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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2009

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from              to
            .

Commission File No. 0-22288





Fidelity Bancorp, Inc.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Pennsylvania                                                   |  | 25-1705405                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

1009 Perry Highway, Pittsburgh, Pennsylvania 15237

(Address of principal executive offices)

412-367-3300

(Registrants telephone number, including area code)

Not Applicable

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





Indicate by check mark whether
the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).:     ̈  Yes    x  No

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: 3,043,359 shares, par value $0.01, at April 30, 2009.









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FIDELITY BANCORP, INC. AND SUBSIDIARIES

Index



|                               |  |                                                                                                    |  |      
|------------------------------ |  | -------------------------------------------------------------------------------------------------- |  | -----
|                               |  |                                                                                                    |  | Page 
|Part I - Financial Information |  |                                                                                                   
|                               |  |                                                                                                   
|Item 1.                        |  | Financial Statements (Unaudited)                                                                   |  | 3    
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Financial Condition as of March 31, 2009 and September 30, 2008         |  | 3    
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Income for the Three and Six Months Ended March 31, 2009 and 2008       |  | 4-5  
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Changes in Stockholders Equity for the Six Months Ended March 31, 2009 |  | 6    
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2009 and 2008             |  | 7-8  
|                               |  |                                                                                                   
|                               |  | Notes to Consolidated Financial Statements                                                         |  | 9    
|                               |  |                                                                                                   
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations              |  | 22   
|                               |  |                                                                                                   
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                         |  | 35   
|                               |  |                                                                                                   
|Item 4T.                       |  | Controls and Procedures                                                                            |  | 35   
|                               | 
|Part II - Other Information    |  |                                                                                                   
|                               |  |                                                                                                   
|Item 1.                        |  | Legal Proceedings                                                                                  |  | 35   
|                               |  |                                                                                                   
|Item 1A.                       |  | Risk Factors                                                                                       |  | 35   
|                               |  |                                                                                                   
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                        |  | 35   
|                               |  |                                                                                                   
|Item 3.                        |  | Defaults Upon Senior Securities                                                                    |  | 36   
|                               |  |                                                                                                   
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                |  | 36   
|                               |  |                                                                                                   
|Item 5.                        |  | Other Information                                                                                  |  | 36   
|                               |  |                                                                                                   
|Item 6.                        |  | Exhibits                                                                                           |  | 36-37
|                               | 
|Signatures                     |  | 38                                                                                                



2



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##### Table of Contents

|Part  I | Financial Information
|------- | ---------------------



|Item 1. | Financial Statements
|------- | --------------------

FIDELITY
BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data)



|                                                                                                                            |  |               |         |   |                   |   |         |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                            |  | March 31,2009 |         |   | September 30,2008 |  
|Assets                                                                                                                      |  |               |         |   |                   |   |         |  
|Cash and due from banks                                                                                                     |  | $             | 6,854   |   |                   | $ | 6,701   |  
|Interest-bearing demand deposits with other institutions                                                                    |  |               | 7,465   |   |                   |   | 4,071   |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Cash and Cash Equivalents                                                                                                   |  |               | 14,319  |   |                   |   | 10,772  |  
|                                                                                                                            |  |              
|Securities available-for-sale (amortized cost of $153,012 and $155,273)                                                     |  |               | 144,523 |   |                   |   | 146,680 |  
|Securities held-to-maturity (fair value of $66,141 and $73,531)                                                             |  |               | 66,498  |   |                   |   | 75,404  |  
|Loans held for sale                                                                                                         |  |               | 561     |   |                   |   | 225     |  
|Loans receivable, net of allowance of $3,757 and $3,424                                                                     |  |               | 456,914 |   |                   |   | 460,786 |  
|Foreclosed real estate, net                                                                                                 |  |               | 106     |   |                   |   | 170     |  
|Federal Home Loan Bank stock, at cost                                                                                       |  |               | 10,034  |   |                   |   | 7,943   |  
|Office premises and equipment, net                                                                                          |  |               | 7,553   |   |                   |   | 6,949   |  
|Accrued interest receivable                                                                                                 |  |               | 3,192   |   |                   |   | 3,512   |  
|Cash surrender value of life insurance                                                                                      |  |               | 6,935   |   |                   |   | 6,131   |  
|Goodwill                                                                                                                    |  |               | 2,653   |   |                   |   | 2,653   |  
|Other assets                                                                                                                |  |               | 7,057   |   |                   |   | 5,985   |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Total Assets                                                                                                                |  | $             | 720,345 |   |                   | $ | 727,210 |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Liabilities and Stockholders Equity                                                                                        |  |               |         |   |                   |   |         |  
|Liabilities:                                                                                                                |  |               |         |   |                   |   |         |  
|Deposits:                                                                                                                   |  |               |         |   |                   |   |         |  
|Non-interest bearing                                                                                                        |  | $             | 40,960  |   |                   | $ | 37,983  |  
|Interest bearing                                                                                                            |  |               | 390,087 |   |                   |   | 378,431 |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Total Deposits                                                                                                              |  |               | 431,047 |   |                   |   | 416,414 |  
|                                                                                                                            |  |              
|Securities sold under agreement to repurchase                                                                               |  |               | 105,390 |   |                   |   | 104,003 |  
|Short-term borrowings                                                                                                       |  |               | 126     |   |                   |   | 32,258  |  
|Long-term debt                                                                                                              |  |               | 118,672 |   |                   |   | 118,800 |  
|Subordinated debt                                                                                                           |  |               | 7,732   |   |                   |   | 7,732   |  
|Advance payments by borrowers for taxes and insurance                                                                       |  |               | 2,998   |   |                   |   | 1,483   |  
|Securities purchased but not settled                                                                                        |  |               | 502     |   |                   |   |        |  
|Other liabilities                                                                                                           |  |               | 4,890   |   |                   |   | 4,365   |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Total Liabilities                                                                                                           |  |               | 671,357 |   |                   |   | 685,055 |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|                                                                                                                            |  |              
|Stockholders equity:                                                                                                       |  |               |         |   |                   |   |         |  
|Preferred stock, $0.01 par value per share, liquidation preference $1,000; 5,000,000 shares authorized; 7,000 shares issued |  |               | 6,655   |   |                   |   |        |  
|Common stock, $0.01 par value per share, 10,000,000 shares authorized; 3,662,488 and 3,647,854 shares issued, respectively  |  |               | 37      |   |                   |   | 36      |  
|Paid-in-capital                                                                                                             |  |               | 46,330  |   |                   |   | 45,931  |  
|Retained earnings                                                                                                           |  |               | 12,335  |   |                   |   | 12,268  |  
|Accumulated other comprehensive loss, net of tax                                                                            |  |               | (5,987  | ) |                   |   | (5,698  | )
|Treasury stock, at cost - 619,129 shares                                                                                    |  |               | (10,382 | ) |                   |   | (10,382 | )
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Total Stockholders Equity                                                                                                  |  |               | 48,988  |   |                   |   | 42,155  |  
|                                                                                                                            |  |               |         |   |                   |   |         |  
|Total Liabilities and Stockholders Equity                                                                                  |  | $             | 720,345 |   |                   | $ | 727,210 |  
|                                                                                                                            |  |               |         |   |                   |   |         |  

See accompanying notes to unaudited consolidated financial statements



3



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FIDELITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

(in thousands, except per share data)



|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|--------------------------------------------------- |  | --------------------------- | ------ | ------------------------- | ---- | - | ----- |  | - | ------ | - |  | - | ------ | -
|                                                    |  | Three Months EndedMarch 31, |        | Six Months EndedMarch 31, |     
|                                                    |  | 2009                        |        |                           | 2008 |   | 2009  |  |   | 2008   |  
|Interest income:                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Loans                                               |  | $                           | 6,871  |                           |      | $ | 7,156 |  | $ | 13,945 |   |  | $ | 14,484 |  
|Mortgage-backed securities                          |  |                             | 1,009  |                           |      |   | 977   |  |   | 2,146  |   |  |   | 1,917  |  
|Investment securities-taxable                       |  |                             | 1,036  |                           |      |   | 1,416 |  |   | 2,170  |   |  |   | 2,929  |  
|Investment securities-tax-exempt                    |  |                             | 438    |                           |      |   | 416   |  |   | 871    |   |  |   | 826    |  
|Other                                               |  |                             | 2      |                           |      |   | 7     |  |   | 4      |   |  |   | 12     |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Total interest income                               |  |                             | 9,356  |                           |      |   | 9,972 |  |   | 19,136 |   |  |   | 20,168 |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Interest expense:                                   |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Deposits                                            |  |                             | 2,177  |                           |      |   | 3,040 |  |   | 4,528  |   |  |   | 6,419  |  
|Securities sold under agreement to repurchase       |  |                             | 1,259  |                           |      |   | 1,178 |  |   | 2,548  |   |  |   | 2,333  |  
|Short-term borrowings                               |  |                             | 41     |                           |      |   | 172   |  |   | 120    |   |  |   | 625    |  
|Long-term debt                                      |  |                             | 1,195  |                           |      |   | 1,357 |  |   | 2,478  |   |  |   | 2,628  |  
|Subordinated debt                                   |  |                             | 102    |                           |      |   | 106   |  |   | 206    |   |  |   | 243    |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Total interest expense                              |  |                             | 4,774  |                           |      |   | 5,853 |  |   | 9,880  |   |  |   | 12,248 |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|                                                    |  |                             |        |                          
|Net interest income                                 |  |                             | 4,582  |                           |      |   | 4,119 |  |   | 9,256  |   |  |   | 7,920  |  
|                                                    |  |                             |        |                          
|Provision for loan losses                           |  |                             | 320    |                           |      |   | 210   |  |   | 875    |   |  |   | 390    |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|                                                    |  |                             |        |                          
|Net interest income after provision for loan losses |  |                             | 4,262  |                           |      |   | 3,909 |  |   | 8,381  |   |  |   | 7,530  |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|                                                    |  |                             |        |                          
|Other income:                                       |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Loan service charges and fees                       |  |                             | 140    |                           |      |   | 114   |  |   | 266    |   |  |   | 228    |  
|Realized gain on sales of securities, net           |  |                             |       |                           |      |   | 7     |  |   |       |   |  |   | 7      |  
|Impairment charge on securities                     |  |                             | (1,645 | )                         |      |   |      |  |   | (1,720 | ) |  |   | (322   | )
|Gain on sales of loans                              |  |                             | 124    |                           |      |   | 44    |  |   | 154    |   |  |   | 57     |  
|Gain (loss) on loan interest rate swaps             |  |                             | 1      |                           |      |   |      |  |   | (17    | ) |  |   |       |  
|Deposit service charges and fees                    |  |                             | 342    |                           |      |   | 326   |  |   | 730    |   |  |   | 724    |  
|ATM fees                                            |  |                             | 171    |                           |      |   | 166   |  |   | 357    |   |  |   | 345    |  
|Non-insured investment products                     |  |                             | 23     |                           |      |   | 74    |  |   | 49     |   |  |   | 145    |  
|Cash surrender value of life insurance              |  |                             | 66     |                           |      |   | 67    |  |   | 138    |   |  |   | 134    |  
|Other                                               |  |                             | 76     |                           |      |   | 99    |  |   | 116    |   |  |   | 158    |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Total other income                                  |  |                             | (702   | )                         |      |   | 897   |  |   | 73     |   |  |   | 1,476  |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Operating expenses:                                 |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Compensation and benefits                           |  |                             | 2,091  |                           |      |   | 2,039 |  |   | 4,018  |   |  |   | 3,911  |  
|Office occupancy and equipment expense              |  |                             | 276    |                           |      |   | 289   |  |   | 512    |   |  |   | 522    |  
|Depreciation and amortization                       |  |                             | 120    |                           |      |   | 129   |  |   | 242    |   |  |   | 259    |  
|Loss on sales of foreclosed real estate             |  |                             | 5      |                           |      |   |      |  |   | 10     |   |  |   | 5      |  
|Foreclosed real estate expense                      |  |                             | 1      |                           |      |   | 3     |  |   | 2      |   |  |   | 23     |  
|Amortization of intangible assets                   |  |                             | 6      |                           |      |   | 7     |  |   | 12     |   |  |   | 15     |  
|Advertising                                         |  |                             | 90     |                           |      |   | 100   |  |   | 190    |   |  |   | 200    |  
|Professional fees                                   |  |                             | 105    |                           |      |   | 122   |  |   | 257    |   |  |   | 249    |  
|Service bureau expense                              |  |                             | 113    |                           |      |   | 75    |  |   | 219    |   |  |   | 143    |  
|FDIC insurance premiums                             |  |                             | 75     |                           |      |   | 12    |  |   | 94     |   |  |   | 25     |  
|Other                                               |  |                             | 538    |                           |      |   | 508   |  |   | 1,096  |   |  |   | 1,019  |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  
|Total operating expenses                            |  |                             | 3,420  |                           |      |   | 3,284 |  |   | 6,652  |   |  |   | 6,371  |  
|                                                    |  |                             |        |                           |      |   |       |  |   |        |   |  |   |        |  



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FIDELITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited) (Contd.)

(in thousands, except per share data)



|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|-------------------------------------------------- |  | --------------------------- | ----- | ------------------------- | ---- | - | ----- |  | - | ----- | - |  | - | -----
|                                                   |  | Three Months EndedMarch 31, |       | Six Months EndedMarch 31,
|                                                   |  | 2009                        |       |                           | 2008 |   | 2009  |  |   | 2008 
|Income before Provision for Income Taxes           |  | $                           | 140   |                           |      | $ | 1,522 |  | $ | 1,802 |   |  | $ | 2,635
|Provision for Income Taxes                         |  |                             | 269   |                           |      |   | 354   |  |   | 244   |   |  |   | 607  
|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|Net Income (Loss)                                  |  |                             | (129  | )                         |      |   | 1,168 |  |   | 1,558 |   |  |   | 2,028
|Preferred stock dividend                           |  |                             | (106  | )                         |      |   |      |  |   | (106  | ) |  |   |     
|Accretion of preferred stock discount              |  |                             | (15   | )                         |      |   |      |  |   | (15   | ) |  |   |     
|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|Net income (loss) available to common stockholders |  | $                           | (250  | )                         |      | $ | 1,168 |  | $ | 1,437 |   |  | $ | 2,028
|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|                                                   |  |                             |       |                          
|Earnings per Share                                 |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|Basic earnings per common share                    |  | $                           | (0.08 | )                         |      | $ | 0.39  |  | $ | 0.47  |   |  | $ | 0.67 
|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|Diluted earnings per common share                  |  | $                           | (0.08 | )                         |      | $ | 0.38  |  | $ | 0.45  |   |  | $ | 0.67 
|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      
|Dividends per common share                         |  | $                           | 0.14  |                           |      | $ | 0.14  |  | $ | 0.28  |   |  | $ | 0.28 
|                                                   |  |                             |       |                           |      |   |       |  |   |       |   |  |   |      

See accompanying notes to unaudited consolidated financial statements.



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FIDELITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders Equity (Unaudited)

(in thousands, except share data)



|                                                                                       |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  
|-------------------------------------------------------------------------------------- |  | --------------------------- |  | -------------- | ----- | ----------- | - | -------------- |  | - | ---------------- | - |  | ------------------------------------------ | ------ | - | ------------- | - | ------ | ----- |  | - | ------- | - |  | - | ------ | -
|                                                                                       |  | Numberof CommonSharesIssued |  | PreferredStock |       | CommonStock |   | Paid-inCapital |  |   | RetainedEarnings |   |  | AccumulatedOtherComprehensiveIncome (Loss) |        |   | TreasuryStock |   |        | Total | 
|Balance at September 30, 2008                                                          |  | 3,647,854                   |  | $              |      |             | $ | 36             |  | $ | 45,931           |   |  | $                                          | 12,268 |   |               | $ | (5,698 | )     |  | $ | (10,382 | ) |  | $ | 42,155 |  
|Comprehensive income:                                                                  |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  
|Net income                                                                             |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            | 1,558  |   |               |   |        |       |  |   |         |   |  |   | 1,558  |  
|Comprehensive loss on cash flow hedges net of tax of ($184)                            |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   | (357   | )     |  |   |         |   |  |   | (357   | )
|Comprehensive loss on investment securities, net of tax of ($549)                      |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   | (1,067 | )     |  |   |         |   |  |   | (1,067 | )
|Reclassification adjustment on investment securities, net of tax of $585               |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   | 1,135  |       |  |   |         |   |  |   | 1,135  |  
|                                                                                       |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  
|Total comprehensive income                                                             |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   | 1,269  |  
|                                                                                       |  |                             |  |                |       |             |   |               
|Cumulative effect of change in accounting for split dollar life insurance arrangements |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            | (520   | ) |               |   |        |       |  |   |         |   |  |   | (520   | )
|Preferred stock issued (7,000 shares)                                                  |  |                             |  |                | 6,640 |             |   |                |  |   | 302              |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   | 6,942  |  
|Accretion of preferred stock discount                                                  |  |                             |  |                | 15    |             |   |                |  |   |                  |   |  |                                            | (15    | ) |               |   |        |       |  |   |         |   |  |   |       |  
|Cumulative dividends on preferred stock                                                |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            | (106   | ) |               |   |        |       |  |   |         |   |  |   | (106   | )
|Stock-based compensation expense                                                       |  |                             |  |                |       |             |   |                |  |   | 55               |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   | 55     |  
|Stock options exercised                                                                |  | 79                          |  |                |       |             |   |                |  |   | 1                |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   | 1      |  
|Tax adjustment on stock options exercised                                              |  |                             |  |                |       |             |   |                |  |   | (15              | ) |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   | (15    | )
|Restricted stock issued                                                                |  | 7,100                       |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  
|Cash dividends declared                                                                |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            | (850   | ) |               |   |        |       |  |   |         |   |  |   | (850   | )
|Shares issued to Dividend                                                              |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  
|Reinvestment Plan                                                                      |  | 7,455                       |  |                |       |             |   | 1              |  |   | 56               |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   | 57     |  
|                                                                                       |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  
|                                                                                       |  |                             |  |                |       |             |   |               
|Balance at March 31, 2009                                                              |  | 3,662,488                   |  | $              | 6,655 |             | $ | 37             |  | $ | 46,330           |   |  | $                                          | 12,335 |   |               | $ | (5,987 | )     |  | $ | (10,382 | ) |  | $ | 48,988 |  
|                                                                                       |  |                             |  |                |       |             |   |                |  |   |                  |   |  |                                            |        |   |               |   |        |       |  |   |         |   |  |   |        |  

See accompanying notes to unaudited consolidated financial statements.



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##### Table of Contents

FIDELITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)



|                                                                                   |  |                            |         |   |      |   |         |  
|---------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                   |  | Six Months Ended March 31, |        
|                                                                                   |  | 2009                       |         |   | 2008 |  
|Operating Activities:                                                              |  |                            |         |   |      |   |         |  
|Net income                                                                         |  | $                          | 1,558   |   |      | $ | 2,028   |  
|Adjustments to reconcile net income to net cash provided by operating activities:  |  |                            |         |   |      |   |         |  
|Provision for loan losses                                                          |  |                            | 875     |   |      |   | 390     |  
|Loss on foreclosed real estate                                                     |  |                            | 10      |   |      |   | 5       |  
|Provision for depreciation and amortization                                        |  |                            | 242     |   |      |   | 259     |  
|Deferred loan fee amortization                                                     |  |                            | (9      | ) |      |   | 6       |  
|Amortization of investment and mortgage-backed securities discounts/premiums, net  |  |                            | 35      |   |      |   | 90      |  
|Amortization of intangibles                                                        |  |                            | 12      |   |      |   | 15      |  
|Net realized gains on sales of investments                                         |  |                            |        |   |      |   | (7      | )
|Impairment charge on securities                                                    |  |                            | 1,720   |   |      |   | 322     |  
|Loans originated for sale                                                          |  |                            | (11,823 | ) |      |   | (5,784  | )
|Sales of loans held for sale                                                       |  |                            | 11,641  |   |      |   | 5,119   |  
|Net gains on sales of loans                                                        |  |                            | (154    | ) |      |   | (57     | )
|Earnings on cash surrender value of life insurance policies                        |  |                            | (138    | ) |      |   | (67     | )
|Expenses related to cash surrender value of life insurance policies                |  |                            | 32      |   |      |   |        |  
|Decrease (increase) in interest receivable                                         |  |                            | 320     |   |      |   | (70     | )
|(Decrease) increase in interest payable                                            |  |                            | (27     | ) |      |   | 25      |  
|Decrease (increase) in accrued taxes                                               |  |                            | 39      |   |      |   | (610    | )
|Noncash compensation expense related to stock benefit plans                        |  |                            | 55      |   |      |   | 56      |  
|Changes in other assets                                                            |  |                            | (947    | ) |      |   | 571     |  
|Changes in other liabilities                                                       |  |                            | (22     | ) |      |   | (560    | )
|                                                                                   |  |                            |         |   |      |   |         |  
|                                                                                   |  |                           
|Net cash provided by operating activities                                          |  |                            | 3,419   |   |      |   | 1,731   |  
|                                                                                   |  |                            |         |   |      |   |         |  
|                                                                                   |  |                           
|Investing Activities:                                                              |  |                            |         |   |      |   |         |  
|Proceeds from sales of securities available-for-sale                               |  |                            |        |   |      |   | 537     |  
|Proceeds from maturities and principal repayments of securities available-for-sale |  |                            | 10,611  |   |      |   | 15,488  |  
|Purchases of securities available-for-sale                                         |  |                            | (10,124 | ) |      |   | (32,841 | )
|Proceeds from maturities and principal repayments of securities held-to-maturity   |  |                            | 14,347  |   |      |   | 15,352  |  
|Purchases of securities held to maturity                                           |  |                            | (5,450  | ) |      |   | (13,954 | )
|Net decrease in loans                                                              |  |                            | 2,889   |   |      |   | 974     |  
|Proceeds from sales of foreclosed real estate                                      |  |                            | 171     |   |      |   | 47      |  
|Additions to office premises and equipment                                         |  |                            | (846    | ) |      |   | (214    | )
|Purchases of FHLB stock                                                            |  |                            | (2,424  | ) |      |   | (3,752  | )
|Redemptions of FHLB stock                                                          |  |                            | 333     |   |      |   | 3,024   |  
|Purchases of cash surrender value life insurance                                   |  |                            | (698    | ) |      |   |        |  
|                                                                                   |  |                            |         |   |      |   |         |  
|                                                                                   |  |                           
|Net cash provided by (used in) investing activities                                |  |                            | 8,809   |   |      |   | (15,339 | )
|                                                                                   |  |                            |         |   |      |   |         |  



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##### Table of Contents

FIDELITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited) (Contd.)

(in thousands)



|                                                                    |  |                            |         |   |      |   |         |  
|------------------------------------------------------------------- |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                                                                    |  | Six Months Ended March 31, |        
|                                                                    |  | 2009                       |         |   | 2008 |  
|Financing Activities:                                               |  |                            |         |   |      |   |         |  
|Net increase (decrease) in deposits                                 |  | $                          | 14,633  |   |      | $ | (10,926 | )
|Net increase in retail repurchase agreements                        |  |                            | 1,387   |   |      |   | 628     |  
|Net decrease in short-term borrowings                               |  |                            | (32,132 | ) |      |   | (4,168  | )
|Increase in advance payments by borrowers for taxes and insurance   |  |                            | 1,515   |   |      |   | 1,645   |  
|Proceeds from long-term debt                                        |  |                            | 30,000  |   |      |   | 55,000  |  
|Repayments of long-term debt                                        |  |                            | (30,128 | ) |      |   | (30,124 | )
|Cash dividends paid                                                 |  |                            | (956    | ) |      |   | (841    | )
|Preferred stock issued                                              |  |                            | 6,942   |   |      |   |        |  
|Stock options exercised                                             |  |                            | 1       |   |      |   | 298     |  
|Excess tax benefit realized on stock-based compensation             |  |                            |        |   |      |   | 27      |  
|Proceeds from sale of stock through Dividend Reinvestment Plan      |  |                            | 57      |   |      |   | 76      |  
|                                                                    |  |                            |         |   |      |   |         |  
|                                                                    |  |                           
|Net cash (used in) provided by financing activities                 |  |                            | (8,681  | ) |      |   | 11,615  |  
|                                                                    |  |                            |         |   |      |   |         |  
|                                                                    |  |                           
|Net increase (decrease) in cash and cash equivalents                |  |                            | 3,547   |   |      |   | (1,993  | )
|                                                                    |  |                           
|Cash and cash equivalents at beginning of period                    |  |                            | 10,772  |   |      |   | 11,076  |  
|                                                                    |  |                            |         |   |      |   |         |  
|                                                                    |  |                           
|Cash and cash equivalents at end of period                          |  | $                          | 14,319  |   |      | $ | 9,083   |  
|                                                                    |  |                            |         |   |      |   |         |  
|                                                                    |  |                           
|Supplemental Disclosure of Cash Flow Information                    |  |                            |         |   |      |   |         |  
|Cash paid during the period for:                                    |  |                            |         |   |      |   |         |  
|Interest on deposits and other borrowings                           |  | $                          | 9,907   |   |      | $ | 12,234  |  
|                                                                    |  |                            |         |   |      |   |         |  
|Income taxes                                                        |  | $                          | 856     |   |      | $ | 825     |  
|                                                                    |  |                            |         |   |      |   |         |  
|                                                                    |  |                           
|Supplemental Schedule of Noncash Investing and Financing Activities |  |                            |         |   |      |   |         |  
|                                                                    |  |                           
|Transfer of loans to foreclosed real estate                         |  | $                          | 117     |   |      | $ | 309     |  
|                                                                    |  |                            |         |   |      |   |         |  

See accompanying notes to unaudited consolidated financial statements.



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##### Table of Contents

FIDELITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - (Unaudited)

March 31, 2009

(1) Consolidation

The consolidated financial statements contained herein for Fidelity Bancorp, Inc. (the Company) include the accounts of Fidelity Bancorp, Inc. and its wholly-owned subsidiary, Fidelity Bank, PaSB (the
Bank). All 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-Q, 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 in the United States. However, all adjustments (consisting of 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 fiscal year ended September 30, 2008. The results for the three and six month periods ended March 31, 2009 are not necessarily indicative of the results that
may be expected for the fiscal year ending September 30, 2009 or any future interim period.

Certain amounts in the 2008 financial statements have
been reclassified to conform with the 2009 presentation format. These reclassifications had no effect on stockholders equity or net income.

(3)
New Accounting Standards

In May 2008, the FASB issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement). This FSP provides guidance on the accounting for certain types of convertible debt instruments that may be settled in cash upon conversion. Additionally, this FSP specifies that issuers of
such instruments should separately account for the liability and equity components in a manner that will reflect the entitys nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The FSP is effective for
financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the FSP will have on the Companys results of
operations.

In June 2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 08-4, Accounting for Convertible Securities
with Beneficial Conversion Features or Contingently Adjusted Conversion Ratios. This Issue provides transition guidance for conforming changes made to EITF Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjusted Conversion Ratios, that resulted from EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments,and FAS No. 150, Accounting for Certain Financial Instruments
with Characteristics of Both Liability and Equity. The conforming changes are effective for financial statements issued for fiscal years ending after December 15, 2008, with earlier application permitted. The Company is currently evaluating
the impact the adoption of the FSP will have on the Companys results of operations.

In December 2008, the FASB issued FSP No. FAS 132(R)-1,
Employers Disclosures about Postretirement Benefit Plan Assets. This FSP amends FASB Statement No. 132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits, to improve an
employers disclosures about plan assets of a defined benefit pension or other postretirement plan. The disclosures about plan assets required by the FSP are to be provided for fiscal years ending after December 15, 2009. The adoption of
this FSP is not expected to have a material effect on the Companys results of operations or financial position.



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##### Table of Contents

In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
Business Combination That Arise from Contingencies.This FSP requires companies acquiring contingent assets or assuming contingent liabilities in a business combination to either (a) if the assets or liabilities fair value can
be determined, recognize them at fair value, at the acquisition date, or (b) if the assets or liabilities fair value cannot be determined, but (i) it is probable that an asset existed or that a liability had been incurred at
the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated, recognize them at their estimated amount, at the acquisition date. If the fair value of these contingencies cannot be determined and they are not
probable or cannot be reasonably estimated, then companies should not recognize these contingencies as of the acquisition date and instead should account for them in subsequent periods by following other applicable GAAP. This FSP also eliminates the
FAS 141R requirement of disclosing in the footnotes to the financial statements the range of expected outcomes for a recognized contingency. This FSP shall be effective for assets or liabilities arising from contingencies in business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of this FSP is not expected to have a material effect on the Companys results of
operations or financial position.

In April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for
the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This FSP relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It
reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP No. FAS 157-4 is effective for interim and annual periods ending after
June 15, 2009, but entities may early adopt this FSP for the interim and annual periods ending after March 15, 2009. The Company is currently evaluating the impact the adoption of the FSP will have on the Companys results of
operations.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which
relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing this FSP, fair values for these assets and liabilities were only disclosed once a
year. The FSP now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP No. FAS 107-1
and APB 28-1 is effective for interim and annual periods ending after June 15, 2009, but entities may early adopt this FSP for the interim and annual periods ending after March 15, 2009. The Company is currently evaluating the impact the
adoption of the FSP will have on the Companys results of operations.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition
and Presentation of Other-Than-Temporary Impairments, which provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. FSP No. FAS 115-2 and FAS 124-2 is
effective for interim and annual periods ending after June 15, 2009, but entities may early adopt this FSP for the interim and annual periods ending after March 15, 2009. The Company is currently evaluating the impact the adoption of the
FSP will have on the Companys results of operations.



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##### Table of Contents

(4) Stock Based Compensation

As of March 31, 2009, the Company had six share-based compensation plans, for which stock options were outstanding as of March 31, 2009. However, the plan described below is the only plan for which stock options and restricted
stock are available for grant.

The Companys 2005 Stock-Based Incentive Plan (the Plan), which was shareholder-approved, permits the grant of stock
options and restricted stock to its employees and non-employee directors for up to 165,000 shares of common stock, of which a maximum of 55,000 may be restricted stock. Option awards are granted with an exercise price equal to the market value of
the common stock on the date of the grant, the options vest over a three-year period, and have a contractual term of seven years, although the Plan permits contractual terms of up to ten years. Option awards provide for accelerated vesting if there
is a change in control, as defined in the Plan. Additionally, at November 30, 2008 and December 31, 2007, the Company awarded 7,100 and 5,100 shares of restricted stock, respectively, from the unallocated shares under the Plan having a
market value of approximately $49,700 and $66,600, respectively. Compensation expense on the restricted stock awards equals the market value of the Companys stock on the grant date and will be amortized ratably over the three-year vesting
period. As of March 31, 2009, 4,242 share awards were available for grant under this program.

As of March 31, 2009 there was approximately
$144,000 of unrecognized compensation costs related to unvested share-based compensation awards granted.

Stock option transactions for the six months
ended March 31, 2009 were as follows:



|                                         |  |         |   |  |                               |      
|---------------------------------------- |  | ------- | - |  | ----------------------------- | -----
|                                         |  | Options |   |  | Weighted-AverageExercisePrice
|Outstanding at the beginning of the year |  | 375,002 |   |  | $                             | 15.68
|Granted                                  |  | 49,200  |   |  |                               | 6.23 
|Exercised                                |  | (79     | ) |  |                               | 10.70
|Forfeited                                |  | (20,611 | ) |  |                               | 10.40
|                                         |  |         |   |  |                               |      
|Outstanding as of March 31, 2009         |  | 403,512 |   |  | $                             | 14.80
|                                         |  |         |   |  |                               |      
|Exercisable as of March 31, 2009         |  | 338,728 |   |  | $                             | 15.89
|                                         |  |         |   |  |                               |      

The options outstanding and exercisable as of March 31, 2009 have a weighted average remaining term of 3.9
and 3.4 years, respectively.

The fair value of options granted for the six month periods ended March 31, 2009 and 2008 were estimated at the date of
grant using a Black-Scholes option pricing model with the following weighted-average assumptions:



|                                               |  |                            |           |   |      |   |           |  
|---------------------------------------------- |  | -------------------------- | --------- | - | ---- | - | --------- | -
|                                               |  | Six Months Ended March 31, |          
|                                               |  | 2009                       |           |   | 2008 |  
|Dividend yield                                 |  |                            | 8.99      | % |      |   | 4.94      | %
|Expected life                                  |  |                            | 5.5 years |   |      |   | 5.5 years |  
|Expected volatility                            |  |                            | 31.23     | % |      |   | 20.92     | %
|Risk-free interest rate                        |  |                            | 2.08      | % |      |   | 3.58      | %
|Weighted average fair value of options granted |  | $                          | 0.62      |   |      | $ | 1.64      |  



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Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over
the vesting period. Compensation expense related to restricted stock was $22,000 and $6,000 for the six months ended March 31, 2009 and 2008, respectively. The following table summarizes restricted stock awards for the six months ended
March 31, 2009 and 2008, respectively:



|                                       |  |                            |       |      |   |      
|-------------------------------------- |  | -------------------------- | ----- | ---- | - | -----
|                                       |  | Six Months Ended March 31,
|                                       |  | 2009                       |       | 2008
|Number of shares awarded               |  |                            | 7,100 |      |   | 5,100
|Market price of stock on date of grant |  | $                          | 7.00  |      | $ | 13.06

(5) Earnings Per Share

Basic earnings per share (EPS) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The following table sets forth the computation of basic and diluted
earnings per share (amounts in thousands, except per share data):



|                                                                                             |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|-------------------------------------------------------------------------------------------- |  | --------------------------- | ----- | ------------------------- | ---- | - | ----- |  | ---- | ----- |  | - | -----
|                                                                                             |  | Three Months EndedMarch 31, |       | Six Months EndedMarch 31,
|                                                                                             |  | 2009                        |       |                           | 2008 |   | 2009  |  | 2008
|Numerator:                                                                                   |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|Net income (loss) available to common stockholders                                           |  | $                           | (250  | )                         |      | $ | 1,168 |  | $    | 1,437 |  | $ | 2,028
|Denominator:                                                                                 |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|Denominator for basic earnings per share - weighted average shares outstanding               |  |                             | 3,041 |                           |      |   | 3,020 |  |      | 3,038 |  |   | 3,009
|Effect of dilutive securities:                                                               |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|Common stock equivalents                                                                     |  |                             |      |                           |      |   | 33    |  |      | 132   |  |   | 33   
|                                                                                             |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|Denominator for diluted earnings per share - weighted average shares and assumed conversions |  |                             | 3,041 |                           |      |   | 3,053 |  |      | 3,170 |  |   | 3,042
|                                                                                             |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|Basic earnings per share                                                                     |  | $                           | (0.08 | )                         |      | $ | 0.39  |  | $    | 0.47  |  | $ | 0.67 
|                                                                                             |  |                             |       |                           |      |   |       |  |      |       |  |   |      
|Diluted earnings per share                                                                   |  | $                           | (0.08 | )                         |      | $ | 0.38  |  | $    | 0.45  |  | $ | 0.67 
|                                                                                             |  |                             |       |                           |      |   |       |  |      |       |  |   |      

All of the shares of common stock and restricted stock that were outstanding during the three months ended
March 31, 2009 were not included in the computation of diluted EPS because to do so would have been anti-dilutive Similarly, options to purchase 170,406 shares of common stock ranging from $18.64 to $22.91 per share were outstanding during the
three months ended March 31, 2008, but were not included in the computation of diluted EPS because to do so would have been anti-dilutive.

Options to
purchase 314,675 shares of common stock ranging from $11.06 to $22.91 per share and 3,200 shares of restricted stock at $13.06 per share were outstanding during the six months ended March 31, 2009, but were not included in the computation of
diluted EPS because to do so would have been anti-dilutive. Similarly, options to purchase 170,406 shares of common stock ranging from $18.64 to $22.91 per share were outstanding during the six months ended March 31, 2008, but were not included
in the computation of diluted EPS because to do so would have been anti-dilutive.



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##### Table of Contents

(6) Securities

The
Companys securities available for sale portfolio is summarized as follows:



|                                                                   |  |               |         |                 |   |                  |  |           |        |  |   |        
|------------------------------------------------------------------ |  | ------------- | ------- | --------------- | - | ---------------- |  | --------- | ------ |  | - | -------
|                                                                   |  | AmortizedCost |         | UnrealizedGains |   | UnrealizedLosses |  | FairValue
|(Dollar amounts in thousands)                                      |  |               |         |                 |   |                  |  |          
|Available for sale:                                                |  |               |         |                 |   |                  |  |           |        |  |   |        
|As of March 31, 2009:                                              |  |               |         |                 |   |                  |  |           |        |  |   |        
|U.S. government and agency obligations                             |  | $             | 26,918  |                 | $ | 1,125            |  | $         |       |  | $ | 28,043 
|Municipal obligations                                              |  |               | 18,227  |                 |   | 193              |  |           | 264    |  |   | 18,156 
|Corporate obligations                                              |  |               | 12,565  |                 |   | 138              |  |           | 908    |  |   | 11,795 
|Equity securities                                                  |  |               | 4,143   |                 |   |                 |  |           | 1,225  |  |   | 2,918  
|Mutual funds                                                       |  |               | 10,050  |                 |   |                 |  |           | 35     |  |   | 10,015 
|Trust preferred securities                                         |  |               | 24,652  |                 |   | 82               |  |           | 7,495  |  |   | 17,239 
|Federal Home Loan Mortgage Corp. preferred stock                   |  |               |        |                 |   | 20               |  |           |       |  |   | 20     
|Mortgage-backed securities and collateralized mortgage obligations |  |               | 56,457  |                 |   | 1,159            |  |           | 1,279  |  |   | 56,337 
|                                                                   |  |               |         |                 |   |                  |  |           |        |  |   |        
|                                                                   |  | $             | 153,012 |                 | $ | 2,717            |  | $         | 11,206 |  | $ | 144,523
|                                                                   |  |               |         |                 |   |                  |  |           |        |  |   |        
|                                                                   |  |               |         |                
|As of September 30, 2008:                                          |  |               |         |                 |   |                  |  |           |        |  |   |        
|U.S. government and agency obligations                             |  | $             | 19,998  |                 | $ | 259              |  | $         | 32     |  | $ | 20,225 
|Municipal obligations                                              |  |               | 17,157  |                 |   | 12               |  |           | 970    |  |   | 16,199 
|Corporate obligations                                              |  |               | 14,076  |                 |   | 54               |  |           | 786    |  |   | 13,344 
|Equity securities                                                  |  |               | 4,064   |                 |   | 64               |  |           | 945    |  |   | 3,183  
|Mutual funds                                                       |  |               | 11,729  |                 |   |                 |  |           | 85     |  |   | 11,644 
|Trust preferred securities                                         |  |               | 25,175  |                 |   |                 |  |           | 5,127  |  |   | 20,048 
|Federal Home Loan Mortgage Corp. preferred stock                   |  |               | 75      |                 |   |                 |  |           |       |  |   | 75     
|Mortgage-backed securities and collateralized mortgage obligations |  |               | 62,999  |                 |   | 188              |  |           | 1,225  |  |   | 61,962 
|                                                                   |  |               |         |                 |   |                  |  |           |        |  |   |        
|                                                                   |  | $             | 155,273 |                 | $ | 577              |  | $         | 9,170  |  | $ | 146,680
|                                                                   |  |               |         |                 |   |                  |  |           |        |  |   |        



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##### Table of Contents

The following table shows the Companys investments gross unrealized losses and fair value aggregated by investment
category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2009 and September 30, 2008:



|                                                                   |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |       
|------------------------------------------------------------------ |  | ------------------- |  | ----------------- | ------ | ---------------- | - | -------------- |  | --------- |  | ---------------- | ------ | -------------- | - | --------- |  | ---------------- |  | - | ------ |  | - | ------
|                                                                   |  | Less than 12 Months |  | 12 Months or More |        | Total           
|                                                                   |  | # ofSecurities      |  | FairValue         |        | UnrealizedLosses |   | # ofSecurities |  | FairValue |  | UnrealizedLosses |        | # ofSecurities |   | FairValue |  | UnrealizedLosses
|As of March 31, 2009:                                              |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |       
|(Dollar amounts in thousands)                                      |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |       
|Municipal obligations                                              |  | 17                  |  | $                 | 9,133  |                  | $ | 234            |  | 1         |  | $                | 470    |                | $ | 30        |  | 18               |  | $ | 9,603  |  | $ | 264   
|Corporate obligations                                              |  | 9                   |  |                   | 5,686  |                  |   | 786            |  | 2         |  |                  | 1,381  |                |   | 122       |  | 11               |  |   | 7,067  |  |   | 908   
|Equity securities                                                  |  | 5                   |  |                   | 1,484  |                  |   | 371            |  | 3         |  |                  | 1,434  |                |   | 854       |  | 8                |  |   | 2,918  |  |   | 1,225 
|Mutual funds                                                       |  |                    |  |                   |       |                  |   |               |  | 2         |  |                  | 2,392  |                |   | 35        |  | 2                |  |   | 2,392  |  |   | 35    
|Trust preferred securities                                         |  | 2                   |  |                   | 1,019  |                  |   | 219            |  | 20        |  |                  | 16,083 |                |   | 7,276     |  | 22               |  |   | 17,102 |  |   | 7,495 
|Mortgage-backed securities and collateralized mortgage obligations |  | 9                   |  |                   | 7,456  |                  |   | 867            |  | 6         |  |                  | 6,983  |                |   | 412       |  | 15               |  |   | 14,439 |  |   | 1,279 
|                                                                   |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |       
|                                                                   |  | 42                  |  | $                 | 24,778 |                  | $ | 2,477          |  | 34        |  | $                | 28,743 |                | $ | 8,729     |  | 76               |  | $ | 53,521 |  | $ | 11,206
|                                                                   |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |       



|                                                                   |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |      
|------------------------------------------------------------------ |  | ------------------- |  | ----------------- | ------ | ---------------- | - | -------------- |  | --------- |  | ---------------- | ------ | -------------- | - | --------- |  | ---------------- |  | - | ------ |  | - | -----
|                                                                   |  | Less than 12 Months |  | 12 Months or More |        | Total           
|                                                                   |  | # ofSecurities      |  | FairValue         |        | UnrealizedLosses |   | # ofSecurities |  | FairValue |  | UnrealizedLosses |        | # ofSecurities |   | FairValue |  | UnrealizedLosses
|As of September 30, 2008:                                          |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |      
|(Dollar amounts in thousands)                                      |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |      
|U.S. government and agency obligations                             |  | 2                   |  | $                 | 3,968  |                  | $ | 32             |  |          |  | $                |       |                | $ |          |  | 2                |  | $ | 3,968  |  | $ | 32   
|Municipal obligations                                              |  | 27                  |  |                   | 15,387 |                  |   | 970            |  |          |  |                  |       |                |   |          |  | 27               |  |   | 15,387 |  |   | 970  
|Corporate obligations                                              |  | 12                  |  |                   | 7,301  |                  |   | 686            |  | 2         |  |                  | 1,893  |                |   | 100       |  | 14               |  |   | 9,194  |  |   | 786  
|Equity securities                                                  |  | 4                   |  |                   | 1,785  |                  |   | 608            |  | 2         |  |                  | 872    |                |   | 337       |  | 6                |  |   | 2,657  |  |   | 945  
|Mutual funds                                                       |  |                    |  |                   |       |                  |   |               |  | 2         |  |                  | 2,288  |                |   | 85        |  | 2                |  |   | 2,288  |  |   | 85   
|Trust preferred securities                                         |  | 11                  |  |                   | 5,588  |                  |   | 1,462          |  | 11        |  |                  | 14,460 |                |   | 3,665     |  | 22               |  |   | 20,048 |  |   | 5,127
|Mortgage-backed securities and collateralized mortgage obligations |  | 23                  |  |                   | 34,874 |                  |   | 917            |  | 7         |  |                  | 6,101  |                |   | 308       |  | 30               |  |   | 40,975 |  |   | 1,225
|                                                                   |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |      
|                                                                   |  | 79                  |  | $                 | 68,903 |                  | $ | 4,675          |  | 24        |  | $                | 25,614 |                | $ | 4,495     |  | 103              |  | $ | 94,517 |  | $ | 9,170
|                                                                   |  |                     |  |                   |        |                  |   |                |  |           |  |                  |        |                |   |           |  |                  |  |   |        |  |   |      



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(7) Loans Receivable

Loans receivable are comprised of the following (dollar amounts in thousands):



|                                      |  |               |         |   |                   |   |         |  
|------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                      |  | March 31,2009 |         |   | September 30,2008 |  
|First mortgage loans:                 |  |               |         |   |                   |   |         |  
|Conventional:                         |  |               |         |   |                   |   |         |  
|1-4 family dwellings                  |  | $             | 203,483 |   |                   | $ | 215,940 |  
|Multi-family dwellings                |  |               | 89      |   |                   |   | 154     |  
|Commercial                            |  |               | 95,932  |   |                   |   | 84,074  |  
|Construction:                         |  |               |         |   |                   |   |         |  
|Residential                           |  |               | 2,739   |   |                   |   | 8,580   |  
|Commercial                            |  |               | 31,670  |   |                   |   | 26,519  |  
|                                      |  |               |         |   |                   |   |         |  
|                                      |  |               | 333,913 |   |                   |   | 335,267 |  
|                                      |  |               |         |   |                   |   |         |  
|                                      |  |              
|Less: Loans in process                |  |               | (12,759 | ) |                   |   | (11,265 | )
|                                      |  |               |         |   |                   |   |         |  
|                                      |  |               | 321,154 |   |                   |   | 324,002 |  
|                                      |  |               |         |   |                   |   |         |  
|Consumer loans:                       |  |               |         |   |                   |   |         |  
|Home equity                           |  |               | 86,366  |   |                   |   | 90,532  |  
|Consumer loans                        |  |               | 1,390   |   |                   |   | 1,765   |  
|Other                                 |  |               | 2,240   |   |                   |   | 2,357   |  
|                                      |  |               |         |   |                   |   |         |  
|                                      |  |               | 89,996  |   |                   |   | 94,654  |  
|                                      |  |               |         |   |                   |   |         |  
|Commercial business loans and leases: |  |               |         |   |                   |   |         |  
|Commercial business loans             |  |               | 49,357  |   |                   |   | 45,277  |  
|Commercial leases                     |  |               | 218     |   |                   |   | 250     |  
|                                      |  |               |         |   |                   |   |         |  
|                                      |  |               | 49,575  |   |                   |   | 45,527  |  
|                                      |  |               |         |   |                   |   |         |  
|Less: Allowance for loan losses       |  |               | (3,757  | ) |                   |   | (3,424  | )
|                                      |  |               |         |   |                   |   |         |  
|                                      |  |              
|Unearned discounts and fees           |  |               | (54     | ) |                   |   | 27      |  
|                                      |  |               |         |   |                   |   |         |  
|Loans receivable, net                 |  | $             | 456,914 |   |                   | $ | 460,786 |  
|                                      |  |               |         |   |                   |   |         |  

(8) Allowance for Loan Losses

Changes in the allowance for loan losses for the six months ended March 31, 2009, fiscal year ended September 30, 2008, and for the six months ended March 31, 2008 are as follows (dollar amounts in
thousands):



|                               |  |                               |       |   |                             |   |       |                               |  |   |       |  
|------------------------------ |  | ----------------------------- | ----- | - | --------------------------- | - | ----- | ----------------------------- |  | - | ----- | -
|                               |  | Six Months EndedMarch 31,2009 |       |   | Year EndedSeptember 30,2008 |   |       | Six Months EndedMarch 31,2008 | 
|Balance at beginning of period |  | $                             | 3,424 |   |                             | $ | 3,027 |                               |  | $ | 3,027 |  
|Provision for loan losses      |  |                               | 875   |   |                             |   | 1,260 |                               |  |   | 390   |  
|Charge-offs                    |  |                               | (578  | ) |                             |   | (947  | )                             |  |   | (239  | )
|Recoveries                     |  |                               | 36    |   |                             |   | 84    |                               |  |   | 23    |  
|                               |  |                               |       |   |                             |   |       |                               |  |   |       |  
|Net charge-offs                |  |                               | (542  | ) |                             |   | (863  | )                             |  |   | (216  | )
|                               |  |                               |       |   |                             |   |       |                               |  |   |       |  
|Balance at end of period       |  | $                             | 3,757 |   |                             | $ | 3,424 |                               |  | $ | 3,201 |  
|                               |  |                               |       |   |                             |   |       |                               |  |   |       |  



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##### Table of Contents

The provision for loan losses charged to expense is based upon past loan loss experience and an evaluation of probable
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 No. 114 does 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 March 31, 2009, the recorded investment in loans that are considered to be impaired under FAS No. 114 was $7.0 million
compared to $11.1 million at March 31, 2008. The decrease is primarily related to two commercial real estate loans totaling $4.6 million at March 31, 2008 that are no longer impaired at March 31, 2009. One loan in the amount of $2.6
million was cured by the way of sale in September 2008 and the second loan in the amount of $2.0 million became a performing loan in May 2008. Included in the current amount are $3.5 million of impaired loans for which the related allowance for loan
losses is $345,000. Impaired loans of $3.3 million do not have a related allowance for loan losses as a result of applying impairment tests prescribed under FAS No. 114. The average recorded investment in impaired loans during the six months
ended March 31, 2009 was $6.9 million compared to $8.9 million for the same period in the prior year. For the six months ended March 31, 2009, the Company recognized $127,000 of interest income on impaired loans using the cash basis
of income recognition. The Company recognized $103,000 of interest income on impaired loans during the six month period ended March 31, 2008.

(9)
Derivative Instruments

The Company accounts for its derivative instruments as either assets or liabilities on the balance sheet at fair value
through adjustments to either the hedged items, accumulated other comprehensive income (loss), or current earnings, as appropriate. As part of its overall interest rate risk management activities, the Company utilizes derivative instruments to
manage its exposure to various types of interest rate risk. These derivative instruments consist of interest rate swaps. There were two interest rate swap contracts outstanding as of March 31, 2009.

During the second quarter of fiscal 2008, the Company entered into an interest rate swap to manage its exposure to interest rate risk. This interest rate swap
transaction involved the exchange of the Companys floating rate interest rate payment on its $7.5 million in floating rate preferred securities for a fixed rate interest payment without the exchange of the underlying principal amount. Entering
into interest rate derivatives potentially exposes the Company to the risk of counterparties failure to fulfill their legal obligations including, but not limited to, potential amounts due or payable under each derivative contract. Notional
principal amounts are often used to express the volume of these transactions, but the amounts potentially subject to credit risk are much smaller.

This
hedge relationship fails to qualify for the assumption of no ineffectiveness (short cut method) as defined by FAS 133 paragraph 68. Therefore, consistent with the requirement of FAS No. 133 paragraphs 28-35 and with the risk management
objective of hedging the variability of expected future cash flows, the Company accounts for this hedge relationship as a cash flow hedge.



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##### Table of Contents

The cumulative change in fair value of the hedging derivative, to the extent that it is expected to be offset by the
cumulative change in anticipated interest cash flows from the hedged exposure, will be deferred and reported as a component of other comprehensive income (OCI). Any hedge ineffectiveness will be charged to current earnings. Consistent with the risk
management objective and the hedge accounting designation, management measured the degree of hedge effectiveness by comparing the cumulative change in anticipated interest cash flows from the hedged exposure over the hedging period to the cumulative
change in anticipated cash flows from the hedging derivative. Management will utilize the Hypothetical Derivative Method to compute the cumulative change in anticipated interest cash flows from the hedged exposure. To the extent that the
cumulative change in anticipated cash flows from the hedging derivative offsets from 80% to 125% of the cumulative change in anticipated interest cash flows from the hedged exposure, the hedge will be deemed effective. The Company will use the
Hypothetical Derivative Method to measure ineffectiveness. Under this method, the calculation of ineffectiveness, as required under paragraph 30(b)(2) of FAS No. 133, will be done by using the change in fair value of the hypothetical
derivative. That is, the swap will be recorded at fair value on the balance sheet and other comprehensive income will be adjusted to an amount that reflects the lesser of either the cumulative change in fair value of the swap or the cumulative
change in the fair value of the hypothetical derivative instrument. Management will determine the ineffectiveness of the hedging relationship by comparing the cumulative change in anticipated interest cash flows from the hedged exposure over the
hedging period to the cumulative change in anticipated cash flows from the hedging derivative. Any difference between these two measures will be deemed hedge ineffectiveness and recorded in current earnings. As of March 31, 2009 the hedge
instrument was deemed to be effective, therefore, no amounts were charged to current earnings. The Company does not expect to reclassify any hedge-related amounts from accumulated other comprehensive income (loss) to earnings over the next twelve
months.

The pay fixed interest rate swap contract outstanding at March 31, 2009 is being utilized to hedge $7.5 million in floating rate preferred
securities. Below is a summary of the interest rate swap contract and the terms at March 31, 2009:



|                       |  |          |       |      |      |   |         |      |   |          |            |            |   |      |  |   |    
|---------------------- |  | -------- | ----- | ---- | ---- | - | ------- | ---- | - | -------- | ---------- | ---------- | - | ---- |  | - | ---
|                       |  | Notional |       | Pay  |      |   | Receive |      |   | Maturity |            | Unrealized
|(Dollars in thousands) |  | Amount   |       | Rate |      |   | Rate(*) |      |   | Date     |            | Gain       |   | Loss
|Cash flow hedge        |  | $        | 7,500 |      | 5.32 | % |         | 2.68 | % |          | 12/15/2012 |            | $ |     |  | $ | 581



|(*) | Variable receive rate based upon contract rates in effect at March 31, 2009.
|--- | ----------------------------------------------------------------------------

During the first quarter of fiscal 2009, the Company entered into a fixed rate loan with one of its commercial mortgage loan customers and simultaneously entered into an offsetting fixed interest rate swap contract with PNC Bank, National
Association (PNC). The Company pays PNC interest at the same fixed rate on the same notional amount as the customer pays to the Bank on the commercial mortgage loan, and receives interest from PNC at a floating rate on the same notional
amount. This interest rate hedging program helps the Bank limit its interest rate risk while at the same time helps the Bank meet the financing needs and interest rate risk management needs of its commercial customers. This interest rate swap
contract was recorded at fair value with any resulting gain or loss recorded in current period earnings. For the three and six months ended March 31, 2009 the Company recorded a gain of $1,000 and a loss of $17,000, respectively, relating to
this contract. As of March 31, 2009, the notional amount of the customer related interest rate derivative financial instrument was $993,000. There were no similar derivatives of this kind outstanding as of March 31, 2008.



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##### Table of Contents

(10) Comprehensive Income

In complying with Financial Accounting Standards No. 130, Reporting Comprehensive Income, the Company has developed the following table, which includes the tax effects of the components of other comprehensive income (loss).
Other comprehensive income (loss) consists of net unrealized gains (losses) on securities available for sale and derivatives that qualify as cash flow hedges. Other comprehensive income (loss) and related tax effects for the indicated periods,
consists of:



|                                                                                                  |  |                   |        |   |                   |   |       |  
|------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | - | ----------------- | - | ----- | -
|                                                                                                  |  | Three MonthsEnded |        |   | Three MonthsEnded |  
|(Dollars in thousands)                                                                            |  | March 31, 2009    |        |   | March 31, 2008    |  
|Net (loss) income                                                                                 |  | $                 | (129   | ) |                   | $ | 1,168 |  
|Comprehensive gain (loss) on cash flow hedges net of tax of $1 in 2009 and $0 in 2008             |  |                   | 1      |   |                   |   | (264  | )
|Comprehensive gain (loss) on investment securities, net of tax of $934 in 2009 and ($81) in 2008  |  |                   | 1,813  |   |                   |   | (156  | )
|Reclassification adjustment on investment securities, net of tax of $560 in 2009 and ($2) in 2008 |  |                   | 1,085  |   |                   |   | (5    | )
|                                                                                                  |  |                   |        |   |                   |   |       |  
|Total comprehensive income                                                                        |  | $                 | 2,770  |   |                   | $ | 743   |  
|                                                                                                  |  |                   |        |   |                   |   |       |  
|                                                                                                  |  |                  
|                                                                                                  |  | Six MonthsEnded   |        |   | Six MonthsEnded   |  
|(Dollars in thousands)                                                                            |  | March 31, 2009    |        |   | March 31, 2008    |  
|Net income                                                                                        |  | $                 | 1,558  |   |                   | $ | 2,028 |  
|Comprehensive loss on cash flow hedges net of tax of ($184) in 2009 and $0 in 2008                |  |                   | (357   | ) |                   |   | (264  | )
|Comprehensive loss on investment securities, net of tax of ($549) in 2009 and ($344) in 2008      |  |                   | (1,067 | ) |                   |   | (667  | )
|Reclassification adjustment on investment securities, net of tax of $585 in 2009 and $108 in 2008 |  |                   | 1,135  |   |                   |   | 207   |  
|                                                                                                  |  |                   |        |   |                   |   |       |  
|Total comprehensive income                                                                        |  | $                 | 1,269  |   |                   | $ | 1,304 |  
|                                                                                                  |  |                   |        |   |                   |   |       |  



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##### Table of Contents

(11) Fair Value

In
September 2006, the FASB issued FAS No. 157, Fair Value Measurements, which provides enhanced guidance for using fair value to measure assets and liabilities. In February 2008, the FASB issued Staff Position No. 157-2, Partial
Deferral of the Effective Date of Statement 157, which deferred the effective date of FAS No. 157 for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. Effective October 1, 2008,
the Company adopted FAS No. 157, which, among other things, required enhanced disclosures about assets and liabilities carried at fair value. FAS No. 157 establishes a hierarchal disclosure framework associated with the level of pricing
observations utilized in measuring assets and liabilities at fair value. The three broad levels defined by FAS No. 157 hierarchy are as follows:



|            |  |                                                                                                                                                                                                                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level I -   |  | Quoted prices are available in the active markets for identical assets or liabilities as of the reported date.                                                                                                                                                                                                                                                                           
|            | 
|Level II -  |  | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include
items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
|            | 
|Level III - |  | Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.                                                                                                                                                                                                                                                      

This hierarchy requires the use of observable market data when available. The adoption of FAS No. 157 did not
have a significant impact on the companys financial position or results of operations.

The following table presents the assets and liabilities
reported on the consolidated statements of financial condition at their fair value as of March 31, 2009 by level within the fair value hierarchy. As required by FAS No. 157, financial assets and liabilities are classified in their entirety
based on the lowest level of input that is significant to the fair value measurement.



|                                |  |         |        |          |   |           |  |       |        |  |   |        
|------------------------------- |  | ------- | ------ | -------- | - | --------- |  | ----- | ------ |  | - | -------
|                                |  | Level I |        | Level II |   | Level III |  | Total
|Assets:                         |  |         |        |          |   |           |  |       |        |  |   |        
|Available for sale securities   |  | $       | 12,933 |          | $ | 114,351   |  | $     | 17,239 |  | $ | 144,523
|Residential loans held for sale |  |         |       |          |   | 561       |  |       |       |  |   | 561    
|Liabilities:                    |  |         |        |          |   |           |  |       |        |  |   |        
|Derivative instruments          |  |         |       |          |   | 732       |  |       |       |  |   | 732    

At March 31, 2009, pooled trust preferred securities represent investments in 23 different trust preferred
offerings with an aggregate fair value of $17.2 million, of which $15.7 million had floating rates based on LIBOR at March 31, 2009. Due to dislocations in the credit markets broadly, and the lack of trading and new issuance in pooled trust
preferred securities, market price indications generally reflect the lack of liquidity in the market rather than credit concerns. Prices on trust preferred securities were calculated using a discounted cash-flow technique. Cash flows were estimated
based on credit and prepayment assumptions. The present value of the projected cash flows was calculated using a discount rate equal to the current yield used to accrete the beneficial interest. The Company recognized a $412,000 non-cash impairment
charge on an investment in a pooled trust preferred security resulting from several factors, including a downgrade in its credit rating, its failure to pass its principal coverage test, indications of a break in yield, and the decline in the
net present value of its projected cash flows. Management of the Company has deemed the impairment on the trust preferred security to be other-than-temporary based upon these factors and the duration and extent to which the market value has been
less than cost, the inability to forecast a recovery in market value, and other factors concerning the issuers in the pooled security. Because the Bank has the ability and intent to hold the remaining trust preferred investments until a recovery of
fair value, which may be maturity, the Bank does not consider the remaining assets to be other-than-temporarily impaired at March 31, 2009.



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##### Table of Contents

The following table presents the changes in the Level III fair-value category for the six months ended March 31,
2009. The Company classifies financial instruments in Level III of the fair-value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to the unobservable inputs, the valuation models
for Level III financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly.



|                              |  |                |   |                       |   |       |  |                                    |   |                                   |   |               |  |                                    |   |  |   |        |  |   |        |  
|----------------------------- |  | -------------- | - | --------------------- | - | ----- |  | ---------------------------------- | - | --------------------------------- | - | ------------- |  | ---------------------------------- | - |  | - | ------ |  | - | ------ | -
|                              |  | October 1,2008 |   | PrincipalTransactions |   | Other |  | Transfers inand/or out ofLevel III |   | Purchasesissuances andsettlements |   | March 31,2009 |  | Unrealizedgains (losses)still held |  
|Assets:                       |  |                |   |                       |   |       |  |                                    |   |                                   |   |               |  |                                    |   |  |   |        |  |   |        |  
|Available for sale securities |  | $              |  |                       | $ |      |  | $                                  |  |                                   | $ | 17,239        |  | $                                  |  |  | $ | 17,239 |  | $ | (7,413 | )

The following table presents the assets measured on a nonrecurring basis on the consolidated statements of
financial condition at their fair value as of March 31, 2009 by level within the fair value hierarchy. Impaired loans that are collateral dependent are written down to fair value through the establishment of specific reserves. Techniques used
to value the collateral that secure the impaired loan include: quoted market prices for identical assets classified as Level 1 inputs; observable inputs, employed by certified appraisers, for similar assets classified as Level 2 inputs. In cases
where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level 3 inputs.



|                                         |  |         |   |          |   |           |  |       |       |  |   |      
|---------------------------------------- |  | ------- | - | -------- | - | --------- |  | ----- | ----- |  | - | -----
|                                         |  | Level I |   | Level II |   | Level III |  | Total
|Assets Measured on a Nonrecurring Basis: |  |         |   |          |   |           |  |       |       |  |   |      
|Impaired loans                           |  | $       |  |          | $ |          |  | $     | 7,001 |  | $ | 7,001

(12) Adoption Of New Accounting Pronouncement

Effective October 1, 2008, the Company adopted Emerging Issues Task Force Issue 06-4 (EITF 06-4), Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar
Life Insurance Arrangements. EITF 06-4 requires that for a split-dollar life insurance arrangement within the scope of the issue, an employer should recognize a liability for future benefits in accordance with FAS No. 106 (if, in substance,
a postretirement benefit plan exists) or Accounting Principles Board Opinion No. 12 (if the arrangement is, in substance, an individual deferred compensation contract) based on the substantive agreement with the employee. The impact of adopting
EITF 06-4 reduced the beginning balance of retained earnings as of October 1, 2008 by $520,000, net-of-tax.

(13) Federal Home Loan Bank
(FHLB) Stock Dividends

The FHLB of Pittsburgh historically paid quarterly cash dividends, which were last paid on November 17, 2008 at
an annualized rate of 2.35%. In December 2008, the FHLB announced that it was suspending dividend payments that normally would be payable in the March 2009 quarter in an effort to retain capital. In addition, the historical practice of repurchasing
excess capital stock from members of the FHLB was also suspended. The Banks investment in the FHLB of Pittsburgh was $10.0 million at March 31, 2009 and is valued at the par issue amount of $100 per share.

(14) TARP Capital Purchase Program

On December 12, 2008, the
Registrant entered into a Letter Agreement and Securities Purchase Agreement (collectively, the Purchase Agreement) with the United States Department of the Treasury (Treasury) under the TARP Capital Purchase Program,
pursuant to which the Registrant sold (i) 7,000 shares of the Registrants Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the Series B Preferred Stock) and (ii) a warrant (the Warrant) to purchase
121,387 shares of the Registrants common stock, par value $0.01 per share (the Common Stock), for an aggregate purchase price of $7.0 million in cash.



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The Series B Preferred Stock will qualify as Tier 1 capital and will pay cumulative dividends at a rate of 5% per
annum for the first five years, and 9% per annum thereafter.

Pursuant to the terms of the Purchase Agreement, the ability of the Registrant to
declare or pay dividends or distributions on, or purchase, redeem or otherwise acquire for consideration, shares of its Junior Stock (as defined below) and Parity Stock (as defined below) will be subject to restrictions, including a restriction
against increasing dividends from the last quarterly cash dividend per share ($0.14) declared on the Common Stock prior to December 12, 2008. The Company may redeem the Series B Preferred Stock at a price of $1,000 per share plus accrued and
unpaid dividends, subject to the concurrence of the Treasury and its federal banking regulators. Prior to December 12, 2011, unless the Company has redeemed the Series B Preferred Stock or the Treasury has transferred the Series B Preferred
Stock to a third party, the consent of the Treasury will be required for the Company to increase its Common Stock dividend or repurchase its Common Stock or other equity or capital securities, other than in certain circumstances specified in the
Agreement.

The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments,
equal to $8.65 per share of the Common Stock. Treasury has agreed not to exercise voting power with respect to any shares of Common Stock issued upon exercise of the Warrant.

The Series B Preferred Stock and the Warrant were issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended. Upon the request of Treasury at any
time, the Registrant has agreed to promptly enter into a deposit arrangement pursuant to which the Series B Preferred Stock may be deposited and depositary shares (Depositary Shares), representing fractional shares of Series B Preferred
Stock, may be issued. The Registrant has agreed to register the Series B Preferred Stock, the Warrant, the shares of Common Stock underlying the Warrant (the Warrant Shares) and Depositary Shares, if any, as soon as practicable after the
date of the issuance of the Series B Preferred Stock and the Warrant. Neither the Series B Preferred Stock nor the Warrant will be subject to any contractual restrictions on transfer, except that Treasury may only transfer or exercise an aggregate
of one-half of the Warrant Shares prior to the earlier of the redemption of 100% of the shares of Series B Preferred Stock or December 31, 2009.

The
fair value of the preferred stock and the common stock warrants was determined based on their relative fair values calculated as of their issuance date, December 12, 2008. Based on their relative fair values, the TARP proceeds (net of issuance
costs) were allocated between preferred stock and additional paid in capital (for the warrant component). The market/discount rate used when deriving the fair value of the preferred stock was 10.00%. This rate was determined by calculating the
average dividend rate of the five most recent preferred equity offerings completed by banks and thrifts. A Black-Scholes model was used to calculate the fair value of the common stock warrants. Key assumptions input into the model included: amount
of common stock, $1,050,000 (based on 15% of the gross TARP proceeds); market price of the common stock on the warrant grant date, $6.75; exercise price of the warrant, $8.65 (20 day trailing average of the common stock as of the Treasurys
approval date); number of common stock warrants issued, 121,387; expected life of the warrants, 5 years; the risk free interest rate, 1.55%; the continuous annualized volatility of the change in the underlying common stocks price, 32.00%; and
the simple annual expected cash dividend yield on common stock, 8.30%. Based on the calculations, the fair value of the preferred stock represented 95.65% of the total fair value of the preferred stock and common stock warrants, while the fair value
of the common stock warrants represented 4.35% of the total. The discount on the preferred stock is being amortized on a straight-line basis over five years.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

FIDELITY BANCORP, INC. AND SUBSIDIARIES

MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words believes, anticipates,
contemplates, expects, and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from
those projected. Those risks and uncertainties include changes in interest rates, risks associated with the effect of integrating newly acquired businesses, the ability to control costs and expenses, and general economic conditions. The Company does
not undertake to, and specifically disclaims any obligation to, update any such forward-looking statements.

Fidelity Bancorp, Inc.s
(Fidelity or the Company) business is conducted principally through its wholly-owned subsidiary, Fidelity Bank PaSB, (the Bank). All references to the Company refer collectively to the Company and the Bank, unless
the context indicates otherwise.

Critical Accounting Policies

Note 1 on pages 53 through 61 of the Companys 2008 Annual Report to Shareholders lists significant accounting policies used in the development and presentation of its financial statements. This discussion and analysis, the significant
accounting policies, and other financial statement disclosures identify and address key variables and other qualitative and quantitative factors that are necessary for an understanding and evaluation of the Company and its results of operations.

The most significant estimates in the preparation of the Companys financial statements are for the allowance for loan losses, evaluation of
investments for other-than-temporary impairment, and accounting for stock options. Please refer to the discussion of the allowance for loan losses in Note 8, Allowance for Loan Losses, on pages 15 and 16 above. In addition, further
discussion of the estimates used in determining the allowance for loan losses is contained in the discussion on Provision for Loan Losses on pages 40 and 41 of the Companys 2008 Annual Report to Shareholders.

At least quarterly, management reviews all securities where the market value is less than the amortized cost. Management evaluates securities for other than temporary
impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. There are numerous factors considered in evaluating whether a decline in market value is other than temporary. The primary
factors include (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its
investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Additional factors considered in the assessment include the implied and historical volatility of the security; whether the market decline
was affected by macroeconomic conditions or by specific information pertaining to an individual security; downgrades by rating agencies; changes in tax laws, regulation, or other governmental policies significantly affecting the issuer; changes in
key financial indicators of the issuer (e.g. significant losses in the current year and prior years, loan covenant violations, changes in asset quality, liquidity, change in key management personnel); changes in the dividend policy of the issuer;
and forecasts of economic and market or industry trends. If the security is deemed other than temporarily impaired it is written down to the current fair value and a corresponding charge to earnings is recognized. The Company recognized
other-than-temporary impairment losses on available-for-sale securities of $1.6 million and $1.7 million for the three and six month periods ended March 31, 2009, respectively. The Company recognized similar losses of $322,000 for the six
months ended March 31, 2008. There were no losses recognized during the three months ended March 31, 2008. The impairment charges for the three month period ended March 31, 2009 relate to the Companys holdings of the AMF Ultra
Short Mortgage Fund and its investment in a pooled trust preferred security. A $1.2 million non-cash impairment charge on the AMF Ultra Short Mortgage Fund resulted from the continuing uncertainty in spreads in the bond market for mortgage related
securities.



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##### Table of Contents

This uncertainty has negatively impacted the market value of the securities in the fund and thus the net asset value of
the fund itself. Management of the Company has deemed the impairment of the fund to be other-than-temporary based upon the duration and extent to which the market value has been less than cost, the limitations placed on fund redemptions, and the
inability to forecast a recovery in the market value. A $412,000 non-cash impairment charge on an investment in a pooled trust preferred security resulted from several factors, including a downgrade in its credit rating, its failure to pass its
principal coverage test, indications of a break in yield, and the decline in the net present value of its projected cash flows. Management of the Company has deemed the impairment on the trust preferred security to be other-than-temporary based upon
these factors and the duration and extent to which the market value has been less than cost, the inability to forecast a recovery in market value, and other factors concerning the issuers in the pooled security. The impairment charges for the six
month period ended March 31, 2009 relate to the Companys holdings of the AMF Ultra Short Mortgage Fund, Freddie Mac preferred stock, and the one pooled trust preferred security. The impairment charges for the six month period ended
March 31, 2008 relate to the Companys holdings of the AMF Ultra Short Mortgage Fund.

In light of recent price volatility, management is closely
monitoring its investments in trust preferred securities, which account for $7.5 million in unrealized losses as of March 31, 2009. At March 31, 2009, these securities represent investments in 23 different trust preferred offerings with an
aggregate fair value of $17.2 million, of which $15.7 million had floating rates based on LIBOR at March 31, 2009. In addition to the factors mentioned above for determining whether the decline in market value is other than temporary, the
analysis of each of these securities includes a review of its current credit rating as compared to its credit rating at purchase; its current collateral coverage test results; the number of issuers in each pooled trust preferred security; the number
of issuers in default; the amount of principal in default; and the percent of principal in default. At March 31, 2009, all trust preferred securities were current with respect to interest payments; however, there were two securities for which a
payment in kind was received in lieu of cash, as permitted by the investment agreements. Eight of the trust preferred securities have a below investment grade rating at March 31, 2009. Due to dislocations in the credit markets broadly, and the
lack of trading and new issuance in pooled trust preferred securities, market price indications generally reflect the lack of liquidity in the market rather than credit concerns. Prices on trust preferred securities were calculated using a spread
model based on their current credit ratings. Because the Bank has the ability and intent to hold the remaining trust preferred investments until a recovery of fair value, which may be maturity, except for the pooled trust preferred security
mentioned above, the Bank does not consider these remaining assets to be other-than-temporarily impaired at March 31, 2009. However, continued price declines could result in a writedown of one or more of the trust preferred investments.

Management is also closely monitoring its investments in equity securities, which account for $1.3 million in unrealized losses as of March 31, 2009.
At March 31, 2009, these securities represent investments in common equity offerings of seven financial institutions with an aggregate fair value of $2.5 million, one investment in preferred stock of an insurance company with a fair value of
$461,000, and investments in three different mutual fund offerings with an aggregate fair value of $10.0 million. In addition to the general factors mentioned above for determining whether the decline in market value is other than temporary, the
analysis of each of these securities includes a review of the profitability of each issuer and its capital adequacy, and all data available to determine the credit quality of each issuer. Based on the Banks detailed analysis, and because the
Bank has the ability and intent to hold the investments until a recovery of fair value, except for the AMF Ultra Short Mortgage Fund mentioned above, the Bank does not consider these remaining assets to be other-than-temporarily impaired at
March 31, 2009. However, continued price declines could result in a writedown of one or more of these equity investments.

Stock based compensation
expense is reported in net income utilizing the fair-value-based method set forth in FAS No. 123R. The fair value of each option award is estimated at the date of grant using the Black-Scholes option-pricing model. Please refer to the
discussion of stock based compensation in Note 4, Stock Based Compensation, on pages 11 and 12 above. In addition, further discussion of the assumptions used in determining stock based compensation is contained in Note 13, Stock
Option Plans, on pages 78 through 80 of the Companys 2008 Annual Report to Shareholders.



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Comparison of Financial Condition

Total assets of the Company decreased $6.9 million, or 0.9%, to $720.3 million at March 31, 2009 from $727.2 million at September 30, 2008. Significant changes in individual categories include decreases in
securities available-for-sale of $2.2 million, securities held-to-maturity of $8.9 million, and net loans of $3.9 million, partially offset by increases in cash and cash equivalents of $3.5 million and Federal Home Loan Bank stock of $2.1 million.
The Company is currently experiencing increased levels of loan and mortgage-backed security prepayment and loan refinancing activity. The decrease in net loans reflects $43.7 million of prepayments, partially offset by $41.7 million in loan
originations.

Total liabilities of the Company decreased $13.7 million, or 2.0%, to $671.4 million at March 31, 2009 from $685.1 million at
September 30, 2008. Significant changes include a decrease in short-term debt of $32.1 million, partially offset by an increase in deposits of $14.6 million, an increase in securities sold under agreement to repurchase of $1.4 million, and an
increase in advance payments by borrowers for taxes and insurance of $1.5 million. The short-term debt decrease was primarily attributed to the increase in deposits and the decreases in securities held-to-maturity, securities available-for-sale, and
net loans. The increase in deposits is primarily attributed to an increase in checking accounts of $4.4 million, an increase in savings accounts of $2.5 million, and an increase in time deposits of $9.4 million, partially offset by a decrease in
money market accounts of $1.7 million.

Stockholders equity increased to $49.0 million at March 31, 2009, compared to $42.2 million at
September 30, 2008. This result reflects net income for the six month period ended March 31, 2009 of $1.6 million, stock options exercised of $1,000, stock issued under the Dividend Reinvestment Plan of $57,000, stock-based compensation of
$55,000, common stock warrants issued of $302,000, and the issuance of Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the Series B Preferred Stock) of $6.6 million. On December 12, 2008, the Company sold $7.0 million in
preferred stock to the U.S. Department of Treasury as a participant in the federal governments TARP Capital Purchase Program. In connection with the investment, the Company also issued a ten-year warrant to the Treasury which permits the
Treasury to purchase up to 121,387 shares of its common stock at an exercise price of $8.65 per share. The Series B Preferred Stock will pay dividends at the rate 5% per annum until the fifth anniversary of issuance and, unless earlier
redeemed, at the rate of 9% thereafter. Until the third anniversary of the issuance of the Series B Preferred Stock or its earlier redemption or transfer by the Treasury Department to an unaffiliated holder, the Company may not increase the dividend
on the common stock or repurchase any shares of common stock. Offsetting these increases were common and preferred stock cash dividends paid of $956,000 and an increase in the accumulated other comprehensive loss of $289,000, as a result of changes
in the net unrealized losses on the available-for-sale securities and by the unrealized loss recognized on the cash flow hedge as discussed in Note 9, Derivative Instrument, on pages 16 and 17 above. Approximately $3.4 million of the
balances in retained earnings as of March 31, 2009 and September 30, 2008 represent base year bad debt deductions for tax purposes only, as they are considered restricted accumulated earnings.



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##### Table of Contents

Non-Performing Assets

The following table sets forth information regarding non-accrual loans and foreclosed real estate held by the Company at the dates indicated. The table does not include $373,000 and $653,000 in loans at March 31, 2009 and
September 30, 2008, respectively, that were more than 90 days past maturity but were otherwise performing in accordance with their terms. The Company did not have any loans which were classified as troubled debt restructurings at the dates
presented (dollar amounts in thousands).



|                                                                                    |  |               |       |   |                   |   |       |  
|----------------------------------------------------------------------------------- |  | ------------- | ----- | - | ----------------- | - | ----- | -
|                                                                                    |  | March 31,2009 |       |   | September 30,2008 |  
|                                                                                    |  |              
|Non-accrual residential real estate loans (one-to-four family)                      |  | $             | 722   |   |                   | $ | 701   |  
|Non-accrual construction, multi-family residential and commercial real estate loans |  |               | 3,518 |   |                   |   | 2,993 |  
|Non-accrual installment loans                                                       |  |               | 685   |   |                   |   | 676   |  
|Non-accrual commercial business loans                                               |  |               | 1,353 |   |                   |   | 1,357 |  
|                                                                                    |  |               |       |   |                   |   |       |  
|Total non-performing loans                                                          |  | $             | 6,278 |   |                   | $ | 5,727 |  
|                                                                                    |  |               |       |   |                   |   |       |  
|Total non-performing loans as a percent of net loans receivable                     |  |               | 1.37  | % |                   |   | 1.24  | %
|                                                                                    |  |               |       |   |                   |   |       |  
|Total foreclosed real estate                                                        |  | $             | 106   |   |                   | $ | 170   |  
|                                                                                    |  |               |       |   |                   |   |       |  
|Total non-performing loans and foreclosed real estate as a percent of total assets  |  |               | 0.89  | % |                   |   | 0.81  | %
|                                                                                    |  |               |       |   |                   |   |       |  

Included in non-performing loans at March 31, 2009 are nine single-family residential real estate loans
totaling $722,000, two commercial real estate loans totaling $3.5 million, nineteen home equity and installment loans totaling $685,000, and eight commercial business loans totaling $1.4 million. Non-performing loans increased $551,000 to $6.3
million at March 31, 2009 from $5.7 million at September 30, 2008 primarily because of one commercial real estate loan with a balance of $932,000 and thirteen home equity and installment loans with an aggregate balance of $239,000 that
were placed on non-accrual during the period.

At March 31, 2009, the Company had an allowance for loan losses of $3.8 million or 0.82% of gross loans
receivable, as compared to an allowance of $3.4 million or 0.74% of gross loans receivable at September 30, 2008. The allowance for loan losses equals 59.8% of non-performing loans at March 31, 2009 and September 30, 2008. Management
believes the balance is adequate based on its analysis of quantitative and qualitative factors as of March 31, 2009. Management has evaluated its entire loan portfolio, including these non-performing loans, and the overall allowance for loan
losses and is satisfied that the allowance for losses on loans at March 31, 2009 is reasonable. See also Provision for Loan Losses on page 30. However, there can be no assurance that the allowance for loan losses is sufficient to
cover possible future loan losses.

The Company recognizes that it must maintain an Allowance for Loan and Lease Losses (ALLL) at a level that
is adequate to absorb estimated credit losses associated with the loan and lease portfolio. The Companys Board of Directors has adopted an ALLL policy designed to provide management with a systematic methodology for determining and documenting
the ALLL each reporting period. This methodology was developed to provide a consistent process and review procedure to ensure that the ALLL is in conformity with the Companys policies and procedures and other supervisory and regulatory
guidelines.



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##### Table of Contents

The Companys ALLL methodology incorporates managements current judgments about the credit quality of the loan
portfolio. The following factors are considered when analyzing the appropriateness of the allowance: historical loss experience; volume; type of lending conducted by the Bank; industry standards; the level and status of past due and non-performing
loans; the general economic conditions in the Banks lending area; and other factors affecting the collectibility of the loans in its portfolio. The primary elements of the Banks methodology include portfolio segmentation and impairment
measurement. Management acknowledges that this is a dynamic process and consists of factors, many of which are external and out of managements control, that can change often, rapidly and substantially. The adequacy of the ALLL is based upon
estimates considering all the aforementioned factors as well as current and known circumstances and events. There is no assurance that actual portfolio losses will not be substantially different than those that were estimated.



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##### Table of Contents

Comparison of Results of Operations

for the Three and Six Months Ended March 31, 2009 and 2008

Net Income

The Company recorded a net loss for the three months ended March 31, 2009 of $129,000 and a net loss available to common stockholders of $250,000 or ($0.08) per
diluted common share compared to net income of $1.2 million or $0.38 per diluted common share for the same period in 2008. The decrease in net income primarily reflects charges of $1.6 million for other-than temporary impairment (OTTI)
on certain investment securities. Excluding the impairment charges of $1.6 million, net income would have been $1.4 million or $0.39 per diluted share. Other factors contributing to the decrease include an increase in the provision for loan losses
of $110,000 and an increase in operating expenses of $136,000, or 4.1%, partially offset by an increase in net interest income of $463,000, or 11.2%, an increase in other income (excluding OTTI charges) of $46,000, or 5.1%, and a decrease in the
provision for income taxes of $85,000.

Net income for the six months ended March 31, 2009 was $1.6 million and net income available to common
stockholders was $1.4 million or $0.45 per diluted common share compared to $2.0 million or $0.67 per diluted common share for the same period in 2008. The decrease in net income primarily reflects OTTI charges of $1.7 million on certain investment
securities. Excluding the impairment charges of $1.7 million, net income would have been $3.0 million or $0.92 per diluted share. Other factors contributing to the decrease include an increase in the provision for loan losses of $485,000 and an
increase in operating expenses of $281,000, or 4.4%, partially offset by an increase in net interest income of $1.3 million, or 16.9%, an increase in other income (excluding OTTI charges) of $317,000, or 21.5%, and a decrease in the provision for
income taxes of $363,000.

The Companys net loss/income available to common stockholders and diluted earnings per common share for the three and six
months ended March 31, 2009 reflects the impact of $121,000 of preferred stock dividends and discount accretion.



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##### Table of Contents

Interest Rate Spread

The Companys interest rate spread, the difference between average yields calculated on a tax-equivalent basis on interest-earning assets and the average cost of funds, increased to 2.41% (annualized) in the three months ended
March 31, 2009 from 2.12% (annualized) in the same period in 2008. The Companys tax-equivalent interest rate spread increased to 2.47% (annualized) in the six months ended March 31, 2009 from 2.04% (annualized) in the same period in
2008. The increase in both periods is the result of the average rate paid on interest-bearing liabilities decreasing more than the average yield on interest-earning assets. The following table shows the average yields earned on the Company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.



|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  
|-------------------------------------------------------------------------------------------- |  | --------------------------- | - |  | ------------------------- | - |  | ---- | - |  | ---- | -
|                                                                                             |  | Three Months EndedMarch 31, |   |  | Six Months EndedMarch 31, |  
|                                                                                             |  | 2009                        |   |  | 2008                      |   |  | 2009 |   |  | 2008 |  
|Average yield on:                                                                            |  |                             |   |  |                           |   |  |      |   |  |      |  
|Mortgage loans                                                                               |  | 5.92                        | % |  | 6.01                      | % |  | 5.96 | % |  | 6.06 | %
|Mortgage-backed securities                                                                   |  | 4.33                        |   |  | 4.37                      |   |  | 4.55 |   |  | 4.38 |  
|Installment loans                                                                            |  | 5.89                        |   |  | 6.38                      |   |  | 6.04 |   |  | 6.47 |  
|Commercial business loans and leases                                                         |  | 5.08                        |   |  | 6.90                      |   |  | 5.28 |   |  | 7.08 |  
|Interest-earning deposits with other institutions, investment securities, and FHLB stock (1) |  | 4.80                        |   |  | 5.36                      |   |  | 4.94 |   |  | 5.45 |  
|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  
|Total interest-earning assets                                                                |  | 5.42                        |   |  | 5.76                      |   |  | 5.53 |   |  | 5.84 |  
|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  
|Average rates paid on:                                                                       |  |                             |   |  |                           |   |  |      |   |  |      |  
|Deposits                                                                                     |  | 2.31                        |   |  | 3.15                      |   |  | 2.39 |   |  | 3.30 |  
|Borrowed funds                                                                               |  | 4.02                        |   |  | 4.37                      |   |  | 4.02 |   |  | 4.55 |  
|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  
|Total interest-bearing liabilities                                                           |  | 3.01                        |   |  | 3.64                      |   |  | 3.06 |   |  | 3.80 |  
|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  
|Average interest rate spread                                                                 |  | 2.41                        | % |  | 2.12                      | % |  | 2.47 | % |  | 2.04 | %
|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  
|Net yield on interest-earning assets                                                         |  | 2.71                        | % |  | 2.44                      | % |  | 2.73 | % |  | 2.35 | %
|                                                                                             |  |                             |   |  |                           |   |  |      |   |  |      |  



|(1) | Interest income on tax-exempt investments has been adjusted for federal income tax purposes using a rate of 34%. Interest income on tax-exempt investment securities was $438,000 and
$416,000 and the yield was 4.49% and 4.42%, prior to adjusting for federal income tax for the three months ended March 31, 2009 and 2008, respectively. Interest income on tax-exempt investment securities was $871,000 and $826,000 and the yield
was 4.52% and 4.42%, prior to adjusting for federal income tax for the six months ended March 31, 2009 and 2008, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest Income

Interest on loans decreased $285,000 or 4.0% to $6.9 million for the three months ended March 31, 2009, compared to
$7.2 million in the same period in 2008. Interest on loans decreased $539,000 or 3.7% to $13.9 million for the six months ended March 31, 2009, compared to the same period in 2008. The decrease for both periods reflects a decrease in the yield
earned on the loan portfolio, partially offset by an increase in the average loan balance outstanding.

Interest on mortgage-backed securities increased
$32,000 or 3.3% to $1.0 million for the three month period ended March 31, 2009, compared to $977,000 in the same period in 2008. Interest on mortgage-backed securities increased $229,000 or 11.9% to $2.1 million for the six month period ended
March 31, 2009, compared to the same period in 2008. The increase for three month period ended March 31, 2009 reflects an increase in the average balance of mortgage-backed securities owned, partially offset by a slight decrease in the
average yield earned on the portfolio. The increase of the six month period ended March 31, 2009 reflects an increase in the average balance of mortgage-backed securities owned as well as an increase in the average yield earned on the
portfolio.



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##### Table of Contents

Interest on interest-bearing demand deposits with other institutions and investment securities (non-tax equivalent)
decreased $363,000 or 19.7% to $1.5 million for the three months ended March 31, 2009, as compared to $1.8 million in the same period in 2008. Interest on interest-bearing demand deposits with other institutions and investment securities
(non-tax equivalent) decreased $722,000 or 19.2% to $3.0 million for the six months ended March 31, 2009, as compared to the same period in 2008. The decrease for both periods reflects a decrease in the average balance of investment securities
in the portfolio as well as a decrease in the yield earned on these investments.

Interest Expense

Interest on deposits decreased $863,000 or 28.4% to $2.2 million for the three month period ended March 31, 2009, as compared to $3.0 million during the same period
in 2008. Interest on deposits decreased $1.9 million or 29.5% to $4.5 million for the six month period ended March 31, 2009, as compared to the same period in 2008. The decrease for both periods reflects a decrease in the average balance of
deposits as well as a decrease in the average cost of the deposits.

Interest on securities sold under agreement to repurchase, including retail, term, and
wholesale structured borrowings, increased $81,000 or 6.9% to $1.3 million for the three month period ended March 31, 2009, as compared to $1.2 million in the same period in 2008. Interest on securities sold under agreement to repurchase
increased $215,000 or 9.2% to $2.5 million for the six month period ended March 31, 2009, as compared to the same period in 2008. The increase for both periods reflects an increase in the cost of these funds, partially offset by a lower level
of average securities sold under agreement to repurchase. The Bank had $95 million of wholesale structured borrowings outstanding at March 31, 2009 and 2008.

Interest on short-term borrowings, including Federal Home Loan Bank (FHLB) RepoPlus advances, FHLB revolving line of credit, federal funds purchased, and treasury, tax and loan notes, decreased $131,000 or 76.2% to
$41,000 for the three month period ended March 31, 2009, as compared to $172,000 in the same period in 2008. Interest on short-term borrowings decreased $505,000 or 80.8% to $120,000 for the six month period ended March 31, 2009, as
compared to the same period in 2008. The decrease for both periods reflects a decrease in the average cost of these borrowings, partially offset by an increase in the average balance of these borrowings.

Interest on long-term debt, including FHLB fixed rate advances and Convertible Select advances, decreased $162,000 or 11.9% to $1.2 million for the three
month period ended March 31, 2009 as compared to $1.4 million in the same period in 2008. Interest on long-term debt decreased $150,000 or 5.7% to $2.5 million for the six month period ended March 31, 2009 as compared to the same period in
2008. The decrease for the three month period ended March 31, 2009 reflects a decrease in the average balance of the debt and a decrease in the average cost of the debt. The decrease for the six month period ended March 31, 2009 reflects a
decrease in the average cost of the debt, partially offset by an increase in the average balance of the debt.

Interest on subordinated debt decreased
$4,000 or 3.8% to $102,000 for the three months ended March 31, 2009, as compared to $106,000 in the same period in 2008. Interest on subordinated debt decreased $37,000 or 15.2% to $206,000 for the six months ended March 31, 2009, as
compared to the same period in 2008. The decrease for both periods reflects a decrease in the average cost of these floating-rate debentures while the average balance remained unchanged. The decrease in interest expense on subordinated debt was
partially offset by $39,000 and $64,000 in interest expense for the three and six months ended March 31, 2009, respectively, on an interest rate swap contract to hedge its interest rate exposure from the subordinated debt. For the three and six
months ending March 31, 2008 the Company recorded interest income on the interest rate swap contract of $11,000.



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##### Table of Contents

Net Interest Income

The Companys net interest income increased $463,000 or 11.2% to $4.6 million, for the three month period ended March 31, 2009, as compared to $4.1 million in the same period in 2008. The Companys net interest income
increased $1.3 million or 16.9% to $9.3 million, for the six month period ended March 31, 2009, as compared to the same period in 2008. The increase in both periods is attributable to an increase in net interest-earning assets as well as an
increase in the interest rate spread. For the three months ended March 31, 2009 and 2008 the ratio of average interest-earning assets to average interest-bearing liabilities was 109.4% and 108.9%, respectively. For the six months ended
March 31, 2009 and 2008 the ratio of average interest-earning assets to average interest-bearing liabilities was 109.0%.

Provision for Loan Losses

The provision for loan losses was $320,000 for the three month period ended March 31, 2009, as compared to $210,000 for the same period in 2008.
The provision for loan losses was $875,000 for the six months ended March 31, 2009 compared to $390,000 for the six months ended March 31, 2008. At March 31, 2009, the allowance for loan losses increased to $3.8 million from $3.4
million at September 30, 2008. Net loan charge-offs were $148,000 for the three months ended March 31, 2009 as compared to net loan charge-offs of $151,000 for the three months ended March 31, 2008. Net loan charge-offs were $542,000
and $216,000 for the six months ended March 31, 2009 and 2008, respectively. Charge-offs for the three months ended March 31, 2009 are primarily attributed to three commercial business loans totaling $136,000. Charge-offs for the six
months ended March 31, 2009 are primarily attributed to nine commercial business loans totaling $298,000, one home equity loan totaling $146,000, and three residential real estate loans totaling $58,000.

The provision for loan losses is charged to operations to bring the total allowance for loan losses to a level that represents managements best estimates of the
losses inherent in the portfolio based on a monthly review by management of factors such as historical experience, volume, type of lending conducted by the Bank, industry standards, the level and status of past due and non-performing loans, the
general economic conditions in the Banks lending area, and other factors affecting the collectibility of the loans in its portfolio.

The allowance
for loan losses is maintained at a level that represents managements best estimates of losses in the loan portfolio at the balance sheet date. However, there can be no assurance that the allowance for loan losses will be adequate to cover
losses which may be realized in the future and that additional provisions for losses will not be required.

Other Income

Excluding OTTI charges of $1.6 million and $1.7 million for the three and six months ended March 31, 2009, respectively, and $322,000 for the six months ended
March 31, 2008, total non-interest or other income increased $46,000 or 5.1% to $943,000 and decreased $5,000 or 0.3% to $1.8 million for the three and six month periods ended March 31, 2009, respectively, as compared to the same periods
in 2008. The increase for the three month period ended March 31, 2009 is primarily attributed to an increase in loan service charges and fees, an increase in gains on sales of loans, an increase in deposit service charges and fees, and an
increase in ATM fees, partially offset by a decrease in non-insured investment product income and a decrease in other income. The decrease for the six month period ended March 31, 2009 is primarily attributed to an increase in losses on loan
interest rate swaps, a decrease in non-insured investment product income, and a decrease in other income, partially offset by an increase in loan service charges and fees, an increase in gains on sales of loans, an increase in deposit service
charges and fees, and an increase in ATM fees.

Loan service charges and fees, which includes late charges on loans and other miscellaneous loan fees,
increased $26,000 or 22.8% to $140,000, and increased $38,000 or 16.7% to $266,000 for the three and six month periods ended March 31, 2009, respectively, as compared to the same period in 2008. The increase for both periods is primarily
attributed to an increase in late charges collected on lines of credit and commercial loans, and an increase in title insurance fees, partially offset by a decrease in miscellaneous fees collected on residential mortgage loans.



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Impairment charges on securities were $1.6 million during the three-month period ending March 31, 2009; there were
no similar charges in the prior fiscal period. The impairment charges relate to the Companys holdings of the AMF Ultra Short Mortgage Fund and its investment in a pooled trust preferred security. A $1.2 million non-cash impairment charge on
the AMF Ultra Short Mortgage Fund resulted from the continuing uncertainty in spreads in the bond market for mortgage related securities. This uncertainty has negatively impacted the market value of the securities in the fund and thus the net asset
value of the fund itself. Management of the Company has deemed the impairment of the fund to be other-than-temporary based upon the duration and extent to which the market value has been less than cost, the limitations placed on fund redemptions,
and the inability to forecast a recovery in the market value. A $412,000 non-cash impairment charge on an investment in a pooled trust preferred security resulted from several factors, including a downgrade in its credit rating, its failure to pass
its principal coverage test, indications of a break in yield, and the decline in the net present value of its projected cash flows. Management of the Company has deemed the impairment on the trust preferred security to be other-than-temporary based
upon these factors and the duration and extent to which the market value has been less than cost, the inability to forecast a recovery in market value, and other factors concerning the issuers in the pooled security. Impairment charges on securities
were $1.7 million and $322,000 for the six months ended March 31, 2009 and 2008, respectively. The impairment charges for the current period relate to the Companys holdings of Freddie Mac preferred stock, the AMF Ultra Short Mortgage
Fund, and its investment in a pooled trust preferred security, whereas the impairment charges for the prior year period primarily relate to the Companys holdings of the AMF Ultra Short Mortgage Fund.

Gains on the sales of loans were $124,000 and $154,000 for the three and six month periods ended March 31, 2009, respectively, as compared to gains of $44,000 and
$57,000 for the same periods in fiscal 2008. The three month period ended March 31, 2009 results reflect the sale of approximately $9.5 million of fixed-rate, single-family mortgage loans, compared to $3.8 million of similar loan sales during
the prior fiscal period. The six month period ended March 31, 2009 results reflect the sale of approximately $11.6 million of fixed-rate, single-family mortgage loans, compared to $5.1 million of similar loan sales during the prior fiscal
period.

The Company recognized a gain of $1,000 on loan interest rate swaps for the three months ended March 31, 2009 and a loss of $17,000 for the
six month period ended March 31, 2009. There were no gains or losses on loan interest rate swaps for the three and six month periods ended March 31, 2008. As discussed in Note (9) above, during the first quarter of fiscal 2009 the
Company entered into a fixed rate loan with one of its commercial mortgage loan customers and simultaneously entered into an offsetting fixed interest rate swap contract with PNC. It remains the only loan-related swap outstanding as of
March 31, 2009 and there were no similar derivatives outstanding in fiscal 2008.

Deposit service charges and fees increased $16,000 or 4.9% to
$342,000, and increased $6,000 or 0.8% to $730,000 for the three and six month periods ended March 31, 2009, respectively, as compared to the same periods in 2008. The increase for the three month period ended March 31, 2009 is primarily
attributed to an increase in service charges collected on checking accounts and an increase in the net volume of fees collected for returned checks on deposit accounts. The increase for the six month period ended March 31, 2009 is primarily
attributed to an increase in service charges collected on checking accounts, partially offset by a decrease in the net volume of fees collected for returned checks on deposit accounts.

Automated teller machine (ATM) fees were $171,000 and $357,000 for the three and six month periods ended March 31, 2009, respectively, as compared to $166,000 and $345,000 for the same periods in 2008. The
increase for both periods is primarily attributed to an increase in the interchange fees earned on debit card transactions.

Non-insured investment product
income was $23,000 and $49,000 for the three and six month periods ended March 31, 2009, respectively, as compared to $74,000 and $145,000 for the same periods in 2008. The decrease for both periods is primarily attributed to a decrease in the
commissions earned on the sales of these products due to lower volumes of sales.



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Operating Expenses

Total operating expenses for the three month period ended March 31, 2009 increased to $3.4 million, as compared to $3.3 million for the same period in 2008. Total operating expenses for the six month period ended March 31, 2009
totaled $6.7 million compared to $6.4 million for the same period in 2008. The increase for the three month period ended March 31, 2009 is primarily attributed to an increase in compensation and benefits expense, an increase in the losses on
foreclosed real estate, an increase in service bureau expense, an increase in FDIC deposit insurance premiums, and an increase in other operating expense, partially offset by a decrease in office occupancy and equipment expense, a decrease in
depreciation and amortization expense, and a decrease in professional fees. The increase for the six month period ended March 31, 2009 is primarily attributed to an increase in compensation and benefits expense, an increase in the losses on
foreclosed real estate, an increase in professional fees, an increase in service bureau expense, an increase in FDIC deposit insurance premiums, and an increase in other operating expense, partially offset by a decrease in office occupancy and
equipment expense, a decrease in depreciation and amortization expense, and a decrease in foreclosed real estate expense.

Compensation and benefits
expense was $2.1 million for the three month period ended March 31, 2009, as compared to $2.0 million for the same period in 2008. Compensation and benefits expense was $4.0 million for the six month period ended March 31, 2009, as
compared to $3.9 million for the same period in 2008. The increase for the three month period ended March 31, 2009 is primarily attributed to normal salary increases for employees and an increase in health and life insurance expense. The
increase for the six month period ended March 31, 2009 is primarily attributed to normal salary increases for employees, an increase in retirement expense, and an increase in health and life insurance expense.

Office occupancy and equipment expense was $276,000 and $512,000 for the three and six month periods ended March 31, 2009, respectively, as compared to $289,000 and
$522,000 for the same periods in 2008. The decrease for both periods is primarily attributed to a decrease in rent expense and furniture fixtures and equipment expense, partially offset by an increase in office repairs and maintenance expense.

Depreciation and amortization expense was $120,000 and $242,000 for the three and six month periods ended March 31, 2009, respectively, as compared
to $129,000 and $259,000 for the same periods in 2008. The decrease for both periods is primarily attributed to equipment becoming fully depreciated, partially offset by depreciation on additions in the current period.

Losses of $5,000 and $10,000 were recognized on the sales of foreclosed real estate for the three and six months ended March 31, 2009, respectively. A loss of
$5,000 was recorded on the sales of foreclosed real estate for the six months ended March 31, 2008. There were no sales of foreclosed real estate during the three months ended March 31, 2008. Foreclosed real estate expense was $1,000 and
$2,000 for the three and six month periods ended March 31, 2009, respectively, as compared to $3,000 and $23,000 for the same periods in 2008. The results reflect the costs associated with the holding and disposition of properties, including
writedowns during the periods. At March 31, 2009, foreclosed real estate consisted of two single-family residential properties.

Professional fees
were $105,000 and $257,000 for the three and six month periods ended March 31, 2009, respectively, as compared to $122,000 and $249,000 for the same periods in 2008. The decrease for the three months ended March 31, 2009 is primarily
attributed to a decrease in audit fees as cost savings were recognized from the engagement of a new audit firm. The increase for the six month period ended March 31, 2009 is primarily attributed to an increase in audit fees. The increase in
audit fees for the six month period is primarily related to consent fees the Company paid to its former audit firm, to consent on the Companys Annual Report for the fiscal year ended September 30, 2008.

Service bureau expense was $113,000 for the three month period ended March 31, 2009, as compared to $75,000 for the same period in 2008. Service bureau expense was
$219,000 and $143,000, for the six month periods ended March 31, 2009 and 2008, respectively. In February 2007, the Bank converted its data processing operations from an in-house environment to an outsourced service bureau environment, which
primarily contributed to the increase. The service bureau environment has reduced compensation expense and office occupancy and equipment expense.



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Federal deposit insurance premiums were $75,000 and $94,000 for the three and six months ended March 31, 2009,
respectively, as compared to $12,000 and $25,000 for the same periods in 2008. The Company anticipates increases in federal deposit insurance premiums due to recent increases in the assessment rate for deposit insurance from the previous 5 to 7
basis points to 12 to 14 basis points for the quarter ended March 31, 2009 and to 12 to 16 basis points thereafter. In addition, the Bank has elected to participate in the Transaction Account Guarantee Program under the FDICs Temporary
Liquidity Guarantee Program which provides unlimited insurance coverage for non-interest-bearing transaction accounts. Under this program, the Bank will be assessed at the rate of 10 basis points for transaction account balances in excess of the
$250,000 insurance limit.

Other operating expenses were $538,000 for the three month period ended March 31, 2009 compared to $508,000 for the same
period in 2008. Other operating expenses were $1.1 million for the six month period ended March 31, 2009 compared to $1.0 million for the same period in 2008. The increase for the three month period ended March 31, 2009 is due primarily to
an increase in ScoreCard Reward expenses. In October of 2008 the Bank started a ScoreCard Reward program where customers can earn points for using their check card for normal routine purchases. For every $2.00 a customer spends, one point is earned.
Points can be redeemed for electronics, air travel, hotel stays and other rewards. The Bank accrues expense based on its estimated redemption rate and also pays administrative fees for the program. The increase in operating expenses for the six
month period ended March 31, 2009 is due primarily to an increase in charitable contributions expense and an increase in ScoreCard Reward expenses

Income Taxes

Total income tax expense for the three month period ended March 31, 2009 was $269,000, as compared to $354,000 for the
same 2008 period. The effective tax rates for the three month periods ended March 31, 2009 and 2008 were approximately 192.1% and 23.3%, respectively. The tax provision for the three months ended March 31, 2009 was significantly impacted
by the OTTI charges during the period, thus the effective tax rate is not meaningful. The amount of tax benefit recognized on the OTTI charges was based on the tax characteristics of each security (capital or ordinary). Those securities that are
treated as capital for tax purposes have limited tax benefits recorded. The Company recognized the AMF Ultra Short Mortgage Fund impairment loss of $1.2 million as a capital loss and recorded a tax valuation allowance of $419,000 relating to this
investment. Total income tax expense for the six month period ended March 31, 2009 was $244,000, as compared to $607,000 for the same 2008 period. The tax provision for the current six month period was also significantly impacted by the
impairment charges during the period as well as the impairment charges recorded for the fiscal year ended September 30, 2008. On October 3, 2008, the Emergency Economic Stabilization Act was enacted which includes a provision permitting
banks to recognize losses relating to FNMA and FHLMC preferred stock as an ordinary loss, thereby allowing the Company to recognize a tax benefit on the losses. Consequently, the Company recognized this additional tax benefit in the quarter ending
December 31, 2008 for the OTTI charges related to its holdings of FHLMC preferred stock recorded in fiscal 2008. This additional tax benefit had a significant impact on the effective tax rate for the current fiscal period. The effective tax
rates for the six month periods ended March 31, 2009 and 2008 were approximately 13.5% and 23.0%, respectively. The effective tax rates are also affected by tax-exempt income. Tax-exempt income includes income earned on certain municipal
investments that qualify for state and/or federal income tax exemption; income earned by the Banks Delaware subsidiary, which is not subject to state income tax; and earnings on Bank-owned life insurance policies, which are exempt from federal
taxation. State and federal tax-exempt income for the three month period ended March 31, 2009 was $1.8 million and $395,000, respectively, compared to $1.9 million and $389,000, respectively, for the three month period ended March 31,
2008. State and federal tax-exempt income for the six month period ended March 31, 2009 was $3.6 million and $788,000, respectively, compared to $3.9 million and $773,000, respectively, for the six month period ended March 31, 2008.



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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 gains (losses) on securities available-for-sale, goodwill, and cash flow hedges, plus certain types of preferred stock, including the Series B Preferred Stock, and the Preferred Securities issued
by FB Statutory Trust III in 2007. The Preferred Securities may comprise up to 25% of the Companys Tier 1 capital. The Series B Preferred Stock constitutes Tier 1 Capital for both the risk-weighted and leverage capital requirements. 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 March 31, 2009, the Company had Tier 1 capital as a percentage of risk-weighted assets of 10.75% and total risk-based capital as a percentage of risk-weighted assets of 11.43%.

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 average total 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 4% or be subject to prompt corrective action by the Federal Reserve. At March 31, 2009, the Company had a leverage ratio of 8.03%.

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 March 31, 2009, the Bank complied with the minimum leverage ratio
having Tier 1 capital of 7.36% 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 March 31, 2009, the Banks total capital to risk-weighted assets ratio calculated under the FDIC capital requirement was 10.53%.

Liquidity

The Companys primary sources of funds have
historically consisted of deposits, repurchase agreements, 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 March 31,
2009, the total of approved loan commitments amounted to $6.9 million. In addition, the Company had $12.8 million of undisbursed loan funds at that date. The amount of savings certificates which mature during the next twelve months totals
approximately $123.5 million, a substantial portion of which management believes, on the basis of prior experience as well as its competitive pricing strategy, will remain in the Company.

Off Balance Sheet Commitments

The Bank is party to financial
instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Those instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet.

The Banks exposure to credit loss in the
event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments
and conditional obligations as it does for on-balance sheet instruments.



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A summary of the contractual amount of the Companys financial instrument commitments is as follows:



|                                                    |  |                |        |                   |   |       
|--------------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                    |  | March 31,2009  |        | September 30,2008
|                                                    |  |               
|                                                    |  | (in thousands)
|Commitments to grant loans                          |  | $              | 6,881  |                   | $ | 5,422 
|Unfunded commitments under lines of credit          |  |                | 69,875 |                   |   | 63,269
|Financial and performance standby letters of credit |  |                | 1,174  |                   |   | 1,404 

The Company does not issue any guarantees that would require liability recognition or disclosure, other than its
standby letters of credit. Standby letters of credit written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Generally, all letters of credit, when issued have expiration dates within
one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Bank requires collateral supporting these letters of credit as deemed necessary. Management believes
that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The current amount of liability as of March 31, 2009
for guarantees under standby letters of credit issued is not material.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Not Applicable



|Item 4T. | Controls and Procedures
|-------- | -----------------------

The Companys management
evaluated, with the participation of the Companys Chief Executive Officer and Chief Financial Officer, the effectiveness of the Companys disclosure controls and procedures, as of the end of the period covered by this report. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it
files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.

There were no changes in the Companys internal control over financial reporting that occurred during the Companys last fiscal quarter that
have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

Part II - Other Information



|Item 1. | Legal Proceedings
|------- | -----------------

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



|Item 1A. | Risk Factors
|-------- | ------------

Not Applicable



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

Not Applicable



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##### Table of Contents

|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

Not Applicable



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

On
February 10, 2009, the Company held its annual meeting of stockholders and the following was the only item presented:

Election of
Director Christopher S. Green, Director Richard G. Spencer, and Director Joanne Ross Wilder as Directors of the Company. Director Green received 2,053,427 votes in favor and 210,313 votes withheld; Director Spencer received 2,468,365 votes in favor
and 245,375 votes withheld; and Director Wilder received 2,449,453 votes in favor and 264,287 votes withheld. Director Green, Director Spencer, and Director Wilder were all elected for a three-year term that expires in February 2012. There were no
abstentions or broker non-votes.



|Item 5. | Other Information
|------- | -----------------

(a) Not applicable

(b) Not applicable



|Item 6. | Exhibits
|------- | --------

The following exhibits are filed as part of this
Report.



|        |  |                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1     |  | Articles of Incorporation (1)                                                                                                                                                                                                                                  
|        | 
|3.2     |  | Amended Bylaws (14)                                                                                                                                                                                                                                            
|        | 
|3.3     |  | Statement with Respect to Shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B (15)                                                                                                                                                             
|        | 
|4.1     |  | Common Stock Certificate (1)                                                                                                                                                                                                                                   
|        | 
|4.2     |  | Rights Agreement dated as of March 31, 2003 by and between Fidelity Bancorp, Inc. and Registrar and Transfer Company (3)                                                                                                                                       
|        | 
|4.3     |  | Amendment No. 1 to Rights Agreement (4)                                                                                                                                                                                                                        
|        | 
|4.4*    |  | Indenture, dated as of September 20, 2007, between Fidelity Bancorp, Inc. and Wilmington Trust Company                                                                                                                                                         
|        | 
|4.5*    |  | Amended and Restated Declaration of Trust, dated as of September 20, 2007, by and among Wilmington Trust Company as Institutional Trustee, Fidelity Bancorp, Inc., as Sponsor and Richard G.
Spencer, Lisa L. Griffith, and Michael A. Mooney as Administrators
|        | 
|4.6*    |  | Guarantee Agreement, as dated as of September 20, 2007, by and between Fidelity Bancorp, Inc. and Wilmington Trust Company                                                                                                                                     
|        | 
|4.7     |  | Form of Certificate for the Series B Preferred Stock (15)                                                                                                                                                                                                      
|        | 
|4.8     |  | Warrant for Purchase of Shares of Common Stock (15)                                                                                                                                                                                                            
|        | 
|10.1**  |  | Employee Stock Ownership Plan, as amended (1)                                                                                                                                                                                                                  
|        | 
|10.4**  |  | 1997 Employee Stock Compensation Program (6)                                                                                                                                                                                                                   
|        | 
|10.6**  |  | 1998 Group Term Replacement Plan (7)                                                                                                                                                                                                                           
|        | 
|10.8**  |  | 1998 Salary Continuation Plan Agreement by and between R.G. Spencer, the Company and the Bank (7)                                                                                                                                                              
|        | 
|10.9**  |  | 1998 Salary Continuation Plan Agreement by and between M.A. Mooney, the Company and the Bank (7)                                                                                                                                                               
|        | 
|10.10** |  | Salary Continuation Plan Agreement with Lisa L. Griffith (2)                                                                                                                                                                                                   
|        | 
|10.11** |  | 1998 Stock Compensation Plan (8)                                                                                                                                                                                                                               
|        | 
|10.12** |  | 2000 Stock Compensation Plan (9)                                                                                                                                                                                                                               



36



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##### Table of Contents

|        |  |                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.13** |  | 2001 Stock Compensation Plan (10)                                                                                                                                                                                 
|        | 
|10.14** |  | 2002 Stock Compensation Plan (11)                                                                                                                                                                                 
|        | 
|10.15** |  | 2005 Stock-Based Incentive Plan (12)                                                                                                                                                                              
|        | 
|10.16** |  | Form of Directors Indemnification Agreement (13)                                                                                                                                                                  
|        | 
|10.17** |  | Employment Agreement, dated January 1, 2002, between Fidelity Bancorp, Inc. and Fidelity Bank, PaSB and Richard G. Spencer (14)                                                                                   
|        | 
|10.18** |  | Employment Agreement, dated January 1, 2000, between Fidelity Bancorp, Inc. and Fidelity Bank, PaSB and Michael A. Mooney (14)                                                                                    
|        | 
|10.19** |  | Severance Agreement, dated February 10, 2004, between Fidelity Bank, PaSB and Lisa L. Griffith (14)                                                                                                               
|        | 
|10.20** |  | Severance Agreement, dated December 19, 1997, between Fidelity Bank, PaSB and Anthony F. Rocco (14)                                                                                                               
|        | 
|10.21** |  | Severance Agreement, dated December 19, 1997, between Fidelity Bank, PaSB and Sandra L. Lee (14)                                                                                                                  
|        | 
|10.22   |  | Letter Agreement, dated December 12, 2008, between Fidelity Bancorp, Inc. and United States Department of the Treasury, with respect to the issuance and sale of the Series B Preferred Stock
and the Warrant (15)
|        | 
|10.23** |  | Form of Waiver, executed by each of Messrs. Spencer, Rocco, and Mooney and Ms. Lee and Ms. Griffith (15)                                                                                                          
|        | 
|10.24** |  | Form of Letter Agreement, executed by each of Messrs. Spencer, Rocco, and Mooney and Ms. Lee and Ms. Griffith (15)                                                                                                
|        | 
|31.1    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                                 
|        | 
|31.2    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                                 
|        | 
|32      |  | Section 1350 Certification                                                                                                                                                                                        



|* | Not filed in accordance with the provisions of Item 601(b)(4)(iii) of Regulation S-K. The Company agrees to provide a copy of these documents to the Commission upon request.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Management contract or compensatory plan or arrangement.
|-- | --------------------------------------------------------

|(1) | Incorporated by reference from the exhibits attached to the Prospectus and Proxy Statement of the Company included in its Registration Statement on Form S-4 (SEC File
No. 33-55384) filed with the SEC on December 3, 1992 (the Registration Statement).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference from the identically numbered exhibit to the Companys Annual Report on Form 10-K for the fiscal year ended September 30, 2003.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference from Exhibit 1 to the Companys Registration Statement on Form 8-A filed March 31, 2003.
|--- | ------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the Companys Registration Statement on Form 8-A filed March 17, 2005.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference from an exhibit to the Registration Statement on Form S-8 (SEC File No. 333-26383) filed with the SEC on May 2, 1997.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference from an exhibit to the Registration Statement on Form S-8 for the year ended September 30, 1998 (SEC File No. 333-47841) filed with the SEC on
March 12, 1998.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to an identically numbered exhibit to the Companys Annual Report on Form 10-K for the fiscal year ended September 30, 1998 filed with the SEC on
December 29, 1998.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 (SEC File No. 333-71145) filed with the SEC on January 25, 1999.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 (SEC File No. 333-53934) filed with the SEC on January 19, 2001.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Incorporated by reference from Exhibit 4.1 to the Registration Statement on Form S-8 (SEC File No. 333-81572) filed with the SEC on January 29, 2002.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Incorporated by reference from Exhibit 4.1 to Registration Statement on Form S-8 (SEC File No. 333-103448) filed with the SEC on February 26, 2003.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference from Exhibit 4.1 to Registration Statement on Form S-8 (SEC File No. 333-123168) filed with the SEC on March 7, 2005.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to an identically numbered exhibit in Form 10-Q filed with the SEC on February 13, 2007.
|---- | ------------------------------------------------------------------------------------------------------------------

|(14) | Incorporated by reference to an identically numbered exhibit to the Registrants Annual Report on Form 10-K for the fiscal year ended September 30, 2007.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(15) | Incorporated by reference to an exhibit to the Registrants Current Report on Form 8-K filed December 12, 2008.
|---- | ---------------------------------------------------------------------------------------------------------------



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##### Table of Contents

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 BANCORP, INC.
|                   |  |                       
|Date: May 15, 2009 |  | By:                    |  | /s/ Richard G. Spencer                                         
|                   |  |                        |  | Richard G. Spencer President and Chief Executive
Officer       
|                   |  |                       
|Date: May 15, 2009 |  | By:                    |  | /s/ Lisa L. Griffith                                           
|                   |  |                        |  | Lisa L. Griffith Sr. Vice President and Chief
Financial Officer



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