SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------

                                   FORM 10-QSB
(Mark One)

X                 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
--
                              EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 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 August 1, 2002: 360,866
                                                                      -------

            Transitional Small Business Disclosure Format (check one)

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


<PAGE>


                                    Contents
                                    --------



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


Item 1.  Financial Statements...................................................

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

         Consolidated Statements of Income and Comprehensive Incomefor the
         three and nine months ended June 30, 2002, and 2001 (unaudited).......2

         Consolidated Statements of Cash Flows for the nine months ended
         June 30, 2002 and 2001 (unaudited)....................................3

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

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>
                                                        JUNE 30       SEPTEMBER 30,
                                                          2002            2001
                                                      ------------    ------------
<S>                                                 <C>             <C>
ASSETS                                                 (UNAUDITED)       (AUDITED)

Cash and due from banks                               $ 11,027,366    $  9,282,084
Securities available for sale                            7,395,876       8,824,145
Securities held to maturity                              1,278,394       2,058,245
Loans receivable, net                                   56,113,346      44,987,076
Real estate owned, net                                      41,797         130,292
Accrued interest receivable                                397,741         318,685
Federal Home Loan Bank of New York (FHLB) stock
  at cost substantially restricted                         499,800         372,600
Prepaid income taxes                                             -          15,292
Premises and equipment                                   2,130,773       1,481,675
Other assets                                                69,712          58,642
                                                      ------------    ------------

         Total assets                                 $ 78,954,805    $ 67,528,736
                                                      ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                              $ 70,889,115    $ 58,156,435
Borrowings from FHLB                                     1,627,730       3,224,606
Advances by borrowers for taxes and insurance              298,533         240,168
Accrued income taxes                                        27,384               -
Deferred income taxes                                       35,045          80,781
Accrued interest payable                                    42,563          61,009
Accounts payable and other accrued
  expenses                                                 107,823         100,297
                                                      ------------    ------------

         Total liabilities                              73,028,193      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               2,885,595       2,585,704
Treasury stock                                            (185,172)       (185,172)
Common stock aquired by
 employee stock ownership plan (ESOP)                     (182,673)       (204,774)
Unissued restricted stock plan shares                      (88,033)       (105,444)
Accumulated other comprehensive income , unrealized
 appreciation on available for sale securities
  net of taxes                                              62,648         140,879
                                                      ------------    ------------

         Total stockholders' equity                      5,926,612       5,665,440
                                                      ------------    ------------
         Total liabilities and
          stockholders' equity                        $ 78,954,805    $ 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            NINE  MONTHS ENDED
                                                       JUNE 30                      JUNE 30
                                                 2002           2001           2002           2001
                                             -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Interest income:
  Loans receivable                           $ 1,031,439    $   813,610    $ 2,908,331    $ 2,378,529
  Securities                                     187,022        227,946        600,356        559,311
  Federal funds sold                              20,188         23,947         56,932         79,514
                                             -----------    -----------    -----------    -----------
        Total interest income                  1,238,649      1,065,503      3,565,619      3,017,354
                                             -----------    -----------    -----------    -----------

Interest expense:
  Deposits                                       446,074        541,624      1,461,486      1,466,832
  Federal Home Loan Bank advances                 25,356         60,053         92,063        254,305
                                             -----------    -----------    -----------    -----------
        Total interest expense                   471,430        601,677      1,553,549      1,721,137
                                             -----------    -----------    -----------    -----------
Net interest income                              767,219        463,826      2,012,070      1,296,217

Provision for loan losses                         50,000         13,124         91,772         25,369
                                             -----------    -----------    -----------    -----------

        Net interest income after
          provision for loan losses              717,219        450,702      1,920,298      1,270,848
                                             -----------    -----------    -----------    -----------

Noninterest income:
  Fees and other service charges                  76,353         58,365        213,288        174,378
  Net realized gain on available for
    sale securities                               18,320         30,359         50,268         64,278
 Other                                                            1,000                         3,000
                                             -----------    -----------    -----------    -----------
        Total noninterest income                  94,673         89,724        263,556        241,656
                                             -----------    -----------    -----------    -----------

Noninterest expense:
  Compensation and benefits                      335,703        252,400        911,600        714,827
  Occupancy and equipment                         85,408         90,153        264,599        257,502
  Federal insurance premiums and
    assessments                                    8,503          7,080         13,544         11,431
  Other                                          166,190        166,533        550,720        527,625
                                             -----------    -----------    -----------    -----------
        Total noninterest expense                595,804        516,166      1,740,463      1,511,385
                                             -----------    -----------    -----------    -----------

Income  before provision for income
  tax expense (benefit)                          216,088         24,260        443,391          1,119
Provision for income tax expense (benefit)        76,500          4,000        143,500         (2,612)
                                             -----------    -----------    -----------    -----------
        Net income                               139,588         20,260        299,891          3,731

Other Comprehensive Income, net of taxes
  Unrealized (Loss) gain on Securities
   Available for Sale                            142,518        (67,950)       (78,231)        76,803
  Reclassification adjustments for gains
    included in net income                       (18,320)       (30,359)       (50,268)       (64,278)
                                             -----------    -----------    -----------    -----------

Comprehensive Income (loss)                  $   263,786    $   (78,049)   $   171,392    $    16,256
                                             ===========    ===========    ===========    ===========

Net income per common share:
  Basic                                      $      0.42    $      0.06    $      0.91    $      0.01
  Diluted                                    $      0.41    $      0.06    $      0.90    $      0.01

Weighted average number of shares
 outstanding during the period:
 basic                                           330,616        322,420        330,616        322,420
 diluted                                         337,395        322,420        334,806        322,420

</TABLE>

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

<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED JUNE 30, 2002
                                                             2002            2001
                                                        ------------    ------------
<S>                                                   <C>             <C>
Cash flows from operating activities:
  Net income                                            $    299,891    $      3,731
                                                        ------------    ------------
  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                             90,769          76,040
    Stock compensation                                        39,512               -
    Provision for loan losses                                 91,772          25,369
    Net gain on sale of AFS securities                       (50,268)        (64,278)
   Net loss on sale of real estate owned                       1,675               -
 Change in:
   Accrued interest receivable                               (79,056)         34,913
   Other assets                                              (11,070)          2,069
   Advances from borrowers                                    58,365          27,008
   Accrued and deferred income taxes                          37,241          39,875
   Accrued interest payable                                  (18,446)         (8,091)
   Other accrued liabilities                                   7,526          (7,690)
                                                        ------------    ------------

         Total adjustments                                   168,020         125,215
                                                        ------------    ------------
         Net cash provided by operating
          activities                                         467,911         128,946
                                                        ------------    ------------

Cash flows from investing activities:

  Net increase in loans receivable                       (11,259,839)     (3,177,733)
  Proceeds from sale of REO                                  128,617               -
  Redemption of securities, held to maturity                 779,851       1,548,265
  Redemption of securities, available for sale             2,151,195          35,347
  Purchase of Federal Home Loan Bank Stock                  (127,200)              -
  Proceeds from sale of securities available for sale      7,734,375      31,223,874
  Purchase of securities held to maturity                          -        (648,750)
  Purchase of securities, available for sale net          (8,525,565)    (32,883,845)
  Purchase of premises and equipment                        (739,867)        (16,418)
                                                        ------------    ------------
         Net cash used in investing
           activities                                     (9,858,433)     (3,919,260)
                                                        ------------    ------------

Cash flows from financing activities:
  Net increase  in deposits                               12,732,680       9,149,832
  Repayment of  Federal Home Loan Bank Borrowings         (1,596,876)     (3,841,328)
                                                        ------------    ------------

         Net cash provided by financing
           activities                                     11,135,804       5,308,504
                                                        ------------    ------------

Net increase in cash and due from banks                    1,745,282       1,518,190

Cash at beginning of period                                9,282,084       3,163,345
                                                        ------------    ------------
Cash at end of period                                   $ 11,027,366    $  4,681,535
                                                        ============    ============
Supplemental  disclosure:
Cash paid during the period for:
    Interest                                            $  1,571,999    $  1,729,228
                                                        ============    ============
    Income taxes                                        $    100,000
                                                        ============    ============

  Unrealized gain  on securities available
    for sale, net of deferred income taxes              $     62,648    $     76,803
                                                        ============    ============


 Investment securities transferred from held to
   maturity to available for sale                       $          -    $  2,273,966
                                                        ============    ============

 Acquisition of real estate in settlement of loans      $     41,797    $    130,292
                                                        ============    ============
</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 June 30,
2002, the  Consolidated  Statements of Income and  Comprehensive  Income for the
three  and nine  months  ended  June 30,  2002 and  2001,  and the  Consolidated
Statements  of Cash Flows for the nine months ended June 30, 2002 and 2001.  The
results of operations  for the three and nine months ended June 30, 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.
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.

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

Peoples  Savings Bank has entered  into a lease  agreement  for a fourth  branch
office located 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 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.

                       For the three months ended June 30
                       ----------------------------------
<TABLE>
<CAPTION>
                                              2002     .                             2001     .
                              -------------------------------------      -------------------------------

                                             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        $139,588       360,866                   $ 20,260     360,866

ESOP Shares, not
Committed to be released                     (18,236)                               (24,312)

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

Basic earnings per share       139,588       330,616      $    0.42      20,260     322,420     $   0.06

Common Stock equivalents                       6,779
                              --------       -------      ---------      ------     -------     --------

Diluted earnings per share    $139,588       337,395      $    0.41      20,260     322,420     $   0.06
                              ========       =======      =========      ======     =======     ========
</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   with  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."

         In the second quarter of fiscal year 2001,  mortgage backed  securities
were acquired and  inadvertently  classified as held to maturity.  It is clearly
evident that  management  intended to classify the  securities  as available for
sale and therefore the quarter ended June 30, 2001 reflects the reclassification
of these securities.

                                       5
<PAGE>

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  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 $11.4 million or 16.9% to $79.0 million at June
30, 2002 from $67.5  million at September  30, 2001.  The increase was primarily
attributable  to an increase in loans  receivable  of $11.0  million net, a $1.7
million  increase in cash and an increase in premises and equipment of $649,000,
partially offset by a $2.2 million decrease in the Bank's investment securities.
The Bank's total liabilities  increased $11.2 million or 18.0%, to $73.0 million
at June 30, 2002 from $61.9 at September  30, 2001.  The increase was  primarily
attributable to a $12.7 million increase in deposits  primarily  attributable to
an increase in local municipal  deposits and to increased deposits at the Bank's
Mt. Laurel branch, offset by a $1.6 million decrease in borrowings.

         Stockholders'  equity  increased  $261,000  to $5.9  million or 7.5% of
total  assets at June 30,  2002,  as compared  to $5.6  million or 8.4% of total
assets at September 30, 2001. The increase in stockholders'  equity is primarily
attributable  to net income of $300,000  and  amortization  of benefit  plans of
$39,000 offset by a change in the unrealized  appreciation on available for sale
securities net of taxes of $78,000.

Results of Operations

         Net Income.  The Bank's net income  increased  $120,000 for the quarter
ended June 30, 2002 to net income of $140,000 from net income of $20,000 for the
quarter ended June 30, 2001. The increase in net income was  attributable  to an
increase in the Bank's net interest  income after  provisions for loan losses of
$267,000, an increase in non-interest income of $5,000, offset by an increase in
non-interest  expense of $80,000 and an increase in income taxes of $73,000. For
the nine  months  ended June 30,  2002 net income  increased  $296,000  to a net
income of $300,000 from net income of $4,000 for the same period in 2001.

                                        6
<PAGE>

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

         Net interest income after provision for loan losses increased $267,000,
or 59.1%,  to $717,000  for the  quarter  ended June 30, 2002 as compared to the
quarter  ended June 30, 2001.  The increase was  primarily due to an increase in
interest income of $173,000, and a decrease in interest expense of $130,000. The
increase in interest  income was partially due to the growth in the  residential
loan portfolio,  attributable to high demand of real estate purchases as well as
refinancing  loans  and Home  Equity  loans.  The  increase  was also due to the
increased  commercial real estate lending provided by the  implementation of the
Commercial Loan Department headed by an experienced Commercial Loan Officer. Net
interest  income after  provision for loan losses  increased by $649,000 for the
nine  months  ended  June 30,  2002  compared  to the same  period in 2001.  The
increase was attributed primarily to the higher lending and by a decrease in the
Bank's  cost of funds.  The Bank's  cost of funds  declined as a result of lower
market interest rates in addition to a lower balance of FHLB borrowings.

         Provision  for Loan Losses.  Provision  for loan losses was $50,000 for
the three months  ended June 30, 2002,  compared to $13,000 for the three months
ended June 30, 2001.  For the nine months ended June 30, 2002 the  provision for
loan  losses was $92,000  compared to $25,000 for the same period in 2001.  This
increase was deemed necessary due to the increased lending volume.

         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 $5,000 or 6.7% from
$89,000 for the quarter  ended June 30, 2001 to $94,000 for the same  quarter in
2002.  Non-interest  income  for  2002  included  a gain on  sale of  securities
available  for sale of $18,000  compared to $30,000 for the same period in 2001.
For the nine months ended June 30, 2002,  non-interest income increased $22,000,
compared to the same period in 2001. This increase is primarily attributed to an
increase in fees and charges of $39,000  partially offset by a decrease in gains
on the sale of securities of $14,000.

         Non-Interest  Expense.  Non-interest expense increased $80,000 or 15.5%
from approximately  $516,000 for the quarter ended June 30, 2001 to $596,000 for
the same quarter in 2002.  The increase in the Bank's  non-interest  expense was
primarily  due to a an  increase  of  $83,000  in the  Bank's  compensation  and
benefits.  The  category  of  non-interest  expense  classified  as  "Other"  is
comprised  of  expenses   related  to   advertising,   fees  charged  by  banks,
loan-processing  fees,  NOW  expenses,  costs  related to  supplies  and various
professional fees. For the nine months ended June 30, 2002, non-interest expense
increased  by $229,000 to $1.7  million,  compared to $1.5  million for the same
period in 2001.

         Income Tax Expense  (benefit).  Income tax expense  changed from $4,000
for the quarter  ended June 30, 2001 to $77,000  income tax expense for the same
period in 2002.  This change of $73,000 is due to the increase in net-income for
the quarter  ended June 30, 2002.  For the nine months ended June 30, 2002,  the
income tax expense was $144,000  compared to an income tax benefit of $3,000 for
2001.

                                       7
<PAGE>

         Liquidity and Capital Resources

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

         Net cash provided by the Bank's operating  activities (the cash effects
of  transactions  that enter into the Bank's  determination  of net income e.g.,
non-cash items,  amortization and  depreciation,  provision for loan losses) for
the nine months ended June 30, 2002 was $468,000,  an increase of $339,000.  The
increase in 2002 was  primarily  attributable  to the  increase in net income in
2002 of $296,000  compared to June 30, 2001, as well as additional  depreciation
and  amortization  partially  offset  by a change  in  other  assets  and  other
liabilities.

         Net  cash  used  by  the  Bank's  investing   activities   (i.e.,  cash
disbursements,  primarily for the purchase of the Bank's  investment  securities
and mortgage-backed securities portfolios and the Bank's loan portfolio) for the
nine months ended June 30, 2002, totaled $9.8 million compared to a use of funds
of $3.9 million for the same period in 2001.  The increase is attributable to an
increase  in net loans  receivable  of $11.2  million  in 2002 and  purchase  of
premises and equipment of $740,000,  partially  offset by sale and redemption of
securities of $2.0 million net.

         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 nine months ended June 30, 2002, totaled $11.0 million, compared to net cash
provided by  financing  activities  of $5.3 million for the same period in 2001.
The increase is  attributable  to a net increase in deposits of $12.7 million in
2002, offset by a repayment of borrowings of $1.6 million in 2002.

         Office of Thrift Supervision ("OTS") capital regulations  applicable to
the Bank require  savings  institutions  to meet three  capital  standards:  (1)
tangible  capital equal to 1.5% of total adjusted  assets,  (2) a leverage ratio
(core  capital)  equal  to at  least  3% of  total  adjusted  assets,  and (3) a
risk-based capital requirement equal to 8.0% of total  risk-weighted  assets. In
addition,  the OTS prompt corrective  action regulation  provides that a savings
institution  that  has a  leverage  capital  ratio  of  less  than  4%  (3%  for
institutions  receiving  the highest  examination  rating)  will be deemed to be
"undercapitalized"  and may be subject to certain restrictions.  The Bank was in
compliance with these  requirements  at June 30, 2002,  with tangible,  core and
risk based capital ratios of 6.70%, 6.70% and 13.13%, 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
         ---------------------------------------------------

         None.

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

         Not applicable.

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

         (a)      Exhibits:

                  99.1 Certification pursuant to 18 U.S.C. ss.1350.

         (b)      Current Reports on Form 8-K filed during the quarter ended
                  June 30, 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: August 6, 2002               By:  /s/Gary N. Pelehaty
                                      ------------------------------------------
                                        Gary N. Pelehaty
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)




Date: August 6, 2002               By:  /s/Charles Alessi
                                      ------------------------------------------
                                        Charles Alessi
                                        Vice President, Chief Financial Officer,
                                        Secretary and Treasurer
                                       (Principal Financial and Accounting
                                        Officer)