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, 2001
                                                 ---------------

                                       OR

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

                  For the transition period from            to
                                                 ----------    ----------.

                           Commission File No. 0-24621

                               Farnsworth Bancorp, Inc.
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as Specified in Its Charter)


New Jersey                                                   22-3591051        .
--------------------------------------------------------------------------------
(State or Other Jurisdiction of 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 3, 2001: 360,866
                                                                      -------
            Transitional Small Business Disclosure Format (check one)

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

                                    Contents
                                    --------


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


Item 1.  Financial Statements.................................................3

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

         Consolidated Statements of Income and Comprehensive Income for the
         three and nine months ended June 30, 2001, and 2000 (unaudited)......4

         Consolidated Statements of Cash Flows for the nine months ended
         June 30, 2001 and 2000 (unaudited)...................................5

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


PART II - OTHER INFORMATION


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

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

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

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

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

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

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


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

                                                       JUNE 30,    SEPTEMBER 30,
                                                         2001          2000
                                                     -----------   -------------
ASSETS                                               (UNAUDITED)     (AUDITED)

Cash and due from banks                            $  4,681,535    $  3,163,345
Securities available for sale:
  Mortgage-backed                                     5,820,169
  Other                                               4,744,643       8,760,132
Securities held to maturity:
  Mortgage-backed                                     2,841,991       1,468,438
  Other                                                               2,273,068
Loans receivable, net                                42,872,160      39,850,070
Real estate owned, net                                  130,292
Accrued interest receivable                             384,546         419,459
Federal Home Loan Bank of New York stock
  at cost substantially restricted                      457,800         457,800
Deferred Income Taxes                                    35,236          66,611
Premises and equipment                                1,516,352       1,575,974
Other assets                                             58,525          60,594
                                                   ------------    ------------
         Total assets                              $ 63,543,249    $ 58,095,491
                                                   ============    ============

    LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                           $ 53,884,467    $ 44,734,635
Borrowings from FHLB                                  3,755,958       7,597,286
Advances by borrowers for taxes and
  insurance                                             239,310         212,302
Accrued income taxes                                      8,969             469
Accrued interest payable                                 64,401          72,492
Accounts payable and other accrued
  expenses                                               89,091          97,298
                                                   ------------    ------------

         Total liabilities                           58,042,196      52,714,482
                                                   ------------    ------------

Preferred stock $.10 par value, 1,000,000
  shares authorized; none issued and
  outstanding
Common stock $.10 par value, 5,000,000 shares
  authorized; 379,858 shares issued                      37,985          37,985
Additional paid in capital                            3,396,262       3,396,262
Retained earnings substantially restricted            2,579,336       2,575,605
Treasury stock at cost: 18,992 shares                  (185,172)       (185,172)
Unvested common stock and related
 additional paid in capital acquired by
 employee stock ownership plan (ESOP)                  (213,054)       (235,154)
Unreleased Restricted Stock Plan Shares                (110,354)       (127,764)
Net unrealized depreciation on available
  for sale securities net of income taxes                (3,950)        (80,753)
                                                   ------------    ------------

         Total stockholders' equity                   5,501,053       5,381,009
                                                   ------------    ------------
         Total liabilities and
          stockholders' equity                     $ 63,543,249    $ 58,095,491
                                                   ============    ============

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

<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED             NINE  MONTHS ENDED
                                                     JUNE 30,                      JUNE 30,
                                                  2001          2000          2001           2000
                                             -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Interest income:
  Loans receivable                           $   813,610    $   766,577    $ 2,378,529    $ 2,268,942
  Securities                                     227,946        200,156        559,311        588,750
  Federal funds sold                              23,947         10,335         79,514         36,484
                                             -----------    -----------    -----------    -----------
        Total interest income                  1,065,503        977,068      3,017,354      2,894,176
                                             -----------    -----------    -----------    -----------
Interest expense:
  Deposits                                       541,624        397,464      1,466,832      1,160,337
  Federal Home Loan Bank advances                 60,053        141,234        254,305        384,674
                                             -----------    -----------    -----------    -----------
        Total interest expense                   601,677        538,698      1,721,137      1,545,011
                                             -----------    -----------    -----------    -----------
Net interest income                              463,826        438,370      1,296,217      1,349,165

Provision for loan losses                         13,124                        25,369         13,000
                                             -----------    -----------    -----------    -----------
        Net interest income after
          provision for loan losses              450,702        438,370      1,270,848      1,336,165
                                             -----------    -----------    -----------    -----------
Noninterest income:
  Fees and other service charges                  58,365         52,587        174,378        156,046
  Net Realized Gain on Available for
    Sale Securities                               30,359                        64,278
Other Income                                       1,000         33,307          3,000         37,761
                                             -----------    -----------    -----------    -----------
        Total noninterest income                  89,724         85,894        241,656        193,807
                                             -----------    -----------    -----------    -----------
Noninterest expense:
  Compensation and benefits                      252,400        234,072        714,827        643,631
  Occupancy and equipment                         90,153         89,220        257,502        222,842
  Federal insurance premiums and
    assessments                                    7,080          7,008         11,431         24,011
  Other                                          166,533        193,430        527,625        488,165
                                             -----------    -----------    -----------    -----------
        Total noninterest expense                516,166        523,730      1,511,385      1,378,649
                                             -----------    -----------    -----------    -----------
Income before provision for income
  tax expense (benefit)                           24,260            534          1,119        151,323
Provision for income tax expense (benefit)         4,000         (4,350)        (2,612)        47,335
                                             -----------    -----------    -----------    -----------
        Net income                                20,260          4,884          3,731        103,988

Other Comprehensive Income, net of taxes
  Unrealized Gain (Loss) on Securities
   Available for Sale                            (67,950)        (8,088)        76,803        (48,211)
  Reclassification adjustments for gains
    included in net income                       (30,359)                      (64,278)
                                             -----------    -----------    -----------    -----------

Comprehensive (loss) income                  $   (78,049)   $    (3,204)   $    16,256    $    55,777
                                             ===========    ===========    ===========    ===========
Net income per common share:
  Basic                                      $      0.06    $      0.01    $      0.01    $      0.31

Shares used in computing basic
  income per share                               322,420        337,314        322,420        337,314
</TABLE>

                                       4
<PAGE>
                     FARNSWORTH BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                           NINE MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
                                                                           2001            2000
                                                                      -------------   -------------
<S>                                                                 <C>             <C>
Cash flows from operating activities:
  Net income                                                          $      3,731    $    103,988
                                                                      -------------   -------------
  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                                           76,040          63,624
    Provision for loan losses                                               25,369          13,000
    Net gain on sale of AFS securities                                     (64,278)
   Net gain on sale of real estate owned                                                   (25,295)
   Decrease (increase) in accrued interest receivable                       34,913         (10,426)
    Decrease (increase) in other assets                                      2,069        (272,251)
    Increase (decrease) in advances from borrowers                          27,008          (6,482)
    Increase (decrease)  in accrued income taxes
     and deferred income taxes                                              39,875        (119,038)
 (Decrease) increase in accrued interest payable                            (8,091)         19,383
  (Decrease) in other accrued liabilities                                   (7,690)        (70,404)
                                                                      -------------   -------------
         Total adjustments                                                 125,215        (407,889)
                                                                      -------------   -------------
         Net cash provided by  (used in) operating
          activities                                                       128,946        (303,901)
                                                                      -------------   -------------
Cash flows from investing activities:

  Net increase in loans receivable                                      (3,177,733)     (1,192,986)
  Proceeds from sale of REO                                                                 80,000
  Redemption of securities, held to maturity                             1,548,265         218,807
  Redemption of securities, available for sale                              35,347
  Purchase of Federal Home Loan Bank Stock                                                 (39,100)
  Proceeds from sale of securities available for sale                   31,223,874
  Purchase of securities held to maturity                                 (648,750)
  Purchase of securities, available for sale net                       (32,883,845)
  Purchase of premises and equipment                                       (16,418)       (151,182)
                                                                      -------------   -------------
         Net cash used in investing
           activities                                                   (3,919,260)     (1,084,461)
                                                                      -------------   -------------
Cash flows from financing activities:
  Net increase  in deposits                                              9,149,832       1,258,526
 Increase in FHLB Borrowings                                                               413,902
  Repayment of  Federal Home Loan Bank Borrowings                       (3,841,328)
                                                                      -------------   -------------
         Net cash provided by financing
           activities                                                    5,308,504       1,672,428
                                                                      -------------   -------------
Net  increase in cash and due from banks                                 1,518,190         284,066

Cash at beginning of period                                              3,163,345       1,883,104
                                                                      -------------   -------------
Cash at end of period                                                 $  4,681,535    $  2,167,170
                                                                      =============   =============
Supplemental disclosure:
  Cash paid during the period for:
    Interest                                                          $  1,729,228    $  1,545,011
                                                                      =============   =============
    Income taxes                                                                      $    120,277
                                                                      =============   =============
  Unrealized  gain (loss) on securities available
    for sale, net of deferred income taxes                            $     76,803    $   (183,605)
                                                                      =============   =============
 Investment securities transferred from held to maturity
  to available for sale                                               $  2,273,966
                                                                      =============   =============

 Acquisition of real estate in settlement of loans                    $    130,292    $    254,491
                                                                      =============   =============
Mortgage to finance sale of REO                                                       $    314,000
                                                                      =============   =============
</TABLE>


                                       5
<PAGE>

                     FARNSWORTH BANCORP, INC. AND SUBSIDIARY
          NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS


NOTE 1.  Presentation of Financial Information
         -------------------------------------

         The accompanying  unaudited  consolidated  interim financial statements
include  the  accounts of  Farnsworth  Bancorp,  Inc.  (the  "Company")  and its
subsidiaries  Peoples Savings Bank (the "Bank") and Peoples Financial  Services,
Inc. The accompanying  unaudited  consolidated interim financial statements have
been prepared in accordance with the  instructions to Form 10-QSB.  Accordingly,
they do not include all of the information  and footnotes  required by generally
accepted accounting principles for complete financial statements. The accounting
and  reporting  policies  of the  Company  conform in all  material  respects to
generally  accepted  accounting  principles and to general  practice  within the
thrift industry. It is the opinion of management that the accompanying unaudited
consolidated  interim financial  statements  reflect all adjustments,  which are
considered  necessary  to report  fairly the  financial  position as of June 30,
2001, the  Consolidated  Statements of Income and  Comprehensive  Income for the
three  and nine  months  ended  June 30,  2001 and  2000,  and the  Consolidated
Statements  of Cash Flows for the nine months ended June 30, 2001 and 2000.  The
results of operations  for the three and nine months ended June 30, 2001 are not
necessarily  indicative  of results  that may be  expected  for the entire  year
ending September 30, 2001, or for any other period.  The accompanying  unaudited
consolidated interim financial statements should be read in conjunction with the
Company's September 30, 2000 consolidated  financial  statements,  including the
notes thereto,  which are included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended September 30, 2000.

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

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

         The Company is a unitary  savings and loan  holding  company.  The Bank
operates  three  branches in  Burlington  County,  New  Jersey.  The Bank offers
customary  banking  services,  including  accepting  checking,  savings and time
deposits  and the making of  commercial,  real-estate  and  consumer  loans,  to
customers  who  are  predominantly   small  and  middle-market   businesses  and
middle-income  individuals.   In  December  2000,  the  Company  began  offering
brokerage and investment advisory services and insurance services to the general
public through Peoples Financial Services,  Inc., a subsidiary organized for the
sale of mutual funds and insurance through a third party networking agreement.

NOTE 2.  Net Income Per Common Share
         ---------------------------

         Basic net income per common share is  calculated by dividing net income
by  the  number  of  shares  of  common  stock  outstanding,  adjusted  for  the
unallocated  portion of shares held by the Company's  Employee  Stock  Ownership
Plan  ("ESOP").  Diluted net income per share is  calculated  by  adjusting  the
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.

                                       6
<PAGE>

                     For the nine months ended June 30, 2001
                     ---------------------------------------
<TABLE>
<CAPTION>

                                         2001                                2000
                                    ---------------                     ---------------
                                        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     $ 3,731      360,866                $ 103,988     379,858

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

RSP Shares                              (14,134)                             (15,194)
                           -------      -------     ------     ---------     -------      ------
                           $ 3,731      322,420     $ 0.01     $ 103,988     337,314      $ 0.31
                           =======      =======     ======     =========     =======      ======
</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.

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

         The Company may from time to time make written or oral "forward-looking
statements,  " including  statements contained in the Company's filings with the
Securities and Exchange  Commission  (including  this  Quarterly  Report of Form
10-QSB),  in its  reports to  stockholders  and in other  communications  by the
Company,  which  are made in good  faith by the  Company  pursuant  to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.

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

                                       7
<PAGE>
concerning taxes, banking securities and insurance);  technological changes; and
the success of the Company at managing the risks involved in the foregoing.

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

Financial Condition

         Total assets  increased  $5.4 million or 9.38% to $63.5 million at June
30, 2001 from $58.1  million at September  30, 2000.  The increase was primarily
attributable  to a $2.4  million  increase  in the  Bank's  cash and  investment
securities,  an increase in loans  receivable  of $3.0  million  net. The Bank's
total liabilities  increased $5.3 million or 10.1%, to $58.0 million at June 30,
2001 from $52.7  million at  September  30, 2000.  The  increase  was  primarily
attributable to a $9.1 million  increase in deposits  attributable to the Bank's
Mt. Laurel branch, offset by a $3.8 million decrease in borrowings.

         Stockholders'  equity  increased  $120,000  to $5.5  million or 8.7% of
total  assets at June 30,  2001,  as compared  to $5.4  million or 9.3% of total
assets at September 30, 2000. The increase in stockholders'  equity is primarily
attributable  to a change in the unrealized  appreciation  on available for sale
securities net of taxes of $77,000 and amortization of benefit plans of $40,000.

Results of Operations

         Net  Income.  The Bank's net income  increased  $15,000 for the quarter
ended June 30, 2001 to a net income of $20,000 from net income of $5,000 for the
quarter ended June 30, 2000. The increase in net income was  attributable  to an
increase  in the Bank's  interest  income  after  provisions  for loan losses of
$12,000,  an  increase  in  non-interest  income of $3,000,  and a  decrease  in
non-interest  expense of $8,000,  for the nine  months  ended June 30,  2001 net
income decreased  $100,000 to a net income of $4,000 from net income of $104,000
for the same period in 2000.

         Net  Interest  Income.  Net  interest  income  is the most  significant
component  of the Bank's  income from  operations.  Net  interest  income is the
difference  between  interest the Bank receive 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  $12,000,
or 2.8%,  to  $451,000  for the  quarter  ended June 30, 2001 as compared to the
quarter  ended June 30,  2000.  The  increase  was  primarily  due to  increased
interest  income of  $88,000,  offset by an  increase  in  interest  expense  of
$63,000.  Net interest income after provision for loan losses decreased  $65,000
for the nine months ended June 30, 2001 compared to the same period in 2000. The
decrease was attributed primarily to the increase in the bank's cost of funds.

         Provision  for Loan Losses.  Provision  for loan losses was $13,000 for
the three  months ended June 30,  2001,  compared to no provision  for the three
months  ended  June  30,  2000.  For the nine  months  ended  June 30,  2001 the
provision for loan losses was $25,000 compared to $13,000 for the same period in
2000.

         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.

                                       8
<PAGE>

         Non-Interest Income.  Non-interest income increased $3,000 or 3.5% from
$86,000 for the quarter  ended June 30, 2000 to $89,000 for the same  quarter in
2001.  Non-interest  income  for  2001  included  a gain on  sale of  securities
available  for  sale of  $30,000.  For the nine  months  ended  June  30,  2001,
non-interest income increased $48,000, compared to the same period in 2000. This
increase  is  primarily  attributed  to a gain in the 2001 period on the sale of
securities of $64,000.

         Non-Interest  Expense.  Non-interest  expense  decreased $8,000 or 1.5%
from approximately  $524,000 for the quarter ended June 30, 2000 to $516,000 for
the same quarter in 2001.  The decrease in the Bank's  non-interest  expense was
primarily due to a $26,000 decrease in other  non-interest  expense offset by an
increase of $18,000 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,  2001,  non-interest  expense  increased  by $100,000 to $1.5  million,
compared to $1.4 million for the same period in 2000.

         Income Tax Expense (benefit).  Income tax expense changed from $(4,000)
for the quarter  ended June 30,  2000 to $4,000  income tax expense for the same
period in 2001.  This change of $8,000 is due to the increase in net-income  for
the quarter  ended June 30, 2001.  For the nine months ended June 30, 2001,  the
Company  recognized an income tax benefit of $3,000 versus an income tax expense
of $47,000 in the same period in 2000.

Liquidity and Capital Resources

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

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

         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, 2001 was $129,000,  an increase of $433,000.  The
increase in 2001 was primarily  attributable  to a decrease in accrued  interest
receivable, an increase in advances from borrowers,  depreciation and provisions
for loan losses offset by a gain on sale of securities.

         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, 2001, totaled $3.9 million compared to a use of funds
of $1.1 million for the same period in 2000. The difference is  attributable  to
an increase in net loans  receivable  of $3.2  million in 2001  compared to $1.2
million in 2000 and purchase of securities of $34.0 million, partially offset by
the sale and redemption of securities of $33.0 million in 2001.

         Net cash provided the Bank's financing  activities (i.e., cash receipts
primarily from net increases in deposits and net increases in FHLB advances) for
the nine months ended June 30, 2001, totaled $5.3 million,  compared to net cash
provided by  financing  activities  of $1.7 million for the same period in 2000.

                                       9
<PAGE>

The  increase is  attributable  to a net increase in deposits of $9.1 million in
2001, offset by a repayment of borrowings of $3.8 million in 2001.

         Office of Thrift Supervision ("OTS") capital regulations  applicable to
the Bank require  savings  institutions  to meet three  capital  standards:  (1)
tangible  capital equal to 1.5% of total adjusted  assets,  (2) a leverage ratio
(core  capital)  equal  to at  least  3% of  total  adjusted  assets,  and (3) a
risk-based capital requirement equal to 8.0% of total  risk-weighted  assets. In
addition,  the OTS prompt corrective  action regulation  provides that a savings
institution  that  has a  leverage  capital  ratio  of  less  than  4%  (3%  for
institutions  receiving  the highest  examination  rating)  will be deemed to be
"undercapitalized"  and may be subject to certain restrictions.  The Bank was in
compliance with these  requirements  at June 30, 2001,  with tangible,  core and
risk based capital ratios of 7.73%, 7.73% and 16.50%, respectively.

                                       10
<PAGE>

                           PART II. OTHER INFORMATION

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

         The Registrant is not engaged in any legal proceedings at the present
         time. From time to time, the Bank is a party to legal proceedings
         within the normal course of business wherein it enforces its security
         interests in loans made by it, and other similar matters.

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

         Not applicable.

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

         Not applicable.

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

         Not applicable.

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 June
               30, 2001:

               On April 3, 2001, the  Registrant  filed a Current Report on Form
               8-K dated  April 2, 2001 to report the  adoption  of amended  and
               restated bylaws of the Registrant (Items 5 and 7).


                                       11
<PAGE>

                                   SIGNATURES


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


                             FARNSWORTH BANCORP, INC.


Date: August 6, 2001          By:  /s/Gary N. Pelehaty
                                  ----------------------------------------------
                                  Gary N. Pelehaty
                                  President and Chief Executive Officer
                                  (Principal Executive Officer)




Date: August 6, 2001          By:  /s/Charles Alessi
                                  ----------------------------------------------
                                  Charles Alessi
                                  Vice President, Chief Financial Officer,
                                  Secretary and Treasurer
                                  (Principal Financial and Accounting Officer)


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