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, 2006
                                      -----------------

                                       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
                                   -------         ------

INDICATE BY CHECK MARK WHETHER THE  REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
RULE 12B-2 OF THE EXCHANGE ACT    YES              NO    X
                                      -------         ------

Number of shares of Common Stock outstanding as of February 2, 2007:  650,530
                                                                      -------

            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
           Consolidated Statements of Financial Condition at December 31, 2006
           (unaudited) and September 30, 2006 (audited)............................................   1

           Consolidated Statements of Income and Comprehensive Income for the three
           months ended December 31, 2006, and 2005 (unaudited)....................................   2

           Consolidated Statements of Cash Flows for the three months ended
           December 31, 2006 and 2005 (unaudited)..................................................   3

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

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations...................................................................   6

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

PART II - OTHER INFORMATION

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

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.............................   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 ...............................................................................   9

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

Certifications.....................................................................................  11
</TABLE>

                                       i
<PAGE>
                    FARNSWORTH BANCORP INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>


                                                                  DECEMBER 31,   SEPTEMBER 30,
                                                                      2006           2006
                                                               -------------    -------------
ASSETS                                                           (UNAUDITED)     (AUDITED)

<S>                                                            <C>              <C>
Cash and due from banks                                        $  10,268,957    $   9,248,363
Securities available for sale                                     20,718,950       19,962,480
Securities held to maturity                                          155,675          161,862
Loans receivable, net                                             74,968,658       73,894,943
Accrued interest receivable                                          488,743          481,452
Federal Home Loan Bank of New York (FHLB) stock
  at cost substantially restricted                                   202,600          204,700
Prepaid income taxes                                                 318,065          374,919
Deferred income taxes                                                241,271          202,141
Premises and equipment                                             2,063,325        2,100,403
Other assets                                                         111,061           94,938
                                                               -------------    -------------
         Total assets                                          $ 109,537,305    $ 106,726,201
                                                               =============    =============


LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                       $  99,834,699    $  96,844,712
Borrowings from FHLB                                                 447,212          489,941
Advances by borrowers for taxes and insurance                        212,353          215,480
Accrued interest payable                                             157,257          130,637
Accounts payable and other accrued
  expenses                                                           157,207          196,968
                                                               -------------    -------------
         Total liabilities                                       100,808,728       97,877,738
                                                               -------------    -------------

Preferred stock $.10 par value, 1,000,000
  shares authorized; none issued and
  outstanding
Common stock $.10 par value, 5,000,000 shares authorized;
  662,698 shares issued, at December 31, 2006 and September
  30, 2006; shares outstanding 650,535 at  December 31, 2006
   and September 30, 2006 respectively                                66,270           66,270
Additional paid in capital                                         8,483,529        8,483,529
Retained earnings substantially restricted                           893,748        1,028,671
Treasury stock at cost 12,163 shares at December 31, 2006
 and  September 30, 2006                                            (118,521)        (118,521)
Common stock aquired by
 employee stock ownership plan (ESOP)                               (187,131)        (192,411)
Accumulated other comprehensive income , unrealized
 depreciation on available for sale securities,
 net of taxes                                                       (409,318)        (419,075)
                                                               -------------    -------------
         Total stockholders' equity                                8,728,577        8,848,463
                                                               -------------    -------------
         Total liabilities and
          stockholders' equity                                 $ 109,537,305    $ 106,726,201
                                                               =============    =============
</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS

                                       1
<PAGE>
                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF (LOSS) INCOME
                         AND COMPREHENSIVE (LOSS) INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                             DECEMBER 31,
                                                     --------------------------
                                                        2006            2005
                                                     -----------    -----------
<S>                                                  <C>            <C>
Interest income:
  Loans receivable                                   $ 1,282,405    $ 1,260,569
  Securities                                             246,219        228,917
  Federal funds sold                                      95,591         63,807
                                                     -----------    -----------
        Total interest income                          1,624,215      1,553,293
                                                     -----------    -----------

Interest expense:
  Deposits                                               832,742        576,395
  Federal Home Loan Bank advances                          6,821          9,280
                                                     -----------    -----------
        Total interest expense                           839,563        585,675
                                                     -----------    -----------

Net interest income                                      784,652        967,618

Provision for loan losses                                     --         30,000
                                                     -----------    -----------

        Net interest income after
          provision for loan losses                      784,652        937,618
                                                     -----------    -----------

Noninterest income:
  Fees and other service charges                          55,752         70,057
  Net realized gain on available for sale:
    Securities                                             3,125          5,156
                                                     -----------    -----------
        Total noninterest income                          58,877         75,213
                                                     -----------    -----------

Noninterest expense:
  Compensation and benefits                              496,043        465,748
  Occupancy and equipment                                126,860        126,860
  Professional fees                                       24,444         77,033
  Service fees                                            76,085         66,257
  Merger expenses                                        121,032
  Other                                                   90,361        112,259
                                                     -----------    -----------
        Total noninterest expense                        934,825        848,157
                                                     -----------    -----------

(Loss) Income  before provision for income
  tax expense                                            (91,296)       164,674
Provision for income tax expense                          11,100         74,500
                                                     -----------    -----------
        Net (loss) income                               (102,396)        90,174

Other comprehensive income (loss), net of taxes
  Unrealized gain (loss) on securities
  available for sale                                      11,632       (108,045)
  Reclassification adjustments for gains
   included in net income                                 (1,875)        (3,094)
                                                     -----------    -----------
Comprehensive  loss                                  $   (92,639)   $   (20,965)
                                                     ===========    ===========

Net (loss) income  per common share:
  Basic                                              $     (0.16)   $      0.14
  Diluted                                            $     (0.16)   $      0.14

Weighted average number of shares
 outstanding during the period:
  Basic                                                  632,900        627,732
  Diluted                                                632,900        667,179
</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS

                                       2
<PAGE>
                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                         THREE MONTHS ENDED DECEMBER 31
<TABLE>
<CAPTION>
                                                                   2006            2005
                                                               ------------    ------------
<S>                                                            <C>             <C>
Cash flows from operating activities:
  Net (loss) income                                            $   (102,396)   $     90,174
                                                               ------------    ------------

  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                                    38,065          36,903
    Stock compensation                                                5,280          13,244
    Provision for loan losses                                          --            30,000
    Net gain on sale of AFS securities                               (3,125)         (5,156)
   Change in:
     Accrued interest receivable                                     (7,291)         15,868
     Other assets                                                   (16,123)        (27,230)
     Advances from borrowers                                         (3,127)       (117,083)
     Accrued and deferred income taxes                               11,219        (103,602)
     Accrued interest payable                                        26,620          18,263
     Other accrued liabilities                                      (39,761)          8,712
                                                               ------------    ------------

         Total adjustments                                           11,757        (130,081)
                                                               ------------    ------------

         Net cash used in operating
          activities                                                (90,639)        (39,907)
                                                               ------------    ------------

Cash flows from investing activities:

  Net change in loans receivable                                 (1,073,715)     (1,832,942)
  Redemption of securities, held to maturity                          6,187         198,449
  Redemption of securities, available for sale                      261,670         250,624
  Proceeds from sale of securities available for sale             2,961,562       3,931,562
  Purchase of securities, available for sale net                 (3,960,315)     (5,906,570)
  Redemption of FHLB stock                                            2,100         348,800
  Purchase of premises and equipment                                   (987)         (7,408)
                                                               ------------    ------------

         Net cash used in investing activities                   (1,803,498)     (3,017,485)
                                                               ------------    ------------


Cash flows from financing activities:
  Net change  in deposits                                         2,989,987         (50,639)
  Repayment of  Federal Home Loan Bank Borrowings                   (42,729)        (40,283)
  Dividends paid                                                    (32,527)        (32,526)
                                                               ------------    ------------

         Net cash provided by (used in) financing activities      2,914,731        (123,448)
                                                               ------------    ------------

Net change in cash                                                1,020,594      (3,180,840)

Cash at beginning of period                                       9,248,363      10,278,409
                                                               ------------    ------------
Cash at end of period                                          $ 10,268,957    $  7,097,569
                                                               ============    ============

Supplemental disclosure:
  Cash paid during the period for:
    Interest                                                   $    812,943    $    567,412
                                                               ============    ============
    Income taxes                                               $         --    $    125,750
                                                               ============    ============

Non cash items:
  Unrealized gain (loss)  on securities available
    for sale, net of deferred income taxes                     $      9,757    $   (111,139)
                                                               ============    ============
</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 December 31,
2006, the  Consolidated  Statements of Income and  Comprehensive  Income for the
three months ended December 31, 2006 and 2005, and the  Consolidated  Statements
of Cash Flows for the three months ended December 31, 2006 and 2005. The results
of operations for the three months ended  December 31, 2006 are not  necessarily
indicative of results that may be expected for the entire year ending  September
30, 2007,  or for any other  period.  The  accompanying  unaudited  consolidated
interim  financial  statements  should be read in conjunction with the Company's
September  30,  2006  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, 2006.

In preparing the financial statements,  management is required to make estimates
and assumptions that affect the reported amount of assets and  liabilities,  the
disclosure of contingent  assets and liabilities  and the reported  revenues and
expenses.  Actual results could differ  significantly  from those estimates.  In
addition,  various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses and foreclosed
real estate.  Such  agencies may require the Bank to recognize  additions to the
allowance for loan losses or additional  write-downs  on foreclosed  real estate
based on their  judgments  about  information  available  to them at the time of
their examination.

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

The Company is a unitary  savings and loan holding  company.  The Bank  operates
four  branches  in  Burlington  County,  New Jersey.  The Bank offers  customary
banking services,  including accepting  checking,  savings and time deposits and
the making of commercial,  real-estate  and consumer loans, to customers who are
predominantly small and middle-market businesses and middle-income individuals.

The Company also offers  brokerage,  investment  advisory services and insurance
services to the general  public  through  Peoples  Financial  Services,  Inc., a
subsidiary  organized for the sale of mutual funds and insurance through a third
party networking agreement.


                                       4
<PAGE>

NOTE 2.  NET (LOSS) 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  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.  Common
Stock  equivalents  of the  Company's  common stock as of December 31, 2006 were
excluded in the  computation  of diluted  earnings per share as the  computation
would be anti-dilutive.
<TABLE>
<CAPTION>

                                          For the three months ended December 31
                            ------------------------------------------------------------------------
                                         2006                                2005
                                         ----                                ----

                                       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      $(102,396)   650,535                  $90,174      650,535

ESOP Shares, not
Committed to be released                 (17,635)                              (22,803)
                             -----------------------------------------------------------------------
Basic (Loss) net income      (102,396)   632,900      $(0.16)     $90,174      627,723         $0.14
Common Stock equivalents                                                        39,447
                             -----------------------------------------------------------------------
Diluted
Net (Loss) income per share $(102,396)   632,900      $(0.16)     $90,174      667,179         $0.14
                            ========================================================================
</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.
                                       5
<PAGE>

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  communications  by the
Company,  which  are made in good  faith by the  Company  pursuant  to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.

         These forward-looking statements involve risks and uncertainties,  such
as statements of the Company's plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economy in which the Company conducts  operations;
the effects of, and changes in,  trade,  monetary and fiscal  policies and laws,
including  interest  rate  policies  of the board of  governors  of the  federal
reserve system, inflation, interest rate, market and monetary fluctuations;  the
impact of changes in financial  services' laws and  regulations  (including laws
concerning taxes, banking securities and insurance);  technological changes; and
the success of the Company at managing the risks involved in the foregoing.

         The Company  cautions that the foregoing  list of important  factors is
not  exclusive.  The Company does not  undertake  to update any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Company.

RECENT DEVELOPMENTS

         On June 23, 2006, the Company,  Sterling Banks, Inc. and Sterling Bank,
a New Jersey chartered  commercial bank ("Sterling"),  entered into an Agreement
and Plan of Merger (the  "Agreement").  Under the  Agreement,  the Company  will
merge with and into Sterling Banks,  Inc. (In  Organization),  the proposed bank
holding  company for Sterling (the  "Merger"),  in exchange for 2.3625 shares of
Sterling Bank's, Inc., common stock, or $27.50 in cash, or a combination of cash
and stock, and at the election of the Company's Farnsworth stockholders, subject
to an overall mix of 50 percent stock and 50 percent cash.  The Merger is valued
at  approximately  $19.1  million.  Sterling will be the  surviving  bank in the
Merger.  The  Agreement  and the  transactions  contemplated  thereby  have been
approved by the  stockholders  of the  Company.  The company is awaiting for all
required regulatory approvals, as well as other customary conditions. The Merger
is  expected  to be  completed  during  the  first  quarter  of  2007.  For more
information  regarding  the  Agreement  and  the  Merger,  please  refer  to the
Company's Current Report on Form 8-K, dated June 23, 2006, as filed with the SEC
on June 26, 2006.

FINANCIAL CONDITION

         Total assets  increased  $2.8 million to $109.5 million at December 31,
2006 from $106.7  million at September 30, 2006.  The increase was attributed to
an  increase  in cash  and due  from  banks  of $1.0  million,  an  increase  in
securities available for sale of $756,000 and an increase in loan receivable net
of $1.1  million.  The Company's  total  liabilities  increased  $2.9 million to
$100.8  million at December 31,

                                       6
<PAGE>

2006 from $97.9 million at September 30, 2006. The increase in  liabilities  was
attributable to an increase in deposits of $2.9 million.

     Stockholders'  equity was $8.7  million or 8.0% of total assets at December
31, 2006,  as compared to $8.8 million or 8.3% of total assets at September  30,
2006. The decrease in  stockholders'  equity is primarily  attributable to a net
loss of $102,000 and dividends paid of $33,000.

RESULTS OF OPERATIONS

     NET LOSS. The Company's net income decreased $192,000 for the quarter ended
December  31,  2006 a net loss of  $102,000  from net income of $90,000  for the
quarter  ended  December  31,  2006.  The  decrease  in net  income  was  mostly
attributable  to a decrease in net  interest  income after  provisions  for loan
losses of $153,000,  merger expenses of $121,000  partially offset by a decrease
in income taxes of $64,000.

     NET INTEREST INCOME. Net interest income is the most significant  component
of the Company's income from  operations.  Net interest income is the difference
between interest the Company receives on its interest earning assets,  primarily
loans and  investments,  and interest  the Company pays on its  interest-bearing
liabilities,  deposits and borrowings. Net interest income depends on the volume
of and rates earned on interest-earning  assets and the volume of and rates paid
on interest-bearing liabilities.

     Net interest income after provision for loan losses decreased $153,000,  or
16.3%,  to  $785,000  for the  quarter  ended  December  31, 2006 as compared to
$938,000 for the quarter ended December 31, 2005. The decrease was primarily due
to an increase in interest  expense of $254,000  partially offset by an increase
in interest  income of $71,000 and a decreases in provisions  for loan losses of
$30,000.  The  Company's  cost of funds  increased as a result of higher  market
interest rates.

     PROVISION  FOR LOAN LOSSES.  No provision  for loan losses was provided for
the three  months ended  December  31,  2006,  compared to $30,000 for the three
months ended December 31, 2005.

     Management  believes  the  allowance  for loan losses is at a level that is
adequate to provide for  estimated  losses.  However,  there can be no assurance
that further  additions  will not be made to the  allowance and that such losses
will not exceed the estimated amount.

     NON-INTEREST  INCOME.  Non-interest  income  decreased  $16,000 or 75.0% to
$59,000  for the  quarter  ended  December  31,  2006 from  $75,000 for the same
quarter in 2005. The decrease was due to a decrease in deposit fees of $14,000.

     NON-INTEREST  EXPENSE.  Non-interest expense increased $87,000 or 10.25% to
$935,000 for the quarter  ended  December 31, 2006  compared to $848,000 for the
same quarter in 2005.  The increase in the  Company's  non-interest  expense was
primarily due to merger expenses of $121,000  partially  offset by a decrease in
professional fees of $53,000 and a decrease in other expenses of $22,000.

     INCOME TAX EXPENSE. Income tax expense decreased by $64,000 for the quarter
ended  December  31, 2006 to $11,000  compared to $75,000 for the same period in
2005.  This change was due to the  decrease in net income for the quarter  ended
December 31, 2006.

                                       7
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of funds are deposits, repayment of loans and
mortgage-backed   securities,    maturities   of   investment   securities   and
interest-bearing  deposits with other banks, advances from the FHLB of New York,
and funds  provided from  operations.  While  scheduled  repayments of loans and
mortgage-backed   securities  and   maturities  of  investment   securities  are
predictable  sources of funds,  deposit flows,  and loan prepayments are greatly
influenced  by the general  level of interest  rates,  economic  conditions  and
competition.  The  Company  uses its  liquidity  resources  principally  to fund
existing  and future  loan  commitments,  maturing  certificates  of deposit and
demand  deposit  withdrawals,  to invest in other  interest-earning  assets,  to
maintain liquidity, and meet operating expenses.

     Net cash used by the Company's  operating  activities  (the cash effects of
transactions  that enter into the  Company's  determination  of net income e.g.,
non-cash items,  amortization and  depreciation,  provision for loan losses) for
the three  months ended  December  31, 2006 was $91,000,  an increase of $51,000
compared  to the  same  period  in 2005.  The  increase  in 2006  was  primarily
attributable to a net loss of $102,000  partially offset by accrued and deferred
income  taxes of  $115,000  and a  decrease  in  provisions  for loan  losses of
$30,000.

     Net  cash  used  by  the  Company's   investing   activities   (i.e.,  cash
disbursements, primarily for the purchase of the Company's investment securities
and mortgage-backed  securities portfolios and the Company's loan portfolio) for
the three months  ended  December 31,  2006,  totaled $1.8  million.  This was a
decrease of $1.1 million from the quarter  ended  December 31, 2005.  The use is
attributable  to funding  loans  receivable  net of $1.1 million and purchase of
available  for  sale  securities  of  $4.0  million  net,  partially  offset  by
redemptions  and proceeds  from sale of  securities  available  for sale of $3.2
million.

     Net  cash  provided  by the  Company's  financing  activities  (i.e.,  cash
receipts  primarily  from net  increases in deposits  and net  decreases in FHLB
advances)  for the three months ended  December 31, 2006,  totaled $2.9 million,
compared to cash used by financing activities of $123,000 for the same period in
2005. The increase is  attributable  to an increase in deposits of $3.0 million,
for the quarter  ended  December 31, 2006 compared to a decrease of $51,000 from
the same period in 2005.

     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, 2006,  with tangible,  core and risk based capital
ratios respectively.

                                       8
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

     (a)  Evaluation  of  disclosure  controls  and  procedures.  Based on their
evaluation of the Company's  disclosure  controls and  procedures (as defined in
Rule 13a-15(e) under the Securities  Exchange Act of 1934 (the "Exchange Act")),
the Company's  principal  executive officer and principal financial officer have
concluded that as of the end of the period  covered by this Quarterly  Report on
Form 10-QSB such disclosure controls and procedures are effective to ensure that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.

     (b)  Changes in  internal  control  over  financial  reporting.  During the
quarter under report, there was no change in the Company's internal control over
financial  reporting that has materially  affected,  or is reasonably  likely to
materially affect, the Company's internal control over financial reporting.

                                       9
<PAGE>

                           PART II. OTHER INFORMATION

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

         The Registrant was not engaged in any material legal proceedings during
the quarter ended  December 31, 2006.  From time to time, the Bank is a party to
legal  proceedings  within the normal course of business wherein it enforces its
security interests in loans made by it, and other similar matters.

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

         Not applicable.

Item 3.  Defaults Upon Senior Securities
----------------------------------------

         Not applicable.

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

     (a)  The Registrant  held a special meeting of stockholders on December 18,
          2006.
     (b)  Not applicable
     (c)  The  purpose of the special  meeting  was to vote upon two  proposals,
          both of which were approved. The results of voting were as follows:

          Proposal #1 - Approval of Agreement  and Plan of Merger dated June 23,
          2006

         For:  421,724              Against:  11,940          Abstain:  6,143

          Proposal #2 - Approval of a proposal to adjourn the special meeting if
          necessary to solicit additional proxies

         For:  404,787              Against:  27,532          Abstain:  7,488

     (d)  Not applicable


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

     (a)  Not applicable.

     (b)  Not applicable.

Item 6.  Exhibits
----------------

     (a)  Exhibits:

          31   Certifications  pursuant to Section 302 of the Sarbanes-Oxley Act
               of 2002
          32   Certification  pursuant to Section 906 of the  Sarbanes-Oxley Act
               of 2002


<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 12, 2007         By: /s/ Gary N. Pelehaty
                                    -------------------------------------------
                                    Gary N. Pelehaty
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)




Date: February 12, 2007         By: /s/ Charles Alessi
                                   --------------------------------------------
                                   Charles Alessi
                                   Vice President, Chief Financial Officer,
                                   Secretary and Treasurer
                                   (Principal Financial and Accounting Officer)


                                       12