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

                                    FORM 10-Q




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


                    For the Quarter Ended September 30, 2003



                            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)


                               18 NW Fourth Street
                            Evansville, Indiana 47708
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)



                                 (812) 424-0921
               --------------------------------------------------
               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  X     NO
                                  ---       ---

Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).

                              YES        NO  X
                                  ---       ---

As of October 28, 2003, there were 9,618,658 shares of the Registrant's common
stock, $1 stated value, issued and outstanding.

<PAGE>

                    FIDELITY FEDERAL BANCORP AND SUBSIDIARIES

                                      Index



                                                                            Page
PART I - FINANCIAL INFORMATION

  ITEM 1--Financial Statements:

   Condensed Consolidated Balance Sheets..................................     3

   Condensed Consolidated Statements of Income............................     4

   Condensed Consolidated Statements of Changes in Stockholders' Equity...     5

   Condensed Consolidated Statements 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......................................... 11-20

  ITEM 3--Quantitative and Qualitative Disclosures about Market Risk......    20

  ITEM 4--Controls and Procedures.........................................    20

PART II - OTHER INFORMATION...............................................    22

SIGNATURES................................................................    23

Index to Exhibits.........................................................    24


                                       2
<PAGE>

Item 1 - Financial Statements

                         Part I - Financial Information

                    Fidelity Federal Bancorp And Subsidiaries
                      Condensed Consolidated Balance Sheets
                        (In thousands except share data)
<TABLE>
<CAPTION>
                                                                  September 30, December 31,
                                                                     2003          2002
                                                                  -----------   ------------
                                                                  (Unaudited)
<S>                                                                <C>          <C>
Assets
Cash and due from banks                                            $   1,229    $   1,454
Interest-bearing demand deposits                                       3,266        2,369
                                                                   ---------    ---------
   Cash and cash equivalents                                           4,495        3,823
Investment securities available for sale                              40,764       34,912
Loans, net of allowance for loan losses of $762 and $837              92,078       73,087
Premises and equipment                                                 4,681        4,935
Federal Home Loan Bank of Indianapolis stock                           2,743        2,674
Deferred income tax receivable                                         6,033        5,615
Foreclosed assets held for sale, net of allowance of $0 and $100         207        2,145
Interest receivable and other assets                                   5,893        5,099
                                                                   ---------    ---------

   Total assets                                                    $ 156,894    $ 132,290
                                                                   =========    =========

Liabilities
Deposits
   Non-interest bearing                                            $   6,599    $   3,209
   Interest bearing                                                  109,555      103,582
                                                                   ---------    ---------
     Total deposits                                                  116,154      106,791
Federal Home Loan Bank advances                                       17,000        3,000
Long-term debt                                                         8,302       10,586
Valuation allowance for letters of credit                                287          445
Other liabilities                                                      1,746        1,880
                                                                   ---------    ---------
     Total liabilities                                               143,489      122,702
                                                                   ---------    ---------

Commitments and Contingencies                                             --           --

Stockholders' Equity
Preferred stock, no par or stated value
   Authorized and unissued--5,000,000 shares
Common stock, $1 stated value
Authorized--15,000,000 shares
Issued and outstanding--9,618,658 and 6,740,883 shares                 9,619        6,741
Additional paid-in capital                                            16,635       15,359
Stock warrants                                                           261          261
Retained earnings                                                    (12,969)     (13,152)
Accumulated other comprehensive income (loss)                           (141)         379
                                                                   ---------    ---------
Total stockholders' equity                                            13,405        9,588
                                                                   ---------    ---------

Total liabilities and stockholders' equity                         $ 156,894    $ 132,290
                                                                   =========    =========
</TABLE>
See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                    FIDELITY FEDERAL BANCORP AND SUBSIDIARIES
               Condensed Consolidated Statements of Income (Loss)
                        (In Thousands, Except Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                  Three Months Ended              Nine Months Ended
                                                                     September 30,                   September 30,
                                                                 2003            2002            2003            2002
                                                              -----------------------------------------------------------
<S>                                                           <C>             <C>             <C>             <C>
Interest Income
   Loans receivable                                           $     1,241     $     1,896     $     3,600     $     6,033
   Investment securities--taxable                                     339             463           1,028           1,248
   Loans held for sale                                                 --              --              39              --
   Deposits with financial institutions                                 4              25              42             107
   Other dividend income                                               31              42             105             121
                                                              -----------     -----------     -----------     -----------
         Total interest income                                      1,615           2,426           4,814           7,509
                                                              -----------     -----------     -----------     -----------

Interest Expense
   Deposits                                                           630           1,127           2,263           3,400
   Short-term borrowings                                                1               4               5              25
   Long-term debt                                                     201             378             703           1,316
                                                              -----------     -----------     -----------     -----------
         Total interest expense                                       832           1,509           2,971           4,741
                                                              -----------     -----------     -----------     -----------

Net Interest Income                                                   783             917           1,843           2,768
   Provision for loan losses                                           99            (400)            (23)           (400)
                                                              -----------     -----------     -----------     -----------


Net Interest Income After Provision for Loan Losses                   684           1,317           1,866           3,168
                                                              -----------     -----------     -----------     -----------


Other Income
   Service charges on deposit accounts                                108             121             327             319
   Net gains on loan sales                                            165             230             648             733
   Net gains on investment sales                                       19              --             339              73
   Letter of credit fees                                              125             124             367             374
   Underwriting and document prep fees                                 64              49             182             107
   Servicing fees on loans sold                                        78              36             216             110
   Securitization income                                               42              --             155              --
   Dealer interest received                                            80               6             243              19
   Gain on sale of real estate owned                                   --              --             317              --
   Other income                                                       234             279             444             853
                                                              -----------     -----------     -----------     -----------
         Total non-interest income                                    915             845           3,238           2,588
                                                              -----------     -----------     -----------     -----------

Other Expenses
   Salaries and employee benefits                                     823             978           2,546           2,773
   Occupancy                                                           87              93             262             278
   Equipment                                                          101              85             300             255
   Data processing                                                    107              83             322             247
   Deposit Insurance                                                   13              13              39              43
   Legal and professional                                              67             121             182             248
   REO expenses                                                        14             153              32             187
   Insurance                                                           74              44             209             129
   Advertising                                                         30              33             119             108
   Printing, postage, and office supplies                              50              45             162             177
   Loss on securitization                                              --             265              --             265
   Fee on prepayment of FHLB advances                                  --             488              --             504
   Letter of credit valuation provision                                --              --            (170)             --
   Amortization of intangible assets                                   --             864              --             917
   Other                                                              297             351           1,078           1,117
                                                              -----------     -----------     -----------     -----------
         Total non-interest expense                                 1,663           3,616           5,081           7,248
                                                              -----------     -----------     -----------     -----------

Income (Loss) From Continuing Operations Before Income Tax            (64)         (1,454)             23          (1,492)
   Income tax expense (benefit)                                       (89)            562            (161)            394
                                                              -----------     -----------     -----------     -----------
Income (loss) from continuing operations                               25          (2,016)            184          (1,886)
   Loss on discontinued operations before tax                          --            (762)             --            (762)
   Income tax expense                                                  --            (229)             --            (229)
                                                              -----------     -----------     -----------     -----------
   Loss on discontinued operations                                     --            (533)             --            (533)
                                                              -----------     -----------     -----------     -----------
Net Income (Loss)                                             $        25     $    (2,549)    $       184     $    (2,419)
                                                              ===========     ===========     ===========     ===========

Basic Net Income (Loss) From Continuing Operations            $      0.00     $     (0.32)    $      0.02     $     (0.31)
Basic Net Income (Loss) From Discontinued Operations                                (0.09)                          (0.09)
Basic Net Income (Loss)                                       $      0.00     $     (0.41)    $      0.02     $     (0.40)
Diluted Net Income (Loss) From Continuing Operations          $      0.00     $     (0.32)    $      0.02     $     (0.31)
Diluted Net Income (Loss) From Discontinuing Operations                             (0.09)                          (0.09)
Diluted Net Income (Loss)                                     $      0.00     $     (0.41)    $      0.02     $     (0.40)

Average Common and Common Equivalent Shares Outstanding         9,618,658       6,161,514       8,700,710       6,079,474
</TABLE>
See notes to condensed consolidated financial statements

                                       4
<PAGE>

                    FIDELITY FEDERAL BANCORP AND SUBSIDIARIES
      Condensed Consolidated Statements of Changes in Stockholders' Equity
                        (In Thousands, Except Share Data)

<TABLE>
<CAPTION>
                                                                                 Nine Months End
                                                                                  September 30,
                                                              --------------------------------------------------
                                                                                2003                    2002
                                                                             ----------              -----------
<S>                                                           <C>            <C>          <C>        <C>
Beginning Balance                                                              $9,588                  $11,895
   Comprehensive loss
     Net income (loss)                                              184                    (2,419)
     Other comprehensive income (loss) - net of tax                (520)                      188
                                                              -------------               ---------
   Comprehensive loss                                                             (336)                 (2,231)
   Issuance of stock                                                             4,153                   1,194
   Issuance of stock warrants                                                                              250
                                                                             ----------              -----------
Balances, September 30 (unaudited)                                             $13,405                 $11,108
                                                                             ==========              ===========
</TABLE>

See notes to condensed consolidated financial statements.







                                       5
<PAGE>

                    FIDELITY FEDERAL BANCORP AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                 September 30,
                                                                            ---------------------
                                                                              2003         2002
                                                                            --------     --------
<S>                                                                         <C>          <C>
Operating Activities
   Net income (loss)                                                        $    184     $ (2,419)
   Adjustments to reconcile net income to net
     cash provided (used) by operating activities
     Provision for loan losses                                                   (23)        (400)
     Letter of credit valuation provision                                       (170)          --
     Net gain on sales of securities available for sale                         (339)         (73)
     Net gain on sale of foreclosed assets                                      (317)
     Loss on impairment of assets held for sale and changes in estimated
       useful lives of intangible assets                                          --        1,184
     Depreciation and amortization                                               329          360
     Valuation allowance--affordable housing investments                          --           40
     Loans originated for sale                                               (40,954)     (11,975)
     Proceeds from sale of loans                                              40,859       12,019
     Changes in
       Interest payable and other liabilities                                   (122)       1,926
       Interest receivable and other assets                                     (531)      (2,094)
     Other                                                                       314         (226)
                                                                            --------     --------
     Net cash used by operating activities                                      (770)      (1,658)
                                                                            --------     --------

Investing Activities
   Purchases of securities available for sale                                (35,488)     (33,803)
   Proceeds from sales of securities available for sale                       15,814       13,107
   Proceeds from maturities of securities available for sale                  12,947           --
   Net change in FHLB stock                                                      (69)         (54)
   Net change in loans                                                       (19,463)      32,107
   Proceeds from sale of foreclosed assets                                     2,544
   Purchase of premises and equipment                                            (75)        (192)
   Funding on outstanding letters of credit                                       --         (225)
                                                                            --------     --------
     Net cash used by investing activities                                   (23,790)      10,940
                                                                            --------     --------

Financing Activities
   Net change in
     Noninterest-bearing, interest-bearing demand and savings deposits         1,596       (2,939)
     Certificates of deposit                                                   7,767          578
   Short-term borrowings                                                          --           --
   Proceeds of FHLB advances                                                  14,000       10,778
   Proceeds from long-term debt                                                4,000           --
   Repayment of long-term debt                                                (6,284)     (24,432)
   Issuance of stock                                                           4,153        1,194
   Issuance of stock warrants                                                     --          250
                                                                            --------     --------
     Net cash provided by financing activities                                25,232      (14,571)
                                                                            --------     --------

Net Change in Cash and Cash Equivalents                                          672       (5,289)

Cash and Cash Equivalents, Beginning of Period                                 3,823       16,316
                                                                            --------     --------

Cash and Cash Equivalents, End of Period                                    $  4,495     $ 11,027
                                                                            ========     ========

Additional Cash Flows Information
   Interest paid                                                            $  2,643     $  4,711
   Income tax paid (refunded)                                                     --           --
   Real estate acquired in settlement of loans                                   192        1,910
</TABLE>
See notes to condensed consolidated financial statements.


                                       6
<PAGE>

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

o        Accounting Policies

The significant accounting policies followed by Fidelity Federal Bancorp
("Fidelity") and its wholly owned subsidiaries for interim financial reporting
are consistent with the accounting policies followed for annual financial
reporting. All adjustments which are necessary for a fair presentation of the
results for the periods reported, consist only of normal recurring adjustments,
and have been included in the accompanying unaudited condensed consolidated
financial statements. The results of operations for the nine months ended
September 30, 2003 are not necessarily indicative of those expected for the
remainder of the year. The condensed consolidated balance sheet at December 31,
2002 has been derived from the audited financial statements.

Certain information and note disclosures normally included in the company's
annual financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the company's Form 10-K annual report for 2002 filed with the
Securities and Exchange Commission.

o        Company Subsidiaries

Fidelity's savings bank subsidiary, United Fidelity Bank, fsb ("United"), was
organized in 1914, is a federally-chartered stock savings bank located in
Evansville, Indiana, and is regulated by the Office of Thrift Supervision
("OTS"). Fidelity, through its savings bank subsidiary, is engaged in the
business of obtaining funds in the form of savings deposits and other borrowings
and investing such funds in consumer, commercial, and mortgage loans, and in
investment and money market securities.

o        Stockholders' Equity

In April 2003, Fidelity issued 2,777,777 shares of common stock for $4.0 million
in cash through the exercise of an option held by Pedcor Holdings and affiliates
("Pedcor"). The exercise price per share was $1.44, and was determined under a
formula included in the shareholder-approved stock purchase agreement effective
May 19, 2000. The proceeds of the option exercise were utilized to reduce
Fidelity's long-term debt outstanding. The remaining options expired on May 19,
2003.

Pedcor Holdings is a member of a group of companies which is controlled by Bruce
A. Cordingley, Gerald K. Pedigo, and Phillip J. Stoffregen, directors of
Fidelity Federal. Following the option exercise, the Pedcor group beneficially
owns approximately 67.75% of Fidelity's issued and outstanding stock.

In July 2002, Fidelity filed a registration statement for a stockholder rights
offering with the Securities and Exchange Commission. A total of 750,000 shares
were registered in this filing. For every 8.1 shares of Fidelity held on the
record date, shareholders could subscribe to purchase one share of Fidelity at
$2.00. The rights offering was completed in September 2002. Fidelity raised
$770,000, net of costs associated with the offering. The shares purchased by
shareholders with these funds were issued in September 2002.

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. United has entered into a
Supervisory Agreement ("Agreement") with the Office of Thrift Supervision
("OTS"). One of the provisions of the Agreement requires prior approval from OTS
for payments of dividends from United to Fidelity. Fidelity is uncertain when it
will pay dividends in the future and the amount of such dividends, if any.

                                       7
<PAGE>

o        Other Restrictions

The Agreement with the OTS is in effect until terminated, modified or suspended
by the OTS. The agreement was entered into in February 1999. The agreement as
written has been modified by mutual agreement to eliminate certain restrictions.
Under the terms of the Agreement, United developed and submitted to the OTS for
approval a strategic plan which included, 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 strategic plan is updated annually and submitted to the OTS.

In addition, United is also prohibited from taking certain actions without prior
approval, including but not limited to: engaging in "sub prime" consumer lending
activities; making capital distributions, including dividends to Fidelity;
making any additional equity investments; real estate development 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; and engaging in any new activities not included in the
strategic plan.

United is also required to obtain OTS approval prior to adding or replacing any
director or senior executive officer, from entering into any contract with any
executive officer or director which would require a golden-parachute payment and
from increasing any executive benefit package in an amount in excess of the
annual cost of living.

The Agreement currently limits the growth of its automobile loan portfolio, in
accordance with its business plan.

United received OTS approval in the first quarter of 2002 to resume commercial
lending on a limited basis in accordance with its business plan. In 2002, United
received OTS approval to complete a $50.0 million automobile loan securitization
transaction. Internet banking, a new activity approved by OTS, was introduced to
United's customers on July 1, 2003. During the third quarter of 2003, United's
most recent three year strategic business plan was approved by the OTS.

Management of United has taken, or has refrained from taking, as applicable, the
actions requested by the OTS. United believes it was in compliance with the
modified provisions of the Agreement at September 30, 2003.

o        Earnings per share

Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>
                                                               Three Months Ended September 30, 2003
                                                            ------------------------------------------
                                                             Income    Weighted-Average    Per Share
                                                                            Shares           Amount
                                                            ------------------------------------------
<S>                                                          <C>           <C>                <C>
           Net income                                        $  25
                                                             =====

           Basic earnings per share
               Income available to common stockholders       $  25         9,618,658          $ 0.00
                                                                                              ======

           Effect of dilutive securities
               Stock options                                     -                  -
                                                             -----    ---------------

           Diluted earnings per share
               Income available to common stockholders and
                 assumed conversions                         $  25         9,618,658          $ 0.00
                                                             =====         =========          ======
</TABLE>



                                       8
<PAGE>
<TABLE>
<CAPTION>
                                                                    Three Months Ended September 30, 2002
                                                                ----------------------------------------------
                                                                   Income    Weighted-Average    Per Share
                                                                                  Shares           Amount
                                                                ----------------------------------------------
<S>                                                              <C>               <C>            <C>
           Loss from continuing operations                       $ (2,016)
                                                                 =========

           Basic earnings per share
               Loss available to common stockholders             $ (2,016)         6,161,514      $  (0.32)
                                                                                                  =========

           Effect of dilutive securities
               Stock options                                             -                 -
                                                                 ---------         ---------

           Diluted earnings per share
               Loss available to common stockholders and
                 assumed conversions                             $ (2,016)         6,161,514      $  (0.32)
                                                                 ========          =========      ========


                                                                    Nine Months Ended September 30, 2003
                                                                ----------------------------------------------
                                                                   Income    Weighted-Average    Per Share
                                                                                  Shares           Amount
                                                                ----------------------------------------------

           Net income                                             $  184
                                                                  ======

           Basic earnings per share
               Income available to common stockholders            $  184         8,700,710          $ 0.02
                                                                                                    ======

           Effect of dilutive securities
               Stock options                                           -                 -
                                                                  ------         ---------

           Diluted earnings per share
               Income available to common stockholders and
                 assumed conversions                              $  184         8,700,710          $ 0.02
                                                                  ======         =========          ======


                                                                    Nine Months Ended September 30, 2002
                                                                ----------------------------------------------
                                                                   Income    Weighted-Average    Per Share
                                                                                  Shares           Amount
                                                                ----------------------------------------------

           Loss from continuing operations                       $ (1,886)
                                                                 ========

           Basic earnings per share
               Loss available to common stockholders             $ (1,886)         6,079,474       $ (0.31)
                                                                                                   ========

           Effect of dilutive securities
               Stock options                                            -                  -
                                                                   ------         ----------

           Diluted earnings per share
               Loss available to common stockholders and
                 assumed conversions                             $ (1,886)         6,079,474       $ (0.31)
                                                                 ========          =========       =======
</TABLE>

Options to purchase 345,796 shares of common stock at prices ranging from $1.53
to $11.81 per share as well as stock warrants representing the right to purchase
527,753 shares of common stock at prices ranging from $3.00 to $8.93 per share
were outstanding at September 30, 2003, but were not included in the computation
of diluted EPS because the options' and warrants' exercise prices were greater
than the average market price of the common shares.

o        Automobile Loan Securitization

United completed an automobile loan securitization transaction in 2002.

A summary of the components of serviced loans, which represents both owned and
securitized loans, follows. The automobile loans presented represent the managed
portfolio of indirect prime automobile loans.

                                       9
<PAGE>

                                                                 Loans Past
                                                  Principal       Due Over
As of September 30, 2003                           Balance         30 Days
----------------------------------------------------------------------------

 Total  serviced automobile loans                 $ 89,924           $348
 Less: Automobile loans securitized                (27,372)           (87)
      Automobile loans serviced                    (31,364)           (78)
                                                ----------------------------

 Total automobile loans held in portfolio         $ 31,188          $ 183
                                                ============================

United estimates the fair value of the retained interest at the date of the
transfer and during the period of the transaction based on a discounted cash
flow analysis. United receives monthly servicing fees based on the principal
loan balances outstanding, the rights to future cash flows arising after
investors in the securitization trust have received their contractual return and
after certain administrative costs of operating the trust. These cash flows are
estimated over the life of the loans using prepayment, default and interest rate
assumptions that market participants would use for financial instruments subject
to similar levels of prepayment, credit and interest rate risk.

A summary of the fair values of the interest-only strips and servicing assets
retained, key economic assumptions used to arrive at the fair values, and the
sensitivity of the September 30, 2003 fair values to immediate 10% and 20%
adverse changes in those assumptions follows. Actual credit losses experienced
through year-end 2002 and thus far in 2003 on the pool of automobile loans
securitized have been consistent with initial projections. As such, the expected
static pool loss assumption would perform consistently with that disclosed in
the sensitivity analysis. The sensitivities are hypothetical. Changes in fair
value may not be linear. Also, the effect of a variation in a particular
assumption on the fair value of the retained interests is calculated without
changing any other assumption; in reality, changes in one factor may result in
changes in another (for example, increases in market interest rates may result
in lower prepayments and increased credit losses), which might either magnify or
counteract the sensitivities.


<TABLE>
<CAPTION>
                                                 Weighted-       Monthly       Expected
                                                  Average      Prepayment     Cumulative     Annual      Weighted-
                                       Fair         Life          Speed         Credit      Discount      Average
                                       Value    (in months)      (% ABS)        Losses        Rate        Coupon
                                    ---------------------------------------------------------------------------------
<S>                                   <C>             <C>        <C>            <C>           <C>          <C>
Interest-only strip
   As of the date of securitization   $ 2,707          39         1.50%          1.50%         15.0%        8.75%
   As of September 30, 2003             1,880          20         1.42           1.50          15.0         8.59
   Decline in fair value of 10%
     adverse change                                              $  29           $ 18          $ 29
   Decline in fair value of 20%
     adverse change                                                 64             37            59

Servicing asset
   As of the date of securitization       362          39         1.50%          1.50%         15.0%
   As of September 30, 2003 *             181          20         1.42           1.50          15.0
   Decline in fair value of 10%
     adverse change                                             $    7            $ 0           $ 2
   Decline in fair value of 20%
     adverse change                                                 20              0             4
</TABLE>

*Carrying value of the servicing asset approximated fair value at September 30,
2003.

o        Stock Option

Stock options and Fidelity's stock-based incentive compensation plans are
discussed more fully in the notes to Fidelity's December 31, 2002 audited
financial statements contained in Fidelity's annual report. Fidelity accounts
for these plans under the recognition and measurement principles of APB Opinion
No. 25, Accounting for Stock Issued to Employees, and related Interpretations.
No stock-based employee compensation cost is reflected in net income, as all
options granted under those plans had an exercise price that was equal to or
greater than the market value of the underlying common stock on the grant date.
The following table illustrates the effect on net income and earnings per share
if Fidelity had applied the fair value provisions of FASB statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                       Three months ended       Nine months ended
                                                                          September 30             September 30
                                                                  ---------------------------------------------------
                                                                        2003          2002       2003       2002
                                                                  ---------------------------------------------------
<S>                                                                    <C>        <C>            <C>       <C>
Net income (loss) as reported                                          $   25     $  (2,549)     $ 184     $(2,419)
Less:  Total stock-based compensation cost determined
       under the fair value based method, net of income taxes              (8)          (9)        (24)       (63)
                                                                  ---------------------------------------------------

Pro forma net income (loss)                                            $   17     $ (2,558)      $ 160    $(2,482)
                                                                  ===================================================

Basic earnings (loss) per share - as reported                           $0.00        $(0.41)     $0.02      $(0.40)
Basic earnings (loss) per share - pro forma                             $0.00        $(0.42)     $0.02      $(0.41)
Diluted earnings (loss) per share - as reported                         $0.00        $(0.41)     $0.02      $(0.40)
Diluted earnings (loss) per share - pro forma                           $0.00        $(0.42)     $0.02      $(0.41)
</TABLE>

o        Discontinued Operations

On September 30, 2002, Fidelity signed a definitive agreement to sell the stock
of its wholly owned affordable housing subsidiary, Village Affordable Housing
Corporation and the stock of United's wholly owned affordable housing
subsidiary, Village Housing Corporation and certain other related affordable
housing assets to Pedcor Funding Corporation (Funding). At September 30, 2002,
Funding was a company controlled by three directors of Fidelity and are members
of a group that beneficially owns approximately 60.7% of Fidelity's issued and
outstanding stock.

Certain charges were recorded in the third quarter of 2002 because it was
determined that some of the assets held for sale were impaired or their
estimated useful lives had changed. Third quarter charges totaled approximately
$533,000, net of tax or $0.09 per share, including approximately $860,000 in
write-downs of intangible assets whose useful lives were reduced.

o        Reclassifications

Reclassifications of certain amounts from the condensed consolidated income
statements for the three and nine month periods ended September 30, 2002 have
been made to conform to the presentation of the three and nine month periods
ended September 30, 2003. These reclassifications had no effect on net income.


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

Management's discussion and analysis of financial condition and results of
operations is intended to assist in understanding the financial condition and
results of operations of Fidelity Federal. The information contained in this
section should be read in conjunction with the consolidated financial statements
and accompanying notes contained in this report.

Portions of this Management's Discussion and Analysis, as well as the notes to
the consolidated financial statements contain certain forward-looking statements
(as defined in the Private Securities Litigation Reform Act of 1995), which
reflect management's current beliefs and expectations and are intended to
benefit the reader. These forward-looking statements are inherently subject to
various risks and uncertainties which may cause actual results to differ
materially from expected results. Such risks and uncertainties include, but are
not limited to, economic conditions, generally and in the market areas of the
Company, increased competition in the financial services industry, actions by
the Federal Reserve Board, changes in interest rates and governmental regulation
and legislation.

Comparison of Financial Condition at September 30, 2003 and December 31, 2002

Total assets at September 30, 2003 were $156.9 million, an increase of $24.6
million from $132.3 million at December 31, 2002. The increase in total assets
was primarily attributable to a $5.9 million increase in investment securities
available for sale and $19.0 million increase in net loans.

United's investment portfolio consists entirely of mortgage related securities
which are classified as "available for sale". Approximately $15.8 million of
securities were sold during 2003, due to continued rapid prepayments in
connection with the low market rate environment, but replaced with approximately
$35.5 million in similar mortgage-backed securities during 2003.

                                       11
<PAGE>

Net loans increased $19.0 million to $92.1 million at September 30, 2003. The
increase is associated with a $13.0 million increase in consumer loans. Low
interest rates resulted in a $5.8 million increase in residential real estate
loans. Continued expansion in commercial lending resulted in a $2.1 million
increase in commercial real estate loans. Offsetting these increases was a $2.9
million decrease in loans due to the payoff of two loans on multifamily real
estate properties.

The allowances for loan losses decreased to $762,000 at September 30, 2003, from
$837,000 at December 31, 2002. The decline was due to a $23,000 credit to the
provision for loan losses and $52,000 in net charge-offs. The $23,000 net loan
loss provision credit was due to excess allowance created from consumer loan
sales during 2003 and a reduction of excess reserves on two multifamily real
estate properties that paid off during the second quarter of 2003 offset
partially by additional provisions for consumer loans in connection with new
loan growth. The allowance for loan losses represented 0.82% of total loans at
September 30, 2003, a decrease from 1.13% at December 31, 2002. Relative to
non-performing assets, the allowance for loan losses was 36.9% at September 30,
2003, compared to 27.4% at December 31, 2002.

The following table sets forth an analysis of the allowance for loan losses for
the nine months ended September 30, 2003 and the year ended December 31, 2002:

                                                  Nine months
                                                     ended       Year ended
                                                 September 30,   December 31,
                                                     2003           2002
                                                 -------------   ------------
                                                    (dollars in thousands)
Allowance for loan losses at beginning of period     $ 837          $ 2,138
Provision for losses                                   (23)            (360)
Loans charged off                                     (151)          (1,954)
Recoveries on loans                                     99            1,013
                                                    ------        ---------
Allowance for loan losses at end of period           $ 762          $   837
                                                    ======        =========

Foreclosed assets held for sale decreased $1.9 million primarily due to the
disposition of a commercial real estate property.

Total deposits increased $9.4 million to $116.2 million at September 30, 2003,
from $106.8 million at December 31, 2002. Approximately $3.4 million of the
increase was associated with an increase in non-interest bearing deposit
accounts and the remaining increase was in certificates of deposit.

Federal Home Loan Bank advances increased $14.0 million to $17.0 million at
September 30, 2003. The increase in borrowings was utilized to fund investment
and loan growth during 2003.

Long-term debt decreased $2.3 million to $8.3 million at September 30, 2003.
Notes payable secured by multi-family mortgages totaling $2.4 million and
bearing interest of 7.42% were paid off during the second quarter. An additional
$1.5 million note payable bearing interest at 10.50% was paid off during the
second quarter as well. Finally, $2.2 million in senior subordinated notes
bearing interest at 10% were retired in the second quarter of 2003. Fidelity
utilized liquidity from a $4.0 million stock option exercise by Pedcor Holdings
and affiliates in April 2003 to pay off the above noted long-term debt. In the
third quarter United secured $4.0 million in floating rate junior subordinated
debentures that qualify for Tier II capital inclusion and currently bear
interest at 4.09%.

Total stockholders' equity increased $3.8 million from December 31, 2002 to
$13.4 million at September 30, 2003. The increase was primarily attributable to
the exercise of stock options totaling $4.1 million during the second quarter of
2003 by Pedcor Holdings and affiliates and net income for the year-to-date
offset partially by the change in the unrealized gain (loss) on available for
sale securities.

Non-Performing Assets

Non-performing assets decreased $1.0 million from December 31, 2002 to $2.1
million or 1.3% of total assets at September 30, 2003. The decrease is primarily
due to the sale of a commercial real estate property with a carrying value of
$1.8 million. The decrease was partially offset by a $434,000 real estate
mortgage loan which was placed in non-accrual status.

                                       12
<PAGE>

The following table provides information on Fidelity's non-performing assets as
of September 30, 2003 and December 31, 2002:

                                                     September 30,  December 31,
                                                          2003          2002
                                                     ---------------------------
                                                        (Dollars in Thousands)
  Non-accrual loans
     Consumer                                           $  265        $  131
     Commercial                                            675           388
     Real estate mortgage                                  917           356
                                                        ------        ------
       Total non-accrual loans                           1,857           875
  Restructured
       Total restructured loans                             19            39
  90 days or more past due and accruing
     Consumer                                                3            --
     Real estate mortgage                                   --             1
                                                        ------        ------
       Total 90 days or more past due and accruing           3             1

  Foreclosed and repossessed assets                        207         2,145
                                                        ------        ------
           Total non-performing assets                  $2,086        $3,060
                                                        ======        ======

  Ratio of non-performing assets to total assets          1.33%         2.31%
                                                        =======       ======

Foreclosed and Repossessed Assets

Foreclosed and repossessed assets totaled $207,000 at September 30, 2003
compared to $2.1 million at December 31, 2002. The properties consists of two
duplex units. A sales contract has been executed on both properties and a sale
is expected to close in the fourth quarter of 2003. As previously discussed,
United disposed of a commercial real estate property with a value of $1.8
million during the second quarter of 2003.

Classified Assets

Classified assets totaled $2.0 million at September 30, 2003 compared to $6.0
million at December 31, 2002. Total classified assets were 13.7% and 55.4% of
Fidelity's capital and reserves at September 30, 2003 and December 31, 2002,
respectively. In addition to the classified assets and letters of credit, there
are other assets and letters of credit totaling $6.6 million at September 30,
2003, compared to $11.9 million at December 31, 2002, for which management was
closely monitoring the borrower's abilities to comply with payment terms.
Classified assets decreased $4.0 million from December 31, 2002 to $2.0 million
at September 30, 2003. The decrease is primarily attributable to two classified
multifamily loans totaling $2.6 million that were paid off during the second
quarter, in addition to the $1.8 million non-residential property that was sold
during the second quarter.

Capital Resources

United is subject to various regulatory capital requirements administered by the
federal banking agencies and is assigned to a capital category. The assigned
category is largely determined by three ratios that are calculated according to
the regulations: tangible capital, core capital and risk-based capital ratios.
The ratios are intended to measure capital relative to assets and credit risk
associated with those assets and off balance sheet exposures of the entity. The
capital category assigned to an entity can also be affected by qualitative
judgments made by regulatory agencies about the risk inherent in the entity's
activities that are not part of the calculated ratios.

The following is a summary of the Bank's regulatory capital and capital
requirements at September 30, 2003 based on capital regulations currently in
effect for savings institutions.

                                       Tangible      Core     Risk-based
                                       Capital      Capital     Capital

Regulatory capital                      $11,024     $11,332     $14,460
Minimum capital requirement               2,276       6,083       8,258
                                        -------     -------     -------
Excess capital                            8,748       5,249       6,202
                                        =======     =======     =======

Regulatory capital ratio                   7.26%       7.45%      14.01%
Required capital ratio                     1.50%       4.00%       8.00%
                                        -------     -------     -------
Ratio excess                               5.76%       3.45%       6.01%
                                        =======     =======     =======

                                       13
<PAGE>

Liquidity

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

Fidelity has a $500,000 line of credit and can draw on this line until its
expiration in September 2004. At September 30, 2003, no balance was outstanding
on the line of credit. Fidelity's liquidity position may be further improved by
the potential issuance of additional stock, additional debt or equity financing,
or dividends from United, to Fidelity. Fidelity believes that the above actions
in connection with the recent $6.3 million in debt reduction in the second
quarter, and the $1.5 million debt reduction scheduled for the fourth quarter,
will assist it in meeting its future liquidity needs.

o        Comparison of Operating Results for the Three Months Ended
         September 30, 2003 and 2002

General. Net income for the quarter ended September 30, 2003 was $25,000
compared to a net loss of $2.5 million for the quarter ended September 30, 2002.
Net interest income decreased, while non-interest income increased and
non-interest expense decreased.

Net Interest Income

Net interest income of $783,000 was recognized during the quarter ended
September 30, 2003, compared to $917,000 for the same period in 2002.

Total interest income decreased $811,000 to $1.6 million for the quarter ended
September 30, 2003, from $2.4 million for the same quarter in 2002. Total
interest income on loans decreased $655,000 in addition to a $124,000 decrease
in interest income from investment securities. Average loans outstanding
decreased $15.2 million to $84.9 million at September 30, 2003. During the third
quarter of 2002, United completed a loan securitization transaction resulting in
the sale of approximately $50 million in consumer loans.

Total interest expense decreased $677,000 to $832,000 for the quarter ended
September 30, 2003. The reduction in interest expense was mainly the product of
average deposits decreasing $14.8 million to $111.6 million for the quarter
ended September 30, 2003, from $126.5 million for the quarter ended September
30, 2002 combined with the average cost of those deposits falling to 2.77% from
3.72% for the respective periods. Also, the average cost of FHLB advances
decreased to 1.87% on an average balance of $19.7 million in the most recent
quarter compared to a cost of 3.54% on an average balance of $12.6 million for
the same period a year ago.

Provision for Loan Losses and Letters of Credit Valuation Provision

The provision for loan losses for the three months ended September 30, 2003 was
$99,000 compared to a credit of $400,000 for the three months ended September
30, 2002. Additional loan loss provisions were made during the current quarter
based on loan growth, delinquency and performance trends. The $400,000 provision
for loan loss credit in 2002 was primarily the result of the allowance for
automobile loan losses being reduced as a result of completing the automobile
loan securitization transaction.

Non-interest income

Non-interest income for the three months ended September 30, 2003 was $915,000
compared to $845,000 for the same period in 2002, an increase of $70,000.

Net gains on loan sales decreased $65,000 from the prior year's quarter
primarily due to a decrease in the volume of automobile loans sold. A $19,000
gain on the sale of available for sale investments was recognized for the
quarter ended September 30, 2002, compared to none for the same period in 2003.
Income of $42,000 was recognized on the retained interests in securitized
assets. Increased mortgage loan volume resulted in a $15,000 increase in
underwriting and document fees over the prior year. An increase in early payoffs
on automobile loans due to the historically low interest rate environment
resulted in the repayment of $80,000 in interest previously written off by
United to automobile dealerships compared to $6,000 for the same period in 2002.
During the third quarter of 2003, higher interest rates had a negative impact on
loan originations but also resulted in a reduction of future prepayment speeds
on the mortgage-servicing portfolio. This reduction in prepayment speeds
resulted in an increase in the value of United's net mortgage servicing asset.

                                       14
<PAGE>

Non-interest expense

Non-interest expense decreased $1.9 million to $1.7 million for the quarter
ended September 30, 2003 compared to $3.6 million for the same period in 2002.

Salaries and employee benefits decreased $155,000 from the third quarter of
2002, due to a reduction in full-time equivalent employees. Equipment expense
increased $16,000 over the prior due to increased maintenance and depreciation
expense. Data processing expense increased $24,000 over the prior year due to
increased volume of mortgage and consumer loans serviced when compared to the
same period in 2002 in addition to internet banking that was introduced to
customers during the third quarter of 2003. Professional liability insurance
expense increased $30,000 over the prior year due to market rate increases
during the year. A loss of $265,000 was recognized in connection with the
securitization transaction completed in the third quarter of 2002. Lower than
expected interest rates and higher costs attributed to the loss, but was offset
by a reversal of $360,000 in the provision for loan losses.

Non-recurring expenses incurred in the third quarter of 2002 included changes in
the estimated useful lives of intangible assets which created additional expense
of $864,000, and prepayment fees on FHLB advances of $488,000.

Comparison of Operating Results For the Nine Months Ended September 30, 2003,
and 2002

General. Net Income for the nine months ended September 30, 2003, was $184,000
compared to the loss of $2.4 million for the nine months ended September 30,
2002. This change was primarily attributable to a decrease in net interest
income offset by increases in non-interest income and a reduction in
non-interest expense.

Net Interest Income

The following table summarizes Fidelity's average interest-earning assets and
average interest-bearing liabilities with the accompanying average rates for the
first nine months of 2003 and 2002:

<TABLE>
<CAPTION>
                                                           Nine months ended          Average yield for
                                                             September 30,           nine months ended
                                                        (dollars in thousands)          September 30,
                                                      ------------------------     ----------------------
                                                         2003          2002          2003           2002
                                                       --------      --------      -------        -------
<S>                                                    <C>           <C>            <C>            <C>
Interest-earning assets                                $125,019      $143,161       5.15%          6.87%
Interest-bearing liabilities                            123,818       143,872       3.21           4.41
                                                       --------      --------       ----           ----
   Net interest bearing assets (liabilities)           $  1,201      $   (711)
                                                       ========      ========

   Net interest spread                                                              1.94%          2.46%
                                                                                    =====          =====

   Net interest margin                                                              1.97%          2.44%
                                                                                    =====          =====
</TABLE>

Net interest income for the first nine months of 2003 was $1.8 million compared
to $2.8 million earned during the first nine months of 2002. Total interest
income decreased $2.7 million to $4.8 million for the nine months ended
September 30, 2003 from $7.5 million for the same period in 2002. The decrease
in interest income was primarily attributable to a decrease in average consumer
loans of $22.9 million resulting from the completion of the securitization
transaction in the third quarter of 2002. The decrease in average balances in
combination with the partial replacement of these assets at lower yields,
resulting in a decrease in consumer loan interest income of $1.7 million.
Average mortgage loans decreased $2.9 million due to refinancing activity caused
by the low interest rate environment over the past year. The majority of
refinanced loans have been sold in the secondary market resulting in a decrease
in mortgage loan outstandings, and interest income of $522,000, when compared to
the prior year. Interest expense decreased $1.8 million due to a combination of
a decrease of $390,000 and $646,000 due to a decrease primarily in certificate
of deposits outstanding and their average interest rate, respectively. The
remaining decrease is associated with the decrease in the amount outstanding and
the average interest rates of FHLB advances and other borrowings totaling
$634,000.

                                       15
<PAGE>

The following table sets forth the details of the rate and volume change for the
first nine months of 2003 compared to the same period in 2002.

                                          Nine Months Ended September 30,
                                                  2003 vs 2002
                                               Increase (Decrease)
                                                Due to change in
                                          -------------------------------
                                          Volume       Rate        Total
                                          -------     -------     -------
Interest Income:
  Loans and mortgage-backed securities    $(1,077)    $(1,536)    $(2,613)
  Other interest-earning assets               (46)        (36)        (82)
                                          -------     -------     -------
    Total interest-earning assets          (1,123)     (1,572)     (2,695)

Interest Expense:
  Deposits                                   (416)       (720)     (1,136)
  FHLB advances and other borrowings         (416)       (218)       (634)
                                          -------     -------     -------
  Total interest-bearing liabilities         (832)       (938)     (1,770)
                                          -------     -------     -------
  Change in net interest income           $  (291)    $  (634)    $  (925)
                                          =======     =======     =======

Provision for Loan Losses and Letters of Credit Valuation Provision

The provision for loan losses for the nine months ended September 30, 2003 was a
credit of $23,000 compared to a $400,000 credit for the nine months ended
September 30, 2002. Additional loan loss provisions were made during first nine
months of 2003 based on loan growth, delinquency and charge-off trends. However,
these provisions were reduced by consumer loan sales completed during 2003, and
the payoffs of two large multifamily loans during the second quarter of 2003.

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. Specific reserves are
assigned to certain credits. The reserves are determined by management's
evaluation of those credits, which include evaluations of borrower's ability to
repay outstanding debt, as well as the value of supporting collateral. The
results of internal loan reviews, previous regulatory reviews, and past events
assist Fidelity in making that evaluation. The independent support for the
allowance for loan losses and letter 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 and consumer 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 nine months ended September 30, 2003 was $3.2
million compared to $2.6 million for the same period in 2002, an increase of
$650,000 or 25.1%.

Net gains on loan sales decreased $85,000 from the prior year due to a decrease
in volume of automobile loans sold. A $339,000 gain on the sale of available for
sale investments was recognized during the first nine months of 2003 compared to
$73,000 in 2002 for the same time period. Increased prepayment speeds, remaining
premiums, and pricing made it advantageous to sell the securities for a gain. As
previously discussed the sale of two foreclosed properties contributed to the
$317,000 gain on disposals compared to none in 2002. Income of $155,000 was
recognized on the retained interests in securitized assets. An increase in early
payoffs on automobile loans due to the historically low interest rate
environment resulted in the repayment of $243,000 in interest previously written
off compared to $19,000 for the same period in 2002. Servicing fees on loans
sold increased $106,000 over the prior year due to the increased size of the
mortgage and consumer loan servicing portfolios compared to the prior year.
During the third quarter of 2003, higher interest rates had a negative impact on
loan originations but also resulted in a reduction of future prepayment speeds
on the mortgage-servicing portfolio. This reduction in prepayment speeds
resulted in an increase in the value of United's mortgage servicing asset. A
gain on the disposition of a rate swap and the early extinguishment of debt of
$72,000 and $140,000 were recognized in 2002 compared to none in 2003. Included
in other income were non-recurring items which Fidelity received during 2003
totaling approximately $125,000 from Fidelity's active participation in
affordable housing activities, which ended late last year.

                                       16
<PAGE>

Non-interest expense

Non-interest expense decreased $2.1 million to $5.1 million for the nine months
ended September 30, 2003 compared to $7.2 million for the same period in 2002.

Salaries and employee benefits decreased $227,000 from the first nine months of
2002, due to a reduction in full-time equivalent employees. Data processing
expense increased $75,000 over the prior year due to increased volume of
mortgage and consumer loans serviced when compared to the same period in 2002 in
addition to internet banking that was introduced to customers during the third
quarter of 2003. Equipment expense increased $45,000 over the prior year due to
increased depreciation and maintenance expense. During the second quarter of
2003, a $170,000 reclassification was recorded between the letter of credit
valuation and allowance for loan losses in which net income was not impacted.
Printing, postage and office supplies decreased $15,000 from the prior year due
to various improvements made in the purchasing and printing process.
Professional liability insurance expense increased $80,000 over the prior year
due to market rate increases during the year. Intangible asset amortization was
$917,000 for the first nine months of 2002 compared to zero in 2003 due to the
change in the estimated lives of these assets in the third quarter of 2002.

Non-recurring expenses incurred in during 2002 included changes in the estimated
useful lives of intangible assets which created additional expense of $864,000,
and prepayment fees on FHLB advances of $504,000.

Income tax benefit

The income tax benefit was $89,000 for the three months ending September 30,
2003 compared to $562,000 in tax expense in the same period last year. The
income tax benefit was $161,000 for the nine months ending September 30, 2003
compared to $394,000 in expense for the same period last year. Included in the
2003 benefit are tax credits of $166,000. These credits are received from
Fidelity's remaining investments in limited partnership interests in affordable
housing properties and are a component of the overall return on these
investments. In 2002, net tax expense of $394,000 was recognized in connection
with Fidelity establishing on tax valuation allowance for the deferred tax asset
until such time that Fidelity meets its future period profitability forecasts.

Consideration of the need for a valuation allowance for the deferred tax asset
was made at September 30, 2003 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 Fidelity's business
plan and cost reductions. These analyses showed that not all carryforwards would
be utilized within the carryforward periods (federal and state) and a valuation
allowance would be necessary. The analyses assume that Fidelity will execute
approximately 50% of the initiatives included within its current business plan
and then achieve 10% growth in annual earnings thereafter. The conservative
level of earnings contemplated by these analyses, if achieved, will constitute
for the majority of the carryforward periods, earnings levels that are below
other thrift holding companies included within Fidelity's peer group. Due to
capital gains generated as a result of the sale of two Company subsidiaries, and
a level of projected profitability for 2002 being less than originally
anticipated, Fidelity's deferred tax valuation allowance was $500,000 at
December 31, 2002. Fidelity considers the current valuation allowance adequate
at September 30, 2003 based upon the results of the above analysis and
assumptions, but cannot assure that future income will be enough to support the
current level of deferred taxes.

The assumptions used to help consider the need for a valuation allowance for the
deferred tax asset are subject to certain risks and uncertainties that could
impact the final determination regarding the amount of the valuation allowance.
These risks include the failure to implement the business plan targets for
increased revenues, cost reductions, the potential loss of key employees,
ability to maintain projected interest rate margins, and the potential
disruption of activities in key income-producing areas.


Critical Accounting Policies


Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses
charged to earnings as losses are estimated to have occurred. Loan losses are
charged against the allowance when management believes the uncollectibility of a
loan balance is confirmed. Subsequent recoveries, if any, are credited to the
allowance.

The allowance for loan losses is evaluated on a regular basis by management and
is based upon management's periodic review of the collectibility of the loans in
light of historical experience, the nature and volume of the loan portfolio,
adverse situations that may affect the borrower's ability to repay, estimated
value of any underlying

                                       17
<PAGE>

collateral and prevailing economic conditions. This evaluation is inherently
subjective as it requires estimates that are susceptible to significant revision
as more information becomes available.

A loan is considered impaired when, based on current information and events, it
is probable that Fidelity or any of its wholly owned subsidiaries will be unable
to collect the scheduled payments of principal or interest when due according to
the contractual terms of the loan agreement. Factors considered by management in
determining impairment include payment status, collateral value and the
probability of collecting scheduled principal and interest payments when due.
Loans that experience insignificant payment delays and payment shortfalls
generally are not classified as impaired. Management determines the significance
of payment delays and payment shortfalls on a case-by-case basis, taking into
consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower's
prior payment record and the amount of the shortfall in relation to the
principal and interest owed. Impairment is measured on a loan-by-loan basis for
commercial and construction loans by either the present value of expected future
cash flows discounted at the loan's effective interest rate, the loan's
obtainable market price or the fair value of the collateral if the loan is
collateral dependent.

Large groups of smaller balance homogenous loans are collectively evaluated for
impairment. Accordingly, United does not separately identify individual consumer
and residential loans for impairment disclosures.

Automobile Loan Securitizations

In 2002, United used the securitization of automobile loans as a source of
funding and as a mechanism to reduce its volume of automobile loans. Automobile
loans were transferred into a qualifying special purpose entity (SPE) then to a
trust in a transaction which is effective under applicable banking rules and
regulations to legally isolate the assets from United. Where the transferor is a
depository institution such as United, legal isolation is accomplished through
compliance with specific rules and regulations of the relevant regulatory
authorities. SFAS 140 requires, for certain transactions completed after the
initial adoption date, a "true sale" analysis of the treatment of the transfer
under state law as if United were a debtor under the bankruptcy code. A "true
sale" legal analysis includes several legally relevant factors, such as the
nature and level of recourse to United and the nature of retained servicing
rights. The analytical conclusion as to a true sale is never absolute and
unconditional, but contains qualifications based on the inherent equitable
powers of a bankruptcy court, as well as the unsettled state of the common law.
Once the legal isolation test has been met under SFAS 140, other factors
concerning the nature and extent of United's control over the transferred assets
are taken into account in order to determine whether derecognition of assets is
warranted, including whether the SPE has complied with rules concerning
qualifying special purpose entities.

A legal opinion was obtained for the automobile loan securitization transaction
in 2002, which was structured as a two-step securitization. While noting the
transaction fell within the meaning of a "securitization" under the FDIC
regulation, "Treatment by the Federal Deposit Insurance Corporation as
Conservator or Receiver of Financial Assets Transferred by an Insured Depository
Institution in Connection with a Securitization or Participation" (the
"Securitization Rule"), in accordance with accounting guidance, an analysis was
also rendered under state law as if United was a debtor under the bankruptcy
code. The "true sale" opinion provides reasonable assurance the purchased assets
would not be characterized as the property of United's receivership or
conservatorship estate in the event of insolvency, and also states United would
not be required to substantively consolidate the assets and liabilities of the
purchaser SPE with those of United upon such event.

In a securitization, the trust issues beneficial interests in the form of senior
and subordinated asset-backed securities backed or collateralized by the assets
sold to the trust. The senior classes of the asset-backed securities typically
receive investment grade credit ratings at the time of issuance. These ratings
are generally achieved through the acquisition of a financial guarantee policy,
the creation of lower-rated subordinated classes of asset-backed securities, as
well as subordinated interests retained by an affiliate of United. In all cases,
United or its affiliate retains interests in the securitized assets, which may
take the form of seller certificates, subordinated tranches, cash reserve
balances, servicing assets, and interest-only strips representing the cash flows
generated by the assets in excess of the contractual cash flows required to be
paid to the investors and for other obligations such as servicing fees.

In accordance with SFAS 140, securitized automobile loans are removed from the
balance sheet and a net gain or loss is recognized in income at the time of
initial sale and each subsequent sale when the combined net sales proceeds and,
if applicable, retained interests differ from the loans' allocated carrying
amount. Net gains or losses resulting from securitizations are recorded in
noninterest income or expense.

Retained interests in the subordinated tranches and interest-only strips are
recorded at their fair value and accounted for as available-for-sale securities
with subsequent adjustments to fair value recorded through other

                                       18
<PAGE>

comprehensive income within stockholders' equity or in other noninterest expense
in the income statement if the fair value has declined below the carrying amount
and such decline has been determined to be other-than-temporary. United uses
assumptions and estimates in determining the fair value allocated to the
retained interests at the time of sale and each subsequent sale in accordance
with SFAS 140. These assumptions and estimates include projections concerning
rates charged to customers, the expected life of the receivables, credit loss
experience, loan repayment rates, the cost of funds, and discount rates
commensurate with the risks involved.

On a quarterly basis, management reviews the historical performance of the
retained interest and the assumptions used to project future cash flows. If past
performance and future expectations dictate, assumptions are revised and the
present value of future cash flows is recalculated. Refer to the automobile loan
securitization footnote for further analysis of the assumptions used in the
determination of fair value.

The retained interest represents United's maximum loss exposure with respect to
securitization vehicles. The investors in the debt securities issued by the SPEs
have no further recourse against United if cash flows generated by the
securitized automobile loans are inadequate to service the obligations of the
SPEs.

Transaction costs associated with the automobile loan securitization were
recognized as a component of the gain or loss at the time of sale.

Servicing rights

Servicing rights on originated loans that have been sold, including those
transferred as part of securitizations, are capitalized by allocating the total
cost of the mortgage or consumer loans between the servicing rights and the
loans based on their relative fair values. Capitalized servicing rights are
amortized in proportion to and over the period of estimated servicing revenues.
Impairment of mortgage and consumer loan-servicing rights is assessed based on
the fair value of those rights. Fair values are estimated using discounted cash
flows based on a current market interest rate. For purposes of measuring
impairment, the rights are stratified based on the predominant risk
characteristics of the underlying loans. The predominant characteristic
currently used for stratification is type of loan. The amount of impairment
recognized is the amount by which the capitalized servicing rights for a stratum
exceed their fair value.

Income tax

Income tax in the consolidated statements of income includes deferred income tax
provisions or benefits for all significant temporary differences in recognizing
income and expenses for financial reporting and income tax purposes. Fidelity
files consolidated income tax returns with its subsidiaries. See the section
titled "income tax benefit" for discussion of the deferred income tax receivable
and the need for a valuation allowance against that receivable.


Recently Issued Accounting Guidance

In May 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial
Instruments with characteristics of Both Liabilities and Equity." This Statement
establishes standards for how an entity classifies and measures certain
financial instruments with characteristics of both liabilities and equity. This
Statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. Adoption of this Standard did not have a
material effect on Fidelity's Condensed Consolidated Financial Statements.

In November 2002, the FASB issued Interpretation No. 45, (FIN 45), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others," which elaborates on the disclosures to be
made by a guarantor about its obligations under certain guarantees issued. It
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and measurement provisions of
this Interpretation apply on a prospective basis to guarantees issued or
modified after December 31, 2002. The disclosure requirements in this
Interpretation are effective for periods ending after December 15, 2002.
Adoption of the requirements of FIN 45 did not have a material effect on
Fidelity's Consolidated Financial Statements.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), "Consolidation
of Variable Interest Entities." This Interpretation clarifies that application
of ARB No. 51, "Consolidate Financial Statements," for certain entities in which
equity investors do not have the characteristics of a controlling financial
interest or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated support from other parties. This
interpretation requires variable interest entities to be consolidated by the
primary beneficiary which represents the

                                       19
<PAGE>

enterprise that will absorb the majority of the variable interest entities'
expected losses if they occur, receive a majority of the variable interest
entities' residual returns if they occur, or both. Qualifying Special Purpose
Entities (QSPE) are exempt from the consolidation requirements of FIN 46. This
Interpretation was effective for variable interest entities created after
January 31, 2003 and for variable interest entities in which an enterprise
obtains an interest after that date. This Interpretation is effective in the
first fiscal year or interim period beginning after June 15, 2003 for variable
interest entities in which an enterprise holds a variable interest that was
acquired before February 1, 2003, with earlier adoption permitted. Adoption of
the requirements of FIN 46 did not have a material effect on Fidelity's
Consolidated Financial Statements.

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.

The data for September 30, 2003 is not required to be filed with the OTS until
45 days after quarter end, which coincides with the 10-Q filing. Management
monitors its interest rate sensitivity during the quarter and will request the
OTS to run scenarios on the NPV model to determine the change in interest rate
sensitivity for management in an effort to assist management with its decision
making regarding the maturities and pricing of its products.

Although United has not yet submitted its CMR to the OTS for September 30, 2003,
management anticipates there has been no material change from the information
disclosed in Fidelity's annual report to shareholders at December 31, 2002.

Item 4 - Controls and Procedures

a.   Evaluation of Disclosure Controls and Procedures. Fidelity's principal
     executive officer and principal financial officer have concluded that
     Fidelity's disclosure controls and procedures (as defined in Rule 13a-14(c)
     under the Securities Exchange Act of 1934, as amended), based on their
     evaluation of these controls and procedures by the end of the period
     covered by this Form 10-Q, are effective.

b.   Changes in Internal Controls. There have been no significant changes in
     Fidelity's internal controls or in other factors that could significantly
     affect these controls subsequent to the date of the evaluation thereof,
     including any corrective actions with regard to significant deficiencies
     and material weaknesses.

c.   Limitations on the Effectiveness of Controls. Fidelity's management,
     including its principal executive officer and principal financial officer,
     does not expect that Fidelity's disclosure controls and procedures and
     other internal controls will prevent all error and all fraud. A control
     system, no matter how well conceived and operated, can provide only
     reasonable, not absolute, assurance that the objectives of the control
     system are met. Further, the design of a control system must reflect the
     fact that there are resource constraints, and the benefits of controls must
     be considered relative to their costs. Because of the inherent limitations
     in all control systems, no evaluation of controls can provide absolute
     assurance that all control issues and instances of fraud, if any, within
     the company have been detected. These inherent limitations include the
     realities that judgments in decision-making can be faulty, and that
     breakdowns can occur because of simple error or mistake. Additionally,
     controls

                                       20
<PAGE>

     can be circumvented by the individual acts of some persons, by collusion of
     two or more people, or by management override of the control.

     The design of any system of controls also is based in part upon certain
     assumptions about the likelihood of future events, and there can only be
     reasonable assurance that any design will succeed in achieving its stated
     goals under all potential future conditions; over time, control may become
     inadequate because of changes in conditions, or the degree of compliance
     with the policies or procedures may deteriorate. Because of the inherent
     limitations in a cost-effective control system, misstatements due to error
     or fraud may occur and not be detected.

d.   CEO and CFO Certifications. Exhibits 31.1 and 31.2 contain the
     Certifications of Fidelity's principal executive officer and principal
     financial officer. The Certifications are required in accord with Section
     302 of the Sarbanes-Oxley Act of 2002 (the "Section 302 Certifications").
     This Item of this report which you are currently reading is the information
     concerning the Evaluation referred to in the Section 302 Certifications and
     this information should be read in conjunction with the Section 302
     Certifications for a more complete understanding of the topics presented.







                                       21
<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    None

ITEM 3    Defaults Upon Senior Securities:
          --------------------------------
          Not applicable.

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

ITEM 5    Other Information:
          ------------------
          None

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

    Exhibit Number  Description
    --------------  -----------

a.       3(i) (a)   Articles of Incorporation of Fidelity, filed as exhibit
                    3(a) to Fidelity's 1995 Annual Report on Form 10-K, are
                    incorporated herein by reference

         3(i) (b)   Articles of Amendment of the Articles of Incorporation,
                    filed as exhibit 4.1 with Fidelity's Registration Statement
                    on Form S-3 (file no. 333-53668), are incorporated by
                    reference

         3(ii)      By-Laws of Fidelity, filed as exhibit 4.2 with Fidelity's
                    Registration Statement on Form S-3 (file no. 333-53668), are
                    incorporated by reference

        10    (a)   The 1993 Director's Stock Option Plan, filed as exhibit
                    10(d) to Fidelity's 1995 Annual Report on Form 10-K, is
                    incorporated herein by reference.
              (b)   The 1995 Key Employee's Stock Option Plan, filed as exhibit
                    10(c) to Fidelity's 1996 Annual Report on Form 10-K, is
                    incorporated herein by reference.
              (c)   Employment agreement between Fidelity and Donald R. Neel,
                    filed as exhibit 10(d) to Fidelity's 2000 Annual Report on
                    Form 10-K, is incorporated herein by reference

        31.1        Certification of CEO required pursuant to 15d-14(a) of the
                    Securities Exchange Act of 1934

        31.2        Certification of CFO required pursuant to 15d-14(a) of the
                    Securities Exchange Act of 1934

        32.1        Certification of Chief Executive Officer required pursuant
                    to Section 906 of the Sarbanes-Oxley Act of 2002

        32.2        Certification of Chief Financial Officer required pursuant
                    to Section 906 of the Sarbanes-Oxley Act of 2002

    Exhibit Number  Description
    --------------  -----------

b.                  A form 8-K was filed on October 30, 2003 announcing that on
                    October 29, 2003, Fidelity issued a press release in
                    connection with Fidelity's third quarter 2003 earnings
                    release.

                    A form 8-K was filed on July 21, 2003 announcing that on
                    July 18, 2003, Fidelity issued a press release in connection
                    with Fidelity's second quarter 2003 earnings release.

                                       22
<PAGE>

                                   SIGNATURES


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

                                     FIDELITY FEDERAL BANCORP

Date: November 12, 2003              By: /s/ DONALD R. NEEL
-----------------------                  -----------------------------
                                         Donald R. Neel
                                         President and CEO



                                     By: /s/ MARK A. ISAAC
                                         -----------------------------
                                         Mark A. Isaac
                                         Vice President and CFO
                                         (Principal Financial Officer)





                                       23
<PAGE>
                                Index to Exhibits


Page   Exhibit Number     Exhibit
--------------------------------------------------------------------------------

    a.   3(i) (a)   Articles of Incorporation of Fidelity, filed as exhibit
                    3(a) to Fidelity's 1995 Annual Report on Form 10-K, are
                    incorporated herein by reference

         3(i) (b)   Articles of Amendment of the Articles of Incorporation,
                    filed as exhibit 4.1 with Fidelity's Registration Statement
                    on Form S-3 (file no. 333-53668), are incorporated by
                    reference

         3(ii)      By-Laws of Fidelity, filed as exhibit 4.2 with Fidelity's
                    Registration Statement on Form S-3 (file no. 333-53668), are
                    incorporated by reference

        10    (a)   The 1993 Director's Stock Option Plan, filed as exhibit
                    10(d) to Fidelity's 1995 Annual Report on Form 10-K, is
                    incorporated herein by reference.
              (b)   The 1995 Key Employee's Stock Option Plan, filed as exhibit
                    10(c) to Fidelity's 1996 Annual Report on Form 10-K, is
                    incorporated herein by reference.
              (c)   Employment agreement between Fidelity and Donald R. Neel,
                    filed as exhibit 10(d) to Fidelity's 2000 Annual Report on
                    Form 10-K, is incorporated herein by reference

        31.1        Certification of CEO required pursuant to 15d-14(a) of the
                    Securities Exchange Act of 1934

        31.2        Certification of CFO required pursuant to 15d-14(a) of the
                    Securities Exchange Act of 1934

        32.1        Certification of Chief Executive Officer required pursuant
                    to Section 906 of the Sarbanes-Oxley Act of 2002

        32.2        Certification of Chief Financial Officer required pursuant
                    to Section 906 of the Sarbanes-Oxley Act of 2002






                                       24