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, 2004



                            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 29, 2004, there were 10,999,871 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............................................... 11-21

  ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk....    21

  ITEM 4 - Controls and Procedures.......................................    22

PART II - OTHER INFORMATION..............................................    23

SIGNATURES...............................................................    24

Index to Exhibits........................................................    25

CERTIFICATIONS........................................................... 26-29

                                       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,
                                                                                   2004            2003
                                                                                -----------      ---------
                                                                                (Unaudited)
<S>                                                                              <C>            <C>
Assets
Cash and due from banks                                                          $     982      $   1,705
Interest-bearing demand deposits                                                     1,296          1,263
                                                                                 ---------      ---------
   Cash and cash equivalents                                                         2,278          2,968
Investment securities available for sale                                            62,724         52,208
Loans held for sale                                                                 10,500
Loans, net of allowance for loan losses of $783 and $737 (Also includes
loans to related parties, net of allowance for loan losses of $369 and $394)       106,602        100,437
Premises and equipment                                                               4,455          4,620
Federal Home Loan Bank of Indianapolis stock                                         3,581          3,466
Deferred income tax                                                                  6,159          6,093
Foreclosed assets held for sale                                                        140             30
Interest receivable and other assets                                                 5,403          5,568
                                                                                 ---------      ---------

   Total assets                                                                  $ 201,842      $ 175,390
                                                                                 =========      =========

Liabilities
Deposits:
Non-interest bearing (includes related party deposits of $7,355 and $854)        $   6,818      $   6,903
Interest bearing                                                                   124,797        113,777
                                                                                 ---------      ---------
     Total deposits                                                                131,615        120,680
Federal funds purchased                                                              8,950              0
Federal Home Loan Bank advances                                                     36,000         31,550
Borrowings (includes borrowings from a related party of $0 and $1,000)               7,367          8,077
Valuation allowance for letters of credit                                              272            291
Other liabilities                                                                    1,467          1,425
                                                                                 ---------      ---------
     Total liabilities                                                             185,671        162,023
                                                                                 ---------      ---------

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--10,999,871 and 9,618,658 shares                             11,000          9,619
Additional paid-in capital                                                          17,728         16,634
Stock warrants                                                                         261            261
Retained earnings                                                                  (12,643)       (12,938)
Accumulated other comprehensive income                                                (175)          (209)
                                                                                 ---------      ---------
Total stockholders' equity                                                          16,171         13,367
                                                                                 ---------      ---------

Total liabilities and stockholders' equity                                       $ 201,842      $ 175,390
                                                                                 =========      =========
</TABLE>
See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                    FIDELITY FEDERAL BANCORP AND SUBSIDIARIES
                   Condensed Consolidated Statements of Income
                        (In Thousands, Except Share Data)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                Three Months Ended                 Nine Months Ended
                                                                   September 30,                     September 30,
                                                               2004             2003             2004             2003
                                                           ------------     ------------     ------------     ------------
<S>                                                        <C>              <C>              <C>              <C>
Interest Income
   Loans receivable                                        $      1,555     $      1,241     $      4,562     $      3,600
   Investment securities--taxable                                   537              339            1,535            1,028
   Loans held for sale                                               53               --               53               39
   Deposits with financial institutions                               3                4               10               42
   Other dividend income                                             41               32              120              105
                                                           ------------     ------------     ------------     ------------
         Total interest income                                    2,189            1,616            6,280            4,814
                                                           ------------     ------------     ------------     ------------

Interest Expense
   Deposits                                                         613              630            1,902            2,263
   Federal funds purchased                                           34               --               60               --
   Federal Home Loan Bank advances                                  228               91              600              172
   Borrowings                                                       123              112              394              536
                                                           ------------     ------------     ------------     ------------
         Total interest expense                                     998              833            2,956            2,971
                                                           ------------     ------------     ------------     ------------

Net Interest Income                                               1,191              783            3,324            1,843
   Provision for loan losses                                        134               99              343              (23)
                                                           ------------     ------------     ------------     ------------

Net Interest Income After Provision for Loan Losses               1,057              684            2,981            1,866
                                                           ------------     ------------     ------------     ------------

Other Income
   Service charges on deposit accounts                              115              108              345              327
   Net gains on loan sales                                           45              146              243              648
   Net gains on sales of securities available for sale               --               19               47              339
   Letter of credit fees                                            123              125              369              367
   Servicing fees on loans sold                                      84               78              251              216
   Income from interest only strip                                   43               42               79              155
   Dealer interest recovery                                          52               80              154              243
   Gain on sale of real estate owned                                 --               --               --              317
   Other income                                                     117              316              452              626
                                                           ------------     ------------     ------------     ------------
         Total non-interest income                                  579              914            1,940            3,238
                                                           ------------     ------------     ------------     ------------

Other Expenses
   Salaries and employee benefits                                   761              823            2,361            2,546
   Occupancy                                                         92               87              270              262
   Equipment                                                         89              101              279              300
   Data processing                                                  124              107              380              322
   Deposit insurance                                                 14               13               41               39
   Legal and professional                                            75               67              199              182
   Advertising and promotions                                        65               60              241              251
   Printing, postage, and office supplies expense                    39               41              101              145
   Insurance                                                         45               74              209              178
   Letter of credit valuation provision                             (34)              --              (34)            (170)
   Correspondent bank charges                                        37               38              110              109
   Other                                                            216              251              555              917
                                                           ------------     ------------     ------------     ------------
         Total non-interest expense                               1,523            1,662            4,712            5,081
                                                           ------------     ------------     ------------     ------------

Income (Loss) Before Income Tax                                     113              (64)             209               23
   Income tax benefit                                                (8)             (90)             (87)            (161)
                                                           ------------     ------------     ------------     ------------
Net Income                                                 $        121     $         26     $        296     $        184
                                                           ============     ============     ============     ============

Basic Earnings per Share                                   $       0.01     $       0.00     $       0.03     $       0.02

Diluted Earnings per Share                                 $       0.01     $       0.00     $       0.03     $       0.02

Average Common and Common Equivalent shares outstanding
                                                             11,000,089        9,618,658       10,322,140        8,700,710
</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 Ended
                                                                                         September 30,
                                                              ------------------------------------------------------
                                                                                2004                       2003
                                                                             ------------              -------------
<S>                                                                 <C>        <C>               <C>       <C>
Beginning Balance                                                              $13,367                     $9,588
   Comprehensive income
     Net income                                                     296                           184
     Other comprehensive income (loss) - net of tax                  33                          (520)
                                                              -------------                 ---------
   Comprehensive income (loss)                                                     329                       (336)
   Issuance of stock                                                                                        4,153
                                                                                 2,475
                                                                             ------------              -------------
Balances, September 30 (unaudited)                                             $16,171                    $13,405
                                                                             ============              =============

</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,
                                                                ---------------------
                                                                  2004         2003
                                                                --------     --------
<S>                                                             <C>          <C>
Operating Activities
   Net income                                                   $    296     $    184
   Adjustments to reconcile net income to net
     cash provided (used) by operating activities
     Provision for loan losses                                       343          (23)
     Letter of credit valuation provision                            (34)        (170)
     Net gain on sales of securities available for sale              (47)        (339)
     Net gain on sale of loans                                      (243)        (648)
     Gain on sale of foreclosed assets                                           (312)
     Depreciation and amortization                                   321          329
     Mortgage loans originated for sale                           (7,254)     (22,728)
     Proceeds from sale of mortgage loans                          7,411       23,194
     Consumer loan origination transferred to held for sale      (24,730)     (17,932)
     Proceeds from consumer loan sales                            14,316       18,114
     Changes in
       Interest payable and other liabilities                         57         (122)
       Interest receivable and other assets                          341         (850)
     Other                                                          (360)         183
                                                                --------     --------
     Net cash used by operating activities                        (9,583)      (1,120)
                                                                --------     --------

Investing Activities
   Purchases of securities available for sale                    (28,465)     (35,073)
   Proceeds from maturities of securities available for sale      15,854       15,368
   Proceeds from sales of securities available for sale            2,555       13,109
   Proceeds from the sale of foreclosed assets                                  2,666
   Purchase of FHLB stock                                           (115)         (69)
   Net change in loans                                            (6,880)     (19,366)
   Purchase of premises and equipment                               (156)         (75)
                                                                --------     --------
     Net cash used by investing activities                       (17,207)     (23,440)
                                                                --------     --------

Financing Activities
   Net change in
     Noninterest-bearing, interest-bearing demand
       and savings deposits                                        5,025        1,596
     Certificates of deposit                                       5,910        7,767
   Proceeds from borrowings                                        2,465        4,000
   Repayment of borrowings                                        (2,175)      (6,284)
   Repayment of borrowings to a related party                     (1,000)
   Net change in federal funds purchased                           8,950
   Proceeds from FHLB advances                                    84,175       14,000
   Repayment of FHLB advances                                    (79,725)
   Sale of stock                                                   2,475        4,153
                                                                --------     --------
     Net cash provided by financing activities                    26,100       25,232
                                                                --------     --------

Net Change in Cash and Cash Equivalents                             (690)         672

Cash and Cash Equivalents, Beginning of Period                     2,968        3,823
                                                                --------     --------

Cash and Cash Equivalents, End of Period                        $  2,278     $  4,495
                                                                ========     ========

Additional Cash Flows Information
   Interest paid                                                $  2,719     $  2,643
   Real estate acquired in settlement of loans                       372          252
</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, 2004 are not necessarily indicative of those expected for the
remainder of the year. The condensed consolidated balance sheet at December 31,
2003 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 2003 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 March 2004, Fidelity filed a registration statement for a stockholder rights
offering with the Securities and Exchange Commission. A total of 1.4 million
shares were registered in this filing. For every 6.9 shares of Fidelity held on
the record date, shareholders could subscribe to purchase one share of Fidelity
at $1.81. The rights offering was completed on May 14, 2004. Fidelity raised
$2.5 million net of cost associated with the offering. The shares purchased by
shareholders with these funds were issued in May 2004.

In April 2003, Fidelity issued 2.8 million shares of common stock for $4.0
million in cash through the exercise of an option held by Pedcor Financial, LLC
("Pedcor Financial") and affiliates. 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 Financial 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. Following the option exercise in
April 2003, Pedcor Financial and group beneficially owned approximately 67.75%
of Fidelity's issued and outstanding stock.

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.

                                       7
<PAGE>

o        Earnings per share

Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>
                                                                 Three Months Ended September 30, 2004
                                                             ----------------------------------------------
                                                                Income    Weighted-Average    Per Share
                                                                               Shares           Amount
                                                             ----------------------------------------------
<S>                                                            <C>           <C>                 <C>
        Net income                                              $ 121
                                                                =====

        Basic earnings per share
            Income available to common stockholders             $ 121        10,999,871          $ 0.01
                                                                                                 ======

        Effect of dilutive securities
            Stock options                                           -               218
                                                               ------       -----------

        Diluted earnings per share
            Income available to common stockholders and
              assumed conversions                              $ 121         11,000,089          $ 0.01
                                                               =====         ==========          ======
</TABLE>

Options to purchase 316,196 shares of common stock at prices ranging from $1.58
to $11.81 per share as well as stock warrants representing the right to purchase
509,471 share of common stock at prices ranging from $3.00 to $8.93 per share
were outstanding at September 30, 2004, but were not included in the computation
of diluted EPS because the options' exercise price was greater than the average
market price of the common shares.

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                                         $     26
                                                           ========

        Basic earnings per share
            Income available to common stockholders        $     26          9,618,658         $0.00
                                                                                               =====

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

        Diluted earnings per share
            Income available to common stockholders and
              assumed conversions                          $     26          9,618,658         $0.00
                                                           ========          =========         =====
</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 share 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' exercise price was greater than the average
market price of the common shares.

                                       8
<PAGE>

Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>
                                                                 Nine Months Ended September 30, 2004
                                                             ----------------------------------------------
                                                                Income    Weighted-Average    Per Share
                                                                               Shares           Amount
                                                             ----------------------------------------------
<S>                                                             <C>          <C>                 <C>
        Net income                                              $ 296
                                                                =====

        Basic earnings per share
            Income available to common stockholders             $ 296        10,319,346          $ 0.03
                                                                                                 ======

        Effect of dilutive securities
            Stock options                                           -             2,794
                                                                -----        ----------

        Diluted earnings per share
            Income available to common stockholders and
              assumed conversions                               $ 296        10,322,140          $ 0.03
                                                                =====        ==========          ======
</TABLE>

Options to purchase 311,696 shares of common stock at prices ranging from $1.79
to $11.81 per share as well as stock warrants representing the right to purchase
509,471 share of common stock at prices ranging from $3.00 to $8.93 per share
were outstanding at September 30, 2004, but were not included in the computation
of diluted EPS because the options' exercise price was greater than the average
market price of the common shares.

Earnings per share (EPS) were computed as follows:

<TABLE>
<CAPTION>
                                                                 Nine Months Ended September 30, 2003
                                                             ----------------------------------------------
                                                                Income    Weighted-Average    Per Share
                                                                               Shares           Amount
                                                             ----------------------------------------------
<S>                                                              <C>            <C>               <C>
        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
                                                                 =====          =========         =====
</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 share 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' exercise price was 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 managed loans, which represents both owned and
securitized loans, follows. The automobile loans presented represent the managed
portfolio of indirect prime automobile loans.

                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                                                  Loans Past
                                                                   Principal       Due Over
As of September 30, 2004                                            Balance         30 Days
----------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>
 Total managed automobile loans (including loans held for sale)   $ 106,654         $1,073

 Less: Automobile loans securitized                                 (13,846)          (279)
      Automobile loans serviced for others                          (34,475)          (339)
                                                                 -----------------------------
 Total automobile loans held in portfolio                           $58,333           $455
                                                                 =============================
</TABLE>

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 annual servicing fees based on the 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 strip and servicing asset
retained, key economic assumptions used to arrive at the fair values, and the
sensitivity of the September 30, 2004 fair values to immediate 10% and 20%
adverse changes in those assumptions follows. Actual credit losses experienced
through year-end 2003 and thus far in 2004 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%        9.09%
   As of September 30, 2004             1,188           9         0.98           1.50          15.0         8.44
   Decline in fair value of 10%
     adverse change                                               $  1            $ 5          $ 11
   Decline in fair value of 20%
     adverse change                                                  9             10            22

Servicing asset
   As of the date of securitization       362          39         1.50%          1.50%         15.0%
   As of September 30, 2004                 0           9         0.98           1.50          15.0
   Decline in fair value of 10%
     adverse change                                                $ 0            $ 0           $ 0
   Decline in fair value of 20%
     adverse change                                                  0              0             0
</TABLE>

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, 2003 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
                                                           ----------------------------------------------------------
                                                                2004          2003          2004           2003
                                                           ----------------------------------------------------------
<S>                                                             <C>            <C>         <C>             <C>
Net income as reported                                          $ 121          $  26       $ 296           $ 184
Less:  Total stock-based compensation cost determined
       under the fair value based method, net of income            (4)            (8)        (11)            (24)
       taxes
                                                           ----------------------------------------------------------

Pro forma net income                                            $ 117         $   18       $ 285           $ 160
                                                           ==========================================================

Basic earnings per share - as reported                          $0.01          $0.00       $0.03           $0.02
Basic earnings per share - pro forma                            $0.01          $0.00       $0.03           $0.02
Diluted earnings per share - as reported                        $0.01          $0.00       $0.03           $0.02
Diluted earnings per share - pro forma                          $0.01          $0.00       $0.03           $0.02
</TABLE>

o        Reclassifications

Reclassifications of certain amounts from the condensed consolidated income
statements for the three and nine month periods ended September 30, 2003 have
been made to conform to the presentation of the three and nine month periods
ended September 30, 2004. These reclassifications had no effect on net income.


o        Subsequent Events

 Until October 28, 2004, United was subject to a supervisory agreement with the
 Office of Thrift Supervision. At that time the OTS eliminated the agreement in
 its entirety.

 Most recently United operated under the following requirements:

o    United must refrain from paying dividends without OTS approval.
o    United should continue to comply with its strategic plan, including its
     capital targets, as noted in the "Regulatory Capital" note, consistent with
     United's business plan as approved by the OTS.
o    United must refrain from engaging in any transaction with or distribution
     of funds to Fidelity or its subsidiaries or selling any assets to an
     affiliate without OTS approval.
o    United should not engage in new activities not included in its strategic
     plan without OTS approval.

United believes that it was in compliance with all provisions of the supervisory
agreement at September 30, 2004.

On November 10, 2004, Fidelity announced a plan to terminate registration of its
common stock. The Board of Directors unanimously approved a 1-for 30,000 reverse
stock split. This would allow Fidelity to terminate the registration of its
common stock with the Securities and Exchange Commission and result in the
delisting of its shares on the NASDAQ. The reverse stock split will be
immediately followed by a 2,500-for-1 stock split. The record dates for the
reverse and forward stock splits have not yet been determined, but are expected
to occur not later than the end of the first quarter of 2005. Additional
information can be found in Fidelity's Form 8-K that was filed on November 12,
2004.


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. 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

                                       11
<PAGE>

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, regulation, and legislation.

Comparison of Financial Condition at September 30, 2004 and December 31, 2003

Total assets. At September 30, 2004 were $201.8 million, an increase of $26.4
million from $175.4 million at December 31, 2003. The increase in total assets
was attributable to an $10.5 million increase in investment securities and $16.7
million increase in net loans and loans held for sale.

Investments. At September 30, 2004, the investment portfolio represented 31.1%
of Fidelity's assets, compared to 29.8% at December 31, 2003 and is managed in a
manner designed to meet the Board's investment policy objectives. Subject to
available liquidity and loan demand, Fidelity expects to reinvest cash flow from
its investments in mortgage-backed securities. At September 30, 2004, the entire
investment portfolio was classified as available for sale. The net unrealized
loss at September 30, 2004, which is included as a component of stockholders'
equity, was $175,000 and was comprised of gross unrealized gains of $112,000 and
gross unrealized losses of $394,000 and tax benefit of $107,000. The decrease in
unrealized loss from December 31, 2003 was caused primarily by market interest
rate changes during the period.

Loans. Net loans increased $6.2 million to $106.6 million at September 30, 2004.
The increase is primarily attributable to an increase in commercial real estate
and consumer loans. Total commercial real estate loans outstanding have
increased by $3.8 million and consumer loans have increased $1.8 million.

Loans held for sale at September 30, 2004 totaled $10.5 million compared to none
at December 31, 2003. Fidelity routinely completes consumer loan sales during
the month the loans are identified for sale, therefore no consumer loans are
identified as held for sale at the end of a period. However, during the third
quarter of 2004 a sale was not completed by quarter-end, therefore loans held
for sale totaled $10.5 million at September 30, 2004. These loans are expected
to be sold during the fourth quarter of 2004. No allowance for loan losses were
set aside for the loans held for sale at September 30, 2004.

Consumer loans increased by $1.8 million to $40.9 million at September 30, 2004.
The portfolio is primarily composed of prime automobile loans generated through
a network of automobile dealers in Indiana, Kentucky, Illinois and Missouri.
During the third quarter of 2004, United terminated the origination of indirect
loans to allocate resources to more traditional community bank lending
activities, and reduced full-time equivalent employees by approximately six.

The increase in loans previously discussed were offset partially by a $2.6
million decrease in first mortgage loans. Fidelity continues to sell originated
fixed-rated conventional mortgage loans, record the gain or loss at the time of
sale and use the proceeds to fund future originations. Payments received during
2004 exceeded originations placed in the portfolio during 2004 resulting in a
net decrease in first mortgage loans.

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

Allowance for Loan Losses. The allowance for loan losses increased $46,000 to
$783,000 at September 30, 2004 from $737,000 at December 31, 2003. The allowance
for loan losses represented 0.73% of total loans at September 30, 2004, compared
to the same percentage at December 31, 2003. Relative to non-performing loans,
the allowance for loan losses was 86.7% compared to 43.3% at December 31, 2003.
Management considers the allowance for loan losses adequate to meet losses
inherent in the loan portfolio at September 30, 2004.

The following table sets forth an analysis of the allowance for loan losses for
the nine months ended September 30, 2004 and the year ended December 31, 2003:

                                       12
<PAGE>

                                                       Nine months
                                                          ended     Year ended
                                                      September 30, December 31,
                                                           2004         2003
                                                       -----------   ----------
                                                         (dollars in thousands)
Allowance for loan losses at beginning of period          $ 737        $ 837
Provision for losses                                        457          492
Provision transferred to held for sale                     (114)        (479)
Loans charged off                                          (403)        (236)
Recoveries on loans                                         106          123
                                                       -----------   ---------
Allowance for loan losses at end of period                $ 783        $ 737
                                                       ===========   =========

Deferred Income Tax. The deferred income tax asset was $6.2 million compared to
$6.1 million at December 31, 2003. The increase is primarily associated with
additional tax credits accrued in 2004. Consideration of the need for a
valuation allowance for the deferred tax asset was made at September 30, 2004
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 the level of projected
profitability for 2002 being less than originally anticipated, Fidelity
established a valuation allowance of $600,000 at December 31, 2002. Fidelity
considers the current valuation allowance adequate at September 30, 2004 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.

Off-balance sheet items. Multifamily letters of credit, an off-balance sheet
item, carry the same risk characteristics as conventional loans and totaled
$27.0 million at September 30, 2004 compared to $27.8 million at December 31,
2003. The valuation allowance for letters of credit to total letters of credit
totaled 1.0% at September 30, 2004 and December 31, 2003. The valuation
allowance for letters of credit is included in other liabilities and totaled
$272,000 at September 30, 2004. The allowance for loan losses and letters of
credit to total loans and letters of credit at September 30, 2004 and December
31, 2003 was 0.79% and 0.80%, respectively. Management considers the valuation
allowance for letters of credit adequate to meet losses inherent in the letters
of credit at September 30, 2004.

Deposits. Average deposits increased $15.3 million to $127.2 million at
September 30, 2004 compared to $111.9 million at December 31, 2003. United
utilizes retail, public, and brokered deposits to assist in asset growth.
Average non-interest bearing accounts at September 30, 2004 increased $1.6
million over December 31, 2003.

Other Funding. Fidelity also utilized its various federal fund lines of credit
to assist in asset growth. At September 30, 2004, Fidelity's federal funds
purchased totaled $9.0 million compared to none at December 31, 2003. At
September 30, 2004, Fidelity's borrowings consisted of FHLB advances, senior
notes and junior notes. Of the $43.4 million outstanding at September 30, 2004,
$36.0 million were FHLB advances. During the first half of 2004, Fidelity
utilized funds received from its debt and equity offerings that were completed
to reduce the amount outstanding on its line of credit by $275,000, in addition
to paying off a $1.0 million unsecured note to a related party and paying off
$1.8 million in 10% senior subordinated notes with an original maturity date of
June 2005.

Stockholders equity. Total stockholders' equity increased $2.8 million to $16.2
million at September 30, 2004. The increase was attributable to net income of
$296,000, and the issuance of $2.5 million in stock in connection with the
equity offering that was completed on May 18, 2004 and a $33,000 change in
unrealized losses on investment securities available for sale.

                                       13
<PAGE>

Non-Performing Assets

Non-performing assets decreased $689,000 from December 31, 2003 to $1.0 million
or 0.52% of total assets at September 30, 2004 compared to $1.7 million or 0.99%
of total assets at December 31, 2003. The decrease is primarily due to one large
residential loan that paid off during the first quarter of 2004 and a reduction
in non-accrual consumer loans. The following table provides information on
Fidelity's non-performing assets as of September 30, 2004 and December 31, 2003:

                                                    September 30,  December 31,
                                                         2004          2003
  -----------------------------------------------------------------------------

                                                       (Dollars in Thousands)
  Non-accrual loans
     Real estate mortgage                               $  133         $  788
     Home equity                                           198            127
     Consumer                                              110            233
     Commercial                                            344            267
                                                    -------------- ------------
       Total non-accrual loans                             785          1,415
  90 days or more past due and accruing
     Consumer                                              110             54
     Commercial                                              7            233
     Home equity                                             1
                                                    -------------- ------------
       Total 90 days or more past due and accruing         118            287

  Other real estate owned and repossessed assets           140             30
                                                    -------------- ------------

           Total non-performing assets                  $1,043          $1,732
                                                    ============== ============


  Ratio of non-performing assets to total assets         0.52%          0.99%
                                                    ============== ============

Classified Assets

Classified assets totaled $1.3 million at September 30, 2004 compared to $1.8
million at December 31, 2003. Total classified assets were 7.3% and 12.2% of
Fidelity's capital and reserves at September 30, 2004 and December 31, 2003,
respectively. In addition to the classified assets and letters of credit, there
are other assets and letters of credit totaling $6.1 million at September 30,
2004, compared to $6.2 million at December 31, 2003, for which management was
closely monitoring the borrower's abilities to comply with payment terms.

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: total risk adjusted capital, Tier I capital, and Tier I
leverage 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.

There are five capital categories defined in the regulations, ranging from well
capitalized to critically undercapitalized. Classification of a bank in any of
the undercapitalized categories can result in actions by regulators that could
have a material effect on a bank's operations. At September 30, 2004 and
December 31, 2003, United is categorized as well capitalized and met all subject
capital adequacy requirements.

                                       14
<PAGE>

<TABLE>
<CAPTION>
                                          Tangible         Core          Tier 1       Risk-based
Dollars in thousands                       Capital        Capital       Capital         Capital
---------------------------------------- ------------    ----------    -----------   --------------
<S>                                         <C>            <C>           <C>           <C>
Regulatory capital                          $13,447        $13,493       $12,425       $17,442
Minimum capital requirement                   2,939          7,839         5,279        10,556
                                         ------------    ---------    -----------   --------------
Excess capital                              $10,508         $5,654       $ 7,146        $6,886
                                         ============    =========    ===========   ==============

Regulatory capital                            6.86%          6.88%         9.42%        13.22%

Required capital requirements                 1.50%          4.00%         4.00%         8.00%
                                         ------------    ---------    -----------   --------------
Excess over minimum                           5.36%          2.88%         5.42%         5.22%
                                         ============    =========    ===========   ==============

Regulatory capital                            6.86%          6.88%         9.42%        13.22%

Strategic plan capital requirement              N/A          6.25%         8.25%        11.00%
                                         ------------    ---------    -----------   --------------
Excess over minimum                           6.86%          0.63%         1.17%         2.22%
                                         ============    =========    ===========   ==============
</TABLE>

Liquidity

The primary sources of funds from operations are principal and interest payments
on loans, deposits from customers, and sales and maturities of investment
securities. Fidelity's entire investment portfolio is classified as "available
for sale" and totaled $62.7 million at September 30, 2004 and could be utilized
to assist in liquidity management. In addition, United is authorized to borrow
money from the Federal Home Loan Bank (FHLB) or draw on $15.0 million in secured
lines of credit with other financial institutions. At September 30, 2004,
United's gross borrowing capacity at the FHLB is $75.0 million with
approximately $9.3 million available to draw upon based on current assets
pledged. United had approximately $3.4 million available to draw on its lines of
credit at September 30, 2004.

Fidelity has a $500,000 line of credit and can draw on this line until its
expiration in November 2004, unless otherwise renewed. At September 30, 2004, $0
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 will assist it in meeting its future liquidity needs.
Fidelity is not subject to any regulatory restrictions on the payment of
dividends to its stockholders.

Comparison of Operating Results for the Three Months Ended September 30, 2004
and 2003

Net income for the three months ended September 30, 2004 was $121,000 compared
to net income of $26,000 for the three months ended September 30, 2003. This
change was primarily attributable to an increase in net interest income and a
reduction in non-interest expense partially offset by an increase in the
provision for loan losses and reduction in non-interest income.

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
three months ended September 30, 2004 and 2003:
<TABLE>
<CAPTION>
                                     Three months ended           Average yield for
                                        September 30,             Three months ended
                                   (dollars in thousands)           September 30,
                                -----------------------------  -----------------------
                                    2004              2003       2004           2003
                                  --------          --------   --------       --------
<S>                               <C>               <C>          <C>          <C>
Interest-earning assets           $182,409          $134,474     4.77%        4.76%
Interest-bearing liabilities       175,944           130,201     2.26         2.54
                                  --------          --------     -----       ------
   Net interest bearing assets    $  6,465          $  4,273
                                  ========          ========

   Net interest spread                                           2.51%        2.22%
                                                                 =====        =====

   Net interest margin                                           2.60%        2.31%
                                                                 =====        =====
</TABLE>

Net interest income for the quarter ended September 30, 2004 was $1.2 million
compared to $783,000 earned during the same period in 2003. Total interest
income increased $573,000 to $2.2 million for the quarter ended

                                       15
<PAGE>

September 30, 2004 from $1.6 million for the same period in 2003. The increase
in interest income was primarily attributable to an increase in average consumer
and commercial loans.

Average investment securities increased by $17.2 million contributing the
increase in interest income of $198,000 for the quarter ended September 30, 2004
when compared to the same period in 2003.

Total interest expense increased by $165,000 for the three months ended
September 30, 2004 compared to the same period in 2003. Although outstandings
for FHLB advances and borrowings increased the overall average yield on interest
bearing liabilities decreased from 2.54% to 2.26%.

Provision for Loan Losses and Letters of Credit Valuation Provision

The provision for loan losses for the three months ended September 30, 2004 was
$134,000 compared to $99,000 for the three months ended September 30, 2003. Loan
loss provisions were made during the third quarter of 2004 based on loan growth,
delinquency and charge-off trends.

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.

United expects to increase the allowance for loan losses if loan growth and
losses meets 2004 targets. As a result, the provision for loan losses may also
increase on a quarter to quarter comparison in 2004.

Non-interest income

Non-interest income for the three months ended September 30, 2004 was $579,000
compared to $914,000 for the same period in 2003, a decrease of $335,000.

Net gains on loan sales decreased $101,000 from the prior year due to a decrease
in volume of mortgage and automobile loans sold. Net gains on sales of
investments decreased $19,000 from the prior year. Underwriting and document
preparation fees decreased $52,000 from the prior year due to a decrease in
mortgage loan volume. A decrease in automobile payoffs resulted in a decline in
dealer interest recovery of $28,000. During the third quarter of 2003, higher
interest rates 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 of $113,000.

Non-interest expense

Non-interest expense decreased $139,000 to $1.5 million for the three months
ended September 30, 2004 compared to $1.7 million for the same period in 2003.

Salaries and employee benefits decreased $62,000 from the quarter ended
September 30, 2003 due to a decline in full-time equivalent employees. Data
processing expense increased $17,000 over the prior year due to increased volume
of mortgage and consumer loans serviced, and the introduction of internet
banking late in 2003. Insurance decreased $29,000 for the quarter ended
September 30, 2004 when compared to the same period in 2003 due to market rate
decreases and amendments to the Agreement. The provision for letters of credit
declined by $34,000 in the third quarter of 2004. A decrease in indirect loan
volume resulted in a reduction of $16,000 in credit bureau expense. Expenses
connected with other real estate owned decreased $14,000 when compared to the
third quarter last year.

                                       16
<PAGE>

Income tax benefit

The income tax benefit was $8,000 for the three months ending September 30, 2004
compared to $90,000 for the same period last year. Included in the 2004 benefit
are tax credits of $55,000. 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.

Comparison of Operating Results for the Nine Months Ended September 30, 2004 and
2003

Net income for the nine months ended September 30, 2004 was $296,000 compared to
net income of $184,000 for the nine months ended September 30, 2003. This change
was primarily attributable to an increase in net interest income and a reduction
in non-interest expense. These improvements were partially offset by an increase
in the provision for loan losses and reduction in non-interest income.

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 2004 and 2003:
<TABLE>
<CAPTION>
                                                 Nine months ended         Average yield for
                                                    September 30,          Nine months ended
                                                (dollars in thousands)       September 30,
                                              -------------------------   ---------------------
                                                 2004          2003          2004        2003
                                               --------      --------     ---------   ---------
<S>                                            <C>           <C>             <C>         <C>
Interest-earning assets                        $176,288      $125,019        4.76%       5.15%
Interest-bearing liabilities                    169,942       123,818        2.32        3.21
                                                -------      --------        -----       -----
   Net interest bearing assets (liabilities)   $  6,346      $  1,201
                                               ========      ========

   Net interest spread                                                       2.44%       1.94%
                                                                             =====       =====

   Net interest margin                                                       2.52%       1.97%
                                                                             =====       =====
</TABLE>

Net interest income for the first nine months ended September 30, 2004 was $3.3
million compared to $1.8 million earned during the first nine months ended
September 30, 2003. Total interest income increased $1.5 million to $6.3 million
for the nine months ended September 30, 2004 from $4.8 million for the same
period in 2003. The increase in interest income was primarily attributable to an
increase in average consumer loans of $21.7 million. The yield on consumer loans
decreased from 7.08% at September 30, 2003 to 5.78% at September 30, 2004. This
decrease in rate, which impacted the margin negatively by $434,000, was offset
by the increase in average balances which resulted in an increase in consumer
loan interest income of $1,152,000 for a net effect of $718,000. The remaining
increase in interest income from loans was a result of increased outstandings in
commercial and commercial real estate loans of $6.8 million.

Average investment securities increased by $21.0 million which attributed to
additional interest income of $539,000. However this interest income was
partially offset by a decrease in yield on the investment portfolio resulting in
$32,000 decrease in interest income for a net effect of additional interest
income of $507,000.

Total interest expense decreased by $15,000 for the nine months ended September
30, 2004 compared to the same period in 2003. This decrease was due to a
decrease in deposits, primarily certificates of deposits, and their average rate
decreasing from 3.21% to 2.32% resulting in a decrease in interest expense. As
indicated in the table below, the decrease in rate was substantially offset by
an increase in outstandings that were utilized to support asset growth in 2004.

The following table sets forth the details of the rate and volume change for the
first nine months of 2004 compared to the same period in 2003.

                                       17
<PAGE>

                                         Nine Months Ended September 30,
                                                 2004 vs 2003
                                              Increase (Decrease)
                                               Due to change in
                                       --------------------------------
                                         Volume       Rate      Total
                                       ----------- ---------- ---------
Interest Income:
  Loans and mortgage-backed securities   $ 2,051     $(582)     $ 1,469
  Other interest-earning assets               21       (24)         (3)
                                         -------     ------     -------
    Total interest-earning assets          2,072      (606)      1,466

Interest Expense:
  Deposits                                   450      (811)       (361)
  FHLB advances and other borrowings         352        (6)        346
                                         -------     ------     -------
  Total interest-bearing liabilities         802      (817)        (15)
                                         -------     ------     -------
  Change in net interest income          $ 1,270     $ 211      $ 1,481
                                         =======     ======     =======

Provision for Loan Losses and Letters of Credit Valuation Provision

Loan losses. The provision for loan losses was $457,000 for the first nine
months of 2004, offset by a $114,000 reduction due to consumer loan sales.
During the first nine months of 2003 the $421,000 provision was offset by a
$444,000 reduction due to consumer loan sales for a net credit of $23,000 for
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.

United expects to increase the allowance for loan losses if loan growth and
losses meets 2004 targets. As a result, the provision for loan losses may also
increase on a quarter to quarter comparison in 2004.

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.

Letters of credit. The letter of credit provision for the first nine months of
2004 was a $34,000 credit compared to a $170,000 credit in 2003. Improvements in
the underlying properties that are secured by the letters of credit resulted in
provision reversals.

Based on the procedures discussed above, management is of the opinion that the
allowance and letters of credit reserves was adequate, but not excessive, to
absorb estimated credit losses at September 30, 3004.

Non-interest income

Non-interest income for the nine months ended September 30, 2004 was $1.9
million compared to $3.2 million for the same period in 2003, a decrease of $1.3
million.

Net gains on loan sales decreased $405,000 from the prior year due to a decrease
in volume of mortgage and 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 $47,000 in 2004 for the same time period. Increased prepayment
speeds, remaining premiums, and pricing made it advantageous to sell the
securities for a gain in 2003. Income of $79,000 was recognized on the retained
interests in securitized assets compared to $155,000 in 2003. An increase in
early payoffs on automobile loans due to the historically low interest rate
environment in 2003 resulted in the repayment of $243,000 in interest previously
written off compared to $154,000 for the same period in 2004. The sale of two
foreclosed properties generated gains totaling $317,000 during the first nine
months of 2003 compared to none in 2004. Included in other income in 2003 were
non-recurring items which Fidelity received during 2003 totaling approximately
$125,000 from Fidelity's active participation in affordable housing activities,

                                       18
<PAGE>

which ended late in 2002. This decrease in the current year was partially offset
in 2004 by slower amortization of loan servicing rights which contributed to
additional non-interest income of $26,000, when compared to last years
amortization and valuation adjustment.

Non-interest expense

Non-interest expense decreased $369,000 to $4.7 million for the nine months
ended September 30, 2004 compared to $5.1 million for the same period in 2003.
Excluding reductions of the letter of credit reserves during both periods,
non-interest expense would have declined by $505,000.

Salaries and employee benefits decreased $185,000 from the first nine months
ended September 30, 2003 due to a decline in full-time equivalent employees.
Data processing expense increased $58,000 over the prior year due to increased
volume of mortgage and consumer loans serviced, and the introduction of internet
banking. Promotion expense decreased $45,000 from 2003 due primarily to a
decrease in automobile originations in the current year. Advertising increased
$35,000 over 2003. Printing, postage and office supplies decreased $44,000 from
2003 due to cost cutting procedures implemented in 2004. Bond issuance expense
decreased $56,000 from 2003 due to the retirement of subordinated notes in 2003
and the deferred cost associate with the retired debt.

Income tax benefit

The income tax benefit was $87,000 for the nine months ending September 30, 2004
compared to $161,000 for the same period last year. Included in the 2004 and
2003 benefit are tax credits of $166,000 for each period. 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.

Sarbanes-Oxley Act

On July 30, 2002, President George W. Bush signed into law the Sarbanes-Oxley
Act of 2002 (the "Sarbanes-Oxley Act"). The Sarbanes-Oxley Act implements a
broad range of corporate governance and accounting measures for public companies
designed to promote honesty and transparency in corporate America and better
protect investors from the type of corporate and accounting scandals that have
occurred during the past years. We anticipate that we will incur additional
expense in complying with the provisions of the Sarbanes-Oxley Act and the
resulting regulations. Over the past year Fidelity's Board of Directors has
discussed the desirability of taking steps to delist its shares of common stock
from NASDAQ and to terminate its reporting obligations under the Securities
Exchange Act of 1934. On November 10, 2004, the Board of Directors announced a
plan to terminate the registration of Fidelity's common stock with the
Securities and Exchange Commission and result in the delisting of its shares on
NASDAQ. See `Subsequent Event' footnote for additional details.

Application of Critical Accounting Policies

Fidelity's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America and reporting
practices followed within the banking industry. The application of these
principles requires management to make estimates, assumptions, and judgments
that affect the amounts reported in the financial statements and accompanying
notes. These estimates, assumptions, and judgments are based on information
available as of the date of the financial statements; as this information
changes, the financial statements could reflect different estimates,
assumptions, and judgments.

Allowance for Loan Losses: Fidelity maintains a reserve to absorb probable loan
losses inherent in the portfolio. The reserve for credit losses is maintained at
a level Fidelity considers to be adequate to absorb probable loan losses
inherent in the portfolio and is based on ongoing quarterly assessments and
evaluations of the collectibility and historical loss experience of loans.
Credit losses are charged and recoveries are credited to the reserve. Provisions
for credit losses are based on Fidelity's review of the historical credit loss
experience and such factors that, in management's judgment, deserve
consideration under existing economic conditions in estimating probable credit
losses. In determining the appropriate level of reserves, Fidelity estimates
losses using a range derived from "base" and "conservative" estimates.
Fidelity's methodology for assessing the appropriate reserve level consists of
several key elements, as discussed below. Fidelity's strategy for credit risk
management includes a combination of conservative exposure limits significantly
below legal lending limits, and conservative underwriting, documentation and
collection standards. The strategy also emphasizes diversification on a
geographic, industry and customer level, regular credit examinations and
quarterly management reviews of large credit exposures and loans experiencing
deterioration of credit quality.

                                       19
<PAGE>

Larger commercial loans that exhibit probable or observed credit weaknesses are
subject to individual review. Where appropriate, reserves are allocated to
individual loans based on management's estimate of the borrower's ability to
repay the loan given the availability of collateral, other sources of cash flow
and legal options available to Fidelity. Included in the review of individual
loans are those that are impaired as provided in SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan." Any reserves for impaired loans are
measured based on the present value of expected future cash flows discounted at
the loan's effective interest rate or fair value of the underlying collateral.
Fidelity evaluates the collectibility of both principal and interest when
assessing the need for a loss accrual. Historical loss rates are applied to
other commercial loans not subject to specific reserve allocations.

Homogenous loans, such as consumer installment and residential mortgage loans,
are not individually risk graded. Rather, standard credit scoring systems and
delinquency monitoring are used to assess credit risks. Reserves are established
for each pool of loans based on the expected net charge-offs for one year.
Factors considered in establishing loss rates include expected future losses,
historical loss rate, and adjustments in loan underwriting by category.

Historical loss rates for commercial and consumer loans may be adjusted for
significant factors that, in management's judgment, reflect the impact of any
current conditions on loss recognition. Factors that management consider in the
analysis include the effects of the national and local economies, trends in the
nature and volume of loans (delinquencies, charge-offs and nonaccrual loans),
changes in mix, credit score migration comparisons, asset quality trends, risk
management and loan administration, changes in the internal lending policies and
credit standards, collection practices and examination results from bank
regulatory agencies and Fidelity's external credit examiners.

An unallocated reserve is maintained to recognize the imprecision in estimating
and measuring loss when evaluating reserves for individual loans or pools of
loans. Reserves on individual loans and historical loss rates are reviewed
quarterly and adjusted as necessary based on changing borrower and/or collateral
conditions and actual collection and charge-off experience.

Fidelity, has not substantively changed any aspect of its overall approach in
the determination of the reserve for loan and lease losses. There have been no
material changes in assumptions or estimation techniques as compared to prior
periods that impacted the determination of the current year reserve for loan
losses.

Based on the procedures discussed above, management is of the opinion that the
reserve of $783,000 was adequate, but not excessive, to absorb estimated credit
losses associated with the loan portfolio at September 30, 2004.

Valuation of Servicing Rights: When Fidelity sells loans through either
securitizations or Freddie Mac, it may retain one or more subordinated tranches,
servicing rights, interest-only strips, credit recourse, other residual
interests, all of which are considered retained interests in the securitized or
sold loans. Gain or loss on sale or securitization of the loans depends in part
on the previous carrying amount of the financial assets sold or securitized,
allocated between the assets sold and the retained interests based on their
relative fair value at the date of sale or securitization. To obtain fair
values, quoted market prices are used if available. If quotes are not available
for retained interests, Fidelity calculates fair value based on the present
value of future expected cash flows using both management's best estimates and
third-party data sources for the key assumptions - credit losses, prepayment
speeds, forward yield curves and discount rates commensurate with the risks
involved. Gain or loss on sale or securitization of loans is reported as a
component of other non-interest income in the Consolidated Statements of Income.
Retained interests from securitized or sold loans, excluding servicing rights,
are carried at fair value. Adjustments to fair value for retained interests are
included in other non-interest expense in the Consolidated Statements of Income
if the fair value has declined below the carrying amount and such decline has
been determined to be other-than-temporary. See "Automobile Loan Securitization"
in the footnotes to the consolidated financial statements for projected adverse
changes in assumptions and the impact on the fair value.

Servicing rights resulting from loan sales are amortized in proportion to and
over the period of estimated net servicing revenues. Servicing rights are
assessed for impairment quarterly, based on fair value, with temporary
impairment recognized through a valuation allowance and permanent impairment
recognized through a write-off of the servicing asset and related valuation
reserve. Key economic assumptions used in measuring any potential impairment of
the servicing rights include the prepayment speed of the underlying loans, the
weighted-average life of the loan, the discount rate and the weighted-average
default rate, as applicable. The primary risk of material

                                       20
<PAGE>

changes to the value of the servicing rights resides in the potential volatility
in the economic assumptions used, particularly the prepayment speed. Fidelity
monitors this risk and adjusts its valuation allowance as necessary to
adequately reserve for any probable impairment in the portfolio. For purposes of
measuring impairment, the mortgage servicing rights are stratified based on
financial asset type and interest rates. Fees received for servicing loans owned
by investors are based on a percentage of the outstanding monthly principal
balance of such loans and are included in non-interest income as loan payments
are received. Costs of servicing loans are charged to expense as incurred. See
"Loan Servicing" in the footnotes to the consolidated financial statements in
Fidelity's 2003 Annual Report.

Income Taxes: Fidelity accounts for income taxes using the asset and liability
method. Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amount of existing assets and liabilities and their
respective tax bases. Such differences can relate to differences in accounting
for credit losses, deprecation timing differences, unrealized gains and losses
on investment securities, deferred compensation and leases, which are treated as
operating leases for tax purposes and loans for financial statement purposes.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

The determination of current and deferred income taxes is based on complex
analyses of many factors including interpretation of Federal and state income
tax laws, the difference between tax and financial reporting basis of assets and
liabilities (temporary differences), estimates of amounts due or owed, the
timing of reversals of temporary differences and current financial accounting
interpretations used in determining the current and deferred income tax
liabilities.

Fidelity has a net deferred tax asset of $6.2 million at September 30, 2004. The
realization of the recorded deferred tax assets ultimately rests upon Fidelity's
ability to generate taxable income to utilize the net operating loss
carryforwards and low income housing tax credits that make up the majority of
the recorded deferred tax asset. To determine that it is more likely than not
that these carryforwards and tax credits will be utilized prior to their
expiration, management utilizes a model that projects the utilization of the
carryforwards and credits based upon the estimated future taxable income of
Fidelity. The most significant assumption used in the model is pre-tax income
estimated by management.

The amount used for pre-tax income for 2004, 2005 and 2006 is estimated based on
a percentage of the budgeted income in United's most recent strategic plan as
approved by the OTS. Amounts used for pre-tax income for 2007 and into the
future assumes 10% growth in earnings. Fidelity established a $600,000 valuation
allowance at December 31, 2002. Additional details on Fidelity's deferred tax
asset and model assumptions may be found under the heading "Income Tax" in the
notes to the consolidated financial statements and under the heading "Income Tax
Expense (Benefit)" in the Management Discussion and Analysis in Fidelity's 2003
Annual report.

Additional accounting policies followed by Fidelity and United are presented in
Note 1 to the financial statements in Fidelity's Annual Report. These policies,
along with the disclosures presented in the other financial statement notes and
in this financial review, provide information on how significant assets and
liabilities are valued in the financial statements and how those values are
determined.

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

                                       21
<PAGE>

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.

The data for September 30, 2004 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, 2004,
management anticipates there has been no material change from the information
disclosed in Fidelity's annual report to shareholders at December 31, 2003.


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 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.

                                       22
<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

b.   A form 8-K was filed on July 22, 2004 announcing that on July 21, 2004,
     Fidelity issued a press release in connection with Fidelity's second
     quarter 2004 earnings release.

                                       23
<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 15, 2004             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)







                                       24
<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

                                       25