U.S. Securities and Exchange Commission


                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1997

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

   For the transition period from ____________________ to ____________________ 

                         Commission file number 0-22288

                             Fidelity Bancorp, Inc.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

  Pennsylvania                                          25-1705405  
--------------------------------------------------------------------------------
 (State  or  other  jurisdiction  of          (IRS Employer Identification No.)
 incorporation  or organization
 
 1009 Perry Highway, Pittsburgh, Pennsylvania             15237 
--------------------------------------------------------------------------------
(Address of principal executive offices)               (Zip code)

                                  412-367-3300
--------------------------------------------------------------------------------
                           (Issuer's telephone number) 

--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes [   ]  No [   ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS 

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 1,549,846 shares, par value
$0.01, at June 30, 1997

         Transitional Small Business Disclosure Format (Check one):
                           Yes [  ]   No   [ X ]  
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                      Index


Part I - Financial Information

Item 1.  Financial Statements

          Statements of Financial Condition as of September 30, 1996           
               and June 30, 1997 (Unaudited)                                    

          Statements of Income (Unaudited) for the Three and Nine Month Periods
               Ended June 30, 1996 and 1997                                     

          Statements of Cash Flows (Unaudited) for the Nine Months Ended
               June 30, 1996 and 1997

          Statement of Changes in Stockholders' Equity (Unaudited) for the Nine
               Months Ended June 30, 1996 and 1997                              

          Notes to Financial Statements                                         

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


Part II - Other Information

Item 1.  Legal Proceedings                                                      

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities                                        

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

Item 5.  Other Information                                                      

Item 6.  Exhibits and Reports on Form 8-K                                       

Signatures
<PAGE>
Part I - Financial Information
<TABLE>
<CAPTION>
                            FIDELITY BANCORP, INC. AND SUBSIDIARIES
                               Statements of Financial Condition


        Assets                                              June 30, 1997   September 30, 1996
                                                            -------------      -------------
                                                              (Unaudited)
<S>                                                         <C>                <C>
Cash and amounts due from
  depository institutions .............................     $  4,856,404     $  4,616,088
Interest-earning demand deposits with
 other institutions ...................................          137,893          146,010
Investment securities held-to-maturity ................        6,620,275        5,401,139
Investment securities available-for-sale ..............       42,144,424       50,928,774
Loans receivable, net .................................      175,926,238      151,263,067
Mortgage-backed securities held-to-maturity ...........       32,480,651       31,274,934
Mortgage-backed securities available-for-sale .........       87,800,553       62,463,269
Real estate owned, net ................................          119,541          369,675
Federal Home Loan Bank stock - at  cost ...............        4,185,000        2,826,300
Accrued interest receivable, net:
    Loans .............................................          910,663          850,006
    Mortgage-backed securities ........................          708,896          566,018
    Investments .......................................          840,748          726,573
Office premises and equipment, net ....................        3,204,031        3,365,941
Deferred tax asset ....................................        1,590,459        1,925,924
Goodwill and other intangible assets ..................              -0-           44,015
Prepaid income taxes ..................................              -0-          324,414
Prepaid expenses and sundry assets ....................        1,776,331          781,894
                                                            ------------     ------------

              Total Assets ............................     $363,302,107     $317,874,041
                                                            ============     ============

     Liabilities and Net Worth
Liabilities:
    Savings deposits ..................................     $238,636,037     $234,275,620
    Federal Home Loan Bank advances ...................       83,700,000       56,650,000
    Reverse repurchase agreements .....................        1,463,809          493,133
    Advance deposits by borrowers for
      taxes and insurance .............................        2,728,744        1,316,683
    Accrued interest on savings and
      other deposits ..................................          113,789          176,914
    Accrued interest on guaranteed preferred beneficial
       interest in subordinated debt ..................          134,163              -0-
    Accrued income taxes payable ......................          651,422              -0-
    Other accrued expenses and sundry liabilities .....        1,086,906        3,183,596
    Guaranteed preferred beneficial interest in
       subordinated debt (Note 8) .....................       10,250,000              -0-
                                                                             ------------

            Total Liabilities .........................      338,764,870      296,095,946
                                                            -------------      -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            FIDELITY BANCORP, INC. AND SUBSIDIARIES
                               Statements of Financial Condition


                                                       June 30, 1997    September 30, 1996
                                                       -------------      -------------
                                                        (Unaudited)
<S>                                                    <C>                <C>
Stockholders' equity (Notes 4 and 5):
    Common stock, $0.01 par value per share;
      10,000,000 shares authorized; 1,549,846
      and 1,506,462 shares issued and outstanding,
      respectively ...............................            15,498             13,732
    Additional paid-in capital ...................        13,661,693         10,437,133
    Retained earnings - substantially restricted .        11,159,442         12,522,830
    Unrealized gain (loss) on securities
      available-for-sale .........................          (299,396)        (1,195,600)
                                                       -------------      -------------

    Total stockholders' equity ...................        24,537,237         21,778,095
                                                       -------------      -------------

Total Liabilities and Stockholders' Equity .......     $ 363,302,107      $ 317,874,041
                                                       =============      =============


                        See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                       FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                           Statements of Income (Unaudited)


                                                              Three Months Ended               Nine Months Ended
                                                                    June 30,                        June 30,
                                                         ---------------------------     ---------------------------  
                                                             1997            1996             1997           1996
                                                         -----------     -----------     -----------     -----------
<S>                                                      <C>             <C>             <C>             <C>
Interest Income:
     Loans .........................................     $ 3,464,077     $ 2,992,309     $ 9,861,072     $ 8,320,947
     Mortgage-backed securities ....................       1,725,860       1,561,996       4,892,652       4,617,686
     Investment securities .........................         774,524         862,130       2,489,160       2,449,645
     Deposits with other institutions ..............           2,358           3,687           7,273          20,022
                                                         -----------     -----------     -----------     -----------
         Total interest income .....................       5,966,819       5,420,122      17,250,157      15,408,300
                                                         -----------     -----------     -----------     -----------

Interest Expense:
     Savings deposits ..............................       2,381,117       2,442,092       7,054,068       7,682,382
     Guaranteed preferred beneficial interest
            in subordinated debt (Note 8) ..........         137,064            --           137,064            --
      Borrowed funds ...............................         913,797         534,780       2,587,374       1,056,679
                                                         -----------     -----------     -----------     -----------

            Total interest expense .................       3,431,978       2,976,872       9,778,506       8,739,061
                                                         -----------     -----------     -----------     -----------

Net interest income before provision for loan losses       2,534,841       2,443,250       7,471,651       6,669,239
Provision for loan losses ..........................         130,000          90,000         365,000         180,000
                                                         -----------     -----------     -----------     -----------

Net interest income after provision for loan losses        2,404,841       2,353,250       7,106,651       6,489,239
                                                         -----------     -----------     -----------     -----------

Other income:
     Service fee income ............................          21,199          20,336          56,838          55,843
     Gain (loss) on sale of investment  and
         mortgage-backed securities, net ...........           6,402           9,617          26,924          26,620
     Gain on sale of loans .........................          10,845           3,360          16,131           8,912
     Other operating income ........................         183,607         161,226         530,580         453,034
                                                         -----------     -----------     -----------     -----------
         Total other income ........................         222,053         194,539         630,473         544,409
                                                         -----------     -----------     -----------     -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                       FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                           Statements of Income (Unaudited)
                                                     (continued)


                                                              Three Months Ended               Nine Months Ended
                                                                    June 30,                        June 30,
                                                         ---------------------------     --------------------------- 
                                                             1997            1996             1997           1996
                                                         -----------     -----------     -----------     -----------
<S>                                                      <C>             <C>             <C>             <C>
Operating expenses:

     Compensation and employee benefits ............         924,137         813,916       2,687,124       2,403,590
     Occupancy and employee benefits ...............         150,516         139,552         439,021         418,049
     Depreciation and amortization .................         119,452         110,190         354,950         332,221
     Federal insurance premiums ....................          37,788         140,343          75,529         420,292
     Loss on real estate owned, net ................           3,820          66,689          36,366          88,142
     Amortization of intangibles ...................            --            66,022          44,015         198,067
     Other operating expenses ......................         374,425         330,632       1,130,020         973,994
                                                         -----------     -----------     -----------     -----------
         Total operating expenses ..................       1,610,138       1,667,344       4,767,025       4,834,355
                                                         -----------     -----------     -----------     -----------

Income before income tax provision .................       1,016,756         880,445       2,970,099       2,199,293

Income tax provision ...............................         361,000         263,000       1,054,000         646,000
                                                         -----------     -----------     -----------     -----------

Net income .........................................     $   655,756     $   617,445     $ 1,916,099     $ 1,553,293
                                                         ===========     ===========     ===========     ===========

Primary earnings per common share ..................     $      0.41     $      0.40     $      1.21     $      1.01
  (Notes 3&4)
Dividends per common share (Note 4) ................     $      0.09     $     0.066     $     0.254     $      .198



                                   See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                   FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                     Statements of Cash Flows (Unaudited)


                                                                                         Nine Months
                                                                                       Ended  June 30,
                                                                              ------------------------------
                                                                                   1997              1996
                                                                              ------------      ------------
<S>                                                                           <C>               <C>
Operating Activities:
     Net income: ........................................................     $  1,916,099      $  1,553,293
     Adjustments to reconcile net income to net
     cash provided by operating activities:
         Provision for loan losses ......................................          365,000           180,000
         Depreciation and amortization ..................................          354,950           332,221
         Deferred loan fee amortization .................................         (122,567)         (221,021)
         Amortization of investment and mortgage-backed
          discounts/premiums, net .......................................          233,914           234,052
         Amortization of intangibles ....................................           44,015           198,067
         Net (gain) loss on sale of investment securities ...............          (57,078)          (10,344)
         Net (gain) loss on sale of mortgage-backed securities ..........           30,154           (16,276)
         Net (gain) loss  on sale of loans ..............................          (16,131)           (8,912)
         Origination of loans held-for-sale .............................         (552,300)         (134,400)
         Proceeds from sale of loans held-for-sale ......................          559,587           143,312
         (Increase) decrease in interest receivable .....................         (317,710)         (473,473)
         (Increase) decrease in deferred tax asset ......................          335,465          (858,332)
         Increase (decrease) in accrued income taxes ....................          975,836                (1)
         Increase (decrease) in interest payable ........................           71,038          (130,510)
         SAIF assessment ................................................       (1,530,357)              -0-
         Other changes, net .............................................       (1,868,309)        2,465,552
                                                                              ------------      ------------

        Net cash provided (used) by operating activities ................          421,606         3,253,228
                                                                              ------------      ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                   FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                     Statements of Cash Flows (Unaudited)
                                                 (continued)


                                                                                         Nine Months
                                                                                       Ended  June 30,
                                                                              ------------------------------
                                                                                   1997              1996
                                                                              ------------      ------------
<S>                                                                           <C>               <C>
Investing Activities:

     Proceeds from sales of investment securities available-for-sale ....       15,191,701         5,555,628
     Proceeds from maturities and principal repayments of
        investment securities available-for-sale ........................        2,000,000         5,000,000
     Purchases of investment securities available-for-sale ..............       (8,011,432)      (24,504,255)
     Proceeds from sales of mortgage-backed securities available-for-sale        8,587,846         5,505,078
     Proceeds from maturities and principal repayments of  mortgage-
        backed securities available-for-sale ............................        5,680,380         5,200,000
     Purchases of mortgage-backed securities available-for-sale .........      (38,894,762)      (12,289,521)
     Proceeds from maturities and principal repayments of investment
        securities held-to-maturity .....................................        1,407,719         1,483,769
     Purchases of investment securities held-to-maturity ................       (2,625,000)              -0-
     Proceeds from principal repayments of mortgage-backed
        securities held to maturity .....................................        3,762,971         5,121,233
     Purchases of mortgage-backed securities held-to-maturity ...........       (5,052,500)          (33,165)
     Principal repayments on first mortgage loans .......................       11,964,110        11,159,662
     Principal repayments on other loans ................................       15,345,122        12,573,125
     First mortgage loans originated and disbursed ......................      (25,866,520)      (26,014,505)
     Other loans originated .............................................      (27,458,872)      (23,535,958)
     Proceeds from sale of other loans ..................................          318,999           521,127
     Additions to office premises and equipment .........................         (529,162)         (185,339)
                                                                              ------------      ------------

  Net cash provided (used) by investing activities ......................      (44,179,400)      (34,443,121)
                                                                              ------------      ------------

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                   FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                     Statements of Cash Flows (Unaudited)
                                                 (continued)


                                                                             Nine Months Ended June 30,
                                                                       -----------------------------------
                                                                             1997                 1996
                                                                       --------------      ---------------
<S>                                                                    <C>                 <C>
Financing Activities:
Net increase (decrease) in savings deposits .....................           4,360,417           (4,056,495)
Increase in advance payments by borrowers for taxes and insurance           1,412,061            1,495,332
Increase (decrease) in reverse repurchase agreements ............             970,676           (4,205,716)
FHLB advance repayments .........................................      (1,165,525,000)        (881,975,000)
FHLB advances ...................................................       1,192,575,000          924,975,000
Cash dividends paid .............................................            (376,038)            (300,090)
Stock options exercised .........................................             266,023               42,611
Proceeds from sale of stock .....................................              56,854               40,397
Proceeds from guaranteed preferred beneficial interest in
  subordinated debt .............................................          10,250,000                   -0-
                                                                       --------------      ---------------
Net cash provided (used) by financing activities ................          43,989,993           36,016,039
                                                                       --------------      ---------------

Increase (decrease) in cash and cash equivalents ................             232,199            4,826,146

Cash and cash equivalents at beginning of period ................           4,762,098            5,043,480
                                                                      ---------------      ---------------

Cash and cash equivalents at end of period ......................     $     4,994,297      $     9,869,626
                                                                      ===============      ===============


Supplemental Disclosure of Cash Flow Information

Cash paid during the period for:
  Interest on deposits and other borrowings .....................     $     9,537,427      $     8,825,394
  Income taxes ..................................................     $        77,953      $       650,000
                                                                      ---------------      ---------------
Transfer of investment and mortgage-backed securities from
   investment to available-for-sale .............................     $            -0-     $    61,864,252
                                                                      ---------------      ---------------
Transfer of loan to REO .........................................     $       119,541      $            -0-
                                                                      ---------------      ---------------


</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                               FIDELITY BANCORP, INC. AND SUBSIDIARIES
                                            Statement of Changes in Stockholders' Equity



                                                                   Additional                      Unrealised Gain/
                                                   Common           Paid-in         Retained     (Loss) on Securities
                                                   Stock            Capital          Earnings     Available-for-Sale       Total
                                              ------------      ------------      ------------      ------------      ------------
<S>                                           <C>               <C>               <C>               <C>               <C>
                                                                                                   

Balance at September 30, 1995 ...........     $     12,357      $  8,138,525      $ 13,788,652      $    192,792      $ 22,132,326
    Net income ..........................                                            1,553,293                           1,553,293
    Cash dividends paid .................                                             (297,682)                           (297,682)
    10% Stock Dividend on Common Stock ..            1,242         2,172,118        (2,173,360)                                  0
    Cash paid on stock dividend in lieu
          of fractional shares ..........                                               (2,408)                             (2,408)
    Effect of change in accounting
          for certain debt and equity
          securities at date of adoption,
          net of deferred taxes .........                                                               (539,414)         (539,414)
     Net change in unrealized gain
          (loss) on securities available-
          for-sale, net of taxes ........                                                             (1,385,336)       (1,385,336)
     Sale of stock ......................               24            40,373                                                40,397
     Stock options exercised ............               72            42,539                                          $     42,611
                                              ------------      ------------      ------------      ------------      ------------

Balance at June 30, 1996 ................     $     13,695      $ 10,393,555      $ 12,868,495      $ (1,731,958)     $ 21,543,787
                                              ============      ============      ============      ============      ============


Balance at September 30, 1996 ...........     $     13,732      $ 10,437,133      $ 12,522,830      $ (1,195,600)     $ 21,778,095
     Net income .........................                                            1,916,099                           1,916,099
     Cash dividends paid ................                                             (374,789)                           (374,789)
     10% Stock Dividend on Common Stock .            1,403         2,902,046        (2,903,449)
     Cash paid on stock dividend in lieu
          of fractional shares ..........                                               (1,249)                             (1,249)
     Net change in unrealized gain
          (loss) on securities available-
          for-sale, net of taxes ........                                                                896,204           896,204
     Sale of stock ......................               27            56,827                                                56,854
     Stock options exercised ............              336           265,687                                               266,023
                                              ------------      ------------      ------------      ------------      ------------

Balance at June 30, 1997 ................     $     15,498      $ 13,661,693      $ 11,159,442      $   (299,396)     $ 24,537,237
                                              ============      ============      ============      ============      ============
</TABLE>
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES


                          Notes to Financial Statements
                                   (Unaudited)
                      September 30, 1996 and June 30, 1997


(1) Consolidation
The audited and unaudited consolidated financial statements contained herein for
Fidelity Bancorp, Inc. (the "Company") include the accounts of Fidelity Bancorp,
Inc. and its wholly-owned subsidiaries,  Fidelity Bank, PaSB (the "Bank") and FB
Capital  Trust  (the  "Trust").  All  significant   inter-company  balances  and
transactions have been eliminated.

(2) Basis of Presentation
The accompanying  consolidated  financial statements were prepared in accordance
with instructions to Form 10-QSB, and therefore,  do not include  information or
footnotes necessary for a complete  presentation of financial position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles.  However, all normal recurring  adjustments which, in the opinion of
management,  are necessary for a fair presentation of the financial  statements,
have been included.  These  financial  statements  should be read in conjunction
with  the  audited  financial  statements  and the  accompanying  notes  thereto
included in the Company's Annual Report for the period ended September 30, 1996.
The  results  for the three and nine month  periods  ended June 30, 1997 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending September 30, 1997.

(3) Earnings Per Share
Earnings  per share for the three and nine  months  ended June 30, 1996 and 1997
are  calculated by dividing net income by the weighted  average number of common
shares  outstanding.  Outstanding  shares also include common stock  equivalents
which consist of certain outstanding stock options. The average number of shares
outstanding  (including  common stock  equivalents)  for the three month periods
ended June 30, 1996 and 1997 were  1,539,044 and  1,616,540,  respectively.  The
average number of shares  outstanding  (including common stock  equivalents) for
the nine  month  periods  ended  June  30,  1996 and  1997  were  1,533,164  and
1,584,700,  respectively. The average number of shares for the periods have been
restated to reflect the 10% stock dividends discussed in Note 4.

In February 1997, the Financial  Accounting  Standards Board ("FASB") issued FAS
No. 128, "Earnings per Share". FAS No. 128 provides revised reporting  standards
for earnings per share and is effective for financial  statement  periods ending
after December 15, 1997,  with earlier  application  not permitted.  FAS No. 128
eliminates primary and fully diluted earnings per share disclosures and adds new
disclosures of basic and diluted earnings per share. Had the Company applied FAS
No. 128 to the accompanying  consolidated  financial statements,  basic earnings
per share would have been $.37 and $.42 for the three months ended June 30, 1996
and 1997,  respectively,  and $.94 and $1.25 for the nine months  ended June 30,
1996 and 1997, respectively. Diluted earnings per share would have been $.36 and
$.41 for the three months ended June 30, 1996 and 1997,  respectively,  and $.92
and $1.20 for the nine months ended June 30, 1996 and 1997, respectively.

(4) Per share amounts have been restated to give  retroactive  effect to the 10%
common stock dividends  declared by the Company's Board of Directors and paid on
May 31, 1996 and May 28, 1997.
<PAGE>
(5)  Securities  The  Company  accounts  for  investments  in  debt  and  equity
securities in accordance  with FAS No. 115, which  requires that  investments be
classified as either:  (1) Securities  Held-to- Maturity - reported at amortized
cost,  (2)  Trading  Securities  - reported  at fair  value,  or (3)  Securities
Available-for-Sale  - reported  at fair value.  Unrealized  gains and losses for
trading  securities are reported in earnings while  unrealized  gains and losses
for  securities  available-for-sale  are  reported  as a separate  component  of
equity.  Unrealized losses of $299,000, net of tax, on investments classified as
available-for-sale  is  recorded as a separate  component  of equity at June 30,
1997.

(6) Loans Receivable

         Loans  receivable  are  comprised of the following  (dollar  amounts in
thousands):
<TABLE>
<CAPTION>
                                                       June 30,      September 30,
                                                         1997            1996
                                                     ---------        ---------
<S>                                                  <C>              <C>
First mortgage loans:
         Conventional:
                  1-4 family dwellings .......       $  94,795        $  80,186
                  Multi-family dwellings .....           4,507            4,435
         Commercial ..........................          19,766           19,112
         Construction ........................           6,209            7,645
                                                     ---------        ---------
                                                       125,277          111,378
                                                     ---------        ---------
Less:
         Loans in process ....................          (4,998)          (4,109)
         Unearned discounts and fees .........            (840)            (960)
                                                     ---------        ---------
                                                       119,439          106,309
                                                     ---------        ---------
Installment loans:
         Home equity .........................          35,835           30,070
         Mobile home loans ...................             109              169
         Consumer loans ......................           2,517            2,479
         Other ...............................           3,022            3,064
                                                     ---------        ---------
                                                        41,483           35,782
                                                     ---------        ---------

Commercial business loans ....................          16,804           10,702
                                                     ---------        ---------

Less: Allowance for possible loan losses .....          (1,800)          (1,530)
                                                     ---------        ---------

         Loans receivable, net ...............       $ 175,926        $ 151,263
                                                     =========        =========

</TABLE>
<PAGE>
(7) Changes in the  allowance for loan losses for the nine months ended June 30,
1997 and 1996 are as follows (dollar amounts in thousands):
<TABLE>
<CAPTION>

                                                           1997            1996
                                                        -------         -------
<S>                                                     <C>             <C>
Balance at beginning of the fiscal year ........        $ 1,530         $ 1,429
Provision for loan losses ......................            365             180
Charge-offs ....................................           (117)           (216)
Recoveries .....................................             22              78
                                                        -------         -------
Balance at June 30, ............................        $ 1,800         $ 1,471
                                                        =======         =======
</TABLE>

The  provision  for loan losses  charged to expense is based upon past loan loss
experience and an evaluation of potential  losses in the current loan portfolio,
including the evaluation of impaired loans under FAS Nos. 114 and 118. A loan is
considered to be impaired when, based upon current information and events, it is
probable  that the Bank will be unable to collect all amounts due  according  to
the contractual  terms of the loan. An insignificant  shortfall in payments does
not necessarily result in a loan being identified as impaired. For this purpose,
delays less than 90 days are considered to be insignificant.

Impairment  losses are included in the provision  for loan losses.  FAS Nos. 114
and 118 do not apply to large groups of smaller balance,  homogeneous loans that
are collectively  evaluated for impairment,  except for those loans restructured
under a troubled debt restructuring. Loans collectively evaluated for impairment
include  consumer loans and residential  real estate loans, and are not included
in the following data.

At June 30, 1997,  the recorded  investment  in loans that are  considered to be
impaired under FAS Nos. 114 was $753,000. Included in this amount is $753,000 of
impaired loans for which the related allowance for credit losses is $66,000, and
no impaired  loans that as a result of  write-downs do not have an allowance for
credit losses. The average recorded investment in impaired loans during the nine
months  ended June 30, 1997,  was  approximately  $715,000.  For the nine months
ended June 30, 1997, the Company recognized no interest income on those impaired
loans, using the cash basis of income recognition.

(8) On May 13,  1997,  the Trust,  a  statutory  business  trust  created  under
Delaware law that is a subsidiary of the Company,  issued $10.25 million,  9.75%
Preferred   Securities   ("Preferred   Securities")  with  a  stated  value  and
liquidation  preference  of $10 per share.  The  Trust's  obligations  under the
Preferred  Securities  issued are fully and  unconditionally  guaranteed  by the
Company. The proceeds from the sale of the Preferred Securities of the Trust, as
well as proceeds  from the issuance of common  securities  to the Company,  were
utilized by the Trust to invest in $10.57  million of 9.75% Junior  Subordinated
Debentures (the  "Debentures") of the Company.  The Debentures are unsecured and
rank subordinate and junior in right of payment to all indebtedness, liabilities
and obligations of the Company.  The Debentures represent the sole assets of the
Trust.  Interest on the Preferred Securities is cumulative and payable quarterly
in arrears.  The Company has the right to optionally redeem the Debentures prior
to the maturity date of July 15, 2027, on or after July 15, 2002, at 100% of the
<PAGE>
stated liquidation amount, plus accrued and unpaid distributions, if any, to the
redemption  date.  Under the occurrence of certain events,  specifically,  a Tax
Event, Investment Company Event or Capital Treatment Event as more fully defined
in the FB Capital Trust  Prospectus dated May 8, 1997, the Company may redeem in
whole, but not in part, the Debentures prior to July 15, 2002. Proceeds from any
redemption of the Debentures would cause a mandatory redemption of the Preferred
Securities  and the common  securities  having an aggregate  liquidation  amount
equal to the principal amount of the Debentures redeemed.

On July 17, 1997, on behalf of the Trust, the Company  requested relief from the
Office of Chief Counsel of the Division of Corporation Finance of the Securities
and Exchange Commission,  exempting the Trust from the reporting requirements of
the Securities  Exchange Act of 1934. The Trust is a wholly-owned  subsidiary of
the Company, has no independent  operations and issued securities that contained
a full and unconditional guarantee of its parent, the Company.
 

                     FIDELITY BANCORP, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Comparison of Financial Condition at September 30, 1996 and June 30, 1997

Total assets of the Bank  increased  $45.4 million or 14.3% to $363.3 million at
June 30, 1997 from $317.9 million at September 30, 1996.  Significant changes in
individual  categories  were increases in loans  receivable of $24.7 million and
mortgage-backed securities available-for-sale of $25.3 million, and decreases in
investment securities available-for-sale of $8.8 million.

Total  liabilities  of the Bank  increased  by $42.7  million or 14.4% to $338.8
million at June 30, 1997 from $296.1 million at September 30, 1996. The increase
reflects a $4.4 million increase in savings  deposits,  a $27.0 million increase
in Federal Home Loan Bank advances outstanding as well as the issuance of $10.25
million of Preferred Securities.

Stockholders'  equity  increased  $2.8 million or 12.7% to $24.5 million at June
30, 1997,  compared to September 30, 1996. The net increase  reflects net income
for the nine month period  ended June 30, 1997 of $1.9  million,  proceeds  from
stock options exercised of $266,000, and proceeds from the Dividend Reinvestment
Plan  of  $57,000,  as  well as a  decrease  in  unrealized  holding  losses  on
securities  available-for-sale  of $896,000 and common stock cash dividends paid
of $376,000.
<PAGE>
Non-Performing Assets
 
The following table sets forth information  regarding non-accrual loans and real
estate  owned  by the  Bank at the  dates  indicated.  The Bank did not have any
accruing  loans  which  were 90 days or more  overdue  or any loans  which  were
classified as troubled debt restructuring during the periods presented.
<TABLE>
<CAPTION>
                                                      June 30,      September 30,  
                                                        1997             1996
                                                     ----------      ----------
<S>                                                  <C>             <C>
Non-accrual residential real
  estate loans (one-to-four-family) ............     $  172,000      $  567,000

Non-accrual construction, multi-family
  residential and commercial real estate loans .        753,000         134,000

Non-accrual installment and
  commercial business loans ....................         56,000         457,000
                                                     ----------      ----------

Total non-performing loans .....................     $  981,000      $1,158,000
                                                     ==========      ==========

Total non-performing loans as
  a percent of net loans receivable ............            .56%            .77%
                                                     ==========      ==========

Total real estate owned,
  net of related reserves ......................     $  120,000      $  370,000
                                                     ==========      ==========

Total non-performing loans and real estate
  owned as a percent of total assets ...........            .30%            .48%
                                                     ==========      ==========
</TABLE>

Included  in  non-performing   loans  at  June  30,  1997  are  4  single-family
residential real estate loans totaling $172,000, one commercial real estate loan
in the amount of $753,000,  and 18  installment  and credit card loans  totaling
$56,000.  Of the 4 non-performing  single-family  residential real estate loans,
the largest amounted to $76,000. The commercial real estate loan is on an office
building  located in Pittsburgh  that is currently for sale.  The 18 installment
and credit card loans total $56,000 and consist of various secured and unsecured
consumer loans.

At June 30,  1997,  the Bank had an allowance  for possible  loan losses of $1.8
million or 1.02% of net loans  receivable,  as compared to an  allowance of $1.5
million or 1.01% of net loans  receivable at September  30, 1996.  The allowance
for possible  loan losses  equaled  183.4% of  non-performing  loans at June 30,
1997.

Management has evaluated these  non-performing  loans and the overall  allowance
for possible loan losses and is satisfied that the allowance for possible losses
on loans at June 30, 1997 is adequate.  In that regard,  consideration was given
to the increase in the level of the  allowance  from  September 30, 1996 to June
30, 1997, as well as the coverage of non-performing loans the allowance provides
at June 30, 1997.
<PAGE>
Real estate  owned at June 30, 1997  consists of one  single-family  residential
property located in Pittsburgh,  Pennsylvania totaling $120,000. The property is
currently  under an agreement of sale and management  believes that the carrying
value of the property at June 30, 1997  approximates the net realizable value of
the property.  However,  while management uses the best information available to
make such determinations, future adjustments may become necessary.


                       Comparison of Results of Operations
           for the Three and Nine Months Ended June 30, 1997 and 1996

Net Income

Net income for the three  months  ended June 30, 1997 was  $656,000  compared to
$617,000  for the same  period in 1996,  an  increase  of $38,000  or 6.2%.  The
increase  reflects  an increase in net  interest  income of $92,000 or 3.8%,  an
increase  in other  income of  $28,000  or 14.1%  and a  decrease  in  operating
expenses of $57,000 or 3.4%.  Partially offsetting these factors was an increase
in the  provision  for loan  losses of $40,000 or 44.4% and an  increase  in the
provision for income taxes of $98,000 or 37.3%.

Net income for the nine months ended June 30, 1997 was $1.9 million  compared to
$1.6 million for the same period in 1996, an increase of $363,000 or 23.4%.  The
increase  reflects an increase in net interest  income of $802,000 or 12.0%,  an
increase  in other  income of  $86,000  or 15.8%  and a  decrease  in  operating
expenses of $67,000 or 1.4%. Partially offsetting these factors were an increase
in provision  for possible  loan losses of $185,000 or 102.8% and an increase in
the provision for income taxes of $408,000 or 63.2%.

Interest Rate Spread

The  Bank's   interest   rate  spread,   the   difference   between   yields  on
interest-earning  assets and the cost of funds,  decreased to 2.94% in the three
months ended June 30, 1997 from 3.29% in the same period in 1996.  The following
table shows the average yields earned on the Bank's  interest-earning assets and
the  average  rates paid on its  interest-bearing  liabilities  for the  periods
indicated,   the  resulting  interest  rate  spreads,  and  the  net  yields  on
interest-earning assets.
<PAGE>
<TABLE>
<CAPTION>
                                                          Three Months Ended June 30,
                                                               1997           1996
                                                               ----           ----
<S>                                                             <C>           <C>
Average yield on:
   Mortgage loans ..................................            8.05%         8.68%
   Mortgage-backed securities ......................            6.27          6.40
   Installment loans ...............................            8.50          7.99
   Commercial business loans .......................            9.20          9.57
   Interest-earning deposits with other
     institutions, investment securities,
     and FHLB stock (1) ............................            6.94          6.70
                                                                ----          ----
   Total interest-earning assets ...................            7.39          7.48
                                                                ----          ----

Average rates paid on:
   Savings deposits ................................            4.06          4.06
   Borrowed funds ..................................            5.68          4.88
                                                                ----          ----
   Total interest-bearing liabilities ..............            4.45          4.19
                                                                ----          ----

Average interest rate spread .......................            2.94%         3.29%
                                                                ====          ====

Net yield on interest-earning assets ...............            3.21%         3.47%
                                                                ====          ====

(1) Interest income on tax free investments has been adjusted for federal income
    tax purposes using a rate of 34%.
</TABLE>
<PAGE>
The Bank's interest rate spread decreased to 3.07% in the nine months ended June
30, 1997 from 3.11% in the same period in fiscal 1996. The following table shows
the average yields earned on the Bank's  interest-earning assets and the average
rates paid on its  interest-bearing  liabilities for the periods indicated,  the
resulting interest rate spreads, and the net yields on interest-earning assets.
<TABLE>
<CAPTION>

                                                           Nine Months Ended June 30,
                                                               1997           1996
                                                               ----           ----
<S>                                                             <C>           <C>
Average yield on:
   Mortgage loans ..................................            8.03%         8.36%
   Mortgage-backed securities ......................            6.28          6.27
   Installment loans ...............................            8.29          8.31
   Commercial business loans .......................            9.72          9.81
   Interest-earning deposits with other
     institutions, investment securities,
     and FHLB stock (1) ............................            7.02          6.99
                                                                ----          ----
   Total interest-earning assets ...................            7.39          7.40
                                                                ----          ----

Average rates paid on:
   Savings deposits ................................            4.03          4.23
   Borrowed funds ..................................            5.28          4.77
   Total interest-bearing liabilities ..............            4.31          4.29
                                                                ----          ----

Average interest rate spread .......................            3.07%         3.11%
                                                                ====          ====
Net yield on interest-earning assets ...............            3.27%         3.29%
                                                                ====          ====

(1) Interest income on tax free investments has been adjusted for federal income
    tax purposes using a rate of 34%.
</TABLE>

Interest Income

Interest  on loans  increased  $472,000  or 15.8% to $3.5  million for the three
months ended June 30, 1997, compared to the same period in 1996. The increase is
attributable to an increase in the average loan balance  outstanding  during the
1997 period,  partially offset by a decrease in the yield earned on these assets
in the 1997 period as compared to the same period in 1996.

Interest on loans  increased  $1.5 million or 18.5% to $9.9 million for the nine
months ended June 30, 1997, compared to the same period in 1996. The increase is
attributable to an increase in the average loan balance  outstanding  during the
1997 period,  partially offset by a decrease in the yield earned on these assets
in the fiscal 1997 period as compared to the same period in fiscal 1996.
<PAGE>
Interest  on  mortgage-backed  securities  increased  $164,000  or 10.5% to $1.7
million  and  $275,000  or 5.9% to $4.9  million  for the three  and nine  month
periods  ended June 30, 1997,  respectively,  as compared to the same periods in
1996. The increase for both the three and nine month periods primarily  reflects
an increase in the average  balance of  mortgage-backed  securities  held in the
1997 periods.  Partially  offsetting  this for the three month period ended June
30, 1997, as compared to the same period in the prior year was a decrease in the
yield earned on the  portfolio.  Yields were  essentially  the same for the nine
month periods in fiscal 1997 and 1996.

Interest on  interest-earning  deposits with other  institutions  and investment
securities  decreased  $89,000 or 10.3% to $777,000  for the three month  period
ended June 30,  1997,  as  compared  to the same  period in 1996.  The  decrease
reflects a decrease  in the average  balance of such  securities  and  deposits,
partially  offset by an increase in the yield earned on these  investments.  For
the nine month period ended June 30, 1997, interest on interest-earning deposits
with other institutions and investment  securities  increased $27,000 or 1.1% to
$2.5  million,  as compared to the same period in the prior year.  The  increase
primarily  reflects an increase in the yield  earned on these  investments.  The
average balance of the investments was not  significantly  different between the
periods.

Interest Expense

Interest  on savings  deposits  decreased  $61,000 or 2.5% to $2.4  million  and
$628,000 or 8.2% to $7.1 million for the three and nine month periods ended June
30, 1997,  respectively,  as compared to the same  periods in fiscal  1996.  The
decrease  for the three  month  period in fiscal 1997 as compared to fiscal 1996
primarily  reflects a decrease in the average balance of deposits.  The decrease
for the nine month period in fiscal 1997,  as compared to fiscal 1996,  reflects
both a decrease in the average balance of deposits, as well as a decrease in the
average cost of deposits.

Interest  on borrowed  funds  increased  $379,000 or 70.9% to $914,000  and $1.5
million or 144.9% to $2.6  million  for the three and nine month  periods  ended
June 30, 1997, respectively, as compared to the same periods in fiscal 1996. The
increases  for both the three and nine month  periods in fiscal 1997 as compared
to fiscal 1996  primarily  reflect an  increase in the average  balance of funds
borrowed during the 1997 periods,  as well as an increase in the average cost of
borrowing  during the 1997  periods.  The Bank  continued  to rely on  wholesale
funding sources throughout fiscal 1997 to fund growth. These funding sources are
primarily Federal Home Loan Bank of Pittsburgh advances.

Interest on guaranteed  preferred  beneficial  interest in subordinated debt was
$137,000  for both the three and nine  month  periods  ended June 30,  1997.  As
discussed  more fully in Note 8, the  Preferred  Securities  were  issued in May
1997. In view of this transaction, the Company may incur an increase in interest
expense in future periods.

Net Interest Income Before Provision for Loan Losses

The Bank's net  interest  income  before  provision  for loan  losses  increased
$92,000 or 3.8% to $2.5 million for the three  months  ended June 30,  1997,  as
compared to the same period in 1996. The increase is primarily  attributable  to
an  increase  in  the  ratio  of  interest-earning  assets  to  interest-bearing
liabilities  in the 1997 period,  partially  offset by a decreased  spread.  Net
<PAGE>
interest income before provision for loan losses increased  $802,000 or 12.0% to
$7.5 million for the nine months  ended June 30,  1997,  as compared to the same
period in  fiscal  1996.  The  increase  reflects  an  increase  in the ratio of
interest-earning  assets to  interest-bearing  liabilities  in the  fiscal  1997
period, partially offset by a small decrease in the spread earned.

Provision for Loan Losses

The  provision  for loan  losses  increased  $40,000  or 44.4% to  $130,000  and
$185,000 or 102.8% to $365,000 for the three and nine month  periods  ended June
30, 1997,  respectively,  as compared to the same  periods in fiscal  1996.  The
provision for both years reflects management's evaluation of the loan portfolio,
current economic conditions, and other factors as described below. The allowance
for  possible  loan losses has  increased  from $1.5 million at June 30, 1996 to
$1.8 million at June 30, 1997.

A monthly  review is conducted by management to determine that the allowance for
possible loan losses is adequate to absorb estimated loan losses. In determining
the level of  allowances  for possible  loan losses,  consideration  is given to
general economic conditions, the diversification and size of the loan portfolio,
historical loss experience,  identified credit problems,  delinquency levels and
the  adequacy  of  collateral.  Although  management  believes  that the current
allowance  for loan losses is adequate,  future  additions to the reserve may be
necessary due to changes in economic conditions. In addition, various regulatory
agencies  review the adequacy of the  allowance for loan losses as part of their
examination  process and may require  additions to the allowance  based on their
judgment.

Other Income

Total  non-interest or other income  increased  $28,000 or 14.1% to $222,000 and
$86,000 or 15.8% to $630,000 for the three and nine month periods ended June 30,
1997, respectively, as compared to the same periods in fiscal 1996.

Service  fee  income,  which  includes  late  charges  on loans,  fees for loans
serviced for others and other miscellaneous loan fees,  increased $1,000 or 4.2%
to $21,000  and $1,000 or 1.8% to $57,000  for the three and nine month  periods
ended June 30,  1997,  respectively,  as compared to the same  periods in fiscal
1996. For both periods, the increase primarily represents increased fees related
to  commercial  loans and lines of  credit,  partially  offset by  reduced  late
charges on loans.

Gain on the sale of investment and mortgage-backed  securities  decreased $3,000
or 33.4% for the three month period ended June 30, 1997, as compared to the same
period in 1996.  For the nine month periods ended June 30, 1997 and 1996,  gains
of  $27,000  were  recorded.  All sales  were  made from the  available-for-sale
portfolio in the periods and were done to reflect  current  economic  conditions
and  asset/liability   management   strategies,   as  well  as  changing  market
conditions.

Gain on sale of loans increased  $7,000 or 222.7% and $7,000 or 81.0% to $11,000
and  $16,000  for the  three  and  nine  month  periods  ended  June  39,  1997,
respectively, as compared to the same periods in the prior fiscal year. The Bank
sells education loans to the Student Loan Marketing Association  ("SLMA").  Such
sales generally result in some gain or loss being realized and are being done to
reduce the Bank's  position in these loans,  which are generally  lower yielding
<PAGE>
and subject to extensive  and costly  government  regulation.  The Bank does not
intend to originate  additional  student loans for its  portfolio,  except those
that will be  serviced  by SLMA.  Results  generally  reflect the timing of such
sales. The volume of loans sold was slightly lower in the fiscal 1997 periods.

Other operating  income includes  miscellaneous  sources of income which consist
primarily of various fees  related to checking  accounts,  fees from the sale of
cashiers  checks and money  orders,  and safe deposit box rental  income.  Other
operating income increased  $22,000 or 13.4% to $184,000 and $78,000 or 17.1% to
$531,000 for the three and nine month  periods  ended June 30, 1997, as compared
to the same  periods in fiscal  1996.  The  increase for both the three and nine
month periods is primarily due to increases in checking  account service charges
and fees related to a debit card product the Bank introduced in fiscal 1996.

Other Expenses

Total operating  expenses  decreased $57,000 or 3.4% to $1.6 million and $67,000
or 1.4% to $4.8  million  for the three and nine  month  periods  ended June 30,
1997, respectively, as compared to the same period in fiscal 1996.

Compensation,  payroll  taxes and fringe  benefits,  the  largest  component  of
operating  expenses,  increased  $110,000 or 13.5% to $924,000  and  $284,000 or
11.8% to $2.7 million for the three and nine month  periods ended June 30, 1997,
respectively,  compared to the same periods in fiscal 1996. Factors contributing
to the increase for both periods were normal salary  increases,  higher  bonuses
awarded in fiscal 1997,  expenses  related to recruiting new  employees,  and an
increase in the number of  employees  on the  payroll,  particularly  related to
lending  operations.  In  addition,  an increase in  retirement  and health care
expenses was experienced.

Office occupancy and equipment  expense increased $11,000 or 7.9% and $21,000 or
5.0% to $151,000 and $439,000  for the three and nine month  periods  ended June
30, 1997 and 1996,  respectively,  compared to the same  periods in fiscal 1996.
For both the three and nine month  periods in fiscal  1997,  as  compared to the
same  period in the  prior  year,  the main  factor  causing  the  increase  was
increased equipment maintenance expenditures.

Depreciation and  amortization  increased $9,000 or 8.4% to $119,000 and $23,000
or 6.8% to $355,000  for the three and nine month  periods  ended June 30, 1997,
respectively,  compared to the same periods in fiscal 1996. The results  reflect
the purchase of new equipment, primarily for back room operations and to upgrade
existing  systems,  as well as  depreciation  on  renovations  completed  at the
Zelionople and Bloomfield branches of the Bank.

Federal insurance  premiums  decreased $103,000 or 73.1% to $38,000 and $345,000
or 82.0% to $76,000 for the three and nine month  periods  ended June 30,  1997,
respectively,  compared to the same  periods in fiscal 1996.  On  September  30,
1996, the President signed into law the Deposit Insurance Funds Act of 1996 (the
ACT).  Among other  things,  the Act imposed a one time  special  assessment  on
deposits insured by the Savings Association  Insurance Fund ("SAIF") designed to
fully capitalize the SAIF to the level required by law. This special  assessment
was  approximately  $1.5  million for the Bank and was recorded as an expense in
the year ended September 30, 1996, and was paid in November 1996. As a result of
the payments by SAIF insured institutions, the FDIC subsequently determined that
the SAIF was fully  capitalized  and that,  for the quarter  ended  December 31,
1996,  no  deposit  insurance  premiums  would  be due from  many  institutions,
including the Bank. For the periods beginning January 1, 1997, deposit insurance
for  well-capitalized  SAIF  insured  institutions,  including  the  Bank,  were
<PAGE>
assessed at a rate of approximately $.0648 per hundred dollars of deposits. This
compares  to a rate  of  $.23  per  hundred  that  was in  effect  prior  to the
recapitalization of SAIF.

Net loss on real  estate  owned was $4,000 for the three  months  ended June 30,
1997,  as compared to a net loss of $67,000 in the  comparable  period in fiscal
1996.  Net loss on real estate  owned was $36,000 and $88,000 for the nine month
periods  ended June 30,  1997 and 1996,  respectively.  Results  for the periods
reflect the sale of property held as real estate  owned.  The higher fiscal 1996
losses  primarily  reflect the higher amounts  expended to maintain and put into
salable  condition a  single-family  home that was sold in fiscal 1996.  Similar
expenditures have not been required in fiscal 1997.

Amortization  of intangibles  was zero for the three month period ended June 30,
1997,  and $66,000 for the  comparable  period in fiscal 1996.  Amortization  of
intangibles  was $44,000 and $198,000 for the nine month  periods ended June 30,
1997 and 1996,  respectively.  The  intangibles  generated  by the three  branch
acquisitions   that  occurred  in  November  1991  were  being  amortized  on  a
straight-line  basis over five years.  These intangibles were fully amortized in
November 1996.

Other operating expenses,  which consists of check processing costs,  consulting
fees, legal and audit fees, advertising,  bank charges, and other administrative
expenses,  increased  $44,000 or 13.3% to $374,000 and $156,000 or 16.0% to $1.1
million for the three and nine month periods ended June 30, 1997,  respectively,
as compared to the same periods in fiscal 1996.  Significant  variations between
both the three and nine month  periods in fiscal  1997,  as  compared  to fiscal
1996, include increases in automatic teller machine network fees, stationary and
supplies,  advertising  and consulting  fees,  and Federal  Reserve Bank service
charges related to the Bank's implementation of check imaging.

Income Taxes

Income  taxes  increased  $98,000 or 37.3% to $361,000  and $408,000 or 63.2% to
$1.1  million  for the  three  and nine  month  periods  ended  June  30,  1997,
respectively, compared to the same periods in fiscal 1997. The increase in taxes
for both the three and nine month  periods  results  from an increase in taxable
income,  as well as an increase in the  effective tax rate to 35.5% for both the
three and nine month periods ended June 30, 1997,  respectively,  as compared to
29.9% and 29.4% for the  comparable  periods in the prior  year.  The  increased
effective tax rate primarily results from the Bank's increased pre-tax income as
well as the sale of tax-free  investments and the reinvestment of those proceeds
into taxable instruments.

Capital Requirements

The Federal Reserve Board measures capital  adequacy for bank holding  companies
on the  basis of a  risk-based  capital  framework  and a  leverage  ratio.  The
guidelines  include  the  concept of Tier 1 capital  and total  capital.  Tier 1
capital is essentially  common equity,  excluding net unrealized  gain (loss) on
securities  available-for-sale  and  goodwill,  plus certain  types of preferred
stock,  including  the  Preferred  Securities  issued by the Trust in 1997.  The
Preferred  Securities  may comprise up to 25% of the  Company's  Tier 1 capital.
Total  capital  includes  Tier 1 capital and other forms of capital  such as the
allowance for loan losses,  subject to limitations,  and subordinated  debt. The
guidelines  establish a minimum standard risk-based target ratio of 8%, of which
at least 4% must be in the form of Tier 1 capital. At June 30, 1997, the Company
had Tier 1 capital as a percentage of  risk-weighted  assets of 17.94% and total
risk-based capital as a percentage of risk-weighted assets of 18.91%.
<PAGE>
In addition,  the Federal Reserve Board has established  minimum  leverage ratio
guidelines for bank holding companies.  These guidelines currently provide for a
minimum  ratio of Tier 1 capital as a percentage  of total  average  assets (the
"Leverage  Ratio") of 3% for bank holding  companies that meet certain criteria,
including  that they  maintain  the highest  regulatory  rating.  All other bank
holding  companies are required to maintain a Leverage  Ratio of at least 100 to
200 basis points above the minimum. At June 30, 1997, the Company had a Leverage
Ratio of 9.81%.

The FDIC has issued regulations that require insured  institutions,  such as the
Bank, to maintain  minimum levels of capital.  In general,  current  regulations
require a leverage  ratio of Tier 1 capital to average  total assets of not less
than 3% for the most highly rated  institutions  and an  additional 1% to 2% for
all other  institutions.  At June 30, 1997,  the Bank  complied with the minimum
leverage  ratio  having  Tier 1 capital of 9.17% of  average  total  assets,  as
defined.

The Bank is also  required to maintain a ratio of  qualifying  total  capital to
risk-weighted assets and off-balance sheet items of a minimum of 8%. At June 30,
1997, the Bank's total capital to  risk-weighted  assets ratio  calculated under
the FDIC capital requirement was 18.30%.

A reconciliation of Stockholders'  Equity for the Bank to Regulatory  Capital is
as follows:
<TABLE>
<CAPTION>
<S>                                                                  <C>
Stockholder's equity at June 30, 1997 (1) .................          $31,258,379
Unrealized securities losses ..............................              272,880
                                                                     -----------
Tier 1 Capital at June 30, 1997 ...........................           31,531,259
Plus: Qualifying loan loss allowance ......................            1,800,192
                                                                     -----------
Total capital at June 30, 1997 ............................          $33,331,451
                                                                     ===========

(1) Represents  equity  capital  of the  Bank as  reported  to the  FDIC and the
    Pennsylvania Department of Banking on Form 032.
</TABLE>

Liquidity

The Bank's  primary  sources of funds have  historically  consisted of deposits,
amortization and prepayments of outstanding  loans,  borrowings from the FHLB of
Pittsburgh and other sources,  including  sales of securities  and, to a limited
extent, loans. At June 30, 1997, the total of approved loan commitments amounted
to $3.4  million.  In addition,  the Bank had $5.0 million of  undisbursed  loan
funds at that date. The amount of savings  certificates  which mature during the
next twelve months totals  approximately $82.9 million, a substantial portion of
which management believes, on the basis of prior experience,  will remain in the
Bank.
<PAGE>
Part II - Other Information

Item. 1  Legal Proceedings

             The Bank is not  involved in any pending  legal  proceedings  other
             than  non-material  legal  proceedings  undertaken  in the ordinary
             course of business.

Item 2.  Changes in Securities
             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
         4.1      Form of Junior Subordinated Debenture*
         4.2      Form of Junior Subordinated Debenture Certificate 
                  (included in Exhibit 4.1)*
         4.3      Form of Trust Agreement*
         4.4      Form of Amended and Restated Trust Agreement*
         4.5      Form of Preferred Security (included in Exhibit 4.4)*
         4.6      Form of Guarantee*
         27       Financial Data Schedule (electronic data filing only)

                  *Incorporated by reference to the registrant's Registration 
                   Statement on Form S-1, file number 333-24509 and 333-24509-1
<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 SAVINGS BANK



Date:  August 1, 1997                        By:    /s/ William L. Windisch
                                                    -----------------------
                                                    William L. Windisch
                                                    President and 
                                                    Chief Executive Officer


Date:  August 1, 1997                        By:    /s/ Richard G. Spencer
                                                    ----------------------
                                                    Richard G. Spencer
                                                    Vice President and  
                                                    Chief Financial Officer