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 December 31, 1999
                                    -----------------

                                       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 January 19, 2000: 379,858
                                                                       -------

            Transitional Small Business Disclosure Format (check one)

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

                                    Contents
                                    --------
<TABLE>
<CAPTION>

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

<S>      <C>                                                                                                    <C>
     Item 1.  Financial Statements................................................................................3

          Consolidated Statements of Financial Condition at December 31, 1999
          (unaudited) and September 30, 1999 (audited)............................................................3

          Consolidated  Statements  of Income and  Comprehensive  Income for the
          three   months   ended   December  31,  1999  and  December  31,  1998
          (unaudited).............................................................................................4

          Consolidated Statements of Cash Flows for the three months ended
          December 31, 1999 and December 31, 1998 (unaudited).....................................................5

          Consolidated  Statement  of  Changes in  Stockholders'  Equity for the
          three Months  ended  December  31, 1999  (unaudited)  and the year
          ended September 30, 1999
          (audited)...............................................................................................6

     Item 2.  Management's Discussion and Analysis of Financial Condition and
              Results of Operations...............................................................................9


PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings..................................................................................12

     Item 2.  Changes in Securities and Use of Proceeds..........................................................12

     Item 3.  Defaults upon Senior Securities....................................................................12

     Item 4.  Submission of Matters to a Vote of Security Holders................................................12

     Item 5.  Other Information..................................................................................12

     Item 6.  Exhibits and Reports on Form 8-K...................................................................12

     Signatures..................................................................................................13

</TABLE>
                                      -2-
<PAGE>
                             FARNSWORTH BANCORP INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>

                                                           DECEMBER 31        SEPTEMBER 30
                                                              1999                1999
                                                       ----------------  --------------------
ASSETS                                                   (UNAUDITED)         (AUDITED)

<S>                                                      <C>                 <C>
Cash and due from banks                                    $ 1,902,675         $ 1,883,104
Securities available for sale                                8,601,561           8,672,614
Securities held to maturity:
  Mortgage-backed                                            1,688,879           1,755,110
  Other                                                      2,268,225           2,267,216
Loans receivable, net                                       40,162,801          38,832,141
Real Estate Owned, net                                          88,013              88,013
Accrued interest receivable                                    449,655             423,706
Federal Home Loan Bank of New York stock
  at cost substantially restricted                             434,300             418,700
Deferred Income Taxes                                          126,647              99,359
Premises and equipment                                       1,501,997           1,516,252
Other assets                                                    54,079              72,236
                                                       ----------------  --------------------

         Total assets                                     $ 57,278,832        $ 56,028,451
                                                       ================  ====================


LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                  $ 43,272,904        $ 42,490,162
Borrowings from FHLB                                         8,184,663           7,712,940
Advances by borrowers for taxes and
  insurance                                                    175,429             213,653
Accrued income taxes                                            77,060              78,160
Accrued interest payable                                        89,773              97,119
Accounts payable and other accrued
  expenses                                                     182,350             149,254
                                                       ----------------  --------------------

         Total liabilities                                  51,982,179          50,741,288
                                                       ----------------  --------------------

Preferred stock $.10 par value, 1,000,000
  shares authorized; none issued and
  outstanding
Common stock $.10 par value, 5,000,000 shares
  authorized; 379,858 shares issued and
  outstanding                                                   37,985              37,985
Additional paid in capital                                   3,396,262           3,396,262
Retained earnings substantially restricted                   2,508,501           2,451,554
Unreleased common stock and related                                                      -
 additional paid in capital acquired by                                                  -
 employee stock ownership plan (ESOP)                         (303,880)           (303,880)
Unissued Restricted Stock Plan Shares                         (159,364)           (159,364)
Net unrealized depreciation on available                                                 -
  for sale securities net of income taxes                     (182,851)           (135,394)
                                                       ----------------  --------------------

         Total stockholders' equity                          5,296,653           5,287,163
                                                       ----------------  --------------------

         Total liabilities and
          stockholders' equity                            $ 57,278,832        $ 56,028,451
                                                       ================  ====================
</TABLE>

                                      -3-
<PAGE>
                     FARNSWORTH BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)

                                                    THREE MONTHS ENDED
                                                       DECEMBER 31
                                                   1999           1998
                                              --------------    ------------
Interest income:
  Loans receivable                                $ 748,171       $ 617,263
  Securities                                        190,841          96,408
  Federal funds sold                                 13,361          26,695
                                              --------------    ------------
        Total interest income                       952,373         740,366

Interest expense:
  Deposits                                          379,406         350,620
  Federal Home Loan Bank advances                   118,631           5,241
                                              --------------    ------------
        Total interest expense                      498,037         355,861
                                              --------------    ------------
Net interest income                                 454,336         384,505

Provision for loan losses                            11,000           5,000
                                              --------------    ------------
        Net interest income after
          provision for loan losses                 443,336         379,505
                                              --------------    ------------

Noninterest income:
  Fees and other service charges                     55,726          61,830
  Other Income                                       12,466               -
                                              --------------    ------------
        Total noninterest income                     68,192          61,830

Noninterest expense:
  Compensation and benefits                         203,053         162,322
  Occupancy and equipment                            60,820          63,131
  Federal insurance premiums and
    assessments                                      10,211           5,318
  Other                                             149,437         121,941
                                              --------------    ------------
        Total noninterest expense                   423,521         352,712
                                              --------------    ------------

Income before provision for income
  taxes                                              88,007          88,623
Provision for income taxes                           31,060          35,560
                                              --------------    ------------
        Net income                                 $ 56,947        $ 53,063
                                              ==============    ============

Other Comprehensive Income, net of taxes
  Unrealized Gain (Loss) on Securities
   Available for Sale                               (47,457)         21,167

                                              --------------    ------------
Comprehensive Income                                $ 9,490        $ 74,230
                                              ==============    ============
Net income per common share:
  Basic                                              $ 0.17          $ 0.15

Shares used in computing basic
  income per share                                  337,314         349,470

                                      -4-
<PAGE>
                     FARNSWORTH BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED DECEMBER 31
                                                               1999                1998
                                                        -----------------   -----------------
<S>                                                         <C>                 <C>
Cash flows from operating activities:
  Net income                                                    $ 56,947            $ 53,063
                                                        -----------------   -----------------
  Adjustments  to  reconcile  net  income
   to net  cash  provided  by  operating
   activities:
    Depreciation and Amortization                                 17,789              16,331
    Provision for loan losses                                     11,000               5,000
    (Increase) in accrued interest receivable                    (25,949)            (61,255)
    Decrease in other assets                                      18,157              22,964
    (Decrease) in advances from borrowers                        (38,224)            (25,174)
    (Decrease) in accrued income taxes
     and deferred income taxes                                    (3,941)            (74,904)
    (Decrease) increase in accrued interest payable               (7,346)             16,197
    Increase (decrease) in other accrued liabilities              33,096             (21,612)
                                                        -----------------   -----------------

         Total adjustments                                         4,582            (122,453)
                                                        -----------------   -----------------

         Net cash provided by  (used in) operating
          activities                                              61,529             (69,390)
                                                        -----------------   -----------------

Cash flows from investing activities:
  Net increase in loans receivable                            (1,341,661)         (1,119,707)
  Purchase of securities held to maturity                              -                   -
  Redemption of securities, held to maturity                      66,273             255,455
  Purchase of Federal Home Loan Bank Stock                       (15,600)                  -
  Proceeds from sale of securities available for sale                  -                   -
  Purchase of securities, available for sale net                       -          (4,500,000)
  Purchase of premises and equipment                              (5,438)            (59,051)
                                                        -----------------   -----------------

         Net cash used in investing activities                (1,296,426)         (5,423,303)
                                                        -----------------   -----------------
Cash flows from financing activities:
  Net increase  in deposits                                      782,742           2,418,064
  Increase in Federal Home Loan Bank borrowings                  471,726           1,000,000
                                                        -----------------   -----------------
         Net cash provided by financing
           activities                                          1,254,468           3,418,064
                                                        -----------------   -----------------
Net  (decrease) increase in cash and due from banks               19,571          (2,074,629)

Cash at beginning of period                                    1,883,104           3,928,077
                                                        -----------------   -----------------
Cash at end of period                                        $ 1,902,675         $ 1,853,448
                                                        =================   =================

Supplemental  disclosure:
  Cash paid during the period for:
    Interest                                                 $   498,037         $   301,884
                                                        =================   =================
    Income taxes                                             $    35,000         $   110,200
                                                        =================   =================

  Unrealized gain  (loss) on securities available
    for sale, net of deferred income taxes                     $ (47,457)           $ 21,167
                                                        =================   =================
</TABLE>
                                      -5-
<PAGE>
                             FARNSWORTH BANCORP INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY

          FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 (unaudited) and
                   THE YEAR ENDED SEPTEMBER 30, 1999 (audited)
<TABLE>
<CAPTION>
                                                                                                      NET UNREALIZED
                                                                                                       APPRECIATION
                                                                                                      (DEPRECIATION)
                                                         RETAINED       COMMON           COMMON       ON SECURITIES
                                           ADDITIONAL    EARNINGS        STOCK           STOCK          AVAILABLE
                                  COMMON    PAID IN    SUBSTANTIALLY   ACQUIRED        ACQUIRED BY      FOR SALE
                                  STOCK     CAPITAL     RESTRICTED      BY RSP            ESOP        NET OF TAXES       TOTAL
                                  -------- ----------- ---------------- ----------- ----------------  -------------  ------------

<S>                              <C>      <C>             <C>          <C>              <C>              <C>        <C>
BALANCE AT SEPTEMBER 30, 1998     $ 37,985 $3,396,262      $ 2,227,363  $        -       $ (303,880)      $ 84,998   $ 5,442,728

NET INCOME FOR THE YEAR ENDED
 SEPTEMBER 30, 1999                      -          -          224,191           -                -              -       224,191
ACQUISITION OF COMMON STOCK                                                                                                    -
  BY RSP                                 -          -                -    (159,364)               -              -      (159,364)
CHANGE IN UNREALIZED
 APPRECIATION ON SECURITIES
 AVAILABLE FOR SALE, NET OF TAX          -          -                -           -                -       (220,392)     (220,392)
                                  -------- ----------- ---------------- ----------- ----------------  -------------  ------------

BALANCE AT SEPTEMBER 30, 1999       37,985  3,396,262        2,451,554    (159,364)        (303,880)      (135,394)    5,287,163


NET INCOME FOR THE THREE MONTHS
 ENDED DECEMBER 31, 1999                 -          -           56,947           -                -              -        56,947
CHANGE IN UNREALIZED
 DEPRECIATION ON SECURITIES
 AVAILABLE FOR SALE, NET OF TAX          -          -                -           -                -        (47,457)      (47,457)
                                  -------- ----------- ---------------- ----------  ----------------  -------------  ------------

BALANCE AT DECEMBER 31, 1999      $ 37,985 $3,396,262      $ 2,508,501  $ (159,364)      $ (303,880)    $ (182,851)  $ 5,296,653
                                  ======== =========== ================ =========== ================  =============  ============
</TABLE>

                                                                            -6-
<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
subsidiary  Peoples  Savings  Bank  (the  "Bank").  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  December  31,1999,   the  Consolidated
Statements  of  Income  and  Comprehensive  Income  for the three  months  ended
December 31, 1999 and 1998,  the  Consolidated  Statements of Cash Flows for the
three months ended, December 31, 1999 and 1998 and the Consolidated Statement of
Stockholders'  Equity for the year ended September 30, 1999 and the three months
ended  December 31, 1999.  The results of operations  for the three months ended
December  31,  1999,  are not  necessarily  indicative  of  results  that may be
expected for the entire year ending September 30, 2000, or for any other period.
The accompanying  unaudited  consolidated interim financial statements should be
read in conjunction with the Company's September 30, 1999 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, 1999.

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.

Cash Equivalents
----------------

For the purpose of  presentation in the  Consolidated  Statements of Cash Flows,
cash  and  cash  equivalents  are  defined  as  those  amounts  included  in the
balance-sheet  caption  "cash and due from  banks."  The Company  considers  all
highly liquid investments with original  maturities of three months or less when
purchased as cash equivalents.

Nature of Operations
--------------------

The Company is a unitary savings and loan holding company. The Bank operates two
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.


                                      -7-
<PAGE>
NOTE 2.  Net Income Per Common Share
         ---------------------------

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128,  "Earnings  Per Share".  Statement  No. 128 is effective  for the years
ended after  December 15, 1997 and requires  that prior period data be restated.
Per share amounts are reported in accordance with Statement No. 128.

     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 Company's  Employee Stock Ownership Plan ("ESOP").
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. The Company has no potentially dilutive securities.

     Per share  amounts for the quarters  ended  December 31, 1999 and 1998 have
been calculated based on the net income for the entire year.

<TABLE>
<CAPTION>

                                                       For the three months ended December 31
                                                       --------------------------------------
                                                 1999                                      1998
                                            --------------                             ------------
                                                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                       $56,947       337,314       $ 0.17       $53,063       349,470        $ 0.15

ESOP Shares                                     (27,350)                                 (30,388)

RSP Shares                                      (15,194)

                                  $56,947        337,314         0.17       $53,063       349,470          0.15
                                  ========       =======         ====       =======       =======          ====
</TABLE>

                                      -8-
<PAGE>

NOTE 3.  Recent Accounting Pronouncements
         --------------------------------

         In June 1997, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standards No. 130,  Reporting  Comprehensive
Income and its  components  in financial  statements.  Statement 130 states that
comprehensive  income  includes  reported net income of a company,  adjusted for
items that are currently  accounted for as direct entries to equity, such as the
net unrealized gain or loss on securities  available for sale,  foreign currency
items, and minimum pension  liability  adjustments.  This statement is effective
for both interim and annual  periods  beginning  after  December  15,  1997.  As
required, the Company adopted Statement 130 in the first quarter of fiscal 1999,
and reported comprehensive income in accordance with the new statement.


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

Financial Condition

         Total  assets  increased  $1.3  million  or 2.3% to  $57.3  million  at
December  31, 1999 from $56.0  million at September  30, 1999.  The increase was
primarily   attributable  to  a  $1.3  million  increase  in  the  Bank's  loans
receivable, net. The Bank's total liabilities increased $1.2 million or 2.4%, to
$52.0 million at December 31, 1999 from $50.8 million at September 30, 1999. The
increase was primarily  attributable  to a $783,000  increase in deposits and an
increase in borrowings from the FHLB of $472,000.

         Stockholders'  equity  increased  $10,000 to $5.297  million or 9.3% of
total  assets at December  31,  1999,  as compared to $5.287  million or 9.4% of
total assets at  September  30, 1999.  The increase in  stockholders'  equity is
primarily  attributable  to net income of $57,000,  offset by an increase in the
unrealized  depreciation  on  available  for  sale  securities  net of  taxes of
$47,000.

         Results of Operations

         Net  Income.  The Bank's net income  increased  $4,000 for the  quarter
ended  December 31, 1999 to $57,000 from $53,000 for the quarter ended  December
31,  1998.  The  increase in net income was  attributable  to an increase in the
Bank's net interest income of $69,000 and an increase in non-interest  income of
$6,000, partially offset by an increase in non-interest expense of $71,000.

         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 received 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.

         Net interest income after provision for loan losses increased  $64,000,
or 16.8%, to $443,000 for the quarter ended December 31, 1999 as compared to the
quarter ended December 31, 1998. The increase was primarily due to the growth in
interest-earning assets to $55.0 million in 1999 from $43.3 million in 1998.

         Provision  for Loan Losses.  Provision  for loan losses was $11,000 for
the quarter ended December 31, 1999, as compared to $5,000 for the quarter ended
December 31, 1998.


                                      -9-
<PAGE>

         Management  believes the  allowance for loan losses are 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 increased $6,000 or 9.7% from
$62,000 for the quarter  ended  December 31, 1998 to $68,000 for the same period
in 1999. This increase in the Bank's non-interest income was due the recognition
of miscellaneous income of $12,000 offset by a decrease in other fees of $6,000.

         Non-Interest  Expense.  Non-interest  expense  increased $71,000 or 21%
from $353,000 for the quarter  ended  December 31, 1998 to $424,000 for the same
period in 1999.  The  increase in the Bank's  non-interest  expense was due to a
$27,000 increase in other non-interest expense and an increase of $41,000 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.

         Income Tax Expense. Income tax expense decreased $5,000 from $36,000 in
1998 to $31,000 in 1999. This decrease in income tax expense is due to permanent
differences.

Liquidity and Capital Resources

         The Bank is  required to maintain  minimum  levels of liquid  assets as
defined by OTS  regulations.  This  requirement,  which varies from time to time
depending upon economic conditions and deposit flows, is based upon a percentage
of the Bank's deposits and short-term  borrowings.  The required ratio currently
is 4.0% and the Bank's regulatory  liquidity ratio average was 15.51 at December
31, 1999.

         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 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 quarter  ended  December 31, 1999 was $49,000,  an increase of $118,000,  as
compared to the same period in 1998. The increase in 1999 was primarily due to a
decrease in the accrued income tax and deferred  income taxes of $71,000,  and a
increase in non-deposit liabilities of $52,000.


                                      -10-
<PAGE>



         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
quarter  ended  December 31,  1999,  totaled  $1.3  million,  a decrease of $4.1
million.  The decrease in cash was  primarily  attributable  to funding net loan
growth of $1.3 million in 1999 as compared to $1.1 in 1998 as well as investment
purchases of $4.5 million in 1998. The decrease in cash was partially  offset by
redemption of securities of $66,000 in 1999 as compared to $255,000 in 1998.

         Net cash  provided  in the  Bank's  financing  activities  (i.e.,  cash
receipts  primarily  from net  increases in deposits  and net  increases in FHLB
advances)  for the quarter  ended  December 31, 1999,  totaled $1.3  million,  a
decrease of $2.1 million as compared to the quarter ended December 31, 1998.

         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 December 31, 1999, with tangible, core and
risk based capital ratios of 8.14%, 8.14% and 16.86%, respectively.


                                      -11-
<PAGE>
                           PART II. OTHER INFORMATION

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

          The Registrant is not engaged in any legal  proceedings at the present
          time.  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 and Reports on Form 8-K
         --------------------------------

             (a)      Exhibits

              3(i)    Articles of Incorporation of Farnsworth Bancorp, Inc. *
              3(ii)   Bylaws of Farnsworth Bancorp, Inc. *
             10.1     Employment Agreement with Gary N. Pelehaty *
             10.2     Employment Agreement with Charles Alessi *
             10.3     Severance Agreement with Elaine Denelsbeck *
             10.4     Farnsworth Bancorp, Inc. 1999 Stock Option Plan**
             10.5     Peoples Savings Bank Restricted Stock Plan**
             27       Financial Data Schedule (electronic filing only)


         ---------------
          *    Incorporated by reference to the  Registration  Statement on Form
               SB-2 (File No. 333-56689) declared effective by the SEC on August
               10, 1999.
          **   Incorporated  by reference to the exhibits to the Proxy Statement
               for the Annual Meeting of Stockholders  held on April 6, 1999 and
               filed with the SEC on February 22, 1999 (File No. 0-24621).

          (b)  No  current  reports on Form 8-K were  filed  during the  quarter
               ended December 31, 1999.

                                      -12-

<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: February 8, 2000        By:/s/Gary N. Pelehaty
                                 -----------------------------------------
                                 Gary N. Pelehaty
                                 President and Chief Executive Officer
                                 (Principal Executive Officer)
                                 (Duly Authorized Officer)



Date:  February 8, 2000       By:/s/Charles Alessi
                                 -----------------------------------------
                                 Charles Alessi
                                 Vice President, Secretary and Treasurer
                                 (Principal Financial and Accounting Officer)