrant did not exist at that date.

Note 2.  Plan of Reorganization
         ----------------------

         On June 12, 1998, the Registrant filed a Registration Statement on Form
SB-2  ("Registration  Statement")  with the Securities  and Exchange  Commission
("SEC").  The  Registration  Statement was filed as part of a plan of conversion
(the "Plan") and  transactions  incident to the Plan,  pursuant to which (i) the
Bank  converted from the mutual to stock form and  simultaneously  issued common
stock to the Registrant in exchange for at least one half of the net proceeds of
the  related  offering  of  common  stock  of the  Registrant  conducted  by the
Registrant  (ii)  certain  depositors  of the Bank  received  an  interest  in a
liquidation account of the Bank established for this purpose pursuant to federal
law.  The Bank is a federally  chartered  savings bank which is regulated by the
Office of Thrift Supervision ("OTS").

Note 3.  Subsequent Events
         -----------------

         The events  contemplated by the Plan were  consummated on September 29,
1998. As a result of this  consummation,  379,858  shares of common stock of the
Registrant  were  issued  resulting  in  gross  proceeds  to the  Registrant  of
$3,798,580.


                                      - 7 -

<PAGE>



                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
         -----------------

                  Not applicable.

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 and Reports on Form 8-K
         --------------------------------

         (a)      None.

         (b)      No  reports on Form 8-K were filed  during the  quarter  ended
                  June 30, 1998.



                                      - 8 -

<PAGE>


                                   SIGNATURES


         In accordance with the  requirements of the Securities  Exchange Act of
1934,  as  amended,  the  registrant  has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                            FARNSWORTH BANCORP, INC.



Date: October 6, 1998             By:    /s/Gary N. Pelehaty
                                         ---------------------------------------
                                         Gary N. Pelehaty
                                         President and Chief Executive Officer
                                         (Principal Executive Officer)
                                         (Duly Authorized Officer)



Date:    October 6, 1998          By:    /s/Charles Alessi
                                         ---------------------------------------
                                         Charles Alessi
                                         Vice President, Secretary and Treasurer
                                         (Principal Financial and Accounting
                                         Officer)