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, 2004
                                    -------------

                                       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  X .      NO
                                   ---          ---

   Number of shares of Common Stock outstanding as of August 1, 2004: 542,670
                                                                      -------

            Transitional Small Business Disclosure Format (check one)

                               YES           NO  X .
                                   ---          ---
<PAGE>

                                    Contents
                                    --------


<TABLE>
<CAPTION>
PART 1 - FINANCIAL INFORMATION                                                          Page(s)
                                                                                        -------
<S>                                                                                      <C>
Item 1.  Financial Statements

          Consolidated  Statements  of  Financial  Condition  at June  30,  2004
          (unaudited) and September 30, 2003 (audited).......................................1

          Consolidated  Statements of Income and Comprehensive Income (Loss) for
          the three and nine months ended June 30, 2004, and 2003 (unaudited)................2

          Consolidated  Statements  of Cash Flows for the nine months ended June
          30, 2004 and 2003 (unaudited)......................................................3

          Notes to Financial Statements......................................................4

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations...............................................................5

Item 3.  Controls and Procedures.............................................................8

PART II - OTHER INFORMATION


Item 1.  Legal Proceedings...................................................................9

Item 2.  Changes in Securities and Small Business Issuer Purchases of Equity Securities .....9

Item 3.  Defaults upon Senior Securities.....................................................9

Item 4.  Submission of Matters to a Vote of Security Holders.................................9

Item 5.  Other Information...................................................................9

Item 6.  Exhibits and Reports on Form 8-K....................................................9

Signatures..................................................................................10

</TABLE>

<PAGE>
                    FARNSWORTH BANCORP INC., AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


<TABLE>
<CAPTION>
                                                              JUNE 30,     SEPTEMBER 30,
                                                                2004           2003
                                                           ------------    ------------
ASSETS                                                       (UNAUDITED)     (AUDITED)

<S>                                                      <C>             <C>
Cash and due from banks                                    $  7,461,304    $ 11,539,886
Securities available for sale                                19,732,613      15,003,778
Securities held to maturity                                     313,318         461,443
Loans receivable, net                                        65,256,041      61,462,266
Accrued interest receivable                                     426,170         415,259
Federal Home Loan Bank of New York (FHLB) stock
  at cost substantially restricted                              490,200         507,400
Deferred income taxes                                           586,163         125,667
Premises and equipment                                        2,317,717       2,232,650
Other assets                                                     80,659          81,219
                                                           ------------    ------------

         Total assets                                      $ 96,664,185    $ 91,829,568
                                                           ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                   $ 88,265,475    $ 83,713,971
Borrowings from FHLB                                            847,432         956,436
Advances by borrowers for taxes and insurance                   416,094         328,379
Accrued income taxes                                            253,795          97,788
Deferred income taxes                                              --                --
Accrued interest payable                                         57,359          23,122
Accounts payable and other accrued expenses                     149,709         146,405
                                                           ------------    ------------

         Total liabilities                                   89,989,864      85,266,101
                                                           ------------    ------------

Preferred stock $.10 par value, 1,000,000
  shares authorized; none issued and
  outstanding
Common stock $.10 par value, 5,000,000 shares
  authorized; 542,670 and 452,023 shares issued for 2004
  and 2003 respectively and 527,569 and 433,031 shares
  outstanding for 2004 and 2003 respectively                     54,267          45,202
Additional paid in capital                                    6,515,350       4,688,162
Retained earnings substantially restricted                      924,101       2,260,041
Treasury stock                                                 (120,658)       (185,172)
Common stock acquired by
  employee stock ownership plan (ESOP)                         (121,284)       (144,054)
Unissued restricted stock plan shares                           (97,505)         (3,645)
Accumulated other comprehensive loss, unrealized
  depreciation on available for sale securities
  net of taxes                                                 (479,950)        (97,067)
                                                           ------------    ------------

         Total stockholders' equity                           6,674,321       6,563,467
                                                           ------------    ------------

         Total liabilities and
          stockholders' equity                             $ 96,664,185    $ 91,829,568
                                                           ============    ============
</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS

                                       1
<PAGE>
                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED               NINE MONTHS ENDED
                                                     JUNE 30                        JUNE 30
                                                2004           2003           2004           2003
                                            -----------    -----------    -----------    -----------
<S>                                       <C>            <C>            <C>            <C>
Interest income:
  Loans receivable                          $ 1,197,742    $ 1,099,298    $ 3,406,530    $ 3,327,449
  Securities                                    217,874        199,146        600,947        556,816
  Federal funds sold                             17,877         21,303         47,262         69,105
                                            -----------    -----------    -----------    -----------
        Total interest income                 1,433,493      1,319,747      4,054,739      3,953,370
                                            -----------    -----------    -----------    -----------

Interest expense:
  Deposits                                      367,068        407,300      1,100,957      1,298,284
  Federal Home Loan Bank advances                12,650         14,829         40,184         46,514
                                            -----------    -----------    -----------    -----------
        Total interest expense                  379,718        422,129      1,141,141      1,344,798
                                            -----------    -----------    -----------    -----------
Net interest income                           1,053,775        897,618      2,913,598      2,608,572

Provision for loan losses                        30,000         10,000        113,000         59,820
                                            -----------    -----------    -----------    -----------

        Net interest income after
          provision for loan losses           1,023,775        887,618      2,800,598      2,548,752
                                            -----------    -----------    -----------    -----------

Noninterest income:
  Fees and other service charges                 79,660         67,444        229,039        208,680
  Net realized gain on available for sale
   Loans                                                                       19,967         56,780
   Securities                                       440         55,207         48,049         65,657
                                            -----------    -----------    -----------    -----------
        Total noninterest income                 80,100        122,651        297,055        331,117
                                            -----------    -----------    -----------    -----------

Noninterest expense:
  Compensation and benefits                     405,524        439,118      1,290,783      1,208,123
  Occupancy and equipment                       113,901        117,754        366,278        355,557
  Federal insurance premiums and
    assessments                                  10,740          9,772         17,908         15,867
  Other                                         218,708        198,118        644,061        622,986
                                            -----------    -----------    -----------    -----------
        Total noninterest expense               748,873        764,762      2,319,030      2,202,533
                                            -----------    -----------    -----------    -----------

Income  before provision for income
  tax expense                                   355,002        245,507        778,623        677,336
Provision for income tax expense                150,000         94,449        314,700        257,002
                                            -----------    -----------    -----------    -----------
        Net income                              205,002        151,058        463,923        420,334

Other Comprehensive Income, net of taxes
  Unrealized (loss) gain on securities
    available for sale                         (473,710)        29,599       (354,054)         8,730
  Reclassification adjustments for gains
    included in net income                         (264)       (33,124)       (28,829)       (39,394)
                                            -----------    -----------    -----------    -----------

Comprehensive (loss) income                 $  (268,972)   $   147,533    $    81,040    $   389,670
                                            ===========    ===========    ===========    ===========

Net income per common share:
  Basic                                     $      0.41    $      0.31    $      0.95    $      0.86
  Diluted                                   $      0.39    $      0.30    $      0.89    $      0.83

Weighted average number of shares
outstanding during the period:
 basic                                          498,645        490,488        490,723        490,488
 diluted                                        531,321        510,537        520,660        507,046
</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS

                                       2

<PAGE>
                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                            NINE MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
                                                             2004            2003
                                                        ------------    ------------
<S>                                                   <C>             <C>
Cash flows from operating activities:
  Net income                                            $    463,923    $    420,334
                                                        ------------    ------------
  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                            116,775         109,034
    Stock compensation                                        61,110          61,110
    Provision for loan losses                                113,000          59,820
    Net gain on sale of AFS securities                       (48,049)        (65,658)
    Net gain on loans sold                                   (19,967)        (46,779)
 Change in:
   Accrued interest receivable                               (10,911)         31,551
   Other assets                                                  560          26,535
   Advances from borrowers                                    87,715         123,048
   Accrued and deferred income taxes                         (57,137)         33,873
   Accrued interest payable                                   34,237         (16,618)
   Other accrued liabilities                                   3,304         (33,819)
                                                        ------------    ------------

         Total adjustments                                   280,637         282,097
                                                        ------------    ------------

         Net cash provided by operating
          activities                                         744,560         702,431
                                                        ------------    ------------

Cash flows from investing activities:

  Net increase in loans receivable                        (3,886,808)       (662,126)
  Redemption of securities, held to maturity                 147,233         547,699
  Redemption of securities, available for sale             1,162,021       4,237,701
  Purchase of Federal Home Loan Bank Stock                                    (7,600)
  Proceeds from redemption of FHLB stock                      17,200
  Proceeds from sale of securities available for sale      6,731,775      11,270,219
  Purchase of securities, available for sale net         (13,207,704)    (19,852,296)
  Purchase of premises and equipment                        (201,842)       (268,818)
                                                        ------------    ------------

         Net cash used in investing
           activities                                     (9,238,125)     (4,735,221)
                                                        ------------    ------------

Cash flows from financing activities:
  Net increase  in deposits                                4,551,504       5,373,731
  Repayment of Federal Home Loan Bank Borrowings            (109,004)       (102,757)
  Common stock issued                                         20,177
  Dividends paid                                             (47,694)        (37,038)
                                                        ------------    ------------

         Net cash provided by financing
           activities                                      4,414,983       5,233,936
                                                        ------------    ------------

Net increase in cash and due from banks                   (4,078,582)      1,201,146

Cash at beginning of period                               11,539,886       9,161,801
                                                        ------------    ------------
Cash at end of period                                   $  7,461,304    $ 10,362,947
                                                        ============    ============

Supplemental disclosure:
  Cash paid during the period for:
    Interest                                            $  1,066,720    $  1,361,416
                                                        ============    ============
    Income taxes                                        $    341,250    $    100,000
                                                        ============    ============

  Unrealized gain (loss)  on securities available
    for sale, net of deferred income taxes              $   (382,883)   $    (30,664)
                                                        ============    ============
Non cash items
  Stock dividend                                        $  1,750,589
  Common stock aquired by Restricted Stock Plan         $    132,200
  Treasury Stock                                        $    (64,514)
  Additional paid in capital                            $    (67,686)
</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS

                                       3
<PAGE>

                     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,
2004, the  Consolidated  Statements of Income and  Comprehensive  Income for the
three  and nine  months  ended  June 30,  2004 and  2003,  and the  Consolidated
Statements  of Cash Flows for the nine months ended June 30, 2004 and 2003.  The
results of operations  for the three and nine months ended June 30, 2004 are not
necessarily  indicative  of results  that may be  expected  for the entire  year
ending September 30, 2004, or for any other period.  The accompanying  unaudited
consolidated interim financial statements should be read in conjunction with the
Company's September 30, 2003 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, 2003.

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.


NOTE 2. Net Income Per Common Share
        ---------------------------


Basic net income per common  share is  calculated  by dividing net income by the
number of  shares of common  stock  outstanding,  adjusted  for the  unallocated
portion of shares held by the Bank's  Employee Stock Ownership Plan ("ESOP") and
the  unawarded  portion  of shares  held by the  Bank's  Restricted  Stock  Plan
("RSP").  Diluted net income per share 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.

                                       4
<PAGE>

                                 For the three months ended June 30
                                 ----------------------------------
<TABLE>
<CAPTION>
                                               2004                                2003
                                 --------------------------------     --------------------------------
                                              Weighted     Per                    Weighted     Per
                                              Average      Share                  Average      Share
                                 Income        Shares      Amount      Income     Shares       Amount
                                 ------        ------      ------      ------     ------       ------

<S>                           <C>            <C>         <C>        <C>         <C>         <C>
Net income available
to Common Shareholders          $205,002       528,758                $ 151,058   519,647

ESOP Shares, not
committed to be released                       (21,805)                           (21,884)

RSP Shares, unawarded                           (8,308)                            (7,275)
                                ----------------------    -------     -------------------      -------
Basic earnings per share         205,002       498,645    $  0.41       151,058   490,488      $  0.31

Common Stock equivalents                        32,676                             20,049
                                ----------------------    -------     -------------------      -------
Diluted earnings per share      $205,002       531,321    $  0.39     $ 151,058   510,537      $  0.30
                                ======================    =======     ===================      =======
</TABLE>


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.

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),  in its  reports to  stockholders  and in other

                                       5
<PAGE>

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 in
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  increased  $4.8 million or 5.3% to $96.6  million at June
30, 2004 from $91.8  million at September  30,  2003.  The increase is primarily
attributable to an increase in securities available for sale of $4.7 million net
and an increase in loans receivable of $3.8 million,  partially offset by a $4.1
million  decrease  in cash and due from  banks.  The  Bank's  total  liabilities
increased  $4.8  million or 5.6%,  to $90.0  million at June 30, 2004 from $85.2
million at September 30, 2003. The increase is primarily  attributable to a $4.6
million increase in deposits primarily attributable to general market conditions
and the new branch office located in Marlton, New Jersey.

         Stockholders'  equity  increased  $110,000  to $6.7  million or 6.9% of
total  assets at June 30,  2004,  as compared  to $6.6  million or 7.2% of total
assets at September 30, 2003. The increase in stockholders'  equity is primarily
attributable  to net  income of  $464,000  partially  offset by an  increase  in
unrealized loss on available for sale securities net of taxes of $383,000.

Results of Operations

         Net  Income.  The Bank's net income  increased  $54,000 for the quarter
ended June 30, 2004 to $205,000  from  $151,000  for the quarter  ended June 30,
2003.  The increase in net income is  attributable  to an increase in the Bank's
net  interest  income  after  provisions  for loan losses of $136,000  partially
offset by an increase in income taxes of $56,000. For the nine months ended June
30, 2004,  net income  increased  $44,000 to $464,000 from $420,000 for the same
period in 2003; this increase was  attributable to an increase in the Bank's net
interest income after provisions for loan losses.

         Net  Interest  Income.  Net  interest  income  is the most  significant
component  of the Bank's  income from  operations.  Net  interest  income is the
difference  between interest the Bank receives on its  interest-earning  assets,
primarily loans,  investment and  mortgage-backed  securities,  and interest the
Bank  pays  on  its   interest-bearing   liabilities,   primarily  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.

                                       6
<PAGE>

         Net interest income after provision for loan losses increased $136,000,
or 15.3%, to $1.0 million for the quarter ended June 30, 2004 as compared to the
quarter  ended June 30, 2003.  The increase was  primarily due to an increase in
interest  income of  $114,000,  and a decrease in  interest  expense of $42,000,
partially  offset by an increase in provisions  for loan losses of $20,000.  The
increase in interest  income was partially due to the growth in the  residential
and commercial real estate loan  portfolio,  attributable to high demand of real
estate  purchases  as well as  refinancing  loans  and home  equity  loans.  Net
interest  income after  provision for loan losses  increased by $252,000 for the
nine  months  ended  June 30,  2004  compared  to the same  period in 2003.  The
increase is  attributable  primarily to the higher lending and a decrease in the
Bank's  cost of funds.  The Bank's  cost of funds  declined as a result of lower
market interest rates in addition to a lower balance of FHLB borrowings.

         Provision  for Loan Losses.  Provision  for loan losses was $30,000 for
the three months  ended June 30, 2004,  compared to $10,000 for the three months
ended June 30, 2003.  For the nine months ended June 30, 2004 the  provision for
loan losses was  $113,000  compared to $60,000 for the same period in 2003.  The
loan loss provision increased during the two fiscal periods due to the increased
level in the balance of loans receivable.

         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 $43,000 or 35.7% to
$80,000 for the quarter  ended June 30, 2004 from  $123,000 for the same quarter
in 2003.  Non-interest  income  in 2003  included  a gain on sale of  loans  and
securities  available  for sale of $55,000  compared  to zero gains for the same
period in 2004.  For the nine months  ended June 30, 2004,  non-interest  income
decreased  $34,000,  compared  to the same  period  in 2003.  This  decrease  is
primarily  attributable  to a  decrease  in  gains  on the  sale  of  loans  and
securities  available  for sale of $54,000,  partially  offset by an increase in
fees and other charges of $20,000.

         Non-Interest Expense. Non-interest expense decreased $16,000 or 2.0% to
$749,000 for the quarter  ended June 30, 2004 from $765,000 for the same quarter
in 2003. The decrease in the Bank's non-interest  expense was primarily due to a
decrease of $35,000 in the Bank's  compensation  and  benefits.  The category of
non-interest  expense  classified as "Other" is comprised of expenses related to
advertising,  fees charged by banks,  loan-processing fees, NOW expenses,  costs
related to supplies  and various  professional  fees.  For the nine months ended
June 30,  2004,  non-interest  expense  increased  by $116,000 to $2.3  million,
compared to $2.2 million for the same period in 2003.

         Income Tax  Expense.  Income tax expense  changed  from $94,000 for the
quarter ended June 30, 2003 to $150,000 for the same period in 2004. This change
of $56,000 is due to the  increase in net income for the quarter  ended June 30,
2004.  For the nine months ended June 30, 2004,  income tax expense was $315,000
compared to $257,000 for 2003.

Liquidity and Capital Resources

         The Bank'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 Bank uses its liquidity resources principally to fund existing
and future

                                       7

<PAGE>

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 Bank's operating  activities (the cash effects
of  transactions  that enter into the Bank's  determination  of net income e.g.,
non-cash items,  amortization and  depreciation,  provision for loan losses) for
the nine months ended June 30, 2004 was $281,000, which was the same as the same
period in 2003.

         Net  cash  used  by  the  Bank's  investing   activities   (i.e.,  cash
disbursements,  primarily for the purchase of the Bank's  investment  securities
and mortgage-backed securities portfolios and the Bank's loan portfolio) for the
nine months ended June 30, 2004,  totaled $9.2 million  compared to $4.7 million
for the same period in 2003. The increase is  attributable to an increase in net
loans  receivable  of $3.2  million  in  2004,  partially  offset  by  sale  and
redemption of securities net of purchases of $1.3 million.

         Net cash  provided  by the  Bank's  financing  activities  (i.e.,  cash
receipts  primarily  from net  increases in deposits  and net  increases in FHLB
advances)  for the nine  months  ended  June 30,  2004,  totaled  $4.4  million,
compared to net cash  provided by financing  activities  of $5.2 million for the
same period in 2003. The decrease is  attributable to a net increase in deposits
of $4.6 million in 2004, compared to $5.4 million in 2003.

         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 June 30, 2004,  with tangible,  core and
risk based capital ratios of 6.81%, 6.81% and 13.13%, respectively.

 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.

                                       8
<PAGE>

PART II.  OTHER INFORMATION


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

         The Company was not engaged in any material  legal  proceedings  during
         the quarter  ended June 30, 2004.  From time to time,  the Company 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 Small  Business  Issuer  Purchases of Equity
        ------------------------------------------------------------------------
        Securities
        ----------

         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) Exhibits:

               31   Certification  pursuant to Section 302 of Sarbanes-Oxley Act
                    of 2002

               32   Certification  pursuant to Section 906 Sarbanes-Oxley Act of
                    2002

         (b) Current Reports on Form 8-K filed during the quarter ended June 30,
             2004:

               During the  quarter  ended June 30,  2004,  the  Company  filed a
               Current  Report  on Form 8-K  dated May 4,  2004,  to report  the
               declaration of a semi-annual cash dividend.

                                        9
<PAGE>

                                   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: August 9, 2004            By: /s/Gary N. Pelehaty
                                    --------------------------------------------
                                    Gary N. Pelehaty
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)
                                    (Duly Authorized Officer)



Date: August 9, 2004            By: /s/Charles Alessi
                                    --------------------------------------------
                                    Charles Alessi
                                    Vice President, Chief Financial Officer
                                    Secretary and Treasurer
                                    (Principal Financial and Accounting Officer)