U.S. Securities and Exchange Commission

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

         For the quarterly period ended June 30, 1999

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

   For the transition period from ____________________ to ____________________

                         Commission file number 0-22288

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

         Pennsylvania                                 25-1705405
         ------------                                 ----------
(State  or  other   jurisdiction  of        (IRS Employer Identification No.)
incorporation or organization

               1009 Perry Highway, Pittsburgh, Pennsylvania, 15237
               ---------------------------------------------------
                    (Address of principal executive offices)

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

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

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

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 1,950,110 shares, par value
$0.01, at July 31, 1999





<PAGE>



                     FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                      Index

<TABLE>
<CAPTION>

<S>                                                                                                         <C>
Part I - Financial Information                                                                                Page
------------------------------                                                                                ----

Item 1.  Financial Statements

          Consolidated Statements of Financial Condition as of September 30, 1998
               and June 30, 1999 (Unaudited)                                                                     1

          Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended
               June 30, 1998 and 1999                                                                            2

          Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended
               June 30, 1998 and 1999                                                                          3-4

          Consolidated Statement of Changes in Stockholders' Equity (Unaudited) for the Nine
               Months Ended June 30, 1998 and 1999                                                               5

          Notes to Consolidated Financial Statements (Unaudited)                                                 6

Item 2.  Management's Discussion and Analysis of Financial Condition and
             Results of Operations                                                                               9

Item 3. Quantitative and Qualitative Disclosures About Market Risk                                              18


Part II - Other Information

Item 1.  Legal Proceedings                                                                                      19

Item 2.  Changes in Securities                                                                                  19

Item 3.  Defaults Upon Senior Securities                                                                        19

Item 4.  Submission of Matters to a Vote of Security Holders                                                    19

Item 5.  Other Information                                                                                      19

Item 6.  Exhibits and Reports on Form 8-K                                                                       19

Signatures                                                                                                      20
</TABLE>





<PAGE>




Part I - Financial Information


                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition
                 ----------------------------------------------
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                  June 30,          September 30,
           Assets                                                   1999                 1998
           ------                                                   ----                 ----
                                                                 (Unaudited)
<S>                                                      <C>                  <C>
Cash and amounts due from
   depository institutions                                            $5,149             $2,539
Interest-earning demand deposits with
   other institutions                                                    480                613
Investment securities held-to-maturity                                 3,626              6,625
Investment securities available-for-sale                              76,570             57,590
Loans receivable, net  (Notes 5 and 6)                               257,255            218,892
Mortgage-backed securities held-to-maturity                           14,473             19,913
Mortgage-backed securities available-for-sale                         93,642             82,957
Real estate owned, net                                                   108                 21
Federal Home Loan Bank stock - at cost                                 7,830              5,050
Accrued interest receivable, net                                       2,783              2,573
Office premises and equipment, net                                     4,672              3,446
Deferred tax asset                                                     2,469                700
Prepaid expenses and sundry assets                                     5,188              5,125
                                                            ----------------     --------------
       Total Assets                                        $         474,245    $       406,044
                                                            ================     ==============
         Liabilities and Net worth
Liabilities:
   Savings deposits                                                 $270,055           $261,735
   Federal Home Loan Bank advances                                   157,300            100,200
   Reverse repurchase agreements                                       3,792              1,870
   Advance deposits by borrowers for
      taxes and insurance                                              3,228              1,126
   Accrued interest on savings and other deposits                         53                 92
   Accrued income taxes payable                                          163                171
   Other accrued expenses and sundry liabilities                       2,491              1,579
   Guaranteed preferred beneficial interest in
       Company's debentures                                           10,250             10,250
                                                            ----------------       ------------
       Total Liabilities                                             447,332            377,023
                                                            ----------------       ------------
Stockholders' equity (Notes 3 and 4):
   Common stock, $0.01 par value per share,
      10,000,000 shares authorized; 1,988,377
      and 1,978,543 shares issued and outstanding,
      respectively                                                        20                 20
   Treasury stock, at cost (28,500 shares)                              (511)                 -
   Additional paid-in capital                                         14,281             14,168
   Retained earnings - substantially restricted                       15,920             14,106
   Accumulated other comprehensive income,
      net of tax                                                      (2,797)               727
                                                            ----------------      -------------
       Total Stockholders' Equity                                     26,913             29,021
                                                            ----------------      -------------
       Total Liabilities and Stockholders' Equity          $         474,245     $      406,044
                                                            ================      =============
</TABLE>


See accompanying notes to financial statements.


                                       -1-



<PAGE>




                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                  Consolidated Statements of Income (Unaudited)
                  ---------------------------------------------
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                Three Months Ended      Nine Months Ended
                                                      June 30,               June 30,
                                                      --------               --------
                                                  1999        1998        1999        1998
                                                  ----        ----        ----        ----
<S>                                          <C>         <C>         <C>         <C>
Interest income:
   Loans                                      $  4,862    $  4,231    $ 14,152    $ 12,175
   Mortgage-backed securities                    1,727       1,877       5,077       5,914
   Investment securities:
       Taxable                                     762         627       2,076       1,937
       Tax-exempt                                  486         342       1,358         870
   Deposits with other institutions                  7          12          27          44
                                              --------     -------    --------    --------
      Total interest income                      7,844       7,089      22,690      20,940
                                              --------     -------    --------    --------
Interest expense:
   Savings deposits                              2,527       2,766       7,975       8,161
   Guaranteed preferred beneficial interest
      in Company's debentures                      263         256         775         768
   Borrowed funds                                2,025       1,351       5,319       4,056
                                              --------     -------    --------    --------
      Total interest expense                     4,815       4,373      14,069      12,985
                                              --------     -------    --------    --------
Net interest income before provision
   for loan losses                               3,029       2,716       8,621       7,955
Provision for loan losses                          155          90         360         315
                                              --------    --------    --------    --------

Net interest income after provision
   for loan losses                               2,874       2,626       8,261       7,640
                                              --------    --------    --------    --------
Other income:
   Service fee income                               34          29         106          93
   Gain (loss) on sale of investment
      And mortgage-backed securities, net           --          60          74          68
   Gain (loss) on sale of loans                      1          (3)          6           6
   Other operating income                          337         230         928         674
                                              --------    --------    --------    --------
      Total other income                           372         316       1,114         841
                                              --------    --------    --------    --------
Operating expenses:
   Compensation and employee benefits            1,165       1,097       3,540       3,143
   Occupancy and equipment expense                 216         167         635         467
   Depreciation and amortization                   139         132         434         382
   Federal insurance premiums                       40          39         118         115
   (Gain) loss on real estate owned, net            (1)          2         (40)         11
   Other operating expenses                        471         421       1,399       1,252
                                              --------    --------    --------    --------
      Total operating expenses                   2,030       1,858       6,086       5,370
                                              --------    --------    --------    --------
Income before income tax provision               1,216       1,084       3,289       3,111
Income tax provision                               334         349         921       1,043
                                              --------    --------    --------    --------
Net income                                    $    882    $    735    $  2,368    $  2,068
                                              ========    ========    ========    ========
Basic earnings per common share (Note 3)      $   0.45    $   0.37    $   1.20    $   1.06
                                              ========    ========    ========    ========
Diluted earnings per common share (Note 3)    $   0.44    $   0.36    $   1.17    $   1.02
                                              ========    ========    ========    ========
Dividends per common share (Note 3)           $   0.10    $   0.09    $   0.28    $  0.234
                                              ========    ========    ========    ========
</TABLE>

See accompanying notes to financial statements.

                                       -2-



<PAGE>



                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Unaudited)
                -------------------------------------------------
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                          Nine Months Ended June 30,
                                                                          --------------------------
                                                                              1999        1998
                                                                              ----        ----
<S>                                                                       <C>         <C>
Operating Activities:
     Net income                                                             $  2,368    $  2,068
     Adjustments to reconcile net income to net
     cash provided by operating activities:
         Provision for loan losses                                               360         315
         (Gain) loss on real estate owned                                        (40)         11
         Depreciation of premises and equipment                                  434         382
         Deferred loan fee amortization                                         (211)       (137)
         Amortization of investment and mortgage-backed securities
          Discounts/premiums, net                                                276         315
         Net (gain) loss on sale of investment securities                       (127)       (186)
         Net (gain) loss on sale of mortgage-backed securities                    53         118
         Net (gain) loss  on sale of loans                                        (6)         (6)
         Origination of loans held-for-sale                                     (477)        (80)
         Proceeds from sale of loans held-for-sale                               479          81
         (Increase) decrease in interest receivable                             (210)       (157)
         Increase (decrease) in accrued income taxes                              (8)         11
         Increase (decrease) in interest payable                                 (39)        (83)
         Other changes, net                                                      933       4,003
                                                                            --------    --------
        Net cash provided (used) by operating activities                       3,785       6,655
                                                                            --------    --------
Investing Activities:

     Proceeds from sales of investment securities available-for-sale           1,558      16,322
     Proceeds from maturities and principal repayments of
        investment securities available-for-sale                              11,508       2,005
     Purchases of investment securities available-for-sale                   (34,787)    (20,261)
     Proceeds from sales of mortgage-backed securities available-for-sale      3,171      40,145
     Proceeds from maturities and principal repayments of  mortgage-
        backed securities available-for-sale                                  21,971      14,467
     Purchases of mortgage-backed securities available-for-sale              (38,532)    (43,544)
     Proceeds from maturities and principal repayments of investment
        securities held-to-maturity                                            5,000       5,202
     Purchases of investment securities held-to-maturity                      (2,004)     (7,997)
     Proceeds from principal repayments of mortgage-backed
       securities held-to-maturity                                             5,379      10,054
     Net (increase) decrease in loans                                        (38,959)    (31,813)
     Proceeds from sale of other loans                                           335         460
     Additions to office premises and equipment                               (1,660)       (235)
     Net purchases of FHLB Stock                                              (2,780)       (165)
                                                                            --------    --------
  Net cash provided (used) by investing activities                           (69,800)    (15,360)
                                                                            --------    --------
</TABLE>



                                       -3-



<PAGE>




                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
           Consolidated Statements of Cash Flows (Unaudited) (Cont'd.)
           -----------------------------------------------------------
                                 (in thousands)

                                                      Nine Months Ended June 30,
                                                      --------------------------
                                                           1999        1998
                                                           ----        ----


Financing Activities:
---------------------

Net increase (decrease) in savings deposits               8,320      16,542
Increase (decrease) in reverse repurchase agreements      1,922       1,019
Net increase (decrease) in FHLB advances                 57,100      (6,700)
Increase in advance payments by borrowers for
  taxes and insurance                                     2,102       1,773
Cash dividends paid                                        (554)       (459)
Stock options exercised                                      36         150
Proceeds from sale of stock                                  77          84
Purchase of treasury stock                                 (511)         --
                                                       --------    --------
Net cash provided (used) by financing activities         68,492      12,409
                                                       --------    --------
Increase (decrease) in cash and cash equivalents          2,477       3,704
Cash and cash equivalents at beginning of period          3,152       3,975
                                                       --------    --------
Cash and cash equivalents at end of period             $  5,629    $  7,679
                                                       ========    ========

Supplemental Disclosure of Cash Flow Information
------------------------------------------------
Cash paid during the period for:
  Interest on deposits and other borrowings            $ 13,978    $ 12,970
  Income taxes                                              915       1,025

Transfer of loans to real estate owned                      135          --




See accompanying notes to financial statements.















                                       -4-



<PAGE>




                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
      Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
      ---------------------------------------------------------------------
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                      Accumulated
                                                                                     Other Compre-
                                        Common       Paid-in   Treasury   Retained   hensive Income
                                         Stock       Capital     Stock    Earnings    Net of Tax     Total
===========================================================================================================
<S>                                  <C>          <C>         <C>        <C>         <C>         <C>

Balance at September 30, 1997          $       16  $   13,810  $       0  $ 11,822     $   233    $  25,881

Net income                                                                   2,068                    2,068

  Cash dividends paid (Note 3)                                                (459)                    (459)

  5/4 Stock Split                               4         (4)                                            -0-

  Cash paid on stock split in
    lieu of fractional shares                                                   (4)                      (4)

  Net change in unrealized gain
    (loss) on securities available-
    for-sale, net of taxes                                                                 362          362

  Sale of stock through Dividend
    Reinvestment Plan                                      84                                            84

  Stock options exercised                                 150                                           150
                                       ----------   ---------   --------  --------   ---------    ---------

Balance at June 30, 1998              $        20  $   14,040  $       0 $  13,427   $     595    $  28,082
                                      ===========    ========  =========  ========   =========    =========



Balance at September 30, 1998         $        20  $   14,168  $       0 $  14,106   $     727    $  29,021

Net income                                                                   2,368                    2,368

  Cash dividends paid                                                         (554)                    (554)

  Net change in unrealized gain
    (loss) on securities available-
    for-sale, net of taxes                                                              (3,524)      (3,524)

  Repurchase - 28,500 shares                                        (511)                              (511)

  Sale of stock through Dividend
    Reinvestment Plan                                      77                                            77

  Stock options exercised                                  36                                            36
                                       ----------   ---------   --------  --------    --------    ---------

Balance at June 30, 1999              $        20  $   14,281  $    (511) $ 15,920    $ (2,797)   $  26,913
                                       ==========   =========   ========  ========    ========    =========
</TABLE>


                                       -5-



<PAGE>



                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements - (Unaudited)
                      September 30, 1998 and June 30, 1999

(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 subsidiaries, Fidelity Bank, PaSB (the "Bank") and FB Capital Trust
(the "Trust"). All significant inter-company balances and transactions have been
eliminated.

(2) Basis of Presentation
    ---------------------
The accompanying  consolidated  financial statements were prepared in accordance
with  instructions to Form 10- 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.  However, all normal recurring adjustments, which, in the opinion of
management,  are necessary for a fair presentation of the financial  statements,
have been included.  These  financial  statements  should be read in conjunction
with  the  audited  financial  statements  and the  accompanying  notes  thereto
included in the Company's Annual Report for the period ended September 30, 1998.
The  results  for the three and nine month  periods  ended June 30, 1999 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending September 30, 1999 or any other period.

(3) Earnings Per Share
    ------------------
In February 1997, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings per Share". SFAS No. 128 provides revised reporting standards
for earnings per share ("EPS") and is effective for financial  statement periods
ending  after  December  15,  1997.  SFAS No. 128  eliminates  primary and fully
diluted EPS disclosures and adds new disclosures of basic and diluted EPS. Basic
EPS  excludes  dilution and is computed by dividing  income  available to common
stockholders 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 Company adopted SFAS No. 128 as of December
31, 1997.  The following  table sets forth the  computation of basic and diluted
earnings per share (amounts in thousands, except per share data):

                                       Three Months Ended  Nine Months Ended
                                            June 30,            June 30,
                                          1999     1998    1999      1998
                                     -------------------  ------------------
Numerator:
Net income                               $  882   $  735   $2,368   $2,068
                                         ------   ------   ------   ------
   Numerator for basic and
    diluted earnings per share           $  882   $  735   $2,368   $2,068
                                         ------   ------   ------   ------
Denominator:
Denominator for basic earnings
   per share - weighted average shares    1,969    1,970    1,977    1,959
Effect of dilutive securities:
   Employee stock options                    46       77       46       71
                                         ------   ------   ------   ------
Denominator for diluted earnings
   per share - weighted average
   shares and assumed conversions         2,015    2,047    2,023    2,030
                                         ======   ======   ======   ======
Basic earnings per share                 $  .45   $  .37   $ 1.20   $ 1.06
                                         ======   ======   ======   ======
Diluted earnings per share               $  .44   $  .36   $ 1.17   $ 1.02
                                         ======   ======   ======   ======


                                       -6-


<PAGE>







Per share  amounts  have been  restated  to give  retroactive  effect to the 25%
common stock split  declared by the  Company's  Board of  Directors  and paid on
March 31, 1998.

(4) Securities
    ----------
The Company accounts for investments in debt and equity securities in accordance
with SFAS No. 115, which requires that investments be classified as either:  (1)
Securities   Held-to-  Maturity  -  reported  at  amortized  cost,  (2)  Trading
Securities  - reported at fair value,  or (3)  Securities  Available-for-Sale  -
reported   at  fair   value.   Unrealized   gains  and  losses  for   securities
available-for-sale  are reported as other comprehensive  income in stockholders'
equity. Unrealized losses of $2.8 million, net of tax, on investments classified
as available-for-sale were recorded at June 30, 1999.

(5) Loans Receivable
    ----------------
         Loans  receivable  are  comprised of the following  (dollar  amounts in
thousands):
                                                       June 30,   September 30,
                                                         1999         1998
                                                         ----         ----
First mortgage loans:
         Conventional:
                  1-4 family dwellings                 $ 125,126    $ 115,559
                  Multi-family dwellings                   4,180        4,262
         Commercial                                       28,492       21,881
         Construction                                     37,644       21,212
                                                       ---------    ---------
                                                         195,442      162,914
                                                       ---------    ---------
Less:
         Loans in process                                (18,305)     (12,916)
         Unearned discounts and fees                      (1,343)      (1,142)
                                                       ---------    ---------
                                                         175,794      148,856
                                                       ---------    ---------
Installment loans:
         Home equity                                      50,402       42,290
         Consumer loans                                    1,843        2,359
         Other                                             5,222        4,473
                                                       ---------    ---------
                                                          57,467       49,122
                                                       ---------    ---------
Commercial business loans and leases:
         Commercial business loans                        21,245       19,509
         Commercial leases                                 5,057        3,648
                                                       ---------    ---------
                                                          26,302       23,157
                                                       ---------    ---------

Less: Allowance for loan losses                           (2,308)      (2,243)
                                                       ---------    ---------

         Loans receivable, net                         $ 257,255    $ 218,892
                                                       =========    =========


(6) Changes in the  allowance for loan losses for the nine months ended June 30,
1999 and 1998 are as follows (dollar amounts in thousands)

                                                  1999       1998
                                               -------    -------
Balance at beginning of the fiscal year        $ 2,243    $ 1,931
Provision for loan losses                          360        315
Charge-offs                                       (312)       (53)
Recoveries                                          17          6
                                               -------    -------
Balance at June 30,                            $ 2,308    $ 2,199
                                               =======    =======

                                       -7-


<PAGE>



The  provision  for loan  losses  charged to expense is based upon past loan and
loss  experience  and an  evaluation  of  probable  losses in the  current  loan
portfolio,  including the  evaluation of impaired  loans under SFAS 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.  SFAS Nos. 114
and 118 do not apply to large groups of smaller balance,  homogeneous loans that
are collectively  evaluated for impairment,  except for those loans restructured
under a troubled debt restructuring. Loans collectively evaluated for impairment
include  consumer loans and residential  real estate loans, and are not included
in the following data.

At June 30, 1999,  the recorded  investment  in loans that are  considered to be
impaired under SFAS No. 114 was $323,000. Included in this amount is $323,000 of
impaired loans for which the related  allowance for loan losses is $60,000,  and
no impaired  loans that as a result of  write-downs do not have an allowance for
loan losses.  The average recorded  investment in impaired loans during the nine
months  ended June 30, 1999 was  $331,000.  For the nine  months  ended June 30,
1999, the Company  recognized  interest income on those impaired loans of $6,000
using the cash basis of income recognition.

(7) Comprehensive Income
    --------------------
In June 1997, the FASB issued SFAS No. 130, "Reporting  Comprehensive  Income ."
SFAS No. 130  establishes  standards for reporting and display of  comprehensive
income and its components (revenue,  expenses,  gains, and losses) in a full set
of general purpose  financial  statements.  SFAS No. 130 requires that all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. SFAS No. 130 requires that an
enterprise (a) classify items of other comprehensive income by their nature in a
financial   statement  and  (b)  display  the   accumulated   balance  of  other
comprehensive  income separately from retained  earnings and additional  paid-in
capital in the equity  section of a statement  of  financial  position.  For the
three months ended June 30, 1999 and 1998,  the  company's  total  comprehensive
income (loss) was ($1.8 million) and $631,000, respectively. Total comprehensive
income  (loss) is  comprised  of net income of $882,000  and  $735,000 and other
comprehensive loss of ($2.67 million) and ($104,000).  For the nine months ended
June 30, 1999 and 1998,  the  Company's  total  comprehensive  income (loss) was
($1.2 million) and $2.4 million, respectively. Total comprehensive income (loss)
is  comprised  of net  income of $2.368  million  and $2.068  million  and other
comprehensive  income  (loss) of  ($3.523  million)  and  $362,000,  net of tax,
respectively. Other comprehensive income consists of unrealized gains and losses
on investment securities and mortgage-backed securities available-for-sale.

(8) On October 1, 1998,  the Bank opened its ninth full service branch office at
2034 Penn  Avenue in  Pittsburgh's  Strip  District.  The  building in which the
branch is located  was  leased  from an  independent  third  party  until it was
purchased by the Bank in June 1999.









                                       -8-


<PAGE>



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

Comparison of Financial Condition at September 30, 1998 and June 30, 1999
-------------------------------------------------------------------------

Total assets of the Company  increased  $68.2 million or 16.8% to $474.2 million
at June 30, 1999 from $406.0 million at September 30, 1998.  Significant changes
in individual  categories  were increases in loans  receivable of $38.4 million,
investment  securities  available-for-sale of $19.0 million, and mortgage-backed
securities  available-for-sale  of $10.7  million,  and  decreases in investment
securities  held-to-maturity  of $3.0  million  and  mortgage-backed  securities
held-to-maturity of $5.4 million.

Total  liabilities  of the Bank  increased  by $70.3  million or 18.6% to $447.3
million at June 30, 1999 from $377.0 million at September 30, 1998. The increase
primarily  reflects a $57.1 million  increase in Federal Home Loan Bank advances
and a $8.3  million  increase in savings  deposits.  Advances  were used to fund
asset growth that was not supported by deposit increases.

Stockholders' equity decreased $2.1 million or 7.3% to $26.9 million at June 30,
1999,  compared to September 30, 1998.  This result  reflects net income for the
nine month period ended June 30, 1999 of $2.37 million,  stock options exercised
of $36,000 and stock  issued under the  Dividend  Reinvestment  Plan of $77,000.
Offsetting these increases were common stock cash dividends paid of $554,000, an
increase  in   unrealized   holding   losses,   net  of  gains,   on  securities
available-for-sale  of $3.5 million,  and the purchase of treasury stock at cost
for $511,000.

Non-Performing Assets
---------------------
The following table sets forth information  regarding non-accrual loans and real
estate  owned  by the  Bank at the  dates  indicated.  The Bank did not have any
accruing  loans  which  were 90 days or more  overdue  or any loans  which  were
classified as troubled debt restructuring during the periods presented.  (Dollar
amounts in thousands):
                                                   June 30,      September 30,
                                                     1999           1998
                                                    ------         ------
Non-accrual residential real
  estate loans (one-to-four-family)                 $  326         $  224

Non-accrual construction, multi-family
  residential and commercial real estate loans       1,443            199

Non-accrual installment and
  commercial business loans                            743            129
                                                    ------         ------

Total non-performing loans                          $2,512         $  552
                                                    ======         ======

Total non-performing loans as
  a percent of net loans receivable                    .98%           .25%
                                                    ======         ======

Total real estate owned                             $  108         $   21
                                                    ======         ======

Total non-performing loans and real estate
  owned as a percent of total assets                   .55%           .14
                                                    ======         ======
                                       -9-


<PAGE>








Included  in  non-performing  loans  at June  30,  1999  are  six  single-family
residential  real estate loans totaling  $326,000,  six  commercial  real estate
loans  totaling  $1.4  million,  10  installment  loans  totaling  $74,000,  six
commercial business loans totaling $616,000 and three commercial business leases
totaling $53,000.

At June 30, 1999,  the Bank had an allowance  for loan losses of $2.3 million or
 .90% of net loans  receivable,  as compared to an  allowance  of $2.2 million or
1.02% of net loans  receivable  at September  30, 1998.  The  allowance for loan
losses equals 98.6% of non-performing loans at June 30, 1999.

Management has evaluated these  non-performing  loans and the overall  allowance
for loan losses and is satisfied  that the allowance for losses on loans at June
30, 1999 is appropriate. See also "Provision for Loan Losses."

Real estate owned at June 30, 1999,  consists of one  single-family  residential
property located in Pittsburgh,  Pennsylvania totaling $108,000. The property is
currently  for sale and  management  believes  that  the  carrying  value of the
property  at June 30,  1999  approximates  the fair  value  less  costs to sell.
However,  while  management  uses the best  information  available  to make such
determinations, future adjustments may become necessary.

                       Comparison of Results of Operations
                       -----------------------------------
           for the Three and Nine Months Ended June 30, 1999 and 1998
           ----------------------------------------------------------


Net Income
----------

Net income for the three  months  ended June 30, 1999 was  $882,000  compared to
$735,000  for the same period in 1998,  an  increase  of $147,000 or 20.0%.  The
increase  reflects an increase in net interest  income of $313,000 or 11.5%,  an
increase in other income of $56,000 or 17.7%,  an increase in the  provision for
loan  losses of $65,000 or 72.2%,  an increase  in other  operating  expenses of
$172,000 or 9.3% and a decrease in the  provision for income taxes of $15,000 or
4.3%.

Net income for the nine months ended June 30, 1999 was $2.368  million  compared
to $2.068 million for the same period in 1998, an increase of $300,000 or 14.5%.
The increase reflects an increase in net interest income of $666,000 or 8.4%, an
increase in other income of $273,000 or 32.5%,  an increase in the provision for
loan  losses of $45,000 or 14.3%,  an increase  in other  operating  expenses of
$716,000 or 13.3% and a decrease in the  provision  for income taxes of $122,000
or 11.7%.

Interest Rate Spread
--------------------

The Bank's interest rate spread,  the difference  between yields calculated on a
tax-equivalent basis on interest-earning assets and the cost of funds, decreased
to 2.75% in the three  months  ended June 30, 1999 from 2.77% in the same period
in 1998.  The  following  table  shows the average  yields  earned on the Bank's
interest-earning  assets  and the  average  rates  paid on its  interest-bearing
liabilities for the periods indicated,  the resulting interest rate spreads, and
the net yields on interest-earning assets.


                                      -10-


<PAGE>







                                                    Three Months Ended June 30,
                                                          1999       1998
                                                          ----       ----
Average yield on:
   Mortgage loans                                         7.49%      7.96%
   Mortgage-backed securities                             6.23       6.39
   Installment loans                                      8.06       8.63
   Commercial business loans                              8.87       9.71
   Interest-earning deposits with other
     institutions, investment securities,
     and FHLB stock (1)                                   6.76       6.97
                                                       -------    -------
   Total interest-earning assets                          7.19       7.49
                                                       -------    -------
Average rates paid on:
   Savings deposits                                       3.79       4.23
   Borrowed funds                                         5.50       5.91
                                                       -------    -------
   Total interest-bearing liabilities                     4.44       4.72
                                                       -------    -------

Average interest rate spread                              2.75%      2.77%
                                                       =======    =======

Net yield on interest-earning assets                      2.89%      2.96%
                                                       =======    =======
----------------------
(1) Interest income on tax-free investments has been adjusted for federal income
    tax purposes using a rate of 34%.

The Bank's  tax-equivalent  interest rate spread  decreased to 2.70% in the nine
months  ended June 30,  1999 from 2.72% in the same period in fiscal  1998.  The
following  table shows the average yields earned on the Bank's  interest-earning
assets and the average rates paid on its  interest-bearing  liabilities  for the
periods indicated,  the resulting  interest rate spreads,  and the net yields on
interest-earning assets.

                                         Nine Months Ended June 30,
                                               1999    1998
                                               ----    ----
Average yield on:
   Mortgage loans                              7.68%   7.99%
   Mortgage-backed securities                  6.15    6.46
   Installment loans                           8.14    8.43
   Commercial business loans                   9.05    9.97
   Interest-earning deposits with other
     institutions, investment securities,
     and FHLB stock (1)                        6.72    6.96
                                               ----    ----
   Total interest-earning assets               7.25    7.48
                                               ----    ----
Average rates paid on:
   Savings deposits                            3.98    4.25
   Borrowed funds                              5.59    5.97
                                               ----    ----
   Total interest-bearing liabilities          4.55    4.76
                                               ----    ----

Average interest rate spread                   2.70%   2.72%
                                               ====    ====

Net yield on interest-earning assets           2.86%   2.92%
                                               ====    ====
--------------------------
(1) Interest income on tax-free investments has been adjusted for federal income
    tax purposes using a rate of 34%.

                                      -11-


<PAGE>







Interest Income
---------------

Interest  on loans  increased  $631,000  or 14.9% to $4.9  million for the three
months  ended June 30, 1999,  compared to the same period in 1998.  The increase
reflects an  increase  in the average  loan  balance  outstanding  during  1999,
partially  offset  by a  decrease  in the yield  earned  on the loan  portfolio.
Interest on loans  increased $2.0 million or 16.2% to $14.2 million for the nine
months  ended June 30,  1999,  compared to the same period in fiscal  1998.  The
increase is attributable to an increase in the average loan balance  outstanding
during the 1999  period,  partially  offset by a decrease in the yield earned on
these  assets in the fiscal 1999 period as compared to the same period in fiscal
1998.  The increase in the average  balance of the loan  portfolio in the fiscal
1999  periods  reflects  management's  continued  strategy  of  emphasizing  and
increasing  loans.  The lower yield earned on the  portfolio  reflects the lower
long term interest rate environment that has existed for much of fiscal 1999, as
new loans originated are at lower rates and more existing  borrowers  refinanced
into lower rate loans.

Interest  on  mortgage-backed  securities  decreased  $150,000  or  8.0% to $1.7
million  and  $837,000  or 14.2% to $5.1  million  for the three and nine months
ended June 30, 1999, respectively,  as compared to the same periods in 1998. The
decrease for both the three and nine month periods ended June 30, 1999, reflects
both a decrease in the average balance of  mortgage-backed  securities  owned in
the fiscal  1999  periods,  as compared  to fiscal  1998,  and a decrease in the
average yield earned on the portfolio.

Interest on  interest-earning  deposits with other  institutions  and investment
securities  increased  $274,000  or 27.9% to $1.3  million  for the three  month
period ended June 30, 1999, as compared to the same period in 1998. The increase
reflects an increase in the average balance in the portfolio,  partially  offset
by a  decrease  in the yield  earned on these  investments.  For the nine  month
period ended June 30, 1999,  interest on  interest-earning  deposits  with other
institutions  and  investment  securities  increased  $610,000  or 21.4% to $3.5
million, as compared to the same period in the prior year. The increase reflects
an increase in the average  balance of such  securities and deposits,  partially
offset by a decrease in the yield earned on these investments.

Interest Expense
----------------

Interest on savings  deposits  decreased  $239,000  or 8.6% to $2.5  million and
$186,000 or 2.3% to $8.0 million for the three and nine month periods ended June
30, 1999,  respectively,  as compared to the same  periods in fiscal  1998.  The
decrease for both the three and nine month periods in fiscal 1999 as compared to
fiscal  1998  reflects a decrease  in the average  cost of  deposits,  partially
offset by an increase in the average balance of savings deposits.

Interest on borrowed funds increased  $674,000 or 49.9% to $2.0 million and $1.3
million or 31.1% to $5.3 million for the three and nine month periods ended June
30, 1999,  respectively,  as compared to the same  periods in fiscal  1998.  The
increases  for both periods in fiscal 1999 as compared to fiscal 1998 reflect an
increase in Federal  Home Loan Bank  ("FHLB")  advances  and reverse  repurchase
agreements  outstanding  during the fiscal 1999 periods,  partially  offset by a
decrease in the cost of those  borrowings.  The Bank  continues to rely on these
wholesale funding sources in fiscal 1999 as an additional way to fund growth.


                                      -12-




<PAGE>



Interest on guaranteed preferred beneficial interest in Company's debentures was
$263,000 and $256,000 for the three month  periods ended June 30, 1999 and 1998,
and $775,000 and  $768,000  for the nine month  periods  ended June 30, 1999 and
1998, respectively. The Preferred Securities were issued in May 1997.

Net Interest Income Before Provision for Loan Losses
----------------------------------------------------

The Bank's net  interest  income  before  provision  for loan  losses  increased
$313,000 or 11.5% to $3.0 million,  and $666,000 or 8.4% to $8.6 million for the
three and nine month periods ended June 30, 1999,  respectively,  as compared to
the same  periods in fiscal  1998.  The  increase  for both periods is primarily
attributable to an increase in net interest-earning assets.

Provision for Loan Losses
-------------------------

The provision for loan losses increased $65,000 or 72.2% to $155,000 and $45,000
or 14.3% to $360,000 for the three and nine month  periods  ended June 30, 1999,
respectively,  as compared to the same periods in fiscal 1998. The provision for
both years  reflects  management's  evaluation  of the loan  portfolio,  current
economic  conditions,  and other factors as described  below.  The allowance for
loan losses has increased  from $2.2 million at June 30, 1998 to $2.3 million at
June 30, 1999.

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

Other Income
------------

Total  non-interest or other income  increased  $56,000 or 17.7% to $372,000 and
$273,000  or 32.5% to $1.1  million for the three and nine month  periods  ended
June 30, 1999, respectively, as compared to the same periods in fiscal 1998.

Service  fee income,  which  includes  late  charges on loans and fees for loans
serviced  for others,  increased  $5,000 or 17.2% to $34,000 for the three month
period  ended June 30,  1999,  as compared to the same period in the prior year.
The increase is not attributable to any individually  significant items. Service
fee income  increased  $13,000 or 14.0% to  $106,000  for the nine month  period
ended June 30, 1999, as compared to the same period in fiscal 1998. The increase
is  primarily  attributable  to an  increase  in late  charges  on loans and the
imposition of an annual fee on lines of credit,  partially  offset by a decrease
in loan servicing fee income.

Gain on the sale of investment  and  mortgage-backed  securities was $60,000 for
the three month period ended June 30, 1998. There were no sales of securities in
the 1999  period.  For the nine  month  period  ended June 30,  1999,  a gain of
$74,000  was  recorded,  as compared to a gain of $68,000 for the same period in
fiscal 1998.  All sales were made from the  available-for-sale  portfolio in the
periods and were done to reflect current economic conditions and asset/liability
management strategies, as well as changing market conditions.

                                      -13-


<PAGE>



Gain on sale of loans was $1,000 and $6,000 for the three and nine month periods
ended June 30, 1999, respectively, as compared to a loss of $3,000 and a gain of
$6,000 in the comparable  periods in fiscal 1998. The Bank sells education loans
to the Student Loan Marketing Association ("SLMA").  Such sales generally result
in  some  gain  or loss  being  realized.  Currently  all  new  education  loans
originated are sold to SLMA. Results generally reflect the timing of such sales.
In  addition,  the Bank  sells a portion  of loans  originated  under low income
housing programs in which it participates in the Pittsburgh area.

Other operating income includes  miscellaneous  sources of income, which consist
primarily of various fees  related to checking  accounts,  fees from the sale of
cashiers  checks and money  orders,  and safe deposit box rental  income.  Other
operating income increased  $107,000 or 46.5% to $337,000 and increased $254,000
or 37.7% to $928,000 for the three and nine month  periods  ended June 30, 1999,
as compared to the same periods in fiscal 1998.  The increase for both the three
and nine month periods is primarily due to increases in fees related to returned
checks,  increased  automated teller machine fees,  increased service charges on
checking accounts and increased safe deposit box fees. In addition,  fiscal 1999
results reflect increased earnings on the cash surrender value of life insurance
policies  on  certain  executive  officers,  and  fees  earned  from a  program,
introduced in July 1998, to sell non-insured  investment products such as mutual
funds and annuities to both Bank and nonbank customers.

Other Expenses
--------------

Total operating expenses increased $172,000 or 9.3% to $2.0 million and $716,000
or 13.3% to $6.1  million  for the three and nine month  periods  ended June 30,
1999, respectively, as compared to the same period in fiscal 1998.

Compensation,  payroll  taxes and fringe  benefits,  the  largest  component  of
operating  expenses,  increased  $68,000 or 6.2% to $1.2 million and $397,000 or
12.6% to $3.5 million for the three and nine month  periods ended June 30, 1999,
respectively,  compared to the same periods in fiscal 1998. Factors contributing
to the increase were normal salary  increases,  higher bonuses awarded in fiscal
1999, an increase in the number of employees on the payroll,  and an increase in
retirement  and health care  expenses.  The  increase in the number of employees
primarily  reflects  staffing  additions  for the new  branch  office  opened in
Pittsburgh's  Strip District in October 1998, as well as staffing for the Bank's
new brokerage services program.

Office occupancy and equipment  expense  increased  $49,000 or 29.3% to $216,000
and  $168,000 or 36.0% to $635,000  for the three and nine month  periods  ended
June 30, 1999,  respectively,  compared to the same  periods in fiscal 1998.  In
both the three and nine month  periods,  the increases  partially  reflect costs
associated  with  renovating and opening the Bank's new Strip District branch in
October 1998, which was a leased facility until the Bank purchased the branch in
June 1999.  Additionally,  the increase  reflects  increased  equipment costs, a
portion of which was incurred addressing the Year 2000 problem.

Depreciation and  amortization  increased $7,000 or 5.3% to $139,000 and $52,000
or 13.6% to $434,000 for the three and nine month  periods  ended June 30, 1999,
respectively,  compared to the same periods in fiscal 1998. The results  reflect
additional  depreciation  on  equipment  added or updated  during the past year,
depreciation  on  renovations  completed on the Bank's data  processing and back
office location,  and  amortization of leasehold  improvements on the Bank's new
Strip District office.


                                      -14-


<PAGE>



Federal  deposit  insurance  premiums  increased  $1,000 or 2.6% to $40,000  and
$3,000 or 2.6% to $118,000 for the three and nine month  periods  ended June 30,
1999,  respectively,  compared to the same periods in fiscal 1998. The insurance
payments reflect the average level of savings deposits outstanding.

Net gain on real  estate  owned was $1,000 for the three  months  ended June 30,
1999,  as  compared to a net loss of $2,000 in the  comparable  period in fiscal
1998.  Net gain on real estate owned was $40,000 for the nine month period ended
June 30,  1999,  compared  to a net loss of $11,000  in the prior  year  period.
Results for the periods  reflect the sale of property held as real estate owned.
At June 30, 1999,  the Bank had one single  family  property  classified as real
estate owned.

Other operating expenses,  which consists of check processing costs,  consulting
fees, legal and audit fees,  advertising,  bank charges and other administrative
expenses,  increased  $50,000 or 11.9% to $471,000 and $147,000 or 11.7% to $1.4
million for the three and nine month periods ended June 30, 1999,  respectively,
as compared to the same periods in fiscal 1998.  Significant  variations between
both the three and nine month  periods in fiscal  1999,  as  compared  to fiscal
1998, include increases in consulting fees, telephone expenses,  legal fees, and
expenses  relating to credit  cards  issued by the Bank,  partially  offset by a
decrease in stationary and supplies expense.

Income Taxes
------------

Income  taxes  decreased  $15,000 or 4.3% to $334,000  and  $122,000 or 11.7% to
$921,000 for the three and nine month periods ended June 30, 1999, respectively,
compared to the same periods in fiscal 1998.  The decrease in taxes for both the
three and nine  month  periods  ended June 30,  1999,  as  compared  to the same
periods in the prior year,  primarily  results from a decrease in the  effective
tax rate. The decrease in the effective tax rate primarily is attributable to an
increase in tax-exempt  investments generating non-taxable income. The effective
tax rate decreased to 28.0% for the nine month period ended June 30, 1999,  from
33.5% in the comparable fiscal 1998 period.

Capital Requirements
--------------------

The Federal Reserve Board measures capital  adequacy for bank holding  companies
on the basis of a risk-  based  capital  framework  and a  leverage  ratio.  The
guidelines  include  the  concept of Tier 1 capital  and total  capital.  Tier 1
capital is essentially  common equity,  excluding net unrealized  gain (loss) on
securities  available-for-sale  and  goodwill,  plus certain  types of preferred
stock,  including  the  Preferred  Securities  issued by the Trust in 1997.  The
Preferred  Securities  may comprise up to 25% of the  Company's  Tier 1 capital.
Total  capital  includes  Tier 1 capital and other forms of capital  such as the
allowance for loan losses,  subject to limitations,  and subordinated  debt. The
guidelines establish a minimum standard risk- based target ratio of 8%, of which
at least 4% must be in the form of Tier 1 capital. At June 30, 1999, the Company
had Tier 1 capital as a percentage of  risk-weighted  assets of 14.34% and total
risk-based capital as a percentage of risk-weighted assets of 15.22%.

In addition,  the Federal Reserve Board has established  minimum  leverage ratio
guidelines for bank holding companies.  These guidelines currently provide for a
minimum ratio of Tier 1 capital as a percentage  of total 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 June 30,  1999,  the
Company had a Leverage Ratio of 8.66%.


                                      -15-


<PAGE>



The FDIC has issued regulations that require insured  institutions,  such as the
Bank, to maintain  minimum levels of capital.  In general,  current  regulations
require a leverage  ratio of Tier 1 capital to average  total assets of not less
than 3% for the most highly rated  institutions  and an  additional 1% to 2% for
all other  institutions.  At June 30, 1999,  the Bank  complied with the minimum
leverage  ratio  having  Tier 1 capital of 6.80% of  average  total  assets,  as
defined.

The Bank is also  required to maintain a ratio of  qualifying  total  capital to
risk-weighted  assets and off-  balance  sheet items of a minimum of 8%. At June
30, 1999,  the Bank's total  capital to  risk-weighted  assets ratio  calculated
under the FDIC capital requirement was 12.11%.

A reconciliation of Stockholders'  Equity for the Bank to Regulatory  Capital is
as follows:

Stockholder's equity at June 30, 1999 (1)    $28,510,175
Plus: Unrealized losses on debt securities     2,725,068
                                             -----------
Tier 1 Capital at June 30, 1999               31,235,243
Plus: Qualifying loan loss allowance           2,308,396
                                             -----------
Total capital at June 30, 1999               $33,543,639
                                             ===========
-----------------------
(1) Represents  equity  capital  of the  Bank as  reported  to the  FDIC and the
    Pennsylvania Department of Banking on Form 032.

Liquidity
---------

The Bank's  primary  sources of funds have  historically  consisted of deposits,
amortization and prepayments of outstanding  loans,  borrowings from the FHLB of
Pittsburgh and other sources,  including  sales of securities  and, to a limited
extent, loans. At June 30, 1999, the total of approved loan commitments amounted
to $7.6 million.  In addition,  the Bank had $18.3 million of  undisbursed  loan
funds at that date. The amount of savings  certificates  which mature during the
next twelve months totals approximately $104.6 million, a substantial portion of
which management believes, on the basis of prior experience,  will remain in the
Bank.

Year 2000
---------

The Year 2000 problem exists because many computer systems use only the last two
digits  to  refer  to  a  year.  This  convention  could  affect  date-sensitive
calculations  that treat "00" as the year 1900,  rather than 2000. An additional
issue is that 1900 was not a leap  year,  whereas  the year 2000 is.  Therefore,
some programs may not properly provide for February 29, 2000. This anomaly could
result in miscalculations  when processing critical  date-sensitive  information
after December 31, 1999.

The following  discussion of the  implications  of the Year 2000 problem for the
Company  contains  numerous  forward-looking   statements  based  on  inherently
uncertain information. The cost of the project and the date on which the Company
plans to  complete  Year  2000  modifications  are  based on  management's  best
estimates,  which are derived utilizing a number of assumptions of future events
including the continued  availability of internal and external resources,  third
party modifications and other factors.  However,  there can be no guarantee that
these  statements  will be achieved and actual  results could differ.  Moreover,
although management believes it will be able to make the necessary modifications
in advance,  there can be no guarantee  that failure to modify the systems would
not have a material adverse impact on the Company.

                                      -16-


<PAGE>







In May 1997 the  Company  established  a Year  2000  Compliance  Committee  (the
"Committee")  and  subsequently  developed  a Year  2000  Compliance  Plan  (the
"Plan"). The objectives of the Plan and the Committee are to prepare the Company
for the new millennium.  The Plan encompasses the following  phases:  Awareness,
Assessment, Renovation, Validation and Implementation.  These phases will enable
the Company to identify risks,  develop an action plan, perform adequate testing
and complete  affirmation  that its processing  systems will be Year 2000 ready.
Execution  of the  Plan is  currently  on  target.  Prioritization  of the  most
critical software  applications and hardware  configurations has been addressed,
along  with  contract  and  service  agreements.  A  significant  portion of the
Company's  data  processing  software is provided  by third party  vendors.  The
Company has maintained  ongoing contact with these vendors so that  modification
of the  software  for Year 2000  readiness is a top  priority.  The Company,  in
coordination with these vendors, has successfully completed testing all critical
applications. In addition, all significant hardware that required replacement or
upgrade has been  purchased and installed or the upgrade  completed.  Testing of
this  equipment  has also been  completed.  The Company has  contacted all other
material  vendors and  suppliers  regarding  their Year 2000 state of readiness.
Each of these third parties has delivered  written assurance to the Company that
they expect to be Year 2000  compliant  prior to the Year 2000.  The Company has
completed  contacting  all material  customers  and  non-information  technology
suppliers  (i.e.,  utility  systems,  telephone  systems and  security  systems)
regarding  their  Year 2000  state of  readiness.  The  Validation  phase is now
substantially  complete. The Implementation Phase is to certify that systems are
Year 2000 ready,  along with  assurances that any new systems are compliant on a
going-forward basis and is now substantially complete.

Monitoring  and managing the Year 2000 project will result in additional  direct
and indirect  costs to the Company.  Direct costs include  potential  charges by
third party  software  vendors  for product  enhancements,  the  replacement  of
computer  hardware  and  related  equipment  that was not Year 2000  ready  with
equipment that is, costs involved in testing software and hardware  products for
Year 2000  compliance,  and any resulting costs for developing and  implementing
contingency  plans for critical  software and  hardware  products  which are not
enhanced.  Indirect  costs  will  principally  consist  of the time  devoted  by
existing  employees in managing vendor progress,  testing enhanced  software and
hardware products and implementing any necessary contingency plans. Total direct
costs are estimated not to exceed $500,000,  but are not expected to be material
to the Company's  results of operations in any one quarter or fiscal year. As of
June 30, 1999,  approximately $400,000 had already been incurred.  This estimate
includes the cost, and resulting  depreciation,  of accelerating the replacement
of computer equipment that is currently fully depreciated, or would have been by
the Year 2000,  and that  would have been  replaced  in the  ordinary  course of
business over the next two years.  Year 2000 remediation  costs are not expected
to have a  material  adverse  impact on the  long-term  results  of  operations,
liquidity or consolidated  financial  position of the Company.  The Company does
not separately track the internal costs incurred for the Year 2000 project; such
costs are  principally  the related  payroll costs for its  information  systems
group and other employees involved in the project.

The Company is developing remediation  contingency plans and business resumption
plans  specific  to the Year 2000.  Remediation  contingency  plans  address the
actions to be taken if the current  approach to  remediating a system is falling
behind  schedule or otherwise  appears to be in jeopardy of failing to deliver a
year 2000 ready  system when needed.  The Company is currently on schedule  with
all  remediation  efforts.  Business  resumption  contingency  plans,  which are
substantially  complete,  address  the  actions  that would be taken if critical
business  functions cannot be carried out in the normal manner upon entering the
next century due to system or supplier failure.

Despite the best efforts of management to address this issue, the vast number of
external entities that have direct and indirect business  relationships with the
Company,  such  as  customers,  vendors,  payment  system  providers  and  other
financial  institutions  makes it  impossible  to assure that failure to achieve
compliance  by one or more of these  entities  would not have  material  adverse
impact on the operations of the Company.

                                      -17-


<PAGE>








Item 3.  Quantitative and Qualitative Disclosures About Market Risk

           There  have  been  no  material  changes  in  information   regarding
           quantitative and qualitative  disclosures  about market risk from the
           information presented as of September 30, 1998 (in the Company's Form
           10-K) to June 30, 1999.












































                                      -18-



<PAGE>



Part II - Other Information
---------------------------


Item. 1  Legal Proceedings

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


Item 2.  Changes in Securities

          None


Item 3.  Defaults Upon Senior Securities

          Not Applicable


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

          None

Item 5.  Other Information

          None


Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits.

         The  following  exhibits  are  filed as part of this Report.

          2      Agreement and Plan of Reorganization(1)

          3.1    Articles of Incorporation(1)

          3.2    Bylaws(1)

          4      Common Stock Certificate(2)

          10.1   Employee Stock Ownership Plan, as amended(2)

          10.2   1988 Employee Stock Compensation Program(2)

          10.3   1993 Employee Stock Compensation Program(3)

          10.4   1997 Employee Stock Compensation Program(4)

          10.5   1993 Directors' Stock Option Plan(3)

          10.6   Employment  Agreement between the Company, the Bank and William
                 L. Windisch(2)

          10.7   1998 Group Term Replacement Plan

          10.8   1998  Salary  Continuation   Plan   Agreement  by  and  between
                 W.L. Windisch, the Company and the Bank

          10.9   1998 Salary  Continuation Plan Agreement  by and  between  R.G.
                 Spencer, the Company and the Bank

          10.10  1998 Salary Continuation Plan  Agreement  by and  between  M.A.
                 Mooney, the Company and the Bank

          27     Financial Data Schedule (in electronic filing only)

---------------------------
(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 (registration No. 33-55384) filed with the SEC on December 3, 1992
     (the "Registration Statement").
(2)  Incorporated by reference from the Registration Statement.
(3)  Incorporated by reference from an exhibit in Form S-8 filed with the SEC on
     May 2, 1997.
(4)  Incorporated by reference from an exhibit in Form S-8 filed with the SEC on
     March 12, 1998.


     (b)  Reports on Form 8-K.

          None.
                                      -19-


<PAGE>







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




                                   FIDELITY BANCORP, INC.



Date:   August 5, 1999             By: /s/ William L. Windisch
                                       -----------------------------------------
                                       William L. Windisch
                                       President and Chief Executive Officer


Date:   August 5, 1999             By: /s/ Richard G. Spencer
                                       -----------------------------------------
                                       Richard G. Spencer
                                       Executive Vice President and
                                       Chief Financial Officer




























                                      -20-