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, 2002

                                       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 April 24, 2002: 360,866

            Transitional Small Business Disclosure Format (check one)

                               YES        .          NO       .
                                     ---                 ---

<PAGE>



                                    Contents
                                    --------



PART 1 - FINANCIAL INFORMATION                                           Page(s)
                                                                         -------


Item 1.  Financial Statements

         Consolidated Statements of Financial Condition at March 31, 2002
         (audited) and September 30, 2001 (audited)............................1

         Consolidated Statements of Income (loss) and Comprehensive Income
         (loss) for the three and six months ended March 31, 2002, and 2001
         (unaudited)...........................................................2

         Consolidated Statements of Cash Flows for the six months ended
         March 31, 2002 and 2001 (unaudited)...................................3

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


PART II - OTHER INFORMATION


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

Item 2.  Changes in 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 and Reports on Form 8-K......................................9

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




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

<TABLE>
<CAPTION>
                                                                 MARCH 31,        SEPTEMBER 30,
                                                                    2002               2001
                                                              -----------------  --------------------
ASSETS                                                          (UNAUDITED)          (AUDITED)

<S>                                                              <C>                 <C>
Cash and due from banks                                            $ 4,745,331         $ 9,282,084
Securities available for sale                                       10,891,163           8,824,145
Securities held to maturity                                          1,805,424           2,058,245
Loans receivable, net                                               52,904,538          44,987,076
Real estate owned, net                                                       -             130,292
Accrued interest receivable                                            386,250             318,685
Federal Home Loan Bank of New York (FHLB) stock
  at cost substantially restricted                                     499,800             372,600
Deferred income taxes                                                   38,373                   -
Prepaid income taxes                                                         -              15,292
Premises and equipment                                               2,112,933           1,481,675
Other assets                                                            84,844              58,642
                                                              -----------------  --------------------

         Total assets                                             $ 73,468,656        $ 67,528,736
                                                              =================  ====================


LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                          $ 65,696,605        $ 58,156,435
Borrowings from FHLB                                                 1,660,499           3,224,606
Advances by borrowers for taxes and insurance                          282,115             240,168
Accrued income taxes                                                    50,884                   -
Deferred income taxes                                                        -              80,781
Accrued interest payable                                                50,946              61,009
Accounts payable and other accrued
  expenses                                                              96,272             100,297
                                                              -----------------  --------------------

         Total liabilities                                          67,837,321          61,863,296
                                                              -----------------  --------------------

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, 360,866 shares outstanding         37,985              37,985
Additional paid in capital                                           3,396,262           3,396,262
Retained earnings substantially restricted                           2,746,007           2,585,704
Treasury stock                                                        (185,172)           (185,172)
Common stock aquired by
 employee stock ownership plan (ESOP)                                 (190,264)           (204,774)
Unissued restricted stock plan shares                                  (93,613)           (105,444)
Accumulated other comprehensive income (loss), unrealized
  (depreciation) appreciation on available for sale securities
  net of taxes.                                                        (79,870)            140,879
                                                              -----------------  --------------------

         Total stockholders' equity                                  5,631,335           5,665,440
                                                              -----------------  --------------------

         Total liabilities and
          stockholders' equity                                    $ 73,468,656        $ 67,528,736
                                                              =================  ====================
</TABLE>

                                        1

<PAGE>
                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                         AND COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED                 SIX  MONTHS ENDED
                                                       MARCH 31                       MARCH 31
                                              2002           2001            2002           2001
                                          -------------- --------------  -------------- ----------------
Interest income:
<S>                                         <C>            <C>            <C>            <C>
  Loans receivable                            $ 967,921      $ 786,882      $1,876,892     $1,564,919
  Securities                                    214,176        145,836         413,334        331,365
  Federal funds sold                             15,337         41,754          36,744         55,567
                                          -------------- --------------  -------------- ----------------
        Total interest income                 1,197,434        974,472       2,326,970      1,951,851
                                          -------------- --------------  -------------- --------------

Interest expense:
  Deposits                                      491,388        483,894       1,015,412        925,208
  Federal Home Loan Bank advances                25,745         81,453          66,707        194,252
                                          -------------- --------------  -------------- ----------------
        Total interest expense                  517,133        565,347       1,082,119      1,119,460
                                          -------------- --------------  -------------- ----------------
Net interest income                             680,301        409,125       1,244,851        832,391

Provision for loan losses                        26,984          9,245          41,772         12,245
                                          -------------- --------------  -------------- ----------------

        Net interest income after
          provision for loan losses             653,317        399,880       1,203,079        820,146
                                          -------------- --------------  -------------- ----------------
Noninterest income:
  Fees and other service charges                 69,836         55,442         136,935        118,013
  Net realized gain on available for
    sale securities                              18,690         26,919          31,948         33,919
                                          -------------- --------------  -------------- ----------------
        Total noninterest income                 88,526         82,361         168,883        151,932
                                          -------------- --------------  -------------- --------------

Noninterest expense:
  Compensation and benefits                     287,404        237,513         575,897        462,427
  Occupancy and equipment                        92,549         93,086         179,191        167,349
  Federal insurance premiums and
    assessments                                   2,600          2,165           5,041          4,351
  Other                                         191,455        182,453         384,530        361,092
                                          -------------- --------------  -------------- ----------------
        Total noninterest expense               574,008        515,217       1,144,659        995,219
                                          -------------- --------------  -------------- ----------------

Income (loss) before provision for income
  tax expense (benefit)                         167,835        (32,976)        227,303        (23,141)
Provision for income tax expense (benefit)       52,000        (10,572)         67,000         (6,612)
                                          -------------- --------------  -------------- --------------
        Net income (loss)                       115,835        (22,404)        160,303        (16,529)

Other Comprehensive Income, net of taxes
  Unrealized (Loss) gain on Securities
   Available for Sale                           (45,294)        64,000        (220,749)        81,064
  Reclassification adjustments for gains
    included in net income                      (18,690)       (26,919)        (31,948)       (33,919)
                                          -------------- --------------  -------------- ----------------

Comprehensive Income (loss)                    $ 51,851       $ 14,677       $ (92,394)      $ 30,616
                                          ============== ==============  ============== ================

Net income (loss) per common share:
  Basic                                        $   0.35       $  (0.07)      $    0.49       $  (0.05)
  Diluted                                      $   0.35       $  (0.07)      $    0.48       $  (0.05)

Weighted average number of shares
outstanding during the period:
 basic                                          327,578        322,420         327,578        337,314
 diluted                                        331,228        322,420         331,544        337,314
</TABLE>

                                       2
<PAGE>
                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                          SIX MONTHS ENDED MARCH 31
                                                          2002              2001
                                                     ----------------  ----------------
<S>                                                  <C>               <C>
Cash flows from operating activities:
  Net income (loss)                                      $   160,303       $   (16,529)
                                                     ----------------  ----------------
  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                             59,038            49,777
    Stock compensation                                        26,341                 -
    Provision for loan losses                                 41,772            12,245
    Net gain on sale of AFS securities                       (31,948)          (33,919)
    Net loss on sale of real estate owned                      1,675                 -
 Change in:
   Accrued interest receivable                               (67,565)           41,294
   Other assets                                              (26,202)         (135,754)
   Advances from borrowers                                    41,947            11,640
   Accrued and deferred income taxes                          71,190            61,173
   Accrued interest payable                                  (10,063)           (4,002)
   Other accrued liabilities                                  (4,025)          (14,885)
                                                     ----------------  ----------------

         Total adjustments                                   102,160           (12,431)
                                                     ----------------  ----------------

         Net cash provided by  (used in) operating
          activities                                         262,463           (28,960)
                                                     ----------------  ----------------

Cash flows from investing activities:

  Net increase in loans receivable                        (7,959,234)       (2,181,113)
  Proceeds from sale of REO                                  128,617                 -
  Redemption of securities, held to maturity                 252,821         2,188,765
  Redemption of securities, available for sale             1,516,409                 -
  Purchase of Federal Home Loan Bank Stock                  (127,200)                -
  Proceeds from sale of securities available for sale      2,497,925         7,762,458
  Purchase of securities held to maturity                          -        (3,625,574)
  Purchase of securities, available for sale net          (6,394,321)       (4,857,705)
  Purchase of premises and equipment                        (690,296)          (13,982)
                                                     ----------------  ----------------

         Net cash used in investing
           activities                                    (10,775,279)         (727,151)
                                                     ----------------  ----------------
Cash flows from financing activities:
  Net increase  in deposits                                7,540,170         6,950,302
  Repayment of  Federal Home Loan Bank Borrowings         (1,564,107)       (3,810,436)
                                                     ----------------  ----------------
         Net cash provided by financing
           activities                                      5,976,063         3,139,866
                                                     ----------------  ----------------

Net  (decrease) increase in cash and due from banks       (4,536,753)        2,383,755

Cash at beginning of period                                9,282,084         3,163,345
                                                     ----------------  ----------------
Cash at end of period                                    $ 4,745,331       $ 5,547,100
                                                     ================  ================

Supplemental disclosure:
  Cash paid during the period for:
    Interest                                             $ 1,092,182       $ 1,123,462
                                                     ================  ================
    Income taxes
                                                     ================  ================

  Unrealized (loss) gain  on securities available
    for sale, net of deferred income taxes                $ (220,749)      $    81,064
                                                     ================  ================

 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>

                                       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 March 31,
2002,  the  Consolidated  Statements of Income (loss) and  Comprehensive  Income
(loss)  for the three and six  months  ended  March 31,  2002 and 2001,  and the
Consolidated  Statements  of Cash Flows for the six months  ended March 31, 2002
and 2001. The results of operations for the three and six months ended March 31,
2002 are not  necessarily  indicative  of results  that may be expected  for the
entire year ending September 30, 2002, or for any other period. The accompanying
unaudited   consolidated   interim  financial   statements  should  be  read  in
conjunction  with  the  Company's  September  30,  2001  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, 2001.

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.
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.

New Branch
----------

Peoples  Savings Bank has entered  into a lease  agreement  for a fourth  branch
office location in Burlington County expected to open in the fall of 2002

                                       4
<PAGE>

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 Banks'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.

                       For the three months ended March 31
                       -----------------------------------
<TABLE>
<CAPTION>
                                                2002                                     2001
                                              Weighted         Per                      Weighted    Per
                                               Average        Share                     Average    Share
                                  Income        Shares        Amount        (Loss)       Shares    Amount
                                  ------        ------        ------        ------       ------    ------
<S>                          <C>              <C>          <C>         <C>            <C>         <C>
Net income (loss) available
To Common Shareholders         $  115,835       360,866                  $ (22,404)     360,866

ESOP shares, not
Committed to be released                        (21,274)                                (24,321)

RSP Shares                                      (12,014)                                (14,134)
                               ----------       -------      ----------  ---------      -------  --------

Basic earnings per share          115,835       327,578      $     0.35    (22,404)     322,420  $  (0.07)

Common Stock equivalents                          3,650
                               ----------       -------      ----------  ---------      -------  --------

Diluted earnings per share     $  115,835       331,228      $     0.35  $ (22,404)     322,420  $  (0.07)
</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.

                                       5
<PAGE>

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

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

Financial Condition

         Total assets  increased  $5.9 million or 8.8% to $73.5 million at March
31, 2002 from $67.5  million at September  30, 2001.  The increase was primarily
attributable to a $7.9 million  increase in the Bank's loans  receivable net and
an increase of $631,000 in premises and equipment partially offset by a decrease
in cash and investment  securities of $2.7 million. The increase in premises and
equipment was  attributable to the purchase of the branch building in Mt. Laurel
which the bank was previously  leasing.  The Bank's total liabilities  increased
$6.0 million or 9.7%,  to $67.8  million at March 31, 2002 from $61.8 million at
September 30, 2001.  The increase was primarily  attributable  to a $7.5 million
increase in deposits  attributable  an  increase  in local  municipal  deposits,
partially offset by a $1.6 million decrease in FHLB borrowings.

         Stockholder's equity decreased $34,000 to $5.6 million or 7.7% of total
assets at March 31, 2002, as compared to $5.6 million or 8.4% of total assets at
September  30,  2001.  The  decrease  in   stockholders'   equity  is  primarily
attributable  to a change in the fair value of available for sale securities net
of taxes of $221,000 partially offset by net income of $160,000.


Results of Operations


         Net Income.  The Bank's net income  increased  $138,000 for the quarter
ended March 31, 2002 to net income of $116,000  from net loss of $22,000 for the
quarter ended March 31, 2001. The increase in net income was  attributable to an
increase in the Bank's net interest income of $271,000,  partially  offset by an
increase in  non-interest  expense of $59,000 and an increase in provisions  for
income taxes of $63,000.  For the six months  ended March 31,  2002,  net income
increased $177,000 to $160,000 from a net loss of $17,000 for the same period in
2001.

         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,  investments and mortgage-backed  securities,  and interest the
Bank  pays  on  its   interest-bearing   liabilities,   primarily  deposits  and
borrowings.  Net  interest  income  depends on the volume of and rates earned on
interest-earning  assets and the  volume of and rates  paid on  interest-bearing
liabilities.

                                       6
<PAGE>

         Net interest income after provision for loan losses increased $253,000,
or 63.4%,  to  $653,000  for the  quarter  ended  March 31,  2002 as compared to
$400,000 for the quarter ended March 31, 2001. The increase was primarily due to
the increased  interest income of $223,000 and a decrease in interest expense of
$47,000 due to the decrease in cost of funds.  The  increase in interest  income
was partially due to the growth of the residential  loan portfolio  attributable
to a high demand of real estate  purchases in the Bank's lending area and a high
demand of refinancing  and home equity loans.  This increase was also due to the
implementation  of a commercial  loan  department  in the third  quarter of 2001
through the hiring of an experienced  commercial  loan officer who has been very
successful in attracting  these higher yielding loans. Net interest income after
provision for loan losses increased  $383,000 for the six months ended March 31,
2002 compared to the same period in 2001.

         Provision  for Loan Losses.  Provision  for loan losses was $27,000 for
the three  months  ended March 31, 2002  compared to $9,000 for the three months
ended March 31, 2001.  The increase  reflects the increase in the loan portfolio
and the increase in commercial  loans within the  portfolio.  For the six months
ended March 31,  2002 the  provision  for loan  losses was  $42,000  compared to
$12,000 for the same period in 2001.

         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 or that such losses
will not exceed the estimated amount.

         Non-Interest  Income.  Non-interest  income increased $6,000 or 7.5% to
$88,000 for the quarter  ended March 31, 2002 from  $82,000 for the same quarter
in 2001.  Non-interest  income for 2002  included  a gain on sale of  securities
available for sale of $19,000  compared to a gain of $27,000 for the same period
in 2001. For the six months ended March 31, 2002,  non-interest income increased
$17,000,  compared to the same period in 2001,  this included a gain in the 2002
period on securities available for sale of $32,000 compared to a gain in 2001 of
$34,000.

         Non-Interest  Expense.  Non-interest expense increased $59,000 or 11.4%
to $574,000  for the quarter  ended March 31, 2002  compared 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 in the Bank's compensation and benefits mostly due to
increased personnel and an increase of $9,000 in other expenses. The category of
non-interest  expense  classified as "Other" is comprised of expenses related to
advertising,  fees charged by banks,  loan processing fees, NOW expenses,  costs
related to supplies  and various  professional  fees.  For the six months  ended
March 31, 2002  non-interest  expenses  increased by $149,000 as compared to the
same  period  in 2001,  the  increase  was due to an  increase  of  $113,000  in
compensation  and  benefits,  $12,000 in office  occupancy  and  equipment and a
$23,000 increase in other expenses. The increase in compensation and benefits is
mostly due to establishing the Bank's commercial loan department

         Income Tax Expense (benefit). Income tax expense changed from an income
tax benefit of $11,000 for the quarter ended March 31, 2001 to a $52,000  income
tax expense  for the same  period in 2002.  This change of $63,000 is due to the
increase in income  before  income taxes of  $201,000.  For the six months ended
March 31, 2002,  the Company had income tax expense of $67,000  versus an income
tax benefit of $7,000 in the same period in 2001.  These changes are also due to
the increase in income before income taxes.

                                       7
<PAGE>

         Liquidity and Capital Resources

         The Bank is  required to maintain  levels of liquid  assets  considered
necessary for its safe and sound operations.


         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 six months  ended March 31,  2002 was  $262,000,  an  increase of  $291,000,
compared to the same period in 2001.  The increase in 2002 was  primarily due to
the net income for the six months  ended March 31,  2002 of $160,000  versus net
loss for the same  period in 2001 of  $17,000  and the  change  in other  assets
partially offset by a change in accrued interest receivable.

         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, 2002 totaled $10.7 million compared to a use of funds
of $700,000 for the same period in 2001.  The difference is  attributable  to an
increase  in net loans  receivable  of $7.9  million  in 2002  compared  to $2.2
million in 2001 and purchase of securities of $6.4 million  partially  offset by
the sale and redemption of securities of $4.3 million in 2002.

         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, 2002, totaled $6.0 million,  compared to net cash
provided by  financing  activities  of $3.1 million for the same period in 2001.
The  increase is  attributable  to a net increase in deposits of $7.5 million in
2002 offset by a repayment of borrowings of $1.6 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, 2002, with tangible,  core and
risk based capital ratios of 6.99 %, 6.99% and 13.41%, respectively.

                                       8
<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  19,  2002,  and  the  following  matters  were  voted  on  by
         stockholders:

         Election of Directors
                                                  FOR      WITHHELD
                                                  ---      --------

         George G. Aaronson,Jr.                 262,716     21,850
         Joseph H. Kelly                        262,716     21,850
         Edward Koenig, Jr.                     262,606     21,960

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, 2002:

                  None.

                                       9

<PAGE>

                                   SIGNATURES


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


                                      FARNSWORTH BANCORP, INC.


Date: April 26, 2002           By:  /s/Gary N. Pelehaty
                                    --------------------------------------------
                                    Gary N. Pelehaty
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)




Date: April 26, 2002           By:  /s/Charles Alessi
                                    --------------------------------------------
                                    Charles Alessi
                                    Vice President, Chief Financial Officer,
                                    Secretary and Treasurer
                                    (Principal Financial and Accounting Officer)


                                       10