UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A




               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


                    For the Quarter Ended September 30, 2000



                            FIDELITY FEDERAL BANCORP
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)



          Indiana                    0-22880             35-1894432
----------------------------        ----------        -------------------
(State of other jurisdiction        Commission          (IRS Employer
    of Incorporation of              File No.         Identification No.)
        Organization)


                       700 S. Green River Road, Suite 2000
                            Evansville, Indiana 47715
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (812) 469-2100
               --------------------------------------------------
               Registrant's telephone number, including area code



Indicate by checkmark whether 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 twelve months and (2) has been subject to such filing requirements
for the past 90 days.

                                    YES     NO  X
                                        ---    ---

As of November 1, 2000, there were 4,607,659 shares of the Registrant's common
stock, $1 stated value, issued and outstanding.

Exhibit Index is on page 29.

<PAGE>

                            FIDELITY FEDERAL BANCORP
                                AND SUBSIDIARIES

                                      Index



                                                                          Page
PART I - FINANCIAL INFORMATION

  ITEM 1--Financial Statements:

    Condensed Consolidated Balance Sheet.................................     3

    Condensed Consolidated Statement of Income...........................     4

    Condensed Consolidated Statement of Stockholders' Equity.............     5

    Condensed Consolidated Statement of Cash Flows.......................     6

    Notes to Condensed Consolidated Financial Statements.................     7

  ITEM 2--Management's Discussion and Analysis of Results of Operations
          and Financial Condition........................................ 11-25

  ITEM 3--Quantitative and Qualitative Disclosures about Market Risk..... 26-27

PART II - OTHER INFORMATION..............................................    28

SIGNATURES...............................................................    29

EXHIBIT INDEX............................................................    30


                                       2
<PAGE>

Item 1 - Financial Statements

                         Part I - Financial Information

                            Fidelity Federal Bancorp
                                and Subsidiaries
                      Condensed Consolidated Balance Sheet
                      (In thousands except for share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             September 30,  December 31,
                                                                  2000         1999
<S>                                                            <C>          <C>
Assets
Cash and due from banks                                        $   1,600    $   8,003
Interest-bearing demand deposits                                  16,713       22,911
                                                               ---------    ---------
     Cash and cash equivalents                                    18,313       30,914
Investment securities available for sale                          21,558       24,305
Loans, net of allowance for loan losses of $2,051 and $2,021     108,163       96,919
Premises and equipment                                             4,998        5,727
Federal Home Loan Bank of Indianapolis stock                       2,620        3,920
Deferred income tax receivable                                     7,107        5,372
Interest receivable and other assets                               5,595        4,300
                                                               ---------    ---------
     Total assets                                              $ 168,354    $ 171,457
                                                               =========    =========

Liabilities
Deposits
     Non-interest bearing                                      $   3,808    $   6,593
     Interest-bearing                                            123,119      128,423
                                                               ---------    ---------
        Total deposits                                           126,927      135,016
Long-term debt                                                    24,690       23,504
Advances by borrowers for taxes and insurance                        548          409
Valuation allowance for letters of credit                          5,222        5,787
Other liabilities                                                  2,426        1,314
                                                               ---------    ---------
     Total liabilities                                           159,813      166,030

Stockholders' Equity
Preferred stock, no par or stated value
     Authorized and unissued - 5,000,000 shares
Common stock, $1 stated value
     Authorized - 5,000,000 shares
     Issued and Outstanding - 4,607,659 and 3,147,662 shares       4,608        3,147
Additional paid in capital                                        13,673       10,869
Stock warrants                                                        11           11
Accumulated deficit                                               (9,051)      (7,825)
Accumulated other comprehensive loss                                (700)        (775)
                                                               ---------    ---------
        Total stockholders' equity                                 8,541        5,427
                                                               ---------    ---------

Total liabilities and stockholders' equity                     $ 168,354    $ 171,457
                                                               =========    =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                            Fidelity Federal Bancorp
                                and Subsidiaries
                   Condensed Consolidated Statement of Income
                    (In thousands, except for per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               Three Months Ended             Nine Months Ended
                                                                  September 30,                  September 30,
                                                               2000           1999            2000          1999
                                                               ----           ----            ----          ----
<S>                                                         <C>            <C>            <C>            <C>
Interest Income
     Loans receivable                                       $     2,385    $     2,300    $     6,987    $     7,466
     Investment securities - taxable                                373            434          1,158          1,118
     Deposits with financial institutions                           179            177            633            659
     Other dividend income                                           61             79            217            249
                                                            -----------    -----------    -----------    -----------
        Total interest income                                     2,998          2,990          8,995          9,492
                                                            -----------    -----------    -----------    -----------

Interest Expense
     Deposits                                                     1,609          1,507          4,726          4,982
     Long-term debt                                                 523            578          1,499          1,659
                                                            -----------    -----------    -----------    -----------
        Total interest expense                                    2,132          2,085          6,225          6,641
                                                            -----------    -----------    -----------    -----------

Net interest income                                                 866            905          2,770          2,851
     Provision (adjustment) for loan losses                         375             75            550           (213)
                                                            -----------    -----------    -----------    -----------
Net interest income after provision for loan losses                 491            830          2,220          3,064
                                                            -----------    -----------    -----------    -----------

Non-interest income
     Fee income-apartment management                                  0             43             88            143
     Service charges on deposit accounts                             79             98            219            302
     Net gains on loan sales                                         18             70             30            190
     Letter of credit fees                                          134            146            400            437
     Real estate investment banking fees                             35              4             66             25
     Agent fee income                                                86              0            133              7
     Title fee income                                                 5             10             16             33
     Servicing fees on loans sold                                    27             28             82             80
     Release fees on multifamily loans                               10              6             22             36
     Other income                                                    50             83            199            265
                                                            -----------    -----------    -----------    -----------
        Total non-interest income                                   444            488          1,255          1,518
                                                            -----------    -----------    -----------    -----------

Non-interest expense
     Salaries and employee benefits                               1,205            858          2,749          2,521
     Net occupancy expense                                          107            100            291            285
     Equipment expense                                               65             75            197            224
     Data processing expense                                         86            113            252            324
     Deposit insurance expense                                       60             81            185            218
     Legal and professional fees                                    261             90            492            292
     Advertising                                                     64             43            148            143
     Letter of credit valuation provision                                                                     (1,215)
     Valuation allowance - affordable housing investments            14            123             55            627
     Other expense                                                  763           (181)         1,607          1,132
                                                            -----------    -----------    -----------    -----------
        Total non-interest expense                                2,625          1,302          5,976          4,551
                                                            -----------    -----------    -----------    -----------

Income (loss) before income tax                                  (1,690)            16         (2,501)            31
     Income tax benefit                                            (765)           (88)        (1,275)          (261)
                                                            -----------    -----------    -----------    -----------
Net Income (loss)                                           $      (925)   $       104    $    (1,226)   $       292
                                                            ===========    ===========    ===========    ===========

Per share:
     Basic earnings (loss) per share                        $     (0.20)   $      0.03    $     (0.32)   $      0.09
     Diluted earnings (loss) per share                            (0.20)          0.03          (0.32)          0.09
     Average common and common equivalent
        shares outstanding                                    4,607,659      3,147,662      3,872,332      3,147,662
</TABLE>

See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                            Fidelity Federal Bancorp
                                and Subsidiaries

            Condensed Consolidated Statement of Stockholders' Equity
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Nine Months Ended
                                                  September 30
                                                 2000       1999
                                                 ----       ----
<S>                                            <C>        <C>
Beginning Balances                             $ 5,427    $ 8,036
Comprehensive income:
     Net income (loss)                          (1,226)       292
     Other comprehensive income net of tax--
        Unrealized gain (loss) on securities        74       (545)
                                               -------    -------
        Comprehensive income                    (1,152)      (253)
     Issuance of stock                           4,266
                                                          -------

Balances, September 30                         $ 8,541    $ 7,783
                                               =======    =======
</TABLE>

See notes to condensed consolidated financial statements.


                                       5
<PAGE>

                            Fidelity Federal Bancorp
                                and Subsidiaries
                 Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      Nine months ended
                                                                        September 30
                                                                      2000        1999
                                                                    --------    --------
<S>                                                                 <C>         <C>
Operating Activities
Net cash provided (used) by operating activities                    $ (1,253)   $    286

Investing Activities
     Purchases of securities available for sale                                  (17,196)
     Proceeds from maturities of securities available for sale         2,824       3,744
     Net change in loans                                             (11,764)     26,120
     Redemption of FHLB stock                                          1,300
     Purchases of premises and equipment                                 (48)       (363)
     Proceeds from sale of premises and equipment                        105           7
                                                                    --------    --------
Net cash provided (used) by investing activities                      (7,583)     12,312

Financing Activities
     Net change in:
        Noninterest-bearing, interest-bearing demand and
          savings deposits                                             2,883      (2,075)
        Certificates of deposit                                      (10,972)    (25,530)
     Proceeds of long-term debt                                        2,000       5,000
     Repayment of long-term debt                                        (814)     (5,828)
     Issuance of stock                                                 3,000
     Net change in advances by borrowers for taxes and insurance         138         168
                                                                    --------    --------
Net cash used by financing activities                                 (3,765)    (28,265)

Net change in Cash and Cash Equivalents                              (12,601)    (15,667)
Cash and Cash Equivalents, beginning of period                        30,914      29,960
                                                                    --------    --------
Cash and Cash Equivalents, end of period                            $ 18,313    $ 14,293
                                                                    ========    ========

Additional Cash Flows and Supplementary information
     Interest paid                                                  $  5,324    $  6,007
     Income tax paid                                                     727
     Stock issued in exchange for partnership operating cash flow
       deficit  guarantees and management services                     1,266
</TABLE>

See notes to condensed consolidated financial statements.

                                       6
<PAGE>

                            Fidelity Federal Bancorp
                                and Subsidiaries
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

o          Accounting Policies

The significant accounting policies followed by Fidelity Federal Bancorp
("Fidelity") and its wholly owned subsidiaries for interim financial reporting
are consistent with the accounting policies followed for annual financial
reporting. All adjustments which are necessary for a fair presentation of the
results for the periods reported, consist only of normal recurring adjustments,
and have been included in the accompanying unaudited condensed consolidated
financial statements. The results of operations for the nine months ended
September 30, 2000 are not necessarily indicative of those expected for the
remainder of the year. The condensed consolidated balance sheet at December 31,
1999 has been derived from the audited financial statements.

o          Stockholders' Equity

On January 21, 2000 Fidelity signed a definitive stock purchase agreement as
amended and restated on April 6, 2000, to sell 1,460,000 shares of its common
stock to Pedcor Holdings, a limited liability company ("Pedcor"). One of the
principals of Pedcor, Bruce A. Cordingley, was a director of Fidelity until his
resignation as a director in December 1999.

On May 19, 2000, the shareholders ratified the approval of the stock purchase
agreement. The consideration paid by Pedcor included $3,000,000 in cash ($3.00
per share), a five-year guarantee to United in an aggregate amount up to
$1,500,000 against any negative cash flow from operations of certain specified
affordable housing properties in United's portfolio and an agreement to provide
management and certain accounting services for the specified properties for ten
years at no fee to United or Fidelity. In addition, three Pedcor principals
(including Cordingley) were named to Fidelity's board of directors.

In connection with Fidelity's first debt and equity rights offering completed on
April 30, 1994, Fidelity has reserved 415,500 shares of its common stock for
issuance upon exercise of 1,500 outstanding warrants. Each warrant represents
the right to purchase 277 shares of common stock. The warrants were valued at
$100 per warrant, carry an exercise price of $6.22 per share, and expire on
April 30, 2004. At September 30, 2000, a total of 397,218 shares originally
reserved had been issued and 18,282 remained reserved and unissued.

In connection with Fidelity's second debt and equity rights offering completed
January 31, 1995, Fidelity has reserved 346,500 shares of its common stock for
issuance upon exercise of 1,500 outstanding warrants. Each warrant represents
the right to purchase 231 shares of common stock. The warrants were valued at
$100 per warrant, carry an exercise price of $8.93 per share, and expire on
January 31, 2005. At September 30, 2000, a total of 337,029 of the shares
originally reserved had been issued and 9,471 remained reserved and unissued.

o          Cash Dividend

Fidelity's dividend policy is to pay cash or distribute stock dividends when its
Board of Directors deems it to be appropriate, taking into account Fidelity's
financial condition and results of operations, economic and market conditions,
industry standards, and other factors, including regulatory capital requirements
of its savings bank subsidiary. Fidelity is not subject to any regulatory
restrictions on payments to its stockholders. Fidelity's primary source of
income is dividends from United Fidelity Bank ("United").

United has entered into a Supervisory Agreement ("Agreement") with the Office of
Thrift Supervision ("OTS"). One of the provisions of the Agreement restricts the
payments of dividends from United to Fidelity without prior

                                       7
<PAGE>

written OTS approval. The OTS, in 1999, permitted the payment of dividends to
assist Fidelity in meeting interest payments on its outstanding debt; however,
there can be no assurance that this approval will be granted going forward if it
continues to be necessary. Fidelity is uncertain when it will pay dividends in
the future and the amount of such dividends, if any.

o          Company Subsidiaries

United, Village Affordable Housing Corporation and Village Securities
Corporation are three subsidiaries of Fidelity. United is a federally chartered
savings bank, and is regulated by the OTS. Village Affordable Housing
Corporation was formed during the third quarter of fiscal 1998 for the purpose
of owning interests in real estate housing, and is currently inactive. Village
Securities Corporation is also currently inactive, and is in the process of
being dissolved.

United's subsidiaries, Village Housing Corporation and Village Management
Corporation (the "Affordable Housing Group"), and Village Capital Corporation
have been involved in various aspects of financing, owning, developing, and
managing affordable housing projects. Currently, they are involved only in the
business of owning affordable housing properties. As of May 19, 2000, a
subsidiary of Pedcor Holdings, LLC, started providing management and certain
accounting services for the properties previously managed by Village Management
Corporation. Village Management completed this transition by the end of June
2000 and is currently inactive. Village Capital has not provided any new banking
services for the past two years, but records fee income on transactions
previously completed. Another subsidiary of United, Village Insurance
Corporation, receives fee income for selling credit life and accident health
insurance sales.

o          Accounting Pronouncements

The Financial Accounting Standards Board has issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, which provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. The provisions of this statement were to
become effective for fiscal years beginning after June 15, 1999. The effective
date of the statement has been delayed by Statement No. 137 to fiscal years
beginning after June 15, 2000. Fidelity does not expect the statement to have a
material impact on Fidelity's financial condition or results of operations and
plans on adopting it on January 1, 2001.

o          Other Restrictions

United entered into a Supervisory Agreement with the OTS on February 3, 1999
which is in effect until terminated, modified or suspended by the OTS.

Under the terms of the Agreement, United developed and submitted to the OTS for
approval a strategic plan which includes, at a minimum, capital targets;
specific strategies; the completion of quarterly projections for a three-year
period; concentration limits for all assets; a plan for reducing United's
concentrations of high risk assets; review of infrastructure, staffing and
expertise with respect to each area of United's operations; and capital
planning.

The agreement indicated that United must, among other things, take other
specified actions within specified time frames. These actions include: the
development of and adherence to a written plan for the reduction of classified
and criticized assets to specified levels; maintenance of sufficient allowances
for loan and lease losses; quarterly reporting to the OTS relating to classified
assets and workout plans; restriction of its growth in total assets without
prior OTS approval; limiting growth of its consumer loan portfolio to an amount
not in excess of 30 percent of its total assets; development of a written plan
to divest all real estate held for development; adoption of policies and
procedures designed to avoid potential conflicts of interest; development of
policies and procedures to

                                       8
<PAGE>

increase liquidity; adoption of a policy with respect to its mortgage brokerage
activity, which would address its operation and methods for risk management;
development of a policy to administer the general partnerships held by Village
Housing Corporation; and maintenance of fully staffed and functioning internal
audit and independent loan review processes.

United is also prohibited from taking certain actions without prior approval,
including but not limited to: investing in, purchasing, or committing to make or
purchase any additional commercial loans or commercial real estate loans;
requesting permission from the OTS to engage in additional commercial loan
activity until United has hired an experienced loan staff; refinancing or
extending classified or criticized commercial loans without the prior approval
of the OTS; engaging in "sub prime" consumer lending activities; making capital
distributions, including dividends to Fidelity; making any additional equity
investments; developing any real estate without specific approval of the OTS;
acquiring any additional real estate for future development; selling any asset
to an affiliated party without prior written approval of the OTS; engaging in
any new activities not included in the strategic plan; and, refinancing or
extending any non-classified or criticized commercial loan if additional funds
are extended.

United is also required to obtain OTS approval prior to adding or replacing any
director or senior executive officer. United is also prohibited, without prior
OTS approval, from entering into any contract with any executive officer or
director which would require a "golden parachute" payment and from increasing
the executive benefit package in an amount in excess of the annual cost of
living. United is required to develop a plan to reduce employee turnover, build
an experienced staff, and provide for management succession.

In conjunction with the recent OTS approval of United's business plan,
management of United has taken or is refraining from taking, as applicable, the
actions requested by the OTS and at September 30, 2000, was in compliance with
the conditions of its Supervisory Agreement.


o          Segment Information

Fidelity operates principally in two industries, banking and real estate
activities. Through United, Fidelity offers traditional banking products, such
as checking, savings and certificates of deposit, as well as mortgage,
commercial and consumer loans. Through the Affordable Housing Group, Fidelity
was previously involved in various aspects of developing, building, renting and
managing affordable housing units. On May 19, 2000, a stock purchase agreement
was approved by the shareholders, which calls for Pedcor to provide management
services to the affordable housing properties at no fee to the properties or
Fidelity.

The Affordable Housing Group's remaining activities consist of holding a general
partner interest in various properties and recognizing income or loss under the
equity method of accounting.

Banking revenue consists primarily of interest and fee income, while the real
estate activities income or loss is generated through the percentage of
ownership in various partnerships. All revenue is earned in the United States.

Operating profit is total revenue less operating expenses. In computing
operating profit, income taxes have been deducted.

                                       9
<PAGE>

Identified assets are principally those used in each segment and are all held in
the United States. Real estate activities conducted by Fidelity are not asset
intensive.

<TABLE>
<CAPTION>
Three months ended                                        Real Estate
September 30, 2000                           Banking      Activities      Eliminations        Total
----------------------------------------------------------------------------------------------------------
<S>                                          <C>            <C>             <C>              <C>
Interest income                              $2,998         $    2          $    (2)         $  2,998
Other income                                    428             16                                444
Interest expense                              2,132              2               (2)            2,132
Other expense                                 2,461            164                              2,625
Provision (adjustment) for loan losses          (42)           417                                375
Income (loss) before tax                     (1,125)          (565)                            (1,690)
Income tax expense (benefit)                   (654)          (111)                              (765)
Total assets                                169,005          2,933           (3,584)          168,354
Capital expenditures                             25                                                25
Depreciation and amortization                    85              2                                 87

Three months ended                                       Real Estate
September 30, 1999                           Banking     Activities       Eliminations        Total
----------------------------------------------------------------------------------------------------------

Interest income                              $2,990       $      2          $    (2)         $  2,990
Other income                                    406             99              (17)              488
Interest expense                              2,085              2               (2)            2,085
Other expense                                 1,083            236              (17)            1,302
Provision for loan losses                        75                                                75
Income (loss) before tax                        153           (137)                                16
Income tax expense (benefit)                     (9)           (79)                -              (88)
Total assets                                165,341          2,915           (3,504)          164,752
Capital expenditures                            167                               -               167
Depreciation and amortization                    96              2                -                98

Nine months ended                                          Real Estate
September 30, 2000                             Banking     Activities     Eliminations        Total
----------------------------------------------------------------------------------------------------------

Interest income                              $8,995       $      6          $    (6)         $  8,995
Other income                                  1,125            147              (17)            1,255
Interest expense                              6,225              6               (6)            6,225
Other expense                                 5,577            416              (17)            5,976
Provision for loan losses                       550                                               550
Income (loss) before tax                     (2,232)          (269)                            (2,501)
Income tax expense (benefit)                 (1,095)          (180)                            (1,275)
Total assets                                169,005          2,933           (3,584)          168,354
Capital expenditures                             48                                                48
Depreciation and amortization                   262              6                                268

Nine months ended                                          Real Estate
September 30, 1999                             Banking     Activities     Eliminations        Total
----------------------------------------------------------------------------------------------------------

Interest income                              $9,492        $     5           $   (5)           $9,492
Other income                                  1,299            256              (37)            1,518
Interest expense                              6,633             13               (5)            6,641
Other expense                                 3,663            925              (37)            4,551
Provision (adjustment) for loan losses         (530)           317                -              (213)
Income (loss) before tax                      1,025           (994)               -                31
Income tax expense (benefit)                    208           (469)               -              (261)
Total assets                                165,341          2,915           (3,504)          164,752
Capital expenditures                            360              3                -               363
Depreciation and amortization                   290              8                -               298
</TABLE>

                                       10
<PAGE>

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

Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as Fidelity "believes",
"anticipates", "expects", "estimates" or words of similar import. Similarly,
statements that describe Fidelity's future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties which are described in close proximity to such
statements and which could cause actual results to differ materially from those
anticipated as of the date of this report. Shareholders, potential investors and
other readers are urged to consider these factors in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included herein are
only made as of the date of this report and Fidelity undertakes no obligation to
publicly update such forward-looking statements to reflect subsequent events or
circumstances.

o          Results of Operations

The net loss for the three months ended September 30, 2000 was $925,000,
compared to net income of $104,000 for the same period last year. Basic and
diluted net loss per share was $.20 per share for the three months ended
September 30, 2000, compared to net income of $0.03 per share in 1999. The net
loss for the nine months ended September 30, 2000 was $1,226,000 compared to net
income of $292,000 for the same period last year. Basic and diluted net loss per
share was $0.32 per share for the nine months ended September 30, 2000, compared
to net income of $0.09 per share in 1999. Interest income decreased $497,000
from the prior year primarily due to payoffs in higher yielding multifamily and
commercial real estate loans, and a reduction in residential mortgage loans, due
to refinancing activity. An increase in consumer loan activity helped offset a
portion of the decrease in interest income. Consumer loan interest income
increased $528,000 for the nine months ended September 30, 2000. Interest
expense decreased approximately $416,000 due to the maturity of higher interest
bearing brokered deposits that were partially replaced with retail deposits. As
a result of these maturities and payoffs, Fidelity's assets have decreased $3.1
million from December 31, 1999 to $168.4 million at September 30, 2000.
Non-interest income for the nine months ended September 30, 2000, decreased
$263,000 from the nine months ended September 30, 1999 primarily due to a
decrease in mortgage loan origination volume, management fees and service
charges collected on deposit accounts. Non-interest expense increased $1.4
million to $6.0 million due primarily to the prior year's letter of credit
valuation adjustment of $1.2 million, a decrease in the valuation allowance for
affordable housing investments of $572,000 and an increase in other operating
expense of $782,000. The non-interest expense section of this document provides
further details regarding the increase in non-interest expense.

Net Interest Income
Net interest income, Fidelity's largest component of income, represents the
difference between interest and fees earned on loans, investments and other
interest-earning assets, and interest paid on interest-bearing liabilities. It
also measures how effectively management has balanced and allocated Fidelity's
interest rate-sensitive assets and liabilities. For the quarter ended September
30, 2000 net interest income decreased $39,000 from the quarter ended September
30, 1999. The net interest margin increased during the nine month period to
2.51% from 2.30% a year ago. Despite the $18.4 million dollar decrease in
average earning assets for the nine months ended September 30, 2000, net
interest income decreased only $81,000 to $2.8 million for the nine months ended
September 30, 2000. Fidelity's reduction in average earning assets was composed
of reductions in fixed rate 1-4 family mortgage loans, multifamily loans and
commercial real estate loans. Average multifamily and commercial real estate
loans decreased $15.7 million due to continued workout efforts, resulting in a
decrease of interest income of $848,000 from the prior year. These decreases
were partially offset by a $6.8 million increase in average consumer loans,
resulting in an increase of interest income of $528,000. Certificates of deposit
and borrowings partially offset this reduction in assets with a decrease of $6.4
million in certificates and $1.7 million in borrowings.

                                       11
<PAGE>

This resulted in decreased interest expense of $162,000 and $160,000,
respectively. Interest income for the nine months ended September 30, 2000 was
$9.0 million compared to $9.5 million for the nine months ended September 30,
1999, a decrease of $500,000 or about 5.3%. Interest expense for the nine months
ended September 30, 2000 was $6.2 million compared to $6.6 million for the nine
months ended September 30, 1999, a decrease of $400,000 or 6.1%. During the
current year United's cost to retain or replace scheduled certificate of deposit
maturities has increased due to the rising interest rate environment. The
average rate on total deposits has increased 21 basis points since December 31,
1999. The decrease in commercial and multifamily loans is expected to continue
during the time that United operates under the Supervisory Agreement. Please
refer to the footnote "Other Restrictions" in the Notes to Consolidated
Financial Statements for further details.

Despite management's efforts, the net interest margin is expected to be
relatively constant or decline during the term of the Supervisory Agreement
between United and the OTS, due to certain lending restrictions. The increase in
the net interest margin during the nine months ended September 30, 2000 came
despite the Supervisory Agreement between United and the OTS, and the resulting
lending restrictions, and was primarily due to consumer lending activity. There
can be no assurance that the net interest margin can continue to increase at the
same rate.

Provision for Loan Losses and Letter of Credit Reserves

Fidelity makes provisions for loan losses in amounts estimated to be sufficient
to maintain the allowance for loan losses at a level considered necessary by
management to absorb losses in the loan portfolios. The provision for loan
losses for the nine months ending September 30, 2000 was $550,000 compared to a
adjustment of $213,000 in the prior year, an increase of $763,000. During the
nine months ended September 30, 1999 Fidelity reduced its allowance for loan
losses and letters of credit valuation reserve due to pay-offs on large,
impaired loans that Fidelity had previously provided reserves for. Increases in
the current quarter and year-to-date provisions for loan losses were primarily
due to losses on consumer loans originated prior to January 1999, and an
additional $200,000 provision for loans to the affordable housing limited
partnerships. The additional provision on the partnership loans is due to
routine maintenance on Fidelity's affordable housing portfolio that had been
deferred by the previous property manager, Village Management Corporation, a
subsidiary of Fidelity. Since these items were deferred by the previous property
manager, they are not eligible for the cash deficit guarantees by Pedcor
according to the Stock Purchase Agreement. Management feels that these types of
items have been identified and adequately reserved for at September 30, 2000.
The ratio of allowance for loan losses to non performing loans was 201.7% at
September 30, 2000 compared to 180.0% at December 31, 1999.

Specific reserves are assigned to certain credits. The reserves are determined
by management's evaluation of those credits. The results of internal loan
reviews, OTS evaluations and recent events assist Fidelity in making that
evaluation. The independent support for the allowance for loan losses and
letters of credit valuation reserve includes documentation that supports the
amount of recorded reserves for these credits.

General reserves for loans and letters of credit not specifically reserved are
also determined. Fidelity computes general reserves for the commercial,
commercial mortgage, residential mortgage, consumer and credit card loan
portfolios by utilizing historical information and information currently
available about the loans within those portfolios that provides information as
to the likelihood of loss. The potential effect of current economic conditions
is also considered with respect to establishing general reserve amounts.

Non-interest income. Non-interest income for the quarter ended September 30,
2000, was $444,000 compared to $488,000 for the same period in 1999, a decrease
of $44,000. Non-interest income for the nine months ended September 30, 2000,
was $1,255,000 compared to $1,518,000 for the same period in 1999, a decrease of
$263,000.

                                       12
<PAGE>

The following table summarizes non-interest income for the nine months ending
September 30, 2000 and 1999:
-----------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
                                                            Nine Months Ended
                                                              September 30,
                                                                                   Increase
                                                             2000       1999      (Decrease)
                                                             ----       ----      ----------
<S>                                                       <C>          <C>         <C>
Fee income-apartment management                             $   88    $   143        $(55)
Service charges on deposit accounts                            219        302         (83)
Gain on sale of real estate loans                               30        190        (160)
Letter of credit fees                                          400        437         (37)
Servicing fees on loans sold                                    82         80           2
Release fees on multifamily loans                               22         36         (14)
Real estate investment banking and reborrowing fees             78         81          (3)
Agent fee income                                               133          7         126
Title fee income                                                16         33         (17)
Rate cap fee income                                             12         31         (19)
Other                                                          175        178          (3)
                                                          --------     ------      -------
  Total non-interest income                               $  1,255     $1,518      $ (263)
                                                          ========     ======      =======
</TABLE>

Fidelity's level of activity in Section 42 real estate activities has continued
to decrease. Fidelity has recorded no Section 42 real estate development fees
over the past three years. Fee income from management activities for the nine
months ended September 30, 2000 decreased approximately $55,000 due to a
reduction in the rate charged for apartment management during the first five
months of the year, and the discontinuance of management activities as of June
1, 2000. The stock purchase agreement approved by the shareholders on May 19,
2000 calls for Pedcor to provide management services to the affordable housing
property at no fee to the property or Fidelity. Therefore, no management fees
will be collected in the future by Fidelity's subsidiary, Village Management
Corporation and expenses will also no longer be incurred to manage these
properties. Service charges on deposit accounts decreased $83,000 for the nine
months ended September 30, 2000, compared to the prior fiscal year due to a
decline in checking accounts. Gains on sale of real estate loans decreased
$160,000 to $30,000 during the nine months ending September 30, 2000 due to a
decrease in mortgage loan sales. Letter of credit fees decreased $37,000 from
the prior year due to a decrease in outstanding letters that are generating
fees. Agent fee income increased $126,000 over the prior year due to increased
activity in the consumer indirect lending area.

Non-Interest Expense
Non-interest expense increased $1.3 million for the three months ended September
30, 2000, compared to the three months ended September 30, 1999. Non-interest
expense increased $1.4 million for the nine months ended September 30, 2000,
compared to the nine months ended September 30, 1999.

                                       13
<PAGE>



The following table summarizes non-interest expense for the nine months ending
September 30, 2000 and 1999:
------------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
                                           Nine Months Ended
                                             September 30
                                        -------------------------------------
                                                                   Increase
                                           2000         1999      (Decrease)
                                           ----         ----      ----------
<S>                                       <C>          <C>         <C>
Salaries and employee benefits            $2,749       $2,521      $    228
Letter of credit valuation provision                   (1,215)        1,215
Write down of affordable housing
  Partnership investments                     55          627          (572)
Legal and professional                       492          292           200
Occupancy expense                            291          285             6
Equipment expense                            197          224           (27)
Data processing expense                      252          324           (72)
Advertising                                  148          143             5
Deposit insurance                            185          218           (33)
Correspondent bank charges                   117          115             2
Printing and supplies                         67           75            (8)
Loss on investment                           224           81           143
Telephone                                     72           46            26
Postage                                       70           65             5
Directors fees                                25          101           (76)
Credit Bureau expense                         43            9            34
Amortization of intangible assets             87                         87
Travel and lodging                            23           24            (1)
Other operating expense                      879          616           263
                                        -------------------------------------

   Total non-interest expense             $5,976       $4,551        $1,425
                                        =====================================
</TABLE>

Salaries and employee benefits increased $228,000 over the nine months ended
September 30, 1999. Fidelity announced on September 29, 2000, that Fidelity and
former President and CEO M. Brian Davis could not come to resolution on an
existing employment contract modification and that Davis would cease to serve in
those roles effective September 29. In conjunction with this announcement,
Fidelity recognized severance expense of approximately $527,000. The severance
payments are subject to OTS and FDIC approval before they can be paid. Without
the $527,000 charge, salaries would have decreased $299,000 from the prior year
due to staff reductions completed during the nine months ended September 30,
2000. A portion of these savings result from the transition of affordable
housing management to Pedcor for certain partnerships previously managed by
Village Management Corporation, and the resulting reductions in staff. Last
year, $1,215,000 was recognized as income on the reversal of a letter of credit
valuation provision; there were no provisions or credits during the nine months
ended September 30, 2000. This credit last year was offset partially by
additional writedowns on affordable housing partnership investments totaling
$627,000. Legal and professional fees increased by $200,000 to $492,000,
primarily due to $125,000 in anticipated legal and professional expenses in
connection with the defense of litigation occurring on a large multifamily loan
that was paid off in 1998. After repaying its loan, the Borrower sued United
alleging that United had agreed to make a second loan for another apartment
development. The Company disputes the allegation and believes that, based on
information available to it, that no material additional charges are expected as
a result of this litigation. The remaining increase is associated with
additional costs incurred for

                                       14
<PAGE>

workout activities with respect to various classified assets. Equipment expense
decreased $27,000 from the prior year due to a decrease in depreciation and
equipment maintenance expense. Data processing expense for the nine months ended
September 30, 2000 decreased $72,000 from the same period last year due to the
decrease in expenses connected with Y2K efforts. Deposit insurance decreased
$33,000 from the prior year due to a decrease in average deposits of $10.8
million since September 30, 1999. Fidelity recorded its percentage share of
losses for its investments in various affordable housing properties under the
equity method of accounting in addition to any additional writedowns due to the
performance of the properties. Fidelity's losses were $224,000 and $81,000 for
the nine months ended September 30, 2000 and September 30, 1999, respectively.
These writedowns are partially offset by tax credits received and recorded as
reductions of income tax expense. Telephone expense increased $26,000 over last
year due to switching telephone service providers and the data transmission
enhancements associated with the new service. Directors fees decreased $76,000
for the nine months ended September 30, 2000 due to a reduction in monthly board
fees paid to directors. Credit bureau expense increased $34,000 from the prior
year due to an increase in consumer loan activity. In conjunction with the stock
sale to Pedcor Holdings, LLC, intangible assets totaling $1.3 million were
recorded. Amortization of these assets resulted in expense of $87,000 for the
nine months ended September 30, 2000. Other operating expense increased $263,000
over last year, primarily due to $205,000 in adjustments to the values of
several real estate properties to record them at their appraised values. An
additional $100,000 for interest expense payable to the Internal Revenue Service
(IRS) was recognized in connection with a recently completed examination, in
which certain prior year deduction were disallowed, therefore reducing the
amount of refund that Fidelity received two years ago. These deductions are
expected by Fidelity to be taken in future years.

Income Tax Benefit
The income tax benefit was $1.3 million for the nine months ending September 30,
2000 compared to $261,000 in the same period last year, primarily due to a
decrease in taxable income. Included in the tax benefit of $1.3 million for the
nine months ending September 30, 2000 are tax credits of $290,000. These credits
are received from Fidelity's investment in affordable housing properties and
comprise a portion of the return on these investments. Fidelity also receives
the tax benefit on its percentage of the operating losses for those projects.
Some of the benefits associated with these tax credits are partially offset by
reductions of the investment in the affordable housing properties, which are
included in the above table under the caption "Loss on Investment". The
effective tax rate for the nine months ended September 30, 2000, was 51.0%, due
to the benefits accrued for the tax credits.

Consideration of the need for a valuation allowance for the deferred tax asset
was made at September 30, 2000 after projecting the reversal of the deferred
items. These analyses were based on projected operating income in future years,
action plans developed and partially implemented included in a newly developed
business plan, cost reductions, and the planned sale of a portion of United's
limited partnership interests. These analyses showed that it was more likely
than not that all carryforwards would be utilized within the carryforward
periods (federal and state) and therefore no valuation allowance was recorded.
The analyses assume that Fidelity will execute its current business plan, sell
approximately 25% of its limited partnership interests (reducing tax credits
granted annually) and then achieve 5 to 10% growth in annual earnings
thereafter. The level of earnings contemplated by these analyses, if achieved,
will constitute, for the majority of the carry forward periods, earnings levels
that are below other thrift holding companies included within Fidelity's peer
group. The analyses used to help consider the need for a valuation allowance for
the deferred tax asset are subject to certain risks and uncertainties that could
impact the final determination regarding the amount of the valuation allowance.
These risks include the failure to implement the newly developed business plan
including cost reductions, or the failure to execute the planned sale of
United's limited partnership interests. United should complete the sale of 25%
of its limited partnerships during the fourth quarter of 2000.


Financial Condition
Total assets at September 30, 2000 decreased $3.1 million to $168.4 million from
$171.5 million in December 1999. Average assets for the nine months ended
September 30, 2000 decreased 8.4% from 1999 to $164.1 million.

                                       15
<PAGE>

Average interest-bearing liabilities at September 30, 2000 decreased $13.7
million as Fidelity used loan payoff proceeds to reduce borrowings and
agent-acquired certificates of deposit, which represent a higher-cost source of
funds for Fidelity.

The decrease in total assets is primarily the result of loan payoffs,
refinancing and payments received on commercial loans and the reduction in
interest-bearing demand deposits due to the continued maturities and roll off of
agent acquired certificates of deposit. According to the provisions of the
Supervisory Agreement, Fidelity is unable to use agent-acquired certificates as
a funding source.

Loans
The following table shows the composition of Fidelity's loan portfolio as of
September 30, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                     September 30,      December 31,
                                                         2000               1999
-------------------------------------------------------------------------------------
<S>                                                    <C>               <C>
Real estate mortgage loans
   First mortgage loans
      Conventional                                     $  48,437         $  48,845
      Construction                                         2,131             1,867
      Commercial                                           7,399             8,576
      Multi-family loans                                   3,668             3,629
      Home equity loans                                    5,444             5,567
      First mortgage real estate loans purchased           1,744             1,899
                                                    ---------------------------------
                                                          68,823            70,383
   Commercial loans, other than
      secured by real estate                               2,899             4,154
   Consumer loans                                         38,492            24,403
                                                    ---------------------------------
        Total loans                                      110,214            98,940
   Allowance for loan losses                              (2,051)           (2,021)
                                                    ---------------------------------

        Net loans                                       $108,163           $96,919
                                                    =================================


        Total loans to total assets                        65.5%             57.7%
                                                    =================================
</TABLE>

Fidelity sells a portion of its current production of 1-4 family loans,
recording the gain or loss and using the proceeds to fund new products. As a
result, conventional real estate mortgage loans continue to decrease.

Multi-family loans increased slightly over the prior year due to the conversion
of multifamily construction loans to permanent loans. Fidelity continues to work
with borrowers to find alternative refinancing opportunities for the remaining
classified multifamily loans, commercial loans and letters of credit.

Commercial real estate loans and commercial loans have continued to decline as a
result of the Supervisory Agreement's restriction of new commercial lending.
Refer to the "Other Restrictions" footnote to the financial statements for
additional information. The focus of United's commercial lending department has
been to develop action plans to minimize potential losses relating to its
remaining classified commercial credits and its letter of credit exposure.

                                       16
<PAGE>

The increase in loans is primarily due to an increase in consumer loans of $14.1
million from December 31, 1999 to $38.5 million at September 30, 2000. Recent
staff replacements to the consumer loan department in 1999 have enabled Fidelity
to achieve strategies designed to increase the number of direct and indirect
automobile loans financed. The level of growth in the consumer loan portfolio
during the first nine months of 2000 is not expected to continue. Under the
Supervisory Agreement, United's total consumer loans are limited to 30% of its
total assets. Currently, consumer loans represent 23.7% of total assets.

Fidelity's loan portfolio contains no loans to foreign governments, foreign
enterprises, foreign operations of domestic companies or highly leveraged
transactions, nor any concentration to borrowers engaged in the same or similar
industries that exceed ten percent of total loans.

Non-Performing Loans
Fidelity discontinues the accrual of interest income on loans when, in the
opinion of management, there is reasonable doubt as to the timely collectibility
of interest or principal. When a loan reaches a ninety day or more past due
status, the asset is generally repossessed or sold, if applicable, or the
foreclosure process is initiated and the loan is re-classified to other real
estate owned to be sold. A loan could be placed in a nonaccrual status sooner
than ninety days, if management knows the customer has abandoned the collateral
and has no intention of repaying the loan. At this point, management
discontinues the accrual of interest and Fidelity would initiate the
repossession or foreclosure process. Typically, when a loan reaches nonaccrual
status, the accrued interest is reversed from income, unless strong evidence
exists that the value of the collateral would support the collection of interest
in a foreclosure situation. Nonaccrual loans are returned to an accrual status
when, in the opinion of management, the financial position of the borrower
indicates that there is no longer any reasonable doubt as to the timely payment
of principal and interest.

The following table provides information on Fidelity's non-performing loans as
of September 30, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                            September 30,    December 31,
                                                                 2000            1999
  ----------------------------------------------------------------------------------------
                                                               (Dollars in Thousands)
<S>                                                             <C>             <C>
  Non-accrual loans
     Consumer                                                   $  127
     Commercial                                                    623
     Real estate mortgage                                                      $   253
     Multi-family                                                                  229
                                                            ------------------------------
        Total non-accrual loans                                    750             482
  Restructured
     Consumer                                                       75              75
     Commercial                                                    119             118
                                                            ------------------------------
        Total restructured loans                                   194             193
  90 days or more past due and accruing
     Consumer                                                       49             135
     Commercial                                                     24             313
                                                            ------------------------------
        Total 90 days or more past due and accruing                 73             448
                                                            ------------------------------
          Total non-performing loans                            $1,017          $1,123
                                                            ==============================


  Ratio of non-performing loans to total loans                  0.92%           1.14%
                                                            ==============================
</TABLE>

Multi-family affordable housing loans, for which specific and general reserves
have been computed, are currently performing with respect to debt service and
are therefore not included in the above "non-performing loans" totals. The
ability of the multi-family loans to remain performing is in part due to general
partner or other advances made

                                       17
<PAGE>

by Fidelity to support cash flow deficits incurred by the affordable housing
projects. There is no assurance that general partner advances will not be
necessary in the future to support further cash flow deficits, or that Fidelity
will not have to extend funds in order to protect its collateral position with
respect to the loans. The likelihood of Fidelity having to make additional
advances should be reduced in future periods due to the guarantees provided by
Pedcor as part of its stock purchase.

Analysis of Allowance for Loan Losses and Letter of Credit Valuation Allowance
Fidelity establishes its provision for loan losses and evaluates the adequacy of
the allowance for loan losses based on management's evaluation of the
performance of its loan and letter of credit portfolio. Such evaluation, which
includes a review of all loans and letters of credit for which full
collectibility may not be reasonably assured, considers among other matters, the
present value of capitalized cash flows, the estimated fair value of the
underlying collateral, economic conditions, historical loss experience, the
composition of the portfolios and other factors that warrant recognition in
providing for an adequate loan loss allowance and letter of credit valuation
allowance. This evaluation is performed on a quarterly basis and is designed to
ensure that all relevant matters affecting collectibility will consistently be
identified in a detailed review and that the outcome of the review will be
considered in a disciplined manner by management in determining the necessary
allowances and related provisions. The amounts actually reported in each period
will vary with the outcome of this detailed review.

Classified Assets and Letters of Credit
(in thousands)
                                                  September 30,    December 31,
                                                      2000             1999

Classified assets                                     $8,756         $8,991
Classified letters of credit                          11,793         13,218
                                                     -------         ------

      Total classified assets/letters of credit      $20,549        $22,209
                                                     =======        =======

Classified assets and letters of credit of Fidelity totaled $20.5 million at
September 30, 2000 compared to $22.2 million at December 31, 1999 and $40.7
million at June 30, 1999, a decrease of 7.7% and 49.6%, respectively. Classified
assets and letters of credit were 167.3% and 214.0% of Fidelity's capital and
reserves at September 30, 2000 and December 31, 1999, respectively. Classified
assets and letters of credit were 71.8% and 85.8% of United's capital and
reserves at September 30, 2000 and December 31, 1999, respectively. In addition
to the classified assets and letters of credit, there were other assets and
letters of credit totaling $18.8 million for which management was closely
monitoring the borrowers' abilities to comply with payment terms.

Impaired loans are those that management believes will not perform under the
original loan terms. At September 30, 2000 and December 31, 1999, Fidelity had
impaired loans totaling $7.7 million and $7.6 million respectively. The
allowance for losses on such impaired loans totaled $1.0 million and $1.1
million, which are included in Fidelity's allowance for loan losses at September
30, 2000 and December 31, 1999, respectively. In addition, using similar
guidelines for impaired loans, impaired letters of credit at September 30, 2000
total $12.4 million, versus $13.2 million at December 31, 1999, a decrease of
10.3%. The valuation allowance on such impaired letters of credit totaled $5.2
million and is included in Fidelity's letter of credit valuation allowance at
September 30, 2000 compared to $5.8 million at December 31, 1999. Impaired loans
do not include large groups of homogeneous loans that are collectively evaluated
for impairment, such as, residential mortgage and consumer installment loans.

                                       18
<PAGE>


The following table sets forth loan charge-offs and recoveries by the type of
loan and an analysis of the allowance for loan losses at September 30, 2000 and
December 31, 1999:

<TABLE>
<CAPTION>
                                                             Nine Months               Year
                                                                Ended                  Ended
                                                             September 30,          December 31,
                                                                 2000                  1999
-----------------------------------------------------------------------------------------------------
                                                                    (dollars in thousands)
<S>                                                            <C>                   <C>
Allowance for loan losses
   at beginning of period                                      $   2,021             $   3,521
                                                        ---------------------------------------------
Loan charge offs
   Real estate mortgage                                               80
   Multi-family                                                      354                 2,631
   Commercial                                                         12                    11
   Consumer                                                          282                   235
                                                        ---------------------------------------------
      Total loan charge offs                                         728                 2,877
                                                        ---------------------------------------------

Loan recoveries
   Real estate mortgage
    Multi-family                                                     154                     3
   Commercial                                                         17                     3
   Consumer                                                           37                    26
                                                        ---------------------------------------------
      Total loan recoveries                                          208                    32
                                                        ---------------------------------------------

Net charge offs                                                      520                 2,845

Provision for loan losses                                            550                 1,345
                                                        ---------------------------------------------

Allowance for loan losses at end of period                     $   2,051             $   2,021
                                                        =============================================

Ratio of net charge offs to average loans
   outstanding during period (annualized)                           .65%                 5.20%
                                                        =============================================

Ratio of provision for loan losses to average
   loans outstanding during period (annualized)                     .69%                 2.46%
                                                        =============================================

Ratio of allowance for loan losses to total loans
   outstanding at year end                                         1.86%                 2.04%
                                                        =============================================

Average amount of loans
   outstanding for the period                                   $107,196              $108,455
                                                        =============================================

Amount of loans outstanding
   at end of period                                             $110,214               $98,940
                                                        =============================================
</TABLE>

The allowance for loan losses was $2.1 million at September 30, 2000 compared to
$2.0 million at December 31, 1999. Net loan charge-offs were $520,000 or 0.65%
of average loans (annualized) for the nine months ended September 30, 2000
compared to $2.8 million or 5.20% of average loans for the six months ended
December 31, 1999. During the nine months ended September 30, 2000, Fidelity
charged-off $354,000 of multifamily loans that

                                       19
<PAGE>

reserves were previously provided for. Consumer loan charge-offs of $282,000,
related primarily to loans originated prior to 1999.

During the six months ended December 31, 1999, Fidelity reevaluated some of the
loans that it had previously established reserves for in fiscal 1998 and charged
off $2.8 million of these loans. In addition, it was determined a $3.2 million
loan originated for the financing of a hotel was not meeting its cash flow
projections, and thus was classified. This substandard classification resulted
in an approximate $470,000 increase in the allowance for loan losses. Based on
recent loss experience, United increased its allowance for consumer loan losses
to target between 1.25% and 1.5% of consumer loans outstanding.

Multi-family letters of credit, an off-balance sheet item, carry the same risk
characteristics as conventional loans and totaled $44.4 million at September 30,
2000 and $44.5 million at December 31, 1999. Specific allocations for letters of
credit totaled 7.7% of outstanding letters of credit at September 30, 2000
compared to 5.5% at December 31, 1999. Management is not currently aware of any
additional letters of credit that are expected to be called or funded.
Management considers the allowance for loan losses and letter of credit
valuation reserve adequate to meet losses inherent in the loan and letter of
credit portfolios as of September 30, 2000.

Allocation of Allowance for Loan Losses
The allocation for loan losses and the percentage of loans within each category
to total loans at September 30, 2000 and at December 31, 1999 are as follows:

<TABLE>
<CAPTION>
Allocation of Amount
                                            September 30,        December 31,
                                                2000                 1999
------------------------------------------------------------------------------
                                                (dollars in thousands)
<S>                                             <C>                  <C>
Real Estate Mortgage:
   Conventional and home equity                   $102              $   103
   Multi-family                                    689                  482
Consumer                                           595                  496
Commercial                                         665                  940
                                           -----------------------------------

      Total                                     $2,051               $2,021
                                           ===================================

Percentage of Loans to Total Loans
                                            September 30,        December 31,
                                                2000                 1999
------------------------------------------------------------------------------
Real Estate Mortgage
   Conventional and home equity                 52.5%                58.8%
   Multi-family                                  3.3                  3.7
Consumer                                        34.9                 24.7
Commercial                                       9.3                 12.8
                                           -----------------------------------
      Total                                    100.0%               100.0%
                                           ===================================
</TABLE>

Investment Securities
United's investment policy is annually reviewed by its Board of Directors. Any
significant changes to the policy must be approved by the Board. The Board has
an asset/liability management committee, which is responsible for keeping the
investment policy current.

At September 30, 2000, the investment portfolio represented 12.8% of Fidelity's
assets, compared to 14.2% at December 31, 1999, and is managed in a manner
designed to meet the Board's investment policy objectives.

                                       20
<PAGE>

During fiscal 1999 due to continued reductions in the loan portfolio, excess
liquidity was reinvested in lower risk investment securities. The primary
objectives, in order of priority, are to further the safety and soundness of
Fidelity, to provide the liquidity necessary to meet day to day, cyclical, and
long-term changes in the mix of Fidelity's assets and liabilities and to provide
for diversification of risk and management of interest rate and economic risk.
At September 30, 2000, the entire investment portfolio was classified as
available for sale. The net unrealized loss at September 30, 2000, which is
included as a component of stockholders' equity, was $700,000 and was comprised
of gross unrealized losses of $1,159,000 and a tax benefit of $459,000. The
decrease in the unrealized loss was caused primarily the portfolio also declined
by market interest rate changes during the period and the decline in the
portfolio. Although the entire portfolio is available for sale, management has
not identified specific investments for sale in future periods.

The following table sets forth the components of United's available-for-sale
investment portfolio as of September 30, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                         September 30,        December 31,
                                                             2000                 1999
-------------------------------------------------------------------------------------------
                                                             (dollars in thousands)
<S>                                                         <C>                 <C>
   Federal Home Loan Mortgage Corporation
      mortgage-backed securities                             $  846            $  1,043
   Federal National Mortgage Association mortgage-
      backed securities                                       1,144               1,377
   Government National Mortgage Association
      mortgage-backed securities                             19,568              21,885

                                                       ------------------------------------

        Total securities available for sale                 $21,558             $24,305
                                                       ====================================
</TABLE>

For the nine months ended September 30, 2000, United's investment securities
portfolio decreased by $2.7 million to $21.6 million compared to $24.3 million
at December 31, 1999. The current year's decrease is the result of maturities
and paydowns received during the nine months. United holds various types of
securities, including mortgage-backed securities. Inherent in mortgage-backed
securities is prepayment risk. Prepayment rates generally can be expected to
increase during periods of lower interest rates as some of the underlying
mortgages are refinanced at lower rates. Conversely, the average lives of these
securities generally are extended as interest rates increase.

Funding Sources

Deposits
Fidelity attracts both short-term and long-term deposits from the retail market
by offering a wide assortment of accounts with different terms and different
interest rates. These deposit alternatives include checking accounts, regular
savings accounts, money market deposit accounts, fixed rate certificates with
varying maturities, variable interest rate certificates, negotiable rate jumbo
certificates ($90,000 or more), and variable rate IRA certificates.

Average deposits decreased by $4.0 million during the first nine months of 2000.
An increase in deposits came primarily in the area of core certificates of
deposit, for which the average balance increased $7.0 million but was offset by
a decrease in NOW accounts and agent-acquired certificates of deposit of $2.0
million and $7.8 million, respectively. According to the provisions of the
Supervisory Agreement, Fidelity is unable to use agent-acquired certificates as
a funding source. Existing agent-acquired certificates of deposit were acquired
at rates higher than the current local market for retail deposits, but generally
below rates charged for FHLB advances. As these agent acquired certificates
mature, United has been successful in replacing the majority of these deposits
with core certificate of deposit products. Due to the rise in interest rates
during this time period, the average rate on total deposits has increased 21
basis points since December 31, 1999 to 5.06% at September 30, 2000.

                                       21
<PAGE>

The following table sets forth the average balances of and the average rate paid
on deposits by deposit category for the nine months ended September 30, 2000 and
the six months ended December 31, 1999.

<TABLE>
<CAPTION>
                                                September 30,                December 31,
                                                    2000                         1999
Average Deposits                            Amount         Rate          Amount        Rate
--------------------------------------------------------------------------------------------------
                                                        (dollars in thousands)
<S>                                         <C>            <C>          <C>            <C>
Demand                                     $   5,491                   $   6,097
NOW accounts                                  17,066       3.31%          19,107       3.39%
Money market accounts                          2,137       1.99            2,545       2.03
Savings accounts                               4,437       2.08            4,657       2.26
Certificates of deposit                       85,373       5.86           78,329       5.60
Agent-acquired certificates of deposit        10,380       5.98           18,147       5.88
                                         -------------               -------------

           Totals                           $124,884       5.06         $128,882       4.85%
                                         =============               =============
</TABLE>

Borrowings
Fidelity's long-term debt increased $1.2 million for the first nine months of
2000 primarily due to a new $2.0 million FHLB advance for a 10 year term
obtained in the second quarter of 2000, which was offset partially by paydowns
on other FHLB advances secured by specific single-family loans. Alternate
funding sources for United are provided by loan sales, loan payoffs, Federal
Home Loan Bank advances as well as through retail deposits. In the following
table, all notes, except for the Federal Home Loan Bank advances, are debt of
the Parent Company both secured and unsecured, and total $14.4 million.


                                       22
<PAGE>


The following table summarizes Fidelity's borrowings as of September 30, 2000
and December 31, 1999.

<TABLE>
<CAPTION>
                                                                             September 30,    December
(dollars in thousands)                                                           2000         31, 1999
---------------------------------------------------------------------------------------------------------
<S>                                                                              <C>         <C>
Note payable, 8.49% adjusted annually, payable $8 per month,
   including interest, due September 2010, secured by specific
   multi-family mortgages                                                      $     977         985
Note payable, 8.49% adjusted annually, payable $12 per month,
   including interest, due September 2010, secured by specific
   multi-family mortgages                                                          1,497       1,510
Note payable, 9.50%, interest paid quarterly, due June 2001,
   secured by United stock                                                         2,000       2,000
Junior subordinated notes, 9.125%, interest paid semi-annually,
   due April 2001, unsecured                                                       1,476       1,476
Junior subordinated notes, 9.25%, interest paid semi-annually,
   due January 2002, unsecured                                                     1,494       1,494
Senior subordinated notes, 10.00%, interest paid semi-annually,
   due June 2005, unsecured                                                        7,000       7,000
Federal Home Loan Bank advances, due at various dates through
   2002 (weighted average rates of 6.49% and 6.59% at September 30, 2000
   and December 31, 1999)                                                         10,246       9,039
                                                                            -----------------------------

        Total long-term debt                                                     $24,690     $23,504
                                                                            =============================
</TABLE>

On September 30, 2000 a modification agreement was entered into, to be effective
October 1, 2000, for the above $2.0 million note payable. Fidelity reduced the
principal balance by $500,000 in return for the extension of the maturity date
from June 21, 2001 to June 21, 2003. It was also agreed that the annual interest
rate would increase to 10.50%. As noted in the liquidity section, Fidelity is in
the process of negotiating agreements to extend maturities of certain debt
obligations.

Capital Resources
Fidelity's stockholders' equity increased $3.1 to $8.5 million at September 30,
2000, compared to $5.4 million at December 31, 1999. The change in stockholders'
equity was accounted for by a net loss of $1.2 million, a decrease in the net
unrealized loss on securities available for sale of $75,000 and the sale of
stock to Pedcor for $3.0 million (at $3.00 per share) and the issuance of
additional $1.3 million in stock for cash flow deficit guarantees and property
management services to be provided by Pedcor.

At September 30, 2000, actual and required minimum levels (to be adequately and
well capitalized) of regulatory capital for United were as follows:



                                       23
<PAGE>

                             (Dollars in Thousands)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                          Required for                     To be well
                                    Actual                              Adequate Capital                   capitalized
                                    Amount           Ratio          Amount         Percent      Amount         Percent
------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>              <C>           <C>              <C>        <C>            <C>
Total risk-based capital (to
risk-weighted assets)                $17,616          13.3%         $10,608          8.0%       $13,260        10.0%
------------------------------------------------------------------------------------------------------------------------
Tier 1 capital (to risk-weighted
assets)                               13,071           9.9            5,304          4.0          7,956         6.0
------------------------------------------------------------------------------------------------------------------------
Core capital (to adjusted total
assets)                               13,071           8.1            6,423          4.0          8,029         5.0
------------------------------------------------------------------------------------------------------------------------
Core capital (to adjusted
tangible assets)                      13,071           8.1            3,212          2.0           N/A          N/A
------------------------------------------------------------------------------------------------------------------------
Tangible capital (to adjusted
total assets)                         13,071           8.1            2,409          1.5           N/A          N/A
------------------------------------------------------------------------------------------------------------------------
</TABLE>

Total capital for United consists of Tier I capital plus the allowance for loan
losses. Minimum capital levels are 4% for the leverage ratio, which is, defined
as Tier I capital as a percentage of total assets less goodwill and other
identifiable intangible assets; 4% for Tier I to risk-weighted assets; and 8%
for total capital to risk-weighted assets. United's capital ratios have exceeded
each of these levels. The leverage ratio was 8.1% at September 30, 2000 and 6.8%
for December 31, 1999, tier I capital to risk-weighted assets was 9.9% and 9.1%
and total capital to risk-weighted assets was 13.3% and 14.3% at September 30,
2000 and December 31, 1999, respectively. Book value per share, including
unrealized losses on investment securities, increased to $1.85 at September 30,
2000, compared to $1.72 at December 31, 2000.

There are no specific targets for capital levels included or agreed to within
the Supervisory Agreement ("Agreement") between United and the OTS, only a
requirement that United include capital targets within a strategic plan. The
original strategic plan was amended by United and approved by the OTS in October
2000. The new strategic plan established capital target levels of 8.1% for
tangible, leverage and core capital and 13.75% for risk-based capital by
December 31, 2000. The revised plan calls for United to reduce its classified
assets to 50% of core capital plus the allowance for loan losses and the letter
of credit valuation reserves by March 31, 2001. At September 30, 2000, United's
tangible, leverage and core capital was 8.1% and risk-based capital was 13.3%.
United's classified assets to core capital plus the allowance for loan losses
and letter of credit valuation reserves was 75.0% at September 30, 2000.

The capital category assigned to an entity can also be affected by qualitative
judgements made by regulatory agencies about the risk inherent in the entity's
activities that are not part of the calculated ratios. At September 30, 2000 and
December 31, 1999, the Bank is categorized as well capitalized and met all
capital adequacy requirements at those dates.


Liquidity
Fidelity's principal source of income and funds is dividends from United and is
not subject to any regulatory restrictions on the payment of dividends to its
stockholders. However, United is restricted from paying any dividends to
Fidelity without prior approval of the OTS.

As previously discussed, the Pedcor transaction added an additional $3.0 million
in cash at the holding company level. In addition, for 3 years following the
approval of the stock purchase agreement, approved on May 19, 2000, Pedcor is
entitled, but not required, under the terms of the Stock Purchase Agreement to
purchase additional

                                       24
<PAGE>

shares from Fidelity in an aggregate amount up to $5.0 million. For shares
purchased in the first year following the closing, Pedcor will pay $3.00 per
share. For shares purchased in the second and third year following the closing,
Pedcor will pay the fair market value of the shares. Absent potential sources of
liquidity available to the holding company including the potential issuance of
additional stock to Pedcor, potential execution of additional debt or equity
financing, and dividends from United (with OTS approval), the holding company
may deplete its available cash in April 2001. In addition to the potential
exercise of Pedcor's option to purchase up to $5.0 million in additional stock,
the Board of Directors is considering terms for a common stock rights offering
to existing shareholders in the first half of 2001, and is negotiating
agreements to extend maturities on certain debt obligations coming due in 2001
and 2002. As noted in the Borrowing section, Fidelity has been partially
successful on one of the debt obligations and is pursuing the extension of
certain remaining debt obligations. These actions, in the aggregate, should
provide sufficient cash to meet projected cash flow shortfalls, if successful.

United is required by federal regulations to maintain specified levels of
"liquid" assets consisting of cash and other eligible investments. Currently,
liquid assets must equal at least four percent of net withdrawable savings plus
borrowings payable upon demand or due within one year or less. As of September
30, 2000 and December 31, 1999, United's liquidity ratios were 17.4% and 31.4%.
United's significant increase in liquidity at December 31, 1999 was the result
of United's cash contingency plan for Year 2000. As a result, United has reduced
the liquidity during the first nine months of 2000. Management believes that
this level of liquidity is sufficient to meet any anticipated requirements for
United's operations.

The primary sources of funds for operations are principal and interest payments
on loans, deposits from customers, and sales and maturities of investment
securities. In addition, United is authorized to borrow money from the FHLB and
other sources as needed. United decreased its borrowings from the FHLB from
$10.7 million at September 30, 1999, to $10.2 million at September 30, 2000.
Fidelity has also decreased its utilization of agency-acquired certificates of
deposit as total loans have decreased and the need for these types of funds has
also decreased.


                                       25
<PAGE>

Item 3 - Asset/Liability Management--Quantitative and Qualitative
         Disclosures about Market Risk

Fidelity is subject to interest rate risk to the degree that its interest
bearing liabilities, primarily deposits with short and medium term maturities,
mature or reprice at different rates than its interest-earning assets. Although
having liabilities that mature or reprice less frequently will be beneficial in
times of rising interest rates, such an asset/liability structure will result in
lower net income during periods of declining interest rates, unless off-set by
other factors.

The OTS utilizes a model, the "Office of Thrift Supervision Net Portfolio Value"
("NPV") model, which uses a net market value methodology to measure the interest
rate risk exposure of savings associations. Under this model, an institution's
"normal" level of interest rate risk in the event of an assumed change in
interest rates is a decrease in the institution's NPV in an amount not exceeding
2% of the present value of its assets. Savings associations with over $300
million in assets or less than 12% risk-based capital ratio are required to file
the OTS Schedule CMR. Data from Schedule CMR is used by the OTS to calculate
changes in NPV (and the related "normal" level of interest rate risk) based upon
certain interest rate changes (discussed below). Associations which do not meet
either of the filing requirements are not required to file OTS Schedule CMR, but
may do so voluntarily. United voluntarily submits a CMR quarterly to the OTS.
Under the regulation, associations which must file are required to take a
deduction (the interest rate risk capital component) from their total capital
available to calculate their risk based capital requirement if their interest
rate exposure is greater than "normal". The amount of that deduction is one-half
of the difference between (a) the institution's actual calculated exposure to a
200 basis point interest rate increase or decrease (whichever results in the
greater pro forma decrease in NPV) and (b) its "normal" level of exposure which
is 2% of the present value of its assets.

Presented below, at June 30, 2000 and December 31, 1999, is an analysis of
United's interest rate risk as measured by changes in NPV for instantaneous and
sustained parallel shifts in the yield curve, in 100 basis point increments, up
and down 300 basis points. At June 30, 2000 and December 31, 1999, 2% of the
present value of United's assets was approximately $3.2 million and $3.4
million. Because the interest rate risk of a 200 basis point increase or
decrease in market rates (using the larger number of a plus or minus 200 basis
point shock) was $3.2 million at June 30, 2000 and $2.9 million at December 31,
1999, United would not have been required to make a deduction from its total
capital available to calculate its risk based capital requirement. The increase
in interest rate risk in the event of increased rates, from December 31, 1999 to
June 30, 2000 is due to interest rate changes and a change in United's balance
sheet mix.

<TABLE>
<CAPTION>
                      Interest Rate Risk as of June 30, 2000
                      --------------------------------------

                         Net Portfolio Value              NPV as Percent of Present
                           (in thousands)                     Value of Assets
-----------------------------------------------------------------------------------
  Change        Dollar         Dollar       Percentage
 in Rates       Amount         Change         Change      NPV Ratio      Change
-----------------------------------------------------------------------------------
<S>  <C>       <C>            <C>              <C>           <C>          <C>
   + 300 bp    $13,139        $(4,858)         (27)%         8.80%      - 259 bp
   + 200 bp     14,840         (3,157)         (18)          9.75       - 165 bp
   + 100 bp     16,511         (1,486)          (8)         10.64       -  75 bp
       0 bp     17,997                                      11.39
   - 100 bp     18,921            924            5          11.80          41 bp
   - 200 bp     18,766            769            4          11.62          22 bp
   - 300 bp     18,625            628            3          11.44           5 bp


                                       26
<PAGE>

                     Interest Rate Risk as of December 31, 1999
                     ------------------------------------------

                        Net Portfolio Value             NPV as Percent of Present
                           (in thousands)                    Value of Assets
-----------------------------------------------------------------------------------
   Change       Dollar         Dollar       Percentage
  in Rates      Amount         Change         Change         NPV         Change
-----------------------------------------------------------------------------------
  +300 bp      $10,879       $(4,685)          (30)%        6.75%       - 242 bp
  +200 bp       12,622        (2,942)          (19)         7.69        - 148 bp
  +100 bp       14,256        (1,308)           (8)         8.53        -  64 bp
     0 bp       15,564                                      9.17
  -100 bp       16,148           585             4          9.41           24 bp
  -200 bp       16,023           459             3          9.27           10 bp
  -300 bp       16,010           446             3          9.19            2 bp
</TABLE>

As with any method of measuring interest rate risk, certain shortcomings are
inherent in the methods of analysis presented above. For example, although
certain assets and liabilities may have similar maturities or periods to
repricing, they may react in different degrees to changes in market rates. Also,
the interest rates on certain types of assets and liabilities may fluctuate in
advance of changes in market interest rates, while interest rates on other types
may lag behind changes in market rates. Additionally, certain assets, such as
adjustable-rate loans, have features which restrict changes in interest rates on
a short-term basis and over the life of the assets. Further, in the event of a
change in interest rates, expected rates of prepayments on loans and early
withdrawals from certificates could likely deviate significantly from those
assumed in calculating the above amounts.




                                       27
<PAGE>

                          PART II -- OTHER INFORMATION


ITEM 1   Legal Proceedings:
              There are no material pending legal proceedings, other than
              ordinary routine litigation incidental to the Registrant's
              business, to which the Registrant or its subsidiaries are a party
              of or which any of their property is the subject.


ITEM 2   Changes in Securities and Use of Proceeds:
              Not applicable.


ITEM 3   Defaults Upon Senior Securities:
              Not applicable.


ITEM 4 Submission of Matters to a Vote of Security Holders:
              None


ITEM 5   Other Information:
              None


ITEM 6   Exhibits and Reports on Form 8-K:
              a.      The following exhibit is submitted herewith:
                      27 Financial Data Schedule

b.         A Form 8-K was filed on October 5, 2000.

                      On September 29, 2000, Fidelity announced that President
                      and CEO M. Brian Davis would cease to serve in those
                      roles, effective September 29, 2000.

                                       28
<PAGE>

                                   SIGNATURES



Pursuant to the requirements 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.

                                 FIDELITY FEDERAL BANCORP



Date: NOVEMBER 14, 2000          By:   /s/ BRUCE A. CORDINGLEY
      -----------------                -----------------------------
                                       Bruce A. Cordingley
                                       Executive Committee Chairman
                                       (Acting Principal Executive Officer)



                                 By:   /s/ DONALD R. NEEL
                                       -----------------------------
                                       Donald R. Neel,
                                       Executive Vice President,
                                       CFO and Treasurer
                                       (Principal Financial Officer)



                                       29
<PAGE>

                                  Exhibit Index


Reg. S-K
Exhibit No.              Description of Exhibit                Page
--------------------------------------------------------------------------------
   27                    Financial Data Schedule               30








                                       30