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 SEPTEMBER 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 October 26, 2001, the latest practicable date was 1,814,822.

<PAGE>

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

                          FORM 10-Q SEPTEMBER 30, 2001
                                      INDEX
PART I. FINANCIAL INFORMATION                                              Page

ITEM 1. FINANCIAL STATEMENTS:

         Consolidated Balance Sheets as of September 30, 2001
                and December 31, 2000                                        3
         Consolidated Statement of Income for the nine and three
                months ended September 30, 2001 and 2000                     4
         Consolidated Statement of Changes in Shareholders' Equity
                for the nine months ended September 30, 2001 and 2000        5
         Consolidated Statement of Cash Flows for the nine months
                ended September 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                                 9-19

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

PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                  19

ITEM 2.  Change in Securities and Use of Proceeds                           19

ITEM 3.  Defaults upon Senior Securities                                    19

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

ITEM 5.  Other Information                                                  19

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

Signature Page                                                              21

Exhibit Index                                                               22


                                        2

<PAGE>

                   FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                 As of September 30, 2001 and December 31, 2000
<TABLE>
<S>                                                          <C>                      <C>
                                                              September 30, 2001     December 31, 2000
                                                                  (unaudited)             (audited)
                                                              ----------------------------------------
ASSETS
Cash and due from banks                                            $ 6,898,438           $ 5,502,430
Interest bearing deposits with financial institutions               79,453,707             3,277,062
                                                              ----------------------------------------
      Total cash and cash equivalents                               86,352,146             8,779,492

Held to maturity securities                                         23,151,983             7,879,433
Available for sale securities                                       87,690,451           111,876,958

Loans net of unearned income                                       341,434,753           336,865,255
Allowance for loan losses                                            3,511,115             3,264,280
                                                              ----------------------------------------
      Net loans                                                    337,923,638           333,600,975

Loans available-for-sale                                            13,770,436            10,318,792
Bank premises and equipment                                         11,591,879            11,390,479
Accrued interest receivable                                          3,737,936             3,885,291
Foreclosed assets held for sale                                        491,922               353,253
When issued securities                                              18,000,000                     -
Other assets                                                         3,589,700             3,659,198
                                                              ----------------------------------------
      Total assets                                               $ 586,300,090         $ 491,743,871
                                                              ========================================

LIABILITIES

Deposits
   NonInterest-bearing                                            $ 47,180,910          $ 47,500,335
   Cert. of deposit $100,000 or more                               139,730,026            94,717,931
   Other interest-bearing deposits                                 220,464,210           197,406,799
                                                              ----------------------------------------
      Total deposits                                               407,375,146           339,625,066

Accrued expenses and other liabilities                               4,601,491             3,574,672
Liability for security settlement                                   18,000,000                     -
Short-term borrowings                                               51,649,505            48,024,721
Long-term debt                                                      63,000,000            63,000,000
                                                              ----------------------------------------
   Total liabilities                                               544,626,142           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                                                 9,194,828             8,881,713
   Accumulated other comprehensive income/(loss)                       446,903            (1,325,435)
   Retained earnings                                                32,032,217            29,963,134
                                                              ----------------------------------------
      Total shareholders' equity                                    41,673,948            37,519,412
                                                              ----------------------------------------
      Total liabilities and shareholders' equity                 $ 586,300,090         $ 491,743,871
                                                              ========================================

                 See notes to consolidated financial statements
</TABLE>

                                        3
<PAGE>
                   FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME Three and Nine Months
             Ended September 30, 2001 and 2000
<TABLE>
<S>                                                     <C>                     <C>                <C>                <C>
                                                                      (unadited)
                                                                   Three Months Ended                      Nine Months Ended
                                                      September 30, 2001  September 30, 2000  September 30, 2001  September 30, 2000
Interest Income Interest and fees on loans:
         Taxable                                            $ 6,694,150         $ 6,797,354        $ 20,415,097        $ 19,031,379
         Nontaxable                                             189,818             185,516             568,941             487,732
    Interest and fees on leases                                 167,730             179,791             537,358             439,154
    Interest-bearing deposits with financial institutions       126,454              23,194             134,628              41,641
    Investment securities:
         US Government agencies                               1,663,022           1,648,118           4,938,223           4,754,789
         States & political subdivisions (nontaxable)           173,651             249,472             581,828             807,276
         Other securities                                        63,112              95,225             219,705             280,376
    Federal funds sold                                          191,931                   -             313,575                   -
                                                       -----------------------------------------------------------------------------
       Total interest income                                  9,269,868           9,178,670          27,709,353          25,842,347
                                                       -----------------------------------------------------------------------------

 Interest expense
    Certificates of deposit of $100,000 or more               1,741,275           1,682,333           5,214,805           4,101,508
    Other deposits                                            2,180,065           2,487,329           6,472,927           6,756,096
    Securities sold under repurchase agreements                 310,791             483,600           1,124,823           1,387,369
    Other                                                       914,033           1,143,712           2,877,519           3,361,066
                                                       -----------------------------------------------------------------------------
       Total interest expense                                 5,146,164           5,796,974          15,690,074          15,606,039
                                                       -----------------------------------------------------------------------------
       Net interest income                                    4,123,704           3,381,696          12,019,279          10,236,308
 Provision for loan losses                                      569,937             138,000           1,173,937             381,000
                                                       -----------------------------------------------------------------------------
       Net interest income, after
        provision for loan losses                             3,553,767           3,243,696          10,845,342           9,855,308
                                                       -----------------------------------------------------------------------------
 Other income:
    Service charges on deposit accounts                         331,323             348,816           1,043,943             902,128
    Gain on sale of investment securities                        85,510                   -             199,885              20,123
    Gain on sale of loans and leases                             42,312              68,621             201,018             147,774
    Gain on loans available-for-sale                                  -              66,808                   -             145,871
    Other income                                                398,184             420,154           1,106,756           1,057,783
                                                       -----------------------------------------------------------------------------
       Total other income                                       857,329             904,399           2,551,602           2,273,679
                                                       -----------------------------------------------------------------------------
 Other operating expenses:
    Salaries and employee benefits                            1,611,278           1,345,344           4,525,151           4,223,643
    Premises and equipment                                      616,942             582,116           1,890,248           1,564,947
    Advertising                                                 122,524             100,906             316,771             330,449
    Other expenses                                              879,753             901,820           2,606,052           2,720,146
                                                       -----------------------------------------------------------------------------
       Total operating expenses                               3,230,497           2,930,186           9,338,221           8,839,185
                                                       -----------------------------------------------------------------------------
 Income before provision for income taxes                     1,180,599           1,217,909           4,058,723           3,289,802
 Provision for income taxes                                     261,685             270,050             926,807             633,750
                                                       -----------------------------------------------------------------------------
        Net income                                            $ 918,914           $ 947,859         $ 3,131,916         $ 2,656,052
                                                       =============================================================================
Basic earnings per share                                         $ 0.51              $ 0.52              $ 1.73              $ 1.47
Diluted earnings per share                                       $ 0.51              $ 0.52              $ 1.73              $ 1.47
Dividends per share                                              $ 0.20              $ 0.20              $ 0.59              $ 0.57


                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 Nine Months Ended September 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                                                      2,656,052                           2,656,052

Change in net unrealized holding
gains/(losses) on available-for-sale
securities, net of reclassification
adjustments and tax effects                                                         928,675           928,675
                                                                                                 ------------
Comprehensive income                                                                                3,584,727
                                                                                                 ------------
Dividends                                                      (1,027,821)                         (1,027,821)

Stock exchange                       901,816

Issuance of stock                        250        15,500                                             15,500

Dividends reinvested                   1,553       109,445                                            109,445
                                   --------------------------------------------------------------------------
Balance, September 30, 2000        1,804,011   $ 8,797,976   $ 29,755,149      $ (3,745,038)      $34,808,087
                                   ==========================================================================

Balance, December 31, 2000         1,806,274   $ 8,881,713   $ 29,963,134      $ (1,325,435)     $ 37,519,412
                                                                                                 ------------
Net income                                                      3,131,916                           3,131,916

Change in net unrealized holding
gains/(losses) on available-for-sale
securities, net of reclassification
adjustments and tax effects                                                       1,772,338         1,772,338
                                                                                                 ------------
Comprehensive income                                                                                4,904,254
                                                                                                 ------------
Dividends                                                      (1,062,834)                         (1,062,834)

Dividends reinvested                   8,551       313,115                                            313,115
                                   --------------------------------------------------------------------------
Balance September 30, 2001         1,814,825   $ 9,194,828   $ 32,032,216         $ 446,903      $ 41,673,948
                                   ==========================================================================
                 See notes to consolidated financial statements.

</TABLE>

     Comprehensive  income for the three  months  ended  September  30, 2001 and
September 30, 2000 was $1,727,303 and $1,844,413, respectively.

                                        5
<PAGE>
                   FIDELITY D & D BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS For the Nine Months
              Ended September 30,2001 and 2000
                                   (unaudited)
<TABLE>
<S>                                                                   <C>                               <C>
                                                                            2001                            2000
                                                                     ---------------                  -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                         $ 3,131,916                    $ 2,656,052
     Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation                                                        898,600                        716,700
        Amortization of securities (net of accretion)                       (29,799)                       (52,374)
        Provision for loan losses                                         1,173,937                        381,000
        Deferred income tax                                                (180,742)                       503,625
        Amortization of mortgage servicing rights                            30,678                         15,629
        (Gain)/loss sale of investment securities                          (199,885)                       (20,123)
        (Gain)/loss on sale of loans and leases                            (201,018)                      (147,774)
        (Gain)/Loss on Sale of foreclosed assets held for sale              (18,051)                        69,035
        (Appreciation)/depreciation available-for-sale loans                      -                       (145,871)
        Net change in interest receivable                                   147,355                     (1,193,892)
        Net change in accrued expenses                                      796,596                        506,332
        Net change in other assets                                         (110,677)                      (711,025)
                                                                     ---------------                  -------------
        Net cash provided by operating activities                       $ 5,438,910                    $ 2,577,314
                                                                     ---------------                  -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of held-to-maturity securities                          $ (15,993,750)                           $ -
     Proceeds from maturity, call and paydown
        of held-to-maturity securities                                      721,209                        157,489
     Proceeds from the sale of available-for-sale securities             11,203,976                      4,809,783
     Proceeds from maturity, call and paydown
        of available-for-sale securities                                 58,128,211                        854,360
     Purchase of available-for-sale securities                          (42,230,646)                    (5,896,249)
     Proceeds from sale of available-for-sale loans                      16,335,656                      5,424,884
     Net change in loans & leases                                       (25,712,778)                   (53,410,703)
     Purchase of bank premises and equipment                             (1,100,000)                    (2,643,384)
     Improvements to foreclosed assets held for sale                        (10,356)                       (41,177)
     Proceeds from sale of foreclosed assets held for sale                  167,076                        197,509
                                                                     ---------------                  -------------
        Net cash provided by/(used in) investing activities             $ 1,508,598                  $ (50,547,488)
                                                                     ---------------                  -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net change in non-interest bearing deposits                         $ (319,426)                   $ 3,279,106
     Net change in interest bearing deposits                             23,057,410                      7,125,609
     Net change in CD's $100,000 or more                                 45,012,095                     36,537,990
     Net change in short term borrowings                                  3,624,784                     (2,885,678)
     Dividends, net of dividends reinvested                                (749,719)                      (918,376)
     Proceeds from issuance of common stock                                       -                         15,500
                                                                     ---------------                  -------------
        Net cash provided by financing activities                 $      70,625,145              $      43,154,151
                                                                     ---------------                  -------------
Net increase(decrease) in cash and cash equivalents               $      77,572,654              $      (4,816,023)
Cash and cash equivalents, beginning                                      8,779,492                     17,957,379
                                                                     ---------------                  -------------
Cash and cash equivalents, end                                    $      86,352,146              $      13,141,356
                                                                     ===============                  =============

                 See notes to consolidated financial statements.
</TABLE>

                                        6
<PAGE>
                   FIDELITY D & D BANCORP, INC. and SUBSIDIARY
                                DUNMORE, PA 18512

                          FORM 10-Q SEPTEMBER 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,
please  refer 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.

                                       7
<PAGE>
     In the  opinion  of  management,  the  consolidated  balance  sheets  as of
September  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 nine months
ended September 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. These adjustments are
of a  normal  reoccurring  nature.  There  have  been  no  material  changes  in
accounting principles, practices or in the method of application, and there have
been no retroactive adjustments during this period.

     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.

     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 September 30, 2001 and 2000:

<TABLE>
<S>                                                  <C>                    <C>                 <C>
                                                                            Weighted
                                                                             Average
                                                                             Common              Earnings
                                                       Income                Shares                per
September 30, 2001                                    Numerator            Denominator            Share
Basic EPS                                            $ 3,131,916            1,809,702             $1.73
                                                                                                =========
Dilutive effect of potential common stock
Stock options;
     Exercise of outstanding options                                           18,800
     Hypothetical share repurchase at $37.00                                  (17,416)
                                                     ---------------------------------
Diluted EPS                                          $ 3,131,916            1,811,086             $1.73
                                                     ====================================================
September 30, 2000
Basic EPS                                            $ 2,656,052            1,803,388             $1.47
                                                                                                =========
Dilutive effect of potential common stock
Stock options;
     Exercise of outstanding options                                           14,400
     Hypothetical share repurchase at $37.75                                  (12,634)
                                                     ---------------------------------
Diluted EPS                                          $ 2,656,052            1,805,154             $1.47
                                                     ====================================================
</TABLE>

                                        8
<PAGE>

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

                          FORM 10-Q SEPTEMBER 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 this date. The Company  undertakes no obligation to publicly
revise  or  update  these  forward-looking   statements  to  reflect  events  or
circumstances that arise in the future.

     1. Changes in Financial Condition

     Total  deposits  increased  $67,750,000  or  19.95%  from  $339,625,000  at
December  31,  2000 to  $407,375,000  at  September  30,  2001.  The  success at
attracting  new customers and additional  funds from existing  depositors can be
linked to our new and  renovated  branches,  services  and  competitive  product
pricing.  The  increase  in deposits  may also be  attributed,  in part,  to the
uncertainties in current financial markets.  Historically,  in times of economic
downturns,  excess funds are deposited in well-capitalized  commercial financial
institutions.

     Non interest-bearing  deposits decreased $319,000 or 0.67% during 2001. The
decline  was  generally  in  outstanding  official  checks  issued  by the Bank.
Official checks decreased  $1,693,000.  Personal demand deposit accounts (DDA's)
increased  $512,000,  business  DDA's  increased  $151,000 and public fund DDA's
increased $852,000.

     Interest-bearing  deposits  increased  $68,070,000  or 23.30%.  Public fund
certificates of deposit (CD's),  personal CD's and  non-personal  CD's increased
$37,054,000,  $18,730,000  and  $20,183,000,   respectively.  Savings  and  club
accounts  increased  $2,053,000.  Decreases  of  $2,631,000  in NOW accounts and
$7,319,000  in 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.

                                        9
<PAGE>
     Short-term  borrowings,   which  are  comprised  of  repurchase  agreements
(Repos),  treasury  tax and loan  retained  funds and federal  funds  purchased,
increased $3,625,000 or 7.55%. Federal funds purchased at December 31, 2000 were
$10,950,000  and $0 at  September  30,  2001.  The  reduction  in federal  funds
purchased  was due to the  increase in deposits  and a  $14,578,000  increase in
Repos.

     Liability  for  security  settlement  was  caused by the  recognition  of a
liability for the purchase of when issued securities. US Government Agency bonds
totaling  $18,000,000  were traded for during  September  2001,  with settlement
dates in October 2001.

     Total cash and cash  equivalents  increased  due to the call of  investment
securities,  the sale of  assets,  the  increase  in  deposits  and  short  term
borrowings  and a  reduction  in loan  demand.  Excess  funds were  placed in an
interest-bearing  account  at the  Federal  Home  Loan  Bank  of  Pittsburgh  at
September 30, 2001.

     During 2001, net loans, including available-for-sale loans, grew $7,774,000
or 2.26%.  Commercial loans increased  $13,673,000 or 9.33%. Consumer loans grew
$2,709,000 or 4.08%.  Residential  mortgages,  SBA guaranteed  loans and student
loans  totaling  $16,135,000  were sold  during  2001 to provide  liquidity  and
improve yield. The Company has classified certain residential mortgages, student
loans and SBA guaranteed  loans of $13,770,000  as  available-for-sale  (AFS) at
September  30, 2001.  The market  value of AFS loans at  September  30, 2001 and
December 31, 2000 was $14,280,00 and $10,507,000, respectively.

     The following table reflects the composition of the loan portfolio:

<TABLE>
<S>                                                   <C>                   <C>
                                                     September 30, 2001    December 31, 2000
Real estate                                                $97,544,981        $109,942,570
Consumer                                                    69,150,602          66,441,389
Commercial                                                 160,283,515         146,610,685
Direct financing leases                                     10,989,594          12,733,075
Real estate construction                                     4,968,134           2,971,505
--------------------------------------------------------------------------------------------
                 Gross loans                              $342,936,826        $338,699,223
Less:
Unearned discount                                            1,502,074           1,833,968
Allowance for loan loss                                      3,511,115           3,264,280
--------------------------------------------------------------------------------------------
Net Loans                                                 $337,923,638        $333,600,975
============================================================================================

</TABLE>

     Paydowns  and  early  calls  of  US  agency  and  municipal  bonds  totaled
$58,649,000.  US  agency  and  municipal  bonds of  $11,005,000,  classified  as
available-for-sale,  were sold to provide  liquidity and to improve the yield on
earning assets.  US Government  agency bonds and  mortgage-backed  securities of
$58,099,000  were purchased during 2001. Due to the reduction of borrowings from
the Federal Home Loan Bank of Pittsburgh (FHLB), the FHLB redeemed $1,793,000 in
FHLB stock, owned by the Company to support the borrowings.

     It should be noted that the  proceeds of called  bonds were  reinvested  at
lower rates. The reinvested rates were determined by current market  conditions.
This could have a potentially negative impact on future net earnings.

                                       10
<PAGE>
     These  activities,  plus a  $2,685,000  improvement  in the market value of
available-for-sale  securities, caused by the reduction in current market rates,
were the major changes in the investment portfolio.

     Fluctuations in capital markets cause frequent  changes in the market value
of  investments.  Market  conditions  are  monitored  daily and the  Company  is
prepared to take remedial actions if deemed appropriate.

     Securities  held-to-maturity and  available-for-sale  at September 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                       $ 7,158,223           $ 123,800              $ 6,672          $ 7,275,352
             Government agencies                            15,993,760           $ 104,000                   10           16,097,750

            Total held-to-maturity                        $ 23,151,983           $ 227,800              $ 6,682         $ 23,373,102

              Available-for-sale
                   Agencies                               $ 56,700,880           $ 302,368             $ 28,743         $ 56,974,505
             State and municipal                            12,922,736             141,625               82,515           12,981,846
          Mortgage backed securities                        13,611,084             133,552                5,302           13,739,334

                  Sub total                                 83,234,700             577,545              116,560           83,695,685

              Equity securities                              3,778,626             256,749               40,608            3,994,767

           Total available-for-sale                       $ 87,013,326           $ 834,293            $ 157,168         $ 87,690,451

                 Grand total                             $ 110,165,309         $ 1,062,093            $ 163,849        $ 111,063,553

</TABLE>
                                       11

<PAGE>
     At  September   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>
                                                            Amortized               Market
               Held-to-maturity                                cost                  value
Five through ten years                                     $ 4,000,000         $ 4,064,000
Over ten years                                              11,993,760          12,033,750
-------------------------------------------------------------------------------------------
                  sub total                                 15,993,760          16,097,750
Mortgage backed securities                                   7,158,223           7,275,352
-------------------------------------------------------------------------------------------
            Total held-to maturity                        $ 23,151,983        $ 23,373,102
-------------------------------------------------------------------------------------------

              Available-for-sale
One year or less                                          $ 10,450,000          10,476,814
One through five years                                       4,404,966           4,417,155
Five through ten years                                      14,933,117          15,141,062
Over ten years                                              39,835,532          39,921,320
-------------------------------------------------------------------------------------------
                  sub total                                 69,623,615          69,956,351
-------------------------------------------------------------------------------------------
Mortgage backed securities                                  13,611,084          13,739,334
Equity securities                                            3,778,626           3,994,767
-------------------------------------------------------------------------------------------
           Total available-for-sale                       $ 87,013,325        $ 87,690,451
-------------------------------------------------------------------------------------------
                 Grand total                             $ 110,165,308       $ 111,063,553
===========================================================================================

</TABLE>

     When issued securities were comprised US Government Agency bonds traded for
during September 2001, with settlement dates in October 2001.

                                       12
<PAGE>

2. Changes in Results of Operations:

     Net Income  for the nine  months  ending  September  30,  2001 and 2000 was
$3,131,916 and  $2,656,052,  respectively.  The  significant  differences are as
follows:
<TABLE>
<S>                                                        <C>                  <C>                  <C>
                                                               2001                2000               Difference
                                                            ----------          ----------            ----------
Net interest income                                         12,019,279          10,236,308            1,782,971  A
Provision for loan losses                                    1,173,937             381,000             (792,937) B
Deposit service charges and other income                     2,150,698           2,105,782               44,916
Gain on sale of assets                                         400,904             167,897              233,007  C
Salaries and employee benefits                               4,525,151           4,223,643             (301,508) D
Premises and equipment                                       1,890,248           1,564,947             (325,301) E
Other expense                                                2,922,823           3,050,595              127,772
Provision for income tax                                       926,807             633,750             (293,057) F

</TABLE>

A)   The tax  equivalent  ("TE") yield on Average  Earning  Assets  decreased 21
     basis  points (bp) from 7.79% at  September  30, 2000 to 7.58% at September
     30, 2001. This reduction  reflects the nine reductions in the discount rate
     since December 31, 2000. The reductions totaled 400 bp.

     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 immediate repricing and call features.

     The  decline  in market  rates  allowed  the Bank to reduce  rates  paid on
     interest-bearing  liabilities. The cost of funds decreased 45 bp from 5.34%
     at September 30, 2000 to 4.89% at September 30, 2001.

     The changes in pricing and volume  increases  in loans  improved the TE net
     yield on earning assets by 19 bp and that increased net interest  income by
     $1,783,000.

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,  the allowance for
     loan losses was increased through the provision for loan losses.

                                       13
<PAGE>

C)   During 2001, AFS  investments  of $11,004,000  and AFS loans of $16,135,000
     were sold to improve liquidity and to protect the investment portfolio from
     called  securities.  Gains on the sales of these  assets were  $200,000 and
     $201,000, respectively.

D)   Merit pay increases and higher benefit costs  increased  personnel  expense
     $302,000.

E)   A full nine months of depreciation on the Peckville branch and fixed assets
     purchased  during 2000 caused  depreciation  expense to increase  $182,000.
     Occupancy  expense at the Kingston branch,  which opened in April 2001, was
     $46,000 before depreciation of $10,000.

F)   The  effective  federal  income  tax rate was  22.8% and 19.3% for the nine
     months  ending  September  30, 2001 and  September  30, 2000  respectively.
     Income before  provision for income taxes in 2001  increased  $769,000 over
     2000.  Non-taxable  income  as a  percentage  of net  income  before  taxes
     declined from 37.67% in 2000 to 27.47% in 2001.

                                       14
<PAGE>


                      THE FIDELITY DEPOSIT & DISCOUNT BANK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                            (in thousands of dollars)
<TABLE>
<S>                                                             <C>                     <C>                     <C>
TAX EQUIVALENT YIELD
-------------------------------------
                                                                Nine months ended       Year ended               Nine months ended
                                                                September 30, 2001    December 31, 2000          September 30, 2000
                                                                -------------------------------------------------------------------
Average earning assets:
Loans and leases                                                    $ 353,963            $ 328,714                  $ 324,036
Investments                                                           119,056              121,796                    121,164
Federal funds sold                                                     11,966                    -                          -
Interest-bearing deposits                                              12,129                6,833                      7,126
      Total                                                         $ 497,114            $ 457,343                  $ 452,326

Average Interest Bearing Liabilities:
Other Interest-bearing deposits                                      $ 80,626             $ 85,927                   $ 86,432
Certificates of deposit                                               242,675              200,670                    195,327
Other borrowed funds                                                   67,530               74,070                     75,302
Repurchase agreements                                                  38,386               34,149                     33,375
      Total                                                         $ 429,217            $ 394,816                  $ 390,436

Interest Income
Loans and leases                                                     $ 21,738             $ 27,461                   $ 20,146
Investments                                                             6,016                8,324                      6,190
Federal funds sold                                                        314                    -                          -
Interest-bearing deposits                                                 134                   45                         42
      Total                                                          $ 28,202             $ 35,830                   $ 26,378

Interest Expense
Other Interest-bearing deposits                                       $ 1,284              $ 3,036                    $ 2,221
Certificates of deposit                                                10,404               12,074                      8,637
Other borrowed funds                                                    2,877                4,441                      3,361
Repurchase agreements                                                   1,125                1,917                      1,387
      Total                                                          $ 15,690             $ 21,468                   $ 15,606

Net Interest Income                                                  $ 12,512             $ 14,362                   $ 10,772

Yield on average earning assets                                          7.58%                7.83%                      7.79%
Cost of average interest-bearing liabilities                             4.89%                5.44%                      5.34%
Interest rate spread                                                     2.69%                2.39%                      2.45%
Net yield on average earning assets                                      3.37%                3.14%                      3.18%

</TABLE>


                                    15


<PAGE>

                   FIDELITY D & D BANCORP, INC. and SUBSIDIARY
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                            Provision for Loan Losses


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

Loans, net of unearned discount and fees                                  341,434,753          336,865,255          326,830,462

Allowance for loan losses                                                   3,511,115            3,264,280            3,121,703

Percentage to net loans                                                         1.03%                0.97%                0.96%

Provision for loan losses
     Year ended                                                                                  1,158,260
     Nine months ended                                                      1,173,937                                   381,000
     Three months ended                                                       569,937                                   138,000

(Charge offs)/recoveries, net
     Year ended                                                                                   (365,338)
     Nine months ended                                                       (927,102)                                 (431,672)
     Three months ended                                                      (358,908)                                 (310,486)

</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
$550,000 at September  30, 2001.  The reserve set aside by the  Commonwealth  of
Pennsylvania  for loans  registered  in the  PENNCAP  program  was  $390,000  at
September 30, 2001.

     Loans secured by deposits were $4,079,000 at September 30, 2001.

     The allowance for loan losses 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:

     Changes in the nature and volume of the loan portfolio;
     Current economic conditions that may effect the borrowers ability to repay;
     Overall portfolio quality; and

                                       16
<PAGE>

     Review 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 not 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. 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  non-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 September 30, 2001 were $3,999,000 and $5,533,000 respectively.  At September
30, 2001, the allowance for loan loss represents 87.80% of non-accrual loans and
63.46% 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
September 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:

        Asset maturities, paydowns and sales
        Growth of core deposits
        Growth of Repos
        Increase of other borrowed funds

                                       17
<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>
                                                    Sept 30, 2001             Dec 31, 2000           Sept 30, 2000

Assets due within one year                               $231,749                 $106,310                $131,897

Liabilities due within one year                          $276,143                 $233,931                $237,571

Percent of assets due within one year
to liabilities due within one year                         83.92%                   45.45%                  55.52%

</TABLE>

     Investments  included  with  assets due within one year were  scheduled  by
maturity dates and not by call 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.

     The  improvement  in liquidity was caused by the reduction in market rates.
As market rates began to decrease, investment securities, subject to call dates,
were in fact called.  Other investments and loans began to prepay. This provided
the Bank with a significant  source of funds to meet liquidity  demands.  Demand
for funds lowered in the commercial  sector due to concerns over the economy and
retail funds increased as consumers grew conservative.

     Management  believes  that the present  level of  liquidity is adequate for
current operations.

     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.

                                       18
<PAGE>

     The  Company's  capital  amounts  and ratios at  September  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)         $ 44,806,298      12.22%      $ 29,336,717      8.00%    $ 36,670,897          10.00%
Tier 1 Capital
        (to Risk Weighted Assets)          $ 41,197,920      11.23%      $ 14,668,359      4.00%    $ 22,002,538           6.00%
Tier 1 Capital
        (to Average Assets)                $ 41,197,920       7.94%      $ 20,767,084      4.00%    $ 25,958,856           5.00%

</TABLE>

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


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,  Management does not know
of any 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.

                None.

ITEM 5. Other Information.

                None.

                                       19
<PAGE>

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.

     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)   The Company did not file any current reports on Form 8-K during the quarter
     ended September 30, 2001.

                                       20

<PAGE>

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

                          FORM 10-Q SEPTEMBER 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: November 2, 2001                      ___________________________________
                                               MICHAEL F. MARRANCA, PRESIDENT




DATE: November 2, 2001                       _________________________________
                                               ROBERT P. FARRELL, TREASURER


                                       21
<PAGE>
                    FIDELITY D&D BANCORP, INC. and SUBSIDIARY
                                DUNMORE, PA 18512
                          FORM 10-Q SEPTEMBER 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