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 June 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 August 7, 2000, there were 4,607,659 shares of the Registrant's common
stock, $1 stated value, issued and outstanding.

Exhibit Index is on page 30.

<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.........11-24

  ITEM 3--Quantitative and Qualitative Disclosures about Market Risk..... 24-26

PART II - OTHER INFORMATION..............................................    27

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>
                                                                June 30,   December 31,
                                                                 2000          1999
                                                               ---------   ------------
<S>                                                            <C>          <C>
Assets
Cash and due from banks                                        $   1,455    $   8,003
Interest-bearing demand deposits                                   7,789       22,911
                                                               ---------    ---------
     Cash and cash equivalents                                     9,244       30,914
Investment securities available for sale                          22,615       24,305
Loans, net of allowance for loan losses of $1,812 and $2,021     108,282       96,919
Premises and equipment                                             5,459        5,727
Federal Home Loan Bank of Indianapolis stock                       3,920        3,920
Deferred income tax receivable                                     5,610        5,372
Interest receivable and other assets                               5,719        4,300
                                                               ---------    ---------
     Total assets                                              $ 160,849    $ 171,457
                                                               =========    =========

Liabilities
Deposits
     Non-interest bearing                                      $   5,634    $   6,593
     Interest-bearing                                            113,726      128,423
                                                               ---------    ---------
        Total deposits                                           119,360      135,016
Short-term borrowings                                                 97           89
Long-term debt                                                    24,953       23,504
Advances by borrowers for taxes and insurance                        368          409
Valuation allowance for letters of credit                          5,802        5,787
Other liabilities                                                    750        1,225
                                                               ---------    ---------
     Total liabilities                                           151,330      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                                        13,674       10,869
Stock warrants                                                        11           11
Accumulated deficit                                               (8,126)      (7,825)
Accumulated other comprehensive loss                                (648)        (775)
                                                               ---------    ---------
        Total stockholders' equity                                 9,519        5,427
                                                               ---------    ---------

Total liabilities and stockholders' equity                     $ 160,849    $ 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            Six Months Ended
                                                                     June 30,                      June 30,
                                                               2000           1999           2000           1999
                                                            -----------    -----------    -----------    -----------
<S>                                                         <C>            <C>            <C>            <C>
Interest Income
     Loans receivable                                       $     2,412    $     2,443    $     4,602    $     5,166
     Investment securities - taxable                                385            426            786            684
     Deposits with financial institutions                           150            192            454            482
     Other dividend income                                           78             78            156            170
                                                            -----------    -----------    -----------    -----------
        Total interest income                                     3,025          3,139          5,998          6,502
                                                            -----------    -----------    -----------    -----------

Interest Expense
     Deposits                                                     1,508          1,658          3,117          3,475
     Short-term borrowings                                            1              1
     Long-term debt                                                 490            533            977          1,081
                                                            -----------    -----------    -----------    -----------
        Total interest expense                                    1,999          2,192          4,094          4,556
                                                            -----------    -----------    -----------    -----------

Net interest income                                               1,026            947          1,904          1,946
     Provision (adjustment) for loan losses                         100            116            175           (288)
                                                            -----------    -----------    -----------    -----------
Net interest income after provision for loan losses                 926            831          1,729          2,234
                                                            -----------    -----------    -----------    -----------

Non-interest income
     Fee income-apartment management                                 44             46             88            100
     Service charges on deposit accounts                             63            100            140            204
     Net gains on loan sales                                          6             31             13            120
     Letter of credit fees                                          121            146            266            291
     Real estate investment banking fees                             15              5             32             21
     Agent fee income                                                39           --               46              7
     Title fee income                                                 6              9             12             23
     Servicing fees on loans sold                                    27             27             55             48
     Release fees on multifamily loans                               10             20             12             30
     Other income                                                    45             75            146            185
                                                            -----------    -----------    -----------    -----------
        Total non-interest income                                   376            459            810          1,029
                                                            -----------    -----------    -----------    -----------

Non-interest expense
     Salaries and employee benefits                                 782            797          1,545          1,663
     Net occupancy expense                                           92            101            184            185
     Equipment expense                                               64             81            132            149
     Data processing expense                                         82            106            166            211
     Deposit insurance expense                                       65             65            124            137
     Legal and professional fees                                     98            115            232            202
     Advertising                                                     53             53             83            100
     Letter of credit valuation provision                                         (750)                         (715)
     Valuation allowance - affordable housing investments            21            421             41            504
     Other expense                                                  422            385            843            813
                                                            -----------    -----------    -----------    -----------
        Total non-interest expense                                1,679          1,374          3,350          3,249
                                                            -----------    -----------    -----------    -----------

Income (loss) before income tax                                    (377)           (84)          (811)            15
     Income tax benefit                                            (244)          (137)          (510)          (173)
                                                            -----------    -----------    -----------    -----------
Net Income (loss)                                           $      (133)   $        53    $      (301)   $       188
                                                            ===========    ===========    ===========    ===========

Per share:
     Basic earnings (loss) per share                        $     (0.04)   $      0.02    $     (0.09)   $      0.06
     Diluted earnings (loss) per share                            (0.04)          0.02          (0.09)          0.06
     Average common and common equivalent
        shares outstanding                                    3,853,595      3,147,662      3,500,629      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>
                                                             Six Months Ended
                                                                 June 30,
                                                             2000       1999
                                                            -------    -------
<S>                                                         <C>        <C>
Beginning Balances                                          $ 5,427    $ 8,036
Comprehensive income:
     Net income (loss)                                         (301)       188
     Other comprehensive income net of tax--
        Unrealized gain (loss) on securities                    127       (410)
                                                            -------    -------
        Comprehensive income                                   (174)      (222)
     Issuance of stock                                        4,266
                                                            -------    -------

Balances, June 30                                           $ 9,519    $ 7,814
                                                            =======    =======
</TABLE>

See notes to condensed consolidated financial statements


                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                                      Six months ended
                                                                           June 30
                                                                      2000        1999
                                                                    --------    --------
<S>                                                                 <C>         <C>
Operating Activities
Net cash used by operating activities                                   (876)        (45)

Investing Activities
     Purchases of securities available for sale                                  (17,196)
     Proceeds from maturities of securities available for sale         1,868       2,283
     Net change in loans                                             (11,509)     22,595
     Purchases of premises and equipment                                 (21)       (195)
     Proceeds from sale of premises and equipment                        108           7
                                                                    --------    --------
Net cash provided (used) by investing activities                      (9,554)      7,494

Financing Activities
     Net change in:
        Noninterest-bearing, interest-bearing demand and
          savings deposits                                            (2,424)     (1,689)
        Certificates of deposit                                      (13,232)    (20,362)
        Short-term borrowings                                              8          (7)
     Repayment of long-term debt                                       1,449         936
     Issuance of stock                                                 3,000
     Net change in advances by borrowers for taxes and insurance         (41)        (20)
                                                                    --------    --------
Net cash used by financing activities                                (11,240)    (21,142)

Net change in Cash and Cash Equivalents                              (21,670)    (13,693)
Cash and Cash Equivalents, beginning of period                        30,914      29,960
                                                                    --------    --------
Cash and Cash Equivalents, end of period                            $  9,244    $ 16,267
                                                                    ========    ========

Additional Cash Flows and Supplementary information
     Interest paid                                                  $  4,165    $  4,601
     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 six months ended June
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

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 June 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 June 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 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. 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 holding interests in real estate housing, and is currently inactive. Village
Securities Corporation is also currently inactive.

                                       7
<PAGE>

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 and managing 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 these
type of services for the past two years and is currently not anticipating any
new activity in the near future. Another subsidiary of United, Village Insurance
Corporation, receives fee income for 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, United must, among other things, take other specified
actions within specified time frames. These actions include, among others; 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 to an amount
not in excess of an amount equal to the net interest credited on deposit
liabilities without prior OTS approval; limiting growth of its consumer loan
portfolio to an amount not in excess of 25 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 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 and credit analyst;
refinancing or extending classified or criticized commercial loans

                                       8
<PAGE>

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 also developed a plan to reduce employee turnover, build an
experienced staff, and provide for management succession.

Management of United has taken or is refraining from taking, as applicable, the
actions requested by the OTS and at June 30, 2000, was in compliance with the
conditions of its Supervisory Agreement, except for the following: meeting
December 31, 1999 capital targets and meeting its target level of classified
assets to core capital plus the allowance for loan loss of 50% or less by
December 31, 1999. Total classified (substandard and doubtful) assets declined
by approximately $14.6 million from $26.3 million at September 30, 1998 to $11.7
million at June 30, 2000. However, United was unable to meet the 50% target
using post-examination December 31, 1999, and June 30, 2000 regulatory capital
and Thrift Financial Report classified assets. The Board and management are
continuing to work strenuously toward this target.

o          Capital Infusion

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.

o          Segment Information

Fidelity operates principally in two industries, banking and real estate
development and management. 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 is or was involved in various aspects of developing, building, renting
and managing affordable housing units.

Banking revenue consists primarily of interest and fee income, while real estate
development and management fee income consists primarily of real estate
management, investment banking, development and other fees. 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 development and management activities conducted
by Fidelity are not asset intensive.

<TABLE>
<CAPTION>
Three months ended                                             Real Estate
June 30, 2000                               Banking            Management           Eliminations          Total
-----------------------------------------------------------------------------------------------------------------
<S>                                         <C>                  <C>                   <C>              <C>
Interest income                              $3,025              $    2                $    (2)         $  3,025
Other income                                    321                  62                     (7)              376
Interest expense                              1,999                   2                     (2)            1,999
Other expense                                 1,563                 123                     (7)            1,679
Provision (adjustment) for loan losses          517                (417)                     -               100
Income (loss) before tax                       (732)                355                      -              (377)
Income tax expense (benefit)                   (361)                117                      -              (244)
Total assets                                161,457               2,827                 (3,435)          160,849
Capital expenditures                              7                   -                      -                 7
Depreciation and amortization                    87                   2                      -                89

Three months ended                                             Real Estate
June 30, 1999                               Banking            Management           Eliminations          Total
----------------------------------------------------------------------------------------------------------------

Interest income                              $3,131             $     2                  $   6            $3,139
Other income                                    398                  71                    (10)              459
Interest expense                              2,184                   2                      6             2,192
Other expense                                   825                 559                     (10)           1,374
Provision (adjustment) for loan losses          (64)                180                      -               116
Income (loss) before tax                        583                (667)                     -               (84)
Income tax expense (benefit)                    152                (289)                     -              (137)
Total assets                                172,859               2,975                 (3,581)          172,253
Capital expenditures                            132                   3                      -               135
Depreciation and amortization                    96                   3                      -                99

Six months ended                                               Real Estate
June 30, 2000                               Banking            Management           Eliminations          Total
---------------------------------------------------------------------------------------------------------------------------

Interest income                              $5,998            $      4                $    (4)         $  5,998
Other income                                    697                 130                    (17)              810
Interest expense                              4,094                   4                     (4)            4,094
Other expense                                 3,116                 252                    (17)            3,351
Provision (adjustment) for loan losses          592                (417)                     -               175
Income (loss) before tax                     (1,106)                295                      -              (811)
Income tax expense (benefit)                   (579)                 69                      -              (510)
Total assets                                161,457               2,827                 (3,435)          160,849
Capital expenditures                             21                   -                      -                21
Depreciation and amortization                   177                   4                      -               181

Six months ended                                               Real Estate
June 31, 1999                               Banking            Management           Eliminations          Total
---------------------------------------------------------------------------------------------------------------------------

Interest income                              $6,502               $   3                 $   (3)           $6,502
Other income                                    893                 156                    (20)            1,029
Interest expense                              4,548                  11                     (3)            4,556
Other expense                                 2,580                 689                    (20)            3,249
Provision (adjustment) for loan losses         (604)                316                      -              (288)
Income (loss) before tax                        872                (857)                     -                15
Income tax expense (benefit)                    216                (389)                     -              (173)
Total assets                                172,859               2,975                 (3,581)          172,253
Capital expenditures                            192                   3                      -               195
Depreciation and amortization                   193                   6                      -               199
</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 June 30, 2000 was $133,000, compared to
net income of $53,000 for the same period last year. Basic and diluted net loss
per share was $.04 per share for the three months ended June 30, 2000, compared
to net income of $0.02 per share in 1999. The net loss for the six months ended
June 30, 2000 was $301,000 compared to net income of $188,000 for the same
period last year. Basic and diluted net loss per share was $0.09 per share for
the six months ended June 30, 2000, compared to net income of $0.06 per share in
1999. Interest income decreased $504,000 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 $239,000 for the six
months ended June 30, 2000. Interest expense decreased approximately $463,000
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 $10.6 million from December 31, 1999
to $160.9 million at June 30, 2000. Non-interest income for the six months ended
June 30, 2000, decreased $219,000 from the six months ended June 30, 1999
primarily due to a decrease in mortgage loan origination volume and service
charges collected on deposit accounts. Non-interest expense increased $101,000
to $3.4 million due primarily to the prior year's letter of credit valuation
provision of ($715,000), and a decrease in the valuation allowance for
affordable housing investments of $463,000. A reduction in total headcount
resulted in a decrease in salaries and employee benefits of $118,000 for the six
months ended June 30, 2000 compared to the prior period,

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. The net interest margin
increased during the six month period to 2.58% from 2.30% a year ago. Despite
the $28.2 million dollar decrease in average earning assets for the six months
ended June 30, 2000, net interest income decreased $42,000 to $1,904,000 for the
six months ended June 30, 2000. For the quarter ended June 30, 2000 net interest
income increased $79,000 over the quarter ended June 30, 1999. 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 real estate mortgage loans have decreased $6.6 million, resulting in a
decrease of $240,000 in interest income. Average multifamily and commercial real
estate loans also decreased $15.2 million due to continued workout efforts,
resulting in a decrease of interest income of $438,000. Certificates of deposit
and borrowings partially offset this reduction in assets with a decrease of
$10.9 million in certificates and $3.5 million in borrowings. This resulted in
decreased interest expense, of $310,000 and $105,000,

                                       11
<PAGE>

respectively. Interest income for the six months ended June 30, 2000 was $6.0
million compared to $6.5 million for the six months ended June 30, 1999, a
decrease of $500,000 or about 7.7%. Interest expense for the six months ended
June 30, 2000 was $4.1 million compared to $4.6 million for the six months ended
June 30, 1999, a decrease of $500,000 or 10.9%. These decreases were partially
offset by a $6.2 million increase in average consumer loans, resulting in an
increase of interest income of $239,000. 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 six months ended June 30,
2000 came despite the Supervisory Agreement between United and the OTS, and the
resulting lending restrictions. 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 six months ending June 30, 2000 was $175,000 compared to a credit
of $288,000 in the prior year, an increase of $463,000. During the six months
ended June 30, 1999 Fidelity reduced its allowance for loan losses and letters
of credit valuation reserve due to full pay-offs on large, impaired loans that
Fidelity had previously provided reserves for. The current quarter and six
months provision for loan losses was primarily associated with the consumer loan
portfolio due to losses on loans originated prior to January 1999. The ratio of
allowance for loan losses to non performing loans was 139.6% at June 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 June 30, 2000,
was $376,000 compared to $459,000 for the same period in 1999, a decrease of
$83,000. Non-interest income for the six months ended June 30, 2000, was
$810,000 compared to $1,029,000 for the same period in 1999, a decrease of
$219,000.

                                       12
<PAGE>

Non-interest income
-------------------
(in thousands)
<TABLE>
<CAPTION>
                                                    Six  Months Ended
                                                         June 30,                     Increase
                                                  2000              1999             (Decrease)

<S>                                             <C>               <C>                   <C>
Fee income-apartment management                 $   88            $   100               $(12)
Service charges on deposit accounts                140                204                (64)
Gain on sale of real estate loans                   13                120               (107)
Gain on sale of fixed assets                        13                                    13
Letter of credit fees                              266                291                (25)
Servicing fees on loans sold                        55                 48                  7
Release fees on multifamily loans                   12                 30                (18)
Real estate investment banking fees                 32                 21                 11
Agent fee income                                    46                  7                 39
Title fee income                                    12                 23                (11)
Rate cap fee                                        10                 21                (11)
Reborrowing fee                                     12                 50                (38)
Other                                              111                114                 (3)
                                                ------             ------             -------
  Total non-interest income                     $  810             $1,029             $ (219)
                                                ======             ======             =======
</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 six
months ended June 30, 2000 decreased approximately $12,000 due to a reduction in
the rate charged for apartment management. The stock purchase agreement approved
by 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 $64,000 for the six months ended June 30, 2000, compared to the prior
fiscal year due to the collectability of previously accrued fee income. Gains on
sale of real estate loans decreased $107,000 to $13,000 during the six months
ending June 30, 2000 due to a volume-driven decrease in mortgage loan sales.
Gain on sale of fixed assets increased $13,000 over the six months ending June
30, 1999 due to Fidelity selling equipment no longer in use. Letter of credit
fees decreased $25,000 from the prior year due to a decrease in outstanding
letters of credit and collectability on certain letters of credit. Release fees
on multifamily loans decreased $18,000 due to the decrease in the number of
units sold during the first six months of 2000 compared to last year at this
time. Agent fee income increased $39,000 over the prior year due to increased
activity in the consumer indirect lending area. Title fee income decreased
$11,000 compared to the six months ended June 30, 1999. The decrease is
primarily due to a decrease in loan volume compared to last year. Reborrowing
fees decreased $38,000 from last year due to Fidelity's continuation of exiting
the affordable housing and multifamily segment. Fees associated with this
segment will continue to decrease each year.

Non-Interest Expense
Non-interest expense increased $305,000 for the three months ended June 30,
2000, compared to the three months ended June 30, 1999. This increase was
associated with income recognition of $300,000 in provisions for letters of
credit, and partnership investment valuations June 30, 1999. Non-interest
expense increased $102,000 for the six months ended June 30, 2000, compared to
the six months ended June 30, 1999.

                                       13
<PAGE>

The following table summarizes non-interest expense for the six months ending
June 30, 1999 and 2000:


                                             Six Months Ended
                                                June 30
                                      ------------------------------------
                                                                 Increase
                                        2000        1999        (Decrease)
                                        ----        ----        ----------

Salaries and employee benefits         $1,545      $1,663    $    (118)
Letter of credit valuation provision                 (715)         715
Write down of affordable housing
  Partnership investments                  41         504         (463)
Legal and professional                    232         202           30
Occupancy expense                         184         185           (1)
Equipment expense                         132         149          (17)
Data processing expense                   166         211          (45)
Advertising                                83         100          (17)
Deposit insurance                         124         137          (13)
Correspondent bank charges                 78          77            1
Printing and supplies                      43          52           (9)
Loss on investment                        146         122           24
Telephone                                  61          32           29
Postage                                    51          45            6
Directors fees                             18          67          (49)
Credit Bureau expense                      28           6           22
Amortization of intangible assets          35                       35
Travel and lodging                         16          10            6
Other operating expense                   367         402          (35)
                                      ------------------------------------

   Total non-interest expense          $3,350      $3,249         $101
                                      ====================================


Salaries and employee benefits decreased $118,000 due to staff reductions
completed during the six months ended June 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. Last
year, $715,000 of income was recognized as a letter of credit valuation
provision compared to none during the six months ended June 30, 2000. This
credit last year was offset partially by additional writedowns on affordable
housing partnership investments totaling $504,000. Legal and professional fees
increased by $30,000 to $232,000, primarily due to additional costs incurred for
workout activities with respect to various classified assets. Equipment expense
decreased $17,000 from the prior year due to a decrease in depreciation and
equipment maintenance expense. Data processing expense for the six months ended
June 30, 2000 decreased $46,000 from the same period last year due to the
discontinuance of expenses connected with Y2K efforts. Advertising expense
decreased $17,000 from the prior year due to a decrease in television
advertising compared to the prior year. Deposit insurance decreased $13,000 from
the prior year due to a decrease of $9.2 million in deposits since June 30,
1999. Fidelity recorded its percentage share of losses, for its investments in
various affordable housing properties under the equity method of accounting.
Fidelity's losses were $146,000 and $122,000 for the six months ended June 30,
2000 and June 30, 1999, respectively. These writedowns are offset by tax credits
received and recorded as reductions of income tax expense. Telephone expense
increased $29,000 over last year due to the timing of invoices associated with
switching telephone service providers and the data transmission enhancements
associated with the new service. Directors fees decreased $49,000 for the six
months ended June 30, 2000 due to a

                                       14
<PAGE>

reduction in monthly board fees paid to directors. Credit bureau expense
increased $22,000 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 created. Amortization of these assets resulted
in expense of $35,000 for the six months ended June 30, 2000 compared to none
last year. Other operating expense decreased from 1999 by $35,000. Management
continues to monitor expenses closely.

Income Tax Benefit
The income tax benefit was $510,000 for the six months ending June 30, 2000
compared to $173,000 in the same period last year, primarily due to a decrease
in taxable income. Included in the tax benefit of $510,000 for the six months
ending June 30, 2000 are tax credits of $193,000. 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 of 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 six months ended June 30, 2000, was 62.9%, 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 June 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, planned sale of a portion of United's limited partnership
interests and the completion of Fidelity's transaction with Pedcor Holdings, LLC
on May 19, 2000. Please refer to the footnote, Capital Infusion, for further
details regarding the Pedcor transaction. 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 approximately 50% of the
initiatives included within its current business plan, sell approximately 50% 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 still 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. Fidelity is
currently working towards the goals used in its projections, however 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.


Financial Condition
Total assets at June 30, 2000 decreased $10.6 million to $160.8 million from
$171.5 million in December 1999. Average assets for the six months ended June
30, 2000 decreased 14.2% from 1999 to $164.3 million. Interest-bearing
liabilities at June 30, 2000 decreased $13.8 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, multifamily and fixed 1-4
family mortgage loans. Fidelity has continued to sell a portion of current
production of fixed 1-4 family mortgages to investors in the secondary market,
therefore the mortgage loan portfolio continues to decline.

                                       15
<PAGE>


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

<TABLE>
<CAPTION>
                                                                 June          December
                                                                 2000            1999
--------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>
Real estate mortgage loans
   First mortgage loans
      Conventional                                            $  48,815       $  48,845
      Construction                                                2,158           1,867
      Commercial                                                  7,559           8,576
      Multi-family loans                                          3,648           3,629
      Home equity loans                                           5,942           5,567
      First mortgage real estate loans purchased                  1,749           1,899
                                                            --------------------------------
                                                                 69,871          70,383
   Commercial loans, other than
      secured by real estate                                      2,992           4,154
   Consumer loans                                                37,231          24,403
                                                            --------------------------------
        Total loans                                             110,094          98,940
   Allowance for loan losses                                     (1,812)         (2,021)
                                                            --------------------------------

        Net loans                                              $108,282         $96,919
                                                            ================================

        Total assets                                           $160,849        $171,457
                                                            ================================

        Total loans to total assets                               68.4%           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
pursue refinancing opportunities for available outlets 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 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.

The increase in loans is primarily due to an increase in consumer loans of $12.8
million from December 31, 1999 to $37.2 million at June 30, 2000. Recent staff
replacements to the consumer loan department in late 1999 have contributed to an
increase in the automobile loans financed. The level of growth in the consumer
loan portfolio during the first six months of 2000 is not expected to be
repeated in the near future. Under the Supervisory Agreement, United's consumer
loan growth is limited to 25% of its total assets. United is expected to
increase sales of its loans to another financial institution, in which
automobile loans are originated on their behalf and United earns a fee from
these transactions. This process was started late in the second quarter of 2000.

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.

                                       16
<PAGE>

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 June 30, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                             June 30,          December 31,
                                                               2000                1999
  ------------------------------------------------------------------------------------------
                                                                (Dollars in Thousands)
<S>                                                           <C>               <C>
  Non-accrual loans
     Consumer                                                 $  127
     Commercial                                                  149
     Real estate mortgage                                                       $   253
     Multi-family                                                478                229
        Total non-accrual loans                                  754                482
  Restructured
     Consumer                                                    106                 75
     Commercial                                                  119                118
        Total restructured loans                                 225                193
  90 days or more past due and accruing
     Consumer                                                     35                135
     Commercial                                                  284                313
                                                         -----------------------------------
        Total 90 days or more past due and accruing              319                448
                                                         -----------------------------------
          Total non-performing loans                          $1,298             $1,123
                                                         ===================================


  Ratio of non-performing loans to total loans                1.18%              1.14%
                                                         ===================================

  Total loans                                              110,094               98,940

                                                         ===================================
</TABLE>

Non-performing loans were 1.18% of total loans at June 30, 2000, as compared to
1.14% of total loans at December 31, 1999 and consisted primarily of commercial,
mortgage and consumer loans. The increase in non-performing loans is due to an
increase in multifamily and consumer loans. 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 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 quarantees provided by
Pedcor as part of its stock purchase.

                                       17
<PAGE>

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 monthly 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)

                                                     June 30,    December 31,
                                                       2000          1999

Classified assets                                     $8,504        $8,991
Classified letters of credit                          11,964        13,218
                                                     -------       -------

      Total classified assets/letters of credit      $20,468       $22,209
                                                     =======       =======

Classified assets and letters of credit of Fidelity totaled $20.5 million at
June 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 119.5% and 167.8% of Fidelity's capital and reserves
at June 30, 2000 and December 31, 1999, respectively. Classified assets and
letters of credit were 50.9% and 72.0% of United's capital and reserves at June
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 $19.0 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 June 30, 2000 and December 31, 1999, Fidelity had
impaired loans totaling $7.6 million compared to $16.5 million at June 30, 1999,
a decrease of 53.9%. The large decrease in impaired loans recognizes Fidelity's
ongoing efforts to reduce classified loans. The allowance for losses on such
impaired loans totaled $951,000 and $1.1 million, which are included in
Fidelity's allowance for loan losses at June 30, 2000 and December 31, 1999,
respectively. In addition, using similar guidelines for impaired loans, impaired
letters of credit at June 30, 2000 total $12.2 million, versus $13.2 million at
December 31, 1999, a decrease of 7.6%. The valuation allowance on such impaired
letters of credit totaled $5.8 million and is included in Fidelity's letter of
credit valuation allowance at June 30, 2000 and 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 June 30, 2000 and
December 31, 1999:

<TABLE>
<CAPTION>
                                                          Six Months               Year
                                                             Ended                 Ended
-----------------------------------------------------------------------------------------------
                                                            June 30,            December 31,
                                                              2000                  1999
-----------------------------------------------------------------------------------------------
                                                                   (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                                                  135                 2,631
   Commercial                                                     12                    11
   Consumer                                                      196                   235
                                                     ------------------------------------------
      Total loan charge offs                                     423                 2,877
                                                     ------------------------------------------

Loan recoveries
   Real estate mortgage
    Multi-family                                                                         3
   Commercial                                                     17                     3
   Consumer                                                       22                    26
                                                     ------------------------------------------
      Total loan recoveries                                       39                    32
                                                     ------------------------------------------

Net charge offs                                                  384                 2,845

Provision for loan losses                                        175                 1,345
                                                     ------------------------------------------

Allowance for loan losses at end of period                 $   1,812             $   2,021
                                                     ==========================================

Ratio of net charge offs to average loans
   outstanding during period                                   0.73%                 5.20%
                                                     ==========================================

Ratio of provision for loan losses to average
   loans outstanding during period                             1.13%                 2.46%
                                                     ==========================================

Ratio of allowance for loan losses to total loans
   outstanding at year end                                     1.65%                 2.04%
                                                     ==========================================

Average amount of loans
   outstanding for the period                               $105,585              $108,455
                                                     ==========================================

Amount of loans outstanding
   at end of period                                         $110,094               $98,940
                                                     ==========================================
</TABLE>

The allowance for loan losses was $1.8 million at June 30, 2000 compared to $2.0
million at December 31, 1999. Net loan charge-offs were $384,000 or 0.73% of
average loans for the six months ended June 30, 2000 compared to $2.8 million or
5.20% of average loans for the six months ended December 31, 1999. During the
six months ended June 30, 2000, Fidelity charged-off $135,000 of multifamily
loans that reserves were previously provided for. Consumer loans charged-off
totaled $196,000, primarily for loans originated prior to 1999.

                                       19
<PAGE>

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 $44.5 million at June 30, 2000
and December 31, 1999. Specific allocations for letters of credit totaled 9.0%
of outstanding letters of credit at June 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 June 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 June 30, 2000 and at December 31, 1999 are as follows:

Allocation of Amount
                                                  June 30,   December 31,
                                                   2000         1999
-------------------------------------------------------------------------
                                                     (in thousands)
Real Estate Mortgage:
   Conventional and home equity                     $102       $   103
   Multi-family                                      554           482
Consumer                                             491           496
Commercial                                           665           940
                                               --------------------------

      Total                                       $1,812        $2,021
                                               ==========================

Percentage of Loans to Total Loans
                                                June 30,     December 31,
                                                  2000           1999
-------------------------------------------------------------------------
Real Estate Mortgage
   Conventional and home equity                   51.5%         51.3%
   Multi-family                                    3.3           3.7
Consumer                                          33.8          30.3
Commercial                                        11.4          14.7
                                               --------------------------
      Total                                      100.0%        100.0%
                                               ==========================

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 June 30, 2000, the investment portfolio represented 14.1% 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. During fiscal 1999
due to continued reductions in the loan portfolio, the excess liquidity was
reinvested in lower risk investment securities. The primary objectives, in order
of priority, are to further the safety and soundness of

                                       20
<PAGE>

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 June 30, 2000, the entire investment portfolio was classified as available
for sale. The net unrealized loss at June 30, 2000, which is included as a
component of stockholders' equity, was $648,000 and was comprised of gross
losses of $1,073,000 and a tax benefit of $425,000. The decrease in the
unrealized loss was caused by market interest rate changes during the period.
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 June 30, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                                         June 30,          December 31,
                                                                           2000                1999
---------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)
<S>                                                                        <C>               <C>
   Federal Home Loan Mortgage Corporation
      mortgage-backed securities                                           $  899            $  1,043
   Federal National Mortgage Association mortgage-backed securities         1,207               1,377
   Government National Mortgage Association
      mortgage-backed securities                                           20,509              21,885

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

        Total securities available for sale                               $22,615             $24,305
                                                                      ===================================
</TABLE>

For the six months ended June 30, 2000, United's investment securities portfolio
decreased by $1.7 million to $22.6 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 six 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 ($100,000 or more), and variable rate IRA certificates.

Average deposits decreased by $2.9 million during the first six months of 2000.
An increase in deposits came primarily in the area of core certificates of
deposit, for which the average balance increased $6.4 million but was offset by
a decrease in NOW accounts and agent-acquired certificates of deposit of $2.2
million and $6.5 million, respectively. According to the provisions of the
Supervisory Agreement, Fidelity is unable to use agent-acquired certificates as
a funding source. 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.

                                       21
<PAGE>

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

<TABLE>
<CAPTION>
                                                    June 30,                   December 31,
                                                      2000                         1999
Average Deposits                              Amount        Rate            Amount        Rate
-------------------------------------------------------------------------------------------------
                                                               (in thousands)
<S>                                          <C>             <C>          <C>             <C>
Demand                                       $   6,045                    $   6,097
NOW accounts                                    16,859       3.27%           19,107       3.39%
Money market accounts                            2,226       1.99             2,545       2.03
Savings accounts                                 4,451       2.09             4,657       2.26
Certificates of deposit                         84,757       5.75            78,329       5.60
Agent-acquired certificates of deposit          11,677       5.92            18,147       5.88
                                          --------------                -------------

           Totals                             $126,015       4.96%         $128,882       4.85%
                                          ==============                =============
</TABLE>

Borrowings
Fidelity's long-term debt increased $1.4 million for the first six 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 $14.5 million.


                                       22
<PAGE>

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

<TABLE>
<CAPTION>
                                                                           June 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                                                  $     979                  985
Note payable, 8.49% adjusted annually, payable $12 per month,
   including interest, due September 2010, secured by specific
   multi-family mortgages                                                      1,501                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 June 30, 2000
   and December 31, 1999)                                                     10,503                9,039
                                                                         -----------------------------------

        Total long-term debt                                                 $24,953              $23,504
                                                                         ===================================
</TABLE>

Capital Resources
Fidelity's stockholders' equity increased $4.1 to $9.5 million at June 30, 2000,
compared to $5.4 million at December 31, 1999. The change in stockholders'
equity was accounted for by a net loss of $301,000, a decrease in the net
unrealized loss on securities available for sale of $127,000 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 June 30, 2000, actual and required minimum levels (to be adequately and well
capitalized) of regulatory capital for United were as follows:

<TABLE>
<CAPTION>
                             (Dollars in Thousands)

------------------------------------------------------------------------------------------------------------
                                                                 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)                $18,182      13.9%      $10,490         8.0%        $13,113       10.0%
------------------------------------------------------------------------------------------------------------
Tier 1 capital (to risk-weighted
assets)                               13,658      10.4         5,245         4.0           7,868        6.0
------------------------------------------------------------------------------------------------------------
Core capital (to adjusted total
assets)                               13,658       8.9         6,158         4.0           6,556        5.0
------------------------------------------------------------------------------------------------------------
Core capital (to adjusted
tangible assets)                      13,658       8.9         3,079         2.0         N/A          N/A
------------------------------------------------------------------------------------------------------------
Tangible capital (to adjusted
total assets)                         13,658       8.9         2,309         1.5         N/A          N/A
------------------------------------------------------------------------------------------------------------
</TABLE>

                                       23
<PAGE>

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 8.9% for the six months ended June
30, 2000 and 6.8% for December 31, 1999, tier I capital to risk-weighted assets
was 10.4% and 9.1% and total capital to risk-weighted assets was 13.9% and 14.3%
at June 30, 2000 and December 31, 1999, respectively. Book value per share,
including unrealized losses on investment securities, increased to $2.07 at June
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 developed by United established capital targets of 8.25%
for tangible, leverage and core capital and 16% for risk-based capital. The
Agreement did set a target level to reduce its classified assets to 50% of core
capital plus the allowance for loan losses and the letter of credit valuation
reserves by December 31, 1999. At June 30, 2000, United's tangible, leverage and
core capital was 8.9% and risk-based capital was 13.9%. United's classified
assets to core capital plus the allowance for loan losses and letter of credit
valuation reserves was 72.9% at June 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 June 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 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 financing, and dividends from United (with OTS approval), the
holding company may deplete its available cash in June 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 also considering common stock rights
offering to existing shareholders on as-needed basis, as well as negotiating
agreements to extend maturities on certain debt obligations coming due in 2001
and 2002. These actions, in the aggregate, should facilitate the acquisition of
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 June 30,
2000 and December 31, 1999, United's liquidity ratios were 14.1% 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 six months of 2000. Management believes that this
level of liquidity is sufficient to meet any anticipated requirements for
United's operations.

                                       24
<PAGE>

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
$12.5 million at June 30, 1999, to $10.5 million at June 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.

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 March 31, 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 March 31, 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 $3.5 million at March 31, 2000 and $2.9 million at December 31,
1999, United would have been required to make a deduction from its total capital
available to calculate its risk based capital requirement if the institution was
required to file the CMR at March 31, 2000, but not at December 31, 1999. The
increase in interest rate risk in the event of increased rates, from December
31, 1999 to March 31, 2000 is due to interest rate changes and a change in
United's balance sheet mix.

                                       25
<PAGE>

                     Interest Rate Risk as of March 31, 2000
                     ---------------------------------------

<TABLE>
<CAPTION>
                          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     $9,754           $(5,424)          (36)%            6.46%         - 304 bp
  + 200 bp     11,630            (3,548)          (23)             7.55          - 194 bp
  + 100 bp     13,492            (1,685)          (11)             8.60         -   90 bp
      0 bp     15,177                                              9.50
  - 100 bp     16,316             1,139             8             10.06             56 bp
  - 200 bp     16,417             1,239             8             10.04             54 bp
  - 300 bp     16,356             1,179             8              9.93             43 bp



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 Ratio         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.

                                       26
<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:
              On May 19, 2000 at 8:30 AM, at Fidelity's subsidiary downtown
              offices at 18 N.W. Fourth Street, Evansville, Indiana, the Annual
              meeting of Shareholders was held in order to vote on seven
              matters.

              Matter 1 was to elect three directors to the Board of Directors to
              serve until their successors are duly elected and qualified. The
              vote tabulation for the election of Curt J. Angermeier was
              2,788,531 for and 195,851 shares against; Donald R. Neel was
              2,791,006 for and 195,913 shares against; Barry Schnakenburg was
              2,755,524 for and 220,263 shares against.

              The following directors terms continued after the meeting; Curt
              J. Angermeier,  William Baugh, Jack Cunningham, M. Brian Davis,
              Donald R. Neel and Barry A. Schnakenburg.

              Matter 2 was to approve the Stock Purchase Agreement. The vote
              tabulation for approval was 2,059,327 for, 213,538 against, and
              10,956 shares abstained.

              Matter 3 was to increase the Authorized Shares. The vote
              tabulation for approval was 2,723,676 for, 228,151 against, and
              15,702 shares abstained.

              Matter 4 was the removal of Cumulative Voting for Directors. The
              vote tabulation for approval 2,037,307 for, 213,078 against, and
              28,356 shares abstained.

              Matter 5 was to reduce the Terms of Directors. The vote tabulation
              for approval was 2,070,460 for, 175,281 against, and 27,050 shares
              abstained.

              Matter 6 was to authorize additional provisions for removal of
              directors. The vote tabulation for approval was 2,207,943 for,
              48,295 against and 22,454 shares abstained.

              Matter 7 was the ratification of the appointment of the auditor of
              Fidelity. The vote tabulation for Olive LLP was 2,924,585 for,
              32,604 shares against, and 10,011 shares abstained.


ITEM 5   Other Information:
              None

                                       27
<PAGE>

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 May 24, 2000.

                      Fidelity reported the completion of the Pedcor transaction
                      on May 19, following receipt of regulatory approval on May
                      4 and receipt of shareholder approval on May 19, 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: AUGUST 14, 2000               By:   /s/ M. BRIAN DAVIS
      ---------------                     ---------------------
                                          M. Brian Davis
                                          President and CEO



                                    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               31






                                       30