SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                    QUARTERLY REPORT UNDER SECTION 13 OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         FOR QUARTER ENDED JUNE 30, 2001

                        COMMISSION FILE NUMBER: 333-90273

                          FIDELITY D & D BANCORP, INC.

             STATE OF INCORPORATION: IRS EMPLOYER IDENTIFICATION NO:
                             PENNSYLVANIA 23-3017653

                                PRINCIPAL OFFICE:
                              BLAKELY & DRINKER ST.
                           DUNMORE, PENNSYLVANIA 18512

                                   TELEPHONE:
                                  570-342-8281

The Company (1) has filed all reports  required to be filed by Section 13 of the
Securities  Exchange  Act of 1934  during the  preceding  12 months (or for such
shorter period that the Company was required to file such reports),  and (2) has
been subject to such filing requirements for the past 90 days.

                                            __X__ YES     ___ NO

The number of outstanding shares of Common Stock of Fidelity D & D Bancorp, Inc.
at July 25, 2001, the latest practicable date was 1,811,876.

<PAGE>

                   FIDELITY D & D BANCORP, INC and SUBSIDIARY.
                                DUNMORE, PA 18512

                             FORM 10-Q JUNE 30, 2001
                                      INDEX

PART I. FINANCIAL INFORMATION                                               Page

ITEM 1. FINANCIAL STATEMENTS:

        Consolidated Balance Sheets as of June 30, 2001
                  and December 31, 2000                                        3
        Consolidated Statement of Income for the six
                  months ended June 30, 2001 and 2000                          4
        Consolidated Statement of Changes in Shareholders' Equity
                   for the six months ended June 30, 2001 and 2000             5
        Consolidated Statement of Cash Flows for the six months
                  ended June 30, 2001 and 2000                                 6
        Notes to Consolidated Financial Statements                           7-8

ITEM 2. Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                 9-17

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk,
                  included in Item 2                                       16-17

PART II.OTHER INFORMATION

ITEM 1. Legal Proceedings                                                     18

ITEM 2. Change in Securities and Use of Proceeds                              18

ITEM 3. Defaults upon Senior Securities                                       18

ITEM 4. Submission of Matters to a Vote of Security Holder                 18-19

ITEM 5. Other Information                                                     19

ITEM 6. Exhibits and Reports on Form 8-K                                   19-20

Signature Page                                                                21

Exhibit Index                                                                 22


                                       2
<PAGE>
                  FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                   As of June 30, 2001 and December 31, 2000
<TABLE>
<S>                                                             <C>                     <C>
                                                                June 30, 2001           December 31, 2000
                                                                 (unaudited)                 (audited)
                                                              -------------------------------------------
ASSETS
Cash and due from banks                                       $    7,044,881             $    5,502,430
Interest bearing deposits with financial institutions             11,334,098                  3,277,062
                                                              -------------------------------------------
      Total cash and cash equivalents                             18,378,979                  8,779,492

Federal funds sold                                                13,600,000                          -
Held to maturity securities                                        7,396,558                  7,879,433
Available for sale securities                                    115,512,187                111,876,958

Loans net of unearned income                                     343,059,915                336,865,255
Allowance for loan losses                                          3,300,086                  3,264,280
                                                              -------------------------------------------
      Net loans                                                  339,759,829                333,600,975

Loans available-for-sale                                          12,491,279                 10,318,792
Bank premises and equipment                                       11,676,692                 11,390,479
Accrued interest receivable                                        3,688,715                  3,885,291
Foreclosed assets held for sale                                       69,640                    353,253
Other assets                                                       5,496,537                  3,659,198
                                                              -------------------------------------------
      Total assets                                            $  528,070,416             $  491,743,871
                                                              ===========================================
LIABILITIES

Deposits
   NonInterest-bearing                                        $   48,198,687             $   47,500,335
   Cert. of deposit $100,000 or more                             140,320,953                 94,717,931
   Other interest-bearing deposits                               194,609,444                197,406,799
                                                              -------------------------------------------
      Total deposits                                             383,129,083                339,625,066

Accrued expenses and other liabilities                             5,965,406                  3,574,672
Short-term borrowings                                             35,775,674                 48,024,721
Long-term debt                                                    63,000,000                 63,000,000
                                                              -------------------------------------------
   Total liabilities                                             487,870,162                454,224,459
                                                              -------------------------------------------
Shareholders' Equity:
   Preferred stock authorized 5,000,000 shares,
         no par value, none issued                                         -                          -
   Common stock authorized 10,000,000 shares,
         no par value                                              9,086,061                  8,881,713
   Accumulated other comprehensive income                           (361,486)                (1,325,435)
   Retained earnings                                              31,475,679                 29,963,134
                                                              -------------------------------------------
      Total shareholders' equity                                  40,200,253                 37,519,412
                                                              -------------------------------------------
      Total liabilities and shareholders' equity              $  528,070,416             $  491,743,871
                                                              ===========================================

                 See notes to consolidated financial statements

                                        3
</TABLE>
<PAGE>
                  FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
            Three and Six Month Periods Ended June 30, 2001 and 2000
                                   (unadited)
<TABLE>
<S>                                                   <C>                     <C>               <C>                   <C>
                                                              Three Months Ended                           Six Months Ended
                                                      June 30, 2001           June 30, 2000      June 30, 2001         June 30, 2000

Interest Income
   Interest and fees on loans:
         Taxable                                     $    6,863,759          $    6,417,767     $   13,720,947        $   12,429,630
         Nontaxable                                         190,981                 154,635            379,123               302,216
   Interest and fees on leases                              181,089                 171,016            369,628               296,416
   Interest-bearing deposits with financial institutions       (273)                  7,905              8,174                18,447
   Investment securities:
         US Government agencies                           1,656,292               1,581,843          3,275,200             3,106,670
         States & political subdivisions (nontaxable)       194,132                 272,487            408,177               557,804
         Other securities                                    58,177                  94,232            156,592               185,151
   Federal funds sold                                       120,683                       -            121,644                     -
                                                     -------------------------------------------------------------------------------
       Total interest income                              9,264,840               8,699,885         18,439,485            16,896,334
                                                     -------------------------------------------------------------------------------
 Interest expense
    Certificates of deposit of $100,000 or more           1,874,084               1,291,749          3,473,530             2,419,174
    Other deposits                                        2,026,068               2,185,353          4,292,862             4,268,767
    Securities sold under repurchase agreements             326,746                 463,107            814,032               903,769
    Other                                                   919,315               1,202,264          1,963,486             2,217,354
                                                     -------------------------------------------------------------------------------
       Total interest expense                             5,146,213               5,142,473         10,543,910             9,809,064
                                                     -------------------------------------------------------------------------------
       Net interest income                                4,118,627               3,557,412          7,895,576             7,087,270
 Provision for loan losses                                  276,000                 136,500            604,000               243,000
                                                     -------------------------------------------------------------------------------
       Net interest income, after
        provision for loan losses                         3,842,627               3,420,912          7,291,576             6,844,270
                                                     -------------------------------------------------------------------------------
 Other income:
    Service charge on deposit accounts                      290,282                 298,670            712,620               553,312
    Gain on sale of investment securities                         -                   9,023            114,375                20,123
    Gain on sale of loans and leases                         78,828                  30,791            158,706                79,153
    Gain on loans available-for-sale                              -                  53,690                  -                79,063
    Other income                                            460,553                 223,584            708,572               404,971
                                                     -------------------------------------------------------------------------------
       Total other income                                   829,663                 615,758          1,694,273             1,136,622
                                                     -------------------------------------------------------------------------------
 Other operating expenses:
    Salaries and employee benefits                        1,534,049               1,322,134          2,913,872             2,690,746
    Premises and equipment                                  634,122                 484,925          1,273,306               982,831
    Advertising                                             104,207                 112,326            194,247               229,543
    Other expenses                                          904,569               1,098,389          1,726,299             2,005,879
                                                     -------------------------------------------------------------------------------
       Total operating expenses                           3,176,947               3,017,774          6,107,724             5,908,999
                                                     -------------------------------------------------------------------------------
 Income before income taxes                               1,495,343               1,018,896          2,878,124             2,071,893
 Provision for income taxes                                 360,558                 176,900            665,122               363,700
                                                     -------------------------------------------------------------------------------
        Net income                                   $    1,134,785          $      841,996     $    2,213,002        $    1,708,193
                                                     ===============================================================================
Basic earnings per share                             $         0.62          $         0.47     $         1.22        $         0.95
Diluted earnings per share                           $         0.62          $         0.47     $         1.22        $         0.95
Dividends per share                                  $         0.20          $         0.19     $         0.39        $         0.38

                See Notes to Consolidated Financial Statements.
</TABLE>

                                       4
<PAGE>
                   FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                 For the Six Months Ended June 30, 2001 and 2000
                                   (unaudited)
<TABLE>
<S>                                 <C>        <C>          <C>           <C>                <C>
                                                                           Accumulated
                                        Capital Stock      Retained    Other Comprehensive
                                    Shares     Amount      Earnings       Income/(Loss)         Total
                                  ------------------------------------------------------------------------
Balance, Dec. 31, 1999               900,392   $8,673,031  $28,126,918    ($4,673,713)        $32,126,236
                                                                                            --------------
Net income                                 -            -    1,708,193                          1,708,193

Change in net unrealized holding
gains/(losses) on
available-for-sale
securities, net of
reclassification
adjustments and tax effects                                                    32,121              32,121
                                                                                            --------------
Comprehensive income                       -            -            -                          1,740,314
                                                                                            --------------
Dividends                                                     (676,026)                          (676,026)

Stock exchange                       901,816

Issuance of stock                        250       15,500                                          15,500

Dividends reinvested                   1,553      109,473                                         109,473
                                  ------------------------------------------------------------------------
Balance, June 30, 2000            $1,804,011  $ 8,798,004  $29,159,085    $(4,641,592)        $33,315,497
                                  ========================================================================
Balance, December 31, 2000        $1,806,274  $ 8,881,713  $29,963,134    $(1,325,435)        $37,519,412
                                                                                            --------------
Net income                                 -            -    2,213,002                          2,213,002

Change in net unrealized holding           -            -            -
gains/(losses) on
available-for-sale
securities, net of
reclassification
adjustments and tax effects                                                   963,949             963,949
                                                                                            --------------
Comprehensive income                                                                            3,176,951
                                                                                            --------------
Dividends                                                     (700,457)                          (700,457)

Dividends reinvested                   5,603      204,347            -              -             204,347
                                  ------------------------------------------------------------------------
Balance June 30, 2001             $1,811,877  $ 9,086,061  $31,475,679      $(361,486)        $40,200,253
                                  ========================================================================

                 See notes to consolidated financial statements.
</TABLE>
Comprehensive  income  (loss) for the three  months ended June 30, 2001 and June
30, 2000 was $928,855 and ($1,405,203), respectively.

                                       5
<PAGE>
                   FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                For the Six Months Ended June 30, 20001 and 2000
                                   (unaudited)
<TABLE>
<S>                                                             <C>               <C>
                                                                      2001            2000
                                                                -------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income................................                 $  2,213,002      $  1,708,193
     Adjustments to reconcile net income to net
     cash provided by (used by) operating activities:
        Depreciation...........................                      597,400           427,800
        Amortization of securities (net of accretion)                (22,619)          (34,184)
        Provision for loan losses.......                             604,000           243,000
        Deferred income tax..........                               (240,264)          107,000
        Amortization of mortgage servicing rights                     19,991             9,527
        (Gain)/loss sale of investment securities......             (114,375)          (20,123)
        (Gain)/loss on sale of loans and leases..                   (158,706)          (79,153)
        (Gain)/Loss on Sale of foreclosed assets held for sale..     (18,018)           69,035
        (Appreciation)/depreciation available-for-sale loans....           -           (79,063)
        (Increase)/decrease in interest receivable                   196,576          (330,270)
        Increase/(decrease) in accrued expenses..                    390,734           611,701
        (Increase)/decrease in other assets......                   (113,645)         (610,913)
                                                                ---------------------------------
        Net cash provided by (used by) operating activities     $  3,354,076      $  2,022,550
                                                                ---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from maturity, call and paydown
        of held-to-maturity securities..........                $    482,874      $     33,580
     Proceeds from the sale of available-for-sale securities       4,114,375         4,809,783
     Proceeds from maturity, call and paydown
        of available-for-sale securities......                    12,971,668           540,334
     Purchase of available-for-sale securities.....              (19,123,750)       (3,896,249)
     (Increase)/decrease in federal funds sold...                (13,600,000)                -
     Proceeds from sale of loans..................                10,775,758         2,671,002
     (Increase)/decrease loans & leases..........                (19,550,238)      (45,678,916)
     Purchase of bank premises and equipment...                     (883,613)       (2,094,572)
     Improvements to foreclosed assets held for sale...               (9,338)                -
     Proceeds from sale of foreclosed assets held for sale.....      308,814           214,425
                                                                ---------------------------------
        Net cash used in investing activities..                 $(24,513,449)     $(43,400,613)
                                                                ---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net increase(decrease) in non-interest bearing deposits    $    698,351      $  4,303,335
     Net increase(decrease) in interest bearing deposits          (2,797,355)        5,022,599
     Net increase(decrease) in CD's $100,000 or more              45,603,022        28,968,740
     Increase(decrease) in short term borrowings                 (12,249,047)       (1,654,828)
     Dividends, net of dividends reinvested                         (496,110)         (566,553)
     Proceeds from issuance of common stock.....                           -            15,500
                                                                ---------------------------------
        Net cash provided by financing activities               $ 30,758,860      $ 36,088,793
                                                                ---------------------------------
Net increase(decrease) in cash and cash equivalents             $  9,599,487      $ (5,289,270)

Cash and cash equivalents, beginning                               8,779,492        17,957,379
                                                                ---------------------------------
Cash and cash equivalents, end                                  $ 18,378,979      $ 12,668,109
                                                                =================================

                        See notes to consolidated financial statements.
</TABLE>
                                       6
<PAGE>
                   FIDELITY D & D BANCORP, INC. and SUBSIDIARY
                                DUNMORE, PA 18512

                             FORM 10-Q JUNE 30, 2001

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying  unaudited  consolidated  financial statements of Fidelity
D&D Bancorp, Inc., and subsidiary, The Fidelity Deposit & Discount Bank, (Bank),
(collectively  the "Company")  have been prepared in accordance  with accounting
principles,  generally  accepted  in the United  States of America  (GAAP),  for
interim financial information and with the instructions to Form 10-Q and Article
10-01 of  Regulation  S-X. In the opinion of  management,  all normal  recurring
adjustments  necessary for a fair  presentation  of the  financial  position and
results of  operations  for the  periods  have been  included.  All  significant
inter-company   balances  and   transactions   have  been   eliminated   in  the
consolidation.  Prior period amounts are reclassified  when necessary to conform
with the current year's presentation.

     The  preparation of financial  statements in conformity  with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reported  periods.  Actual  results could differ from those
estimates.  For  additional  information  and  disclosures  required under GAAP,
reference  is made to the Bank's  Annual  Report on Form 10-K for the year ended
December 31, 2000.

     The  Bank  is  a  commercial   bank  chartered  by  the   Commonwealth   of
Pennsylvania.  Having  commenced  operations  in 1903,  the Bank provides a full
range of traditional  banking services and alternative  financial  products from
its main office located in Dunmore and other branches throughout  Lackawanna and
Luzerne counties.

     Management is responsible  for the fairness,  integrity and  objectivity of
the unaudited financial statements included in this report.  Management prepared
the  unaudited  financial  statements  in  accordance  with GAAP. In meeting its
responsibility for the financial statements, management depends on the Company's
accounting systems and related internal controls. These systems and controls are
designed to provide reasonable,  but not absolute,  assurance that the financial
records accurately reflect the transactions of the Company,  that Company assets
are  safeguarded  and that  financial  statements  present  fairly the financial
position and results of operations of the Company.

     In the opinion of management,  the  consolidated  balance sheets as of June
30,  2001 and  December  31,  2000  present  fairly the  consolidated  financial
position of the Company as of those dates and the related  statements of income,
changes in shareholders' equity and cash flows for the six months ended June 30,
2001 and 2000 present fairly the consolidated  results of its operations and its
cash flows for the periods  then ended.  All material  adjustments  required for
fair  presentation  have been  made.  There  have been no  material  changes  in
accounting principles,

                                       7
<PAGE>
practices or in the method of  application,  and there have been no  retroactive
adjustments  during this period.  These adjustments are of a normal  reoccurring
nature.

     This quarterly  report on Form 10-Q should be read in conjunction  with the
Company's audited financial  statements for the year ended December 31, 2000 and
the notes  included  therein,  in the Company's  Annual Report on Form 10-K. The
results of operations for interim periods are not necessarily  indicative of the
results of operations to be expected for the entire year.

     Basic  earnings  per common share is computed by dividing net income by the
weighted  average  number  of  common  shares  outstanding  during  the  period,
1,808,255 shares in 2001 and 1,803,017 shares in 2000.

     Diluted  earnings per share is similar to the computation of basic earnings
per common share, except that the denominator is increased to include the number
of  additional  common shares that would have been  outstanding  if the dilutive
potential  common shares had been issued.  The following  data shows the amounts
used in computing  earnings per share and the effects on income and the weighted
average  number of shares of  dilutive  potential  common  stock for the periods
ended June 30, 2001 and 2000:
<TABLE>
<S>                                                 <C>              <C>              <C>
                                                                        Common          Earnings
                                                        Income          Shares            per
June 30, 2001                                         Numerator       Denominator        Share
                                                     -----------     -----------      -----------
Basic EPS                                          $  2,213,002        1,808,255         $1.22
                                                                                      ===========
Dilutive effect of potential common stock
Stock options;
     Exercise of outstanding options                                     14,400
     Hypothetical share repurchase at $36.50                            (13,066)
                                                     -----------     -----------
Diluted EPS                                        $  2,213,002       1,809,589          $1.22
                                                     ===========     ===========      ===========
June 30, 2000
Basic EPS                                          $  1,708,193       1,803,017          $0.95
                                                                                      ===========
Dilutive effect of potential common stock
Stock options;
     Exercise of outstanding options                                      7,000
     Hypothetical share repurchase at $35.75                             (6,070)
                                                     -----------     -----------
Diluted EPS                                        $  1,708,193       1,803,947          $0.95
                                                     ===========     ===========      ===========

</TABLE>
     The  Company  became  a bank  holding  company  on June 30,  2000,  when it
acquired  all of the  outstanding  shares of the Bank.  On that date,  each then
outstanding  share of common stock of the Bank came to  represent  two shares of
the  Company's  common  stock,  in  accordance  with  the  terms  of the plan of
reorganization.

                                       8
<PAGE>
                   FIDELITY D & D BANCORP, INC. and SUBSIDIARY
                                DUNMORE, PA 18512

                             FORM 10-Q JUNE 30, 2001

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

     In  addition  to  historical  information,   this  Form  10-Q  may  contain
forward-looking  statements.  Forward-looking  statements are subject to certain
risks and  uncertainties  that could cause actual  results to differ  materially
from those projected in the forward-looking  statements.  Important factors that
might cause such a difference  include,  but are not limited to, those discussed
in the section  entitled,  "Management's  Discussion  and  Analysis of Financial
Condition and Results of  Operations".  Readers are cautioned not to place undue
reliance  on  these  forward-looking  statements,   which  reflect  management's
analysis  only as of the date hereof.  The Company  undertakes  no obligation to
publicly revise or update these forward-looking  statements to reflect events or
circumstances that arise after the date hereof.

     1. Changes in Financial Condition

     Total  deposits  increased  $43,504,000  or  12.81%  from  $339,625,000  at
December 31, 2000 to  $383,129,000  at June 30, 2001.  The success at attracting
new customers and additional funds from existing depositors can be linked to the
new and renovated branches and competitive product pricing.

     Non  interest-bearing  deposits  increased  $698,000 or 1.47%  during 2001.
Growth was centered in personal demand deposit  accounts (DDA's) which increased
$455,000.

     Interest-bearing  deposits  increased  $42,806,000  or 14.65%.  Public fund
certificates of deposit (CD's),  personal CD's and  non-personal  CD's increased
$39,402,000,  $3,978,000 and $7,115,000 respectively.  Savings and club accounts
increased $1,489,000. Decreases in NOW and money market deposit accounts reduced
the increase in CD's,  savings and club  accounts.  Some of the funds in Now and
money market deposit accounts  transferred into CD's to take advantage of higher
yields.

     Short-term  borrowings,   which  are  comprised  of  repurchase  agreements
(Repos),  treasury  tax and loan  retained  funds and federal  funds  purchased,
decreased  $12,249,000 or 4.79%. Of the total decrease,  federal funds purchased
were reduced  $10,950,000.  The reduction in federal funds  purchased was due to
the increase in deposits and Repos.

     The rise in  deposits  less  the  decrease  in  short-term  borrowings,  an
increase  in common  stock  through  the  Dividend  Reinvestment  Plan,  and the
retention of earnings,  caused Total  Liabilities  and  Shareholders'  Equity to
increase $36,327,000 or 7.39% since December 31, 2000.

                                       9

<PAGE>

     During 2001, net loans, including available-for-sale loans, grew $8,331,000
or 2.42%.  Commercial loans increased  $11,134,000 or 7.59%. Consumer loans grew
$2,023,000 or 3.04%.  Residential  mortgages,  SBA guaranteed  loans and student
loans  totaling  $10,617,000  were sold  during  2001 to provide  liquidity  and
improve yield. The Company has classified certain residential mortgages, student
loans and SBA guaranteed  loans of $12,491,000  as  available-for-sale  (AFS) at
June 30,  2001.  The market value of AFS loans at June 30, 2001 and December 31,
2000 was $12,719,00 and $10,507,000, respectively.

     The following table reflects the composition of the loan portfolio:
<TABLE>
<S>                                                   <C>                       <C>
                                                        June 30, 2001           December 31, 2000
                                                     ------------------         ------------------
Real estate                                             $102,462,389              $109,942,570
Consumer                                                  68,464,439                66,441,389
Commercial                                               157,744,663               146,610,685
Direct financing leases                                   11,625,157                12,733,075
Real estate construction                                   4,412,217                 2,971,505
--------------------------------------------------------------------------------------------------
                Gross loans                             $344,708,864              $338,699,223

Less:
Unearned discount                                          1,648,949                 1,833,968
Allowance for loan loss                                    3,300,086                 3,264,280
--------------------------------------------------------------------------------------------------
Net Loans                                               $339,759,829              $333,600,975
==================================================================================================
</TABLE>

     Paydowns  and  early  calls  of  US  agency  and  municipal  bonds  totaled
$11,537,000.  US agency bonds of $4,000,000,  classified as  available-for-sale,
were sold to provide  liquidity and to improve the yield on earning  assets.  US
Government  agency bonds with a par value of $19,000,000  were purchased  during
2001.  Due to the  reduction  of  borrowings  from the Federal Home Loan Bank of
Pittsburgh  (FHLB),  $1,793,000  in FHLB equity  stock,  owned by the Company to
support the  borrowings,  was  redeemed by the FHLB.  These  activities,  plus a
$1,461,000  improvement  in the market value of  available-for-sale  securities,
were the major changes in the investment portfolio.

     Fluctuations in capital markets cause frequent  changes in the market value
of investments.  The amount of net depreciation in the investment portfolio does
not indicate a material weakness in the Company. Market conditions are monitored
daily  and  the  Company  is  prepared  to  take  remedial   actions  if  deemed
appropriate.


                                       10
<PAGE>
Securities  held-to-maturity and  available-for-sale at June 30, 2001 consist of
the following:
<TABLE>
<S>                                   <C>               <C>                     <C>                 <C>
                                        AMORTIZED         UNREALIZED            UNREALIZED              FAIR
                                          COST              GAINS                 LOSSES                VALUE
                                     ---------------------------------------------------------------------------
Held-to-maturity:
Mortgage backed securities           $   7,396,558        $   69,257           $   55,650          $   7,410,165
                                     ---------------------------------------------------------------------------
Total held-to-maturity               $   7,396,558        $   69,257           $   55,650          $   7,410,165
                                     ===========================================================================

Available-for-sale:
Agencies                             $  89,294,896        $   61,114           $  724,453          $  88,631,557
State and municipal                     16,144,144           149,670              167,671             16,126,142
Mortgage backed securities               6,842,228            25,610               55,783              6,812,055
                                     ---------------------------------------------------------------------------
Sub total                              112,281,268           236,393              947,906            111,569,755

Equity securities                        3,778,626           224,129               60,322              3,942,433
                                     ---------------------------------------------------------------------------
Total available-for-sale             $ 116,059,894        $  460,521           $1,008,228          $ 115,512,187
                                     ===========================================================================
Grand total                          $ 123,456,452        $  529,778           $1,063,878          $ 122,922,352
                                     ===========================================================================
</TABLE>

                                       11
<PAGE>

     At June 30, 2001, the contractual maturities of securities held-to-maturity
and available-for-sale  are listed below. Mortgage backed securities,  which are
subject to monthly principal reductions,  are listed in total. Equity securities
have no stated maturity dates and are listed in total.
<TABLE>
<S>             <C>                                     <C>             <C>
                                                          Amortized         Market
                                                            Cost             Value
                                                        ------------     ------------
                Held-to-maturity
                ----------------
Mortgage backed securities                             $   7,396,558     $  7,410,165
-------------------------------------------------------------------------------------
            Total held-to maturity                     $   7,396,558     $  7,410,165
=====================================================================================
                Available-for-sale
                ------------------
One year or less                                       $     549,973     $    551,505
One through five years                                     2,204,676        2,224,359
Five through ten years                                    31,228,251       31,302,336
Over ten years                                            71,456,139       70,679,499
-------------------------------------------------------------------------------------
                    sub total                            105,439,040      104,757,699

Mortgage backed securities                                 6,842,228        6,812,055
Equity securities                                          3,778,626        3,942,433
-------------------------------------------------------------------------------------
             Total available-for-sale                  $ 116,059,894    $ 115,512,187
=====================================================================================
                  Grand total                          $ 123,456,452    $ 122,922,352
=====================================================================================
</TABLE>


2. Changes in Results of Operations:

     Net Income for the six months ending June 30, 2001 and 2000 was  $2,213,002
and $1,708,193 respectively. The significant differences are as follows:
<TABLE>
<S>                                          <C>             <C>                <C>
                                                2001            2000            Difference
                                             ----------      ---------          ----------
Net interest income                          7,895,576       7,087,270           808,306 A
Provision for loan losses                      604,000         243,000          (361,000)B
Deposit service charges and other income     1,421,192       1,037,346           383,846 C
Gain on sale of assets                         273,081          99,276           173,805
Salaries and employee benefits               2,913,872       2,690,746          (223,126)D
Premises and equipment                       1,273,306         982,831          (290,475)E
Other expense                                1,920,546       2,235,422           314,876 F
Provision for income tax                       665,122         363,700          (301,422)G
</TABLE>


A)   The tax equivalent ("TE") yield on Average Earning Assets increased 6 basis
     points  (bp) from 7.73% at June 30,  2000 to 7.79% at June 30,  2001.  This
     improvement was affected  despite six reductions in the discount rate since
     December 31, 2000. The reductions totaled 275 bp.

                                       12
<PAGE>

     The  discount  rate is the rate at which the  Federal  Reserve  Bank  lends
     overnight funds to banks. Changes in the discount rate have a direct effect
     on loans and  investments  subject  to in  accordance  with GAAP  immediate
     repricing.

     Deliberate  measures  undertaken  by  the  Bank  to  improve  earnings  are
     accountable for the improvement in the TE yield on earning assets.

     The  decline  in market  rates  allowed  the Bank to reduce  rates  paid on
     interest-bearing  liabilities.  The cost of funds decreased 11bp from 5.18%
     at June 30, 2000 to 5.07% at June 30, 2001.

     The changes in pricing and volume  increases  in loans  improved the TE net
     yield on earning assets by 14 bp and that increased Net Interest  Income by
     $808,000.

B)   In the  internal  review  of loans  for  both  delinquency  and  collateral
     sufficiency,  there was an  increase  in loans that  lacked the  ability to
     repay in accordance with contractual terms.  Accordingly,  it was necessary
     to increase the  allowance  for loan losses.  The allowance for loan losses
     was increased through the provision for loan losses.

C)   Service   charges  on  loans  and   deposits   rose  $26,000  and  $159,000
     respectively.  Included in the increase in service charges on deposits is a
     $31,000  increase  in ATM  charges.  Fees  generated  from  loan  servicing
     increased  $11,000  due to volume  increase  in sold loans  serviced by the
     Bank.  Trust income increased  $21,000.  Gross fees from the sale of mutual
     funds and annuities increased $11,000.

D)   Merit pay increases and higher benefit costs  increased  personnel  expense
     $223,000.

E)   A full six months of depreciation on the Peckville  branch and fixed assets
     purchased  during  2000 caused an $170,000  rise in  depreciation  expense.
     Occupancy expense at the Kingston branch was $27,000 before depreciation of
     $3,000.

F)   Advertising costs were lowered $27,000 in 2001,  despite the opening of the
     Kingston branch. Merchant credit card expense was reduced $69,000.  Holding
     company organization costs of $149,000 were incurred in 2000. There were no
     organization  expenses  in 2001.  Stationary  and supply  expense  declined
     $74,000 in 2001.

G)   Income before  provision for income taxes in 2001  increased  $806,000 over
     2000.  Non-taxable  income  as a  percentage  of net  income  before  taxes
     declined from 39.92% in 2000 to 26.53% in 2001.

                                       13
<PAGE>

                      THE FIDELITY DEPOSIT & DISCOUNT BANK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                           (in thousands of dollars)
<TABLE>
<S>                                             <C>                           <C>                       <C>
TAX EQUIVALENT YIELD
====================
                                                Six months ended                Year ended              Six months ended
Average earning assets:                           June 30, 2001              December 31, 2000            June 30, 2000
                                                ------------------------------------------------------------------------
Loans and leases                                 $    352,888                 $    328,714                $    315,688
Investments                                           119,288                      121,796                     120,053
Federal funds sold                                      6,406                            -                           -
Interest-bearing deposits                               7,429                        6,833                       7,081
                                                ------------------------------------------------------------------------
      Total                                      $    486,011                 $    457,343                $    442,822
                                                ========================================================================

Average Interest Bearing Liabilities:

Other Interest-bearing deposits                  $     81,326                 $     85,927                $     85,312
Certificates of deposit                               230,491                      200,670                     186,517
Other borrowed funds                                   69,267                       74,070                      75,622
Repurchase agreements                                  38,647                       34,149                      33,300
                                                ------------------------------------------------------------------------
      Total                                      $    419,731                 $    394,816                $    380,751
                                                ========================================================================

Interest Income:
Loans and leases                                 $     14,614                 $     27,461                $     12,925
Investments                                             4,031                        8,324                       4,080
Federal funds sold                                        122                            -                           -
Interest-bearing deposits                                   8                           45                          18
                                                ------------------------------------------------------------------------
      Total                                      $     18,775                 $     35,830                $     17,023
                                                ========================================================================

Interest Expense:
Other Interest-bearing deposits                  $        960                 $      3,036                $      1,366
Certificates of deposit                                 6,807                       12,074                       5,322
Other borrowed funds                                    1,963                        4,441                       2,217
Repurchase agreements                                     814                        1,917                         904
                                                ------------------------------------------------------------------------
      Total                                      $     10,544                 $     21,468                $      9,809
                                                ========================================================================
Net Interest Income                              $      8,231                 $     14,362                $      7,215
                                                ========================================================================

Yield on average earning assets                          7.79%                        7.83%                       7.73%
Cost of average interest-bearing liabilities             5.07%                        5.44%                       5.18%
                                                ------------------------------------------------------------------------
Interest rate spread                                     2.72%                        2.39%                       2.55%
                                                ------------------------------------------------------------------------
Net yield on average earning assets                      3.42%                        3.14%                       3.28%
                                                ========================================================================
</TABLE>
                                       14
<PAGE>

                  FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                           PROVISION FOR LOAN LOSSES
<TABLE>
<S>                                             <C>                  <C>                   <C>
                                                June 30, 2001      December 31, 2000       June 30, 2000

Net Loans                                        339,759,829           333,600,975           259,118,544

Allowance for loan losses                          3,300,086             3,264,280             3,141,094

Percentage to net loans                                 0.97%                 0.98%                 1.21%

Provision for loan losses
     Year ended                                                          1,158,260
     Six months ended                                604,000                                     243,000
     Three months ended                              276,000                                     136,500

(Charge offs)/recoveries, net
     Year ended                                                           (365,338)
     Six months ended                               (568,194)                                   (121,185)
     Three months ended                             (376,140)                                     11,696

</TABLE>

     In addition to the  allowance  for loan losses,  there are  guarantees  and
other  reserves not  recorded on the  Company's  records  that are  available to
mitigate  potential loan loss.  The guaranteed  portion of SBA and Student Loans
that are either 90 days or more  delinquent  or classified  as  non-accrual  was
$764,000  at June  30,  2001.  The  reserve  set  aside by the  Commonwealth  of
Pennsylvania  for loans  registered in the PENNCAP  program was $358,000 at June
30, 2001.

     Loans secured by deposits were $7,065,000 at June 30, 2001.

     The  allowance for loan loses is  established  through a provision for loan
losses. The allowance  represents an amount,  which, in management's  judgement,
will be  adequate  to absorb  possible  losses  on  existing  loans and  leases.
Management's  judgement in determining the adequacy of the allowance is based on
evaluations of the  collectibility  of the loans.  These  evaluations  take into
consideration such factors as:

    oChanges in the nature and volume of the loan portfolio;
    oCurrent economic conditions that may effect the borrowers ability to repay;
    oOverall portfolio quality; and

                                       15
<PAGE>

    oReview of specific impaired loans.

     Loans considered uncollectible are charged to the allowance.  Recoveries on
charged-off loans are added to the allowance.

     A loan is considered  impaired when,  based on current  information,  it is
probable  that the  Company  will be unable to collect the  scheduled  payments.
Factors  considered  in  determining   impairment  include  payment  status  and
collateral value. The significance of payment shortfalls is determined on a case
by  case  basis.  Such  factors  include  the  length  of the  delinquency,  the
underlying  reasons and the  borrower's  prior  payment  record.  Impairment  is
measured on a case by case basis. The Company does not group  homogeneous  loans
collectively for the purpose of determining impairment.

     The Company carefully monitors  potential problem loans.  Potential problem
loans are those  where  there is known  information  that  leads the  company to
believe repayment is in jeopardy.  The loans are either  non-accrual or past due
90 days or more.  Non-accrual loans and loans that were past due 90 days or more
at June 30, 2001 were $3,697,000 and $4,635,000  respectively.  At June 30, 2001
the allowance for loan loss represents 89.26% of non-accrual loans and 71.20% of
loans 90 days or more past due.

     Interest rate risk  management  is an integral part of the Asset  Liability
Management  Process.  Interest  rate  risk is  defined  as the  degree  to which
interest rate  movements may affect net interest  income and the balance  sheet.
Fluctuations in rates can affect income through the balance of repricing  assets
and source funds. If more assets reprice than liabilities,  the balance sheet is
positively gapped. This position contributes favorably to net interest income in
a rising interest rate  environment.  Conversely,  if the balance sheet has more
liabilities  repricing than assets, the balance sheet is liability sensitive and
negatively  gapped. In a declining rate  environment,  net interest income would
improve.

     The Company uses a simulation  model to better  understand the risks to the
company that may be brought about by changes in market  interest  rates. At June
30,  2001 the Company  simulated  the effects on net  interest  income  given an
immediate  parallel  shift in the  yield  curve of 200  basis  points  in either
direction.  The results of the simulation were within the Company's  established
policy limits for changes in net interest income.

     Liquidity for a bank is the ability to fund customers' needs for borrowings
and withdrawals. Sources of liquidity are:

    oAsset maturities, paydowns and sales
    oGrowth of core deposits
    oGrowth of Repos
    oIncrease of other borrowed funds

                                       16
<PAGE>

     Management  monitors  asset and liability  maturities to match  anticipated
cash flow  requirements.  These cash flow requirements are reviewed with the use
of internally  generated reports.  The Company has instituted certain procedures
and policy  guidelines to manage the rate  sensitive  position.  Those  internal
rules  enable the  Company to react to changes in market  rates and  protect net
interest income from significant fluctuations.



Liquidity (in thousands of dollars)
<TABLE>
<S>                                                 <C>                         <C>                  <C>
                                                    June 30, 2001             Dec 31, 2000           June 30, 2000

Assets due within one year                               $157,118                 $106,310                $131,574

Liabilities due within one year                          $253,726                 $233,931                $235,471

Percent of assets due within one year
to liabilities due within one year                         61.92%                   45.45%                  55.88%
</TABLE>

     Management  believes  that the present  level of  liquidity is adequate for
current operations. Investments were scheduled by maturity dates.

     Liabilities include deposits not having stated maturity dates (DDA's, NOWs,
Savings & MMDA's) in the amounts  reported.  In addition,  sweep  accounts  were
classified as having immediate maturity dates.

     This presentation does not take into consideration lines of credit that are
available to the Company, or assets  available-for-sale,  both of which could be
used to meet liquidity needs.

     The Company's capital amounts and ratios at June 30, 2001 are as follows:
<TABLE>
<S>                          <C>              <C>         <C>          <C>           <C>             <C>
                                                                                       To be Well Capitalized
                                                               For Capital             Under Prompt Corrective
                                       Actual               Adequacy Purposes             Action Provisions
                               Amount          Ratio         Amount    Ratio           Amount          Ratio

Total Capital
  (to Risk Weighted Assets) $42,832,693        13.00%    $26,981,084    8.00%       $33,726,355        10.00%
Tier 1 Capital
  (to Risk Weighted Assets)  40,532,607        12.02%     13,490,542    4.00%        20,235,813         6.00%
Tier 1 Capital
  (to Average Assets)        40,532,607         7.99%     20,303,903    4.00%        25,379,879         5.00%

</TABLE>


 The ratios for the Company are not materially different from those of the Bank.

                                       17
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

     In the opinion of Management, there are no proceedings pending to which the
Company is a party or to which its  property  is  subject,  which if  determined
adversely  to the  Company,  would be  material  in  relation  to the  Company's
undivided  profits or financial  condition.  In addition,  there are no material
proceedings   pending,   threatened  or  contemplated  against  the  Company  by
government authorities.

ITEM 2. Changes in Securities and Use of Proceeds.

     None

ITEM 3. Default Upon Senior Securities.

     None

ITEM 4. Submission of matters to a Vote by Security Holders.

     At the annual meeting of Shareholders held on May 1, 2001, 1,428,097 shares
of common stock representing 79% of the total number of shares outstanding, were
represented in person or by proxy. The following votes were cast:

          A    Election of Class A Directors to serve for a two-year term:

                                                                        Withhold
                                                        For            Authority
                  Paul A. Barrett                    1,425,582           2,515
                                                     ---------           -----
                  John T. Cognetti                   1,425,358           2,739
                                                     ---------           -----
                  John F. Glinsky, Jr.               1,425,358           2,739
                                                     ---------           -----
                  Michael J. McDonald                1,425,582           2,515
                                                     ---------           -----

          B    Election of Class B Directors to serve for a one-year term:

                                                                        Withhold
                                                        For            Authority
                  Samuel C. Cali                     1,425,582           2,515
                                                     ---------           -----
                  Mary E. McDonald                   1,419,582           8,515
                                                     ---------           -----
                  David L. Tressler, Sr.             1,402,687          25,410
                                                     ---------          ------

                                       18
<PAGE>

          C    Election of Class C Directors to serve for a three-year term:

                                                                       Withhold
                                                        For            Authority
                  Brian J. Cali                      1,419,283           8,814
                                                     ---------           -----
                  Patrick J. Dempsey                 1,425,582           2,515
                                                     ---------           -----
                  Michael F. Marranca                1,422,399           5,698
                                                     ---------           -----

          D    Proposal  to approve and adopt the  Fidelity D & D Bancorp,  Inc.
               Independent Directors Stock Option Plan:

                  1,355,657  For    20,635    Against  51,805  Abstain
                  ---------         ------             ------

          E    Proposal  to approve and adopt the  Fidelity D & D Bancorp,  Inc.
               2000 Stock Incentive Plan:

                  1,398,132  For    15,330    Against  14,635  Abstain
                  ---------         ------             ------

          F    Proposal to ratify the selection of Parente Randolph, P.C. as the
               independent auditors for the Company for the year ending December
               31, 2001:

                  1,422,629  For     3,794    Against   1,674  Abstain
                  ---------         ------             ------

ITEM 5. Other Information.

     On April 10, 2001, the Board of Directors named Joseph T. Earyes  Executive
Vice  President  and CEO of the Company and Bank.  Michael F.  Marranca  remains
President of the Company and Bank and in addition  was elected Vice  Chairman of
the Company's and the Bank's Board of Directors on May 1, 2001.

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

     a)   Exhibits

          3(i) Amended and Restated  Articles of  Incorporation  of  Registrant.
          Incorporated by reference to Exhibit 3(i) to Registrant's Registration
          Statement No. 333-90273 on Form S-4, filed with the SEC on November 3,
          1999 and as amended on April 6, 2000.

          3(ii)  Bylaws of  Registrant.  Incorporated  by reference to Exhibit 3
          (ii) to Registrant's Registration Statement No. 333-90273 on Form S-4,
          filed  with the SEC on  November  3, 1999 and as  amended  on April 6,
          2000.


                                       19
<PAGE>


          10.1  Registrant's  2000  Independent  Directors  Stock  Option  Plan.
          Incorporated by reference to Exhibit 4.3 to Registrant's  Registration
          Statement  No.  333-64356  on Form S-8,  filed with the SEC on July 2,
          2001.

          10.2 Registrant's 2000 Stock Incentive Plan. Incorporated by reference
          to Exhibit 4.4 to Registrant's Registration Statement No. 333-64356 on
          Form S-8, filed with the SEC on July 2, 2001.

          10.3 Form of Deferred  Compensation  Plan of the Fidelity  Deposit and
          Discount   Bank.   Incorporated   by  reference  to  Exhibit  10.3  to
          Registrant's  Registration  Statement No. 333-45668 on Form S-1, filed
          with the SEC on  September  12,  2000,  as  amended  by  Pre-effective
          Amendment  No. 1 on October 11, 2000 and by  Post-effective  Amendment
          No. 1 on Form S-3 on May 30, 2001.

          10.4 Registrant's  2000 Dividend  Reinvestment  Plan.  Incorporated by
          reference to Exhibit 4.3 to  Registrant's  Registration  Statement No.
          333-45668 on Form S-1,  filed with the SEC on September  12, 2000,  as
          amended by  Pre-effective  Amendment  No. 1 on October 11, 2000 and by
          Post-effective Amendment No. 1 on Form S-3 on May 30, 2001.

          11 Statement  regarding  computation  of earnings per share.  Included
          herein on page 8.



     b)   No  Current  Report on Form 8-K was filed by the  Company  during  the
          quarter ended June 30, 2001.


                                       20
<PAGE>

                    FIDELITY D&D BANCORP, INC. and SUBSIDIARY
                                DUNMORE, PA 18512

                             FORM 10-Q JUNE 30, 2001


Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has caused this report to be signed on its behalf by the  undersigned  thereunto
duly authorized.




DATE:  July 27, 2001                              MICHAEL F. MARRANCA, PRESIDENT




DATE:  July 27, 2001                              ROBERT P. FARRELL, TREASURER

                                       21
<PAGE>

                    FIDELITY D&D BANCORP, INC. and SUBSIDIARY
                                DUNMORE, PA 18512
                             FORM 10-Q JUNE 30, 2001

Exhibit Index

          3(i)Amended  and Restated  Articles of  Incorporation  of  Registrant.
          Incorporated by reference to Exhibit 3(i) to Registrant's Registration
          Statement No. 333-90273 on Form S-4, filed with the SEC on November 3,
          1999 and as amended on April 6, 2000.

          3(ii)Bylaws of Registrant. Incorporated by reference to Exhibit 3 (ii)
          to  Registrant's  Registration  Statement  No.  333-90273 on Form S-4,
          filed  with the SEC on  November  3, 1999 and as  amended  on April 6,
          2000.

          10.1  Registrant's  2000  Independent  Directors  Stock  Option  Plan.
          Incorporated by reference to Exhibit 4.3 to Registrant's  Registration
          Statement  No.  333-64356  on Form S-8,  filed with the SEC on July 2,
          2001.

          10.2 Registrant's 2000 Stock Incentive Plan. Incorporated by reference
          to Exhibit 4.4 to Registrant's Registration Statement No. 333-64356 on
          Form S-8, filed with the SEC on July 2, 2001.

          10.3 Form of Deferred  Compensation  Plan of the Fidelity  Deposit and
          Discount   Bank.   Incorporated   by  reference  to  Exhibit  10.3  to
          Registrant's  Registration  Statement No. 333-45668 on Form S-1, filed
          with the SEC on  September  12,  2000,  as  amended  by  Pre-effective
          Amendment  No. 1 on October 11, 2000 and by  Post-effective  Amendment
          No. 1 on Form S-3 on May 30, 2001.

          10.4 Registrant's  2000 Dividend  Reinvestment  Plan.  Incorporated by
          reference to Exhibit 4.3 to  Registrant's  Registration  Statement No.
          333-45668 on Form S-1,  filed with the SEC on September  12, 2000,  as
          amended by  Pre-effective  Amendment  No. 1 on October 11, 2000 and by
          Post-effective Amendment No. 1 on Form S-3 on May 30, 2001. .

          11 Computation of earnings per share. Included herein on page 8.


                                       22