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 March 31, 1999

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

          For the transition period from _____________ to _____________

                         Commission file number 0-22288

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

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


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


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

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

     Check whether the issuer (1) filed all reports required to be filed by
 Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
 shorter period that the registrant was required to file such reports), and (2)
                  has been subject to such filing requirements
                         for the past 90 days. Yes   X     No
                                                  ------     ------    
                                     
                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

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

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 1,976,082 shares, par value
$0.01, at April 30, 1999
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES

                                      Index

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


Item 1.  Financial Statements

          Consolidated Statements of Financial Condition as of       
          September 30, 1998 and March 31, 1999 (Unaudited)                 

          Consolidated Statements of Income (Unaudited) for the 
          Three and Six Months Ended March 31, 1998 and 1999                

          Consolidated Statements of Cash Flows (Unaudited) for 
          the Six Months Ended March 31, 1998 and 1999                      

          Consolidated Statement of Changes in Stockholders' Equity  
          (Unaudited) for the Six Months Ended March 31, 1998 and 1999      

          Notes to Consolidated Financial Statements (unaudited)            

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

Item 3.   Quantitative and Qualitative Disclosures About Market Risk        


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

Item 1.  Legal Proceedings                                                  

Item 2.  Changes in Securities                                              

Item 3.  Defaults Upon Senior Securities                                    

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

Item 5.  Other Information                                                  

Item 6.  Exhibits and Reports on Form 8-K                                   

Signatures                                                                  
<PAGE>
Part I - Financial Information

                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition
                                 (in thousands)
<TABLE>
<CAPTION>
                                                         March 31,    September 30,
                                                           1999            1998
                                                           ----            ----
                                                              (Unaudited)
<S>                                                     <C>            <C>      
Cash and amounts due from
   depository institutions                              $   6,636      $   2,539
Interest-earning demand deposits with
   other institutions                                         240            613
Investment securities held-to-maturity                      3,628          6,625
Investment securities available-for-sale                   73,196         57,590
Loans receivable, net  (Notes 5 and 6)                    240,211        218,892
Mortgage-backed securities held-to-maturity                15,668         19,913
Mortgage-backed securities available-for-sale              96,836         82,957
Real estate owned, net                                         --             21
Federal Home Loan Bank stock - at cost                      7,357          5,050
Accrued interest receivable, net                            2,667          2,573
Office premises and equipment, net                          3,896          3,446
Deferred tax asset                                          1,086            700
Prepaid expenses and sundry assets                          5,377          5,125
                                                        ---------      ---------
       Total Assets                                     $ 456,798      $ 406,044
                                                        =========      =========
</TABLE>
(continued)
<PAGE>
<TABLE>
<CAPTION>
                                                         March 31,    September 30,
                                                           1999            1998
                                                           ----            ----
                                                              (Unaudited)
<S>                                                     <C>            <C>      
         Liabilities and Net worth
         -------------------------
Liabilities:
   Savings deposits                                     $ 264,573      $ 261,735
   Federal Home Loan Bank advances                        145,500        100,200
   Reverse repurchase agreements                            2,594          1,870
   Advance deposits by borrowers for
      taxes and insurance                                   2,365          1,126
   Accrued interest on savings and other deposits              36             92
   Accrued income taxes payable                                --            171
   Other accrued expenses and sundry liabilities            2,192          1,579
   Guaranteed preferred beneficial interest in
       Company's debentures                                10,250         10,250
                                                        ---------      ---------
       Total Liabilities                                  427,510        377,023
                                                        ---------      ---------
Stockholders' equity (Notes 3 and 4):
   Common stock, $0.01 par value per share,
      10,000,000 shares authorized; 1,981,052
      and 1,978,543 shares issued and outstanding,
      respectively                                             20             20
   Treasury stock, at cost (5,000 shares)                     (89)            --
   Additional paid-in capital                              14,248         14,168
   Retained earnings - substantially restricted            15,236         14,106
   Accumulated other comprehensive income,
      net of tax                                             (127)           727
                                                        ---------      ---------
       Total Stockholders' Equity                          29,288         29,021
                                                        ---------      ---------
       Total Liabilities and Stockholders' Equity       $ 456,798      $ 406,044
                                                        =========      =========
</TABLE>
See accompanying notes to financial statements 

                                       -1-
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                  Consolidated Statements of Income (Unaudited)
                      (in thousands except per share data)
<TABLE>
<CAPTION>
                                                          Three Months Ended                   Six Months Ended          
                                                                March 31,                           March 31,
                                                         1999              1998              1999               1998
                                                         ----              ----              ----               ----
<S>                                                   <C>                <C>               <C>                <C>        
Interest income:                                    
   Loans                                              $  4,612           $ 3,960           $  9,291           $  7,944   
   Mortgage-backed securities                            1,709             1,952              3,350              4,037  
   Investment securities:                                                                                               
       Taxable                                             666               636              1,313              1,310  
       Tax-exempt                                          457               278                873                528  
   Deposits with other institutions                          7                29                 20                 33  
                                                      --------          --------           --------           --------  
     Total interest income                               7,451             6,855             14,847             13,852  
                                                      --------          --------           --------           --------  

Interest expense:                                     
   Savings deposits                                      2,621             2,724              5,449              5,395
   Guaranteed preferred beneficial interest                                                                           
      in subordinated debt                                 256               256                512                512
Borrowed funds                                           1,751             1,321              3,293              2,706
                                                      --------          --------           --------           --------
      Total interest expense                             4,628             4,301              9,254              8,613
                                                      --------          --------           --------           --------

Net interest income before provision                  
   for loan losses                                       2,823             2,554              5,593              5,239
Provision for loan losses                                  100               110                205                225
                                                      --------          --------           --------           --------
 Net interest income after provision                                                                                     
    for loan losses                                      2,723             2,444              5,388              5,014
                                                      --------          --------           --------           --------
                                                      
Other income:                                          
   Service fee income                                       28                30                 73                 64   
   Gain (loss) on sale of investment                                                                                  
      and mortgage-backed securities, net                   74                (1)                74                  8
   Gain (loss) on sale of loans                              1                 7                  5                  9
   Other operating income                                  315               271                591                444
                                                      --------          --------           --------           --------
    Total other income                                     418               307                743                525
                                                      --------          --------           --------           --------
</TABLE>
(continued)
<PAGE>
<TABLE>
<CAPTION>
                                                          Three Months Ended                   Six Months Ended
                                                                March 31,                           March 31,
                                                         1999              1998              1999               1998
                                                         ----              ----              ----               ----
<S>                                                   <C>                <C>               <C>                <C>        
Operating expenses:                                   
   Compensation and employee benefits                    1,183             1,003              2,375              2,047   
   Occupancy and equipment expense                         209               161                419                299
   Depreciation and amortization                           149               127                295                250
   Federal insurance premiums                               40                38                 78                 76
   (Gain) loss on real estate owned, net                     6                 1                (39)                10
   Other operating expenses                                484               421                929                830
                                                      --------          --------           --------           --------
     Total operating expenses                            2,071             1,751              4,057              3,512
                                                      --------          --------           --------           --------

Income before income tax provision                       1,070             1,000              2,074              2,027   
Income tax provision                                       286               335                587                694
                                                      --------          --------           --------           --------
Net income                                            $    784          $    665           $  1,487           $  1,333
                                                      ========          ========           ========           ========
Basic earnings per common share (Note 3)              $   0.40          $   0.34           $   0.75           $   0.68
                                                      ========          ========           ========           ========
Diluted earnings per common share (Note 3)            $   0.39          $   0.33           $   0.73           $   0.65
                                                      ========          ========           ========           ========
Dividends per common share (Note 3)                   $  0.090          $  0.072           $  0.180           $  0.144
                                                      ========          ========           ========           ========
</TABLE>
See accompanying notes to financial statements.       

                                       -2-
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                             Six Months Ended March 31,
                                                                             --------------------------
                                                                                1999          1998
                                                                                ----          ---- 
<S>                                                                           <C>           <C>     
Operating Activities:
     Net income                                                               $  1,487      $  1,333
     Adjustments to reconcile net income to net
     cash provided by operating activities:
         Provision for loan losses                                                 205           225
         (Gain) loss on real estate owned                                          (39)           10 
         Depreciation of premises and equipment                                    295           250
                                                                                  (158)          (66)
         Deferred loan fee amortization
         Amortization of investment and mortgage-backed securities
          discounts/premiums, net                                                  196           205
         Net (gain) loss on sale of investment securities                         (127)           (6)
         Net (gain) loss on sale of mortgage-backed securities                      53            (3)
         Net (gain) loss  on sale of loans                                          (5)           (9)
         Origination of loans held-for-sale                                       (477)          (68)
         Proceeds from sale of loans held-for-sale                                 479            68
         (Increase) decrease in interest receivable                                (94)         (136)
         (Increase) decrease in deferred tax asset                                (386)         (180)
         Increase (decrease) in accrued income taxes                              (171)          316 
         Increase (decrease) in interest payable                                   (56)         (107)
         Other changes, net                                                        941          (946)
                                                                              --------      --------

        Net cash provided (used) by operating activities                         2,143           886
</TABLE>

<TABLE>
<CAPTION>
                                                                             Six Months Ended March 31,
                                                                             --------------------------
                                                                                1999          1998 
                                                                                ----          ---- 
<S>                                                                           <C>           <C>     
Investing Activities:

     Proceeds from sales of investment securities available-for-sale             1,558         8,001
     Proceeds from maturities and principal repayments of
        investment securities available-for-sale                                 9,008         2,005
     Purchases of investment securities available-for-sale                     (26,375)      (11,764)
     Proceeds from sales of mortgage-backed securities available-for-sale        3,171        14,042
     Proceeds from maturities and principal repayments of  mortgage-
        backed securities available-for-sale                                    15,342         8,066
     Purchases of mortgage-backed securities available-for-sale                (33,515)      (24,192)
     Proceeds from maturities and principal repayments of investment
        securities held-to-maturity                                              5,000         5,129
     Purchases of investment securities held-to-maturity                        (2,004)       (7,997)
     Purchases of mortgage-backed securities held-to-maturity                       --            --
     Proceeds from principal repayments of mortgage-backed
       securities held-to-maturity                                               4,201         5,845
     Net (increase) decrease in loans                                          (21,738)      (19,426)
     Proceeds from sale of other loans                                             251           269
     Additions to office premises and equipment                                   (746)         (195)
     Net purchases of FHLB Stock                                                (2,307)          (40)
                                                                              --------      --------

  Net cash provided (used) by investing activities                             (48,154)      (20,257)
                                                                              --------      --------
</TABLE>
                                       -3-
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
              Consolidated  Statements of Cash Flows (Unaudited) (Cont'd.)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                    Six Months Ended March 31,
                                                                     1999               1998
                                                                     ----               ----
<S>                                                                 <C>                 <C>  
Financing Activities:                                                               
Net increase (decrease) in savings deposits                            2,838            18,814 
Increase (decrease) in reverse repurchase agreements                     724               575 
Net increase (decrease) in FHLB advances                              45,300              (600)
Increase in advance payments by borrowers for                                                  
  taxes and insurance                                                  1,239             1,015 
Cash dividends paid                                                     (357)             (281)
Stock options exercised                                                   52                45 
Proceeds from sale of stock                                               28               114         
Repurchase of stock                                                      (89)               -- 
                                                                    --------          -------- 
                                                                                               
Net cash provided (used) by financing activities                      49,735            19,682 
                                                                    --------          -------- 
                                                                                               
Increase (decrease) in cash and cash equivalents                       3,724               311 
                                                                                               
Cash and cash equivalents at beginning of period                       3,152             3,975 
                                                                    --------          -------- 
                                                                                               
Cash and cash equivalents at end of period                          $  6,876          $  4,286 
                                                                    ========          ======== 
                                                                                               
                                                                                               
Supplemental Disclosure of Cash Flow Information                                               
                                                                                               
Cash paid during the period for:                                                               
  Interest on deposits and other borrowings                         $  9,195          $  8,575 
  Income taxes                                                      $    750          $    785 
                                                                    --------          -------- 
                                                                                      
</TABLE>
See accompanying notes to financial statements.

                                       -4-
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
      Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                                       Accumulated
                                                                       Additional                     Other Compre-
                                          Common         Paid-in        Treasury        Retained      hensive Income
                                          Stock          Capital         Stock          Earnings        Net of Tax         Total
                                          -----          -------         -----          --------        ----------         -----
<S>                                     <C>           <C>              <C>              <C>             <C>             <C>      
Balance at September 30, 1997           $       16    $   13,810       $        0       $ 11,822     $      233         $  25,881

Net income                                                                                 1,333                            1,333

  Cash dividends paid (Note 3)                                                              (281)                            (281)

  5/4 Stock Split                                4           (4)                                                                0

  Cash paid on stock split in
   lieu of fractional shares                                                                  (5)                              (5)
 
  Net change in unrealized gain
    (loss) on securities available-
    for-sale, net of taxes                                                                                  466               466

  Sale of stock through Dividend
    Reinvestment Plan                                        114                                                              114

  Stock options exercised                                     45                                                               45
                                        ----------    ----------       ----------       --------     ----------         ---------
Balance at March 31, 1998               $       20    $   13,965       $        0       $ 12,869     $      699          $ 27,553
                                        ==========    ==========       ==========       ========     ==========          ========


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

Net income                                                                                 1,487                            1,487

  Cash dividends paid (Note 3)                                                              (357)                            (357)

  Net change in unrealized gain
    (loss) on securities available-
    for-sale, net of taxes                                                                                 (854)             (854)

  Repurchase - 5,000 shares                                                   (89)                                            (89)

  Sale of stock through Dividend
    Reinvestment Plan                                         28                                                               28

  Stock options exercised                                     52                                                               52
                                        ----------    ----------       ----------       --------     ----------         ---------
Balance at March 31, 1999               $       20    $   14,248       $      (89)      $ 15,236     $     (127)        $  29,288
                                        ==========    ==========       ==========       ========     ==========          ========
</TABLE>
                                                            -5-
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements - (Unaudited)
                      September 30, 1998 and March 31, 1999
(1) Consolidation
-----------------
The consolidated  financial  statements  contained herein for Fidelity  Bancorp,
Inc.  (the  "Company")  include the accounts of Fidelity  Bancorp,  Inc. and its
wholly-owned subsidiaries, Fidelity Bank, PaSB (the "Bank") and FB Capital Trust
(the "Trust"). All significant inter-company balances and transactions have been
eliminated.

(2) Basis of Presentation
-------------------------
The accompanying  consolidated  financial statements were prepared in accordance
with  instructions  to Form 10-Q, and therefore,  do not include  information or
footnotes necessary for a complete  presentation of financial position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles.  However, all normal recurring adjustments, which, in the opinion of
management,  are necessary for a fair presentation of the financial  statements,
have been included.  These  financial  statements  should be read in conjunction
with  the  audited  financial  statements  and the  accompanying  notes  thereto
included in the Company's Annual Report for the period ended September 30, 1998.
The  results for the three and six  month  periods  ended March 31, 1999 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending September 30, 1999 or any other period.

(3) Earnings Per Share
----------------------
In February 1997, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings per Share". SFAS No. 128 provides revised reporting standards
for earnings per share ("EPS") and is effective for financial  statement periods
ending  after  December  15,  1997.  SFAS No. 128  eliminates  primary and fully
diluted EPS disclosures and adds new disclosures of basic and diluted EPS. Basic
EPS  excludes  dilution and is computed by dividing  income  available to common
stockholders by the weighted average number of common shares outstanding for the
period.  Diluted  EPS  reflects  the  potential  dilution  that  could  occur if
securities or other  contracts to issue common stock were exercised or converted
into common  stock or resulted in the  issuance of common stock that then shared
in the earnings of the Company.  The Company adopted SFAS No. 128 as of December
31, 1997.  The following  table sets forth the  computation of basic and diluted
earnings per share (amounts in thousands, except per share data):
<PAGE>
<TABLE>
<CAPTION>
                                                        Three Months Ended                          Six Months Ended
                                                              March 31,                                  March 31,
                                                        1999          1998                           1999        1998
                                                        ------------------                           ----------------
Numerator:
<S>                                                    <C>           <C>                             <C>        <C>   
Net income                                             $  784        $  665                          $1,487     $1,333
   Numerator for basic and
    diluted earnings per share                         $  784        $  665                          $1,487     $1,333
    Denominator:
Denominator for basic earnings
   per share - weighted average shares                  1,983         1,959                           1,981      1,953
Effect of dilutive securities:
   Employee stock options                                  47            86                              47         86
Denominator for diluted earnings
   per share - weighted average
   shares and assumed conversions                       2,030         2,045                           2,028      2,039
Basic earnings per share                               $  .40        $  .34                          $  .75     $  .68
Diluted earnings per share                             $  .39        $  .33                          $  .73     $  .65
</TABLE>

                                       -6-
<PAGE>
Per share  amounts  have been  restated  to give  retroactive  effect to the 25%
common stock split  declared by the  Company's  Board of  Directors  and paid on
March 31, 1998.

(4) Securities
The Company accounts for investments in debt and equity securities in accordance
with SFAS No. 115, which requires that investments be classified as either:  (1)
Securities   Held-to-  Maturity  -  reported  at  amortized  cost,  (2)  Trading
Securities  - reported at fair value,  or (3)  Securities  Available-for-Sale  -
reported   at  fair   value.   Unrealized   gains  and  losses  for   securities
available-for-sale  are reported as other comprehensive  income in stockholders'
equity.  Unrealized losses of $127,000, net of tax, on investments classified as
available-for-sale are recorded at March 31, 1999.

(5) Loans Receivable
         Loans  receivable  are  comprised of the following 
         (dollar  amounts in thousands):
<TABLE>
<CAPTION>
                                                   March 31,      September 30,
                                                     1999            1998
<S>                                                <C>            <C>      
First mortgage loans:
         Conventional:
                  1-4 family dwellings             $ 132,930      $ 115,559
                  Multi-family dwellings               3,715          4,262
         Commercial                                   23,786         21,881
         Construction                                 14,633         21,212
                                                   ---------      ---------
                                                     175,064        162,914
                                                   ---------      ---------
Less:
         Loans in process                            (10,718)       (12,916)
         Unearned discounts and fees                  (1,220)        (1,142)
                                                   ---------      ---------
                                                     163,126        148,856
                                                   ---------      ---------
Installment loans:
         Home equity                                  44,697         42,290
         Consumer loans                                2,091          2,359
         Other                                         4,940          4,473
                                                   ---------      ---------
                                                      51,728         49,122
                                                   ---------      ---------
Commercial business loans and leases:
         Commercial business loans                    23,500         19,509
         Commercial leases                             4,194          3,648
                                                   ---------      ---------
                                                      27,694         23,157
                                                   ---------      ---------

Less: Allowance for loan losse                        (2,337)        (2,243)
                                                   ---------      ---------

         Loans receivable, net                     $ 240,211      $ 218,892
                                                   =========      =========
</TABLE>
<PAGE>
(6) Changes in the  allowance for loan losses for the six months ended March 31,
1999 and 1998 are as follows (dollar amounts in thousands):

<TABLE>
<CAPTION>
                                            1999           1998
                                           ------         ------
<S>                                        <C>            <C>   
Balance at beginning of the fiscal year    $2,243         $1,931
Provision for loan losses                     205            225
Charge-offs                                  (113)           (46)
Recoveries                                      2              4
                                           ------         ------
Balance at March 31,                       $2,337         $2,114
                                           ======         ======
</TABLE>

                                       -7-
<PAGE>
The  provision  for loan  losses  charged to expense is based upon past loan and
loss  experience  and an  evaluation  of  probable  losses in the  current  loan
portfolio,  including the  evaluation of impaired  loans under SFAS Nos. 114 and
118. A loan is considered to be impaired  when,  based upon current  information
and events,  it is probable  that the Bank will be unable to collect all amounts
due according to the contractual  terms of the loan. An insignificant  shortfall
in payments does not necessarily  result in a loan being identified as impaired.
For this purpose, delays less than 90 days are considered to be insignificant.

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

At March 31, 1999,  the recorded  investment in loans that are  considered to be
impaired under SFAS No. 114 was $506,000. Included in this amount is $506,000 of
impaired loans for which the related allowance for loan losses is $243,000,  and
no impaired  loans that as a result of  write-downs do not have an allowance for
loan losses.  The average  recorded  investment in impaired loans during the six
months  ended March 31, 1999 was  $334,000.  For the six months  ended March 31,
1999, the Company  recognized  interest income on those impaired loans of $6,000
using the cash basis of income recognition.

(7) Comprehensive Income
------------------------
In June 1997, the FASB issued SFAS No. 130, "Reporting  Comprehensive  Income ."
SFAS No. 130  establishes  standards for reporting and display of  comprehensive
income and its components (revenue,  expenses,  gains, and losses) in a full set
of general purpose  financial  statements.  SFAS No. 130 requires that all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. SFAS No. 130 requires that an
enterprise (a) classify items of other comprehensive income by their nature in a
financial   statement  and  (b)  display  the   accumulated   balance  of  other
comprehensive  income separately from retained  earnings and additional  paid-in
capital in the equity section of a statement of financial position.  For the six
months ended March 31, 1999 and 1998, the Company's total  comprehensive  income
was $633,000  and $1.8  million,  respectively.  Total  comprehensive  income is
comprised of net income of $1.5 million and $1.3 million and other comprehensive
income of ($854,000) and $466,000, net of tax, respectively. Other comprehensive
income  consists of  unrealized  gains and losses on investment  securities  and
mortgage-backed securities available-for-sale.

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

                                       -8-
<PAGE>
                     FIDELITY BANCORP, INC. AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Comparison of Financial Condition at September 30, 1998 and March 31, 1999
--------------------------------------------------------------------------

Total assets of the Company  increased  $50.8 million or 12.5% to $456.8 million
at March 31, 1999 from $406.0 million at September 30, 1998. Significant changes
in individual  categories  were increases in loans  receivable of $21.3 million,
investment  securities  available-for-sale  of  $15.6  million,  mortgage-backed
securities  available-for-sale  of $13.9  million,  and  decreases in investment
securities  held-to-maturity  of $3.0  million  and  mortgage-backed  securities
held-to-maturity of $4.2 million.

Total  liabilities  of the Bank  increased  by $50.5  million or 13.4% to $427.5
million  at March 31,  1999 from  $377.0  million at  September  30,  1998.  The
increase  primarily  reflects a $45.3 million increase in Federal Home Loan Bank
advances and a $2.8 million increase in savings deposits.

Stockholders'  equity  increased  $267,000 or .9% to $29.3  million at March 31,
1999,  compared to September 30, 1998. The increase  reflects net income for the
six month period ended March 31, 1999 of $1.49 million,  stock options exercised
of $52,000 and stock  issued under the  Dividend  Reinvestment  Plan of $28,000.
Partially  offsetting  these  increases were common stock cash dividends paid of
$357,000,    a   decrease   in   unrealized    holding   gains   on   securities
available-for-sale  of $854,000,  and the purchase of treasury stock at cost for
$89,000.

Non-Performing Assets
---------------------
The following table sets forth information  regarding non-accrual loans and real
estate  owned  by the  Bank at the  dates  indicated.  The Bank did not have any
accruing  loans  which  were 90 days or more  overdue  or any loans  which  were
classified as troubled debt restructuring during the periods presented.  (Dollar
amounts in thousands):
<TABLE>
<CAPTION>
                                                    March 31,    September 30,
                                                     1999            1998
                                                     ----            ----
<S>                                                <C>              <C>   
Non-accrual residential real                                      
  estate loans (one-to-four-family)                $  211           $  224
                                                                  
Non-accrual construction, multi-family                            
  residential and commercial real estate loans      1,544              199
                                                                  
Non-accrual installment and                                       
  commercial business loans                           587              129
                                                   ------           ------
                                                                  
Total non-performing loans                         $2,342           $  552
                                                   ======           ======
                                                                  
Total non-performing loans as                                     
  a percent of net loans receivable                   .97%             .25%
                                                   ======           ======
                                                                  
Total real estate owned,                                          
  net of related reserves                          $   -            $   21
                                                   ======           ======
                                                                  
Total non-performing loans and real estate                        
  owned as a percent of total assets                  .51%             .14%
                                                   ======           ======
</TABLE>
                                       -9-                        
<PAGE>
Included  in  non-performing  loans at  March  31,  1999 are four  single-family
residential  real estate loans totaling  $211,000,  four  commercial real estate
loans  totaling  $1.5 million,  16  installment  loans  totaling  $138,000,  six
commercial business loans totaling $411,000 and three commercial business leases
totaling $37,000.

At March 31, 1999,  the Bank had an allowance for loan losses of $2.3 million or
 .97% of net loans  receivable,  as compared to an  allowance  of $2.2 million or
1.02% of net loans  receivable  at September  30, 1998.  The  allowance for loan
losses equals 99.8% of non-performing loans at March 31, 1999.

Management has evaluated these  non-performing  loans and the overall  allowance
for loan losses and is satisfied that the allowance for losses on loans at March
31, 1999 is appropriate.

There was no real estate owned at March 31, 1999.

                       Comparison of Results of Operations
           for the Three and Six Months Ended March 31, 1999 and 1998

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

Net income for the three months  ended March 31, 1999 was  $784,000  compared to
$665,000  for the same period in 1998,  an  increase  of $119,000 or 17.9%.  The
increase  reflects an increase in net interest  income of $269,000 or 10.5%,  an
increase in other income of $111,000 or 36.2%,  a decrease in the  provision for
loan losses of $10,000 or 9.1%, and a decrease in the provision for income taxes
of $49,000 or 14.6%. Partially offsetting these factors was an increase in other
operating expenses of $320,000 or 18.3%.

Net income for the six months ended March 31, 1999 was $1.487  million  compared
to $1.333 million for the same period in 1998, an increase of $154,000 or 11.6%.
The increase reflects an increase in net interest income of $354,000 or 6.8%, an
increase in other income of $218,000 or 41.5%,  a decrease in the  provision for
loan losses of $20,000 or 8.9% and a decrease in the  provision for income taxes
of  $107,000 or 15.4%.  Partially  offsetting  these  factors was an increase in
other operating expenses of $545,000 or 15.5%.

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

The Bank's interest rate spread,  the difference  between yields calculated on a
tax-equivalent basis on interest-earning assets and the cost of funds, increased
to 2.59% in the three  months ended March 31, 1999 from 2.56% in the same period
in 1998.  The  following  table  shows the average  yields  earned on the Bank's
interest-earning  assets  and the  average  rates  paid on its  interest-bearing
liabilities for the periods indicated,  the resulting interest rate spreads, and
the net yields on interest-earning assets.

                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                                                                                        Three Months Ended March 31,
                                                                                           1999           1998
                                                                                           ----           ----
<S>                                                                                        <C>             <C>  
Average yield on:
   Mortgage loans                                                                          7.55%           7.74%
   Mortgage-backed securities                                                              6.09            6.38
   Installment loans                                                                       8.09            8.21
   Commercial business loans                                                               8.77            9.62
   Interest-earning deposits with other 
     institutions, investment securities,
     and FHLB stock (1)                                                                    6.57            6.91
                                                                                           ----            ----
   Total interest-earning assets                                                           7.12            7.32
                                                                                           ----            ----
Average rates paid on:
   Savings deposits                                                                       3.96             4.26
   Borrowed funds                                                                         5.58             5.94
                                                                                          ----             ----
   Total interest-bearing liabilities                                                     4.53             4.76
                                                                                          ----             ----

Average interest rate spread                                                              2.59%            2.56%
                                                                                          ====             ====
Net yield on interest-earning assets                                                      2.81%            2.80%
                                                                                          ====             ====
</TABLE>

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

The Bank's  tax-equivalent  interest  rate spread  decreased to 2.66% in the six
months  ended March 31, 1999 from 2.68% in the same period in fiscal  1998.  The
following  table shows the average yields earned on the Bank's  interest-earning
assets and the average rates paid on its  interest-bearing  liabilities  for the
periods indicated,  the resulting  interest rate spreads,  and the net yields on
interest-earning assets.
<PAGE>
<TABLE>
<CAPTION>
                                                                                  Six Months Ended March 31,
                                                                                      1999         1998
<S>                                                                                   <C>          <C>  
Average yield on:
   Mortgage loans                                                                     7.80%        8.00%
   Mortgage-backed securities                                                         6.09         6.44
   Installment loans                                                                  8.22         8.32
   Commercial business loans                                                          9.05        10.12
   Interest-earning deposits with other
     institutions, investment securities,
     and FHLB stock (1)                                                               6.69         6.95
                                                                                      ---          ----
   Total interest-earning assets                                                      7.27         7.45
                                                                                      ----         ----
Average rates paid on:
   Savings deposits                                                                   4.09         4.25
   Borrowed funds                                                                     5.64         5.31
0                                                                                      ----         ----
   Total interest-bearing liabilities                                                 4.61         4.77
                                                                                      ----         ----

Average interest rate spread                                                          2.66%        2.68%
                                                                                      ====         ====

Net yield on interest-earning assets                                                  2.85%        2.89%
                                                                                      ====         ====
</TABLE>
(1) Interest income on tax-free investments has been adjusted for federal income
    tax purposes using a rate of 34%.

                                      -11-
<PAGE>
Interest Income
---------------

Interest  on loans  increased  $652,000  or 16.5% to $4.6  million for the three
months ended March 31, 1999,  compared to the same period in 1998.  The increase
reflects an  increase  in the average  loan  balance  outstanding  during  1999,
partially  offset  by a  decrease  in the yield  earned  on the loan  portfolio.
Interest  on loans  increased  $1.3  million or 17.0% to $9.3 for the six months
ended March 31, 1999,  compared to the same period in fiscal 1998.  The increase
is  attributable to an increase in the average loan balance  outstanding  during
the 1999  period,  partially  offset by a decrease in the yield  earned on these
assets in the fiscal 1999 period as compared to the same period in fiscal  1998.
The  increase in the average  balance of the loan  portfolio  in the fiscal 1999
periods reflects  management's  continued strategy of emphasizing and increasing
loans.  The lower yield  earned on the  portfolio  reflects  the lower long term
interest rate  environment that has existed for much of fiscal 1999, as both new
loans originated are at lower rates and more existing  borrowers refinanced into
lower rate loans.

Interest  on  mortgage-backed  securities  decreased  $243,000  or 12.4% to $1.7
million and $687,000 or 17.0% to $3.4 million for the three and six months ended
March 31,  1999,  respectively,  as  compared to the same  periods in 1998.  The
decrease for both the three and six month periods ended March 31, 1999, reflects
both a decrease in the average balance of  mortgage-backed  securities  owned in
the fiscal  1999  periods,  as compared  to fiscal  1998,  and a decrease in the
average yield earned on the portfolio.

Interest on  interest-earning  deposits with other  institutions  and investment
securities  increased  $187,000  or 19.8% to $1.1  million  for the three  month
period  ended  March 31,  1999,  as  compared  to the same  period in 1998.  The
increase reflects an increase in the average balance in the portfolio, partially
offset by a decrease in the yield earned on these investments. For the six month
period ended March 31, 1999,  interest on  interest-earning  deposits with other
institutions  and  investment  securities  increased  $335,000  or 17.9% to $2.2
million, as compared to the same period in the prior year. The increase reflects
an increase in the average  balance of such  securities and deposits,  partially
offset by a decrease in the yield earned on these investments.
<PAGE>
Interest Expense
----------------
Interest on savings  deposits  decreased  $103,000  or 3.8% to $2.6  million and
increased  $54,000 or 1.0% to $5.4  million for the three and six month  periods
ended March 31,  1999,  respectively,  as compared to the same periods in fiscal
1998.  The  decrease  for the three  month  period in fiscal 1999 as compared to
fiscal  1998  reflects a decrease  in the average  cost of  deposits,  partially
offset by an increase in the average balance of savings  deposits.  The increase
for the six month  period in fiscal  1999  reflects  an  increase in the average
balance of savings  deposits in the fiscal 1999  period,  partially  offset by a
decrease in the average cost of the deposits. The cost of deposits has decreased
in fiscal  1999 as  interest  rates have  generally  been lower than in the same
periods in fiscal 1998.

Interest  on borrowed  funds  increased  $430,000  or 32.6% to $1.8  million and
$587,000  or 21.7% to $3.3  million  for the three and six month  periods  ended
March 31,  1999,  respectively,  as compared to the same periods in fiscal 1998.
The increases for both periods in fiscal 1999 as compared to fiscal 1998 reflect
an  increase  in the  Federal  Home  Loan Bank  ("FHLB")  advances  and  reverse
repurchase  agreements  outstanding  during the fiscal 1999  periods,  partially
offset by a decrease in the cost of those borrowings for the three month period;
the  cost of  those  borowings  increased  for the six  month  period.  The Bank
continues  to rely on these  wholesale  funding  sources  in  fiscal  1999 as an
additional way to fund growth.

                                      -12-
<PAGE>
Interest on guaranteed  preferred  beneficial  interest in subordinated debt was
$256,000 and $512,000 for the three and six month  periods  ended March 31, 1999
and 1998. The Preferred Securities were issued in May 1997.

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

The Bank's net  interest  income  before  provision  for loan  losses  increased
$269,000 or 10.5% to $2.8 million,  and $354,000 or 6.8% to $5.6 million for the
three and six month periods ended March 31, 1999,  respectively,  as compared to
the same  periods in fiscal  1998.  The  increase  for both periods is primarily
attributable to an increase in net interest-earning assets.

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

The provision for loan losses decreased  $10,000 or 9.1% to $100,000 and $20,000
or 8.9% to $205,000  for the three and six month  periods  ended March 31, 1999,
respectively,  as compared to the same periods in fiscal 1998. The provision for
both years  reflects  management's  evaluation  of the loan  portfolio,  current
economic  conditions,  and other factors as described  below.  The allowance for
loan losses has increased from $2.1 million at March 31, 1998 to $2.3 million at
March 31, 1999.

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

Total  non-interest or other income increased  $111,000 or 36.2% to $418,000 and
$218,000 or 41.5% to $743,000  for the three and six month  periods  ended March
31, 1999, respectively, as compared to the same periods in fiscal 1998.

Service  fee income,  which  includes  late  charges on loans and fees for loans
serviced  for  others,  decreased  $2,000 or 6.7% to $28,000 for the three month
period ended March 31,  1999,  as compared to the same period in the prior year.
The  decrease is primarily  attributable  to a decrease in late charges on loans
and loan servicing fee income.  Service fee income  increased $9,000 or 14.1% to
$73,000 for the six month period  ended March 31, 1999,  as compared to the same
period in fiscal 1998. The increase is primarily  attributable to an increase in
late charges on mortgage  loans and the  imposition of an annual fee on lines of
credit, partially offset by a decrease in loan servicing fee income.

Gain on the sale of investment  and  mortgage-backed  securities was $74,000 for
the three month period ended March 31, 1999,  as compared to a loss of $1,000 in
the same period in 1998.  For the six month  period ended March 31, 1999, a gain
of $74,000 was recorded,  as compared to a gain of $8,000 for the same period in
fiscal 1998.  All sales were made from the  available-for-sale  portfolio in the
periods and were done to reflect current economic conditions and asset/liability
management strategies, as well as changing market conditions.

                                      -13-
<PAGE>
Gain on sale of loans was $1,000 and $5,000 for the three and six month  periods
ended March 31, 1999, respectively, as compared to gains of $7,000 and $9,000 in
the  comparable  periods in fiscal 1998. The Bank sells  education  loans to the
Student Loan Marketing Association ("SLMA"). Such sales generally result in some
gain or loss being realized and are being done to reduce the Bank's  position in
these loans,  which are  generally  lower  yielding and subject to extensive and
costly government  regulation.  The Bank does not intend to originate additional
student  loans for its  portfolio,  except  those that will be serviced by SLMA.
Results generally reflect the timing of such sales.

Other operating  income includes  miscellaneous  sources of income which consist
primarily of various fees  related to checking  accounts,  fees from the sale of
cashiers  checks and money  orders,  and safe deposit box rental  income.  Other
operating income increased  $44,000 or 16.2% to $315,000 and increased  $147,000
or 33.1% to $591,000 for the three and six month  periods  ended March 31, 1999,
as compared to the same periods in fiscal 1998.  The increase for both the three
and six month  periods is primarily due to increases in fees related to returned
checks,  increased automatic teller machine fees, and increased safe deposit box
fees,  partially  offset by  decreased  fees on the sale of accident  and health
insurance on loans. In addition,  fiscal 1999 results reflect increased earnings
on the cash  surrender  value of life  insurance  policies on certain  executive
officers,  and fees  earned  from a program,  introduced  in July 1998,  to sell
non-insured  investment products such as mutual funds and annuities to both Bank
and nonbank customers.

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

Total  operating  expenses  increased  $320,000  or  18.3% to $2.1  million  and
$545,000  or 15.5% to $4.1  million  for the three and six month  periods  ended
March 31, 1999, respectively, as compared to the same period in fiscal 1998.

Compensation,  payroll  taxes and fringe  benefits,  the  largest  component  of
operating expenses,  increased $180,000 or 18.0% to $1.2 million and $328,000 or
16.0% to $2.4 million for the three and six month  periods ended March 31, 1999,
respectively,  compared to the same periods in fiscal 1998. Factors contributing
to the increase were normal salary  increases,  higher bonuses awarded in fiscal
1999, an increase in the number of employees on the payroll,  and an increase in
retirement  and health care  expenses.  The  increase in the number of employees
primarily  reflects  staffing  additions  for the new  branch  office  opened in
Pittsburgh's  Strip District in October 1998, as well as staffing for the Bank's
new brokerage services program.

Office occupancy and equipment  expense  increased  $48,000 or 29.8% to $209,000
and  $120,000 or 40.1% to  $419,000  for the three and six month  periods  ended
March 31, 1999,  respectively,  compared to the same periods in fiscal 1998.  In
both the three and six month  periods,  the  increases  partially  reflect costs
associated  with  renovating and opening the Bank's new Strip District branch in
October 1998, which is a leased facility.  Additionally,  the increase  reflects
increased equipment costs, a portion of which was incurred dealing with the Year
2000 problem.

Depreciation and amortization increased $22,000 or 17.3% to $149,000 and $45,000
or 18.0% to $295,000 for the three and six month  periods  ended March 31, 1999,
respectively,  compared to the same periods in fiscal 1998. The results  reflect
additional  depreciation  on  equipment  added or updated  during the past year,
depreciation  on  renovations  completed on the Bank's data  processing and back
office location,  and  amortization of leasehold  improvements on the Bank's new
Strip District office.
                                      -14-
<PAGE>
Federal  deposit  insurance  premiums  increased  $2,000 or 5.3% to $40,000  and
$2,000 or 2.6% to $78,000  for the three and six month  periods  ended March 31,
1999,  respectively,  compared to the same periods in fiscal 1998. The insurance
payments reflect the average level of savings deposits outstanding.

Net loss on real estate  owned was $6,000 for the three  months  ended March 31,
1999,  as  compared to a net loss of $1,000 in the  comparable  period in fiscal
1998.  Net gain on real estate  owned was $39,000 for the six month period ended
March 31,  1999,  compared  to a net loss of $10,000  in the prior year  period.
Results for the periods  reflect the sale of property held as real estate owned.
At March 31, 1999, the Bank had no property classified as real estate owned.

Other operating expenses,  which consists of check processing costs,  consulting
fees, legal and audit fees,  advertising,  bank charges and other administrative
expenses,  increased  $63,000  or  15.0% to  $484,000  and  $99,000  or 11.9% to
$929,000 for the three and six month periods ended March 31, 1999, respectively,
as compared to the same periods in fiscal 1998.  Significant  variations between
both the three and six month periods in fiscal 1999, as compared to fiscal 1998,
include  increases in  consulting  fees,  telephone  expenses,  legal fees,  and
expenses  relating to credit  cards  issued by the Bank,  partially  offset by a
decrease in stationary and supplies expense.

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

Income  taxes  decreased  $49,000 or 14.6% to $286,000  and $107,000 or 15.4% to
$587,000 for the three and six month periods ended March 31, 1999, respectively,
compared to the same periods in fiscal 1998.  The decrease in taxes for both the
three and six month  periods  ended  March 31,  1998,  as  compared  to the same
periods in the prior year,  primarily results from a decrease in taxable income.
The  decrease  in taxable  income is  primarily  attributable  to an increase in
tax-exempt  investments  generating  non-taxable  income. The effective tax rate
decreased to 28.3% for the six month period ended March 31, 1999,  from 34.2% in
the comparable fiscal 1998 period.

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

The Federal Reserve Board measures capital  adequacy for bank holding  companies
on the  basis of a  risk-based  capital  framework  and a  leverage  ratio.  The
guidelines  include  the  concept of Tier 1 capital  and total  capital.  Tier 1
capital is essentially  common equity,  excluding net unrealized  gain (loss) on
securities  available-for-sale  and  goodwill,  plus certain  types of preferred
stock,  including  the  Preferred  Securities  issued by the Trust in 1997.  The
Preferred  Securities  may comprise up to 25% of the  Company's  Tier 1 capital.
Total  capital  includes  Tier 1 capital and other forms of capital  such as the
allowance for loan losses,  subject to limitations,  and subordinated  debt. The
guidelines  establish a minimum standard risk-based target ratio of 8%, of which
at least 4% must be in the  form of Tier 1  capital.  At  March  31,  1999,  the
Company had Tier 1 capital as a percentage of risk-weighted assets of 15.12% and
total risk-based capital as a percentage of risk-weighted assets of 16.18%.

In addition,  the Federal Reserve Board has established  minimum  leverage ratio
guidelines for bank holding companies.  These guidelines currently provide for a
minimum ratio of Tier 1 capital as a percentage  of total assets (the  "Leverage
Ratio") of 3% for bank holding companies that meet certain  criteria,  including
that they  maintain  the  highest  regulatory  rating.  All other  bank  holding
companies are required to maintain a Leverage Ratio of at least 100 to 200 basis
points above the minimum.
At March 31, 1999, the Company had a Leverage Ratio of 8.81%.

                                      -15-
<PAGE>
The FDIC has issued regulations that require insured  institutions,  such as the
Bank, to maintain  minimum levels of capital.  In general,  current  regulations
require a leverage  ratio of Tier 1 capital to average  total assets of not less
than 3% for the most highly rated  institutions  and an  additional 1% to 2% for
all other  institutions.  At March 31, 1999,  the Bank complied with the minimum
leverage  ratio  having  Tier 1 capital of 6.50% of  average  total  assets,  as
defined.

The Bank is also  required to maintain a ratio of  qualifying  total  capital to
risk-weighted  assets and  off-balance  sheet items of a minimum of 8%. At March
31, 1999,  the Bank's total  capital to  risk-weighted  assets ratio  calculated
under the FDIC capital requirement was 12.10%.

A reconciliation of Stockholders'  Equity for the Bank to Regulatory  Capital is
as follows:
<TABLE>
<CAPTION>
<S>                                                                  <C>  
Stockholder's equity at March 31, 1999 (1)                           $28,432,335
Plus: Unrealized losses on debt securities                                66,273
                                                                     -----------
Tier 1 Capital at March 31, 1999                                      28,498,608
Plus: Qualifying loan loss allowance                                   2,337,258
                                                                     -----------
Total capital at March 31, 1999                                      $30,835,866
                                                                     ===========
</TABLE>
(1) Represents  equity  capital  of the  Bank as  reported  to the  FDIC and the
    Pennsylvania Department of Banking on Form 032.

Liquidity
---------

The Bank's  primary  sources of funds have  historically  consisted of deposits,
amortization and prepayments of outstanding  loans,  borrowings from the FHLB of
Pittsburgh and other sources,  including  sales of securities  and, to a limited
extent,  loans.  At March 31,  1999,  the  total of  approved  loan  commitments
amounted to $4.3 million. In addition, the Bank had $10.7 million of undisbursed
loan funds at that date. The amount of savings  certificates which mature during
the next twelve months totals approximately $96.0 million, a substantial portion
of which management believes,  on the basis of prior experience,  will remain in
the Bank.
<PAGE>
Year 2000
---------

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

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

                                      -16-
<PAGE>
In May 1997 the  Company  established  a Year  2000  Compliance  Committee  (the
"Committee")  and  subsequently  developed  a Year  2000  Compliance  Plan  (the
"Plan"). The objectives of the Plan and the Committee are to prepare the Company
for the new millennium.  The Plan encompasses the following  phases:  Awareness,
Assessment, Renovation, Validation and Implementation.  These phases will enable
the Company to identify risks,  develop an action plan, perform adequate testing
and complete  affirmation  that its processing  systems will be Year 2000 ready.
Execution  of the  Plan is  currently  on  target.  Prioritization  of the  most
critical software  applications and hardware  configurations has been addressed,
along  with  contract  and  service  agreements.  A  significant  portion of the
Company's  data  processing  software is provided  by third party  vendors.  The
Company has maintained  ongoing contact with these vendors so that  modification
of the  software  for Year 2000  readiness is a top  priority.  The Company,  in
coordination  with  these  vendors,  has  successfully   completed  testing  all
significant  applications.  In addition,  all significant hardware that required
replacement  or  upgrade  has  been  purchased  and  installed  or  the  upgrade
completed.  Testing of this equipment has also been substantially completed. The
Company has contacted all other material  vendors and suppliers  regarding their
Year 2000 state of readiness.  Each of these third parties has delivered written
assurance to the Company that they expect to be Year 2000 compliant prior to the
Year 2000.  The Company has  completed  contacting  all material  customers  and
non-information  technology suppliers (i.e., utility systems,  telephone systems
and  security  systems)  regarding  their  Year  2000  state of  readiness.  The
Validation phase is now substantially  complete.  The Implementation Phase is to
certify that  systems are Year 2000 ready,  along with  assurances  that any new
systems are compliant on a going-forward basis.
The Implementation Phase is targeted for completion by June 30, 1999.

Monitoring  and managing the Year 2000 project will result in additional  direct
and indirect  costs to the Company.  Direct costs include  potential  charges by
third party  software  vendors  for product  enhancements,  the  replacement  of
computer  hardware  and  related  equipment  that was not Year 2000  ready  with
equipment that is, costs involved in testing software and hardware  products for
Year 2000  compliance,  and any resulting costs for developing and  implementing
contingency  plans for critical  software and  hardware  products  which are not
enhanced.  Indirect  costs  will  principally  consist  of the time  devoted  by
existing  employees in managing vendor progress,  testing enhanced  software and
hardware products and implementing any necessary contingency plans. Total direct
costs are estimated not to exceed $500,000,  but are not expected to be material
to the Company's  results of operations in any one quarter or fiscal year. As of
March 31, 1999,  approximately $350,000 had already been incurred. This estimate
includes the cost, and resulting  depreciation,  of accelerating the replacement
of computer equipment that is currently fully depreciated, or would have been by
the Year 2000,  and that  would have been  replaced  in the  ordinary  course of
business over the next two years.  Year 2000 remediation  costs are not expected
to have a  material  adverse  impact on the  long-term  results  of  operations,
liquidity or consolidated  financial  position of the Company.  The company does
not separately track the internal costs incurred for the Year 2000 project; such
costs are  principally  the related  payroll costs for its  information  systems
group and other employees involved in the project.
<PAGE>
The Company is developing remediation  contingency plans and business resumption
plans  specific  to the Year 2000.  Remediation  contingency  plans  address the
actions to be taken if the current  approach to  remediating a system is falling
behind  schedule or otherwise  appears to be in jeopardy of failing to deliver a
year 2000 ready  system  when  needed.  Business  resumption  contingency  plans
address the actions that would be taken if critical business functions cannot be
carried out in the normal manner upon entering the next century due to system or
supplier failure.

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

                                      -17-
<PAGE>
Item 3.  Quantitative and Qualitative Disclosures About Market Risk

           There  have  been  no  material  changes  in  information   regarding
           quantitative and qualitative  disclosures  about market risk from the
           information presented as of September 30, 1998 (in the Company's Form
           10-K) to March 31, 1999.

                                      -18-
<PAGE>
Part II - Other Information


Item. 1   Legal Proceedings

          The  Bantk  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

         On  February  2,  1999,   the  Company  held  its  annual   meeting  of
         stockholders and the following items were presented:

         Election of Directors Robert F. Kastelic,  Oliver D. Keefer and Charles
         E.  Nettrour  for terms of three  years  ending in 2002.  Mr.  Kastelic
         received 1,407,200 votes in favor and 104,859 votes withheld. Mr Keefer
         received  1,407,200 votes in favor and 104,859  withheld.  Mr. Nettrour
         received 1,407,200 votes in favor and 104,859 votes withheld

         Ratification of the  appointment of KPMG LLP as the Company's  auditors
         for the 1999  fiscal  year.  KPMG  LLP was  ratified  as the  Company's
         auditors with  1,492,377  votes for,  9,282 votes  against,  and 10,399
         abstentions.


Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

         None
                                                     -19-
<PAGE>
Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                      FIDELITY BANCORP, INC.



Date:  May 14, 1999                   By: /s/ William L. Windisch
                                      -------------------------------------
                                      William L. Windisch
                                      President and Chief Executive Officer
                              
                              
Date:  May 14, 1999                   By:  /s/ Richard G. Spencer
                                      -------------------------------------
                                      Richard G. Spencer
                                      Vice President and Chief Financial Officer

<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:  May 14, 1999                   By: /s/ William L. Windisch
                                      ------------------------------------------
                                      William L. Windisch
                                      President and Chief Executive Officer
                              
                              
Date:  May 14, 1999                   By: /s/ Richard G. Spencer
                                      ------------------------------------------
                                      Richard G. Spencer
                                      Vice President and Chief Financial Officer

                                     -20-