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 December 31, 1996 

[ ] 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: 1,382,616 shares, par value $0.01, at
January 31, 1997.

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

                                      Index


Part I - Financial Information

Item 1.  Financial Statements

          Statements of Financial Condition as of September 30, 1996
               and December 31, 1996 (Unaudited)                                

          Statements of Income (Unaudited) for the Three Month Periods
               Ended December 31, 1995 and 1996                                 

          Statements of Cash Flows (Unaudited) for the Three Months Ended
               December 31, 1995 and 1996                                       

          Statement of Changes in Stockholders' Equity (Unaudited) for the Three
               Months Ended December 31, 1995 and 1996                          

          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>
<TABLE>
<CAPTION>
Part I - Financial Information


                                   FIDELITY BANCORP, INC. AND SUBSIDIARY
                                     Statements of Financial Condition


        Assets                                                  September 30, 1996      December 31, 1996  
                                                                ------------------      -----------------
                                                                                           (Unaudited)
<C>                                                              <C>                     <C>
Cash and amounts due from
  depository institutions                                        $   4,616,088           $   3,964,013
Interest-earning demand deposits with
 other institutions                                                    146,010                 115,808
Investment securities held-to-maturity                               5,401,139               5,272,395
Investment securities available-for-sale                            50,928,774              45,152,583
Loans receivable, net                                              151,263,067             153,509,009
Mortgage-backed securities held-to-maturity                         31,274,934              31,889,740
Mortgage-backed securities available-for-sale                       62,463,269              68,501,473
Real estate owned, net                                                 369,675                     -0-
Federal Home Loan Bank stock - at  cost                              2,826,300               3,052,500
Accrued interest receivable, net:
    Loans                                                              850,006                 810,548
    Mortgage-backed securities                                         566,018                 598,706
    Investments                                                        726,573                 808,964
Office premises and equipment, net                                   3,365,941               3,588,826
Deferred tax asset                                                   1,925,924               1,627,417
Prepaid income taxes                                                   324,414                  37,415
Goodwill and other intangible assets                                    44,015                     -0-
Prepaid expenses and sundry assets                                     781,894               1,406,636
                                                                 -------------           -------------

              Total Assets                                       $ 317,874,041           $ 320,336,033
                                                                 =============           =============

     Liabilities and Net Worth
Liabilities:
    Savings deposits                                             $ 234,275,620           $ 233,641,739
    Federal Home Loan Bank advances                                 56,650,000              60,300,000
    Reverse repurchase agreements                                      493,133                 504,514
    Advance deposits by borrowers for
      taxes and insurance                                            1,316,683               2,088,287
    Accrued interest on savings and
      other deposits                                                   176,914                  14,011
    Other accrued expenses and sundry liabilities                    3,183,596                 652,307
                                                                 -------------           -------------

            Total Liabilities                                      296,095,946             297,200,858
                                                                 -------------           -------------
<PAGE>
<CAPTION>
Part I - Financial Information


                                   FIDELITY BANCORP, INC. AND SUBSIDIARY
                                     Statements of Financial Condition
                                               (continued)


                                                               September 30, 1996      December 31, 1996            
                                                                                           (Unaudited)
<C>                                                              <C>                     <C>
Stockholders' equity (Note 4):
    Common stock, $0.01 par value per share;
      10,000,000 shares authorized; 1,373,151
      and 1,380,977 shares issued and outstanding                       13,732                  13,810
    Additional paid-in capital                                      10,437,133              10,496,369
    Retained earnings - substantially restricted                    12,522,830              13,035,540
Unrealized gain (loss) on securities available-for-sale             (1,195,600)               (410,544)
                                                                 -------------           -------------

Total stockholders' equity                                          21,778,095              23,135,175
                                                                 -------------           -------------

Total Liabilities and Stockholders' Equity                       $ 317,874,041           $ 320,336,033
                                                                 =============           =============


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

                                Statements of Income (Unaudited)


                                                                      Three months ended
                                                                         December 31,
                                                              ---------------------------------
                                                                  1995                  1996
                                                              -----------           -----------
<S>                                                           <C>                   <C>
Interest Income:
     Loans                                                    $ 2,622,619           $ 3,185,792
     Mortgage-backed securities                                 1,560,269             1,554,579
     Investment securities                                        729,261               859,840
     Deposits with other institutions                               7,274                 2,654
                                                              -----------           -----------
         Total interest income                                  4,919,423             5,602,865
                                                              -----------           -----------

Interest Expense:
     Savings deposits                                           2,672,656             2,363,252
     Borrowed funds                                               206,211               788,800
                                                              -----------           -----------

         Total interest expense                                 2,878,867             3,152,052
                                                              -----------           -----------

Net interest income before provision for loan losses            2,040,556             2,450,813
Provision for loan losses                                          30,000               115,000
                                                              -----------           -----------

Net interest income after provision for loan losses             2,010,556             2,335,813
                                                              -----------           -----------
Other income:
     Service fee income                                            20,889                19,091
     Gain (loss) on sale of investment securities
       and mortgage-backed securities, net                        (12,357)               (1,641)
     Gain (Loss) on sale of loans                                   2,054                 1,901
     Other operating income                                       135,363               165,070
                                                              -----------           -----------

         Total other income                                       145,949               184,421
                                                              -----------           -----------

Operating expenses:
     Compensation, payroll taxes and fringe benefits              791,533               909,753
     Office occupancy and equipment expense                       134,749               144,930
     Depreciation and amortization                                108,710               112,535
     Federal insurance premiums                                   140,726                   -0-
     (Gain) loss on real estate owned, net                          8,300                 6,660
     Amortization of intangibles                                   66,022                44,015
     Other operating expenses                                     313,353               372,068
                                                              -----------           -----------

         Total operating expenses                               1,563,393             1,589,961
                                                              -----------           -----------
<PAGE>
<CAPTION>
                              FIDELITY BANCORP, INC. AND SUBSIDIARY

                                Statements of Income (Unaudited)
                                          (continued)


                                                                      Three months ended
                                                                         December 31,
                                                              ---------------------------------
                                                                  1995                  1996
                                                              -----------           -----------
<S>                                                           <C>                   <C>
Income before income tax provision                                593,112               930,273

Income tax provision                                              180,000               307,500
                                                              -----------           -----------

Net Income                                                    $   413,112           $   622,773
                                                              ===========           ===========


Primary earnings per common share (Note 3)                    $       .30           $       .44
                                                              ===========           ===========

Dividends per common share (Note 3)                           $      .073           $       .08
                                                              ===========           ===========

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                    FIDELITY BANCORP, INC. AND SUBSIDIARY
                                     Statements of Cash Flows (Unaudited)
                                                                             Three Months Ended December 31,
                                                                             -------------------------------
                                                                                  1995              1996
                                                                              -----------      -----------
<S>                                                                           <C>              <C>   
Operating Activities:
     Net income:                                                              $   413,112      $   622,773
     Adjustments to reconcile net income
     to net cash provided by operating activities:
         Provision for loan losses                                                 30,000          105,000
         Loss on real estate owned                                                  8,300            6,660
         Depreciation and amortization                                            108,710          112,535
         Deferred loan fee amortization                                           (26,685)         (57,839)
         Amortization of investment and mortgage-
             backed securities discounts/premiums, net                             73,502           78,689
         Amortization of intangibles                                               66,022           44,015
         Net (gain) loss on sale of investment securities                            --              1,205
         Net (gain) loss on sale of mortgage-backed securities                     12,357              436
         Net (gain) loss on sale of loans                                          (2,054)          (1,901)
         Origination of loans held-for-sale                                       (47,800)         (66,500)
         Proceeds from sale of loans held-for-sale                                 48,508           67,352
         (Increase) decrease in interest receivable                              (242,684)         (75,621)
         (Increase) decrease in deferred tax asset                                (84,126)         298,508
         Increase (decrease) in accrued income taxes                              198,970          286,999
         Increase (decrease) in interest payable                                 (244,011)        (162,904)
         SAIF assessment                                                             --         (1,530,357)
         Other changes - net                                                      807,720         (992,344)
                                                                              -----------      -----------

     Net cash provided (used) by operating activities                           1,119,841       (1,253,294)
                                                                              -----------      -----------
Investing Activities:
     Proceeds from sales of investment securities available-for-sale                 --          6,735,624
     Proceeds from maturities and principal repayments
        of investment securities available-for-sale                             3,000,000        1,000,000
     Proceeds from maturities and principal repayments
        of mortgage-backed securities available-for-sale                        1,062,804        2,560,620
     Purchases of investment securities available-for-sale                     (8,391,256)      (1,522,023)
     Purchases of mortgage-backed securities available-for-sale                      --         (8,006,214)
     Proceeds from maturities and principal repayments of
        investment securities held-to-maturity                                    160,017          129,434
     Purchases of mortgage-backed securities held-to-maturity                     (33,165)      (2,007,500)
     Proceeds from sales of mortgage-backed securities held-to-maturity         1,376,337             --
     Proceeds from mortgage-backed securities held-to-maturity
        principal repayments                                                    2,227,654        1,365,216
     Principal repayments on first mortgage loans                               3,024,415        5,360,310
     Principal repayments on other loans                                        3,878,833        4,204,947
     First mortgage loans originated and disbursed                             (5,199,678)      (6,141,300)
     Proceeds from sale of other loans                                            182,156          136,538
     Other loans originated                                                    (6,676,539)      (5,884,974)
     Additions to office premises and equipment                                   (30,777)        (336,412)
                                                                              -----------      -----------

     Net cash provided (used) by investing activities                          (5,419,199)      (2,405,734)
                                                                              -----------      -----------
<PAGE>
<CAPTION>
                            FIDELITY BANCORP, INC. AND SUBSIDIARY
                       Statements of Cash Flows (Unaudited) (Cont'd.)


                                                          Three Months Ended December 31,
                                                          --------------------------------
                                                               1995               1996
                                                          -------------      -------------

<S>                                                       <C>                 <C>
Financing Activities:
Net increase (decrease) in savings deposits                   1,465,139           (633,881)
Increase (decrease) in reverse repurchase agreements         (4,541,951)            11,381
FHLB advance repayments                                     (33,100,000)      (461,825,000)
FHLB advances                                                40,400,000        465,475,000
Cash dividends paid                                             (98,981)          (110,063)
Stock options exercised                                          13,057             43,788
Proceeds from sale of stock                                       9,637             15,526
                                                          -------------      -------------

Net cash provided (used) by financing activities              4,146,901          2,976,751
                                                          -------------      -------------

Increase (decrease) in cash and cash equivalents               (152,457)          (682,277)

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

Cash and cash equivalents at end of period                $   4,891,023      $   4,079,821
                                                          =============      =============


Supplemental Disclosure of Cash Flow Information

Cash paid during the period for:
  Interest on deposits and other borrowings               $   3,038,789      $   3,312,415
  Income taxes                                                  180,000             20,000

Transfer of investment and mortgage-backed securities
  from investment to available-for-sale                   $  61,864,252               --




See accompanying notes to financial statements 

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                FIDELITY BANCORP, INC. AND SUBSIDIARY

                                            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                                                                         413,112                            413,112
    Cash dividends paid at $.08
          per share                                                                    (98,981)                           (98,981)
    Effect of change in accounting
          for certain debt and equity
          securities at date of adoption,
          net of deferred taxes (Note 4)                                                               (539,414)         (539,414)
     Net change in unrealized gain
          (loss) on securities available-
          for-sale, net of taxes                                                                        811,530           811,530
     Sale of stock                                       8             9,629                                                9,637
     Stock options exercised                            15            13,042                                         $     13,057
                                              ------------      ------------      ------------     ------------      ------------
Balance at December 31, 1995                  $     12,380      $  8,161,196      $ 14,102,783     $    464,908      $ 22,741,267
                                              ============      ============      ============     ============      ============


Balance at September 30, 1996                 $     13,732      $ 10,437,133      $ 12,522,830     $ (1,195,600)     $ 21,778,095
     Net income                                                                        622,773                            622,773
     Cash dividends paid at $.08
          per share                                                                   (110,063)                          (110,063)
Net change in unrealized gain
          (loss) on securities available-
          for-sale, net of taxes                                                                        785,056           785,056
     Sale of stock                                       8            15,518                                               15,526
     Stock options exercised                            70            43,718                                               43,788
                                              ------------      ------------      ------------     ------------      ------------
Balance at December 31, 1996                  $     13,810      $ 10,496,369      $ 13,035,540     $   (410,544)     $ 23,135,175
                                              ============      ============      ============     ============      ============

</TABLE>
<PAGE>
                      FIDELITY BANCORP, INC. AND SUBSIDIARY
                          Notes to Financial Statements
                                   (Unaudited)

                    September 30, 1996 and December 31, 1996

(1)      Consolidation
The consolidated  financial statements include the accounts of Fidelity Bancorp,
Inc. (the Company) and its  wholly-owned  subsidiary  Fidelity Savings Bank (the
Bank). Intercompany transactions have been eliminated in consolidation.

(2)      Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the  instructions  for Form 10-QSB and,  therefore,  do not include all the
information  or footnotes  necessary  for a complete  presentation  of financial
condition,  results of operations,  changes in shareholders' equity, and changes
in cash  flow in  conformity  with  generally  accepted  accounting  principles.
However, all adjustments, consisting only of normal recurring adjustments which,
in the opinion of management,  are necessary for a fair  presentation  have been
included.  The results of operations  for the three month period ended  December
31, 1996 are not necessarily indicative of the results which may be expected for
the entire fiscal year.

Cash  and  cash  equivalents  include  cash  and  amounts  due  from  depository
institutions and interest-earning demand deposits with other institutions.

(3)      Earnings Per Share
Earnings  per share for the three  months  ended  December 31, 1995 and 1996 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 period
ended December 31, 1995 and 1996 were 1,386,246 and 1,419,228 respectively.  The
average  number of shares for the 1995  period has been  restated to reflect the
10% stock dividend discussed in Note 5.

(4) In May 1993, the Financial  Accounting Standards Board (FASB) issued FAS No.
115, "Accounting for Certain Investments in Debt and Equity securities." FAS No.
115 requires that investment securities be classified into three categories: (1)
Securities  Held  to  Maturity  --  reported  at  amortized  cost,  (2)  Trading
Securities -- reported at fair value,  and (3) Securities  Available for Sale --
reported  at fair  value.  Unrealized  holding  gains  and  losses  for  trading
securities  will be included  in earnings  while  unrealized  holding  gains and
losses for securities available for sale are reported as a separate component of
equity.  FAS No. 115 is effective for fiscal years  beginning after December 15,
1993, and initial adoption is required to be reflected  prospectively.  The Bank
adopted FAS No. 115 as of October 1, 1994.

On  November  15,  1995,  the  FASB  issued  a  Special  Report,   "A  Guide  to
Implementation  of Statement 115 on Accounting  for Certain  Investments in Debt
and Equity Securities"  (Guide).  The Guide provided a one-time  opportunity for
companies to reassess the  classification  of securities  under FAS No. 115. The
one-time  reclassification  could be made  without  calling  into  question  the
propriety  of a company's  stated  intent in prior or  subsequent  periods.  The
reclassification  had to occur between  November 15, 1995 and December 31, 1995.
As a  result  of the  above,  approximately  $63.2  million  of  investment  and
mortgage-backed  securities were transferred to  available-for-sale  in December
1995.
<PAGE>
(5) On April 16,  1996,  the Board of  Directors  declared a 10% stock  dividend
payable on May 31, 1996 to stockholders of record on May 15, 1996. All per share
amounts have been restated to reflect this stock dividend. -6-
 


                      FIDELITY BANCORP, INC. AND SUBSIDIARY
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Comparison of Financial Condition at September 30, 1996 and December 31, 1996

Total assets of the Bank  increased  $2.5  million or 0.8% to $320.3  million at
December 31, 1996 from $317.9 million at September 30, 1996. Significant changes
in individual  categories were increases in loans receivable of $2.2 million and
mortgage-backed securities available-for-sale of $6.0 million, and a decrease in
investment securities available-for-sale of $5.8 million.

Total  liabilities  of the Bank  increased  by $1.1  million  or 0.4% to  $297.2
million at December  31, 1996 from $296.1  million at September  30,  1996.  The
increase  primarily  reflects a $3.6 million  increase in Federal Home Loan Bank
advances  outstanding,  partially  offset by a decrease  in savings  deposits of
$634,000 and other liabilities of $2.5 million. Included in other liabilities at
September 30, 1996, was the accrual of approximately $1.5 million representing a
one-time charge to recapitalize the Savings Association  Insurance Fund ("SAIF")
mandated by the Deposit Insurance Funds Act of 1996. This assessment was paid in
November 1996.

Stockholders' equity increased $1.4 million or 6.2% to $23.1 million at December
31, 1996,  compared to September 30, 1996. The increase  reflects net income for
the three  month  period  ended  December  31, 1996 of  $623,000,  a decrease in
unrealized holding losses on securities  available-for-sale  of $785,000,  stock
options  exercised of $44,000 and stock  issued under the Dividend  Reinvestment
Plan of $16,000.  Partially  offsetting  these  increases were common stock cash
dividends paid of $110,000.
<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>

                                                    September 30     December 31, 
                                                        1996             1996 
                                                     ----------      ----------
<S>                                                  <C>             <C>
Non-accrual residential real
  estate loans (one-to-four-family)                  $  567,000      $  341,000

Non-accrual construction, multi-family
  residential and commercial real estate loans          134,000         891,000

Non-accrual installment and
  commercial business loans                             457,000         128,000
                                                     ----------      ----------

Total non-performing loans                           $1,158,000      $1,360,000
                                                     ==========      ==========

Total non-performing loans as
  a percent of net loans receivable                         .77%            .89%
                                                     ==========      ==========

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

Total non-performing loans and real estate
  owned as a percent of total assets                        .48%            .42%
                                                     ==========      ==========
</TABLE>

Included  in  non-performing  loans at  December  31,  1996 are 9  single-family
residential real estate loans totaling $341,000, one single-family  construction
loan for $134,000,  one commercial real estate loan for $757,000, 34 installment
loans totaling $113,000,  and one commercial business loan for $15,000. Of the 9
non-performing single-family residential real estate loans, the largest amounted
to $92,000.  The commercial real estate loan is on a commercial  office building
located in Pittsburgh that is currently for sale.

The 34  installment  loans total  $113,000  and  consist of various  secured and
unsecured consumer loans and credit card loans.

At December 31, 1996, the Bank had an allowance for possible loan losses of $1.6
million  or 1.05% of loans  receivable,  as  compared  to an  allowance  of $1.5
million or 1.00% of loans  receivable at September  30, 1996.  The allowance for
possible loan losses equals 120% of non-performing loans at December 31, 1996.
<PAGE>
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 December 31, 1996 is adequate.  In that  regard,  consideration  was
given to the increase in the level of the allowance  from  September 30, 1996 to
December 31, 1996, as well as the coverage of non-performing loans the allowance
provides at December 31, 1996.

There was no real estate owned at December 31, 1996.


                       Comparison of Results of Operations
              for the Three Months Ended December 31, 1996 and 1995

Net Income

Net income for the three months ended December 31, 1996 was $623,000 compared to
$413,000  for the same period in 1995,  an  increase  of $210,000 or 50.7%.  The
increase  reflects an increase in net interest  income of $410,000 or 20.1%,  an
increase in the  provision  for  possible  loan losses of $85,000 or 283.3%,  an
increase  in other  income of  $38,000  or 26.4% and an  increase  in  operating
expenses  of  $27,000  or  1.7%.  Additionally,  there  was an  increase  in the
provision for income taxes of $128,000 or 70.8%.

Interest Rate Spread

The Bank's interest rate spread,  the difference  between yields calculated on a
tax-equivalent basis on interest-earning assets and the cost of funds, increased
to 3.18% in the three  months  ended  December  31,  1996 from 3.02% in the same
period in 1995.  The  following  table shows the average  tax-equivalent  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
                                                               December 31,
                                                           ------------------
                                                            1996        1995
                                                           -----        ----
<S>                                                        <C>          <C>
Average yield on:         
   Mortgage loans                                           8.07%       8.24%
   Mortgage-backed securities                               6.31        6.32
   Installment loans                                        8.35        8.66
   Commercial business loans                               10.12        9.80
   Interest-earning deposits with other
     institutions, investment securities,
     and FHLB stock (1)                                     7.10        7.04
                                                           -----        ----
   Total interest-earning assets                            7.44        7.41
                                                           -----        ----

Average rates paid on:
   Savings deposits                                         4.01        4.36
   Borrowed funds                                           5.22        4.95
                                                           -----        ----
   Total interest-bearing liabilities                       4.26        4.39
                                                           -----        ----

Average interest rate spread                                3.18%       3.02%
                                                            ====        ====

Net yield on interest-earning assets                        3.34%       3.17%
                                                            ====        ====

(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  $563,000  or 21.5% to $3.2  million for the three
months  ended  December  31,  1996,  compared  to the same  period in 1995.  The
increase is  attributable  to an increase in the average loan portfolio  balance
outstanding  during  the 1996  period,  partially  offset by a  decrease  in the
average yield earned on these assets in the 1996 period, as compared to the same
period in 1995.  The  increase  in the  average  balance  of the loan  portfolio
reflects  management's  continued  strategy of emphasizing  and increasing  loan
originations.

Interest on mortgage-backed  securities  decreased $6,000 or .4% to $1.6 million
for the three months ended  December 31, 1996, as compared to the same period in
1995.  Both  the  average  yield  earned  and  the  average   portfolio  balance
outstanding were comparable between the 1996 and 1995 periods.

Interest on  interest-earning  deposits with other  institutions  and investment
securities  increased  $126,000 or 17.1% to $862,000  for the three month period
ended  December 31, 1996,  as compared to the same period in 1995.  The increase
reflects both an increase in the yield earned on these  investments  in the 1996
period,  as compared to 1995,  as well as an increase in the average  balance of
such securities and deposits.
<PAGE>
Interest Expense

Interest on savings deposits decreased $309,000 or 11.6% to $2.4 million for the
three month  period ended  December 31, 1996,  as compared to the same period in
1995.  The decrease  reflects both a decrease in the average  balance of savings
deposits  for the 1996  period  compared  to 1995,  as well as a decrease in the
average cost of deposits.
                                                                              
Interest  on borrowed  funds  increased  $583,000 or 282.5% to $789,000  for the
three month  period ended  December 31, 1996,  as compared to the same period in
1995. The increase reflects  primarily an increase in the Federal Home Loan Bank
("FHLB") advances  outstanding during the 1996 period, as well as an increase in
the average cost of borrowing  during the 1996 period,  as compared to 1995. The
Bank relied more on these  wholesale  funding sources in 1996 to fund growth due
to the decrease in deposits that was experienced.

Net Interest Income Before Provision for Loan Losses

The Bank's net  interest  income  before  provision  for loan  losses  increased
$410,000 or 20.1% to $2.5 million for the three months ended  December 31, 1996,
as compared  to the same period in 1995.  This  increase is  attributable  to an
increase in net interest earning assets,  as well as an increase in the interest
rate spread,  from 3.02% for the three month period ended  December 31, 1995, to
3.18% for the same period in 1996.

Provision for Loan Losses

The  provision for loan losses  increased  $85,000 or 283.3% to $115,000 for the
three month  period ended  December 31, 1996,  as compared to the same period in
1995. The variation in the provision reflects management's current evaluation of
economic  conditions  and other  factors  described  below.  The  allowance  for
possible  loan losses has  increased  from $1.4  million at December 31, 1995 to
$1.6 million at December 31, 1996.

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 size of the loan portfolio, the diversification
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  $38,000 or 26.4% to $184,000 for
the three  months ended  December  31,  1996,  as compared to the same period in
1995.

Service  fee income,  which  includes  late  charges on loans and fees for loans
serviced  for others,  decreased  $2,000 or 8.6% to $19,000 for the period ended
December  31,  1996,  as  compared  to the same  period in 1995.  There  were no
individually significant variations between periods.
<PAGE>
Loss on the sale of investment and mortgage-backed securities was $2,000 for the
period ended  December  31, 1996,  as compared to a loss of $12,000 for the same
period in 1995.  Sales in both  periods  were  made from the  available-for-sale
category and  represented a partial  repositioning  of the portfolio  based upon
current market conditions.

Gain on sale of loans was $2,000 for both the three month periods ended December
31, 1995 and 1996. 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 and subject to extensive  and costly  government
regulation.  The Bank does not  intend  to  originate  additional  loans for its
portfolio,  except those that will be serviced by SLMA.  Sales to SLMA increased
slightly in the period ended December 31, 1996, as compared to 1995, however the
net gains recorded in 1996 and 1995 reflect the timing of the sales.

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  $30,000 or 21.9% to  $165,000  for the three month
period  ended  December 31,  1996,  as compared to the same period in 1995.  The
increase  primarily  reflects fees earned on a debit card product  introduced by
the Bank in 1996 and increased fees earned on credit and life insurance sales on
loans.

Other Expenses

Total operating expenses increased $27,000 or 1.7% to $1.6 million for the three
months ended December 31, 1996, compared to the same period in 1995.

Compensation,  payroll  taxes and fringe  benefits,  the  largest  component  of
operating expenses,  increased $118,000 or 14.9% to $910,000 for the three month
period ended  December 31,  1996,  compared to the same period in 1995.  Factors
contributing  to the  increase  were normal  salary  increases,  higher  bonuses
awarded in the 1996 period,  a small  increase in the number of employees on the
payroll, and an increase in retirement expenses.

Office occupancy and equipment expense increased $10,000 or 7.6% to $145,000 for
the three months ended  December 31, 1996,  compared to the same period in 1995.
The increase primarily reflects increased equipment maintenance expenditures.

Depreciation and amortization  increased $4,000 or 3.5% to $113,000 for the 1996
period as compared to 1995. The increase reflects the purchase of new equipment,
primarily  for back room  operations,  as well as  depreciation  on  renovations
completed at the Zelionople and Bloomfield branches of the Bank.

Federal insurance  premiums  decreased  $141,000 or 100.0% to zero for the three
months  ended  December  31,  1996,  compared  to the same  period  in 1995.  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 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
<PAGE>
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 quarter  beginning January 1, 1997,  deposit insurance for  well-capitalized
SAIF insured  institutions,  including  the Bank,  will be 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 $7,000 in the 1996  period,  as compared to a
net loss of $8,000 for the three months ended  December 31, 1995.  There were no
individually significant transactions included in the results.

Amortization  of  intangibles  was  $44,000  for the three  month  period  ended
December 31, 1996,  compared to $66,000 for the  comparable  period in 1995. 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,  amounted to $372,000 and $313,000 for the three month  periods  ended
December  31,  1996 and 1995,  respectively,  an  increase  of $59,000 or 18.7%.
Significant  variations  between periods include  increases in automatic  teller
machine  network fees,  advertising  and consulting  fees,  partially  offset by
reduced telecommunications expenses.

Income Taxes

Income taxes increased  $128,000 or 70.8% to $307,000 for the three month period
ended  December 31, 1996,  compared to the same period in 1995.  The increase in
taxes results from an increase in taxable income,  as well as an increase in the
effective tax rate to approximately  33.0% in 1996 from  approximately  30.3% in
the same period in 1995.

Capital Requirements

The FDIC has issued  regulations  that require insured  institutions 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 December 31, 1996,  the Bank complied with the minimum  leverage ratio having
Tier 1 capital of 7.05% 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 December
31, 1996,  the bank's total  capital to  risk-weighted  assets ratio  calculated
under the FDIC capital requirement was 15.43%.
<PAGE>
A reconciliation of Stockholders' Equity to Regulatory Capital is as follows:
<TABLE>
<CAPTION>
<S>                                                          <C>
Stockholder's equity at December 31, 1996 (1)                $22,056,341
Unrealized securities losses                                     377,769
                                                             -----------
Tier I capital                                                22,434,110
Plus: Qualifying loan loss allowance                           1,632,282
                                                             -----------
Total regulatory capital at December 31, 1996                $24,066,392
                                                             ===========

(1)  Represents  equity  capital  of the  Bank as  reported  to the FDIC and the
Pennsylvania Department of Banking on Form 033.
</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 December 31, 1996,  the total of approved  loan  commitments
amounted to $7.5 million. In addition,  the Bank had $4.2 million of undisbursed
loan funds at that date. The amount of savings  certificates which mature during
the next twelve months totals approximately $86.1 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
             None

<PAGE>
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.


                                   SIGNATURES




                                             FIDELITY SAVINGS BANK



Date:  February 10, 1997            By:/s/ William L. Windisch
                                      -----------------------
                                      William L. Windisch
                                      President and Chief Executive Officer


Date:  February 10, 1997           By:/s/ Richard G. Spencer
                                      ----------------------
                                      Richard G. Spencer
                                      Vice President and Chief Financial Officer