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 December 31, 2002
                                    -----------------

[ ] 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 CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest  practicable date:  2,424,010 shares,  par value
                                                    ----------------------------
$0.01, at January 31, 2003
--------------------------




<PAGE>



                     FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                      Index

Part I - Financial Information                                              Page
------------------------------                                              ----

Item 1.   Financial Statements (Unaudited)

          Consolidated Statements of Financial Condition as                    1
          of December 31, 2002 and September 30, 2002

          Consolidated Statements of Income for the Three                      2
          Months Ended December 31, 2002 and 2001

          Consolidated Statements of Cash Flows for the Three                3-4
          Months Ended December 31, 2002 and 2001

          Consolidated Statements of Changes in Stockholders'                  5
          Equity for the Three Months Ended December 31, 2002
          and 2001

          Notes to Consolidated Financial Statements                           6

Item 2.   Management's Discussion and Analysis of Financial                   12
          Condition and Results of Operations

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          19

Item 4.   Controls and Procedures                                             19


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

Item l.   Legal Proceedings                                                   20

Item 2.   Changes in Securities                                               20

Item 3.   Defaults Upon Senior Securities                                     20

Item 4.   Submission of Matters to a Vote of Security Holders                 20

Item 5.   Other Information                                                   20

Item 6.   Exhibits and Reports on Form 8-K                                    21

Signatures                                                                    22



<PAGE>



Part I - Financial Information
Item 1.  Financial Statements

                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
           Consolidated Statements of Financial Condition (Unaudited)
           ----------------------------------------------------------
                        (in thousands except share data)
<TABLE>
<CAPTION>

                                                             December 31,    September 30,
              Assets                                             2002            2002
              ------                                             ----            ----
<S>                                                         <C>            <C>
Cash and amounts due from depository institutions             $   9,480      $   9,318
Interest-earning demand deposits with other institutions          7,578         14,516
Investment securities held-to-maturity
  (market value of $43,573 and $41,060)                          41,955         39,198
Investment securities available-for-sale                        101,038         90,729
Mortgage-backed securities held-to-maturity
  (market value of $51,039 and $43,019)                          50,274         42,403
Mortgage-backed securities available-for-sale                    80,536         71,656
Loans receivable, net  (Notes 6 and 7)                          308,393        316,320
Loans held for sale                                               1,153          1,869
Real estate owned, net                                              512            658
Federal Home Loan Bank stock - at cost                           10,767         10,120
Accrued interest receivable                                       3,484          3,711
Office premises and equipment, net                                5,823          5,696
Deferred tax asset                                                  777            531
Goodwill                                                          2,934          2,557
Core deposit intangibles                                            299            154
Prepaid income taxes                                                 --            320
Prepaid expenses and other assets                                 5,392          6,049
                                                              ---------      ---------
       Total Assets                                           $ 630,395      $ 615,805
                                                              =========      =========
              Liabilities and Stockholders' Equity
Liabilities:
   Savings and time deposits                                  $ 362,509      $ 351,406
   Federal Home Loan Bank advances and
        other borrowings                                        200,615        190,834
   Guaranteed preferred beneficial interest in
       Company's debentures                                      10,000         20,250
   Securities sold under agreement to repurchase                  5,304          5,849
   Advance deposits by borrowers for
      taxes and insurance                                         3,116          1,238
   Accrued interest payable                                       1,540          1,923
   Accrued income taxes payable                                      89             --
   Other accrued expenses and liabilities                         3,124          1,725
                                                              ---------      ---------
       Total Liabilities                                        586,297        573,225
                                                              ---------      ---------
Stockholders' equity (Notes 4 and 5):
   Common stock, $0.01 par value per share,
      10,000,000 shares authorized; 2,520,772
      and 2,504,563 shares issued, respectively                      25             25
   Additional paid-in capital                                    15,745         15,458
   Treasury stock, at cost - 93,678 and 183,287 shares           (1,150)        (2,358)
   Retained earnings - substantially restricted                  26,777         26,282
   Accumulated other comprehensive income,
       net of tax                                                 2,701          3,173
                                                              ---------      ---------
       Total Stockholders' Equity                                44,098         42,580
                                                              ---------      ---------
       Total Liabilities and Stockholders' Equity             $ 630,395      $ 615,805
                                                              =========      =========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       -1-


<PAGE>

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

                                                 Three Months Ended December 31,
                                                 -------------------------------
                                                       2002           2001
                                                       ----           ----
Interest income:
   Loans                                             $5,755         $6,185
   Mortgage-backed securities                         1,373          1,382
   Investment securities                              1,674          1,684
   Deposits with other institutions                      49              4
                                                     ------         ------
      Total interest income                           8,851          9,255
                                                     ------         ------
Interest expense:
   Savings deposits                                   2,428          3,006
   Guaranteed preferred beneficial interest
      in subordinated debt                              830            256
   Borrowed funds                                     2,709          3,004
                                                     ------         ------
      Total interest expense                          5,967          6,266
                                                     ------         ------


Net interest income before provision
   for loan losses                                    2,884          2,989
Provision for loan losses                               330            100
                                                     ------         ------
Net interest income after provision
   for loan losses                                    2,554          2,889
                                                     ------         ------
Other income:
   Loan service charges and fees                        132            110
   Gain(loss) on sale of investment and
      Mortgage-backed securities, net                   227            104
   Gain on sale of loans                                107             83
   Deposit service charges and fees                     322            188
   Other operating income                               263            247
                                                     ------         ------
      Total other income                              1,051            732
                                                     ------         ------

Operating expenses:
   Compensation and employee benefits                 1,662          1,513
   Occupancy and equipment expense                      191            202
   Depreciation and amortization                        169            159
   Federal insurance premiums                            14             14
   Loss on real estate owned, net                         8             13
   Goodwill amortization                                 --             36
   Core deposit intangible amortization                   8             --
   Other operating expenses                             560            529
                                                     ------         ------
      Total operating expenses                        2,612          2,466
                                                     ------         ------

Income before income tax provision                      993          1,155
Income tax provision                                    218            198
                                                     ------         ------
Net income                                           $  775         $  957
                                                     ======         ======
Basic earnings per common share (Note 4)             $  .33         $  .44
                                                     ======         ======
Diluted earnings per common share (Note 4)           $  .32         $  .43
                                                     ======         ======
Dividends per common share                           $  .12         $ .109
                                                     ======         ======

See accompanying notes to unaudited consolidated financial statements.

                                       -2-


<PAGE>

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

<TABLE>
<CAPTION>
                                                                                         Three Months Ended December 31,
                                                                                              2002             2001
                                                                                              ----             ----
<S>                                                                                     <C>               <C>
Operating Activities:
---------------------
     Net income                                                                           $    775          $    957
     Adjustments to reconcile net income to net
     cash provided by operating activities:
         Provision for loan losses                                                             330               100
         (Gain) loss on real estate owned                                                        8                13
         Depreciation of premises and equipment                                                169               159
         Deferred loan fee amortization                                                       (198)              (96)
         Amortization of investment and mortgage-backed securities
          discounts/premiums, net                                                              227                55
         Amortization of intangibles                                                             8                36
         Net (gain) loss on sale of investment securities                                     (227)             (104)
         Net (gain) loss  on sale of loans                                                    (107)              (83)
         Origination of loans held-for-sale                                                 (5,564)           (8,505)
         Proceeds from sale of loans held-for-sale                                           6,383             5,789
         (Increase) decrease in interest receivable                                            227                46
         (Increase) decrease in prepaid income taxes                                           409               216
         Increase (decrease) in interest payable                                              (383)               (8)
         Write-off of unamortized debt issuance costs                                          599                --
         Other changes, net                                                                    836              (207)
                                                                                          --------          --------

        Net cash provided by (used in) operating activities                                  3,492            (1,632)
                                                                                          --------          --------

Investing Activities:
---------------------

     Proceeds from sales of investment securities available-for-sale                         2,731             3,482
     Proceeds from maturities and principal repayments of
        investment securities available-for-sale                                                --             7,740
     Purchases of investment securities available-for-sale                                 (13,256)           (7,962)
     Proceeds from sales of mortgage-backed securities available-for-sale                       --             1,973
     Proceeds from maturities and principal repayments of  mortgage-
        backed securities available-for-sale                                                18,008             5,797
     Purchases of mortgage-backed securities available-for-sale                            (27,302)           (6,567)
     Proceeds from maturities and principal repayments of investment
        securities held-to-maturity                                                          6,795                --
     Purchases of investment securities held-to-maturity                                    (9,565)          (10,468)
     Purchases of mortgage-backed securities held-to-maturity                              (18,357)           (9,779)
     Rescission of purchase of mortgage-backed securities held-to-maturity (Note 5)             --             2,516
     Proceeds from principal repayments of mortgage-backed
       securities held-to-maturity                                                          10,412             3,235
     Net (increase) decrease in loans                                                        7,745             6,487
     Proceeds from sale of other loans                                                          51                86
     Net purchases of FHLB stock                                                              (647)             (113)
     Additions to office premises and equipment                                               (297)             (171)
                                                                                          --------          --------

  Net cash provided by (used in) investing activities                                      (23,682)           (3,744)
-----------------------------------------------------                                     --------          --------
</TABLE>

Continued on page 4.

                                       -3-


<PAGE>

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

<TABLE>
<CAPTION>
                                                                                         Three Months Ended December 31,
                                                                                              2002             2001
                                                                                              ----             ----
<S>                                                                                     <C>               <C>
Financing Activities:
---------------------
Net increase (decrease) in savings and time deposits                                        11,103             6,502
Increase (decrease) in reverse repurchase agreements                                          (545)              615
Net increase (decrease) in FHLB advances and other borrowings                                9,781              (269)
Trust preferred securities retired                                                         (10,250)               --
Proceeds from sale of stock in conjunction with the First PA merger                          1,570                --
Increase in advance payments by borrowers for
  taxes and insurance                                                                        1,878             1,477
Cash dividends paid                                                                           (280)             (236)
Stock options exercised                                                                        134               126
Proceeds from sale of stock through Dividend Reinvestment Plan                                  23                13
Purchase of treasury stock                                                                      --              (233)
                                                                                          --------          --------

Net cash provided by (used in) financing activities                                         13,414             7,995
                                                                                          --------          --------

Increase (decrease) in cash and cash equivalents                                            (6,776)            2,619

Cash and cash equivalents at beginning of period                                            23,834             8,031
                                                                                          --------          --------

Cash and cash equivalents at end of period                                                $ 17,058          $ 10,650
                                                                                          ========          ========

Supplemental Disclosure of Cash Flow Information
------------------------------------------------

Cash paid during the period for:
  Interest on deposits and other borrowings                                               $  6,350          $  6,273
  Income taxes                                                                            $      4          $      0
                                                                                          --------          --------

Supplemental Schedule of Non-Cash Investing and Financing Activities
--------------------------------------------------------------------

Transfer of loans to real estate owned                                                    $     --          $     50
                                                                                          --------          --------


The Company acquired First Pennsylvania Savings Association. In conjunction with
the acquisition, the assets acquired and liabilities assumed were as follows:

Fair value of assets acquired                                                             $ 26,228          $     --
Fair value of liabilities assumed                                                         $ 26,758          $     --
                                                                                          --------

Liabilities assumed in excess of assets acquired                                          $    530          $     --
                                                                                          --------          --------
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                       -4-


<PAGE>



                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
     Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                                     Accumulated Other
                                                            Additional                                 Comprehensive
                                               Common        Paid-in       Treasury     Retained      Income (Loss)
                                                Stock        Capital        Stock       Earnings        Net of Tax        Total
====================================================================================================================================

<S>                                          <C>         <C>           <C>            <C>             <C>               <C>
Balance at September 30, 2001                  $   22      $ 14,789      $ (3,872)      $ 22,887        $  1,460          $ 35,286

Comprehensive income:
     Net income                                    --            --            --            957              --               957
     Other comprehensive income (loss),
       net of tax of $481                          --            --            --             --            (933)             (933)
     Reclassification adjustment,
       Net of tax of $35                                                                                     (68)              (68)
                                               ------      --------      --------       --------        --------          --------
Total comprehensive income (loss)                  --            --            --            957          (1,001)              (44)

Cash dividends paid                                --            --            --           (236)             --              (236)

Treasury stock purchased -
   15,000 shares                                   --            --          (233)            --              --              (233)

 Contribution of stock to ESOP -
     12,000 shares                                 --             9           186             --              --               195

 Sale of stock through Dividend
    Reinvestment Plan                              --            13            --             --              --                13

 Stock options exercised                           --           126            --             --              --               126
                                               ------      --------      --------       --------        --------          --------


Balance at December 31, 2001                   $   22      $ 14,937      $ (3,919)      $ 23,608        $    459          $ 35,107
                                               ======      ========      ========       ========    =   ========          ========


Balance at September 30, 2002                  $   25      $ 15,458      $ (2,358)      $ 26,282        $  3,173          $ 42,580

Comprehensive income:
     Net income                                    --            --            --            775              --               775
     Other comprehensive income (loss),
       net of tax of ($166)                        --            --            --             --            (322)             (322)
     Reclassification adjustment,
       Net of tax of ($77)                         --            --            --             --            (150)             (150)
                                               ------      --------      --------       --------        --------          --------

Total comprehensive income (loss)                  --            --            --            775            (472)              303

Acquisition of First Pennsylvania                  --           130         1,208             --              --             1,338

 Cash dividends paid                               --            --            --           (280)             --              (280)

 Sale of stock through Dividend
       Reinvestment Plan                           --            23            --             --              --                23

 Stock options exercised                           --           134            --             --              --               134
                                               ------      --------      --------       --------        --------          --------

Balance at December 31, 2002                   $   25      $ 15,745      $ (1,150)      $ 26,777        $  2,701          $ 44,098
                                               ======      ========      ========       ========        ========          ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       -5-


<PAGE>

                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements - (Unaudited)
                                December 31, 2002

(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"),  FB Capital Trust
and  FB  Statutory   Capital  Trust  II   (collectively,   the  "Trusts").   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.  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 fiscal year ended September 30,
2002.  The results for the three month  period  ended  December 31, 2002 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending September 30, 2003 or any future interim period.

(3) New Accounting Standards
    ------------------------
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets",  which  addresses  financial  accounting  and
reporting  for the  impairment or disposal of  long-lived  assets.  SFAS No. 144
supersedes SFAS No. 121, "Accounting for Impairment of Long-Lived Assets and for
Long-Lived  Assets  to  Be  Disposed  Of,"  however,  it  retains  many  of  the
fundamental  provisions of that Statement.  SFAS No. 144 is effective for fiscal
years  beginning after December 15, 2001. The Company adopted SFAS No. 144 as of
October 1, 2002 and it did not have a material effect on the financial condition
or results of operations of the Company.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
The  provisions of this  statement  related to the  rescission of SFAS No. 4 are
effective for fiscal years beginning after May 15, 2002.  Certain  provisions of
the statement  relating to SFAS no. 13 are effective for transactions  occurring
after May 15, 2002.  All other  provisions  of the  statement  are effective for
financial  statements  issued  on or after May 15,  2002.  The  Company  adopted
Statement No. 145 as of October 1, 2002. In November 2002, the Company  reported
the write-off of $599,000 of  unamortized  debt issuance costs as a component of
interest  expense,  whereas  this  write-off  would  have  been  reported  as an
extraordinary loss under SFAS No. 4. In issuing SFAS No. 145, the FASB concluded
that  the  rescission  of  SFAS  No.  4 would  improve  financial  reporting  by
eliminating  a  requirement  to  classify  a normal and  important  part of many
entities'  ongoing  activities to manage interest rate risk as an  extraordinary
item.  (See  "Interest  Expense"  section  of the  Management's  Discussion  and
Analysis of Financial Condition and Results of Operation)

In  October  2002,  the FASB  issued  SFAS No.  147,  "Acquisitions  of  Certain
Financial Institutions - an amendment of FASB Statements No. 72 and 144 and FASB
Interpretation  No.  9,  "  which  provides   interpretative   guidance  on  the
application of the purchase method to  acquisitions  of financial  institutions.
The provisions of SFAS No. 147 are effective  October 1, 2002.  Adoption of SFAS
No. 147 had no impact on the Company's financial statements.


                                       -6-

<PAGE>


In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123".  This  Statement  amends  FASB  Statement  No. 123 to provide  alternative
methods of  transition  for  voluntary  change to the fair value based method of
accounting for stock-based employee compensation. This Statement also amends the
disclosure requirements of Statement 123 to require prominent disclosure on both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based  compensation and the effect of the method used on reported results.
The transition alternatives of SFAS 148 are available for fiscal years beginning
after  December  15,  2003 and,  if the fair  value  provisions  of SFAS 123 are
adopted,  the effect on the Company's financial  statements is contingent on the
transition  provision  elected.   The  pro-forma  disclosure   requirements  are
effective for the Company's second fiscal quarter.


(4) Earnings Per Share
    ------------------
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. All weighted average share and per share amounts
reflect the 10% stock  dividend paid on May 28, 2002.  The following  table sets
forth the  computation  of basic and  diluted  earnings  per share  (amounts  in
thousands, except per share data):

                                                       Three Months Ended
                                                           December 31,
                                                         2002         2001
                                                       ---------------------
Numerator:
Net Income                                              $  775       $ 957
                                                        ------       -----
  Numerator for basic and diluted
  earnings per share                                    $  775       $ 957
                                                        ------       -----
Denominator:
  Denominator for basic earnings per                     2,353       2,167
  share - weighted average shares
Effect of dilutive securities:
  Employee stock options                                    83          53
                                                        ------       -----

Denominator for diluted earnings per share -
weighted average
  Shares and assumed conversions                         2,436       2,220
                                                        ------       -----

Basic earnings per share                                $  .33       $ .44
                                                        ------       -----
Diluted earnings per share                              $  .32       $ .43
                                                        ------       -----


(5) 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  accumulated  other  comprehensive  income  (loss) in  stockholders'
equity.  Unrealized gains of $2.7 million, net of tax, on investments classified
as  available-for-sale  are recorded at December  31,  2002.  The Company had no
securities classified as trading as of December 31, 2002 and September 30, 2002.


                                       -7-

<PAGE>

During the quarter  ended  December  31, 2001,  $2.5 million of  mortgage-backed
securities classified by the Company as held-to-maturity were repurchased by the
selling  dealer due to  misrepresentations  by the selling dealer as to the risk
characteristics and structure of the securities.  The Company did not anticipate
this  event  and  believes  this  was an  isolated,  nonrecurring,  and  unusual
circumstance.  The  securities  were  repurchased by the dealer at the Company's
original cost, thus no gain or loss was recorded.

(6) Loans Receivable
    ----------------

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

                                                December 31,       September 30,
                                                    2002                2002
                                                --------------------------------
First mortgage loans:
        Conventional:
            1-4 family dwellings               $  150,274          $ 169,849
            Multi-family dwellings                  6,948              7,217
        Commercial                                 36,292             29,036
        Construction:
            Residential                            12,571             11,372
            Commercial                              7,211              8,205
                                                ---------          ---------
                                                  213,296            225,679
                                                ---------          ---------
Less:
        Loans in process                          (10,192)            (9,065)
        Unearned discounts and fees                (1,016)            (1,368)
                                                ---------          ---------
                                                  202,088            215,246
                                                ---------          ---------
Installment loans:
        Home equity                                59,325             58,549
        Consumer loans                              1,738              1,286
        Other                                       2,955              2,037
                                                ---------          ---------
                                                   64,018             61,872
                                                ---------          ---------
Commercial business loans and leases:
        Commercial business loans                  41,888             38,287
        Commercial leases                           3,457              3,971
                                                ---------          ---------
                                                   45,346             42,258
                                                ---------          ---------

Less:  Allowance for loan losses                   (3,059)            (3,056)
                                                ---------          ---------

        Loans receivable, net                   $ 308,393          $ 316,320
                                                ---------          ---------




                                       -8-
<PAGE>

(7) Allowance for Loan Losses
-----------------------------
Changes in the allowance for loan losses for the three months ended December 31,
2002 and the fiscal year ended September 30, 2002 are as follows (dollar amounts
in thousands):

<TABLE>
<CAPTION>
                                                          December 31,    September 30,
                                                          ------------    -------------
                                                              2002            2002
                                                              ----            ----
<S>                                                      <C>              <C>
Balance at beginning of period                             $ 3,056          $ 2,871
Allowance for loan losses of Carnegie Savings Bank              --              204
Allowance for loan losses of First Pennsylvania Savings         40               --
Provision for loan losses                                      330              400
Charge-offs                                                   (369)            (520)
Recoveries                                                       2              101
                                                           -------          -------
Balance at end of period                                   $ 3,059          $ 3,056
                                                           -------          -------
</TABLE>

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 December 31, 2002, the recorded investment in loans that are considered to be
impaired  under  SFAS No.  114 was $1.3  million  compared  to $1.8  million  at
December 31, 2001.  Included in the current amount is $115,000 of impaired loans
for which the related allowance for loan losses is $13,000,  and $1.2 million of
impaired loans that as a result of applying  impairment  tests  prescribed under
SFAS No. 114, do not have an  allowance  for loan losses.  The average  recorded
investment in impaired loans during the three months ended December 31, 2002 was
$1.6 million compared to $1.8 million for the same period in the prior year. For
the three months ended  December  31,  2002,  as well as December 31, 2001,  the
Company  recognized no interest  income on those  impaired  loans using the cash
basis of income recognition.







                                       -9-

<PAGE>


(8) Comprehensive Income
    --------------------

Total comprehensive  income amounted to the following for the three months ended
December 31 (dollar amounts in thousands):

                                                          Three Months Ended
                                                             December 31,
                                                          2002          2001
                                                        ----------------------

Net Income                                              $  775     $     957
Change in unrealized gains (losses) on
investment securities and mortgage-
backed securities available for sale, net of
taxes                                                   $ (472)     $ (1,001)
                                                        ------     ---------

Comprehensive income (loss)                             $  303     $     (44)
                                                        ======     =========


(9) Acquisition
    -----------

On July 12, 2002, the Company and First Pennsylvania Savings Association ("First
Pennsylvania)  jointly  announced the signing of an Agreement and Plan of Merger
Conversion,  whereby it was agreed that First  Pennsylvania would merge with and
into Fidelity  Bank. On September 30, 2002, the agreement was amended to require
an offering of stock of the  Company to certain  members of First  Pennsylvania.
Pursuant  to  the  amended  agreement,   First   Pennsylvania   converted  to  a
Pennsylvania-chartered  stock savings institution and simultaneously merged with
and into the Bank on December  31, 2002 and the Bank  acquired all of the assets
and assumed  all of the  liabilities  of First  Pennsylvania.  Additionally,  in
connection with the merger,  Fidelity sold approximately 89,600 shares at $17.52
per share of its common  stock to  certain  members  of First  Pennsylvania  and
Fidelity's  employee  stock  ownership  plan in a  subscription  offering and to
Fidelity's  stockholders  and certain  members of the community in a stockholder
and community offering.

The  acquisition  was accounted for under the purchase method of accounting and,
accordingly,  the results of operations of First Pennsylvania have been included
in the Company's  consolidated  financial statements from December 31, 2002. The
Company  acquired  loans  with a  fair  value  of  approximately  $6.8  million,
investment and  mortgage-backed  securities  with a fair value of $11.8 million,
deposits with a fair value of approximately  $12.3 million and Federal Home Loan
Bank  advances  with  a  fair  value  of  approximately  $13.9  million  in  the
transaction.  Goodwill and core deposit intangibles arising from the transaction
were approximately $530,000.





                                      -10-
<PAGE>

(10) Goodwill and Other Intangible Assets - Adoption of Statement 142

In July 2001, the Financial Accounting Standards Board issued Statement No. 141,
"Business  Combinations",  and Statement No. 142, "Goodwill and Other Intangible
Assets".  Statement No. 141 requires  that the purchase  method of accounting be
used for all business combinations  initiated after June 30, 2001 as well as all
purchase method business  combinations  completed after June 30, 2001. Statement
No. 141 also specifies certain criteria intangible assets acquired in a purchase
method business  combination  must meet to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an assembled workforce may
not be accounted  for  separately.  Statement No. 142 requires that goodwill and
intangible  assets with indefinite  useful lives no longer need to be amortized,
but instead  tested for  impairment  at least  annually in  accordance  with the
provisions of Statement No. 142. Statement No. 142 also requires that intangible
assets with definite useful lives be amortized over their  respective  estimated
useful lives to their estimated  residual value,  and reviewed for impairment in
accordance  with SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of
Long-Lived  Assets." The Company adopted Statement No. 142 as of October 1, 2002
and, as a result,  no longer  amortizes  goodwill,  but will test  goodwill  for
impairment  on an annual basis.  The  following  table sets forth net income and
earnings per share for the three month periods ended  December 31, 2002 and 2001
excluding the effects of goodwill amortization.

                                         For the three months ended December 31,
                                                 2002                2001
                                                 ------------------------

   Reported net income                           $775                $957
   Add back: Goodwill amortization                                     36
                                                 ----                ----
   Adjusted net income                           $775                $993
                                                 ----                ----

   Basic earnings per share:
            Reported net income                  $.33                $.44
            Goodwill amortization                                    $.02
                                                 ----                ----
            Adjusted net income                  $.33                $.46
                                                 ----                ----

   Diluted earnings per share:
            Reported net income                  $.32                $.43
            Goodwill amortization                                    $.02
                                                 ----                ----
            Adjusted net income                  $.32                $.45
                                                 ----                ----





                                      -11-

<PAGE>


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.

Fidelity  Bancorp,  Inc.'s (the  "Company")  business is  conducted  principally
through  Fidelity  Bank  (the  "Bank").  All  references  to the  Company  refer
collectively  to  the  Company  and  the  Bank,  unless  the  context  indicates
otherwise.

Overview
--------

Recent Legislation to Curtail Corporate Accounting  Irregularities.  On July 30,
------------------------------------------------------------------
2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the "Act").
The  Securities  and Exchange  Commission  (the "SEC") has  promulgated  certain
regulations  pursuant  to the  Act  and  will  continue  to  propose  additional
implementing  or clarifying  regulations as necessary in furtherance of the Act.
The  passage  of the Act  and the  regulations  implemented  by the SEC  subject
publicly-traded   companies  to  additional   and  more   cumbersome   reporting
regulations   and  disclosure.   Compliance  with  the  Act  and   corresponding
regulations may increase the Company's expenses.

On  December  31,  2002,  the  Company   completed  its   acquisition  of  First
Pennsylvania  Savings  Association ("First  Pennsylvania").  The acquisition was
accounted for under the purchase  method of  accounting  and,  accordingly,  the
results of operations of First  Pennsylvania have been included in the Company's
consolidated  financial  statements from December 31, 2002. The Company acquired
loans  with  a  fair  value  of  approximately  $6.8  million,   investment  and
mortgage-backed  securities with a fair value of $11.8 million,  deposits with a
fair value of  approximately  $12.3  million and Federal Home Loan Bank advances
with a fair value of approximately  $13.9 million in the  transaction.  Goodwill
and  other  core  deposit   intangibles   arising  from  the  transaction   were
approximately  $530,000.  In connection with the merger, the Company raised $1.6
million in  proceeds  from the  issuance  of stock to  certain  members of First
Pennsylvania  and  Fidelity's  employee  stock  ownership plan in a subscription
offering and the Fidelity's stockholders and certain members of the community in
a stockholder and community offering.








                                      -12-

<PAGE>

Comparison of Financial Condition
---------------------------------

Total assets of the Company increased $14.6 million,  or 2.4%, to $630.4 million
at December  31, 2002 from $615.8  million at September  30,  2002.  Significant
changes in individual  categories  include an increase in investment  securities
available-for-sale  of $10.3 million, an increase in mortgage-backed  securities
available-for-sale  of $8.9 million,  an increase in mortgage-backed  securities
held-to-maturity of $7.9 million, a decrease in interest-earning demand deposits
of $6.9  million,  and a  decrease  in net loans of $7.9  million.  The  Company
continued to experience  increased levels of loan and  mortgage-backed  security
prepayment  and loan  refinancing  activity.  The decrease in net loans reflects
$47.1 million of prepayments and $6.4 million in loan sales, partially offset by
$6.8 million in loans acquired from First  Pennsylvania and $38.9 million in new
loan originations.


Total  liabilities of the Company  increased  $13.1 million,  or 2.3%, to $586.3
million at  December  31,  2002 from  $573.2  million  at  September  30,  2002.
Significant  changes  include an increase in savings and time  deposits of $11.1
million, an increase of FHLB advances and other borrowings of $9.8 million,  and
a decrease in trust preferred securities of $10.3 million.  Deposits with a fair
value of approximately  $12.3 million and Federal Home Loan Bank advances with a
fair value of  approximately  $13.9 million were assumed in connection  with the
acquisition of First Pennsylvania.

Stockholders' equity increased $1.5 million or 3.6% to $44.1 million at December
31, 2002,  compared to $42.6 million at September 30, 2002. This result reflects
net income for the three month period ended December 31, 2002 of $775,000,  $1.3
million of stock issued  during the  acquisition  of First  Pennsylvania,  stock
options exercised of $134,000,  and stock issued under the Dividend Reinvestment
Plan of $23,000.  Offsetting  these  increases  were common stock cash dividends
paid of $280,000 and a decrease of  accumulated  other  comprehensive  income of
$472,000.  Accumulated other  comprehensive  income decreased from September 30,
2002  as  a   result   of   changes   in  the  net   unrealized   gains  on  the
available-for-sale  securities due to the  fluctuations in interest rates during
the  current  period.  Because  of  interest  rate  volatility,   the  Company's
accumulated  other  comprehensive  income (loss) could materially  fluctuate for
each interim and year-end period.  Approximately $3.4 million of the balances in
retained  income as of December 31, 2002 and September 30, 2002  represent  base
year  bad  debt  deductions  for  tax  purposes  only,  as they  are  considered
restricted accumulated earnings.






                                      -13-

<PAGE>

Non-Performing Assets
---------------------
The following table sets forth information  regarding non-accrual loans and real
estate owned by the Company at the dates indicated. The Company 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).

                                                    December 31    September 30,
                                                        2002           2002
                                                        ----           ----
Non-accrual residential real estate loans
    (one-to-four family)                              $1,092           $  515

Non-accrual construction, multi family
    Residential and commercial real estate loans         253              408

Non-accrual installment loans                            378              273

Non-accrual commercial business loans                  1,086            1,461
                                                      ------           ------

Total non-performing loans                            $2,809           $2,657
                                                      ======           ======

Total non-performing loans as a percent of
    net loans receivable                                .91%             .81%
                                                        ====             ====

Total real estate owned                               $  512           $  658
                                                      ======           ======

Total non-performing loans and real estate
    Owned as a percent of total assets                  .53%             .54%
                                                        ====             ====


Included  in  non-performing  loans at December  31,  2002 are 23  single-family
residential real estate loans totaling $1.1 million,  two commercial real estate
loans totaling $253,000, 26 home equity and installment loans totaling $378,000,
nine  commercial  business  loans  totaling  $1.0 million,  and four  commercial
business leases totaling $59,000.

Non-accrual  residential  real estate loans totaled $1.1 million at December 31,
2002,  compared to $515,000 at September 30, 2002, an increase of $577,000.  The
increase reflects $277,000 of non-accrual residential real estate loans acquired
from First  Pennsylvania.  Non-accrual  commercial  business  loans totaled $1.1
million at December 31, 2002,  compared to $1.5 million at September 30, 2002, a
decrease  of  $375,000.  The  decrease  is  primarily  attributed  to a $300,000
commercial  business loan being charged-off during the three-month period ending
December 31, 2002. This loan was previously  non-performing  and was charged-off
once the entity declared bankruptcy.

At December  31,  2002,  the Company  had an  allowance  for loan losses of $3.1
million or .99% of net loans  receivable,  as compared to an  allowance  of $3.1
million or .97% of net loans receivable at September 30, 2002. The allowance for
loan losses equals 108.9% of non-performing  loans at December 31, 2002 compared
to 115.0% at September 30, 2002.

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 December 31, 2002 is appropriate.  See
also  "Provision for Loan Losses."  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.

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.

                                      -14-
<PAGE>

                       Comparison of Results of Operations
                       -----------------------------------
              for the Three Months Ended December 31, 2002 and 2001
              -----------------------------------------------------

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

Net income for the three months ended December 31, 2002 was $775,000 compared to
$957,000  for the same  period in 2001,  a decrease  of  $182,000 or 19.0 %. The
decrease  reflects a decrease in net  interest  income of  $105,000 or 3.5%,  an
increase  in the  provision  for loan losses of  $230,000,  an increase in other
operating  expenses of $146,000 or 5.9%,  and an increase in the  provision  for
income  taxes of $20,000 or 10.1%.  Partially  offsetting  these  factors was an
increase in other income of 319,000, or 43.6%.


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

The Company'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 1.99% in the three months ended December 31, 2002 from 2.29% in the
same period in fiscal 2002 as a result of the  average  yield on total  interest
earning assets  decreasing  more than the average rate paid on  interest-bearing
liabilities.  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.

                                                          Three Months Ended
                                                              December 31,
                                                        2002              2001
                                                        ----              ----
  Average yield on:
    Mortgage loans                                      7.45%             7.57%
    Mortgage-backed securities                          4.65              5.88
    Installment loans                                   7.33              7.91
    Commercial business loans and leases                6.63              8.10
    Interest -earning deposits with other
    institutions, investment securities, and
    FHLB stock (1)                                      5.10              6.23
                                                        ----              ----
    Total interest-earning assets                       6.19              7.04
                                                        ----              ----

  Average rates paid on:
    Savings deposits                                    2.73              3.77
    Borrowed funds                                      6.73              6.04
                                                        ----              ----
    Total interest-bearing liabilities                  4.20              4.75
                                                        ----              ----

  Average interest rate spread                          1.99%             2.29%
                                                        =====             =====

  Net yield on interest-earning assets                  2.14%             2.41%
                                                        =====             =====

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




                                      -15-

<PAGE>


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

Interest on loans decreased  $430,000 or 7.0% to $5.8 million in fiscal 2003 for
the first three months ended  December 31, 2002,  compared to the same period in
fiscal  2002.  The  decrease  reflects a decrease  in the average  loan  balance
outstanding  during  2002 as well as a decrease  in the net yield  earned on the
loan  portfolio.  The  Company  acquired  $6.8  million  in net  loans  upon the
acquisition of First  Pennsylvania  and the Company  originated $38.9 million in
new loans;  however,  these  increases in loans were offset by $47.1  million of
loan  prepayments  and $6.4  million  in loan  sales,  thus  accounting  for the
decrease in the average  loan  balance  outstanding  for the fiscal 2003 period.
Higher levels of principal  repayments  have been  experienced  due to the lower
interest rate  environment  during the current fiscal period.  In addition,  the
current fiscal period reflects the sale of  approximately  $6.4 million of fixed
rate,  single family  mortgage  loans,  compared to $5.8 million of similar loan
sales during the prior fiscal period.

Interest on mortgage-backed  securities decreased $9,000 or .7% to $1.37 million
for the three months ended  December 31, 2002, as compared to the same period in
fiscal 2002. The decrease reflects a decrease in the average yield earned on the
portfolio,   partially   offset  by  an  increase  in  the  average  balance  of
mortgage-backed   securities   owned  in  the   period.   The   fair   value  of
mortgage-backed securities acquired from First Pennsylvania on December 31, 2002
was approximately $4.9 million.

Interest on  interest-earning  deposits with other  institutions  and investment
securities  increased $35,000 or 2.1% to $1.7 million for the three-month period
ended  December  31, 2002,  as compared to the same period in fiscal  2002.  The
increase reflects an increase in the average balance in the portfolio  partially
offset by a decrease in the yield earned on these investments.  Interest-earning
deposits of $7.1 million and investment securities of $6.9 million were acquired
with the purchase of First Pennsylvania on December 31, 2002.


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

Interest  on  savings  and time  deposits  decreased  $578,000  or 19.2% to $2.4
million for the  three-month  period ended December 31, 2002, as compared to the
same period in fiscal 2002. The decrease reflects a decrease in the average cost
of the  deposits,  partially  offset by an increase  in the  average  balance of
savings deposits.  The increase in the average balance of deposits also reflects
the  approximately  $12.3 million of deposits  assumed with the  acquisition  of
First Pennsylvania.

Interest  on  guaranteed  preferred  beneficial  interest in  subordinated  debt
increased  $574,000,  or 224.2%. The increase reflects the write-off of $599,000
in unamortized  issuance  costs related to $10,250,000 of 9.75% trust  preferred
securities  that were called by the Company on November 4, 2002. The 9.75% trust
preferred  securities  that were called were  replaced  during the prior quarter
with  $10,000,000  of  floating  rate trust  preferred  securities  that bore an
initial rate of 5.22%  through  December 26,  2002,  and which adjust  quarterly
thereafter  at a rate of  3-month  LIBOR plus  3.40%.  The  floating  rate trust
preferred securities current rate is 4.80%. The 9.75% trust preferred securities
were called by the Company and  replaced by the  floating  rate trust  preferred
securities  primarily  to  take  advantage  of the  current  low  interest  rate
environment.

Interest  on  Federal  Home Loan Bank  ("FHLB")  advances  and other  borrowings
decreased  $295,000 or 9.8% to $2.7  million for the  three-month  period  ended
December 31, 2002,  as compared to the same period in fiscal 2002.  The decrease
reflects  a  decrease  in the  cost  of FHLB  advances  and  reverse  repurchase
agreements,  while the average  balance of advances  and  repurchase  agreements
outstanding  was relatively  unchanged.  The Company  continues to rely on these
advances and repurchase agreements as cost effective wholesale funding sources.


                                      -16-

<PAGE>

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

The Company's net interest  income  before  provision for loan losses  decreased
$105,000 or 3.5% to $2.9 million for the  three-month  period ended December 31,
2002, as compared to the same period in fiscal 2002. The decrease in fiscal 2003
is  attributable  to a decreased  interest rate spread,  partially  offset by an
increase in net interest-earning assets.

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

The  provision  for loan losses  increased  $230,000 to $330,000,  for the three
month period ended  December 31, 2002,  as compared to the same period in fiscal
2002. At December 31, 2002,  the allowance for loan losses  increased  $3,000 to
$3.059 million from $3.056  million at September 30, 2002. Net loan  charge-offs
were  $367,000 and  $140,000  for the three  months ended  December 31, 2002 and
2001,  respectively.  A $300,000 commercial business loan was charged-off during
the three-month period ending December 31, 2002.

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 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
------------

Total  non-interest or other income increased  $319,000 or 43.6% to $1.1 million
for the three month  period ended  December  31,  2002,  as compared to the same
period in fiscal 2002. The increase  primarily relates to increased gains on the
sale  of  investment  and  mortgage-backed  securities  and  loans,  as  well as
increased loan and deposit account service charges.

Loan service  charges and fees,  which  includes late charges on loans and other
miscellaneous  loan fees,  increased  $22,000 or 20.0% to $132,000 for the three
month period ended  December 31, 2002,  as compared to the same period in fiscal
2002.  The increase is primarily  attributed to an increase in the collection of
title insurance fees on mortgages originated,  partially offset by a decrease in
late charges on loans.

Gain on the sale of investment and  mortgage-backed  securities was $227,000 for
the three  month  period  ended  December  31,  2002,  as  compared to a gain of
$104,000  in the same  period  in fiscal  2002.  Such  sales  were made from the
available-for-sale  portfolio as part of management's asset/liability management
strategies.

Gain on the sale of loans was $107,000 for the three month period ended December
31, 2002, as compared to $83,000 for the three month period in fiscal 2002.  The
current fiscal period reflects the sale of  approximately  $6.4 million of fixed
rate,  single  family  mortgage  loans,  compared to $5.8 of similar  loan sales
during the prior fiscal period.

Deposit service charges and fees increased $134,000 or 71.3% for the three month
period ended  December 31, 2002,  as compared to the same period in fiscal 2002.
The  increase  is  primarily  attributed  to an  increase  in the volume of fees
collected for returned checks on deposit accounts.

                                      -17-

<PAGE>

Operating Expenses
------------------

Total  operating  expenses for the  three-month  period ended  December 31, 2002
totaled  $2.6  million  compared  to $2.5  million for the same period in fiscal
2002. The increase is due primarily to an increase in compensation  and benefits
expense.  The overall increase in operating  expense for the current year period
reflects the operation of the Carnegie branch which was not in operation for the
entire prior fiscal period.

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

Total income tax expense for the three month period ended  December 31, 2002 was
$218,000 compared to $198,000 for the same fiscal 2002 period. The effective tax
rate  for  the  three-month  periods  ended  December  31,  2002  and  2001  was
approximately 22.0% and 17.1%,  respectively.  The increase in the effective tax
rate for the current  period is attributed  to a decrease in  tax-exempt  income
from the corresponding  prior year.  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  December  31, 2002 was  $560,000  and $1.6  million,
respectively.

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 Trusts in 1997 and 2002.
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 December  31,  2002,  the
Company had Tier 1 capital as a percentage of risk-weighted assets of 13.37% and
total risk-based capital as a percentage of risk-weighted assets of 14.24%.

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 December  31,
2002, the Company had a Leverage Ratio of 7.88%.

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 December 31, 2002, the Bank complied with the minimum
leverage  ratio  having  Tier 1 capital of 7.03% of  average  total  assets,  as
defined.

The Bank is also  required to maintain a ratio of  qualifying  total  capital to
risk-weighted assets and off-balance sheet items of a minimum of 8%. At December
31, 2002,  the Bank's total  capital to  risk-weighted  assets ratio  calculated
under the FDIC capital requirement was 12.99%.


                                      -18-

<PAGE>


Liquidity
---------

The Company's primary sources of funds have historically  consisted of deposits,
amortization and prepayments of outstanding  loans,  borrowings from the FHLB of
Pittsburgh and other sources,  including  sales of securities  and, to a limited
extent,  loans.  At December 31, 2002,  the total of approved  loan  commitments
amounted  to $5.0  million.  In  addition,  the  Company  had $10.2  million  of
undisbursed  loan funds at that date. The amount of savings  certificates  which
mature during the next twelve  months  totals  approximately  $99.0  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.

Critical Accounting Policies
----------------------------

Certain critical accounting  policies affect the more significant  judgments and
estimates used in the preparation of the consolidated financial statements.  The
Company's  single  most  critical  accounting  policy  relates to the  Company's
allowance for loan losses,  which reflects the estimated  losses  resulting from
the inability of the Company's borrowers to make required loan payments.  If the
financial condition of the Company's borrowers were to deteriorate, resulting in
an impairment of their ability to make payments,  the Company's  estimates would
be updated, and additional  provisions for loan losses may be required.  Further
discussion of the estimates used in determining the allowance for loan losses is
contained in the discussion on "Provision for Loan Losses" on page 16 herein and
page 44 of the Company's 2002 Annual Report to Shareholders.


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 at December
          31,  2002  from  the   information   presented   under  the   caption,
          Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations - Asset and Liability Management,  as Exhibit 13
          to the Form 10-K for September 30, 2002.


Item 4.   Controls and Procedures

          (a)  Evaluation of disclosure controls and procedures.  Based on their
               ------------------------------------------------
               evaluation as of a date within 90 days of the filing date of this
               Quarterly  Report  on  Form  10-Q,  the  Registrant's   principal
               executive officer and principal  financial officer have concluded
               that the  Registrant's  disclosure  controls and  procedures  (as
               defined in Rules  13a-14(c)  and 15d-14(c)  under the  Securities
               Exchange  Act of 1934 (the  "Exchange  Act"))  are  effective  to
               ensure that  information  required to be disclosed by the Company
               in reports  that it files or submits  under the  Exchange  Act is
               recorded,  processed,  summarized  and  reported  within the time
               periods specified in Securities and Exchange Commission rules and
               forms.

          (b)  Changes in internal controls.  There were no significant  changes
               ----------------------------
               in the  Registrant's  internal  controls or in other factors that
               could significantly  affect these controls subsequent to the date
               of their evaluation, including any corrective actions with regard
               to significant deficiencies and material weaknesses.




                                      -19-
<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

          Not Applicable


Item 5.   Other Information

          On December 31, 2002 the Company  completed the  acquisition  of First
          Pennsylvania Savings Association.  In connection with the acquisition,
          the Company sold  approximately  89,600  shares at $17.52 per share of
          its common stock to certain members of First Pennsylvania,  Fidelity's
          employee stock ownership plan, Fidelity's  stockholders and members of
          the community.








                                      -20-

<PAGE>

Item 6.   Exhibits and Reports on Form 8-K
          (a)  Exhibits
               The following exhibits are filed as part of this Report.
               2.0   Plan of Merger Conversion (1)
               2.1   Amended and Restated Agreement and Plan of Merger
                     Conversion (2)
               3.1   Articles of Incorporation (3)
               3.2   Amended Bylaws (4)
               10.1  Employee Stock Ownership Plan, as amended (3)
               10.2  1988 Employee Stock Compensation Program (3)
               10.3  1993 Employee Stock Compensation Program (5)
               10.4  1997 Employee Stock Compensation Program (6)
               10.5  1993 Directors' Stock Option Plan (5)
               10.6  Employment  Agreement  between  the  company,  the  Bank
                     and William L. Windisch (3)
               10.7  1998 Group Term Replacement Plan (7)
               10.8  1998 Salary  Continuation Plan Agreement by and between
                     W.L. Windisch, the Company and the Bank (7)
               10.9  1998 Salary  Continuation Plan Agreement by and between
                     R.G.Spencer, the Company and the Bank (7)
               10.10 1998 Salary  Continuation Plan Agreement by and between
                     M.A. Mooney, the Company and the Bank (7)
               10.11 1998 Stock Compensation Plan (8)
               10.12 2000 Stock Compensation Plan (9)
               20.1  Dividend Reinvestment Plan (10)
               99    Certification Pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002

          (b)  Reports on Form 8-K

               (1)  A report on Form 8-K was filed on December 11, 2002 pursuant
                    to items 5 and 7 announcing the stock offering in connection
                    with the agreement and plan of merger  conversion with First
                    Pennsylvania Savings Association.
               (2)  A report on Form 8-K was filed on December 18, 2002 pursuant
                    to items 5, 7 and 9 announcing  the  completion of the stock
                    offering in connection with the Company's  merger with First
                    Pennsylvania Savings Association.

(1)  Incorporated  by reference to an identically  numbered  exhibit on Form S-1
     Amendment No. 1 filed with the SEC (3330-100303) on November 12, 2002.
(2)  Incorporated by reference to Form 424B3 filed on November 22, 2002 with the
     SEC (333-100303).
(3)  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").
(4)  Incorporated by reference to an identically  numbered  exhibit on Form 10-Q
     filed with the SEC on August 14, 2002.
(5)  Incorporated by reference from an exhibit in Form S-8 filed with the SEC on
     May 2, 1997.
(6)  Incorporated by reference from an exhibit in Form S-8 filed with the SEC on
     March 12, 1998.
(7)  Incorporated by reference to an identically  numbered  exhibit on Form 10-Q
     filed with the SEC on December 29, 1998.
(8)  Incorporated by reference from an exhibit in Form S-8 filed with the SEC on
     January 25, 1999.
(9)  Incorporated by reference to Exhibit 4.1 to the Form S-8 filed with the SEC
     on January 19, 2001.
(10) Incorporated  by reference  from an Exhibit in Form 10-Q filed with the SEC
     on February 14, 2000.


                                      -21-


<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:   February 14, 2003        By:  /s/ Richard G. Spencer
                                      ------------------------------------------
                                      Richard G. Spencer
                                      President and Chief Executive Officer



Date:   February 14, 2003        By:  /s/ Lisa L. Griffith
                                      ------------------------------------------
                                      Lisa L. Griffith
                                      Vice President and Chief Financial Officer






























                                      -22-


<PAGE>

                            SECTION 302 CERTIFICATION


     I, Richard G. Spencer, Chief Executive Officer, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-Q of Fidelity  Bancorp,
     Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     (c)  presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date: February 14, 2003                    /s/ Richard G. Spencer
                                           -------------------------------------
                                           Richard G. Spencer
                                           Chief Executive Officer


<PAGE>



                            SECTION 302 CERTIFICATION


     I, Lisa L. Griffith, Chief Executive Officer, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-Q of Fidelity  Bancorp,
     Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     (c)  presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: February 14, 2003                    /s/ Lisa L. Griffith
                                           -------------------------------------
                                           Lisa L. Griffith
                                           Chief Financial Officer