<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-K

                  Annual report pursuant to Section 13 of the
                        Securities Exchange Act of 1934

                  For the fiscal year ended December 31, 2001

                         Commission File No,:  0-25172

                           FIRST BELL BANCORP, INC.
            (exact name of registrant as specified in its charter)

          DELAWARE                                   25-1752651
(state or other jurisdiction of                      (I.R.S. Employer I.D. No.)
incorporation or organization)

          Suite 1704, 300 Delaware Avenue, Wilmington, Delaware 19801
                   (Address of principal executive offices)

      Registrant's telephone number, including area code: (302) 427-7883
          Securities registered pursuant to Section 12(b) of the Act
                                     None
                               (Title of class)
          Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $0.01 per share

     The registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes  X  No ____.
          ---

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

     As of March 20, 2002, the Registrant had 4,774,436 shares outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Annual Report to Stockholders for the year ended December
31, 2001 are incorporated by reference into Part II of this Form 10-K.  Portions
of the Proxy Statement for the 2002 Annual Meeting of Stockholders are
incorporated by reference into Part III of this Form 10-K.
<PAGE>

                                        INDEX

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
PART I

Item 1.    Business.......................................................    1

Item 2.    Properties.....................................................   28

Item 3.    Legal Proceedings..............................................   29

Item 4.    Submission of Matters to a Vote of Security Holders............   29
PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder
           Matters........................................................   29

Item 6.    Selected Financial Data........................................   29

Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations......................................   29

Item 7A.   Quantitative and Qualitative Disclosure about Market Risk......   29

Item 8.    Financial Statements and Supplementary Data....................   30

Item 9.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure.......................................   30
PART III

Item 10.   Directors and Executive Officers of the Registrant.............   31

Item 11.   Executive Compensation.........................................   31

Item 12.   Security Ownership of Certain Beneficial Owners and
           Management.....................................................   31

Item 13.   Certain Relationships and Related Transactions.................   31
PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports
           on Form 8-K....................................................   31

SIGNATURES................................................................   34
</TABLE>

                                       2
<PAGE>

PART 1

Item 1.  Business

General

     First Bell Bancorp, Inc (the "Company") is incorporated under Delaware law
and is a savings and loan holding company subject to regulations by the Office
of Thrift Supervision ("OTS"), the Federal Deposit Insurance Corporation
("FDIC") and the Securities and Exchange Commission ("SEC").  First Bell
Bancorp, Inc. owns all of the capital stock of its subsidiary, Bell Federal
Savings and Loan Association of Bellevue (the "Association").  In June 2001, the
Association established a Delaware Holding Company subsidiary, 1891 Associates,
Inc., to hold a portion of the investment securities previously owned
exclusively by the Association. At December 31, 2001, the Company had
consolidated total assets of $855.2 million and total equity of $66.4 million.
Currently, the Company does not transact any material business other than
through its subsidiary, the Association. All references to the Company include
the Association and it subsidiary, 1891 Associates, Inc., unless otherwise
indicated.

     Bell Federal Savings and Loan Association of Bellevue was originally
founded in 1891 as the Commercial Building and Loan Association, a state
chartered building and loan association.  In 1941, the Association converted to
a federally chartered mutual savings and loan association and changed its name
to First Federal Savings and Loan Association of Bellevue.  The Association
again changed its name in 1971 to Bell Federal Savings and Loan Association of
Bellevue.  The Association's deposits are insured up to applicable limits by the
Savings Association Insurance Fund ("SAIF").  The Association's business is
conducted through six branch offices located throughout the suburban Pittsburgh,
Pennsylvania area and its principal office in the borough of Bellevue.  The
Company's principal executive office is located at Suite 1704, 300 Delaware
Avenue, Wilmington, Delaware 19801 and its executive office telephone number is
(302) 427-7883.

     The principal business of the Company is to operate a traditional customer
oriented savings and loan association.  The Company attracts retail deposits
from the general public and invests those funds primarily in fixed and
adjustable-rate, owner-occupied, single-family conventional mortgage loans and,
to much lesser extent, residential construction loans, multi-family loans, home
equity loans and consumer loans.  The Company's revenues are derived principally
from interest on conventional mortgage loans, interest and dividends on
investment securities and short-term investments and other fees and service
charges.  The Company's primary sources of funds are deposits and borrowings.

     The Association is subject to extensive regulation, supervision and
examination by the OTS, its primary regulator and the FDIC, which insures its
deposits.  The Association is a member of the Federal Home Loan Bank ("FHLB").

Private Securities Litigation Reform Act Safe Harbor Statement

     In addition to historical information, this 10-K includes certain forward-
looking statements based on current management expectations.  Examples of this
forward-looking information can be found in, but are not limited to, the
allowance for loan losses discussion and certain sections of the 2001 Annual
Report

                                       1
<PAGE>

incorporated herein. The Company's actual results could differ materially from
those of management's expectations. Factors that could cause future results to
vary from current management expectations include, but are not limited to,
general economic conditions, legislative and regulatory changes, monetary and
fiscal policies of the federal government, changes in tax policies, rates and
regulations of federal, state and local tax authorities, changes in interest
rates, deposit flows, the cost of funds, demand for loan products, demand for
financial services, competition, changes in the quality or composition of the
Company's loan and investment portfolios, changes in accounting principles,
policies or guidelines, and other economic, competitive, governmental and
technological factors affecting the Company's operations, markets, products,
services and prices.

Market Area and Competition

     The Association has been, and continues to be, a community-oriented savings
institution offering a variety of financial services to meet the needs of the
community it serves.  Its primary market area is in the areas surrounding its
offices, while its lending activities extend throughout Allegheny County and
parts of Beaver, Butler, Washington and Westmoreland Counties, in Pennsylvania.
In addition to its principal office in Bellevue, the Association operates six
other retail offices, all of which are located in Allegheny County.

     The communities in Allegheny County are composed mostly of stable,
residential neighborhoods of predominantly one and two-family residences and
middle-to-upper-income families.  Management believes that, to a large degree,
the economic vitality of these communities depends on the economic vitality of
the City of Pittsburgh.

     The Greater Pittsburgh area has been in the process of restructuring over
the past decade.  Once centered on heavy manufacturing, primarily steel, its
economic base is now more diverse, including technology, health and business
services.  Several "Fortune 500" industrial firms are headquartered in the
Greater Pittsburgh area, including USX Corp. and Aluminum Company of America.
The largest employers in Pittsburgh, by the number of local employees, include
University of Pittsburgh Medical Center, USAirways, the University of Pittsburgh
and Mellon Bank Corp.  Seven colleges and universities are located in the
Greater Pittsburgh area.

     The Association serves its market area with a wide selection of residential
loans and other retail financial services.  Management considers the
Association's reputation for customer service as its major competitive advantage
in attracting and retaining customers in its market area.  The Association also
believes it benefits from its community orientation, as well as its established
deposit base and level of core deposits.


Lending Activities

     Loan and Mortgage-Backed Securities Portfolio Composition.  The loan
portfolio consists primarily of conventional mortgage loans secured by one- to
four-family, owner-occupied residences, and, to a much lesser extent,
residential construction loans, multi-family loans, home equity loans and
consumer loans.  Mortgage loans are originated to be held in the portfolio.  At
December 31, 2001, total loans receivable were $441.5 million, of which $420.8
million, or 95.3%, were conventional mortgage loans.  Of the conventional
mortgage loans outstanding at that date, 91.0% were fixed-rate loans.  At
December 31, 2001, the loan portfolio also included $5.7 million of residential
construction loans; $241,000 of multi-

                                       2
<PAGE>

family loans; $14.0 million of residential home equity loans; and $778,000 of
other consumer loans. The Association also offers FHA/VA qualifying one- to
four-family residential mortgage loans.

     The types of loans originated are regulated by federal law and regulations.
Interest rates charged on loans are affected principally by the demand for such
loans and the supply of money available for lending purposes.  These factors
are, in turn, affected by general and economic conditions, monetary policies of
the federal government, legislative and tax policies and governmental budgetary
matters.

     Set forth below is a table showing loan origination, purchase and sales
activity for the periods indicated.

<TABLE>
<CAPTION>
                                                                               For the Year Ended December 31,
                                                                      -------------------------------------------------
                                                                        2001                 2000                 1999
                                                                      --------             --------             --------
                                                                                   (in thousands)
<S>                                                                   <C>                  <C>                  <C>
Loans receivable at beginning of period                               $536,129             $545,222             $559,846

Additions:
      Originations of conventional mortgages(1)(2)                      26,005               50,582               82,564

Reductions:
       Transfer of mortgage loans to foreclosed real                        --                   29                  459
        estate
       Repayments(1)                                                   100,397               59,646               96,729
       Loan sales                                                       20,207                   --                   --
                                                                      --------             --------             --------

           Total reductions                                            120,604               59,675               97,188
                                                                      --------             --------             --------

           Total loans receivable at end of period                    $441,530             $536,129             $545,222
                                                                      ========             ========             ========

Mortgage-backed securities at beginning of period                     $ 21,523             $     --             $     --

       Purchases                                                        66,375               23,073                   --
       Sales                                                            21,184                   --                   --
       Repayments                                                       10,477                1,768                   --
       (Discount accretion), net                                          (295)                 (34)                  --
       Unrealized gain or loss                                              53                  252                   --
                                                                      --------             --------             --------
Mortgage-backed securities at end of period                           $ 55,995             $ 21,523             $     --
                                                                      ========             ========             ========
</TABLE>

(1)  Includes conventional mortgages, residential construction loans and home
     equity mortgage loans.
(2)  The Association originated no multi-family loans during the periods shown.

                                       3
<PAGE>

  The following table sets forth the composition of the loan portfolio and the
mortgage-backed securities portfolio in dollar amounts and in percentages of the
portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                                                                    At December 31.  (in thousands)
                                                                                                    -------------------------------
                                                               2001                     2000                      1999
                                                             --------                 --------                  --------
                                                                  Percent of               Percent of                Percent of
                                                        Amount      Total        Amount      Total         Amount      Total
                                                      ---------   ----------   ---------   ----------     --------   ----------
<S>                                                   <C>         <C>          <C>         <C>            <C>        <C>
Real estate loans:
        Conventional mortgages                         $420,780        95.30%   $507,601        94.68%    $516,514        94.73%
        Residential construction loans                    5,716         1.30      12,087         2.25       16,229         2.98
        Multi family loans                                  241         0.05         399         0.07          500         0.09
        Second mortgage loans                            14,015         3.17      15,073         2.82       11,012         2.02
                                                       --------       ------    --------       ------     --------       ------
           Total real estate loans                      440,752        99.82     535,160        99.82      544,255        99.82

Consumer loans:
        Loans on deposit accounts                           778         0.18         969         0.18          967         0.18
        Home improvement loans                                -            -           -            -            -            -
                                                       --------       ------    --------       ------     --------       ------
           Total consumer loans                             778         0.18         969         0.18          967         0.18
                                                       --------       ------    --------       ------     --------       ------
Total loans receivable                                  441,530       100.00%    536,129       100.00%     545,222       100.00%
                                                                      ======                   ======                    ======

Less:
        Undisbursed portion of loans in process           2,568                    5,373                     8,652
        Deferred net loan origination fees                1,564                    2,020                     2,386
        Allowance for loan losses                           925                      925                       925
                                                       --------                 --------                  --------
           Loans receivable, net                       $436,473                 $527,811                  $533,259
                                                       ========                 ========                  ========

Mortgage-backed securities
        GNMA                                           $      -            -%   $ 12,148        56.44%    $      -            - %
        FHLMC                                                 -            -           -            -            -            -
        FNMA                                             55,995       100.00       9,375        43.56            -            -
                                                       --------       ------    --------       ------     --------       ------
           Total mortgage-backed securities            $ 55,995       100.00%   $ 21,523       100.00%    $      -            -%
                                                       ========       ======    ========       ======     ========       ======

<CAPTION>
                                                           1998                   1997
                                                         ---------              ---------
                                                                Percent of             Percent of
                                                       Amount     Total       Amount     Total
                                                      --------  ----------   --------  ----------
<S>                                                   <C>       <C>          <C>       <C>
Real estate loans:
        Conventional mortgages                        $535,864       95.72%  $568,405       95.37%
        Residential construction loans                  17,924        3.20     25,563        4.29
        Multi family loans                                 651        0.12        860        0.14
        Second mortgage loans                            4,508        0.81        268        0.05
                                                      --------      ------   --------      ------
           Total real estate loans                     558,947       99.85    595,096       99.85

Consumer loans:
        Loans on deposit accounts                          895        0.15        899        0.15
        Home improvement loans                               4           -          8           -
                                                      --------      ------   --------      ------
           Total consumer loans                            899        0.15        907        0.15
                                                      --------      ------   --------      ------
Total loans receivable                                 559,846      100.00%   596,003      100.00%
                                                                    ======                 ======

Less:
        Undisbursed portion of loans in process         10,354                 12,072
        Deferred net loan origination fees               3,153                  3,822
        Allowance for loan losses                          805                    715
                                                      --------               --------
           Loans receivable, net                      $545,534               $579,394
                                                      ========               ========

Mortgage-backed securities
        GNMA                                          $      -           -%  $ 26,958       84.55%
        FHLMC                                                -           -          -           -
        FNMA                                                 -           -      4,927       15.45
                                                      --------      ------   --------      ------
           Total mortgage-backed securities           $      -           -%  $ 31,885      100.00%
                                                      ========      ======   ========      ======
</TABLE>

                                       4
<PAGE>

Loan Maturity Schedule.  The following table sets forth certain information at
December 31, 2001 regarding the dollar amount of loans maturing in the portfolio
based on their remaining contractual terms to maturity.  The table does not
include the effect of prepayments or scheduled principal amortization.
Prepayments and scheduled principal amortization on loans totalled $100.4
million, $59.6 million and $96.7 million for the years ended December 31, 2001,
2000 and 1999, respectively.

<TABLE>
<CAPTION>
                                                                              At December 31, 2001  (in thousands)
                                               -----------------------------------------------------------------------------------
                                                                 More Than Three   More Than Six     More Than     More Than Three
                                               Three Months or    Months to Six      Months to        One Year         Years to
                                                    Less              Months       Twelve Months   to Three Years     Five Years
                                               -----------------------------------------------------------------------------------
<S>                                          <C>                 <C>               <C>              <C>              <C>
Interest-earning Assets:
   Real estate loans:
      One-to-four-family adjustable-
         rate loans........................         $   --              $   -        $   --            $   49           $  105
      One-to-four-family fixed-rate
         loans.............................             91                 11            75               832            3,114
      Residential construction loans                    --                 --            --                --               --
      Multi family.........................             --                 --             2                54               --
      Second mortgage loans................          2,263                 40            54             3,187            6,202
                                                    ------              -----        ------            ------           ------

         Total Real Estate Loans                     2,354                 51           131             4,122            9,421

Consumer Loans                                         778                 --            --                 -               --
                                                    ------              -----        ------            ------           ------

         Total loans.......................         $3,132              $  51        $  131            $4,122           $9,421
                                                    ======              =====        ======            ======           ======

<CAPTION>
                                                          ---------------------------------------
                                                          More Than Five
                                                             Years to       More Than
                                                            Ten Years       Ten Years     Total
                                                          ---------------------------------------
<S>                                                        <C>             <C>           <C>
Interest-earning Assets:
   Real estate loans:
      One-to-four-family adjustable-
         rate loans........................                  $   100       $ 37,777      $ 38,031
      One-to-four-family fixed-rate
         loans.............................                   81,184        297,442       382,749
      Residential construction loans                              --          5,716         5,716
      Multi family.........................                      185             --           241
      Second mortgage loans................                    2,269             --        14,015
                                                             -------       --------      --------
         Total Real Estate Loans                              83,738        340,935       440,752

Consumer Loans                                                    --             --           778
                                                             -------       --------      --------

         Total loans.......................                  $83,738       $340,935      $441,530
                                                             =======       ========      ========
</TABLE>

                                       5
<PAGE>

     The following table sets forth the dollar amount of all loans and mortgage-
backed securities at December 31, 2001, which have fixed or adjustable interest
rates, and which are due after December 31, 2002.

<TABLE>
<CAPTION>
                                                            Due After December 31, 2002
                                                    --------------------------------------------
                                                     Fixed            Adjustable         Total
                                                    --------          ----------        --------
                                                                    (In thousands)
<S>                                                 <C>               <C>               <C>
Real estate loans:
  Conventional mortgages....................        $382,572            $38,031         $420,603
  Residential construction..................           1,910              3,806            5,716
  Multi-family..............................             239                  -              239
  Second mortgage...........................           9,851              1,807           11,658
                                                    --------            -------         --------

     Total loans............................         394,572             43,644          438,216

Mortgage backed securities                                 -             55,995           55,995
                                                    --------            -------         --------
                                                    $394,572            $99,639         $494,211
                                                    ========            =======         ========
</TABLE>

     One- to Four-Family Residential Mortgage Lending Residential mortgage loans
are primarily secured by owner-occupied one-to-four-family residences. Loan
originations are generally obtained from existing or past customers, members of
the local communities served, or referrals from local real estate agents,
attorneys and builders. The Association originates fixed-rate loans and
adjustable rate mortgage ("ARM") loans.

     Originated mortgage loans are held in the loan portfolio and are secured by
properties located within the Association's primary market area.  Historically,
the market interest rates of mortgage loans in the Pittsburgh area have been
below national averages.  The mortgage loan portfolio has decreased from $535.2
million at December 31, 2000 to $440.8 million at December 31, 2001.

     The Association from time to time purchases one- to four-family mortgage
loans and loan participations.  A number of these loans are secured by
properties located outside the Association's market area, such as other regions
of Pennsylvania, California, Illinois, Maryland, New York, Texas, Virginia,
Utah, North Carolina, Tennessee and Georgia.  The Association did not purchase
any mortgage loans or participations in 2001.  At December 31, 2001, the
Association had $8.8 million in purchased mortgage loans and loan participations
serviced by others, totalling 2.0% of the total loan portfolio at that date,
primarily secured by one- to four-family residences.  The Association intends to
continue purchasing loans to supplement reduced loan demand as needed.  Loans
purchased generally must meet the same underwriting criteria as loans originated
by the Association.

     In February 2001, the Company sold approximately $20.2 million fixed rate
mortgage loans.  The sale of loans was completed to improve the Company's
interest rate risk position.  There were no loan sales for the years ended
December 31, 2000 and 1999.  Most of the loan portfolio is underwritten in
conformity with Federal National Mortgage Association ("FNMA") secondary market
requirements.  Although the

                                       6
<PAGE>

Association has been approved by FNMA to sell loans in the secondary market,
there is no assurance that the Association will be able to originate loans for
sale in the secondary market or, that if originated, such loans will be sold in
the secondary market in the future. Should the Association decide to sell
mortgage loans in the future, the lower interest rates on such loans,
characteristic of the Pittsburgh market, may tend to diminish the demand for
such loans in the secondary market.

     In 2001, the maximum loan to value ratio on Adjustable Rate Loans was
increased to 90%.  On all other conventional mortgages with the exception of
Community Reinvestment Act ("CRA") loans, the maximum loan-to-value ratio is
80%.  If the loan to value ratio exceeds 80%, private mortgage insurance is
purchased to bring the Company's exposure at or below 80%.  As a result, a
majority of borrowers are previous homeowners, whom the Association believes to
be relatively stable borrowers.  The Association also offers FHA/VA qualifying
one-to four-family residential mortgage loans.  One-to four-family residential
mortgage loans do not provide for negative amortization.  Mortgage loans in the
portfolio generally include due-on-sale clauses, which provide the Association
with the contractual right to demand the loan immediately due and payable in the
event that the borrower transfers ownership of the property that is subject to
the mortgage.  It is the Association's policy to enforce due-on-sale clauses.
The residential mortgage loans originated are generally for terms to maturity
from 15 to 30 years.  At December 31, 2001, the maximum one-to four-family loan
amount is $600,000, unless otherwise approved by the Board of Directors.

     Presently, four ARM loans are offered; a one-year, three-year, five-year
and 7/1 ARM loan.  The one-year ARM loan has an interest rate that adjusts
annually based on a spread of 2.50 percentage points above the rate on one-year
United States Treasury securities.  The one-year ARM loan is subject to a
limitation on interest rate increases and decreases of 2.0% per year, a lifetime
ceiling on interest rate increases of 6.0% above the origination rate, and a
floor rate equal to the origination interest rate.  This mortgage can convert to
a fixed-rate loan at specified times during the first five years.  The three-
year ARM loan has an interest rate that adjusts every three years based on a
spread of 2.75 percentage points above the rate on three-year United States
Treasury securities.  The three-year ARM is subject to a limitation on interest
rate increases and decreases of 2% per change, a lifetime ceiling on the
interest rate of 6.0% above the origination rate and a floor rate equal to the
origination interest rate.  The five-year ARM loan has an interest rate that
adjusts every five years based on a spread of 2.75 percentage points above the
rate on five-year United States Treasury securities.  The five-year ARM loan is
subject to a limitation on interest rate increases and decreases of 3.0% per
change, a lifetime ceiling on the interest rate of 6.0% above the origination
rate, and a floor rate equal to the origination interest rate.  The 7/1 ARM loan
has an interest rate that remains constant for the first seven years and then
the interest rate adjusts annually based on a spread of 2.50 percentage points
above the rate on one-year United States Treasury securities.  After the initial
seven years, this ARM loan is subject to a limitation on interest rate increases
and decreases of 2.0% per year, a lifetime ceiling on interest rate increases of
6.0% above the origination rate, and a floor equal to the origination interest
rate.  The mortgage can convert to a fixed-rate loan at the first change date.

     The volume and types of ARM loans originated are affected by such market
factors as the level of interest rates, competition, consumer preferences and
the availability of funds.  In 2001, $5.7 million of the $26.0 million, or
21.9%, of the conventional mortgage and construction loans originated were
adjustable rate mortgages.  Although ARM loans will continue to be offered,
there can be no assurance that in the

                                       7
<PAGE>

future ARM loans will be originated in sufficient volume to constitute a
significant portion of the loan portfolio.

     In an effort to provide financing for low and moderate income home buyers,
additional single family residential mortgage loans are offered to low and
moderate income borrowers and residents of CRA neighborhoods, with terms of up
to 30 years.  Such loans must be secured by a single-family, owner-occupied
unit.  These loans are originated using modified underwriting guidelines with
reduced down payments and expenses.  Private mortgage insurance is normally
required.  Because the Association typically charges a lower rate of interest,
lower mortgage origination fees and a discount on closing costs on its CRA
loans, a lower rate of return is expected on such loans, as compared to other
residential mortgage loans.  For the years ended December 31, 2001, 2000 and
1999, the Association originated  16, 35, and 47  loans under the CRA loan
program, respectively, with aggregate dollar amounts of $1.1 million, $2.1
million, and $2.8 million, respectively.

     Residential Construction Loans.  The Association originates loans for the
construction of one-to four-family residential properties.  Such loans are made
on contract directly to the home buyer.  Residential construction loans are
subject to the same maximum loan amounts as conventional mortgage loans.
Residential construction loans are made for terms of up to one year, at which
time the loans convert to permanent conventional mortgage financing.
Residential construction loans are generally offered at the Association's
prevailing interest rate.  An additional fee may be charged for construction
servicing. Advances are made to builders as phases of construction of the
property are completed.  As of December 31, 2001, the Association's residential
construction loans totaled $5.7 million, or 1.3% of the total loan portfolio.
Of these construction loans, $2.6 million had been committed but was undisbursed
as of that date.

     Construction lending involves greater risks than other loans due the fact
that loan funds are advanced upon the security of the project under construction
and are predicated on the future value of the property upon completion of
construction.  Moreover, because of the uncertainties inherent in estimating
construction costs, delays resulting from labor problems, material shortages or
weather conditions and other unpredictable contingencies, it is relatively
difficult to evaluate accurately the total funds required to complete a project
and to establish the related loan-to-value ratio.  Because of these factors, the
analysis of prospective construction loan projects requires an expertise that is
different in significant respects from that which is required for residential
mortgage lending.

     Multi-Family Loans.  In prior years, the Association also originated multi-
family loans.  As of December 31, 2001, the Association's total loan portfolio
contained 7 multi-family loans, totalling $241,000, or 0.1%, of total loans.
Since 1991, the Association has not originated any multi-family mortgage loans.
In the future, the Association may originate a limited number of multi-family
loans on a case-by-case basis.

     The multi-family loans in the Association's portfolio consist of fixed-rate
rate loans which were originated at prevailing market rates.  The Association's
policy has been to originate multi-family loans only in its market area.  In
making multi-family loans, the Association considers primarily the ability of
net operating income generated by the real estate to support the debt service,
the financial resources and

                                       8
<PAGE>

income level and managerial expertise of the borrower, the marketability of the
property, and the Association's lending experience with the borrower.

     Second Mortgage Loans.  During 1998, the Association began offering home
equity installment and line of credit loans to homeowners in its lending
territory.  Home equity installment loans are underwritten for a fixed rate with
a five year term or an adjustable rate ten year term in which the rate adjusts
after the fifth year based on the prime rate.  Line of credit loans can be drawn
on for ten years and paid back in twenty years and are based on the prime rate.
The Association offers second mortgage loans with maximum combined loan-to-value
ratios of up to 80%.  During 2001 the Association originated 197 home equity
installment and line of credit loans totaling $5.0 million.  At December 31,
2001, the Association had $14.0 million or 3.2% of total loans in second
mortgage loans.

     Consumer Loans.  The Association also offers secured consumer loans.  At
December 31, 2001, the Association's consumer loans totalled $778,000, or 0.2%
of the Association's total loan portfolio, all of which were secured by deposit
accounts.

     Loan Servicing and Loan Fees.  Servicing on all loans that have been sold
has been retained.  Fees are received for these servicing activities, which
include collecting and remitting loan payments, inspecting the properties and
making certain insurance and tax payments on behalf of the borrowers.  At
December 31, 2001, the Association was servicing $31.0 million of loans for
others.  Loan servicing income was $40,000, $6,000 and $7,000 for the years
ended December 31, 2001, 2000 and 1999, respectively.  The Association also
receives income in the form of service charges and other fees on loans.  For the
years ended December 31, 2001, 2000 and 1999, the Association earned $576,000,
$167,000 and $142,000, respectively, in loan related service charges and other
fees.

     Mortgage-backed Securities.  As of December 31, 2001, the Association had
$56.0 million in mortgage-backed securities.  These securities consisted of five
Federal National Mortgage Association ("FNMA"), adjustable rate securities, with
a fair value of $56.0 million.  These securities are classified as available-
for-sale.  At December 31, 2000 the Association had $21.5 million in mortgage-
backed securities.  The Association had no mortgage-backed securities at
December 31, 1999.  The Association may invest in mortgage-backed securities in
the future to offset any significant decrease in demand for one- to four-family
loans.

     Loan Approval Procedures and Authority.  Loan approval authority has been
granted by the Board of Directors to the Association's Loan Committee.  All
mortgage loans must be approved by the Loan Committee.  As of December 31, 2001,
any loan application over $600,000 must be approved by the Board of Directors.

     Upon receipt of a completed loan application from a prospective borrower,
the Association generally orders a credit report, verifies employment, income
and other information, and, if necessary, obtains additional financial or credit
related information.  An appraisal of the real estate used for collateral is
also obtained.  All appraisals are performed by licensed certified appraisers.
The Board of Directors annually approves the independent appraisers used by the
Association and reviews the Association's appraisal policy.  When the credit
information is obtained and an appraisal is completed, loans are

                                       9
<PAGE>

presented for approval to the Association's Loan Committee. The Loan Committee
must approve all loans originated by the Association.

     The Association's policy is to require either title insurance or an
attorney's opinion of title, and hazard insurance on all real estate loans.
Borrowers are required to advance funds together with each payment of principal
and interest to a mortgage escrow account from which the Association makes
disbursements for items such as real estate taxes, hazard insurance premiums and
private mortgage insurance premiums, if required.

Asset Quality

     Loan Collection.  When a borrower fails to make a required payment on a
loan, the Association takes a number of steps to induce the borrower to cure the
delinquency and restore the loan to a current status.  The borrower is sent a
written notice of non-payment when the loan is 15 days past due.  In the event
payment is not then received, additional letters and phone calls generally are
made.  If the loan is still not brought current and it becomes necessary to take
legal action, which typically occurs after a loan is delinquent 120 days or
more, the Association may commence foreclosure proceedings against the real
property that secures the loan.  Decisions as to when to commence foreclosure
actions are made on a case by case basis.  If a foreclosure action is instituted
and the loan is not brought current, paid in full, or refinanced within 30 days
of delivery of the notice of default and intent to foreclose, the real property
securing the loan is generally sold at foreclosure or by the Association as soon
thereafter as practicable.

     On purchased mortgage loans or loan participations, monthly reports are
received from loan servicers in order to monitor the loan portfolio.  Based upon
servicing agreements with the servicers of the loans, the Association relies
upon the servicer to contact delinquent borrowers, collect delinquent amounts
and to initiate foreclosure proceedings, when necessary, all in accordance with
applicable laws, regulations and the terms of the servicing agreements between
the Association and its servicing agents.

                                       10
<PAGE>

Delinquent Loans.  At December 31, 2001, 2000 and 1999, delinquencies in the
loan portfolio were as follows:

<TABLE>
<CAPTION>
                                                 At December 31, 2001                                 At December 31, 2000
                              ------------------------------------------------------   -------------------------------------------
                                   60 - 89 Days              90 Days or More             60 - 89 Days           90 Days or More
                              ------------------------  ----------------------------   --------------------- ---------------------
                                           Principal                    Principal                  Principal             Principal
                                Number of  Balance of    Number of     Balance of     Number of   Balance of  Number of  Balance of
                                  Loans      Loans         Loans          Loans         Loans        Loans      Loans       Loans
                                --------- -----------                  -----------                ----------   --------  -----------
                                                     (Dollars in thousands)                              (Dollars in thousands)
<S>                             <C>        <C>           <C>          <C>              <C>        <C>           <C>       <C>
Conventional mortgage loans...      14        $1,568             23         $1,026            10         $ 405       13      $ 565
Second mortgage loans.........       1            10              1             30            --            --       --         --
Multi-family loans............      --            --             --             --            --            --       --         --
Consumer loans................      --            --             --             --            --            --       --         --
                                    --        ------             --         ------          ----         -----  -------      -----
     Total loans..............      15        $1,578             24         $1,056            10         $ 405       13      $ 565
                                    ==        ======             ==         ======          ====         =====  =======      =====

Delinquent loans to
 total loans..................                  0.36%                         0.24%                       0.08%               0.11%
                                              ======                        ======                       =====                ====

<CAPTION>
                                                                                 At December 31, 1999
                                                      -----------------------------------------------------------------------------
                                                                60 - 89 Days                               90 Days or More
                                                      -------------------------------------       ---------------------------------
                                                                              Principal                                 Principal
                                                          Number of           Balance of             Number of          Balance of
                                                             Loans              Loans                  Loans              Loans
                                                      -------------------  -----------------      --------------      --------------
                                                                                      (Dollars in thousands)
          <S>                                               <C>                 <C>                    <C>                 <C>
          Conventional mortgage loans..................        $    2           $   127                  $     7           $   269
          Second mortgage loans........................            --                --                       --
          Multi-family loans...........................            --                --                       --                --
          Consumer loans...............................            --                --                       --                --
                                                               ------            ------                  -------           -------
               Total loans.............................        $    2            $  127                  $     7           $   269
                                                               ======            ======                  =======           =======
          Delinquent loans to total loans..............                            0.02%                                      0.05%
                                                                                 ======                                    =======
</TABLE>

                                      11
<PAGE>

     Non-Performing Loans and Real Estate Owned.  The following table sets forth
information regarding non-accrual mortgage and other loans and real estate owned
("REO").  Interest is not accrued on loans past due 90 days or more.  The
Association had no real estate owned and no in substance foreclosures at
December 31, 2001.  During the years ended December 31, 2001, 2000 and 1999, the
amounts of interest income that would have been recorded on non-accrual loans,
had they been current, totalled $50,000, $32,000, and $6,000, respectively.
Interest income recorded on non-accrual loans was $57,000, $33,000, and $8,000
for each of the years ended December 31, 2001, 2000 and 1999, respectively.

<TABLE>
<CAPTION>
                                                                            At December 31,
                                                ------------------------------------------------------------------
                                                      2001         2000          1999          1998          1997
                                                -----------       ------       -------       -------       -------
                                                                        (Dollars in Thousands)
<S>                                               <C>            <C>           <C>           <C>           <C>
Non-accrual delinquent mortgage loans...........    $1,056         $ 565         $ 269         $ 498         $ 634
Non-accrual delinquent other loans..............        --            --            --            --            --
                                                    ------         -----         -----         -----         -----
  Total non-performing loans....................     1,056           565           269           498           634
Real estate owned...............................        --            29           390            82            --
                                                    ------         -----         -----         -----         -----
   Total non-performing assets..................    $1,056         $ 594         $ 659         $ 580         $ 634
                                                    ======         =====         =====         =====         =====
Total non-performing loans to total loans.......      0.24%         0.11%         0.05%         0.10%         0.11%
Total non-performing assets to total assets.....      0.12%         0.07%         0.08%         0.08%         0.09%
</TABLE>

     Classified Assets.  Federal regulations and the Association's policy
require the classification of loans and other assets, such as debt and equity
securities considered to be of lesser quality, as "Substandard," "Doubtful" or
"Loss" assets.  An asset is considered "Substandard" if it is inadequately
protected by the current net worth and paying capacity of the obligor or of the
collateral pledged, if any.  "Substandard" assets include those characterized by
the distinct possibility that the institution will sustain some loss if the
deficiencies are not corrected.  Assets classified as "Doubtful" have all of the
weaknesses inherent in those classified "Substandard," with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions, and values, highly
questionable and improbable.

     At December 31, 2001, classified assets totaled $1.1 million, or 0.12% of
total assets, and consisted of twenty-three conventional and one second mortgage
loan classified as "Substandard".

     Allowance for Loan Losses, Investments in Real Estate and Real Estate
Owned.  The allowance for loan losses is established and maintained through a
provision for loan losses based on management's evaluation of the risk inherent
in the loan portfolio and the condition of the local economy in the Company's
market area.  Such evaluation, which includes a review of all loans on which
full collectibility is not reasonably assured, considers among other matters,
the estimated fair value of the underlying collateral, economic and regulatory
conditions, and other factors that warrant recognition of an adequate loan loss
allowance.  Management believes that the allowance for loan losses is adequate
to cover losses inherent in the portfolio as of December 31, 2001. Although
management believes it uses the best information available to make
determinations with respect to the allowance for loan losses, future adjustments
may be necessary if economic and other conditions differ substantially from the
economic and other conditions in the assumptions used in making the initial
determinations, such as a material increase in the balance of the loan
portfolio.

                                      12
<PAGE>

The following table sets forth the allowance for loan losses at the dates
indicated.

<TABLE>
<CAPTION>
                                                                            For the Years Ended December 31,
                                                    ------------------------------------------------------------------------------
                                                        2001            2000             1999             1998             1997
                                                    -----------      ----------      -----------      -----------      -----------
                                                                                     (in thousands)
<S>                                                 <C>              <C>             <C>              <C>              <C>
Allowance for loan losses:
Balance at beginning of period..........................  $ 925           $ 925            $ 805            $ 715            $ 665
Charge-offs:
    Conventional mortgages..............................     --              --               --               --               --
    Residential construction............................     --              --               --               --               --
    Multi-family........................................     --              --               --               --               --
    Consumer............................................     --              --               --               --               --
                                                          -----           -----            -----            -----            -----
      Total charge-offs.................................     --              --               --               --               --
Total recoveries........................................     --              --               --               --                5

Provision for (recovery of) loan losses.................     --              --              120               90               45
                                                          -----           -----            -----            -----            -----
Balance at end of period(1).............................  $ 925           $ 925            $ 925            $ 805            $ 715
                                                          =====           =====            =====            =====            =====
Ratio of net charge-offs during the period to
 average loans outstanding during the period............     --%             --%              --%              --%              --%

Ratio of allowance for loan losses to total
 loans at the end of the period.........................   0.21%           0.18%            0.17%            0.15%            0.12%

Ratio of allowance for loan losses to
 non-performing assets at the end of the period.........   .88x           1.56x            1.40x            1.39x            1.13x

</TABLE>
____________________________
(1)  The total amount of the allowance for loan losses for each of the periods
     shown was allocated to mortgage loans.  At the end of each reported period,
     mortgage loans represented in excess of 99.8% of total loans.

     In addition, the OTS and FDIC, as an integral part of their examination
process, periodically review the allowance for loan losses and real estate owned
and investments in real estate valuations.  Such agencies may require the
recognition of  additions to the allowance or additional write-downs based on
their judgments about information available to them at the time of their
examination.  The OTS, in conjunction with the other federal banking agencies,
adopted an interagency policy statement on the allowance for loan and lease
losses.  The policy statement provides guidance for financial institutions on
both the responsibilities of management for the assessment and establishment of
adequate allowances and guidance for banking agency examiners to use in
determining the adequacy of general valuation guidelines.  Generally, the policy
statement recommends that institutions have effective systems and controls to
identify, monitor and address asset quality problems; that management analyze
all significant factors that affect the collectibility of the portfolio in a
reasonable manner; and that management establish acceptable allowance evaluation
processes that meet the objectives set forth in the policy statement.  As a
result of the declines in local and regional real estate market values and the
significant losses experienced by many financial institutions, there has been a
greater level of scrutiny by regulatory authorities of the loan portfolios of
financial institutions undertaken as part of the examination of institutions by
the OTS and the FDIC.  While management believes that it has established an
adequate allowance for loan losses, there can

                                      13
<PAGE>

be no assurance that regulators, in reviewing the loan portfolio, will not
request a material increase at that time in the allowance for loan losses,
thereby negatively affecting the financial condition and earnings at such time.


Investment Activities

     As a member of the FHLB System, the Association is required to maintain
liquid assets at minimum levels which vary from time to time.  The Association
increases or decreases its liquid investments depending on the availability of
funds, the comparative yields on liquid investments in relation to the return on
loans and in response to its interest rate risk management.  To meet liquidity
obligations, federally chartered savings institutions have authority to invest
in various types of assets, including U.S. Treasury obligations, securities of
various federal agencies, mortgage-backed and mortgage-related securities,
certain certificates of deposit of insured banks and savings institutions,
certain bankers acceptances, repurchase agreements, loans of federal funds and,
subject to certain limits, corporate securities, commercial paper and mutual
funds.  The Association's liquid investments primarily consist of federal funds
sold, U.S. Government securities, federal agency securities and interest-bearing
deposits.  Historically, the Association has maintained its liquid assets at
levels well above the minimum regulatory requirements.

     The Company's Investment Committee, which is appointed by the Chief
Executive Officer, formulates the investment policy of the Company.  The
Company's Investment Committee reports all purchases and sales of investments to
the Board of Directors.  The policy of the Association is to invest funds among
various categories of investments and maturities to meet the day-to-day,
cyclical and long-term changes in assets and liabilities.  In establishing its
investment strategies, the Company considers its cash position, the condition of
its loans, the stability of deposits, its capital position, its interest rate
risk and other factors.

     Investment Securities.  OTS guidelines regarding investment portfolio
policy and accounting require insured institutions to categorize securities and
certain other assets as held for "investment," "sale," or "trading."  The
Association's investment policy provides for "held for investment" and
"available for sale" portfolios.  Although the Association's investment policy
allows that some investments and loans will qualify to be held-to-maturity, the
policy allows the sale of investments in certain specific instances, such as
when the quality of an asset deteriorates, or when regulatory changes require
that an asset be disposed.  At December 31, 2001, the Association had total
investments of $291.8 million, all of which were classified as available-for-
sale.  The investments classified as available-for-sale consisted of $178.1
million in municipal securities, $47.5 million in Small Business Association
securities, $46.0 million in collateralized mortgage obligations ("CMO's"), $4.8
million in Federal Home Loan Bank bonds, $5.0 million in Trust Preferred
securities, $10.4 million in Federal Home Loan Bank Stock and $4,000 in stock of
FNMA.

                                      14
<PAGE>

     The following table sets forth certain information regarding the carrying
and market values of the portfolio of investment securities available-for-sale
and held-to-maturity at the dates indicated:


<TABLE>
<CAPTION>
                                                                                 At December 31,
                                                 --------------------------------------------------------------------------
                                                           2001                    2000                       1999
                                                ------------------------------------------------    -----------------------
                                                    Carrying     Market     Carrying     Market      Carrying      Market
                                                     Value       Value       Value       Value        Value        Value
                                                 ------------   --------   ---------   ---------    ----------   ----------
                                                                                  (In thousands)
<S>                                              <C>            <C>         <C>        <C>         <C>           <C>
Investment securities:
   Municipal securities.........................    $179,969    $178,162    $199,196    $197,186      $199,141        $184,768
   U.S. Treasury securities.....................          --          --          --          --         4,985           5,167
   Agency Securities (Small Bus. Admin.)........      47,895      47,470          --          --            --              --
   Collateralized mortgage obligations..........      45,989      45,989      11,037      11,044        12,902          12,761
   FHLB bond....................................       5,000       4,805       5,000       5,000         5,000           4,853
   Other investments............................       5,004       5,004           4           4             4              75
   FHLB Stock...................................      10,400      10,400      11,400      11,400        11,400          11,400
                                                    --------    --------    --------    --------      --------        --------
     Total investments..........................    $294,257    $291,830    $226,637    $224,634      $233,432        $219,024
                                                    ========    ========    ========    ========      ========        ========
</TABLE>

     Other Investments.   In 2001, the Company purchased $20.0 million in Bank
Owned Life Insurance ("BOLI").  This insurance was purchased as a means to
offset employee benefit costs and earned $1.0 million in the year ended December
31, 2001.

                                      15
<PAGE>

     The following table sets forth the carrying values, market values and
average yields for the Association's available for sale investment portfolio
(excluding $10.4 million in FHLB stock and $4,000 in FNMA stock) by maturity,
call date or repricing date, whichever is first, at December 31, 2001, (dollars
in thousands).

<TABLE>
<CAPTION>
                          One Year or Less     One to Five Years    Five to Ten Years   More than Ten Years    Total Securities
                         -------------------  -------------------  -------------------  --------------------  -------------------
                                   Weighted             Weighted             Weighted              Weighted             Weighted
                         Carrying   Average   Carrying   Average   Carrying   Average   Carrying    Average   Carrying   Average
                          Value      Yield     Value      Yield     Value      Yield      Value      Yield     Value      Yield
                         --------  ---------  --------  ---------  --------  ---------  ---------  ---------  --------  ---------
<S>                      <C>       <C>        <C>       <C>        <C>       <C>        <C>        <C>        <C>       <C>
Investment Securities:
  Municipal securities    $   810      5.31%  $163,679      4.53%   $12,304      4.56%    $ 3,176      4.45%  $179,969      4.54%
   Agency securities      $47,895      3.62%        --        --         --        --          --        --   $ 47,895      3.62%
  Collateralized
   Mortgage Obligations   $11,407      5.96%  $  9,704      5.79%   $14,934      6.08%    $ 9,944      6.64%  $ 45,989      6.11%

  FHLB bond               $ 5,000      5.00%        --        --         --        --          --        --   $  5,000      5.00%
   Trust-preferred
     securities           $ 5,000      3.63%        --        --         --        --          --        --   $  5,000      3.63%
     Totals:              $70,112      4.12%  $173,383      4.60%   $27,238      5.39%    $13,120      6.11%  $283,853      4.63%
</TABLE>

                                      16
<PAGE>

Sources of Funds

     General. The lending and investment activities are predominantly funded by
savings deposits, borrowings, interest and principal payments on loans and other
investments, and loan origination fees.

     Deposits. Deposits serve as the predominant source of funds. The
Association offers interest rates on deposits that are competitive in the
Greater Pittsburgh market area to maintain a strong depositor base. Deposits
consist of savings and club accounts, interest-bearing and non-interest-bearing
demand deposit accounts, money market deposit accounts and certificates of
deposit. The Association relies on its competitive pricing policies and customer
service to maintain deposit growth. The Association has produced an overall
increase in total deposits of 9.7%, from $511.9 million at December 31, 1999 to
$561.3 million at December 31, 2001. The flow of deposits is influenced
significantly by general economic conditions, changes in money market and
prevailing interest rates and competition.

     The following table presents the deposit activity for the periods
indicated.

<TABLE>
<CAPTION>
                                                                      For the Years Ended December 31,
                                                             --------------------------------------------------
                                                                2001                2000               1999
                                                             -----------         -----------        -----------
                                                                                (In thousands)
<S>                                                          <C>                 <C>                <C>
Deposits...........................................             $784,598            $817,448           $740,561
Withdrawals........................................              768,639             808,601            737,891
                                                                --------            --------           --------
Net increase before interest credited..............               15,959               8,847              2,670
Interest credited..................................                8,708              15,907             14,133
                                                                --------            --------           --------
Net increase in deposits...........................             $ 24,667            $ 24,754           $ 16,803
                                                                ========            ========           ========
</TABLE>


     The following table indicates the amount of the certificates of deposit of
$100,000 or more by the time remaining until maturity as of December 31, 2001.

<TABLE>
<CAPTION>
                                                                             Amount
                                                                       ------------------
                                                                         (In thousands)
               Maturity Period:
               <S>                                                     <C>
                  Three months or less...........................                 $17,070
                  Over three through six months..................                   6,967
                  Over six through 12 months.....................                  15,539
                  Over 12 months.................................                  11,702
                                                                                  -------
                     Total.......................................                 $51,278
                                                                                  =======
</TABLE>

                                       17
<PAGE>

     The following table sets forth the distribution of the average daily
balance of deposit accounts and borrowings for the periods indicated and the
weighted average nominal interest rates on each category of deposits presented.

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                  --------------------------------------------------------------------------------------------------
                                                2001                             2000                            1999
                                  -------------------------------  ------------------------------- ---------------------------------
                                                        Weighted                         Weighted                          Weighted
                                                        Average                          Average                            Average
                                    Average              Nominal     Average             Nominal     Average                Nominal
                                    Balance   Interest    Rate       Balance   Interest   Rate       Balance    Interest     Rate
                                  ---------- --------- ----------  ---------  --------- ---------- ----------  ---------- ----------
                                                                        (in thousands)
<S>                               <C>        <C>       <C>         <C>        <C>       <C>        <C>         <C>        <C>
Money market and NOW
  deposits......................    $ 76,970   $ 1,601    2.08%     $ 83,044   $ 1,637    1.97%    $ 53,508      $ 1,404     2.62%

Savings deposits................      73,756     2,437    3.30        59,000     2,737    4.64       85,151        3,021     3.55

Certificates of deposit.........     410,250    24,475    5.97       389,054    23,256    5.98      356,439       19,751     5.54

Borrowings......................     216,552    12,635    5.83       221,960    13,047    5.88      230,335       12,886     5.59
                                    --------   -------              --------   -------             --------      -------
    Total interest-bearing
      liabilities...............    $777,528   $41,148    5.29      $753,058   $40,677    5.40     $725,433      $37,062     5.11
                                    ========   =======              ========   =======             ========      =======
</TABLE>


                                       18
<PAGE>

    The following table presents the amount of certificate accounts outstanding
based upon original contractual periods to maturity and contracted rates, at
December 31, 2001, and based upon contracted rates, at December 31, 2000 and
1999.

<TABLE>
<CAPTION>
                                                         December 31, 2001                                        At December 31,
                           ---------------------------------------------------------------------------------    -------------------
                           Less Than      One to     Two to      Three to    Four to    Five to      Total
                           One Year        Two       Three         Four       Five        Ten       December
                                          Years      Years        Years       Years      Years      31, 2001      2000       1999
                           ---------     -------     -------     --------    -------    -------     --------    --------   --------
                                                                          (In thousands)
<S>                        <C>           <C>         <C>         <C>         <C>        <C>         <C>         <C>        <C>
Certificate Accounts:
  1.50% to 5.50%.......     $212,021     $23,955     $16,537      $1,389     $ 6,288    $ 1,338     $261,528    $ 30,631   $217,751
  5.501% to 6.00%......       10,953       5,054         579         362      15,510      2,319       34,777      73,556    119,707
  6.001% to 6.50%......        1,048       7,393       4,359         332       3,833      5,854       22,819     110,565     29,773
  6.501% to 7.50%......           21      50,982      14,427         860       6,865     14,074       87,229     188,371     14,350
  7.501% to 8.50%......           --          --          --          --          --         56           56       2,346      2,750
  8.501% to 9.50%......           --          --          --          --          --         --           --          --      2,033
                            --------     -------     -------      ------     -------    -------     --------    --------   --------
                            $224,043     $87,384     $35,902      $2,943     $32,496    $23,641     $406,409    $405,469   $386,364
                            ========     =======     =======      ======     =======    =======     ========    ========   ========
</TABLE>

Borrowings

    Borrowings are used in conjunction with deposits in funding the operating
and investment activity of the Company. At December 31, 2001, the Company had
borrowings of $214.3 million. Of these borrowings, $208.0 million are held at
the Association level and the remaining $6.3 is held at the Company level. All
of the Association's borrowings have an original contractual maturity of ten
years. However, every six months the FHLB has the option to convert $70 million
of these borrowings to an adjustable rate based on the three month LIBOR. If the
FHLB elects to convert the borrowings to an adjustable rate, the borrowings can
be repaid without penalty. The balance of the Association's borrowings, $138
million carry a fixed interest rate for the first five years. On the fifth
anniversary date the FHLB has the option to convert these borrowings to an
adjustable rate based on the three month LIBOR. Again, if the FHLB elects to
convert the borrowings to adjustable rates, the borrowing can be repaid without
penalty. If the borrowings are not converted to an adjustable rate, the rate
remains fixed at the current contractual rate for the remaining five years of
the borrowings. The weighted average rate on these borrowings is 5.73%. The FHLB
borrowings are secured by assets of the Association. The Company has an
adjustable rate term loan of $6.2 million The interest rate on this term loan
adjusts quarterly based on the three month LIBOR rate, plus 150 basis points.
The rate on this loan as of December 31, 2001, is 3.77%. These borrowings are
secured by the assets of the Company.

Subsidiary Activities

    In June, 2001, Bell Federal Savings established a Delaware Holding Company
subsidiary, 1891 Associates, Inc., to hold a portion of the investment
securities previously owned exclusively by the Association. Bell Federal Savings
provided a $100 million line of credit to the subsidiary. The proceeds from the
line of credit were used to purchase $98.5 million of Bank Qualified Municipal
Securities which were previously held as "available-for-sale" securities by the
Association. These securities are also classified as "available-for-sale" by the
Delaware Holding Company subsidiary.

                                       19
<PAGE>

                          REGULATION AND SUPERVISION

General

    As a savings and loan holding company, the Company is required by federal
law to file reports with, and otherwise comply with, the rules and regulations
of the OTS. The Association is subject to extensive regulation, examination and
supervision by the OTS, as its primary federal regulator, and the FDIC, as the
deposit insurer. The Association is a member of the FHLB System, and with
respect to deposit insurance the SAIF managed by the FDIC. The Association must
file reports with the OTS and the FDIC concerning its activities and financial
condition in addition to obtaining regulatory approvals prior to entering into
certain transactions such as mergers with, or acquisitions of, other savings
institutions. The OTS and/or the FDIC conduct periodic examinations to test the
Association's safety and soundness and compliance with various regulatory
requirements. This regulation and supervision establishes a comprehensive
framework of activities in which an institution can engage and is intended
primarily for the protection of the insurance fund and depositors. The
regulatory structure also gives the regulatory authorities extensive discretion
in connection with their supervisory and enforcement activities and examination
policies, including policies with respect to the classification of assets and
the establishment of adequate loan loss reserves for regulatory purposes. Any
change in such regulatory requirements and policies, whether by the OTS, the
FDIC or the United States Congress, could have a material adverse impact on the
Company, the Association and their operations. Certain of the regulatory
requirements applicable to the Association and to the Company are referred to
below or elsewhere herein. The description of statutory provisions and
regulations applicable to savings institutions and their holding companies set
forth in this Form 10-K does not purport to be a complete description of such
statutes and regulations and their effects on the Association and the Company.

Holding Company Regulation

    The Company is a non-diversified unitary savings and loan holding company
within the meaning of federal law. Under prior law, a unitary savings and loan
holding company, such as the Company was not generally restricted as to the
types of business activities in which it may engage, provided that the
Association continued to be a qualified thrift lender. See "Federal Savings
Institution Regulation-QTL Test." The Gramm-Leach-Bliley Act of 1999 provides
that no company may acquire control of a savings association after May 4, 1999
unless it engages only in the financial activities permitted for financial
holding companies under the law or for multiple savings and loan holding
companies as described below. Further, the Gramm-Leach Bliley Act specifies that
existing savings and loan holding companies may only engage in such activities.
The Gramm-Leach-Bliley Act, however, grandfathered the unrestricted authority
for activities with respect to unitary savings and loan holding companies
existing prior to May 4, 1999, such as the Company, so long as the Association
continues to comply with the QTL Test. Upon any nonsupervisory acquisition by
the Company of another savings institution or savings bank that meets the
qualified thrift lender test and is deemed to be a savings institution by the
OTS, the Company would become a multiple savings and loan holding company (if
the acquired institution is held as a separate subsidiary) and would generally
be limited to activities permissible for bank holding companies under Section
4(c)(8) of the Association Holding Company Act, subject to the prior approval of
the OTS, and certain activities authorized by OTS regulation.


                                       20
<PAGE>

    A savings and loan holding company is prohibited from, directly or
indirectly, acquiring more than 5% of the voting stock of another savings
institution or savings and loan holding company, without prior written approval
of the OTS and from acquiring or retaining control of a depository institution
that is not insured by the FDIC. In evaluating applications by holding companies
to acquire savings institutions, the OTS considers the financial and managerial
resources and future prospects of the company and institution involved, the
effect of the acquisition on the risk to the deposit insurance funds, the
convenience and needs of the community and competitive factors.

    The OTS may not approve any acquisition that would result in a multiple
savings and loan holding company controlling savings institutions in more than
one state, subject to two exceptions: (i) the approval of interstate supervisory
acquisitions by savings and loan holding companies; and (ii) the acquisition of
a savings institution in another state if the laws of the state of the target
savings institution specifically permit such acquisitions. The states vary in
the extent to which they permit interstate savings and loan holding company
acquisitions.

    Although savings and loan holding companies are not subject to specific
capital requirements or specific restrictions on the payment of dividends or
other capital distributions, federal regulations do prescribe such restrictions
on subsidiary savings institutions as described below. The Association must
notify the OTS 30 days before declaring any dividend to the Company. In
addition, the financial impact of a holding company on its subsidiary
institution is a matter that is evaluated by the OTS and the agency has
authority to order cessation of activities or divestiture of subsidiaries deemed
to pose a threat to the safety and soundness of the institution.

Acquisition of the Holding Company

    Under the Federal Change in Bank Control Act ("CIBCA"), a notice must be
submitted to the OTS if any person (including a company), or group acting in
concert, seeks to acquire 10% or more of the Company's outstanding voting stock,
unless the OTS has found the acquisition will not result in a change of control
of the Company. Under CIBCA, the OTS has 60 days from the filing of a complete
notice to act, taking into consideration certain factors, including the
financial and managerial resources of the acquirer and the anti-trust effects of
the acquisition. Any company that so acquires control would then be subject to
regulation as a savings and loan holding company.

Federal Savings Institution Regulation

    Business Activities. The activities of federal savings institutions are
governed by federal law and regulations. These laws and regulations delineate
the nature and extent of the activities in which federal associations may
engage. In particular, many types of lending authority for federal association,
e.g., commercial, non-residential real property loans and consumer loans, are
limited to a specified percentage of the institution's capital or assets.

    Capital Requirements. The OTS capital regulations require savings
institutions to meet three minimum capital standards: a 1.5% tangible capital
ratio, a 4% leverage ratio (3% for institutions receiving the highest rating on
the CAMELS rating system) and an 8% risk-based capital ratio. In addition, the
prompt corrective action standards discussed below also establish, in effect, a
minimum 2% tangible capital

                                       21
<PAGE>

standard, a 4% leverage ratio (3% for institutions receiving the highest rating
on the CAMELS financial institution rating system), and, together with the risk-
based capital standard itself, a 4% Tier I risk-based capital standard. The OTS
regulations also require that, in meeting the tangible, leverage and risk-based
capital standards, institutions must generally deduct investments in and loans
to subsidiaries engaged in activities not permissible for a national bank.

    The risk-based capital standard for savings institutions requires the
maintenance of Tier I (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of 4% and 8%, respectively.
In determining the amount of risk-weighted assets, all assets, including certain
off-balance sheet assets, are multiplied by a risk-weight factor of 0% to 100%,
assigned by the OTS capital regulation based on the risks believed inherent in
the type of asset. Core (Tier 1) capital is defined as common stockholders'
equity (including retained earnings), certain noncumulative perpetual preferred
stock and related surplus, and minority interests in equity accounts of
consolidated subsidiaries less intangibles other than certain mortgage servicing
rights and credit card relationships. The components of supplementary capital
currently include cumulative preferred stock, long-term perpetual preferred
stock, mandatory convertible securities, subordinated debt and intermediate
preferred stock, the allowance for loan and lease losses limited to a maximum of
1.25% risk-weighted assets and up to 45% of unrealized gains on available-for-
sale equity securities with readily determinable fair values. Overall, the
amount of supplementary capital included as part of total capital cannot exceed
100% of core capital.

    The capital regulations also incorporate an interest rate risk component.
Savings institutions with "above normal" interest rate risk exposure are subject
to a deduction from total capital for purposes of calculating their risk-based
capital requirements. For the present time, the OTS has deferred implementation
of the interest rate risk component deduction, although the OTS may require
individual savings associations with "above normal" interest rate risk to hold
additional capital. At December 31, 2001, the Association met each of its
capital requirements.

    The following table presents the Association's capital position at December
31, 2001.

<TABLE>
<CAPTION>
                                                       Excess                   Capital
                                                                                -------
                     Actual         Required        (Deficiency)        Actual           Required
                     ------         --------        ------------        ------           --------
<S>                 <C>             <C>             <C>                 <C>              <C>
Tangible            $79,235          $12,990          $66,245            9.15%             1.50%
Core                 79,235           34,641           44,594            9.15              4.00
(Leverage)
Risk-based           80,160           27,066           53,094           23.69              8.00
</TABLE>

    Prompt Corrective Regulatory Action. The OTS is required to take certain
supervisory actions against undercapitalized institutions, the severity of which
depends upon the institution's degree of undercapitalization. Generally, a
savings institution that has a ratio of total capital to risk weighted assets of
less than 8%, a ratio of Tier 1 (core) capital to risk-weighted assets of less
than 4% or a ratio of core capital to total assets of less than 4% (3% or less
for institutions with highest examination rating) is considered to be
"undercapitalized." A savings institution that has a total risk-based capital
ratio less than 6%, a Tier 1 capital ratio of less than 3% or a leverage ratio
that is less than 3% is considered to be "significantly undercapitalized" and a
savings institution that has a tangible capital to asset ratio equal to or

                                       22
<PAGE>

less than 2% is deemed be "critically undercapitalized." Subject to a narrow
exception, the OTS is required to appoint a receiver or conservator for an
institution that is "critically undercapitalized." The regulation also provides
that a capital restoration plan must be filed with the OTS within 45 days of the
date a savings institution receives notice that it is "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized." Compliance
with the plan must be guaranteed by any parent holding company. In addition,
numerous mandatory supervisory actions become immediately applicable to an
undercapitalized institution, including, but not limited to, increased
monitoring by regulators and restrictions on growth, capital distributions and
expansion. The OTS could also take any one of a number of discretionary
supervisory actions, including the issuance of a capital directive and the
replacement of senior executive officers and directors.

    Insurance of Deposit Accounts. The Association is a member of the SAIF. The
FDIC maintains a risk-based assessment system by which institutions are assigned
to one of three categories based on their capitalization and one of three
subcategories based on examination ratings and other supervisory information. An
institution's assessment rate depends upon the categories to which it is
assigned. Assessment rates for SAIF member institutions are determined
semiannually by the FDIC and currently range from zero to 27 basis points of
assessable assets for the healthiest to most at risk institutions, respectively.

    In addition to the assessment for deposit insurance, institutions are
required to make payments on bonds issued in the late 1980s by the Financing
Corporation ("FICO") to recapitalize the predecessor to the SAIF. During 2001,
FICO payments for SAIF members approximated 1.9 basis points of assessable
assets.

    The Association's assessment rate for fiscal 2001 was 0.47 basis points and
the premium paid for this period was $104,000. A significant increase in SAIF
insurance premiums would likely have an adverse effect on the operating expenses
and results of operations of the Association. Management cannot predict what
insurance assessment rates will be in the future.

    Insurance of deposits may be terminated by the FDIC upon a finding that the
institution has engaged in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC or the OTS. The
management of the Association does not know of any practice, condition or
violation that might lead to termination of deposit insurance.

    Loans to One Borrower. Federal law provides that savings institutions are
generally subject to the limits on loans to one borrower applicable to national
banks. A savings institution may not make a loan or extend credit to a single or
related group of borrowers in excess of 15% of its unimpaired capital and
surplus. An additional amount may be lent, equal to 10% of unimpaired capital
and surplus, if secured by readily-marketable collateral. At December 31, 2001,
the Association's limit on loans to one borrower was $11.9 million and the
Association's largest aggregate outstanding balance of loans to one borrower was
$597,000.

    QTL Test. The HOLA requires savings institutions to meet a QTL test. Under
the QTL test, a savings association is required to either qualify as a "domestic
building and loan association" under the Internal Revenue Code or to maintain at
least 65% of its "portfolio assets" (total assets less: (i) specified

                                       23
<PAGE>

liquid assets up to 20% of total assets; (ii) intangibles, including goodwill;
and (iii) the value of property used to conduct business) in certain "qualified
thrift investments" (primarily residential mortgages and related investments,
including certain mortgage-backed securities) in at least 9 months out of each
12 month period.

    A savings institution that fails the QTL test is subject to certain
operating restrictions and may be required to convert to a bank charter.  As of
December 31, 2001, the Association maintained 70.5% of its portfolio assets in
qualified thrift investments and, therefore, met the QTL test.  Recent
legislation has expanded the extent to which education loans, credit card loans
and small business loans may be considered "qualified thrift investments."

    Limitation on Capital Distributions.  OTS regulations impose limitations
upon all capital distributions by a savings institution, such as cash dividends,
payments to repurchase its shares and payments to shareholders of another
institution in a cash-out merger.  Under the regulation, an application to and
the prior approval of the OTS is required prior to any capital distribution if
the institution does not meet the criteria for "expedited treatment" of
applications under OTS regulations (e.g., generally, examination ratings in the
two top categories), the total capital distributions for the calendar year
exceed net income for that year plus the amount of retained net income for the
preceding two years, the institution would be undercapitalized following the
distribution or the distribution would otherwise be contrary to a statute,
regulation or agreement with OTS.  If an application is not required, the
institution must still provide prior notice to OTS of the capital distribution.
In the event the Association's capital fell below its regulatory requirements or
the OTS notified it that it was in need of more than normal supervision, the
Association's ability to make capital distributions could be restricted.  In
addition, the OTS could prohibit a proposed capital distribution by any
institution, which would otherwise be permitted by the regulation, if the OTS
determines that such distribution would constitute an unsafe or unsound
practice.

    Liquidity.  The Company is required to maintain liquid assets as a level,
which would be consistent with the safe and sound operation of the Association.
Management of the Association believes that it has met or exceeded these
requirements during the current and prior fiscal years.

    Assessments.  Savings institutions are required to pay assessments to the
OTS to fund the agency's operations.  The general assessments, paid on a semi-
annual basis, are computed upon the savings institution's total assets,
including consolidated subsidiaries, as reported in the Association's latest
quarterly thrift financial report.  The assessments paid by the Association for
the fiscal year ended December 31, 2001 totaled $164,000.

    Transactions with Related Parties.  The Association's authority to engage in
transactions with related parties or "affiliates" (e.g., any company that
controls or is under common control with an institution, including the Company
and its non-savings institution subsidiaries) is limited by federal law.  The
aggregate amount of covered transactions with any individual affiliate is
limited to 10% of the capital and surplus of the savings institution.  The
aggregate amount of covered transactions with all affiliates is limited to 20%
of the savings institution's capital and surplus.  Certain transactions with
affiliates are required to be secured by collateral in an amount and of a type
described in federal law.  The purchase of low quality assets from affiliates is
generally prohibited.  Transactions with affiliates must be on terms and under
circumstances that are at least as favorable to the institution as those
prevailing at the time for

                                       24
<PAGE>

comparable transactions with non-affiliated companies. In addition, savings
institutions are prohibited from lending to any affiliate that is engaged in
activities that are not permissible for bank holding companies and no savings
institution may purchase the securities of any affiliate other than a
subsidiary.

    The Association's authority to extend credit to executive officers,
directors and 10% shareholders ("insiders"), as well as entities such persons
control, is also governed by federal law.  Such loans are required to be made on
terms substantially the same as those offered to unaffiliated individuals and
not involve more than the normal risk of repayment.  Recent legislation created
an exception for loans made pursuant to a benefit or compensation program that
is widely available to all employees of the institution and does not give
preference to insiders over other employees.  The law also limits both the
individual and aggregate amount of loans the Association may make to insiders
based, in part, on the Association's capital position and requires certain board
approval procedures to be followed.

    Enforcement.  The OTS has primary enforcement responsibility over savings
institutions and has the authority to bring actions against the institution and
all institution-affiliated parties, including stockholders, and any attorneys,
appraisers and accountants who knowingly or recklessly participate in wrongful
action likely to have an adverse effect on an insured institution.  Formal
enforcement action may range from the issuance of a capital directive or cease
and desist order to removal of officers and/or directors to institution of
receivership, conservatorship or termination of deposit insurance.  Civil
penalties cover a wide range of violations and can amount to $25,000 per day, or
even $1 million per day in especially egregious cases.  The FDIC has the
authority to recommend to the Director of the OTS enforcement action to be taken
with respect to a particular savings institution.  If action is not taken by the
Director, the FDIC has authority to take such action under certain
circumstances.  Federal law also establishes criminal penalties for certain
violations.

    Standards for Safety and Soundness.  The federal banking agencies have
adopted Interagency Guidelines Prescribing Standards for Safety and Soundness.
The guidelines set forth the safety and soundness standards that the federal
banking agencies use to identify and address problems at insured depository
institutions before capital becomes impaired.  If the OTS determines that an
institution fails to meet any standard prescribed by the guidelines, the OTS may
require the institution to submit an acceptable plan to achieve compliance with
the standard.



Federal Home Loan Bank System

    The Association is a member of the Federal Home Loan Bank System, which
consists of twelve regional Federal Home Loan Banks.  The Federal Home Loan Bank
provides a central credit facility primarily for member institutions.  The
Association, as a member of the Federal Home Loan Bank, is required to acquire
and hold shares of capital stock in that Federal Home Loan Bank in an amount at
least equal to 1.0% of the aggregate principal amount of its unpaid residential
mortgage loans and similar obligations at the beginning of each year, or 1/20 of
its advances (borrowings) from the Federal Home Loan Bank, whichever is greater.
The Association was in compliance with this requirement with an investment in
Federal Home Loan Bank stock at December 31, 2001 of $10.4 million.

                                       25
<PAGE>

    The Federal Home Loan Banks are required to provide funds for the resolution
of insolvent thrifts from the late 1980's and to contribute funds for affordable
housing programs.  These requirements could reduce the amount of dividends that
the Federal Home Loan Banks pay to their members and could also result in the
Federal Home Loan Banks imposing a higher rate of interest on advances to their
members.  If dividends were reduced, or interest on future Federal Home Loan
Bank advances increased, the Association's net interest income would likely also
be reduced.  Recent legislation has changed the structure of the Federal Home
Loan Banks funding obligations for insolvent thrifts, revised the capital
structure of the Federal Home Loan Banks and implemented entirely voluntary
membership for Federal Home Loan Banks.  Management cannot predict the effect
that these changes may have with respect to its Federal Home Loan Bank
membership.

Federal Reserve System

    The Federal Reserve Board regulations require savings institutions to
maintain non-interest earning reserves against their transaction accounts
(primarily NOW and regular checking accounts).  The regulations generally
provide that reserves be maintained against aggregate transaction accounts as
follows:  a 3% reserve ratio is assessed on net transaction accounts over $5.7
million to and including $41.3 million; a 10% reserve ratio is applied above
$41.3 million.  The first $5.7 million of otherwise reservable balances (subject
to adjustments by the Federal Reserve Board) are exempted from the reserve
requirements.  These amounts are adjusted annually.  The Association complies
with the foregoing requirements.

                                       26
<PAGE>

                          FEDERAL AND STATE TAXATION

Federal Taxation

    General.  The Company and the Association report their income on a
consolidated basis and the accrual method of accounting, and are subject to
federal income taxation in the same manner as other corporations with some
exceptions, including particularly the Association's reserve for bad debts
discussed below.  The following discussion of tax matters is intended only as a
summary and does not purport to be a comprehensive description of the tax rules
applicable to the Association or the Company.  The Association has not been
audited by the IRS during the last five years.  For its 2001 taxable year, the
Company is subject to a maximum federal income tax rate of 34%.

    Bad Debt Reserves.  For tax years beginning prior to December 31, 1995,
thrift institutions were allowed to establish a reserve for bad debts and deduct
reasonable annual additions to their bad debt reserves.  Annual additions to bad
debt reserves were calculated using either the experience method or the
percentage of taxable income method.  Federal legislation effective for tax
years beginning after January 1, 1996 eliminated the percentage of taxable
income method for all thrift institutions and prohibited thrifts with assets in
excess of $500 million from using the reserve method of accounting for bad
debts.  First Bell is, therefore, required to use the specific charge-off method
of accounting for bad debts, with loans deducted as they are charged off.  In
addition, thrifts were required to "recapture" (i.e., take into income) the
amounts added to their bad debt reserves for tax years beginning after January
1, 1988.

    Thrift institutions required to change their accounting methods as a result
of federal legislation have been permitted to recapture accumulated bad debt
reserves ratably over a six year period, starting with the tax year beginning
after December 31, 1995, with a two year postponement available provided the
institution met certain residential loan requirements.  First Bell previously
recorded a deferred tax liability equal to the bad debt recapture; as a result,
the recapture rules have not affected net income or income tax expenses.

    Distributions.  Under the 1996 Act, if the Association makes "non-dividend
distributions" to the Company, such distributions will be considered to have
been made from the Association's unrecaptured tax bad debt reserves (including
the balance of its reserves as of December 31, 1987) to the extent thereof, and
then from the Association's supplemental reserve for losses on loans, to the
extent thereof, and an amount based on the amount distributed (but not in excess
of the amount of such reserves) will be included in the Association's income.
Non-dividend distributions include distributions in excess of the Association's
current and accumulated earnings and profits, as calculated for federal income
tax purposes, distributions in redemption of stock, and distributions in partial
or complete liquidation.  Dividends paid out of the Association's current or
accumulated earnings and profits will not be so included in the Association's
income.

    The amount of additional taxable income triggered by a non-dividend is an
amount that, when reduced by the tax attributable to the income, is equal to the
amount of the distribution.  Thus, if the Association makes a non-dividend
distribution to the Company, approximately one and one-half times the amount of
such distribution (but not in excess of the amount of such reserves) would be
includable in income for federal income tax purposes, assuming a 34% federal
corporate income tax rate.  The

                                       27
<PAGE>

Association does not intend to pay dividends that would result in a recapture of
any portion of its bad debt reserves.

    Corporate Alternative Minimum Tax.  The Internal Revenue Code (the "Code")
imposes a tax on alternative minimum taxable income ("AMTI"), which directly and
indirectly taxes certain items as tax preferences (e.g. tax exempt interest
income), at a rate of 20%.  In 2001, and 2000, due to the Company's level of tax
exempt interest income, the Company paid alternative minimum tax of $1.1 million
and $944,000, respectively.  These payments are subsequently treated as minimum
tax credits which have an indefinite carry forward period and can be used to
reduce future regular tax liabilities of the Company.

    Dividends Received Deduction and Other Matters. The Company may exclude from
its income 100% of dividends received from the Association as a member of the
same affiliated group of corporations. The corporate dividends received
deduction is generally 70% in the case of dividends received from unaffiliated
corporations with which the Company and the Association will not file a
consolidated tax return, except that if the Company owns more than 20% of the
stock of a corporation distributing a dividend, 80% of any dividends received
may be deducted.


State and Local Taxation

    The Association is subject to the Mutual Thrift Institutions Tax of the
Commonwealth of Pennsylvania based on the Association's financial net income
determined in accordance with generally accepted accounting principles with
certain adjustments.  The tax rate under the Mutual Thrift Institutions Tax is
11.5%.  Interest on state and federal obligations is excluded from net income.
An allocable portion of net interest expense incurred to carry the obligations
is disallowed as a deduction. The Company is subject to the Capital Stock Tax of
the Commonwealth of Pennsylvania and the Franchise Tax of the state of Delaware.

Personnel

    As of December 31, 2001, the Association had 51 full-time equivalent
employees. The employees are not represented by a collective bargaining unit,
and the Association considers its relationship with its employees to be good.


Item 2.   Properties

    The Company conducts its business by maintaining an office at 300 Delaware
Avenue, Suite 1704, Wilmington, Delaware 19801. The Association conducts its
business through its main office located at 532 Lincoln Avenue, Pittsburgh,
Pennsylvania 15202 and six full-service branch offices, all of which are located
in Allegheny County. Three of the Association's branch offices are leased. Loan
originations are processed at the administrative office. The Association
believes that its current facilities are adequate to meet the present and
immediately foreseeable needs of the Association and the Company.

                                       28
<PAGE>

Item 3.   Legal Proceedings

     Neither the Company nor its subsidiary is involved in any pending legal
proceedings other than routine legal proceedings occurring in the ordinary
course of business, which in the aggregate involve amounts which are believed by
management to be immaterial to the financial condition and results of the
operations of the Association.

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

     None

                                    PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder
          Matters

     Information relating to the market for Registrant's common equity and
related stockholder matters appears under "Shareholder Information" on page 47
in the Registrant's 2001 Annual Report to Stockholders and is incorporated
herein by reference.  Information relating to the dividend restrictions for
Registrant's common stock appears under Note 12 to the "Notes to Consolidated
Financial Statements Years Ended December 31, 2001, 2000 and 1999" on pages 36
and 37 in the Registrant's 2001 Annual Report to Stockholders and is
incorporated herein by reference.

Item 6.   Selected Financial Data

     The above-captioned information appears under "Selected Financial and Other
Data of the Company" in the Registrant's 2001 Annual Report to Stockholders on
pages 1 and 2 is incorporated herein by reference.

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

     The above-captioned information appears under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Registrant's
2001 Annual Report to Stockholders on pages 8 through 21 and is incorporated
herein by reference.



Item 7a.  Quantitative and Qualitative Disclosure About Market Risks

     The above-captioned information appears under the heading "Interest Rate
Sensitivity" in the Registrant's 2001 Annual Report to Stockholders on pages 12
through 13 is incorporated herein by reference.


                                       29
<PAGE>

Item 8.   Financial Statements and Supplementary Data

     The Consolidated Financial Statements of First Bell Bancorp, Inc. and its
subsidiary, together with the report thereon by S.R. Snodgrass, A.C. appears in
the Registrant's 2001 Annual Report to Stockholders on pages 23 through 44 and
are incorporated herein by reference.

Item 9.   Change in and Disagreements with Accountants on Accounting and
        Financial Disclosure

     Prior to fiscal year ended December 31, 2001, First Bell's consolidated
financial statements were audited by Deloitte & Touche LLP.  On August 23, 2001,
First Bell dismissed the former accountant and engaged S.R. Snodgrass A.C. which
continues as the independent auditors of First Bell.  The decision to change
auditors was approved by the Board of Directors on August 20, 2001.

For the fiscal year ended December 31, 2000 and up to the date of the
replacement of First Bell's former accountant, there were no disagreements with
the former accountant on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of the former accountant, would have caused it to
make a reference to the subject matter of the disagreement in connection with
its reports.  The independent auditor's report on the consolidated financial
statements for the fiscal year ended December 31, 2000 did not contain an
adverse opinion or a disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope, or accounting principles.

                                       30
<PAGE>

                                 PART III

Item 10.  Directors and Executive Officers of the Registrant

     The information relating to Directors and Executive Officers of the
Registrant is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on April 29, 2002,
at pages 4 through 5.

Item 11.  Executive Compensation

     The information relating to directors' compensation and executives'
compensation is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on April 29, 2002,
at pages 7 through 12 (excluding the Compensation Committee Report and Stock
Performance Graph).

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The information relating to security ownership of certain beneficial owners
and management is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on April 29, 2002,
at pages 4 through 5.

Item 13.  Certain Relationships and Related Transactions

     The information relating to certain relationships and related transactions
is incorporated herein by reference to the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held on April 29, 2002, at page 12.

                                 PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)  The following documents are filed as a part of this report:

(1)  Consolidated Financial Statements of the Company are incorporated by
     reference to the following indicated pages of the 2001 Annual Report to
     Stockholders.

                                                                          PAGE

  Report Of Independent Auditors for the year ended December 31, 2001....  23

  Consolidated Balance Sheet for the
    Years Ended December 31, 2001 and 2000...............................  24

                                       31
<PAGE>

     Consolidated Statement of Income for the
       Years Ended December 31, 2001, 2000 and 1999...................   25

     Consolidated Statement of Comprehensive Income(Loss) for the
       Year Ended December 31, 2001, 2000 and 1999....................   26

     Consolidated Statement of Changes in Stockholders' Equity
       for the Years Ended December 31, 2001, 2000 and 1999...........   27

     Consolidated Statement of Cash Flows for the
       Years Ended December 31, 2001, 2000 and 1999...................   28

     Notes to Consolidated Financial Statements for the
       Years Ended December 31, 2001, 2000 and 1999...................   29-44

     The remaining information appearing in the 2001 Annual Report to
Stockholders is not deemed to be filed as part of this report, except as
expressly provided herein.

(2)  Report of Independent Auditors for the years ended December 31, 2000 and
     1999 is incorporated by reference to Exhibit 23c.

(3)  All schedules are omitted because they are not required or applicable, or
     the required information is shown in the consolidated financial statements
     or the notes thereto.

(4)  Exhibits

     (a)  The following exhibits are filed as part of this report.
          3.1  Certificate of Incorporation of First Bell Bancorp, Inc.*
          3.2  Bylaws of First Bell Bancorp, Inc.*
          4.0  Stock Certificate of First Bell Bancorp, Inc.*
          4.2  Shareholder Rights Plan**
          10.1 First Bell Bancorp, Inc. 1996 Master Stock Option Plan***
          10.2 Bell Federal Savings and Loan Association of Bellevue Master
               Stock Compensation Plan***
          10.5 Form of Bell Federal Savings and Loan Association of Bellevue
               Supplemental Executive Retirement Plan*
          10.6 Employment Agreement between First Bell Bancorp, Inc. and certain
               executive officers, including Messrs. Eckert and Hinds ****
          10.7 Employment Agreement between Bell Federal Savings and Loan
               Association of Bellevue and certain executive officers, including
               Messrs. Eckert and Hinds ****
          11.0 Computation of earnings per share (incorporated in 2001 Annual
               Report)
          13.0 Portions of the 2001 Annual Report to Stockholders (filed
               herewith)
          21.0 The wholly owned subsidiary of the Company is Bell Federal
               Savings and Loan Association of Bellevue, Pittsburgh,
               Pennsylvania
          21.1 The wholly owned subsidiary of the Association is 1891
               Associates, Inc., a Delaware Holding Company
          23a  Consent of Independent Accountant (S.R. Snodgrass A.C.
          23b  Consent of Independent Accountant (Deloitte & Touche LLP)
          23c  Report of Independent Auditors (for the years ended December 31,
               2000 and 1999)

                                       32
<PAGE>

          99.0 Proxy Statement for 2002 Annual Meeting of Stockholders to be
               held on April 29, 2002 and previously filed on March 27, 2002 is
               herein incorporated by reference
________________________
*    Incorporated herein by reference into this document from the Exhibits to
     the Form S-1, Registration Statement, originally filed on November 9, 1994,
     as amended and declared effective on May 9, 1995, Registration No. 33-
     86160.
**   Incorporated herein by reference into this document from the Exhibits to
     the Form 8-K originally filed on November 20, 1998.
***  Incorporated herein by reference into this document from the Exhibits to
     the Form S-1 Registration Statement originally filed on November 9, 1994 as
     amended and declared effective on May 9, 1999, Registration No. 33-86160.
**** Incorporated herein by reference into this document from the Exhibits to
     the December 31, 1998 Form 10-K originally filed on March 30, 1999

     (b)     Reports on Form 8-K
             None.

                                       33
<PAGE>

                                 SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

Date:   March 29, 2002                 By:  /s/ Albert H. Eckert II
      -----------------------               -----------------------
                                       Albert H. Eckert II,
                                       President, Chief Executive Officer
                                       and Director

Date:   March 29, 2002                 By: /s/ Jeffrey M. Hinds
      -----------------------              --------------------
                                       Jeffrey M. Hinds
                                       Executive Vice President, Chief Financial
                                       Officer and Director

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.

/s/ Albert H. Eckert, II        President, Chief Executive    March 29, 2002
----------------------------                                  --------------
Albert H. Eckert, II            Officer and Director

/s/ Jeffrey M. Hinds            Executive Vice President,     March 29, 2002
-----------------------------                                 --------------
Jeffrey M. Hinds                Chief Financial Officer and
                                Director

/s/ Thomas J. Jackson, Jr.      Director                      March 29, 2002
-----------------------------                                 --------------
Thomas J. Jackson, Jr.

/s/ Robert C. Baierl            Secretary and Director        March 29, 2002
-----------------------------                                 --------------
Robert C. Baierl

/s/ William S. McMinn           Vice President and            March 29, 2002
-----------------------------                                 --------------
William S. McMinn               Director

                                       34
<PAGE>

/s/ Peter E. Reinert                Director         March 29, 2002
----------------------------                         --------------
Peter E. Reinert

/s/ Jack W. Schweiger               Director         March 29, 2002
----------------------------                         --------------
Jack W. Schweiger

/s/ Theodore R. Dixon               Director         March 29, 2002
----------------------------                         --------------
Theodore R. Dixon

                                       35