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 March 31, 2001
                                                 ----------------

                                       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                         (I.R.S. Employer
Incorporation                                          Identification No.)
or Organization)


               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 April 23, 2001: 360,866
                                                                      -------

            Transitional Small Business Disclosure Format (check one)

                          YES        .          NO    X   .
                              --------             --------

<PAGE>

                                    Contents
                                    --------


<TABLE>
<CAPTION>
PART 1 - FINANCIAL INFORMATION                                                           Page(s)
                                                                                         -------

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

         Consolidated  Statements  of  Financial  Condition  at March  31,  2001
         (unaudited) and September 30, 2000 (audited).........................................3

         Consolidated  Statements  of Income  and  Comprehensive  Income for the three
         and six months ended March 31, 2001, and 2000 (unaudited)............................4

         Consolidated Statements of Cash Flows for the six months ended
         March 31, 2001 and 2000 (unaudited)..................................................5

Item 2.  Management's Discussion and Analysis of Financial Condition and
            Results of Operations.............................................................7


PART II - OTHER INFORMATION


Item 1.  Legal Proceedings...................................................................11

Item 2.  Changes in Securities and Use of Proceeds...........................................11

Item 3.  Defaults upon Senior Securities.....................................................11

Item 4.  Submission of Matters to a Vote of Security Holders.................................11

Item 5.  Other Information...................................................................11

Item 6.  Exhibits and Reports on Form 8-K....................................................11

Signatures...................................................................................12

</TABLE>

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



<TABLE>
<CAPTION>
                                                            MARCH 31      SEPTEMBER 30,
                                                              2001            2000
                                                          ------------    ------------
     ASSETS                                                 (UNAUDITED)       (AUDITED)

<S>                                                     <C>             <C>
Cash and due from banks                                   $  5,547,100    $  3,163,345
Securities available for sale                                6,366,605       8,760,132
Securities held to maturity:
  Mortgage-backed                                            4,904,636       1,468,438
  Other                                                                      2,273,068
Loans receivable, net                                       41,856,113      39,850,070
Real estate owned, net                                         130,292
Accrued interest receivable                                    378,165         419,459
Federal Home Loan Bank of New York stock
  at cost substantially restricted                             457,800         457,800
Accrued income taxes                                            11,183
Deferred Income Taxes                                                           66,611
Premises and equipment                                       1,540,179       1,575,974
Other assets                                                   196,348          60,594
                                                          ------------    ------------
         Total assets                                     $ 61,388,421    $ 58,095,491
                                                          ============    ============

     LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                  $ 51,684,937    $ 44,734,635
Borrowings from FHLB                                         3,786,850       7,597,286
Advances by borrowers for taxes and
  insurance                                                    223,942         212,302
Accrued income taxes                                                               469
Deferred taxes                                                   6,214
Accrued interest payable                                        68,490          72,492
Accounts payable and other accrued
  expenses                                                      82,413          97,298
                                                          ------------    ------------
         Total liabilities                                  55,852,846      52,714,482
                                                          ------------    ------------
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                             37,985          37,985
Additional paid in capital                                   3,396,262       3,396,262
Retained earnings substantially restricted                   2,559,078       2,575,605
Treasury stock at cost: 18,992 shares                         (185,172)       (185,172)
Unvested common stock and related
 additional paid in capital acquired by
 employee stock ownership plan (ESOP)                         (220,644)       (235,154)
Unreleased Restricted Stock Plan Shares                       (115,934)       (127,764)
Net unrealized appreciation (depreciation) on available
  for sale securities net of income taxes                       64,000         (80,753)
                                                          ------------    ------------
         Total stockholders' equity                          5,535,575       5,381,009
                                                          ------------    ------------
         Total liabilities and
          stockholders' equity                            $ 61,388,421    $ 58,095,491
                                                          ============    ============
</TABLE>
                                      -3-
<PAGE>
                     FARNSWORTH BANCORP, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDED            SIX  MONTHS ENDED
                                                       MARCH 31                     MARCH 31
                                                  2001           2000           2001           2000
                                             -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Interest income:
  Loans receivable                           $   786,882    $   652,376    $ 1,564,919    $ 1,502,365
  Securities                                     145,836        120,923        331,365        388,594
  Federal funds sold                              41,754          6,526         55,567         26,149
                                             -----------    -----------    -----------    -----------
        Total interest income                    974,472        779,825      1,951,851      1,917,108
                                             -----------    -----------    -----------    -----------
Interest expense:
  Deposits                                       483,894        352,404        925,208        762,873
  Federal Home Loan Bank advances                 81,453         39,449        194,252        243,440
                                             -----------    -----------    -----------    -----------
        Total interest expense                   565,347        391,853      1,119,460      1,006,313
                                             -----------    -----------    -----------    -----------
Net interest income                              409,125        387,972        832,391        910,795

Provision for loan losses                          9,245          9,000         12,245         13,000
                                             -----------    -----------    -----------    -----------
        Net interest income after
          provision for loan losses              399,880        378,972        820,146        897,795
                                             -----------    -----------    -----------    -----------
Noninterest income:
  Fees and other service charges                  55,442         64,494        118,013        103,459
  Net Realized Gain on Available for
    Sale Securities                               26,919          1,484         33,919          4,454
                                             -----------    -----------    -----------    -----------
        Total noninterest income                  82,361         65,978        151,932        107,913
                                             -----------    -----------    -----------    -----------
Noninterest expense:
  Compensation and benefits                      237,513        184,928        462,427        409,559
  Occupancy and equipment                         93,086         78,265        167,349        133,622
  Federal insurance premiums and
    assessments                                    2,165          5,376          4,351         17,003
  Other                                          182,453        133,003        361,092        294,735
                                             -----------    -----------    -----------    -----------
        Total noninterest expense                515,217        401,572        995,219        854,919
                                             -----------    -----------    -----------    -----------
(Loss) income before provision for income
  tax expense (benefit)                          (32,976)        43,378        (23,141)       150,789
Provision for income tax expense (benefit)       (10,572)        18,240         (6,612)        51,685
                                             -----------    -----------    -----------    -----------
        Net (loss) income                        (22,404)        25,138        (16,529)        99,104

Other Comprehensive Income, net of taxes
  Unrealized Gain (Loss) on Securities
   Available for Sale                             64,000        (22,848)        81,064        (40,123)
  Reclassification adjustments for gains
    included in net income                       (26,919)                      (33,919)             -
                                             -----------    -----------    -----------    -----------
Comprehensive Income                         $    14,677    $     2,290    $    30,616    $    58,981
                                             ===========    ===========    ===========    ===========
Net (loss) income per common share:
  Basic                                      $     (0.07)   $      0.07    $     (0.05)   $      0.29

Shares used in computing basic
  income per share                               322,420        337,314        322,420        337,314

</TABLE>
                                      -4-
<PAGE>
                     FARNSWORTH BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                            SIX MONTHS ENDED MARCH 31

<TABLE>
<CAPTION>
                                                               2001           2000
                                                           -----------    -----------
<S>                                                      <C>            <C>

Cash flows from operating activities:
  Net (loss) income                                        $   (16,529)   $    99,104
                                                           -----------    -----------
  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                               49,777         36,729
    Provision for loan losses                                   12,245         13,000
    Net (gain) on sale of AFS securities                       (33,919)
   Net loss on sale of real estate owned                                        8,013
   Decrease in accrued interest receivable                      41,294          1,369
    (Increase) decrease in other assets                       (135,754)        10,335
    Increase (decrease) in advances from borrowers              11,640        (30,697)
    Increase (decrease)  in accrued income taxes
     and deferred income taxes                                  61,173        (87,259)
  (Decrease) in accrued interest payable                        (4,002)        (2,221)
  (Decrease) in other accrued liabilities                      (14,885)        (1,960)
                                                           -----------    -----------
         Total adjustments                                     (12,431)       (52,691)
                                                           -----------    -----------
         Net cash provided by  (used in) operating
          activities                                           (28,960)        46,413
                                                           -----------    -----------
Cash flows from investing activities:

  Net increase in loans receivable                          (2,181,113)    (1,312,067)
  Proceeds from sale of REO                                                    80,000
  Redemption of securities, held to maturity                 2,188,765        113,005
  Purchase of Federal Home Loan Bank Stock                                    (39,100)
  Proceeds from sale of securities available for sale        7,762,458
  Purchase of securities held to maturity                   (3,625,574)
  Purchase of securities, available for sale net            (4,857,705)
  Purchase of premises and equipment                           (13,982)      (101,745)
                                                           -----------    -----------
         Net cash used in investing
           activities                                         (727,151)    (1,259,907)
                                                           -----------    -----------
Cash flows from financing activities:
  Net increase in deposits                                   6,950,302        304,645
  Repayment of Federal Home Loan Bank Borrowings            (3,810,436)     1,442,861
                                                           -----------    -----------
         Net cash provided by financing
           activities                                        3,139,866      1,747,506
                                                           -----------    -----------
Net  increase in cash and due from banks                     2,383,755        534,012

Cash at beginning of period                                  3,163,345      1,883,104
                                                           -----------    -----------
Cash at end of period                                      $ 5,547,100    $ 2,417,116
                                                           ===========    ===========
Supplemental disclosure:
 Cash paid during the period for:
    Interest                                               $ 1,123,462    $   508,276
                                                           ===========    ===========
    Income taxes                                                          $   120,277
                                                           ===========    ===========
  Unrealized gain (loss) on securities available
    for sale, net of deferred income taxes                 $   144,753    $   (40,123)
                                                           ===========    ===========
 Investment securities transferred from held to maturity
  to available for sale                                    $ 2,273,966
                                                           ===========    ===========
 Acquisition of real estate in settlement of loans         $   130,291
                                                           ===========    ===========
</TABLE>
                                      -5-
<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 March 31,
2001, the  Consolidated  Statements of Income and  Comprehensive  Income for the
three and six  months  ended  March  31,  2001 and  2000,  and the  Consolidated
Statements  of Cash Flows for the six months ended March 31, 2001 and 2000.  The
results of operations  for the three and six months ended March 31, 2001 are not
necessarily  indicative  of results  that may be  expected  for the entire  year
ending September 30, 2001, or for any other period.  The accompanying  unaudited
consolidated interim financial statements should be read in conjunction with the
Company's September 30, 2000 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, 2000.

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
three  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.
In December 2000, the Company began offering  brokerage and 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.


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 Company's  Employee Stock Ownership Plan ("ESOP").
Diluted net income per share is  calculated by adjusting the

                                      -6-
<PAGE>

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.


                                       For the three months ended March 31
                                       -----------------------------------
<TABLE>
<CAPTION>

                                              2001 .                            2000  .
                                            --------                           --------

                                            Weighted    Per-                   Weighted     Per-
                                            Average     Share                  Average      Share
                               Loss         Shares      Amount     Income      Shares       Amount
                               ----         ------      ------     ------      ------       ------
<S>                        <C>              <C>        <C>        <C>         <C>         <C>
Net (loss) income available
To Common Shareholders      $(16,529)        360,866               $99,104     379,858

ESOP Shares                                  (24,312)                          (27,350)

RSP Shares                                   (14,134)                          (15,194)
                            --------         -------    ------     -------     -------     ------
                            $(16,529)        322,420    $(0.05)    $99,104     337,314     $ 0.29
                            ========         =======    ======     =======     =======     ======
</TABLE>

NOTE 3.  Investments
         -----------

         In fiscal year 2001, the Bank adopted Statement of Financial Accounting
Standard No. 133 "Accounting for Derivative Instruments and Hedging Activities."
In accordance FASB 133, the Bank  transferred a portion of its  held-to-maturity
portfolio  to   available-for-sale.   The   unrealized   gain  or  loss  on  the
held-to-maturity  investments  that were  transferred to  available-for-sale  is
reported  in  accumulated  other   comprehensive   income  consistent  with  the
requirements of Statement of Financial  Accounting  Standard No. 115 "Accounting
for Certain Investments in Debt and Equity Securities."


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  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

                                      -7-
<PAGE>

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 $3.3 million or 5.65% to $61.4 million at March
31, 2001 from $58.1  million at September  30, 2000.  The increase was primarily
attributable  to a $1.1  million  increase  in the  Bank's  cash and  investment
securities, an increase in loans receivable of $2.0 million, net and an increase
in other assets of $100,000. The Bank's total liabilities increased $3.1 million
or 5.9%,  to $55.8 million at March 31, 2001 from $52.7 million at September 30,
2000.  The increase was  primarily  attributable  to a $6.9 million  increase in
deposits  attributable to the Bank's Mt. Laurel branch, offset by a $3.8 million
decrease in borrowings.

         Stockholder' equity increased $155,000 to $5.5 million or 9.0% of total
assets at March 31, 2001, as compared to $5.4 million or 9.3% of total assets at
September  30,  2000.  The  increase  in   stockholders'   equity  is  primarily
attributable  to a change in the unrealized  appreciation  on available for sale
securities net of taxes of $145,000.


Results of Operations


         Net  Income.  The Bank's net income  decreased  $47,000 for the quarter
ended March 31, 2001 to a net loss of $22,000 from net income of $25,000 for the
quarter ended March 31, 2000. The decrease in net income was  attributable to an
increase in the Bank's non-interest expenses of $114,000, partially offset by an
increase in interest  income  after  provisions  for loan losses of $21,000,  an
increase in non-interest  income of $16,000,  and by a decrease in provision for
income  taxes of  $29,000.  For the six months  ended  March 31, 2001 net income
decreased  $116,000 to a net loss of $17,000  from net income of $99,000 for the
same period in 2000.

         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  $21,000,
or 5.5%,  to $400,000  for the  quarter  ended March 31, 2001 as compared to the
quarter  ended March 31, 2000.  The increase was  primarily due to the increased
interest  income of  $194,000  offset by an  increase  in  interest  expense  of
$173,000.  Net interest income after provision for loan losses decreased $78,000
for the six months ended March 31, 2001 compared to the same period in 2000. The
decrease was attributed primarily to the increase in cost of funds.

         Provision for Loan Losses. Provision for loan losses was $9,000 for the
three  months  ended March 31,  2001,  this was the same as for the three months
ended March 31, 2000.  For the six months ended March 31, 2001 the provision for
loan losses was $12,000 compared to $13,000 for the same period in 2000.

                                      -8-
<PAGE>

         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 increased  $16,000 or 24.8%
from  $66,000  for the  quarter  ended  March 31,  2000 to $82,000  for the same
quarter  in  2001.  Non-interest  income  for  2001  included  a gain on sale of
securities  available  for sale of $27,000.  For the six months  ended March 31,
2001,  non-interest  income  increased  $44,000,  compared to the same period in
2000,  this included a gain in the 2001 period on securities  available for sale
of $34,000.

         Non-Interest Expense.  Non-interest expense increased $114,000 or 28.3%
from approximately $402,000 for the quarter ended March 31, 2000 to $515,000 for
the same quarter in 2001.  The increase in the Bank's  non-interest  expense was
primarily due to a $49,000 increase in other non-interest expense an increase of
$53,000 in the Bank's  compensation  and  benefits and an increase of $15,000 in
occupancy,  and equipment.  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.  The increase in these  expenses was mostly due to the Banks
branch office located in Mt.  Laurel,  New Jersey which opened in March of 2000.
For the six months  ended  March 31, 2001  non-interest  expenses  increased  by
$140,000 as compared to the same period in 2000.

         Income Tax Expense  (benefit).  Income tax expense changed from $18,000
for the quarter  ended  March 31, 2000 to an $11,000  income tax benefit for the
same  period in 2001.  This  change of  $29,000 is due to the  operating  losses
incurred  in fiscal year 2001.  For the six months  ended  March 31,  2001,  the
Company  recognized an income tax benefit of $7,000 versus an income tax expense
of $52,000 in the same period in 2000.


         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 15.45% at March
31, 2001.

         In December  2000,  the Bank  transferred  a portion of its  investment
securities from  held-to-maturity  into  available-for-sale,  in accordance with
FASB 133.

         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.

                                      -9-
<PAGE>

Net  cash  used  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 six months  ended March 31,  2001 was  $29,000,  a decrease  of $75,000,  as
compared to the same period in 2000.  The decrease in 2001 was  primarily due to
the net loss recognized in the six months ended March 31, 2001 versus net income
for the same period in 2001 and the change in other assets.

         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
six months ended March 31, 2001,  totaled $727,000 compared to a use of funds of
$1.3 million for the same period in 2000. The difference is  attributable  to an
increase  in net loans  receivable  of $2.1  million  in 2001  compared  to $1.3
million in 2000 and purchase of securities of $8.5 million  partially  offset by
the sale and redemption of securities of $10.0 million in 2001.

         Net cash provided the Bank's financing  activities (i.e., cash receipts
primarily from net increases in deposits and net increases in FHLB advances) for
the six months ended March 31, 2001, totaled $3.1 million,  compared to net cash
provided by  financing  activities  of $1.7 million for the same period in 2000.
The  increase is  attributable  to a net increase in deposits of $6.9 million in
2001 offset by a repayment of borrowings of $3.8 million in 2001.

         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, 2001, with tangible,  core and
risk based capital ratios of 7.94%, 7.94% and 16.80%, respectively.

                                      -10-
<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
         ---------------------------------------------------

         The  annual  meeting  of  stockholders  of the  Registrant  was held on
         February  20,  2001,  and  the  following  matters  were  voted  on  by
         stockholders:

         Election of Directors
         ---------------------
                                                     FOR               WITHHELD
                                                     ---               --------
         Charles E. Adams                            272,454           25,355
         William H. Wainwright, Jr.                  272,429           25,380

Item 5.  Other Information
         -----------------

         Not applicable.

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

          (a)  Exhibits:

               None.

          (b)  Current  Reports on Form 8-K filed during the quarter ended March
               31, 2001:

               On January 26, 2001,  the  Registrant  filed a Current  Report on
               Form 8-K dated January 25, 2001 to report information under Items
               5 and 7.

                                      -11-
<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.

<TABLE>
<CAPTION>
                                      FARNSWORTH BANCORP, INC.

<S>                                 <C>

Date: May 1, 2001                      By:  /s/Gary N. Pelehaty
                                          ---------------------------------------------------------
                                                Gary N. Pelehaty
                                                President and Chief Executive Officer
                                                (Principal Executive Officer)




Date: May 1, 2001                      By:  /s/Charles Alessi
                                          ---------------------------------------------------------
                                                Charles Alessi
                                                Vice President, Chief Financial Officer,
                                                Secretary and Treasurer
                                                (Principal Financial and Accounting Officer)
</TABLE>

                                      -12-