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, 2003
                                                 -------------

                                       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, 2003: 360,866
                                                                      -------

            Transitional Small Business Disclosure Format (check one)

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

<PAGE>

                                    Contents
                                    --------

<TABLE>
<CAPTION>

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

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

          Consolidated  Statements  of  Financial  Condition  at June  30,  2003
          (unaudited) and September 30, 2002 (audited)..............................1

          Consolidated  Statements  of Income and  Comprehensive  Income for the
          three and nine months ended June 30, 2003, and 2002 (unaudited)...........2

          Consolidated  Statements  of Cash Flows for the nine months ended June
          30, 2003 and 2002 (unaudited).............................................3

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

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

Item 3.  Controls and Procedures....................................................9

PART II - OTHER INFORMATION


Item 1.  Legal Proceedings..........................................................10

Item 2.  Changes in Securities and Use of Proceeds..................................10

Item 3.  Defaults upon Senior Securities............................................10

Item 4.  Submission of Matters to a Vote of Security Holders........................10

Item 5.  Other Information..........................................................10

Item 6.  Exhibits and Reports on Form 8-K...........................................10

Signatures..........................................................................11

</TABLE>

<PAGE>

                    FARNSWORTH BANCORP INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                         JUNE 30      SEPTEMBER 30,
                                                          2003            2002
                                                      ------------    ------------
ASSETS                                                  (UNAUDITED)      (AUDITED)

<S>                                                 <C>             <C>
Cash and due from banks                               $ 10,362,947    $  9,161,801
Securities available for sale                           16,116,589      11,710,884
Securities held to maturity                                599,601       1,147,300
Loans receivable, net                                   58,628,524      58,026,218
Accrued interest receivable                                358,908         390,459
Federal Home Loan Bank of New York (FHLB) stock
  at cost substantially restricted                         507,400         499,800
Premises and equipment                                   2,275,574       2,117,790
Other assets                                                72,912          99,447
                                                      ------------    ------------

         Total assets                                 $ 88,922,455    $ 83,153,699
                                                      ============    ============


LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                              $ 80,662,718    $ 75,288,987
Borrowings from FHLB                                       991,717       1,094,474
Advances by borrowers for taxes and insurance              379,001         255,953
Accrued income taxes                                       121,257          87,911
Deferred income taxes                                       49,085          71,002
Accrued interest payable                                    19,366          35,984
Accounts payable and other accrued
  expenses                                                  98,409         132,228
                                                      ------------    ------------

         Total liabilities                              82,321,553      76,966,539
                                                      ------------    ------------

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               3,364,231       2,980,935
Treasury stock                                            (185,172)       (185,172)
Common stock acquired by
 employee stock ownership plan (ESOP)                     (151,644)       (174,414)
Unissued restricted stock plan shares                      (16,425)        (54,765)
Accumulated other comprehensive income , unrealized
 appreciation on available for sale securities
  net of taxes                                             155,665         186,329
                                                      ------------    ------------

         Total stockholders' equity                      6,600,902       6,187,160
                                                      ------------    ------------

         Total liabilities and
          stockholders' equity                        $ 88,922,455    $ 83,153,699
                                                      ============    ============
</TABLE>
                                       1
<PAGE>

                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED            NINE  MONTHS ENDED
                                                     JUNE 30                      JUNE 30
                                               2003           2002           2003           2002
                                           -----------    -----------    -----------    -----------
<S>                                      <C>            <C>            <C>            <C>
Interest income:
  Loans receivable                         $ 1,099,298    $ 1,031,439    $ 3,327,449    $ 2,908,331
  Securities                                   199,146        187,022        556,816        600,356
  Federal funds sold                            21,303         20,188         69,105         56,932
                                           -----------    -----------    -----------    -----------
        Total interest income                1,319,747      1,238,649      3,953,370      3,565,619
                                           -----------    -----------    -----------    -----------

Interest expense:
  Deposits                                     407,300        446,074      1,298,284      1,461,486
  Federal Home Loan Bank advances               14,829         25,356         46,514         92,063
                                           -----------    -----------    -----------    -----------
        Total interest expense                 422,129        471,430      1,344,798      1,553,549
                                           -----------    -----------    -----------    -----------
Net interest income                            897,618        767,219      2,608,572      2,012,070

Provision for loan losses                       10,000         50,000         59,820         91,772
                                           -----------    -----------    -----------    -----------

        Net interest income after
          provision for loan losses            887,618        717,219      2,548,752      1,920,298
                                           -----------    -----------    -----------    -----------

Noninterest income:
  Fees and other service charges                67,444         76,353        208,680        213,288
  Net realized gain on available for
    sale loans and securities                   55,207         18,320        122,437         50,268
                                           -----------    -----------    -----------    -----------
        Total noninterest income               122,651         94,673        331,117        263,556
                                           -----------    -----------    -----------    -----------

Noninterest expense:
  Compensation and benefits                    439,118        335,703      1,208,123        911,600
  Occupancy and equipment                      117,754         85,408        355,557        264,599
  Federal insurance premiums and
    assessments                                  9,772          8,503         15,867         13,544
  Other                                        198,118        166,190        622,986        550,720
                                           -----------    -----------    -----------    -----------
        Total noninterest expense              764,762        595,804      2,202,533      1,740,463
                                           -----------    -----------    -----------    -----------

Income  before provision for income
  tax expense                                  245,507        216,088        677,336        443,391
Provision for income tax expense                94,449         76,500        257,002        143,500
                                           -----------    -----------    -----------    -----------
        Net income                             151,058        139,588        420,334        299,891

Other Comprehensive Income, net of taxes
  Unrealized (Loss) gain on Securities
   Available for Sale                           23,355        142,518         34,993        (78,231)
  Reclassification adjustments for gains
    included in net income                     (26,880)       (18,320)       (65,657)       (50,268)
                                           -----------    -----------    -----------    -----------

Comprehensive Income                       $   147,533    $   263,786    $   389,670    $   171,392
                                           ===========    ===========    ===========    ===========

Net income  per common share:
  Basic                                    $      0.44    $      0.42    $      1.23    $      0.91
  Diluted                                  $      0.43    $      0.41    $      1.19    $      0.90

Weighted average number of shares
 outstanding during the period:
 basic                                         340,617        330,616        340,617        330,616
 diluted                                       354,540        337,395        352,115        334,806
</TABLE>
                                       2
<PAGE>

                    FARNSWORTH BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                         NINE MONTHS ENDED JUNE 30
                                                            2003            2002
                                                        ------------    ------------
<S>                                                   <C>             <C>
Cash flows from operating activities:
  Net income                                            $    420,334    $    299,891
                                                        ------------    ------------
  Adjustments to reconcile net income
   to net cash provided by operating activities
    Depreciation and amortization                            109,034          90,769
    Stock compensation                                        61,110          39,512
    Provision for loan losses                                 59,820          91,772
    Net gain on sale of AFS securities                       (65,658)        (50,268)
    Net gain on loans sold                                   (46,779)
   Net loss on sale of real estate owned                           -           1,675
 Change in:
   Accrued interest receivable                                31,551         (79,056)
   Other assets                                               26,535         (11,070)
   Advances from borrowers                                   123,048          58,365
   Accrued and deferred income taxes                          33,873          37,241
   Accrued interest payable                                  (16,618)        (18,446)
   Other accrued liabilities                                 (33,819)          7,526
                                                        ------------    ------------

         Total adjustments                                   282,097         168,020
                                                        ------------    ------------
         Net cash provided by operating
          activities                                         702,431         467,911
                                                        ------------    ------------

Cash flows from investing activities:

  Net increase in loans receivable                          (662,126)    (11,259,839)
  Proceeds from sale of REO                                        -         128,617
  Redemption of securities, held to maturity                 547,699         779,851
  Redemption of securities, available for sale             4,237,701       2,151,195
  Purchase of Federal Home Loan Bank Stock                    (7,600)       (127,200)
  Proceeds from sale of securities available for sale     11,270,219       7,734,375
  Purchase of securities, available for sale net         (19,852,296)     (8,525,565)
  Purchase of premises and equipment                        (268,818)       (739,867)
                                                        ------------    ------------
         Net cash used in investing
           activities                                     (4,735,221)     (9,858,433)
                                                        ------------    ------------
Cash flows from financing activities:
  Net increase  in deposits                                5,373,731      12,732,680
  Repayment of  Federal Home Loan Bank Borrowings           (102,757)     (1,596,876)
  Dividends paid                                             (37,038)              -
                                                        ------------    ------------

         Net cash provided by financing
           activities                                      5,233,936      11,135,804
                                                        ------------    ------------

Net increase in cash and due from banks                    1,201,146       1,745,282

Cash at beginning of period                                9,161,801       9,282,084
                                                        ------------    ------------
Cash at end of period                                   $ 10,362,947    $ 11,027,366
                                                        ============    ============
Supplemental disclosure:
  Cash paid during the period for:
    Interest                                            $  1,361,416    $  1,571,999
                                                        ============    ============
    Income taxes                                        $    100,000    $    100,000
                                                        ============    ============

  Unrealized gain (loss)  on securities available
    for sale, net of deferred income taxes              $    (30,664)   $     62,648
                                                        ============    ============

 Acquisition of real estate in settlement of loans      $          -    $     41,797
                                                        ============    ============
</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,
2003, the  Consolidated  Statements of Income and  Comprehensive  Income for the
three  and nine  months  ended  June 30,  2003 and  2002,  and the  Consolidated
Statements  of Cash Flows for the nine months ended June 30, 2003 and 2002.  The
results of operations  for the three and nine months ended June 30, 2003 are not
necessarily  indicative  of results  that may be  expected  for the entire  year
ending September 30, 2003, or for any other period.  The accompanying  unaudited
consolidated interim financial statements should be read in conjunction with the
Company's September 30, 2002 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, 2002.

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

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

The Company is a unitary  savings and loan holding  company.  The Bank  operates
four  branches  in  Burlington  County,  New Jersey.  The Bank offers  customary
banking services,  including accepting  checking,  savings and time deposits and
the making of commercial,  real-estate  and consumer loans, to customers who are
predominantly small and middle-market businesses and middle-income  individuals.
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 opened its fourth  branch office  located in Marlton,  New
Jersey on January 13, 2003.

                                       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>
                                            2003                                  2002
                           -----------------------------------   ---------------------------------
                                           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     $ 151,058      360,866                 $ 139,588     360,866

ESOP Shares, not
Committed to be released                  (15,197)                              (18,236)

RSP Shares                                 (5,052)                              (12,014)
                           -----------------------------------    ---------------------------------

Basic earnings per share     151,058      340,617       $ 0.44      139,588     330,616      $ 0.42

Common Stock equivalents                   13,923                                 6,779
                           -----------------------------------    ---------------------------------

Diluted earnings per share $ 151,058      354,540       $ 0.43    $ 139,588     337,395      $ 0.41
                           ======================                 =====================

</TABLE>

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

                                       5
<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  $5.7 million or 6.9% to $88.9  million at June
30, 2003 from $83.2  million at September  30, 2002.  The increase was primarily
attributable  to an increase in  securities  available  for sale of $4.4 million
net, a $1.2  million  increase in cash and an increase  in loans  receivable  of
$602,000, partially offset by a $548,000 decrease in the Bank's held to maturity
securities.  The Bank's total  liabilities  increased  $5.4 million or 6.9%,  to
$82.3  million at June 30, 2003 from $76.9  million at September  30, 2002.  The
increase  was  primarily  attributable  to a $5.4  million  increase in deposits
primarily  attributable  to general market  conditions and the new branch office
located in Marlton, New Jersey.

         Stockholders'  equity  increased  $414,000  to $6.6  million or 7.4% of
total  assets at June 30,  2003,  as compared  to $6.2  million or 7.4% of total
assets at September 30, 2002. The increase in stockholders'  equity is primarily
attributable  to net income of $420,000  and  amortization  of benefit  plans of
$61,000 partially offset by a change in the unrealized appreciation on available
for sale securities net of taxes of $31,000

Results of Operations

         Net  Income.  The Bank's net income  increased  $11,000 for the quarter
ended June 30,  2003 to net income of $151,000  from net income of $140,000  for
the quarter ended June 30, 2002. The increase in net income was  attributable to
an increase in the Bank's net interest  income after  provisions for loan losses
of  $171,000,  an  increase  in  non-interest  income of  $28,000,  offset by an
increase in non-interest  expense of $169,000 and an increase in income taxes of
$18,000.  For the nine months ended June 30, 2003 net income increased  $120,000
to a net income of $420,000  from net income of $300,000  for the same period in
2002.

         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 $171,000,
or 23.7%,  to  $888,000  for the  quarter  ended June 30,  2003 as  compared  to
$717,000 for the quarter ended June 30, 2002.  The increase was primarily due to
an increase in interest income of $81,000, and a decrease in interest expense of
$49,000.  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.  Net interest  income after
provision  for loan losses  increased by $628,000 for the nine months ended June
30, 2003  compared  to the same  period in 2002.  The  increase  was  attributed
primarily to the higher lending and 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.

                                       6
<PAGE>

         Provision  for Loan Losses.  Provision  for loan losses was $10,000 for
the three months  ended June 30, 2003,  compared to $50,000 for the three months
ended June 30, 2002.  For the nine months ended June 30, 2003 the  provision for
loan  losses was $60,000  compared  to $92,000 for the same period in 2002.  The
loan loss provision  decreased during the two fiscal periods due to the constant
level in the balance of loans receivable.

         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  $28,000 or 29.5%
from  $95,000  for the  quarter  ended June 30,  2002 to  $123,000  for the same
quarter in 2003.  Non-interest  income for 2003 included a gain on sale of loans
and  securities  available for sale of $55,000  compared to $18,000 for the same
period in 2002.  For the nine months  ended June 30, 2003,  non-interest  income
increased  $68,000,  compared  to the same  period  in 2002.  This  increase  is
primarily attributed to an increase in gains on the sale of loans and securities
available for sale of $72,000.

         Non-Interest Expense.  Non-interest expense increased $169,000 or 28.3%
from approximately  $596,000 for the quarter ended June 30, 2002 to $765,000 for
the same quarter in 2003.  The increase in the Bank's  non-interest  expense was
primarily  due to a an  increase  of  $103,000  in the Bank's  compensation  and
benefits,  and an  increase  of $32,000 in the Bank's  occupancy  and  equipment
expense  and  an  increase  of  $32,000  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 nine months ended
June 30,  2003,  non-interest  expense  increased  by $462,000 to $2.2  million,
compared to $1.7 million for the same period in 2002.

         Income Tax Expense  Income tax expense  increased by $18,000 to $94,000
for the quarter  ended June 30, 2003  compared to $77,000 for the quarter  ended
June 30, 2002. The increase was attributable to the increase in pretax income of
$28,000 and to the  elimination  of the 3% New Jersey tax rate,  which  formerly
applied to thrift institutions  located in New Jersey. This Savings Institutions
Tax Rate was  eliminated in July 2002 and replaced by the 9% Corporate Tax Rate.
For the nine months ended June 30, 2003 income tax expense increased by $113,000
to $257,000 from $144,000 the prior year.

         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, 2003 was $702,000,  an increase of $235,000.  The
increase in 2003 was  primarily  attributable  to the  increase in net income in
2003 of  $120,000  compared  to June 30,  2002,  the change in accrued  interest
receivable, partially offset by the net gain on loans sold.

                                       7
<PAGE>

         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, 2003,  totaled $4.7 million  compared to $9.9 million
for the same period in 2002. The decrease is  attributable to a decrease in cash
used for net loans  receivable of $10.6 million and an increase in cash provided
by sale and  redemption of  securities of $5.4 million  offset by an increase in
cash used for purchase of securities of $11.3 million.

         Net cash  provided  by 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,  2003,  totaled  $5.2  million,
compared to net cash  provided by financing  activities of $11.1 million for the
same period in 2002. The decrease is  attributable to a net decrease in deposits
of $7.4 million in 2003,  partially  offset by a repayment of borrowings of $1.5
million and payment of dividends of $37,000.

         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, 2003,  with tangible,  core and
risk based capital ratios of 6.86%, 6.86% and 12.68%, respectively.


                                       8
<PAGE>

Item 3.  Controls and Procedures

         (a) Evaluation of disclosure  controls and  procedures.  Based on their
             --------------------------------------------------
evaluation  as of a date  within 90 days of the  filing  date of this  quarterly
report  on  Form  10-QSB,  the  Registrant's  principal  executive  officer  and
principal  financial  officer have  concluded that the  Registrant's  disclosure
controls and procedures (as defined in Rules  13a-14(c) and 15d-14(c)  under the
Securities  Exchange Act of 1934 (the  "Exchange  Act")) are effective to ensure
that  information  required to be  disclosed  by the Company in reports  that it
files or submits under the Exchange Act is recorded,  processed,  summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.

         (b) Changes in internal controls.  There were no significant changes in
             ----------------------------
the Registrant's  internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

                                       9
<PAGE>

                           PART II. OTHER INFORMATION


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

         The Registrant was not engaged in any material legal proceedings during
         the quarter ended June, 2003. 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 March
               31, 2003:

               On April 18, 2003, the Registrant  filed a Current Report on Form
               8-K dated April 18,  2003,  to report that the Board of Directors
               had  declared  a  semi-annual  cash  dividend  of $.05 per  share
               payable on May 12, 2003, to  shareholders  of record as of May 1,
               2003. (Items 5 and 7)

               On May 5, 2003, the Registrant filed a Current Report on Form 8-K
               dated May 5, 2003, to report  earnings for the quarter and fiscal
               year ended March 31, 2003. (Items 7 and 12)


                                       10
<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: July 30, 2003             By: /s/ Gary N. Pelehaty
                                    -------------------------------------
                                    Gary N. Pelehaty
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)




Date: July 30, 2003             By: /s/ Charles Alessi
                                    -------------------------------------
                                    Charles Alessi
                                    Vice President, Chief Financial Officer,
                                    Secretary and Treasurer
                                    (Principal Financial and Accounting Officer)


                                       11