<PAGE>
===============================================================================



                      SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.   20549

                                FORM 10-K

                Annual Report Pursuant to Section 13 of the
                      Securities Exchange Act of 1934

                For the fiscal year ended September 30, 2001

                       Commission file number 1-12753


                         FIDELITY BANCORP, INC.
         (Exact name of registrant as specified in its charter)

                 Delaware                             36-3915246
         (State of incorporation)          (I.R.S. Employer Identification No.)

            5455 West Belmont Avenue, Chicago, Illinois   60641
                 (Address of principal executive offices)

                        Telephone (773) 736 - 4414
       Securities registered pursuant to Section 12 (b) of the Act: None
         Securities registered pursuant to Section 12 (g) of the Act:

                         Common Stock, par value $.01
                               (Title of class)

The registrant (1) has filed all reports required to be filed by Section 13
or 15 (D) of the Securities Exchange Act of 1934 during the preceding twelve
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.   Yes    X      No       .

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K.  [ X ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant, i.e., persons other than directors and executive officers of the
registrant is $49,894,732 and is based upon the last sales price as quoted on
Nasdaq Stock Market for December 1, 2001.

The number of shares of Common Stock outstanding as of December 1, 2001:
2,022,867


                     DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Stockholders to be
held on January 23, 2002 are incorporated by reference into Part III hereof.
===============================================================================
<PAGE>  1
ITEM 1.   BUSINESS

GENERAL

On December 3, 1993, Fidelity Bancorp, Inc., a Delaware corporation (the
"Company"), completed its public offering of 3,782,350 shares of common stock
at $10.00 per share and became the holding company for Fidelity Federal Savings
Bank (the "Bank") as part of the Bank's conversion from a federally-chartered
mutual savings bank to a federally-chartered stock savings bank.  Primarily as
a result of stock repurchase programs, outstanding shares of common stock at
September 30, 2001 totalled 2,020,367.  The Company's common stock is listed on
the national market tier of the Nasdaq Stock Market and trades under the symbol
"FBCI".

Originally organized in 1906, the Bank conducts its business through its main
office and four full-service branch offices, located in Chicago, Franklin Park,
and Schaumburg, Illinois.  The Bank's results of operations are dependent on
net interest income which is the difference between interest earned on its loan
and investment portfolios, and its cost of  funds, consisting of interest paid
on deposits and Federal Home Loan Bank ("FHLB") advances.  In addition to
traditional mortgage, commercial, and construction loans, consumer loans, and
retail banking products, the Bank generates non-interest income such as
transactional fees, and fees and commissions from its full-service securities
brokerage services offered through INVEST Financial Corporation ("INVEST") as
well as insurance and annuity products.  The brokerage services, as well as the
insurance and annuity products, are offered through Fidelity Corporation, a
wholly owned subsidiary.  The Bank's operating expenses primarily consist of
employee compensation, occupancy expenses, federal deposit insurance premiums
and other general and administrative expenses.  The Bank's results of
operations are also significantly affected by general economic and competitive
conditions, particularly changes in market interest rates, government policies
and actions of regulatory authorities.

As a federally chartered savings bank, the Bank's deposits are insured up to
the applicable limits by the Federal Deposit Insurance Corporation ("FDIC").
The Bank is a member of the FHLB of Chicago, which is one of the twelve
regional banks for federally insured financial institutions comprising the FHLB
system.  The Bank is regulated by the Office of Thrift Supervision ("OTS") and
the FDIC.  The Bank is further regulated by the Board of Governors of the
Federal Reserve System as to reserves required to be maintained against
deposits and certain other matters.

The Company's executive offices are located at 5455 West Belmont Avenue,
Chicago, Illinois 60641 and its telephone number is (773) 736-3000.


MARKET AREA

The Bank's market area for deposits is concentrated in the neighborhoods
surrounding its offices in the northwest Chicago and suburban areas.  The
Bank's primary market area for lending includes northwest Chicago, western Cook
County and adjacent areas in DuPage, Kane and Lake Counties, Illinois, and to a
lesser extent McHenry County and the remainder of Cook County, Illinois.
Management believes that its offices are located in communities that can
generally be characterized as consisting of stable, residential neighborhoods
of predominately one- to four-family residences.



<PAGE>  2

COMPETITION

The bank is faced with increasing competition in attracting retail customer
business, including deposit accounts and loan originations.  The Chicago
metropolitan area is a highly competitive market.  Competition for deposits
comes primarily from savings institutions, commercial banks, money market
mutual funds, and insurance companies (primarily in the form of annuity
products) and is primarily based on interest rates offered, convenience of
branch locations, ease of business transactions, and office hours.  Competition
for loan products comes primarily from other mortgage brokers, savings
institutions, commercial banks and mortgage banking companies and is primarily
based on interest rates, terms, fees, and level of customer service.


REGULATORY ENVIRONMENT

The Bank is subject to extensive regulation, supervision and examination by the
OTS, as its chartering authority and primary federal regulator, and by the
FDIC, which insures its deposits up to applicable limits.  The regulation and
supervision of the Bank establishes a comprehensive framework of approved
activities in which the Bank can engage and is designed primarily for the
protection of the insurance fund and depositors.  The regulatory structure also
gives the regulatory authorities extensive discretion in connection with their
supervisory and enforcement activities.  Any change in regulation, whether by
the OTS, the FDIC or Congress, could have a material impact on the Bank and its
operations.  See "Supervision and Regulation" for more information.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

This report contains certain forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.  The Company intends such forward-
looking statements to be covered by the safe harbor provisions for forward-
looking statements contained in the Private Securities Reform Act of 1995, and
is including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Company, are generally
identifiable by use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project" or similar expressions.  The Company's ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain.  Factors which could have a material adverse affect on the
operations and future prospects of the Company and the subsidiaries include,
but are not limited to, changes in: interest rates, general economic
conditions, legislative/regulatory changes, monetary and fiscal policies of the
U.S. Government, including policies of the U.S. Treasury and the Federal
Reserve Board, the quality or composition of the loan or investment portfolios,
demand for loan products, deposit flows, competition, demand for financial
services in the Company's market area, implementation of new technologies, the
Company's ability to develop and maintain secure and reliable electronic
systems and accounting principles, policies and guidelines.  These risks and
uncertainties should be considered in evaluating forward-looking statements and
undue reliance should not be placed on such statements.

<PAGE>
<PAGE>  3

Item 2.     Properties

The Bank conducts its business through five full-service offices.  All offices
have ATM facilities.  All offices, except for the Franklin Park branch, have
drive-through facilities.  During fiscal 2000, the Company's wholly owned
subsidiary, Fidelity Corporation, opened a satellite office to sell insurance
and non-FDIC insured investments through INVEST Financial Corporation.  This
office was closed on September 30, 2001.  Management believes that the current
facilities are adequate to meet the present and immediately foreseeable needs
of the Bank and the Company.  Certain information concerning the offices of the
Company and the Bank is set forth below.

<TABLE>
<CAPTION>
                                                                Net Book Value
                                          Original Date         of Property or          Leased
                                             Leased or      Leasehold Improvements        or
             Location                        Acquired        at September 30, 2000      Owned
                                                                (In thousands)
<S>                                       <C>                    <C>                  <C>
EXECUTIVE AND HOME OFFICE:                 Various dates
  5455 W. Belmont Ave.                     commencing in
  Chicago, IL  60641                           1955               $ 1,009              Owned

BRANCHES:
  Higgins Branch
    6360 W. Higgins Road
    Chicago, IL  60630                         1984                   463              Owned
  Franklin Park Branch
    10227 W. Grand Ave.
    Franklin Park, IL  60131                   1980                    38              Leased
  Schaumburg Branch
    2425 W. Schaumburg Road
    Schaumburg, IL 60194                       1995                   868              Leased
  Harlem Avenue Branch
    3940 N. Harlem Ave.
    Chicago, IL  60634                         1995                   380              Owned
                                                                  -------

                                                                  $ 2,758
                                                                  =======
</TABLE>


Item 3.   LEGAL PROCEEDINGS

As of September 30, 2001, neither the Company nor its subsidiaries are involved
in any pending legal proceedings, other than routine legal proceedings
occurring in the ordinary course of business.  Such proceedings in the
aggregate are believed by management to be immaterial to the Company's
financial condition or results of operations.


Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None.






<PAGE>  4

PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the Nasdaq Stock Market under the
symbol "FBCI".  As of December 1, 2001 the Company had approximately 450
stockholders of record.  The table below shows  the reported high and low sales
prices of the common stock during the periods indicated as reported on the
Nasdaq Stock Market and does not necessarily reflect retail markups, markdowns,
or commissions:

                                       2001                    2000
                                  High        Low         High       Low

First Quarter                    $18.81      $17.63      $18.00      $16.00
Second Quarter                    21.38       18.75       18.25       16.38
Third Quarter                     22.59       20.85       18.00       17.25
Fourth Quarter                    25.15       22.25       17.75       17.00

The Company announced its most recent stock purchase plan, the 10th, on October
19, 1999 for 110,000 shares and expanded it to 220,000 shares on January 26,
2000.  This repurchase program was completed on April 24, 2001 at an average
price of $17.91 per share.  The Company views stock repurchases as part of an
ongoing strategy to build value for stockholders.

The Board of Directors declared per share dividends aggregating $0.48 and $0.47
during fiscal 2001 and 2000, respectively.  In addition, the Board of Directors
declared a regular quarterly dividend of $0.12 per share, payable on November
15, 2001 to stockholders of record as of October 31, 2001.





























<PAGE>  5
Item 6.   SELECTED FINANCIAL DATA

The following table sets forth certain financial data at or for the periods
indicated.  This information should be read in conjunction with the
Consolidated Financial Statements and the notes thereto.

<TABLE>
<CAPTION>
                                     At and For the Years Ended September 30,
                                     2001     2000     1999    1998     1997
                                  (Dollars in thousands, except per share data)
<S>                              <C>        <C>     <C>      <C>      <C>
SELECTED OPERATING DATA:

Interest income                   $ 46,454   43,851   39,294   36,127   35,915
Interest expense                    31,461   29,112   23,762   21,836   21,470
                                    ------   ------  ------   ------   ------
Net interest income before
  provision for loan losses         14,993   14,739   15,532   14,291   14,445
Provision for loan losses              295      180      165      181       64
                                    ------   ------  ------   ------   ------
Net interest income after
  provision for loan losses         14,698   14,559   15,367   14,110   14,381

Non-interest income:

  Fees and commissions                 457      452      374      332      341
  Insurance and annuity commissions    820    1,063      721      717      700
  Gain on sale of securities           231       -        -        -        -
  Gain on sale of loans                640       -        -        -        -
  Other                                159       53       51       58       62
                                    ------   ------  ------   ------   ------
Total non-interest income            2,307    1,568    1,146    1,107    1,103
Non-interest expense                 9,700    9,320    9,840    9,218   12,266
                                    ------   ------   ------   ------   ------
Income before income taxes           7,305    6,807    6,673    5,999    3,218
Income tax expense                   2,433    2,565    2,543    2,219    2,293

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

Net income                         $ 4,872    4,242    4,130    3,780      925
                                    ======   ======   ======   ======   ======

SELECTED FINANCIAL CONDITION DATA:
Total assets                     $ 668,706  637,031  599,281  513,563  495,634
Loans receivable, net              422,980  534,277  507,557  425,608  388,262
Loans held for sale                 41,219       -        -        -        -
Mortgage-backed securities
  held to maturity                      -     2,901    3,585   11,177   16,875
Mortgage-backed securities
  available for sale               127,685       -        -        -        -
Securities available for sale       42,006   74,366   66,070   58,979   70,297
Deposits                           399,619  381,433  357,016  330,670  323,443
Borrowed funds                     187,345  205,150  186,250  121,400  113,400
Stockholders' equity                49,384   42,803   42,021   48,597   49,617
</TABLE>



<PAGE>  6
<TABLE>
<CAPTION>
                                       At and For the Years Ended September 30,
                                             2001     2000     1999     1998     1997
SELECTED FINANCIAL RATIOS AND OTHER DATA: <C>     <C>      <C>      <C>       <C>

Return on average assets                      0.77%   0.70%    0.74%    0.76%    0.19%
Return on average stockholders' equity       11.11   10.17     9.42     7.30     1.82

Average stockholders' equity to
  average assets                              6.90    6.90     7.89    10.46    10.40

Stockholders' equity to total assets          7.39    6.72     7.01     9.46    10.01

Non interest expense to average assets        1.53    1.54     1.77     1.87     1.91
Interest rate spread during period            1.95    2.06     2.43     2.38     2.45
Net interest margin                           2.41    2.49     2.87     2.98     3.03

ASSET QUALITY RATIOS:
Non-performing loans to loans
  receivable, net                             0.16    0.07     0.07     0.20     0.47
Non-performing assets to total assets         0.10    0.06     0.06     0.19     0.41
Net charge-offs to average loans                -       -     (0.05)    0.01     0.11

Allowance for loan losses to total loans      0.29    0.18     0.15     0.14     0.12
Allowance for loan losses to
  non-performing loans                      182.57  250.66   227.41    71.12    25.44


REGULATORY CAPITAL RATIOS (Bank only):
Tangible                                      7.51    6.95     6.89     8.91     8.59
Core                                          7.51    6.95     6.89     8.91     8.59
Risk-based                                   17.65   14.55    14.71    18.99    18.37


OTHER DATA:
Loan originations (dollars in thousands)  $140,139 110,184  196,859  142,788   97,774

Number of deposit accounts                $ 24,493  25,356   24,524   21,193   24,984

Book value per share outstanding          $ 24.44    21.14    19.03    18.76    17.75

Earnings per share - diluted              $  2.31     1.96     1.76     1.33     0.32

Cash dividends declared per share            0.48     0.47     0.43     0.38     0.30
</TABLE>



ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND
SEPTEMBER 30, 2000

GENERAL.  Net income for the year ended September 30, 2001 was $4.9 million, or
$2.31 per diluted share ($2.42 per basic share), an increase of 14.9% over the
prior year.  Diluted earnings per share increased by 17.9% over the $1.96
recorded in fiscal 2000 as a result of higher net income.  Net income increased
as a result of a increases in both net interest and non-interest income.



<PAGE>  7

NET INTEREST INCOME.    The Bank's core earnings, net interest income, is the
primary source of earnings for the Company.  Net interest income consists of
interest income on loans, mortgage-backed and investment securities, offset by
interest expense on deposits and borrowed funds.  Net interest income for the
year was $15.0 million, compared to $14.7 million in fiscal 2000.  The
Company's average interest-earning assets increased to $622.5 million for the
year ended September 30, 2001 from $592.8 million for the year ended September
30, 2000, an increase of $29.7 million, or 5.0%, while the Company's net
interest margin declined to 2.41% for the year ended September 30, 2001,
compared to 2.49% one year ago.

Interest income for the year ended September 30, 2001 totaled $46.5 million, an
increase of $2.6 million from the year ended September 30, 2000.  The average
balance of the investment portfolio increased to $98.5 million.  Interest
generated from mortgage-backed and investment securities for the year ended
September 30, 2001 was $7.0 million, an increase of $1.6 million from the year
ended September 30, 2000.  Changes in the mix of the investment portfolio to
include government and agency, mortgage-backed, corporate and municipal
securities increased the weighted average yield 19 basis points to 7.15%.
Interest income on loans, the largest component of interest-earning assets,
increased $1.0 million from the prior year to $39.3 million.  The average loan
portfolio increased $9.7 million in fiscal 2001.  The average yield on loans
increased to 7.52% for the year ended September 30, 2001 from 7.47% for the
year ended September 30, 2000.

Interest expense for the year totaled $31.5 million, an increase of $2.3
million from the prior year. The increase in interest expense was impacted by
the increase in the average cost of interest-bearing liabilities to 5.51% from
5.34%. Interest expense on deposit accounts increased $1.1 million to $19.1
million for the year.  Average interest-bearing deposits increased $11.7
million to $376.5 million for the year ended September 30, 2001. Increased
competition for deposits required payment of higher deposit rates to retain and
attract deposits.

For the year ended September 30, 2001, the Company recorded interest expense on
borrowed funds of $12.3 million on an average balance of $194.5 million for an
average cost of 6.34%. This compares to interest expense of $11.1 million on an
average balance of $180.7 million, or an average cost of 6.16% for 2000. The
increase in the average balance from 2000 was due to increased funding needs
for loan originations and purchases of securities.  The increase in the cost of
funds was due to heavier borrowing in the first half of the year, when short-
term borrowing rates were higher.


PROVISION FOR LOAN LOSSES.  Based on management's evaluation of the loan
portfolio, a provision for loan losses of $295,000 was recorded during the year
ended September 30, 2001.  The provision for loan losses was $180,000 for
fiscal 2000.  At September 30, 2001, the ratio of non-performing loans to total
loans was 0.16%.  The allowance for loan losses represented 0.29% of total
loans receivable at September 30, 2001 compared to 0.18% one year ago.
Management reviews the provision for loan losses quarterly to provide coverage
for probable losses in the loan portfolio.  The Company evaluates its loan
portfolio quarterly in conjunction with a number of factors, including the
current level of non-performing loans, loan portfolio mix changes,  and general
economic conditions.  Based on management's evaluation of the loan portfolio,
past loan loss experience, and known risks in the portfolio, management
believes that the allowance is adequate, although there can be no assurances
that losses will not exceed estimated amounts.

<PAGE>  8

NON-INTEREST INCOME.  Total non-interest income for the year ended September
30, 2001 was $2.3 million, a $739,000 increase, or 47.1%, over 2000.  The
Company capitalized on the opportunities in the current interest rate
environment by selling loans that were likely to repay, therefore recognizing a
gain of $618,000 (see discussion of reclassification of loans in "REVIEW OF
FINANCIAL CONDITION").  Additional gains of $231,000 from the sale of
investment securities, and $106,000 from the sale of the Bank's subsidiary's
interest in a real estate investment were reported.  Annuity and insurance
product sales remain another source of non-interest income.  Through its
relationship with INVEST, the Bank offers non-traditional investment products
to its customers such as mutual funds, annuities and other brokerage services.
Commission revenue from insurance and annuity sales decreased $243,000 to
$820,000 from $1.1 million for the year ended September 30, 2000.
Uncertainties regarding the stock market and lower interest rates contributed
to lower sales volumes for the year ended September 30, 2001.


NON-INTEREST EXPENSE.  Total non-interest expense for the year ended September
30, 2001 was $ 9.7 million, an increase of $380,000, or 4.1%, from the prior
year. The operating expense to average assets ratio remained  stable at 1.53%
for 2001 compared to 1.54% in 2000.

Salaries and benefits, the largest portion of non-interest expenses, increased
$247,000 to $5.6 million for fiscal 2001 from $5.3 million for fiscal year
2000. While ESOP expense decreased, compensation increased due to normal salary
increases.  In addition, employee benefit costs, primarily medical insurance
costs, contributed to the 4.6% increase.

Advertising and promotion expense decreased $111,000 to $443,000 for the year
ended September 30, 2001.  The decrease reflects decreased spending on media
campaigns.  Additionally, the prior year's results include start-up costs for
the Bank's website.

Other non-interest expenses increased $94,000 to $1.5 million for the year
ended September 30, 2001 compared to the prior year.  Telephone expenses
increased with the implementation of a new Company-wide system.  Additionally,
professional service costs increased, these costs include legal, internal audit
outsourcing, supervisory exams and assessments, and consultant fees.

INCOME TAX EXPENSE.  The Company recorded a provision for income taxes of $2.4
million for the year ended September 30, 2001.  The Company's effective income
tax rate declined to 33.3% compared to 37.7% for the year ended September 30,
2000.  The reduction in the effective income tax rate was the result of the
utilization of a capital loss carry forward in connection with the gain on the
sale of the Bank's subsidiary's interest in a real estate investment.


COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND
SEPTEMBER 30, 1999

GENERAL.  Net income for the Company was $4.2 million, or $1.96 per diluted
share ($2.04 per basic share) for the year ended September 30, 2000, an
increase of 2.7% over the prior year.  Diluted earnings per share increased by
11.4% over the $1.76 recorded in fiscal 1999 as a result of our continuing
stock repurchase program.  Net income increased as a result of increased non-
interest income and lower non-interest expense.



<PAGE>  9

NET INTEREST INCOME.   Net interest income for the year was $14.7 million,
compared to $15.5 million in fiscal 1999.  The Company's average interest-
earning assets increased to $592.8 million for the year ended September 30,
2000 from $542.0 million for the year ended September 30, 1999, an increase of
$50.9 million, or 9.4%, while the Company's net interest margin declined to
2.49% for the year ended September 30, 2000, compared to 2.87% one year ago.
The decrease in the net interest margin was primarily due to the impact of the
flat to inverted yield curve witnessed over the past twelve months, increased
competition for savings deposits, and wider than normal borrowing spreads.
This interest rate environment was reflected in the 52 basis point increase in
interest-bearing liabilities offset only partially by the 15 basis point
increase in the yield on average interest-earning assets.

Interest income for the year ended September 30, 2000 totaled $43.9 million, an
increase of $4.6 million from the year ended September 30, 1999.  The increase
in interest income was due to a combination of both a 9.4% increase in
interest-earning assets combined with an increase in the yield.  Interest
income on loans, the largest component of interest-earning assets, increased
$4.5 million from the prior year to $38.3 million.  The average loan portfolio
when comparing year to year increased $53.6 million. The increase that can be
attributed to rate has been affected by the trend in loan originations away
from fixed-rate products toward adjustable rate mortgages in the rising rate
environment over the past year.  Interest income on investment securities
increased $285,000, or 5.8% to $5.2 million for the year ended September 30,
2000 compared to $5.0 million for the year prior.

Interest expense for the year totaled $29.1 million, an increase of $5.4
million from the prior year. The increase in interest expense was impacted by
the increase in the average cost of interest-bearing liabilities to 5.34% from
4.82%. Interest expense on deposit accounts increased $2.9 million to $18.0
million for the year.  Average interest-bearing deposits increased $30.3
million to $364.8 million for the year ended September 30, 2000.  Increases in
short term U.S. Treasury rates and increased competition for deposits required
payment of higher deposit rates to attract and retain deposits.  The average
cost of deposits for the year was 4.93%, an increase from the average cost of
4.51% for fiscal 1999.

For the year ended September 30, 2000, the Company recorded interest expense on
borrowed funds of $11.1 million on an average balance of $180.7 million at an
average cost of 6.16%. This compares to interest expense of $8.7 million on an
average balance of $158.5 million at an average cost of 5.48% for the year
ended 1999. The increase in the average balance was primarily due to funding
loan originations, while the increase in the average rate was due to the
replacement of called advances at higher interest rates.  Additional net
proceeds from the Federal Home Loan Bank of Chicago ("FHLB") borrowing for the
year ended September 30, 2000 totaled $15.0 million.

PROVISION FOR LOAN LOSSES.  During the year ended September 30, 2000, the
Company's  provision for loan losses was $180,000 compared to $165,000 for
fiscal 1999.  At both September 30, 2000 and 1999, the ratio of non-performing
loans to total loans was 0.07%.  The allowance for loan losses represented
0.18% of total loans receivable at September 30, 2000 compared to 0.15% one
year ago.  Management reviews the provision for loan losses quarterly to
provide coverage for probable losses.  The Company evaluates its loan portfolio
quarterly in conjunction with a number of factors, including the current level
of non-performing loans and general economic conditions.


<PAGE>  10

NON-INTEREST INCOME.  Total non-interest income for the year ended September
30, 2000 was $1.6 million, a $422,000 increase, or 36.8%, over 1999 results.
Annuity and insurance product sales remain the primary source of non-interest
income.  Through its relationship with INVEST, the Bank offers non-traditional
investment products to its customers such as mutual funds, annuities and other
brokerage services.  Commission revenue from insurance and annuity sales
increased $342,000 to $1.1 million, from $721,000 for the year ended September
30, 1999.  The increase was due to a rise in sales of mutual funds and other
non-traditional products, a dedicated sales force, and an expanded product
line.

NON-INTEREST EXPENSE.  Total non-interest expense for the year ended September
30, 2000 was $ 9.3 million, a decrease of $520,000 from the prior year.
Management continues to control expenses and this was evidenced in the improved
operating expense to average assets ratio of 1.54% for fiscal 2000, compared to
1.77% for fiscal 1999.

Salaries and benefits decreased $453,000 to $5.3 million for fiscal 2000 from
$5.8 million for fiscal year 1999. The decline was primarily due to decreased
ESOP expense.  ESOP expense of $415,300 was $485,000 lower than the 1999
expense of $900,200, primarily due to a lower market adjustment of $182,000 in
fiscal 2000 compared to $502,000 in fiscal 1999.

Advertising and promotion expense increased $155,000 to $554,000 for the year
ended September 30, 2000.  The increase was due to increased deposit and equity
line of credit advertising campaigns in addition to expenses related to the
launch of the Bank's website during the 2000 fiscal year.

Other non-interest expenses decreased $174,000 to $1.4 million for the year
ended September 30, 2000 compared to the prior year.  Included in this decrease
was a reduction in federal deposit insurance premium expense resulting from a
scheduled decrease in insurance rates effective January 1, 2000.

INCOME TAX EXPENSE.  The Company recorded a provision for income taxes of $2.6
million for the year ended September 30, 2000, or an effective tax rate of
37.7%, compared to $2.5 million for the year ended September 30, 1999, or an
effective tax rate of 38.0%.





















<PAGE>  11
RATE/VOLUME ANALYSIS

The table below presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and interest expense
during the period indicated.  Information is provided in each category with
respect to (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate), (ii) changes attributable to changes in rate
(changes in rate multiplied by prior volume), and (iii) the net changes.  The
changes attributable to the combined impact of volume and rate have been
allocated proportionately to the changes due to volume and the changes due to
rate.




<TABLE>
<CAPTION>
Years ended September 30                  2001 Compared to 2000       2000 Compared to 1999
                                       Increase (Decrease)Due to    Increase (Decrease) Due to

                                       Volume     Rate      Total    Volume     Rate     Total
                                                     (in thousands)
<S>                                  <C>         <C>      <C>        <C>      <C>      <C>
INTEREST-EARNING ASSETS:
  Loans receivable, net               $ 729       279      1,008      3,990     552     4,542
  Mortgage-backed securities            982         2        984       (286)     19      (267)
  Interest-earning deposits              12         5         17         (6)      1        (5)
  Securities and federal funds sold     446       148        594         96     191       287
                                      ------     ----      -----     ------    -----     -----
TOTAL                                 $2,169      434      2,603      3,794     763     4,557
                                       ======     ====    ======     ======    =====    ======

INTEREST-BEARING LIABILITIES:
  Passbook and NOW accounts           $    20    (289)     (269)       (313)      19     (294)
  Money Market accounts                   (90)    (32)     (122)       (116)     (14)    (130)
  Certificate accounts                    819     701     1,520       2,374      972    3,346
  Borrowed funds                          874     346     1,220       1,292    1,136    2,428
                                       ------     ----     -----      -----    -----     -----
Total                                 $ 1,623     726     2,349       3,237    2,113    5,350
                                       ======     ====    ======      =====    =====    ======
Net change in net interest income                        $  254                          (793)
                                                          ======                        ======

</TABLE>


















<PAGE> 12
AVERAGE BALANCE SHEETS

The following table sets forth certain information relating to the Company's
average balance sheets and reflects the average yield on assets and average
cost of liabilities for the periods indicated.  Such yields and costs are
derived by dividing income or expense by the average balance of assets or
labilities, respectively, for the years shown.  Average balances are derived
from average daily balances.  The yields and costs include fees, which are
considered adjustments to yields.
<TABLE>
<CAPTION>
For years ended September 30,                2001                         2000                         1999
                                                       Average                     Average                    Average
                                      Average           Yield/    Average           Yield/    Average           Yield/
                                      Balance  Interest  Cost     Balance  Interest  Cost     Balance  Interest  Cost
                                                                (dollars in thousands)
<S>                                <C>        <C>       <C>       <C>      <C>      <C>       <C>       <C>      <C>
INTEREST-EARNING ASSETS:
  Loans receivable, net             $ 523,153   39,337   7.52%  $ 513,437   38,329   7.47%  $ 459,886   33,787   7.35%
  Mortgage-backed securities           16,804    1,223   7.28%      3,307      239   7.23%      7,280      506   6.95%
  Interest-earning deposits               941       58   6.16%        734       41   5.59%        837       46   5.50%
  Securities available for sale
    and federal funds sold (3)         81,650    5,836   7.15%     75,367    5,242   6.96%     73,950    4,955   6.70%
                                      -------   ------   ----     -------   ------   ----    --------  -------   ----
Total interest-earning assets         622,548   46,454   7.46%  $ 592,845   43,851   7.40%  $ 541,953   39,294   7.25%

Non-interest earning assets            12,937                      11,153                      13,993
                                       ------                     -------                     -------
Total assets                        $ 635,485                   $ 603,998                   $ 555,946
                                      =======                     =======                     =======

INTEREST-BEARING LIABILITIES:
  Deposits:
    Passbook and NOW accounts         139,869    4,868   3.48%    139,330    5,137   3.69%    147,820    5,431   3.67%
    Money market accounts              11,820      423   3.58%     14,284      545   3.82%     17,324      675   3.90%
    Certificate accounts              224,822   13,830   6.15%    211,174   12,310   5.83%    169,337    8,964   5.29%
                                      -------    -----   ----     -------   ------   ----    --------   ------   ----
  Total deposits                      376,511   19,121   5.08%    364,788   17,992   4.93%    334,481   15,070   4.51%

  Borrowed funds                      194,545   12,340   6.34%    180,651   11,120   6.16%    158,523    8,692   5.48%
                                      -------    -----   ----     -------   ------   ----    --------   ------   ----
Total interest-bearing liabilities    571,056   31,461   5.51%    545,439   29,112   5.34%    493,004   23,762   4.82%
Non-interest bearing deposits           8,213                       6,452                       7,768
Other liabilities                      12,374                      10,402                      11,327
                                       ------                     -------                     -------
Total liabilities                     591,643                     562,293                     512,099
Stockholders' equity                   43,842                      41,705                      43,847
                                       ------                     -------                     -------
Total liabilities and stockholders'
  equity                            $ 635,485                   $ 603,998                   $ 555,946
                                      =======                     =======                     =======

Net interest income/interest rate
  spread (1)                                    14,993   1.95%              14,739   2.06%              15,532   2.43%
                                                ======   ====               ======   ====               ======   ====

Net earning assets/net interest
  margin (2)                        $  51,492            2.41%     47,406            2.49%     48,949            2.87%
                                      =======            ====     =======            ====     =======            ====
Ratio of interest-earning assets to
  interest-bearing liabilities           1.09x                       1.09x                       1.10x
                                      =======                     =======                     =======

</TABLE>
(1)  Interest rate spread represents the difference between the average rate on
     interest-earning assets and the average cost of interest-bearing
     liabilities.

(2)  Net interest margin represents net interest income divided by average
     interest-earning assets.

(3)  Municipal bond yields included in Securities Available for Sale category
     above are not tax effected.



<PAGE>  13

REVIEW OF FINANCIAL CONDITION

Total assets increased $31.7 million to $668.7 million at September 30, 2001,
compared to $637.0 million at September 30, 2000.  The increase was primarily
due to increased loan originations and purchases of securities, funded by the
proceeds of $56.7 million in single-family mortgage sales, loan prepayments,
and growth in the deposit base.  An additional $41.2 million in fixed-rate
mortgage loans were classified as available for sale.  Loan originations for
the current fiscal year were $140.1 million, compared to $110.2 million for the
year ended September 30, 2000. Loan repayments were $152.6 million, compared to
$84.0 million for the year ended September 30, 2000.

Cash and cash equivalents amounted to $8.6 million at September 30, 2001 as
compared to $6.2 million a year earlier.

Securities classified as available for sale totalled $42.0 million at September
30, 2001, compared to $74.4 million at September 30, 2000.  The Company
purchased $50.4 million, which consisted of U.S. Agency securities, corporate
debt securities, and municipal bonds, offset by maturities and sales totalling
$85.7 million.

At September 30, 2000, the Company owned one mortgage-backed security as held
to maturity.  This security was sold in the third quarter of the year after
management determined that the investment portfolio would supplement the
Company's liquidity base.  All mortgage-backed securities purchased in the
current year were  recorded as available for sale.  Mortgage-backed securities
classified as available for sale were $127.7 million at September 30, 2001.
The current year purchases were funded by the proceeds from heavy refinance
activity in the Bank's loan portfolio as well as the redeployment of the
proceeds from the sale of mortgage loans in the final quarter of this fiscal
year.

Securities classified as available for sale represent a secondary source of
liquidity to the Bank and the Company.  The market value of these securities
fluctuates with interest rate movements.  Net interest income in future periods
may be adversely impacted to the extent interest rates increase and these
securities are not sold with the proceeds reinvested at higher market rates.
The decision whether to sell the available for sale securities or not, is based
on a  number of factors, including projected funding needs, reinvestment
opportunities and the relative cost of alternative liquidity sources.

Loans receivable decreased 20.8%, or $111.3 million to $423.0 million from
$534.3 million at September 30, 2000.   The changing interest rate environment,
with rapid decreases in prime beginning in January 2001 and continuing through
September, prompted management to evaluate the loan and investment portfolios.
Falling interest rates triggered significant prepayment and refinance activity.
Repayments on loans receivable increased 85.1% from $84.0 million in fiscal
2000 to $155.5 million for the year ended September 30, 2001.  Management took
a proactive approach and identified $94.3 million of loans that had similar
characteristics to those prepaying at high speeds and thus generating less
yield to the bank than originally projected.  These loans were then
specifically identified and transferred from held to maturity to held for sale
as a one-time event.  This transfer gave management the opportunity to monitor
prepayment volumes and act quickly to protect our earning assets.  Of the
transferred loans, $53.4 million were sold in September 2001 and generated a
pre-tax gain of $618,000.  The balance of the transferred loans remains in the
held for sale portfolio.  Beginning the first quarter of fiscal 2002 the Bank


<PAGE>  13
started offering loans, through the TPOs, that carry a prepayment penalty for
the first 3 to 5 years.

Deposits increased 4.8%, or $18.2 million to $399.6 million at September 30,
2001, compared to $381.4 million at September 30, 2000.  Savings and
transaction accounts at September 30, 2001 amounted to $177.2 million, compared
to $162.9 million.  Certificates of deposit increased throughout the year and
were $222.4 million at September 30, 2001, compared to $218.6 million at
September 30, 2000.  The deposit base and the interest rates offered continues
to be priced competitively in order to attract deposits when alternative
investment products and savings competition is significant within the Company's
market areas.

Borrowed funds decreased $17.8 million, or 8.7%, to $187.3 million at September
30, 2001.  The Bank utilized loan prepayment and growth in deposits to repay
FHLB advances.  Of the FHLB of Chicago advances at September 30, 2001, $65.0
million of advances, with a weighted average term to maturity of 2.96 years,
contain various call provisions, with a weighted average term to call of .23
years.  The calls are most likely exercised by the issuer in a period of rising
interest rates.

Advance payments by borrowers for real estate taxes of $7.2 million at
September 30, 2001, was $5.0 million higher than the balance of $2.2 million at
September 30, 2000.  The  prior year's lower balance reflected Cook County real
estate taxes being paid prior to September 30, 2000.  The Company remitted real
estate tax payments in excess of $6 million in October of 2001.

Stockholders' equity of the Company grew to $49.4 million at September 30,
2001, compared to $42.8 million at September 30, 2000, an increase of $6.6
million.  The net increase in stockholders' equity was due to net income of
$4.9 million, offset by $968,000 payment of cash dividends, and the increase in
accumulated other comprehensive income, the mark to market component of
available for sale securities of $2.8 million.


LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funds are deposits and borrowing, proceeds
from principal and interest on loans and securities.  While maturities and
scheduled amortization of loan and securities are predictable source of funds,
deposit flows and mortgage prepayments are greatly influenced by interest rate
cycles and economic conditions.  The Bank generally manages the pricing of its
deposits to be competitive and increase core deposit relationships.  The Bank
utilizes particular sources of funds based on comparative costs and
availability.

The Company's most liquid assets are cash and cash equivalents, which include
federal funds and interest-bearing deposits.  The level of these assets are
dependent on the Company's operating, financing and lending, and investing
activities during any given period.  At September 30, 2001 and 2000, cash and
cash equivalents totaled $8.6 million and $6.2 million, respectively.

Liquidity management for the Company is both a daily and long-term function.
In the event that the Company should require funds beyond its ability to
generate them internally, additional sources of funds are available through the
use of FHLB advances.  The Company's cash flows are comprised of three
classifications:  cash flows from operating activities, cash flows from
investing activities, and cash flows from financing activities.

<PAGE>  14
Net cash related to operating activities, consisting primarily of interest and
dividends received less interest paid on deposits, and gains realized from the
sale of loans and securities were $8.8 million for the year ended September 30,
2001.  During the year, $10.4 million was used in investing activities,
consisting primarily of loan originations and purchases of securities, largely
offset by principal collections on loans, proceeds from maturities  of
securities and proceeds from sales of securities and loans.  Net cash provided
by financing activities amounted to $4.1 million for the year ended September
30, 2001.

At September 30, 2001, the Company believed it had sufficient cash to fund its
outstanding commitments, or would be able to obtain the necessary funds from
outside sources to meet its cash needs.


LENDING ACTIVITIES

LOANS AND MORTGAGE-BACKED SECURITIES PORTFOLIO COMPOSITIONS.  The loan
portfolio consists primarily of conventional first mortgage loans secured by
one- to four-family residences.  At September 30, 2001, the gross loans
receivable portfolio was $422.0 million, of which $269.5 million were one- to
four-family residential mortgage loans.  Of the one- to four-family residential
mortgage loans outstanding at that date, 53.7% were fixed-rate and 46.3% were
adjustable-rate mortgage (ARM) loans.  During the year, the Bank sold $55.5
million of single-family mortgage loans to Federal Home Loan Mortgage
Corporation ("FHLMC") and to Federal National Mortgage Association ("FNMA").
Included in the year-end loan portfolio balance are $41.2 million in fixed-rate
mortgage loans classified as held for sale.  The remainder of the loan
portfolio at September 30, 2001 consisted of $120.4 million of multi-family
loans, $1.7 million in commercial real estate, $15.3 in construction loans, and
$15.1 million of consumer loans.  Consumer loans consisted primarily of home
equity and second mortgage loans.

During 1994, the Bank expanded its delivery system for mortgage loans to
include third party originators ("TPOs"), which are mortgage brokers that have
agreed to originate loans for the Bank's portfolio.  The loan department
continues to seek and sign agreements with new TPOs.  At September 30, 2001,
the Bank had a network of 86 TPOs.  The TPO program produced $110.5 million or
96.7% of the one- to four-family and multi-family mortgage loan originations in
2001.  The Bank originated $23.2 million in commercial loans and $6.7 million
in consumer loans for a total of $140.1 million in new loans; a 26.9% increase
from the year ended September 30, 2000.

In 1996, the Bank began offering certain residential loans without income
verification.  Verification that the applicant is employed is noted in the file
and the amount listed on the application is used to determine the debt to
income ratio.  The maximum loan to value ratio is 95% for this program.  The
Bank also offers a similar program for people who typically are self-employed.
The income used to qualify the loan is the amount stated on the loan
application.  The maximum loan amount allowed under this program is 95% of the
property value.  The Bank also grants loans to applicants with less than
perfect credit and higher debt to income ratios than secondary market
conforming standards.  In all other respects the loans are originated in the
same manner as a conventional loan.  All loans have risk premium factored into
the rate and additional valuation allowances are established when the loan is
funded.  It is the Bank's general policy to require private mortgage insurance
(PMI) on any conventional loan with a loan to value ratio greater than 80% for
one- to four-family homes, townhouses, and condominium units.  The Bank
originated $96.0 million of these loans during fiscal 2001.  At September 30,

<PAGE>  15
2001, the portfolio included $147.8 million of these loans.

Loan origination standards of the Bank generally conform to the requirements
for sale to the FHLMC and FNMA.  During the year ended September 30, 2001, the
Bank sold mortgage loans totalling $2.1 million and $54.6 million to the FHLMC
and FNMA, respectively.  At September 30, 2001, the unpaid balance of total
mortgage loans sold to the FHLMC and FNMA and serviced by the Bank was $5.5
million and $51.0 million respectively.

The Bank's investment policy permits the investment in mortgage-backed
securities.  The Bank purchases FHLMC Gold, GNMA II, and FNMA mortgage-backed
securities to coincide with its ongoing asset/liability management objectives
and to supplement its own loan origination program.  The mortgage-backed
securities owned by the Bank are issued by FNMA, FHLMC or GNMA and are
collateralized with generic pools of single family mortgages.  With respect to
prepayment risk, these securities are likely to exhibit substantially the same
characteristics as the whole loans owned by the Bank.  Prepayments are not
expected to have a material effect on the yield or the recoverability of the
carrying amounts of these securities.    During the year ended September 30,
2001, the Bank purchased $129.1 million of mortgage-backed securities.  The
FHLMC mortgage-backed security held for investment at September 30, 2000 was
sold during the year for a realized gain of $77,000.  At September 30, 2001,
the total cost of mortgage-backed securities was $126.0 million with a fair
value of $127.7 million, resulting in an unrealized gain of $1.7 million.

The following table sets forth the composition of the loan portfolio and
mortgage-backed securities, in dollar amounts and in percentages of the
respective portfolios at the dates indicated.
<TABLE>
<CAPTION>
                                                        At September 30,
                                        2001                  2000                  1999
                                            Percent               Percent             Percent
                                   Amount   of Total    Amount   of Total    Amount   of Total
                                                 (Dollars in thousands)
<S>                            <C>         <C>       <C>         <C>      <C>          <C>
Mortgage loans:
  One- to four-family           $ 269,472    63.86%   $ 390,805    73.46      388,586   76.86%
  Multi-family                    120,432    28.54      118,309    22.25      100,412    19.86
  Commercial                        1,665     0.39        3,448     0.65        2,577     0.51
  Construction                     15,325     3.63        2,304     0.43           -        -
                                  -------    -----      -------     ----       ------    -----
    Total mortgage loans          406,894    96.42      514,866    96.79      491,575    97.23
Consumer loans                     15,096     3.58       17,101     3.21       14,016     2.77
                                  -------   ------      -------   ------      ------   -------
  Gross loans receivable          421,990   100.00%     531,967   100.00%     505,591  100.00%
                                            ======                ======               =======
Less:
  Loans in process                    107                    26                    16
  Unearned discounts and
    deferred loan costs            (2,333)               (3,286)               (2,762)
  Allowance for loan losses         1,236                   950                   780
                                  -------               -------               -------
Loans receivable, net           $ 422,980             $ 534,277             $ 507,557
                                  =======               =======               =======
Mortgage-backed securities:
FHLMC held to maturity          $  -----     ---- %       2,901   100.00%       3,585  100.00%
FHLMC available for sale            9,139     7.16           -      -              -     -
FNMA available for sale            66,524    52.10           -      -              -     -
GNMA Available for sale            52,022    40.74           -      -              -     -
                                  -------   ------       ------   ------       ------  ------
Mortgage-backed securities, net $ 127,685   100.00%   $  2,901    100.00%   $   3,585  100.00%
                                  =======   ======      =======   ======       ======  ======
</TABLE>

<PAGE>  16
<TABLE>
<CAPTION>
                                              At September 30,
                                        1998                  1997
                                            Percent               Percent
                                   Amount   of Total    Amount   of Total
                                          (Dollars in thousands)
<S>                            <C>         <C>       <C>         <C>
Mortgage loans:
  One- to four-family           $ 324,265    76.47%   $ 304,950    78.83%
  Multi-family                     83,084    19.59       64,450    16.66
  Commercial                        3,295     0.78        2,894     0.75
  Commercial leases                    30     0.01          408     0.10
                                  -------    -----      -------     ----
    Total mortgage loans          410,674    96.85      372,702    96.34

Consumer loans                     13,358     3.15       14,152     3.66
                                  -------    -----      -------     ----
  Gross loans receivable          424,032   100.00%     386,854   100.00%
                                            ======
Less:
  Loans in process                      1                    -
  Unearned discounts and
    deferred loan costs            (2,168)               (1,868)
  Allowance for loan losses           591                   460
                                  -------               -------
  Loans receivable, net         $ 425,608               388,262
                                  =======               =======

Mortgage-backed securities
FHLMC held to maturity          $  11,177  100.00%     $ 16,875   100.00%
                                  -------  ------       -------   ------
  Mortgage-backed
  securities, net               $  11,177  100.00%     $ 16,875   100.00%
                                  =======  ======       =======   ======
</TABLE>




























<PAGE>  17
The following table sets forth the Bank's loan originations, commercial leases,
purchases of loans, and mortgage-backed securities, sales and principal
repayments for the periods indicated:
<TABLE>
<CAPTION>
                                                                 Years Ended September 30,
                                                             2001        2000           1999
                                                                  (in thousands)
<S>                                                      <C>            <C>          <C>
Mortgage Loans (gross):
  At beginning of period                                  $ 514,866      491,575      410,674
  Mortgage loans originated:
    One- to four- family                                     88,425       67,373      157,429
    Multi-family                                             21,874       26,158       29,224
    Commercial/Construction                                  23,157        8,350        2,216
                                                            -------      -------      -------
  Total mortgage loans originated                           133,456      101,881      188,869


  Transfer to foreclosed real estate and net charge-offs       (268)         (73)        (262)
  Transfer to loans held for sale                      (94,302)          -            -
  Principal repayments of loans receivable                 (146,858)     (78,517)    (107,676)
  Principal repayments of commercial leases                      -            -           (30)
                                                            -------      -------      -------
  At end of period                                          406,894      514,866      491,575
                                                            -------      -------      -------


Consumer loans (gross):
  At beginning of period                                 $   17,101       14,016       13,358
  Consumer loans originated                                   6,683        8,581        7,990
  Principal repayments                                       (8,688)      (5,496)      (7,332)
                                                            -------       ------       ------
  At end of period                                           15,096       17,101       14,016
                                                            -------       ------       ------

Total loans (gross)                                       $ 421,990      531,967      505,591
                                                            =======      =======      =======


Mortgage-backed securities:
  At beginning of period                                  $   2,901        3,585       11,177
  Mortgage-backed securities purchased                      129,142           -            -
  Mortgage-backed securities sold                            (2,366)          -            -
  Amortization and principal repayments                      (3,729)        (684)      (7,592)
                                                           ---------      ------       ------
                                                          $ 125,948        2,901        3,585
                                                            =======       ======       ======
</TABLE>


















<PAGE>  18

LOANS MATURITY AND REPRICING.  The following table shows the maturity or period
to repricing of the loans at September 30, 2001.  The table does not include
prepayments or scheduled principal amortization.  Principal repayments and
prepayments on loans totalled $155.5 million, $84.0 million, and $115.0 million
for the years ended September 30, 2001, 2000, and 1999, respectively.


<TABLE>
<CAPTION>
                                                     At September 30, 2001
                             Fixed Rate        Adjustable Rate    Other Loans

                                                                  Con-             Total
                           One-to-            One-to-          struction           Loans
                           Four     Multi-    four      Multi-    and              Receiv-
                           Family   Family    Family    Family Commercial Consumer  able
                                                          (in thousands)
<S>                    <C>         <C>      <C>       <C>       <C>       <C>     <C>
AMOUNTS DUE:
Within one year         $  24,649   3,230     36,527    37,411    4,635     3,264    109,716

After one year:
One to three years         38,330   3,068     65,993    59,555   12,314     3,310    182,570
Three to five years        27,920   1,470     22,178    13,874       41     2,415     67,898
Five to 10 years           39,596   1,531        -         -         -      3,333     44,460
10 to 20 years             13,196     293        -         -         -      2,774     16,263
Over 20 years               1,083     -          -         -         -         -       1,083
                          -------   -----    -------    ------    -----     -----    -------
Total due after
  one year                120,125   6,362     88,171    73,429   12,355    11,832    312,274
                          -------   -----    -------    ------    -----     -----    -------

Total amounts due       $ 144,774   9,592    124,698   110,840   16,990    15,096    421,990
                          =======   =====    =======   =======   ======    ======

Less:
  Loans in process                                                                       107
  Unearned discounts,
    premiums and deferred
    loan costs, net                                                                   (2,333)
  Allowance for loan losses                                                            1,236
                                                                                      ------
Loan receivable, net                                                               $ 422,980
                                                                                    ========
</TABLE>























<PAGE>  19

ONE- TO FOUR-FAMILY MORTGAGE LENDING.  The Bank primarily originates first
mortgage loans secured by one- to four-family residences located in its primary
market area, including townhouse and condominium units.  Typically, such
residences are single or two-family homes that serve as the primary residence
of the owner.  To a lesser extent, the Bank also originates loans secured by
non-owner occupied one- to four-family residential real estate.  Loan
originations are generally obtained from existing or past customers, members of
the local communities, third party mortgage originators located in the Bank's
market area, local real estate agent referrals, and builder/developer referrals
within the Bank's market area.

The Bank offers fixed-rate and ARM loans, which are generally amortized over 30
years, with terms of up to 30 years.  Loan rates are based on market
conditions.  The Bank originates zero-point loans, and loans with discount
points and fees for related origination expenses, such as appraisals and other
closing costs, on one- to four-family residential mortgage loans.  Generally,
all residential mortgage loans originated by the Bank are underwritten in
conformity with FHLMC guidelines.  The ARM loans generally reprice on a one,
three, or five year basis.  As a general matter, the Bank does not offer
"teaser rates" on its ARM loans, nor does it offer loans with a negative
amortization feature.  At time of origination, the Bank determines whether to
sell or retain fixed-rate, one- to four-family residential first mortgages
loans, while generally retaining the servicing right for loans sold.  ARM loans
originated are normally held for investment.

The Bank generally makes first mortgage loans secured by one- to four-family,
owner-occupied residential real estate in amounts up to 97% of the lower of the
purchase price or the appraised value.  The Bank also originates first mortgage
loans secured by one- to four-family residential investment (i.e., other than
owner occupied) properties in amounts up to 95% of the appraised value of the
property.  It is the Bank's general policy to require private mortgage
insurance (PMI) on any conventional loan with a loan to value ratio greater
than 80% for one- to four-family homes, townhouses, and condominium units.  In
addition, the Bank usually requires certain housing expense to income ratios
and monthly debt payment to income ratios for all borrowers which vary
depending on the loan to value ratio and other compensating factors.  Mortgage
loans originated by the Bank generally include due-on-transfer clauses which
provide the Bank with the contractual rights to deem the loan immediately due
and payable, in most instances, in the event that the borrower transfers
ownership of the property without the Bank's consent.  It is the Bank's policy
to enforce due-on-transfer provisions.

Residential loans without income verification are offered in amounts up to a
maximum value ratio of 95%.  The Bank also offers a similar program for people
who typically are self-employed.  The income and assets used to qualify the
loan is the amount stated on the loan application.  The maximum loan amount
allowed under this program is 95% of the property value.  The Bank, to a lesser
extent, grants loans to applicants with less than perfect credit and higher
debt to income ratios than secondary market conforming standards.  In all other
respects the loans are originated in the same manner as a conventional loan. It
is the Bank's general policy to require private mortgage insurance (PMI) on any
conventional loan with a loan to value ratio greater than 80% for one- to four-
family homes, townhouses, and condominium units. All loans have risk premium
factored into the rate and additional valuation allowances are established when
the loan is funded.

The Bank offers a mortgage loan modification program that allows the borrower
to receive a reduced interest rate, change in term, or a change in loan
<PAGE>  20
program, in lieu of refinancing the original loan.  The borrower is charged a
fee that varies based upon the modifications made, including an appraisal fee
when the Bank requires a reappraisal of the collateral.  The program has been
advantageous to the Bank during periods of heavy refinance activity such as
1998 and 2001, by limiting the disruption to its loan operations, as well as
reducing the costs associated with refinance activity of existing borrowers.

MULTI-FAMILY AND COMMERCIAL REAL ESTATE LENDING.  The Bank originates fixed and
adjustable rate multi-family loans secured by properties (five units or more)
typically located in its primary market area.  These loans generally have rate
and payment adjustment periods of 3 to 5 years, with amortizations of up to 30
years.  The Bank customarily charges origination fees of up to 3% of the loan
amount for newly originated loans and lesser fees for renewals or modifications
of existing loans.  The Bank's policies generally require personal guarantees
from the borrowers, with joint and several liability.  The Bank's underwriting
decisions relating to these loans are primarily based upon the net operating
income generated by the property in relation to the debt service ("debt
coverage ratio"), the borrower's cash-at-risk position, financial resources and
income level of the borrower, the borrower's experience in owning or managing
similar property, the marketability of the property and the Bank's lending
relationship with the borrower.  The Bank originates multi-family loans in
amounts up to 85% of the lower of the appraised value of the property or the
purchase price.  The Bank generally requires a minimum debt coverage ratio of
1.15x on multi-family properties, utilizing forecasted net operating income.
As of September 30, 2001, $120.4 million, or 28.5%, of the Bank's loan
portfolio consisted of multi-family loans. Multi-family mortgage loans
typically involve substantially larger loan balances than single-family
mortgage loans, and are dependent on successful property operation as well as
on general and local economic conditions.

In connection with the Bank's policy of maintaining an interest-rate sensitive
loan portfolio, the Bank has originated loans secured by commercial real
estate, which generally carry a higher yield and are made for a shorter term
than fixed-rate one- to four-family residential loans.  Commercial real estate
loans are generally granted in amounts up to 75% of the appraised value of the
property, as determined by an independent appraiser previously approved by the
Bank.  The Bank's commercial real estate loans are secured by improved
properties located in the Chicago metropolitan area.  As of September 30, 2001,
$1.7 million, or 0.4%, of the Bank's loan portfolio consisted of commercial
real estate loans.

Loans secured by commercial real estate properties are generally larger and
involve a greater degree of risk than residential mortgage loans.  Because
payments on loans secured by commercial real estate properties are often
dependent on the successful operation or management of the properties,
repayment of such loans may be subject to adverse conditions in the real estate
market or the economy.  The Bank seeks to minimize these risks by lending
primarily on existing income-producing properties and generally restricting
such loans to properties in the Chicago area.  The Bank analyzes the financial
condition of the borrower and the reliability and predictability of the net
income generated by the security property in determining whether to extend
credit.  In addition, the Bank usually requires a net operating income to debt
service ratio of at least 1.15 times.

CONSTRUCTION LENDING.  The Bank originates loans to finance the construction of
residential property primarily in its market area. The Bank will consider
commercial construction loans  in the future on a case-by-case basis. During
the year ended September 30, 2001, the Bank originated eight loans to finance
construction projects for $18.0 million.  At September 30, 2001, the Bank had

<PAGE>  21
nine construction loans which totaled $21.1 million, and reported an unpaid
balance of $15.3 million, or 3.6% of total loans receivable.

The Bank uses underwriting and construction loan guidelines for financing
primarily individual, owner-occupied houses where qualified contractors are
involved.  Construction loans are structured either to be converted to
permanent loans at the end of the construction phase or to be paid off upon
receiving financing from another financial institution.  Construction loans are
based on the appraised value of the property, as determined by an independent
appraiser, and an analysis of the potential marketability and profitability of
the project.  Construction loans generally have terms of up to 18 months, with
extensions as needed.  Loan proceeds are disbursed in increments as
construction progresses and as inspections warrant.

Construction loans afford the Bank the opportunity to increase the interest
rate sensitivity of its loan portfolio and to receive yields higher than those
obtainable on ARM loans secured by existing residential properties.  These
higher yields correspond to the higher risks associated with construction
lending.  Construction development loans involve additional risks attributable
to the fact that loan funds are advanced upon the security of the project under
construction, which is of uncertain value prior to its completion.  Because of
the uncertainties inherent in estimating construction costs as well as the
market value of the completed project and the effects of governmental
regulation of real property, it is relatively difficult to evaluate accurately
the total funds required to complete a project and the related loan- to-value
ratio.  As a result of the foregoing, construction lending often involves the
disbursement of substantial funds with repayment dependent, in part, on the
success of the ultimate project rather than the ability of the borrower or
guarantor to repay principal and interest.  If the Bank is forced to foreclose
on a project prior to or at completion due to a default, there can be no
assurance that the Bank will be able to recover all of the unpaid balance of,
and accrued interest on, the loan as well as related foreclosure and holding
costs.  In addition, the Bank may be required to fund additional amounts to
complete the project and may have to hold the property for an unspecified
period of time.  The Bank has attempted to address these risks through its
underwriting procedures and its limited amount of construction lending on
multi-family and commercial real estate properties.


OTHER LENDING.  The Bank's other lending activities consist of consumer
lending, primarily home equity loans, fixed-rate second mortgage loans, and to
a lesser extent automobiles, boats and recreational vehicles, and other secured
and unsecured loans.  On September 30, 2001, outstanding balances on home
equity lines represented $13.8 million or 3.3% of the Bank's total loan
portfolio.  The Bank uses the same underwriting standards for home equity lines
of credit as it uses for residential mortgage loans.  As of September 30, 2001,
$1.3 million or 0.3% of the Bank's loan portfolio consisted of consumer loans.

LOAN APPROVAL PROCEDURES AND AUTHORITY.  Certain officers have authority to
approve loans up to specified dollar amounts.  One- to four-family mortgage
loans conforming to agency standards and all consumer loans may be approved by
the Senior Vice President - Personal Banking, Senior Vice President - Loan
Investments and designated underwriters up to the agency maximum loan
limitations.  Non-conforming loans up to $250,000 and otherwise conforming to
the loan policy may be approved by the Senior Vice President - Loan
Investments.  Loans of up to $500,000 may be approved by the Senior Vice
President - Loan Investments with the concurrence of a member of the Bank loan
committee or a senior underwriter.  Secured mortgage and unsecured consumer
loans may be approved by designated personal banking managers.  The Bank's

<PAGE>  22
policies generally provide that all other loans are to be approved by the Board
or certain committees which include Board members.  All multi-family loans over
$1.5 million and one- to four-family construction loans over $1.5 million
require the approval of a majority of the Board.

For all loans originated by the Bank, upon receipt of a completed loan
application from a prospective borrower, a credit report is ordered, income and
certain other information generally is verified and, if necessary, additional
financial information is required.  All borrowers of one- to four-family
residential mortgage loans are qualified pursuant to applicable agency
guidelines.  The Bank's policies require appraisals on all real estate intended
to secure a proposed loan, which currently are performed by independent
appraisers designated and approved by the Bank.  Further, under current OTS
regulations, all loan transactions of $1.0 million or more, non-residential
transactions of $250,000 or more, and complex residential transactions of
$250,000 or more, the Bank requires appraisals conducted by state certified or
licensed appraisers.  The Board, at least annually, approves the independent
appraisers used by the Bank and reviews the Bank's appraisal policy.  It is the
Bank's policy to obtain title insurance on all real estate first mortgage
loans.  Borrowers must also obtain hazard insurance prior to closing.
Borrowers generally are required to advance funds on a monthly basis together
with each payment of principal and interest to a mortgage escrow account from
which the Bank makes disbursements for items such as real estate taxes and
hazard insurance premiums.

DELINQUENCIES AND CLASSIFIED ASSETS.

DELINQUENT LOANS.  The Board of Directors performs a monthly review of all
delinquent loans.  The procedures taken by the Bank with respect to
delinquencies vary depending on the nature of the loan and period of
delinquency.

The Bank's policies generally provide that delinquent mortgage loans be
reviewed and that a written late charge notice be mailed no later than the
twentieth day of delinquency.  The policies also require telephone contacts for
loans more than 20 days late to ascertain the reasons for the delinquency and
the prospects of repayment.  Face-to-face interviews and collection notices are
generally required for loans more than 30 days delinquent and on a case-by-case
basis for mortgage loans.  After 60 days, the Bank will either set a date by
which the loan must be brought current, enter into a written forbearance
agreement, foreclose on any collateral or take other appropriate action.  The
Bank's policies regarding delinquent consumer loans are similar except that
telephone contacts and correspondence will generally occur after a consumer
loan is more than 15 days delinquent.

It is the Bank's general policy to discontinue the accrual of interest on all
first mortgage loans 90 days past due.  Consumer loans continue to accrue
interest until a determination is made by the Bank that the loan may result in
a loss.  Property acquired by the Bank as a result of a foreclosure on a
mortgage loan is classified as real estate owned and is recorded at the lower
of the unpaid principal balance or fair value at the date of acquisition and
subsequently carried at the lower of cost or net realizable value.







<PAGE>  23
Set forth below is certain information regarding delinquent real estate loans
at September 30, 2001, 2000 and 1999:


<TABLE>
<CAPTION>
                                At September 30, 2001                       At September 30, 2000
                            60-89 Days       90 Days or More         60-89 Days        90 Days or More
                        -----------------  ------------------     -----------------   -----------------
                        Number  Principal   Number  Principal     Number  Principal   Number  Principal
                          of     Balance      of     Balance        of     Balance      of     Balance
                         Loans  of Loans     Loans  of Loans       Loans  of Loans     Loans  of Loans
                                               (Dollars in thousands)
<S>                      <C>   <C>           <C>   <C>             <C>    <C>          <C>   <C>
One- to four- family       4    $   583        5    $   628          7     $  896        3    $  151
Multi-family               4        953        -         -           1        215        -        -
Commercial                 -         -         -         -           -         -         1       224
                          --      -----       --      -----         --       ----       --      ----
Total mortgage loans       8      1,536        5        628          8      1,111        4       375

Consumer                   -         -         4         49          2         32        1         4
                          --      -----       --      -----         --       ----       --      ----
Total loans                8    $ 1,536        9    $   677         10     $1,143        5    $  379
                          ==      =====       ==      =====         ==       ====       ==      =====
Delinquent loans to
  total loans                      0.33%               0.16%                 0.21%              0.07%
                                   ====               =====                  ====               ====
</TABLE>

<TABLE>
<CAPTION>
                                At September 30, 1999
                            60-89 Days       90 Days or More
                        -----------------  ------------------
                        Number  Principal   Number  Principal
                          of     Balance      of     Balance
                         Loans  of Loans     Loans  of Loans
                                 (Dollars in thousands)
<S>                       <C>   <C>          <C>    <C>
One- to four- family       2     $  252        5     $  216
Multi-family               1        159        1         84
                          --        ---       --       ----
Total mortgage loans       3        411        6        300

Consumer                   -         --        4         43
                          --        ---       --       ----
Total loans                3     $  411       10     $  343
                          ==        ===       ==       ====
Delinquent loans to
  total loans                      0.08%                0.07%
                                    ===               ======
</TABLE>



















<PAGE>  24
NON-PERFORMING ASSETS. The following table sets forth information regarding
non-accrual loans, loans which are 90 days or more past due, and real estate in
foreclosure.  The Bank continues accruing interest on all consumer loans until
a loss determination is made.  Upon determination that the loan will result in
a loss, the Bank discontinues the accrual of interest and/or establishes a
reserve in the amount of the anticipated loss.  For the year ended September
30, 2001, interest income on non-accrual loans included in net income amounted
to less than $1,000.  If all non-accrual mortgage loans, as of September 30,
2001, had been currently performing in accordance with their original terms,
the Bank would have recognized interest income from such loans of $36,000.
<TABLE>
<CAPTION>
                                                At September 30,
                                 2001       2000       1999      1998       1997
                                            (Dollars in thousands)

<S>                           <C>        <C>        <C>       <C>        <C>
Non-accrual mortgage loans     $  628     $  375     $  300    $  799     $ 1,397
Non-accrual commercial leases      -          -          -         30         408
Non-accrual consumer loans         49          4         43         2           3
                                -----        ---       ----      ----       -----
  Total non-accrual loans         677        379        343       831       1,808

Consumer loans 90 days or more
  past due and still accruing    -          -         -          -          -
                                 -----       ---       ----      ----        ----
  Total non-performing loans       677        379       343       831       1,808

Real estate in foreclosure          --          3        -        131         215
                                 -----        ---      ----      -----      -----
  Total non-performing assets  $   677    $   382   $   343   $   962     $ 2,023
                                 =====       ====      ====      =====      =====
Total non-performing loans to
  total loans                     0.16%      0.07%     0.07%     0.20%      0.47%
                                 =====       ====      =====     =====      =====
Total non-performing assets to
  total assets                    0.10%      0.06%     0.06%     0.19%      0.41%
                                 =====       ====      =====     =====      =====
</TABLE>


CLASSIFIED ASSETS.  Federal regulations require the Bank to classify loans and
other assets such as debt and equity securities, considered by the OTS to be of
lesser quality, as "substandard", "doubtful" or "loss" assets.  The Bank's
classification policies provide that assets will be classified according to OTS
regulations.  An asset is considered "substandard" if it is inadequately
protected by the current net worth and paying capacity of the obligor or of the
collateral pledged, if any.  "Substandard" assets include those characterized
by the "distinct possibility" that the insured institution will sustain "some
loss" if the deficiencies are not corrected.  Assets classified as "doubtful"
have all of the weaknesses inherent in those classified "substandard," with the
added characteristic that the weaknesses present make "collection or
liquidation in full," on the basis of currently existing facts, conditions, and
values, "highly questionable and improbable."  Assets classified as "loss" are
those considered "uncollectible" and of such little value that their
continuance as assets without the establishment of a specific loss reserve is
not warranted.  Assets which do not currently expose the insured institution to
sufficient risk to warrant classification in one of the aforementioned
categories but possess weaknesses are required to be designated "special
mention" by management.

<PAGE>  25

When the Bank determines that an asset should be classified, it generally does
not establish a specific allowance for such asset unless it determines that
such asset may result in a loss.  The Bank however, establishes valuation
allowances in amounts deemed prudent for the pools of classified assets.
Valuation allowances represent loss allowances which have been established to
recognize probable losses associated with lending activities, but which, unlike
specific allowances, have not been allocated to particular problem assets.  The
Bank's policies provide for the establishment of a specific allowance equal to
100% of each asset classified as "loss" or to charge-off such amount.  A
savings institution's determination as to the classification of its assets and
the amount of its valuation allowances is subject to review by the OTS which
can order the establishment of additional general or specific loss allowances.
The Bank reviews the problem loans in its portfolio on a monthly basis to
determine whether any loans require classification in accordance with
applicable regulations; and believes its classification policies are consistent
with OTS policies.

As of September 30, 2001, the Bank had classified assets of $677,000.
Classified loans of $677,000 were categorized as substandard, consisting of 5
residential mortgage loans and 3 auto loans.  There were no assets classified
as doubtful.

ALLOWANCE FOR LOAN LOSSES.  The allowance for loan losses is established
through a provision for loan and lease losses based on management's evaluation
of probable incurred credit losses in its loan portfolio.  Such evaluation,
which includes a review of all loans on which full collection may not be
reasonably assured, considers among other matters the estimated net realizable
value of the underlying collateral, economic conditions, historical loan loss
experience, peer group information and other factors that warrant recognition
in providing for an adequate loan loss allowance.  Although the Bank maintains
its allowance at a level which it considers adequate to provide for probable
losses, there can be no assurances that such losses will not exceed the
estimated amounts.


























<PAGE>  26
The following table sets forth the Bank's allowance for loan losses at the
dates indicated.
<TABLE>
<CAPTION>
                                           At or for the Years Ended September 30,
                                      2001    2000      1999      1998      1997
                                                  (Dollars in thousands)
<S>                             <C>          <C>       <C>       <C>       <C>
Balance at beginning of year     $    950     $ 780     $ 591     $ 460     $ 810
Provision for loan losses             295       180       165       181        64
Charge offs:
  One-to four-family                    -         -         -         -         -
  Multi-family                          -         -         -         -         -
  Commercial leases                     -         -         -         -      (406)
  Consumer loans                      (12)      (13)      (8)      (51)       (19)
                                     ----      ----      ----      ----      ----
Total Charge-offs                     (12)      (13)      (8)      (51)      (425)

Recoveries:
  Commercial leases                    -          -        27        -         -
  Consumer loans                        3         3         5         1        11
                                     ----      ----      ----      ----      ----
Total Recoveries                        3         3        32         1        11
                                     ----      ----      ----      ----      ----
Balance at end of year           $  1,236     $ 950     $ 780     $ 591     $ 460
                                     ====      ====      ====      ====      ====
Charge-offs during the
  year to average loans
  outstanding during the year          - %       - %       - %     0.01%     0.11%
                                     ====      ====      ====      ====      ====
Allowance for loan losses
  to net loans receivable
   at end of year                    0.29%     0.18%     0.15%     0.14%     0.12%
                                     ====      ====      ====      ====      ====
Allowance for loan losses
  to total non-performing
  loans at end of year             182.57%    250.66%   227.41%    71.12%    25.44%
                                   ======     ======    ======     =====     =====
Allowance for loan losses
  to non-performing assets
  at end of year                   182.57%    248.69%   227.41%    61.43%    22.74%
                                   ======     ======    ======     =====     =====
</TABLE>



















<PAGE>  27
At September 30, 2001, the Bank maintained no specific reserves on its loan
portfolio, and is unaware of any specific identifiable charge-offs in its loan
portfolio.  The following table sets forth the Company's allocation of its
allowance for loan losses.  This allocation is based on management's subjective
estimates.  The amount allocated to a particular category should not be
interpreted as the only amount available for future charge-offs that may occur
within that category; it may not be indicative of future charge-off trends and
it may change from year to year based on management's assessment of the risk
characteristics of the loan portfolio.



<TABLE>
<CAPTION>
                                                                At September 30,
                                           2001                      2000                   1999
                                             % of Loans                 % of Loans            % of Loans
                                             in Category                in Category           in Category
                                              of Total                   of Total               of Total
                                             Outstanding                Outstanding           Outstanding
                                  Amount        Loans         Amount       Loans      Amount      Loans
                                                        (Dollars in thousands)
<S>                            <C>           <C>              <C>       <C>          <C>       <C>
Mortgage loans:
  One- to four- family          $   407        63.86%          $ 421      73.45%      $ 340      76.86%
  Multi-family                      238        28.54             232      22.25         179      19.86
  Commercial real estate             22         0.39              39       0.65          38       0.51
  Construction                      307         3.63              23       0.43           -          -
Consumer loans                      213         3.58             190       3.22         171       2.77
Unallocated Portion                  49          -                45         --          52         -
                                  -----       ------            ----     ------        ----     ------
  Total                         $ 1,236       100.00%          $ 950     100.00%      $ 780     100.00%
                                  =====       ======            ====     ======        ====     ======
</TABLE>


INVESTMENT ACTIVITIES

The investment policies of the Company and the Bank, established by the Board
of Directors and implemented by the Asset/Liability Committee, attempt to
provide and maintain liquidity, generate a favorable return on investments
without incurring undue interest rate and credit risk, and complement the
Bank's lending activities.  Federally chartered savings institutions have the
authority to invest in various types of liquid assets, including United States
Treasury obligations, securities of various federal agencies, certain
certificates of deposit of insured banks and savings institutions, certain
bankers' acceptances, repurchase agreements and federal funds.  Subject to
various restrictions, federally chartered savings institutions may also invest
their assets in commercial paper, investment grade corporate debt securities,
asset-backed securities, and mutual funds whose assets conform to the
investments that a federally chartered savings institution is otherwise
authorized to make directly.

The Company is the holder of certain subordinated notes (the "Notes") issued by
Cole Taylor Financial Group, Inc.  The Notes have a par value and cost basis of
$3.0 million.  The Notes were acquired by the Company in 1994, when Cole Taylor
Financial Group, Inc. was the parent company for both a consumer finance
company and a Chicago area bank.  In fiscal 1997, Cole Taylor's bank subsidiary
was "spun-off" to certain Cole Taylor shareholders in exchange for stock and
certain assets.  The Notes remained as obligations of the surviving company,
which became known as Reliance Acceptance Group, Inc. ("RAG") and remained the
parent company for the consumer finance company.



<PAGE>  28

On November 14, 1997, RAG filed a Form 10-Q with the SEC in which  RAG
reported, among other things, substantial additions to its loan loss reserves,
increasing delinquencies and repossession losses, a severe decline in its net
interest margin, continuing defaults under senior credit agreements, a lack of
future funding sources, and the imposition of substantial restrictions by
senior lenders.

The Company evaluated the information that was then available about RAG's
circumstances and future prospects in an effort to assess impairment and to
place a value on the Notes in the context of a possible RAG liquidation, sale
and/or bankruptcy.  The Company concluded that the impairment was other than
temporary, and that a complete write-down of the Notes was appropriate.
Accordingly, the Company wrote the Notes down $3.0 million during the fourth
quarter and fiscal year ended September 30, 1997.

RAG subsequently filed a bankruptcy petition in the United States Bankruptcy
Court in Delaware.  The Company is continuing its efforts to attempt to realize
some recovery of its subordinated notes.  Among other things, the Company
actively participated on the Official Committee of the Unsecured Creditors of
RAG and in the formulation of a plan for RAG's bankruptcy liquidation.
Further, the Estate Representative for RAG, with the support of the Company and
other holders of RAG subordinated notes, has filed two lawsuits against a
number of RAG insiders, certain legal and accounting firms and others in the
United States District Court for the District of Delaware.

The lawsuits allege a variety of causes of action against these individuals and
entities relating to the spin-off, the accuracy of RAG's financial statements
and similar matters.  A litigation fund of approximately $5.0 million was
established pursuant to RAG's plan of reorganization to pursue these lawsuits
and similar litigation.  In addition on February 14, 2000, the Company filed a
class action in the Circuit court of Cook County, Illinois against LaSalle
National Bank and affiliates.  The action is brought on behalf of the Company
individually and as class representative of all RAG subordinated noteholders.
The compliant alleges a cause of action arising out of LaSalle's involvements
as a trustee of the RAG subordinated notes.

In late 2001, the Estate Representative for RAG arrived at a preliminary
settlement with certain parties that would allow RAG to settle or satisfy the
claims of certain of its creditors including the Company.  Under the proposed
settlement, certain members of the Taylor family would be required to deliver
to RAG $15 million in cash, $30 million of trust preferred securities and 15%
of the outstanding common stock of Taylor Capital Group, Inc.  the parent bank
holding company of Cole Taylor Bank.  The proposed settlement is subject to
certain significant conditions and no assurances can be provided that the
settlement will be completed or that the Company will receive any settlement
proceeds.












<PAGE>  29
The following table sets forth certain information regarding the amortized cost
and fair value of the Company's interest-earning deposits, federal funds sold,
FHLB - Chicago stock, and securities portfolio at the dates indicated:

<TABLE>
<CAPTION>
                                                         At September 30,
                                          2001                   2000                 1999
                                 Amortized     Fair     Amortized     Fair   Amortized    Fair
                                   Cost       Value        Cost      Value     Cost      Value
                                                          (in thousands)

<S>                            <C>          <C>         <C>        <C>        <C>       <C>
Interest-earning deposits:
  FHLB daily investment         $  1,394     1,394       1,400      1,400        404       404
  Money market fund                    3         3           5          5        172       172
                                   -----     -----         ---        ---      -----     -----
Total interest-bearing deposits $  1,397     1,397       1,405      1,405        576       576
                                   =====     =====       =====      =====      =====     =====

Federal funds sold              $    100       100         100        100        100       100
                                    ====      ====        ====       ====       ====      ====

FHLB-Chicago Stock              $ 18,055    18,055      10,065     10,065      9,615     9,615
                                  ======    ======      ======     ======      =====     =====

Securities available for sale:
  U.S. Government and
  agencies                      $ 23,109    23,199      68,436     65,603     68,428    66,070
  Municipal debt securities        3,491     3,492          -          -          -         -
  Corporate debt securities       14,719    15,315       7,972      8,763         -         -
                                 -------    ------      ------     ------     ------    ------
Total securities
  available for sale           $  41,319    42,006      76,408     74,366     68,428    66,070
                                 =======    ======      ======     ======     ======    ======
</TABLE>


The table below sets forth certain information regarding the carrying value,
weighted average yields and maturities of the Company's investment securities
available for sale at September 30, 2001.

<TABLE>
<CAPTION>
                                                       At September 30, 2001

                                One Year            One to         Five to      More than
                                 or Less           Five Years      10 Years    10 Years                   Total
                                                                                                Avg
                                       Wtd               Wtd            Wtd           Wtd     remaining                  Wtd
                               Amtzd   Avg      Amtzd    Avg     Amtzd  Avg    Amtzd  Avg     Years to   Amtzd  Fair     Avg
                               Cost   Yield     Cost    Yield    Cost  Yield   Cost  Yield    Maturity   Cost   Value   Yield
                                                           (dollars in thousands)
<S>                       <C>       <C>        <C>     <C>      <C>      <C>    <C>     <C>     <C>    <C>      <C>     <C>
U.S. Government
  and agencies (1)         $ 23,109  6.64%        -       -%        -      - %     --    --%      -     23,109   23,199  6.64%

Municipal debt
 securities (2)                  -      -         -       -         -      -     3,491   4.91    17.3    3.491   3.492   4.91

Corporate debt
  securities (3)                 -      -         -       -      3,553    6.60   11,166  9.21    23.8   14,719   15,315  8.58
                             ------  ----       ----    ----    ------    -----  ------  -----   ----   ------   ------  ----
                           $ 23,109  6.64%        -      - %     3,553    6.60%  14,657  8.19%   19.2   41,319   42,006  7.59%
                             ======  ====       ====    ====    ======    =====  ======  =====   ====   ======   ======  ====
</TABLE>
(1) U.S. government and agencies investments include $20.0 million in callable
notes.  These securities are one year or less as both securities were called in
October, 2001.

(2) Municipal bond yields included in securities available for sale above are
not tax effected.

<PAGE>  30

SOURCES OF FUNDS

GENERAL.  Deposits, loan repayments, and cash flows generated from operations
are the primary sources of the Bank's funds for use in lending, investing and
for other general purposes.  The Bank also utilizes FHLB advances from time to
time.

DEPOSITS.  The Bank offers a variety of deposit accounts having a range of
interest rates and terms.  The Bank's deposits consist of passbook savings,
NOW, Super NOW, money market and certificate accounts.  The flow of deposits is
influenced significantly by general economic conditions, changes in money
market rates, prevailing interest rates and competition.  The Bank's deposits
are obtained primarily from the areas in which its home office is located.  The
Bank relies primarily on customer service and long-standing relationships with
customers to attract and retain these deposits.  Certificate accounts in excess
of $100,000 are not solicited by the Bank nor does the Bank use brokers to
obtain deposits.  Management constantly monitors the Bank's deposit accounts
and, based on historical experience, management believes it will retain a large
portion of such accounts upon maturity.

The following table presents the deposit activity of the Bank for the years
indicated.

<TABLE>
<CAPTION>
                                               Years Ended September 30,
                                           2001         2000        1999
                                                   (in thousands)
<S>                                   <C>           <C>          <C>
Deposits                               $ 849,874      702,632      716,232
Withdrawals                             (850,825)    (696,519)    (704,706)
                                         -------      -------      -------
Net deposits in excess of withdrawals       (951)       6,113       11,526
Interest credited on deposits             19,137       18,304       14,820
                                         -------      -------      -------
Total increase in deposits             $  18,186       24,417       26,346
                                         =======      =======      =======
</TABLE>


The following table sets forth maturities time deposits over $100,000 at
September 30, 2001:

<TABLE>
<CAPTION>
                           Maturity Period
                                                 (in thousands)
                <S>                                <C>
                 Three months or less               $ 11,051
                 Over three through six months         8,712
                 Over six through 12 months           16,125
                 Over 12 months                        2,455
                                                     -------
                                                    $ 38,343
                                                     =======
</TABLE>


<PAGE>  31
The following table sets forth the distribution of the Bank's deposit accounts
at the dates indicated and the weighted average nominal interest rates on each
category of deposits presented.  Management does not believe that the use of
fiscal year-end balances instead of average balances resulted in any material
difference in the information presented.


<TABLE>
<CAPTION>
                                                      At September 30,
                                           2001                             2000
                                                      Weighted
Weighted
                                          Percent of   Average             Percent of  Average
                                            Total      Nominal               Total     Nominal
                                Amount    Deposits      Rate       Amount  Deposits     Rate
                                                  (dollars in thousands)
<S>                         <C>         <C>          <C>       <C>        <C>          <C>
Passbook Savings             $ 132,217    33.09%      3.04%     $ 121,787    31.93%      4.09%
Transaction Accounts:
  NOW/non-interest bearing      13,746     3.44         -           9,287     2.44         -
  NOW                           18,869     4.72       1.82         19,074     5.00       2.03
  Money market and management   12,345     3.09       3.36         12,711     3.33       3.59
                                ------    -----       ----         ------     ----       ----
    Total transaction accounts  44,960    11.25       2.93         41,072    10.77       3.81

Certificate Accounts:
  3 month                        1,049     0.26       3.71          1,029     0.27       4.30
  6 month                       17,246     4.33       4.14          7,660     2.01       5.24
  7 month                       13,772     3.45       4.89          2,509     0.66       4.70
  8 month                       61,359    15.35       5.30          1,609     0.42       4.70
  10 month                      60,548    15.15       4.58         16,834     4.41       6.11
  12 month                      19,228     4.81       5.49         31,017     8.13       6.39
  13 month                      10,280     2.57       4.79        105,917    27.77       6.63
  15 month                       7,388     1.85       4.55         15,307     4.01       6.12
  24 month                      20,978     5.25       6.68         22,694     5.95       6.57
  36 month                       3,889     0.97       5.06          5,291     1.39       5.46
  36 month rising rate           1,775     0.44       4.33          2,826     0.74       5.64
  60 month                       4,930     1.23       5.77          5,881     1.54       5.82
  Other                            -         -          -             -        -           -
                                ------    -----       ----         ------     ----       ----
  Total certificate accounts   222,442    55.66       5.08        218,574    57.30       6.36
                                ------    -----       ----         ------     ----       ----
Total Deposits               $ 399,619   100.00%      4.17%       381,433   100.00%      5.30%
                               =======   ======       ====        =======   ======       ====
</TABLE>

























<PAGE>  32
<TABLE>
<CAPTION>

                                      At September 30,
                                           1999
                                                      Weighted
                                          Percent of   Average
                                            Total      Nominal
                                Amount    Deposits      Rate
                                  (dollars in thousands)
<S>                         <C>         <C>          <C>
Passbook Savings             $ 127,415    35.69%      3.70%

Transaction Accounts:
  NOW/non-interest bearing       6,385     1.79         -
  NOW                           16,577     4.64       2.22
  Money market and management   16,100     4.51       3.82
                                ------    -----       ----
    Total transaction accounts  39,062    10.94       3.56

Certificate Accounts:
  3 month                        2,160     0.61       4.40
  6 month                       10,503     2.94       4.67
  7 month                       31,955     8.95       5.03
  8 month                        5,125     1.44       4.63
  10 month                      45,000    12.60       5.40
  12 month                      18,600     5.21       4.87
  13 month                      35,610     9.97       5.75
  15 month                      12,475     3.49       4.90
  24 month                      10,170     2.85       5.25
  36 month                       6,843     1.92       5.65
  36 month rising rate           3,959     1.11       5.17
  60 month                       8,139     2.28       6.01
  Other                             --       --         --
                                ------    -----       ----
  Total certificate accounts   190,539    53.37       5.27
                                ------    -----       ----
Total Deposits               $ 357,016   100.00%      4.49%
                               =======   ======       ====
</TABLE>

The following table presents, by various rate categories, the amount of
certificate accounts outstanding at September 30, 2001, 2000 and 1999 and the
periods to maturity of the certificate accounts outstanding at September 30,
2001.


<TABLE>
<CAPTION>
                                                            Period to maturity from September 30, 2001
                             At September 30,
                                                                               Two to
                                                      Within       One to       Three    There-
                        2001     2000      1999     One Year     Two Years     Years    after   Total
                                                 (in thousands)

                 <C>        <C>      <C>        <C>           <C>         <C>       <C>    <C>
Certificate accounts:
  2.99% or less      $      -        59       81         -            -          -       -          -
  3.00% to 3.99%         9,508       -        -       8,476          411        621      -       9,508
  4.00% to 4.99%       127,880   22,497   53,218    120,312        5,185      2,135     248    127,880
  5.00% to 5.99%        41,550   30,333  133,805     36,037        4,327        669     517     41,550
  6.00% to 6.99%        30,704  129,611    3,435     29 956          748         -       -      30,704
  7.00% to 7.99%        12,800   36,074       -      12,800           -          -       -      12,800
                       -------  -------  -------    -------       ------      -----     ---    -------
Total                $ 222,442  218,574  190,539    207,581       10,671      3,425     765    222,442
                       =======  =======  =======    =======       ======      =====     ===    =======
</TABLE>



<PAGE>  33

BORROWING

Although deposits are the Bank's primary source of funds, the Bank's policy has
been to utilize borrowing, such as advances from the FHLB of Chicago, when they
are a less costly source of funds or can be invested at an acceptable rate of
return.



The following table sets forth certain information regarding borrowing at and
for the date indicated:

<TABLE>
<CAPTION>
                                   At and for the Years Ended September 30,
                                               2001         2000         1999
                                                      (in thousands)
<S>                                       <C>            <C>          <C>

Average balance outstanding                $ 194,545      180,651      158,523
Maximum amount outstanding at any
  month-end during the year                  214,360      205,150      192,300
Balance outstanding at year end              187,345      205,150      186,250
Weighted average interest rate
  during the year                               6.34%        6.16%        5.48%
Weighted average interest rate
  at end of year                                5.50%        6.72%        5.56%
</TABLE>


The Bank obtains advances from the FHLB of Chicago secured by its capital stock
in the FHLB of Chicago and a blanket pledge of certain of its mortgage loans
and specifically pledged mortgage-backed securities.  Such advances are made
pursuant to several different credit programs, each of which has its own
interest rate and range of maturities.  The maximum amount that the FHLB of
Chicago will advance to member institutions, including the Bank, for purposes
other than  meeting withdrawals, fluctuates from time to time in accordance
with the policies of the OTS and the FHLB of Chicago.  The maximum amount of
FHLB of Chicago advances to a member institution generally is reduced by
borrowing from any other source.  During the year ended September 30, 2001, two
advances totalling $55 million matured. At September 30, 2001, the Bank's FHLB
of Chicago advances totalled $183.1 million.

Included in FHLB of Chicago advances at September 30, 2001 are $65.0 million of
fixed-rate advances which are callable at the discretion of the FHLB of Chicago
at periods from 6 months to 2 years from the origination date.  The average
term to maturity on these advances is 2.96 years, while the average term to
call is 0.23 years.  No advance was called during the year ended September 30,
2001.  The Bank receives a lower cost of borrowing on callable advances than on
similar non-callable long-term advances in return for granting the FHLB of
Chicago the right to call the advance prior to their final maturity.  If
called, the FHLB of Chicago will provide replacement funding at the then
prevailing market rate of interest for the remaining term of the advances,
subject to standard terms and conditions.

UNSECURED TERM BANK LINE OF CREDIT  During fiscal 2000, the Company obtained a
$5.0 million unsecured line of credit from an unrelated financial institution.
The loan provides for an interest rate of the prime rate or 2% over the one,
<PAGE>  34
two, or three-month LIBOR at management's discretion, adjustable and payable at
the end of the repricing period.  At September 30, 2001, the loan carries an
interest rate of 2% over the three-month LIBOR.  The loan requires quarterly
payments of all accrued unpaid interest due and one payment of all outstanding
principal plus all accrued unpaid interest on December 15, 2001.  The financing
agreements contain covenants that, among other things, require the Company to
maintain a minimum stockholders' equity balance and to obtain certain minimum
operating results, as well as requiring the Bank to maintain "well capitalized"
regulatory capital levels and certain non-performing asset ratios.  At
September 30, 2001, the Company was in compliance with these covenants.


SUBSIDIARY ACTIVITY

Fidelity Corporation, incorporated in 1970, is a wholly-owned subsidiary of the
Bank.  Fidelity Corporation's business is safe deposit box rentals, and annuity
and insurance sales primarily to customers of the Bank.  In addition, in
cooperation with INVEST, full service securities brokerage services are offered
to customers and non-customers of the Bank.

Fidelity Corporation had a 7.64% ownership interest as a limited partner and
had a 0.08% ownership interest as a general partner in an Illinois limited
partnership formed in 1987 for the purpose of (i) developing, in the City of
Evanston, Illinois, a public parking garage containing 602 parking spaces,
which was sold in 1989 to the City of Evanston, and (ii) developing, managing
and operating a 190 unit luxury rental apartment building adjacent thereto.
Fidelity Corporation's investment in this limited partnership, represented by
its capital contributions, totalled $732,100 at September 30, 2000.  On
November 3, 2000, Fidelity Corporation sold its partnership interest to the
other General Partner for $835,000.  The Company recorded a pre-tax gain of
$106,000 on the sale of this investment.  Income generated from safe deposit
box rentals, annuity sales and insurance sales was $132,000 for the year ended
September 30, 2001.  Operating expenses for the fiscal year were $52,000,
resulting in a total pre-tax profit of $183,000.

Fidelity Loan Services, Inc., (FLSI), incorporated in 1989, is a wholly-owned
subsidiary of the Bank that ceased operations in October 1994.


PERSONNEL

As of September 30, 2001, the Company had 126 full-time employees and 21 part-
time employees.  The employees are not represented by a collective bargaining
unit and the Company considers its relationship with its employees to be
excellent.


SUPERVISION AND REGULATION

GENERAL  Financial institutions and their holding companies are extensively
regulated under federal and state law.  As a result, the growth and earnings
performance of the Company can be affected not only by management decisions and
general economic conditions, but also by the requirements of applicable state
and federal statutes and regulations and the policies of various governmental
regulatory authorities, including the Office of Thrift Supervision (the "OTS")
the Board of Governors of the Federal Reserve System (the "Federal Reserve"),
the Federal Deposit Insurance Corporation (the "FDIC"), the Internal Revenue
Service and state taxing authorities and the Securities and Exchange Commission
<PAGE>  35
(the "SEC"). The effect of applicable statutes, regulations and regulatory
policies can be significant, and cannot be predicted with a high degree of
certainty.

Federal and state laws and regulations generally applicable to financial
institutions, such as the Company and the Bank, regulate, among other things,
the scope of business, investments, reserves against deposits, capital levels
relative to operations, the nature and amount of collateral for loans, the
establishment of branches, mergers, consolidations and dividends. The system of
supervision and regulation applicable to the Company and the Bank establishes a
comprehensive framework for their respective operations and is intended
primarily for the protection of the FDIC's deposit insurance funds and the
depositors, rather than the shareholders, of financial institutions.

The following is a summary of the material elements of the regulatory framework
that applies to the Company and the Bank.  It does not describe all of the
statutes, regulations and regulatory policies that apply to the Company and the
Bank, nor does it restate all of the requirements of the statutes, regulations
and regulatory policies that are described. As such, the following is qualified
in its entirety by reference to the applicable statutes, regulations and
regulatory policies.  Any change in applicable law, regulations or regulatory
policies may have a material effect on the business of the Company and the
Bank.

RECENT REGULATORY DEVELOPMENTS  The terrorist attacks in September, 2001, have
impacted the financial services industry and have already led to federal
legislation that attempts to address certain related issues involving financial
institutions. On October 26, 2001, President Bush signed into law the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the "USA PATRIOT Act").  Among its other
provisions, the USA PATRIOT Act requires each financial institution: (i) to
establish an anti-money laundering program; (ii) to establish due diligence
policies, procedures and controls with respect to its private banking accounts
and correspondent banking accounts involving foreign individuals and certain
foreign banks; and (iii) to avoid establishing, maintaining, administering, or
managing correspondent accounts in the United States for, or on behalf of, a
foreign bank that does not have a physical presence in any country.  In
addition, the USA PATRIOT Act contains a provision encouraging cooperation
among financial institutions, regulatory authorities and law enforcement
authorities with respect to individuals, entities and organizations engaged in,
or reasonably suspected of engaging in, terrorist acts or money laundering
activities.  It is anticipated that regulations interpreting the USA PATRIOT
Act will be issued during the first quarter of 2002.

THE COMPANY  The Company, as the sole shareholder of the Bank, is a savings and
loan holding company.  As a savings and loan holding company, the Company is
registered with, and is subject to regulation by, the OTS under the Home
Owners' Loan Act, as amended (the "HOLA").  Under the HOLA, the Company is
subject to periodic examination by the OTS. The Company is also required to
file with the OTS periodic reports of the Company's operations and such
additional information regarding the Company and the Bank as the OTS may
require.

INVESTMENTS AND ACTIVITIES  The HOLA prohibits a savings and loan holding
company, directly or indirectly, or through one or more subsidiaries from:  (i)
acquiring control of, or acquiring by merger or purchase of assets, another
savings association or savings and loan holding company without the prior
written approval of the OTS; (ii) subject to certain exceptions, acquiring more
than 5% of the issued and outstanding shares of voting stock of a savings

<PAGE>  36
association or savings and loan holding company except as part of an
acquisition of control approved by the OTS; or (iii) acquiring or retaining
control of a financial institution that is not FDIC-insured.

Prior to 1999, qualifying unitary savings and loan holding companies were
permitted to engage in non-financial activities.  However, under Title IV of
the Gramm-Leach-Bliley Act of 1999, only those unitary savings and loan holding
companies that either were savings and loan holding companies on or before
May 4, 2000, like the Company, or became a savings and loan holding company
pursuant to an application pending before the OTS on or before May 4, 2000, may
continue to engage in such non-financial activities, so long as the holding
company's savings association subsidiary qualifies as a qualified thrift lender
(see "-- The Bank--Qualified Thrift Lender Test").  A savings and loan holding
company that controls only one savings association subsidiary but is not a
grandfathered company is subject to the same activity restrictions as a
multiple savings and loan holding company.  In all cases, however, if, the OTS
determines that there is reasonable cause to believe that the continuation by a
savings and loan holding company of a particular activity constitutes a serious
risk to the financial safety, soundness or stability of its savings association
subsidiary, the OTS may require the holding company to cease engaging in the
activity (or divest any subsidiary which engages in the activity) or may impose
such restrictions on the holding company and the subsidiary savings association
as the OTS deems necessary to address the risk. The restrictions the OTS may
impose include limitations on (i) the payment of dividends by the savings
association to the holding company; (ii) transactions between the savings
association and its affiliates; and (iii) any activities of the savings
association that might create a serious risk that liabilities of the holding
company and its affiliates may be imposed on the savings association.

Federal law also prohibits any person or company from acquiring "control" of a
savings association or a savings and loan holding company without prior notice
to the appropriate federal bank regulator.  "Control" is defined in certain
cases as the acquisition of 10% or more of the outstanding shares of a savings
association or savings and loan holding company.

DIVIDENDS  The Delaware General Corporation Law (the "DGCL") allows the Company
to pay dividends only out of its surplus (as defined and computed in accordance
with the provisions of the DGCL) or if the Company has no such surplus, out of
its net profits for the fiscal year in which the dividend is declared and/or
the preceding fiscal year. Additionally, OTS policies provide that a savings
and loan holding company should not pay dividends that are not supportable by
the company's core earnings or that may be funded only by borrowing or by sales
of assets. The OTS also possesses enforcement powers over savings and loan
holding companies to prevent or remedy actions that represent unsafe or unsound
practices or violations of applicable statutes and regulations.  Among these
powers is the ability to prohibit or limit the payment of dividends by savings
and loan holding companies.

FEDERAL SECURITIES REGULATION  The Company's common stock is registered with
the SEC under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended (the "Exchange Act").  Consequently, the
Company is subject to the information, proxy solicitation, insider trading and
other restrictions and requirements of the SEC under the Exchange Act.

THE BANK  The Bank is a federally chartered savings association, the deposits
of which are insured by the FDIC's Savings Association Insurance Fund ("SAIF").
As a SAIF-insured, federally chartered savings association, the Bank is subject
to the examination, supervision, reporting and enforcement requirements of the
OTS, as the chartering authority for federal savings associations, and the FDIC
<PAGE>  37
as administrator of the SAIF.  The Bank is also a member of the Federal Home
Loan Bank System, which provides a central credit facility primarily for member
institutions.

DEPOSIT INSURANCE  As an FDIC-insured institution, the Bank is required to pay
deposit insurance premium assessments to the FDIC.  The FDIC has adopted a
risk-based assessment system under which all insured depository institutions
are placed into one of nine categories and assessed insurance premiums based
upon their respective levels of capital and results of supervisory evaluations.
Institutions classified as well-capitalized (as defined by the FDIC) and
considered healthy pay the lowest premium while institutions that are less than
adequately capitalized (as defined by the FDIC) and considered of substantial
supervisory concern pay the highest premium.  Risk classification of all
insured institutions is made by the FDIC for each semi-annual assessment
period.

During the year ended December 31, 2000, SAIF assessments ranged from 0% of
deposits to 0.27% of deposits.  For the year ending December 31, 2001, SAIF
assessment rates will continue to range from 0% of deposits to 0.27% of
deposits.

The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution: (i)
has engaged or is engaging in unsafe or unsound practices; (ii) is in an unsafe
or unsound condition to continue operations; or (iii) has violated any
applicable law, regulation, order or any condition imposed in writing by, or
written agreement with, the FDIC.  The FDIC may also suspend deposit insurance
temporarily during the hearing process for a permanent termination of insurance
if the institution has no tangible capital.  Management of the Bank is not
aware of any activity or condition that could result in termination of the
deposit insurance of the Bank.

FICO ASSESSMENTS  Since 1987, a portion of the deposit insurance assessments
paid by SAIF members has been used to cover interest payments due on the
outstanding obligations of the Financing Corporation ("FICO").  FICO was
created in 1987 to finance the recapitalization of the Federal Savings and Loan
Insurance Corporation, the SAIF's predecessor insurance fund.  As a result of
federal legislation enacted in 1996, beginning as of January 1, 1997, both SAIF
members and members of the FDIC's Bank Insurance Fund ("BIF") became subject to
assessments to cover the interest payments on outstanding FICO obligations.
These FICO assessments are in addition to amounts assessed by the FDIC for
deposit insurance. Between January 1, 2000, and the final maturity of the
outstanding FICO obligations in 2019, BIF members and SAIF members will share
the cost of the interest on the FICO bonds on a pro rata basis. During the year
ended September 30, 2001, the FICO assessment rate for BIF and SAIF members was
approximately 0.02% of deposits.

SUPERVISORY ASSESSMENTS  All Federal savings associations are required to pay
supervisory assessments to the OTS to fund the operations of the OTS. The
amount of the assessment is calculated using a formula which takes into account
the institution's size, its supervisory condition (as determined by the
composite rating assigned to the institution as a result of its most recent OTS
examination) and the complexity of its operations.  During the year ended
September 30, 2001, the Bank paid supervisory assessments to the OTS totaling
$127,500.




<PAGE>  38

CAPITAL REQUIREMENTS  Pursuant to the HOLA and OTS regulations, savings
associations, such as the Bank, are subject to the following minimum capital
requirements:  a core capital requirement, consisting of a minimum ratio of
core capital to total assets of 3% for savings associations assigned a
composite rating of 1 as of the association s most recent OTS examination, with
a minimum core capital requirement of 4% of total assets for all other savings
associations; a tangible capital requirement, consisting of a minimum ratio of
tangible capital to total assets of 1.5%; and a risk-based capital requirement,
consisting of a minimum ratio of total capital to total risk-weighted assets of
8%, at least one-half of which must consist of core capital.  Core capital
consists primarily of permanent stockholders' equity less (i) intangible assets
other than certain supervisory goodwill, certain mortgage servicing rights and
certain purchased credit card relationships and (ii) investments in
subsidiaries engaged in activities not permitted for national banks. Tangible
capital is substantially the same as core capital except that all intangible
assets other than certain mortgage servicing rights must be deducted. Total
capital consists primarily of core capital plus certain debt and equity
instruments that do not qualify as core capital and a portion of the Bank's
allowances for loan and lease losses.

The capital requirements described above are minimum requirements.  Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions.  For example, the regulations of the
OTS provide that additional capital may be required to take adequate account
of, among other things, interest rate risk, the risks posed by concentrations
of credit or nontraditional activities.

During the year ended September 30, 2001, the Bank was not required by the OTS
to increase its capital to an amount in excess of the minimum regulatory
requirement.  As of September 30, 2001, the Bank exceeded its minimum
regulatory capital requirements with a core capital ratio of 7.51%, a tangible
capital ratio of 7.51% and a risk-based capital ratio of 17.65%.

Federal law provides the federal banking regulators with broad power to take
prompt corrective action to resolve the problems of undercapitalized
institutions.  The extent of the regulators' powers depends on whether the
institution in question is "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized," in each case as defined by regulation.  Depending upon the
capital category to which an institution is assigned, the regulators'
corrective powers include:  (i) requiring the institution to submit a capital
restoration plan; (ii) limiting the institution's asset growth and restricting
its activities; (iii) requiring the institution to issue additional capital
stock (including additional voting stock) or to be acquired; (iv) restricting
transactions between the institution and its affiliates; (v) restricting the
interest rate the institution may pay on deposits; (vi) ordering a new election
of directors of the institution; (vii) requiring that senior executive officers
or directors be dismissed; (viii) prohibiting the institution from accepting
deposits from correspondent banks; (ix) requiring the institution to divest
certain subsidiaries; (x) prohibiting the payment of principal or interest on
subordinated debt; and (xi) ultimately, appointing a receiver for the
institution.  As of September 30, 2001, the Bank was well capitalized, as
defined by OTS regulations.

DIVIDENDS  OTS regulations require prior OTS approval for any capital
distribution by a savings association that is not eligible for expedited
processing under the OTS's application processing regulations.  In order to

<PAGE>  39

qualify for expedited processing, a savings association must:  (i) have a
composite examination rating of 1 or 2; (ii) have a Community Reinvestment Act
rating of satisfactory or better; (iii) have a compliance rating of 1 or 2;
(iv) meet all applicable regulatory capital requirements; and (v) not have been
notified by the OTS that it is a problem association or an association in
troubled condition.  Savings associations that qualify for expedited processing
are not required to obtain OTS approval prior to making a capital distribution
unless: (a) the amount of the proposed capital distribution, when aggregated
with all other capital distributions during the same calendar year, will exceed
an amount equal to the association's year-to-date net income plus its retained
net income for the preceding two years; (b) after giving effect to the
distribution, the association will not be at least "adequately capitalized" (as
defined by OTS regulation); or (c) the distribution would violate a prohibition
contained in an applicable statute, regulation or agreement with the OTS or the
FDIC or violate a condition imposed in connection with an OTS-approved
application or notice. The OTS must be given prior notice of certain types of
capital distributions, including any capital distribution by a savings
association that, like the Bank, is a subsidiary of a savings and loan holding
company or by a savings association that, after giving effect to the
distribution, would not be "well-capitalized" (as defined by OTS regulation).

The payment of dividends by any financial institution or its holding company is
affected by the requirement to maintain adequate capital pursuant to applicable
capital adequacy guidelines and regulations, and a financial institution
generally is prohibited from paying any dividends if, following payment
thereof, the institution would be undercapitalized.  As described above, the
Bank exceeded its minimum capital requirements under applicable guidelines as
of September 30, 2001.  Further, under applicable regulations of the OTS, the
Bank may not pay dividends in an amount which would reduce its capital below
the amount required for the liquidation account established in connection with
the Bank's conversion from the mutual to the stock form of ownership in 1993.
Notwithstanding the availability of funds for dividends, however, the OTS may
prohibit the payment of any dividends by the Bank if the OTS determines such
payment would constitute an unsafe or unsound practice.

INSIDER TRANSACTIONS  The Bank is subject to certain restrictions imposed by
federal law on extensions of credit to the Company, on investments in the stock
or other securities of the Company and the acceptance of the stock or other
securities of the Company as collateral for loans.  Certain limitations and
reporting requirements are also placed on extensions of credit by the Bank to
its directors and officers, to directors and officers of the Company, to
principal stockholders of the Company, and to "related interests" of such
directors, officers and principal stockholders.  In addition, federal law and
regulations may affect the terms upon which any person becoming a director or
officer of the Company or one of its subsidiaries or a principal stockholder of
the Company may obtain credit from banks with which the Bank maintains a
correspondent relationship.

SAFETY AND SOUNDNESS STANDARDS  The federal banking agencies have adopted
guidelines which establish operational and managerial standards to promote the
safety and soundness of federally insured depository institutions.  The
guidelines set forth standards for internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, fees and benefits, asset quality and
earnings.




<PAGE>  40

In general, the safety and soundness guidelines prescribe the goals to be
achieved in each area, and each institution is responsible for establishing its
own procedures to achieve those goals.  If an institution fails to comply with
any of the standards set forth in the guidelines, the institution's primary
federal regulator may require the institution to submit a plan for achieving
and maintaining compliance. If an institution fails to submit an acceptable
compliance plan, or fails in any material respect to implement a compliance
plan that has been accepted by its primary federal regulator, the regulator is
required to issue an order directing the institution to cure the deficiency.
Until the deficiency cited in the regulator's order is cured, the regulator may
restrict the institution's rate of growth, require the institution to increase
its capital, restrict the rates the institution pays on deposits or require the
institution to take any action the regulator deems appropriate under the
circumstances. Noncompliance with the standards established by the safety and
soundness guidelines may also constitute grounds for other enforcement action
by the federal banking regulators, including cease and desist orders and civil
money penalty assessments.

BRANCHING AUTHORITY Federally chartered savings associations which qualify as
"domestic building and loan associations," as defined in the Internal Revenue
Code, or meet the qualified thrift lender test (see "-- Qualified Thrift Lender
Test") have the authority, subject to receipt of OTS approval, to establish or
acquire branch offices anywhere in the United States.  If a federal savings
association fails to qualify as a "domestic building and loan association," as
defined in the Internal Revenue Code, and fails to meet the qualified thrift
lender test the association may branch only to the extent permitted for
national banks located in the savings association's home state.  As of
September 30, 2001, the Bank qualified as a "domestic building and loan
association," as defined in the Internal Revenue Code and met the qualified
thrift lender test.

QUALIFIED THRIFT LENDER TEST  The HOLA requires every savings association to
satisfy a "qualified thrift lender" ("QTL") test.  Under the HOLA, a savings
association will be deemed to meet the QTL test if it either (i) maintains at
least 65% of its "portfolio assets" in "qualified thrift investments" on a
monthly basis in nine out of every 12 months or (ii) qualifies as a "domestic
building and loan association," as defined in the Internal Revenue Code.  For
purposes of the QTL test, "qualified thrift investments" consist of mortgage
loans, mortgage-backed securities, education loans, small business loans,
credit card loans and certain other housing and consumer-related loans and
investments.  "Portfolio assets" consist of a savings association's total
assets less goodwill and other intangible assets, the association's business
properties and a limited amount of the liquid assets maintained by the
association pursuant to OTS requirements.  A savings association that fails to
meet the QTL test must either convert to a bank charter or operate under
certain restrictions on its operations and activities.  Additionally, within
one year following the loss of QTL status, the holding company for the savings
association will be required to register as, and will be deemed to be, a bank
holding company.  A savings association that fails the QTL test may requalify
as a QTL but it may do so only once.  As of September 30, 2001, the Bank
satisfied the QTL test, with a ratio of qualified thrift investments to
portfolio assets of 97.26%, and qualified as a "domestic building and loan
association," as defined in the Internal Revenue Code.





<PAGE>  41

LIQUIDITY REQUIREMENTS  The OTS issued a final rule, effective July 18, 2001,
eliminating the requirement that each savings association maintain an average
daily balance of liquid assets of at least 4% of its liquidity base. The change
was made to implement a recent change to the HOLA. The rule, nevertheless,
requires each savings association and service corporation to maintain
sufficient liquidity to ensure its safe and sound operation.

FEDERAL RESERVE SYSTEM  Federal Reserve regulations, as presently in effect,
require depository institutions to maintain non-interest earning reserves
against their transaction accounts (primarily NOW and regular checking
accounts), as follows:  for transaction accounts aggregating $42.8 million or
less, the reserve requirement is 3% of total transaction accounts; and for
transaction accounts aggregating in excess of $42.8 million, the reserve
requirement is $1.284 million plus 10% of the aggregate amount of total
transaction accounts in excess of $42.8 million.  The first $5.5 million of
otherwise reservable balances are exempted from the reserve requirements.
These reserve requirements are subject to annual adjustment by the Federal
Reserve.  The Bank is in compliance with the foregoing requirements.  The
balances maintained to meet the reserve requirements imposed by the Federal
Reserve Board may be used to satisfy liquidity requirements imposed by the OTS.


IMPACT OF INFLATION AND CHANGING PRICES

The Company's financial statements and notes thereto presented herein have been
prepared in accordance with GAAP, which generally require the measurement of
financial position and operating results in terms of historical dollars without
considering the changes in the relative purchasing power of money over time due
to inflation.  The impact of inflation is reflected in the increased cost of
the Company's operations.  Unlike industrial companies, nearly all of the
assets and liabilities of the Company are monetary in nature.  As a result,
interest rates have a greater impact on the Company's performance than do the
effects of general levels of inflation.  Interest rates do not necessarily move
in the same direction or to the same extent as the price of goods and services.


Item 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The OTS requires all regulated thrift institutions to calculate the estimated
change in the Bank's net portfolio value (NPV) assuming instantaneous, parallel
shifts in the Treasury yield curve of 100 to 300 basis points either up or down
in 100 basis point increments.  The NPV is defined as the present value of
expected cash flows from existing assets less the present value of expected
cash flows from existing liabilities plus the present value of net expected
cash inflows from existing off-balance sheet contracts.

The OTS provides all institutions that file a CONSOLIDATED MATURITY/RATE
schedule (CMR) as a part of their quarterly Thrift Financial Report with an
interest rate sensitivity report of NPV.  The OTS simulation model uses a
discounted cash flow analysis and an option-based pricing approach to measuring
the interest rate sensitivity of NPV.  The OTS model estimates the economics
value of each type of asset, liability, and off-balance sheet contact under the
assumption that the Treasury yield curve shifts instantaneously and parallel up
and down 100 to 300 basis points in 100 basis point increments.  The OTS
provides thrifts the results of their interest rate sensitivity model, which is
based on information provided by the Bank, to estimate the sensitivity of NPV.


<PAGE>  42

The OTS model utilizes an option-based pricing approach to estimate the
sensitivity of mortgage loans.  The most significant embedded option in these
types of assets is the prepayment option of the borrowers.  The OTS model uses
various price indications and prepayment assumptions to estimate sensitivity of
mortgage loans.

In the OTS model, the value of deposit accounts appears on the asset and
liability side of the NPV analysis.  In estimating the value of certificate of
deposit accounts, the liability portion of the CD is represented by the implied
value when comparing the difference between the CD face rate and available
wholesale CD rates.  On the asset side of the NPV calculation, the value of the
"customer relationship" due to the rollover of retail CD deposits represents an
intangible asset in the NPV calculation.

Other deposit accounts such as transaction accounts, money market deposit
accounts, passbook accounts, and non-interest bearing accounts also are
included on the asset and liability side of the NPV calculation in the OTS
model.  The accounts are valued at 100% of the respective account balances on
the liability side.  On the assets side of the analysis, the value of the
"customer relationship" of the various types of deposit accounts is reflected
as a deposit intangible.

The NPV sensitivity of borrowed funds is estimated by the OTS model based on a
discounted cash flow approach.  The cash flows are assumed to consist of
monthly interest payments with principal paid at maturity.

The OTS model is based only on the Bank's balance sheet.  The assets and
liabilities at the parent company level are short-term in nature, primarily
cash and equivalents, and were not considered in the analysis because they
would not have a material effect on the analysis of NPV sensitivity.  The
following table sets forth the Company's September 30, 2001 interest rate
sensitivity of NPV, the most recent available from the OTS.

<TABLE>
<CAPTION>
                                                     Net Portfolio Value as a %
                       Net Portfolio Value           of Present Value of Assets
                 ------------------------------      --------------------------
Changes in
  Rates          $ Amount   $ Change   % Change        NPV Ratio       Change
----------       ---------  --------   --------        ---------      ---------
<C>               <C>        <C>         <C>            <C>           <C>

 + 300 bp          41,324     (39,870)    (49)%           6.31%        - 522 bp
 + 200 bp          54,777     (26,416)    (33)%           8.16%        - 337 bp
 + 100 bp          68,370     (12,824)    (16)%           9.94%        - 159 bp
     0 bp          81,194                                11.53%
 - 100 bp          89,382       8,188      10 %          12.49%        +  95 bp
 - 200 bp          94,104      13,910      17 %          13.11%        + 158 bp
 - 300 bp              -           -        - %             - %           -  bp
</TABLE>







<PAGE>  43

Item 8.   Financial Statements and Supplementary Data

Consolidated Statements of Financial Condition
(Dollars in thousands, except per share data)

September 30, 2001 and 2000

<TABLE>
<CAPTION>

ASSETS                                                                      2001       2000
<S>                                                                    <C>          <C>
Cash and due from banks                                                 $   7,107      4,690
Interest-earning deposits                                                   1,397      1,405
Federal funds sold                                                            100        100
                                                                         --------    -------
Cash and cash equivalents                                                   8,604      6,195

FHLB of Chicago stock, at cost                                             18,055     10,065
Mortgage-backed securities held to maturity, at amortized cost
  (approximate fair value of $2,924 at September 30, 2000)                     -       2,901
Mortgage-backed securities available for sale                             127,685         -
Securities available for sale                                              42,006     74,366
Loans held for sale                                                        41,219         -
Loans receivable, net of allowance for loan losses of $1,236 and $950
  at September 30, 2001 and 2000                                          422,980    534,277
Accrued interest receivable                                                 3,650      4,161
Premises and equipment                                                      3,850      3,925
Other assets                                                                  657      1,141
                                                                         --------    -------
                                                                        $ 668,706    637,031
                                                                         ========    =======
LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES

Deposits                                                                  399,619    381,433
Borrowed funds                                                            187,345    205,150
Advance payments by borrowers for taxes and insurance                       7,193      2,198
Due to broker                                                              14,918         --
Other liabilities                                                          10,247      5,447
                                                                         --------    -------
   Total liabilities                                                      619,322    594,228

STOCKHOLDERS' EQUITY

Preferred stock, $.01 par value; authorized 2,500,000 shares;
  none outstanding                                                             -          -
Common stock, $.01 par value; authorized 8,000,000 shares;
  issued 3,782,350 shares; 2,020,367 and 2,025,085 shares outstanding
  at September 30, 2001 and 2000, respectively                                 38         38
Additional paid-in capital                                                 38,636     38,780
Retained earnings, substantially restricted                                40,926     37,022
Treasury stock, at cost (1,761,983 and 1,757,265 shares at
  September 30, 2001 and 2000, respectively)                              (31,540)   (31,391)
Common stock acquired by Employee Stock Ownership Plan                         --       (189)
Common stock acquired by Bank Recognition and Retention Plans                (178)      (191)
Accumluated other comprehensive income (loss)                               1,502     (1,266)
                                                                         --------    -------
   Total stockholders' equity                                              49,384     42,803
                                                                         --------    -------


                                                                         $668,706    637,031
                                                                         ========    =======
</TABLE>

See accompanying notes to consolidated financial statements.




<PAGE>  44

Consolidated Statements of Earnings
(Dollars in thousands, except per share data)

Years ended September 30, 2001, 2000, and 1999

<TABLE>
<CAPTION>
                                                                  2001       2000       1999
<S>                                                           <C>          <C>        <C>
INTEREST INCOME:
  Loans receivable                                             $ 39,337     38,329     33,787
  Investment securities                                           5,822      5,236      4,951
  Mortgage-backed securities                                      1,223        239        506
  Other interest income                                              72         47         50
                                                                -------     ------     ------
                                                                 46,454     43,851     39,294
INTEREST EXPENSE:
  Deposits                                                       19,121     17,992     15,070
  Borrowed funds                                                 12,340     11,120      8,692
                                                                -------     ------     ------
                                                                 31,461     29,112     23,762

Net interest income before provision for loan losses             14,993     14,739     15,532
  Provision for loan losses                                         295        180        165
                                                                -------     ------     ------
Net interest income after provision for loan losses              14,698     14,559     15,367

NON-INTEREST INCOME:
  Fees and commissions                                              457        452        374
  Insurance and annuity commissions                                 820      1,063        721
  Gain on sale of securities                                        231         -          -
  Gain on sale of loans                                             640         -          -
  Other                                                             159         53         51
                                                                -------     ------     ------
                                                                  2,307      1,568      1,146

NON-INTEREST EXPENSE:
  General and administrative expenses:
    Salaries and employee benefits                                5,578      5,331      5,784
    Office occupancy and equipment                                1,666      1,452      1,512
    Data processing                                                 467        521        498
    Advertising and promotions                                      443        554        399
    Other                                                         1,535      1,441      1,615
  Amortization of deposit base intangible                            11         21         32
                                                                -------     ------     ------
                                                                  9,700      9,320      9,840

Income before income taxes                                        7,305      6,807      6,673
Income tax expense                                                2,433      2,565      2,543
                                                                -------     ------     ------
NET INCOME                                                     $  4,872      4,242      4,130
                                                                =======     ======     ======

Earnings per share - basic                                        $2.42       2.04       1.85
Earnings per share - diluted                                      $2.31       1.96       1.76

</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>  45

CONSOLIDATED STATEMENTS of CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
Years ended September 30, 2001, 2000, and 1999
<TABLE>
<CAPTION>
                                                                                        Accumu-
                                                                              Common  lated Other
                                                                     Common    Stock    Compre-
                                      Additional                     Stock    Acquired  hensive
                               Common   Paid-in   Retained Treasury  Acquired   By      Income
                                Stock   Capital   Earnings  Stock    By ESOP  By BRRP's (loss)   Total

<S>                             <C>     <C>      <C>       <C>      <C>        <C>      <C>      <C>
Balance at September 30, 1998    $ 38    38,117   30,646   (19,210)  (1,092)     (242)     340    48,597
Net income                         -        -      4,130       -        -          -        -      4,130
Change in accumulated other
    comprehensive income           -        -         -        -        -          -    (1,820)   (1,820)
                                  ---    ------   -------   ------   ------     ------   -----    ------
Total comprehensive income                                                                         2,310

Purchase of treasury stock
  (402,426 shares)                 -        -         -     (9,312)     -          -        -     (9,312)
Cash dividends ($.43 per share)    -        -     (1,005)      -        -          -        -     (1,005)
Amortization of award of BRRP
  stock                            -        -         -        -        -          44       -    44
Cost of ESOP shares released       -        -         -        -        460        -        -        460
Exercise of stock options and
  reissuance of treasury shares
  (20,488 shares)                  -       (145)      -        354      -          -        -        209
Tax benefit related to vested
  BRRP stock                       -        154       -        -        -          -        -        154
Tax benefit related to stock
  options exercised                -         62       -        -        -          -        -         62
Market adjustment for committed
  ESOP shares                      -        502       -        -        -          -        -        502
                                  ---    ------   -------   ------   ------     ------   -----    ------
Balance at September 30, 1999      38    38,690   33,771   (28,168)    (632)     (198)  (1,480)   42,021
Net income                         -        -      4,242       -        -          -        -      4,242
Change in accumulated other
    comprehensive loss             -        -         -        -        -          -       214       214
                                  ---    ------   -------   ------   ------     ------   -----    ------
Total comprehensive income                                                                         4,456
Purchase of treasury stock
 (191,200 shares)                  -        -         -     (3,377)     -          -        -     (3,377)
Cash dividends ($.47 per share)    -        -       (991)      -        -          -        -       (991)
Amortization of award of BRRP
  stock                            -        -         -        -        -           7       -          7
Cost of ESOP shares released       -        -         -        -        443        -        -        443
Exercise of stock options and
  reissuance of treasury shares
 (8,439 shares)                    -       (150)      -        154      -          -        -          4
Tax benefit related to vested
  BRRP stock                       -          4       -        -        -          -        -          4
Tax benefit related to stock
  options exercised                -         54       -        -        -          -        -         54
Market adjustment for committed
  ESOP shares                      -        182       -        -        -          -        -        182
                                  ---    ------   -------   ------   ------     ------   -----    ------
Balance at September 30, 2000      38    38,780   37,022   (31,391)    (189)     (191)  (1,266)   42,803


                                                    - continued -













<PAGE>  46

                                                                                       Accumu-
                                                                             Common  lated Other
                                                                     Common    Stock    Compre-
                                      Additional                     Stock    Acquired  hensive
                               Common   Paid-in   Retained Treasury  Acquired   By      Income
                                Stock   Capital   Earnings  Stock    By ESOP  By BRRP's (loss)   Total
<S>                             <C>     <C>      <C>       <C>      <C>        <C>      <C>      <C>

Balance at September 30, 2000      38    38,780   37,022   (31,391)    (189)   (191)    (1,266)   42,803
Net income                         -        -      4,872       -         -         -        -      4,872
Change in accumulated other
    comprehensive loss                                                                   2,768     2,768
                                  ---    ------   -------   ------   ------     ------   -----    ------
Total comprehensive income                                                                         7,640
Purchase of treasury stock
 (28,800 shares)                   -        -         -       (562)      -         -        -       (562)
Cash dividends ($.48 per share)    -        -       (968)      -         -         -        -       (968)
Amortization of award of BRRP
  stock                            -        -         -        -         -       13         -         13
Cost of ESOP shares released       -        -         -        -        189        -        -        189
Exercise of stock options and
 reissuance of treasury shares
 (27,500 shares)                    -      (208)      -        413       -         -        -        205
Tax benefit related to vested
  BRRP stock                       -          1       -        -         -         -        -          1
Tax benefit related to stock
  options exercised                -         25       -        -         -         -        -         25
Market adjustment for committed
  ESOP shares                      -         38       -        -         -         -        -         38
                                  ---    ------   -------   ------   ------    ------    -----    ------
Balance at September 30, 2001      38    38,636   40,926   (31,540)     --      (178)   (1,502)   49,384
                                  ===    ======   =======   ======   ======    ======    =====    ======

</TABLE>

See accompanying notes to consolidated financial statements.






























<PAGE>  47
CONSOLIDATED STATEMENTS of CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Years ended September 30,                                                2000       1999       1998
<S>                                                                 <C>          <C>        <C>
Cash flows from operating activities:
Net income                                                            $  4,872      4,242      4,130
Adjustment to reconcile net income to net cash provided by
  operating activities:
    Depreciation                                                           400        446        447
    Deferred income taxes                                                    4        190          9
    Provision for loan losses                                              295        180        165
    Net amortization and accretion of premiums and discounts               (37)        (8)         3
    Amortization of cost of stock benefit plans                             13          7         44
    ESOP                                                                   277        625        962
    Deferred loan costs, net of amortization                               229       (483)      (634)
    Stock dividend from FHLB of Chicago                                   (761)      (344)        -
    Loans originated fro sale                                           (2,186)        -          -
    Proceeds from loans originated for sale                              2,208         -          -
    Amortization of deposit base intangible                                 11         21         32
    Loss (gain) on sale of real estate owned                                 5        (13)       (45)
    Gain on sale of securities and loans                                  (871)        -          -
    Decrease (increase) in accrued interest receivable                     511       (496)      (118)
    Decrease in other assets, net                                          732         38         46
    (Increase) decrease in other liabilities, net                        3,120       (839)     1,316
                                                                        ------      ------     -----
   NET CASH PROVIDED by OPERATING ACTIVITIES                             8,772      3,566      6,357

   CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of mortgage-backed securities available for sale          (114,224)        -          -
   Proceeds from maturities of securities available for sale            40,051         -      30,000
   Proceeds from sale of securities available for sale                  45,736         -          -
   Proceeds from sale of securities held to maturity                     2,443         -          -
   Proceeds from sale of real estate owned                                 280         86        438
   Proceeds from redemption of Federal Home Loan Bank of Chicago stock      -          -         740
   Purchase of Federal Home Loan Bank of Chicago stock                  (7,229)      (106)    (3,845)
   Purchase of securities available for sale                           (50,442)    (7,972)   (39,951)
   Loans originated for investment                                    (140,139)   110,184)  (196,859)
   Proceeds from sale of loans                                          54,235        -           -
   Purchase of premises and equipment                                     (325)      (169)      (248)
   Principal repayments collected on loans receivable                  155,546     84,013    115,038
   Principal repayments collected on mortgage-backed securities          3,654        684      7,590
                                                                        ------      -----     ------
NET CASH USED IN INVESTING ACTIVITIES                                  (10,414)   (33,926)   (87,097)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase in deposits                                             18,186     24,417     26,346
   Net increase in (repayment of) borrowed funds                       (17,805)    18,900     64,850
   Net increase (decrease) in advance payments by borrowers for
      taxes and insurance                                                4,955     (5,788)     1,067
   Purchase of treasury stock                                             (562)    (3,377)    (9,312)
   Payment of common stock dividends                                      (968)      (991)    (1,005)
   Proceeds from exercise of stock options                                 205          4        209
                                                                        ------      -----     ------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                4,501     33,165     82,155
                                                                        ------      -----     ------
Net change in cash and cash equivalents                                  2,409      2,805      1,415
Cash and cash equivalents at beginning of year                           6,195      3,390      1,975
                                                                        ------      -----     ------
Cash and cash equivalents at end of year                              $  8,604      6,195      3,390
                                                                        ======      =====     ======
CASH PAID DURING THE YEAR FOR:
  Interest                                                            $ 31,667     29,180     23,256
  Income taxes                                                           1,557      2,292      1,955
NON-CASH INVESTING ACTIVITIES:
  Loans transferred to real estate in foreclosure                          277        231        262
  Due to broker for securities transactions                             14,918         -          -
  Loans transferred to held for sale                                    94,302         -          -
                                                                        ======      =====     ======
</TABLE>
See accompanying notes to consolidated financial statements.




<PAGE>  48
(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fidelity Bancorp, Inc. (the Company) is a Delaware corporation incorporated on
September 7, 1993 for the purpose of becoming the savings and loan holding
company for Fidelity Federal Savings Bank (the Bank).  On December 3, 1993, the
Bank converted from a mutual to a stock form of ownership, and the Company
completed its initial public offering and with a portion of the net proceeds
acquired all of the issued and outstanding capital stock of the Bank.

The Company through the branch network of the Bank provides financial and other
banking services to customers located primarily in Chicago and surrounding
suburbs of Chicago.  Customers in these areas are primarily users of the Bank's
loan and deposit services.  A major portion of loans is secured primarily by
real estate collateral, although borrower cash flow is expected to be the
primary source of repayment.

While the Company's principal decision makers monitor the revenue streams of
the various products and services, operations are managed and financial
performance is evaluated on a Company-wide basis.  Accordingly, all of the
Company's banking operations are considered by management to be aggregated in
one reportable operating segment.

PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Fidelity Federal Savings Bank, and the
Bank's wholly owned operating subsidiary, Fidelity Corporation.  All
intercompany accounts have been eliminated in consolidation.

BASIS OF ACCOUNTING
The accompanying consolidated financial statements are prepared in accordance
with accounting principles  generally accepted in the United States of America
and conform to general practices within the banking industry.  A summary of
significant policies follows:

USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
including the allowance for loan losses, fair values of financial instruments,
and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of income and
expenses during the reporting period.  Actual results could differ from those
estimates.

INVESTMENT AND MORTGAGE-BACKED SECURITIES
Securities which the entity has the positive intent and ability to hold to
maturity are classified as "held to maturity" and measured at amortized cost.
Securities purchased for the purpose of being sold are classified as trading
securities and measured at fair value with any changes in fair value included
in earnings.  All other investments that are not classified as "held to
maturity" or "trading" are classified as "available for sale." Investments
available for sale are measured at fair value with any changes in fair value
reflected as a separate component of stockholders' equity, net of related tax
effects.  The Company does not have any securities designated as trading.






<PAGE>  49

For securities classified as either available for sale or held-to-maturity, the
Company determines whether a decline in fair value below the amortized cost
basis is other than temporary in nature.  If the decline in fair value is
judged by management to be other than temporary, the cost basis of the
individual security is written down to fair value as the new cost basis and the
amount of the write-down is included in earnings.

LOANS HELD FOR SALE
The Bank sells, generally without recourse, whole loans and participation
interests in mortgage loans that it originates.  Loans originated are
identified as either held for investment or sale upon origination.  Loans which
the Bank intends to sell before maturity are classified as held for sale, and
are carried at the lower of cost, adjusted for applicable deferred loan fees or
expenses, or estimated market value in the aggregate.

LOANS RECEIVABLE
Loans receivable are stated at unpaid principal balances plus net deferred loan
costs, less loans in process, unearned discounts, and allowances for loan
losses.

Loan fees are deferred, net of certain direct costs associated with loan
originations.  Net deferred fees or costs are amortized as yield adjustments
over the contractual life of the loan using the interest method.

Impaired loans are measured at the present value of expected future cash flows
discounted at the loan's effective interest rate, or, as a practical expedient,
at the loan's observable market price or at the fair value of the collateral if
the loan is collateral dependent.  Factors in determining impairment include
payment status, collateral value, and the probability of collecting scheduled
payments.  Large groups of smaller balance homogeneous loans, such as
residential mortgages and consumer loans, are collectively evaluated for
impairment.

The allowance for loan losses is increased by charges to operations and
decreased by charge-offs, net of recoveries.  The allowance for loan losses
reflects management's estimate of the reserves needed to cover probable
incurred credit losses within the Bank's loan portfolio.  In determining an
appropriate level of loss reserves, management periodically evaluates the
adequacy of the allowance based on known and inherent risks in the portfolio,
adverse situations that may affect the borrower's ability to repay, estimated
value of any underlying collateral, and current  economic conditions.  In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for losses on loans
receivable.  Such agencies may require the Bank to recognize additions to the
allowance for loan losses based on their judgements of information available to
them at the time of their examination.

REAL ESTATE IN FORECLOSURE
Real estate acquired through foreclosure or deed in lieu of foreclosure is
carried at the lower of fair value or the related loan balance at the date of
foreclosure, less estimated costs to dispose.  Valuations are periodically
performed by management and an allowance for losses is established by a charge
to operations if the carrying value of a property subsequently exceeds its
estimated net realizable value.




<PAGE>  50

PREMISES AND EQUIPMENT
Premises and equipment are stated at cost less accumulated depreciation and
amortization.  Depreciation and amortization of premises and equipment are
computed using the straight-line method over the estimated useful life of the
respective asset.  Useful lives are 25 to 40 years for office buildings, and 5
to 10 years for furniture, fixtures, and equipment.  Amortization of leasehold
improvements is computed on the straight-line method over the lesser of the
term of the lease or the useful life of the property.

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
Compensation expense under the ESOP is equal to the fair value of common shares
released or committed to be released annually to participants in the ESOP.
Common stock purchased by the ESOP and not committed to be released to
participants is included in the consolidated statements of financial condition
at cost as a reduction of stockholders' equity.

STOCK COMPENSATION
Employee compensation expense under stock option plans is reported if options
are granted below market price at grant date.  Pro forma disclosures of net
income and earnings per share are shown using the fair value of SFAS No. 123 to
measure expense for options granted using an option pricing model to estimate
fair value.

INCOME TAXES
Deferred income taxes arise from the recognition of certain items of income and
expense for tax purposes in years different from those in which they are
recognized in the consolidated financial statements.  Income tax benefits
attributable to vested Bank Recognition and Retention Plans (BRRP) stock and
exercised non qualified stock options are credited to additional paid-in-
capital.

Deferred income taxes are accounted for under the asset and liability method,
whereby deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying the applicable tax rate to differences
between the financial statement carrying amounts and the tax basis of existing
assets and liabilities.  The effect on deferred taxes of a change in tax rates
is recognized in income in the period that includes the enactment date of any
such tax law change.  A valuation allowance is established on deferred tax
assets when, in the opinion of management, the realization of the deferred tax
asset does not meet the "more likely than not" criteria.

INSURANCE AND ANNUITY COMMISSIONS
Insurance and annuity commissions are recognized as income as of the date of
inception of the related policy and contracts.

CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, cash and cash equivalents include cash
and due from banks, interest-bearing deposits, and federal funds sold.

EARNINGS PER SHARE
Basic earnings per share is determined by dividing net income by the weighted
average number of common shares outstanding during the period.  ESOP shares are
considered outstanding for this calculation unless unearned. Diluted earnings
per share include the dilutive effect of additional potential shares issuable
under stock options.



<PAGE>  51

Weighted average shares used in calculating earnings per share are summarized
below:


<TABLE>
<CAPTION>
                                                 2001       2000      1999
                                                ------     -----      -----
<S>                                         <C>         <C>        <C>
Basic
  Net Income                                 $    4,872      4,242      4,130
                                               --------- ---------  ---------
  Weighted average common shares outstanding  2,016,716  2,092,093  2,300,562
  Less: Average unallocated ESOP shares          (1,180)   (15,336)   (63,930)
                                               --------- ---------  ---------
     Average shares                           2,015,536  2,076,757  2,236,632

Basic earnings per common share              $     2.42  $    2.04  $    1.85
                                               --------- ---------  ---------

Diluted
  Net income                                 $    4,872      4,242      4,130
                                               --------- ---------  ---------
  Weighted average common shares outstanding
  for basic earnings per common share         2,015,536  2,076,757  2,236,632
  Add:  Dilutive effect of assumed exercises
        of stock options                         88,473     83,862    115,496
                                              ---------  ---------  ---------
     Average shares                           2,104,009  2,160,619  2,352,128
                                              ---------  ---------  ---------
Diluted earnings per common share            $     2.31  $    1.96  $    1.76
                                              =========  =========  =========
</TABLE>

COMPREHENSIVE INCOME
Comprehensive income consists of net income and other comprehensive income
(loss).  Other comprehensive income (loss) includes unrealized gains and losses
on securities available for sale, net of tax effects, which are also recognized
as separate components of equity.

Reclassifications
Certain reclassifications have been made in prior years financial statements to
conform to the current year s presentation.

NEW ACCOUNTING PRONOUNCEMENTS
New accounting guidance was issued that will, beginning in 2002, revise the
accounting for goodwill and intangible assets.  Intangible assets with
indefinite lives and goodwill will no longer be amortized, but will
periodically be reviewed for impairment and written down if impaired.
Additional disclosures about intangible assets and goodwill may be required.
The Company does not expect this new guidance to have any effect on the
financial statements.





<PAGE>  52

Beginning October 1, 2002, a new accounting pronouncement addressing the
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs will become effective.  The Company does not expect this new accounting
pronouncement to have any effect on the financial statements.

Another new accounting pronouncement becomes effective October 1, 2002 which
addresses financial accounting and reporting for the impairment of long-lived
assets and long-lived assets to be disposed of.  The Company does not expect
this new accounting pronouncement to have any effect on the financial
statements.


(2)  Mortgage-backed Securities

Mortgage-backed securities at September 30, are summarized as follows:


<TABLE>
<CAPTION>
                                         2001                                   2000
                                    Gross      Gross                       Gross       Gross
                       Amortized  unrealized  unrealized  Fair    Amortized unrealized unrealizef Fair
                         cost       gains      losses    value      cost     gains      losses   value
                                                        (in thousands)
<S>                   <C>            <C>       <C>   <C>             <C>       <C>       <C>    <C>

Available for Sale:
FHLMC pass-through
 certificates          $    8,977      162        -   $   9,139          -       -          -       -
FNMA pass-through
 certificates              65,426    1,098        -      66,524          -       -          -       -
GNMA pass-though
 certificates              54,545      477        -      52,022          -       -          -       -
                         --------   ------     -----    -------        ----    ----       ----     ---

                      $ 125,948    1,737       -   $ 127,685         -       -         -       -
                        =======   ======     =====   =======       ====    ====      =====   ====

Held to Maturity:
FHLMC pass-through   $     -          -        -   $      -       2,901     23         -    2,924
 certificates
                        =======   ======     =====   =======     ======    ====      =====  =====
</TABLE>


As of September 30, 2001, the Company recorded unrealized gains on mortgage-
backed securities available for sale as increases to stockholders' equity of
$1.1 million net of deferred income tax expense of $660,000.  Proceeds from the
sale of mortgage-backed securities held to maturity in 2001 were $2.4 million,
resulting in gross gains of $77,000.  The amortized cost of the securities sold
was $2.4 million.   There were no sales of mortgage-backed securities during
the years  ended  September 30, 2000 and 1999.

The mortgage-backed securities held at September 30, 2001 all have a
contractual maturity term of 30 years.  Expected maturities may differ from
contractual maturities because of prepayments on underlying mortgage loans.






<PAGE>  53

(3) Securities Available for Sale

Securities available for sale at September 30, are summarized as follows:

<TABLE>
<CAPTION>
                                         2001                                      2000
                                    Gross      Gross                          Gross       Gross
                       Amortized unrealized unrealized  Fair      Amortized unrealized unrealized   Fair
                         cost      gains     losses     value        cost      gains      losses    value
                                                        (in thousands)
<S>                   <C>          <C>      <C>     <C>            <C>        <C>      <C>       <C>
U.S. Government and
  agency obligations
  due:
    One year or less    $ 23,109     90        -     $ 23,199           -       -           -         -
    After five years
      to ten years            -      -         -           -        68,436      -       2,833     65,603

Municipal securities -
    After 10 years
      or more              3,491     11        10       3,492           -       -          -          -

Corporate Securities:
    After 5 years
      to 10 years          3,553     81        -        3,634           -       -          -          -
    After 10 years
      or more years       11,166    519         4      11,681        7,972     791         -       8,763
                        --------   ----     -----     -------      -------     ----     -----     ------
                       $  41,319    701        14    $ 42,006       76,408     791      2,833     74,366
                        ========   ====     =====     =======      =======     ====     =====     ======
</TABLE>

As of September 30, 2001 and 2000, the Company recorded unrealized gains
(losses) on securities available for sale as increases (decreases) to
stockholders' equity of $426,000 and $(1.3 million), respectively, net of
deferred income tax expense (benefit) of $261,000 and $(776,000), respectively.
Proceeds from the sale of securities available for sale in 2001 were $45.7
million resulting in gross gains of $231,000 and no losses.  There were no
sales of securities during the years ended September 30, 2000 and 1999.

The fair value of securities available for sale is based upon quoted market
prices where available.  Actual maturities may differ from contractual
maturities shown in the table above because the borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.


(4)  Loans Held for Sale

At September 30, 2001, the Bank had $41.2 million of fixed-rate loans
classified as held for sale with weighted average rate of 7.61%.  As discussed
in Note 5, these loans were transferred from the loans receivable portfolio in
September of 2001.  There were no loans held for sale at September 30, 2000.











<PAGE>  54

(5)  LOANS RECEIVABLE

Loans receivable are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                                     2001               2000
                                                         (in thousands)
<S>                                              <C>                 <C>
One-to-four family mortgages                      $ 269,472           390,805
Multi-family mortgages                              120,432           118,309
Commercial                                            1,665             3,448
Construction                                         15,325             2,304
Consumer loans                                       15,096            17,101
                                                  ---------          --------
Gross loans receivable                              421,990           531,967

Less:
  Loans in process                                     (107)              (26)
  Deferred loan costs                                 2,336             3,299
  Allowance for losses on loans                      (1,236)             (950)
  Unearned discount on consumer loans                    (3)              (13)
                                                  ---------          --------
                                                  $ 422,980           534,277
                                                  =========          ========

</TABLE>


Mortgage loans serviced for others are not included in the accompanying
consolidated statements of financial condition.  The unpaid principal balances
of these loans at September 30, 2001, 2000, and 1999 were approximately
$61,690,000, $6,062,000, and $7,314,000, respectively.  Custodial balances
maintained in connection with the mortgage loans serviced for others were
included in deposits at September 30, 2001, 2000,  and 1999, and were
approximately $3.47 million, $207,000, and $298,000, respectively.  Service fee
income for the years ended September 30, 2001, 2000, and 1999 was $14,000,
$22,000, and $29,000, respectively.

During September 2001, management transferred $94.3 million to loans held for
sale to improve flexibility in monitoring interest rate risk.  Adjustable
mortgages totalling $53.4 million were sold in September 2001, resulting in a
gain of $618,000.  Mortgage servicing rights of $200,000 were recorded in the
sale of these loans.
















<PAGE>  55
Activity in the allowance for loan losses is summarized as follows for the
years ended September 30:

<TABLE>
<CAPTION>
                                                2001      2000      1999
                                                      (in thousands)
<S>                                         <C>           <C>       <C>
Balance at beginning of year                 $   950       780       591
Provision for loan losses                        295       180       165
Charge-offs-loans receivable                     (12)      (13)       (8)
Recoveries                                         3         3        32
                                               -----      ----       ---
Balance at end of year                       $ 1,236       950       780
                                               =====      ====       ===
</TABLE>


Non-accrual loans receivable were as follows:
<TABLE>
<CAPTION>
                                                     Principal     Percent of
                                                      Balance      total loans
                                           Number  in thousands)   receivable
<S>                                        <C>       <C>            <C>

September 30, 2001:
  Loans receivable                           9        $   677        0.16%

September 30, 2000:
  Loans receivable                           5        $   379        0.07%

September 30, 1999:
  Loans receivable                          10        $   343        0.07%
                                           ===          =====        =====

</TABLE>

At September 30, 2001, 2000 and 1999, there were no loans considered to be
impaired.


(6)  ACCRUED INTEREST RECEIVABLE

Accrued interest receivable is summarized as follows at September 30:
<TABLE>
<CAPTION>
                                                     2001           2000
                                                         (in thousands)
<S>                                               <C>              <C>
Loans receivable                                   $ 2,338          2,520
Mortgage-backed securities                             603             18
Investment securities                                  571          1,534
FHLB Stock                                             174            110
Reserve for uncollected interest                       (36)           (21)
                                                    ------          -----
                                                   $ 3,650          4,161
                                                    ======          =====
</TABLE>

<PAGE>  56

(7)  PREMISES AND EQUIPMENT

Premises and equipment are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                                      2001          2000
                                                        (in thousands)
<S>                                               <C>            <C>
Land                                               $   858           855
Buildings                                            3,858         3,851
Leasehold improvements                               1,429         1,434
Furniture, fixtures, and equipment                   4,220         3,937
                                                    ------         -----
                                                    10,365        10,077
Less accumulated depreciation and amortization       6,515         6,152
                                                    ------         -----
                                                   $ 3,850         3,925
                                                    ======         =====
</TABLE>
Depreciation and amortization of premises and equipment for the years ended
September 30, 2001, 2000 and 1999 was $400,000, $446,000, and $447,000,
respectively.

The Bank is obligated under non-cancelable leases on two of its branches.  The
leases contain renewal options and rent escalation clauses.  Rent expense under
these leases for the years ended September 30, 2001, 2000, and 1999
approximated $179,000, $153,000, and $136,000, respectively.  The projected
minimum rentals under existing leases as of September 30, 2001 are as follows:


<TABLE>
Year ended September 30,                      Amount
           <S>                          <C>
            2002                             135,000
            2003                              99,000
            2004                             105,000
            2005                             106,000
            2006                             107,000
            Thereafter                       232,000
                                           ---------
            Total                        $   784,000
                                           =========
</TABLE>















<PAGE>  57

(8)  DEPOSITS

Deposits are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                            2001                                    2000
                            Stated or                                Stated or
                            Weighted               Percent            Weighted                 Percent
                            Average                of total            Average                of total
                             Rate       Amount     deposits             Rate      Amount     deposits
                                                      (Dollars in thousands)
<S>                         <C>       <C>         <C>                 <C>       <C>          <C>
Passbook accounts            3.04%     $132,217     33.1%              4.09%     $121,787      31.9%
NOW accounts                 1.82        32,615      8.2               2.03        28,361       7.5
Money market and
  management accounts        3.36        12,345      3.1               3.59        12,711       3.3
                             ----       -------     ----               -----       ------      -----
                                        177,177     44.4                          162,859      42.7

Certificate accounts:
  91-day certificates        3.71         1,049      0.3               4.30         1,029       0.3
  6-month certificates       4.14        17,246      4.3               5.24         7,660       2.0
  7-month certificates       4.89        13,772      3.4               4.70         2,509       0.7
  8-month certificates       5.30        61,359     15.4               4.70         1,609       0.4
  10-month certificates      4.58        60,548     15.2               6.11        16,834       4.4
  12-month certificates      5.49        19,228      4.8               6.39        31,017       8.1
  13-month certificates      4.79        10,280      2.6               6.63       105,917      27.8
  15-month certificates      4.55         7,388      1.8               6.12        15,307       4.0
  24-month certificates      6.68        20,978      5.2               6.57        22,694       6.0
  36-month certificates      5.06         3,889      1.0               5.46         5,291       1.4
  36-month rising rate
    certificates             4.33         1,775      0.4               5.64         2,826       0.7
  60-month certificates      5.77         4,930      1.2               5.82         5,881       1.5
                             ----       -------     ----               -----      -------     -----
                                        222,442     55.6                          218,574      57.3
                                        -------     ----                          -------      -----
                             4.17%     $399,619    100.0%              5.30%     $381,433     100.0%
                             ====       =======    =====               =====      =======      =====
</TABLE>


The contractual maturities of certificate accounts are as follows at September
30:
<TABLE>
<CAPTION>
                                      2001                    2000
                               Amount     Percent       Amount        Percent
                           (in thousands)           (in thousands)
<S>                        <C>           <C>           <C>            <C>
Under 12 months             $ 207,581      93.3%        191,016         87.4
12 to 36 months                14,096       6.3          26,504         12.1
Over 36 months                    765       0.4           1,054          0.5
                            ---------     -----         -------        -----
                            $ 222,442     100.0%        218,574        100.0%
                            =========     =====         =======        =====
</TABLE>


The aggregate amount of certificate accounts with a balance of $100,000 or
greater at September 30, 2001 and 2000 was approximately $38,343,000 and
$35,261,000, respectively.





<PAGE>  58

(8)  BORROWED FUNDS

Borrowed funds are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                      Interest rate            Amount
                                      2001     2000        2001       2000
                                                            (in thousands)
<S>                                   <C>     <C>      <C>           <C>
Secured advances from the
  FHLB of Chicago:
    Fixed rate advances due:
      May 8, 2001                       -  %   7.16     $     -       25,000
      August 17, 2001                   -      5.63           -       30,000
      December 5, 2001                 7.12    7.12        25,000     25,000
      May 8, 2002                      7.40    7.40        25,000     25,000
      June 5, 2003 (callable)          6.44    6.44        25,000     25,000
      October 18, 2003 (callable)      5.95      -         30,000         -
      September 27, 2004 (callable)    4.00      -         20,000         -
      August 22, 2010 (callable)       6.22    6.22         5,000      5,000
      September 7, 2010 (callable)     6.07    6.07         5,000      5,000
                                      -----   -----        ------     ------

    Open line advance, due on demand   3.50%   6.81        48,100     61,300
                                       ----   -----       -------    -------
Total borrowings from FHLB of Chicago                     183,100    201,300

Unsecured line of credit               6.07%.  8.73 -       4,245      3,850
                                       ----   -----       -------    -------
                                                        $ 187,345  $ 205,150
                                                          =======    =======
</TABLE>

FEDERAL HOME LOAN BANK OF CHICAGO ADVANCES  The Bank has entered into a
collateral pledge agreement whereby the Bank has agreed to keep on hand at all
times, free of all other pledges, liens, and encumbrances, first mortgages with
unpaid principal balances aggregating no less than 167% of the outstanding
secured advances from the FHLB of Chicago.  All stock in the FHLB of Chicago is
pledged as additional collateral for these advances.

Included in FHLB of Chicago advances at September 30, 2001 are $65.0 million of
fixed-rate advances with original scheduled maturities of 2 to 9 years, which
are callable at the discretion of the FHLB of Chicago at periods from 6 months
to 2 years from the origination date.  The average term to maturity on these
advances is 2.96 years, while the average term to call is 0.23 years.  The Bank
receives a lower cost of borrowing on such advances than on similar non-
callable long-term advances in return for granting the FHLB of Chicago the
right to call the advance prior to its final maturity.

UNSECURED TERM BANK LINE OF CREDIT  The Company obtained a $5.0 million
unsecured line of credit from an unrelated financial institution.  The loan
provides for an interest rate of the prime rate or 2% over the one, two, or
three-month LIBOR at management's discretion, adjustable and payable at the end
of the repricing period.  At September 30, 2001, the loan carries an interest
rate of 2% over the three-month LIBOR of 1.77%.  The loan requires quarterly
payments of all accrued unpaid interest due and one payment of all outstanding
principal plus all accrued unpaid interest on December 15, 2001.  The financing
agreements contain covenants that, among other things, require the Company to

<PAGE>  59

maintain a minimum stockholders' equity balance and to obtain certain minimum
operating results, as well as requiring the Bank to maintain "well capitalized"
regulatory capital levels and certain non-performing asset ratios.  At
September 30, 2001, the Company was in compliance with these covenants.


(10)  Regulatory Matters

The Bank is subject to regulatory capital requirements under the OTS.  Failure
to meet minimum capital requirements can initiate certain mandatory, and
possibly additional discretionary actions by regulators that, if undertaken,
could have a material impact on the Bank's financial statements.  Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Bank must meet specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off-balance sheet items
as calculated under regulatory accounting practices.

Quantitative measures established by the OTS to ensure capital adequacy require
the Bank to maintain minimum amounts and ratios (as set forth in the table
below) of three capital requirements: a tangible capital (as defined in the
regulations) to adjusted total assets ratios, a core capital (as defined) to
adjusted total assets ratio, and a risk based capital (as defined) to total
risk-weighted assets ratio.  Management believes, as of September 30, 2001,
that the Bank meets all capital adequacy requirements to which it is subject.

The most recent notification from the federal banking agencies categorized the
Bank as well capitalized under the regulatory framework for prompt corrective
action.  To be categorized as well capitalized, the Bank must maintain minimum
total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in
the table.  There are no conditions or events since that notification that have
changed the Bank's category.



























<PAGE> 60
The Bank's actual capital amounts and ratios, as well as minimum amounts and
ratios required for capital adequacy and prompt corrective action provisions
are presented below:

<TABLE>
<CAPTION>
                                                                            To be well capitalized
                                                             For capital          under prompt
                                           Actual         adequacy purposes      corrective action
                                       Amount    Ratio    Amount     Ratio      Amount     Ratio
                                                    (dollars in thousands)
<S>                                 <C>         <C>       <C>        <C>        <C>       <C>
As of September 30, 2001
Total capital
  (to risk weighted assets)          $ 51,367    17.65%    23,281     8.00       29,101    10.00

Tier 1 capital
  (to risk weighted assets)            50,131    17.23       n/a       n/a       17,461     6.00

Tier 1 capital
  (to adjusted assets)                 50,131     7.51     20,013     3.00       33,355     5.00

Tangible capital
  (to total assets)                    50,131     7.51     10,028     1.50         n/a       n/a


As of September 30, 2000:
Total capital
  (to risk weighted assets)          $ 45,201    14.55     24,859     8.00       31,074    10.00

Tier 1 capital
  (to risk weighted assets)            44,251    14.24       n/a       n/a       18,644     6.00

Tier 1 capital
  (to adjusted assets)                 44,251     6.59     19,113     3.00       31,854     5.00

Tangible capital
  (to total assets)                    44,251     6.95      9,541     1.50         n/a       n/a

</TABLE>


(10)  INCOME TAXES

Income tax expense is summarized as follows for the years ended September 30:
<TABLE>
<CAPTION>
                                            2001        2000        1999
                                                    (in thousands)
<S>                                      <C>           <C>          <C>
Current:
  Federal                                 $ 2,125       2,015        2,388
  State                                       304         360          146
                                           ------       -----        -----
Total current                               2,429       2,375        2,534

Deferred:
  Federal                                     316         181            7
  State                                        82           9            2
  Change in valuation allowance              (394)          -            -
                                           ------       -----        -----
Total deferred                                  4         190            9
                                           ------       -----        -----
                                          $ 2,433       2,565        2,543
                                           ======       =====        =====
</TABLE>


<PAGE>  61
The reasons for the difference between the effective tax rate and the corporate
federal income tax rate of 34% are detailed as shown below for the years ended
September 30:
<TABLE>
<CAPTION>
                                            2001         2000         1999
<S>                                        <C>          <C>          <C>
Federal income tax rate                     34.0%        34.0         34.0
State income taxes, net of federal benefit   3.9          3.7          1.9
Change in valuation allowance               (5.4)          --           --
Other                                        0.8           --          2.1
                                           ------       -----        -----
Effective income tax rate                   33.3%        37.7         38.0
                                           ======       =====        =====
</TABLE>

Retained earnings at September 30, 2001 included $4 million of "base-year" tax
bad debt reserves for which no provision for federal or state income taxes has
been made.  If in the future this amount, or a portion thereof, is used for
certain purposes, then a federal and state tax liability will be imposed on the
amount so used at the then current corporate income tax rates.

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below at
September 30:

<TABLE>
<CAPTION>
                                                                2001       2000
                                                                 (in thousands)
<S>                                                            <C>        <C>
Deferred tax assets:
  Deferred compensation                                         $    23        22
  Allowance for loan losses                                         475       358
  Decline in value of investment security                           712     1,106
  Retirement and pension plans                                      463       326
  Unrealized gain on investment securities available for sale        --       776
  Other                                                              22        59
                                                                  -----     -----
                                                                  1,695     2,647
Less valuation allowance                                           (712)   (1,106)
                                                                  -----     -----
Deferred tax assets                                                 983     1,541

Deferred tax liabilities:
  Deferred loan fees and costs                                   (2,081)   (2,056)
  FHLB stock, due to stock dividends                               (540)      (87)
  Property and equipment, due to depreciation                      (283)     (304)
  Tax bad debt reserves                                            (426)     (568)
  Tax basis in partnership less than book                            --      (187)
  Mortgage servicing rights                                         (74)       --
  Unrealized gain on securities available for sale                 (921)       --
  Other                                                             (20)       --
                                                                 ------     -----
Deferred tax liabilities                                         (4,345)   (3,202)
                                                                 ------     -----
Net deferred tax liability                                      $(3,362)   (1,661)
                                                                 ======    ======
</TABLE>



<PAGE> 62

The valuation allowance for deferred tax assets was $712,000 and $1,106,000 as
of September 30, 2001 and 2000.  The valuation allowance relates to the capital
loss of an investment security.  The change in the valuation allowance in 2001
resulted from the use of a portion of the capital loss carryforward to offset
capital gains generated in 2001 as a result of a sale of a partnership
interest.  As capital losses can only be utilized to offset capital gains,
there is uncertainty as to the realization of this remaining deferred tax
asset.


(12) Pension Plan

The Bank has a noncontributory defined benefit pension plan which covers
substantially all full-time employees who are 21 years of age and older and
have been employed for a minimum of one year.  Pension costs are accrued and
funded as computed by the consulting actuary, using the entry age normal
actuarial cost method.

Accumulated benefit obligation, projected benefit obligation, accrued pension
liability, and net periodic pension cost, as estimated by the consulting
actuary, and plan net assets as of August 31, the date of the latest actuarial
valuation, are as follows:


<TABLE>
<CAPTION>
                                                            2001       2000
                                                             (in thousands)
<S>                                                      <C>         <C>
Change in benefit obligation:
  Beginning benefit obligation                            $ 1,718     1,754
  Service cost                                                139       153
  Interest cost                                               129       127
  Actuarial gain                                              132      (160)
  Benefits paid                                              (210)     (156)
                                                            -----     -----
Ending benefit obligation                                   1,908     1,718

Change in plan assets, at fair value:
  Beginning plan assets                                     1,978     1,409
  Actual return                                               (14)      255
  Employer contribution                                        --       470
  Benefits paid                                              (210)     (156)
                                                            -----     -----
Ending plan assets                                          1,754     1,978

Funded status                                                (154)      260
  Unrecognized net actuarial gain                             (69)     (379)
  Unrecognized prior service cost                             (32)      (35)
  Unrecognized transition obligation                          (34)      (41)
                                                            -----     -----
Accrued benefit cost                                      $  (289)     (195)
                                                            =====     =====
</TABLE>




<PAGE> 63

The component of pension expense and related Actuarial assumptions were as
follows for the years ended September 30:
<TABLE>
<CAPTION>
                                                      2001     2000    19989
                                                          (in thousands)
<S>                                                 <C>       <C>      <C>
Service cost                                         $ 139      153     139
Interest cost                                          129      127     110
Actuarial return on plan assets                       (152)    (255)   (158)
Net amortization and deferral                          (21)     (10)    (10)
Net gain (loss) on assets                               --      117      48
                                                      ----      ---     ---
Net periodic pension cost                            $  95      132     129
                                                      ====      ===     ===

Discount rate on benefit obligation                   7.25%    7.25%   7.25%
Long-term expected rate of return on plan assets      8.00     8.00    8.00
Rate of compensation increase                         6.00     6.00    6.00
                                                      ====     ====    ====
</TABLE>

The Bank sponsors the Fidelity Federal Savings Bank Supplemental Retirement
Plan.  The Supplemental Retirement Plan is intended to provide retirement
benefits and preretirement death and disability benefits for certain officers
of the Bank.  Benefits accrued were $991,000 and $855,000 at September 30, 2001
and 2000, respectively.  The expense for the years ended September 30, 2001,
2000, and 1999 was approximately $124,000, $77,000, and $129,000, respectively.


(13)  Officer, Director, and Employee Benefit Plans

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)  In conjunction with the Bank's
conversion, the Bank formed an ESOP.  The ESOP covers substantially all full-
time employees over the age of 21 and with more than one year of employment.
The ESOP borrowed $2.9 million from the Company and purchased 290,950 common
shares of the Company issued in the conversion.  The Bank committed to make
discretionary contributions to the ESOP sufficient to service the requirements
of the loan over a period not to exceed seven years.  During fiscal 2001 the
loan was fully repaid.  Compensation expense related to the ESOP was $196,000,
$415,000, and $900,000 for the years ended September 30, 2001, 2000, and 1999,
respectively.

Shares held by the ESOP were as follows for the years ended September 30,
<TABLE>
<CAPTION>
                                                          2001        2000
                                                          ----        ----
<S>                                                    <C>        <C>
Allocated to participants                               239,902      257,591
Unearned                                                     -        18,876
                                                       --------     --------
   Total ESOP shares                                    239,902      276,467
                                                       ========     ========

Fair value of unearned shares                         $      -   $   333,879
                                                       ========    =========
</TABLE>
<PAGE>  64

STOCK OPTION PLANS  In conjunction with the conversion, the Company and its
stockholders adopted an incentive stock option plan for the benefit of
employees of the Company and a directors' stock option plan for the benefit of
outside directors of the Company.

The number of shares of common stock authorized under the employees' plan is
287,313.  The exercise price must be at least 100% of the fair market value of
the common stock on the date of grant, and the option term cannot exceed 10
years.  Under the employees' plan, options granted become exercisable at a rate
of 20% per year commencing one year from the date of the grant.  A summary of
the stock option activity and related information in the employee plan follows:

<TABLE>
<CAPTION>
                                      2001                   2000                1999
                                          Weighted               Weighted            Weighted
                                          Average                Average             Average
                                          Exercise               Exercise            Exercise
                                  Shares    Price        Shares    Price     Shares    Price
                                 -------- ---------     -------- ---------  -------- --------
<S>                              <C>       <C>          <C>       <C>        <C>      <C>
Outstanding at beginning of year  169,456   $ 10.15      171,876   $ 10.15    188,864  $ 10.16
Granted                            12,000     22.46         -         -          -        -
Exercised                         (27,550)    10.33       (2642)    10.00    (16,988)    10.35
Cancelled                            -         -            -         -          -        -
                                 -------    ------      -------    ------    -------    -----
End of period                    153,906   $ 10.10      169,456   $ 10.15    171,876  $  10.14
                                 =======    ======      =======    ======    =======   ======
Options exercisable              141,606                168,256              169,179
                                 =======                =======              =======
Fair value of options granted
  during the year                          $  2.71                  N/A                  N/A
                                            ======                 ======              ======
</TABLE>

At September 30, 2001, options for 24,121 shares were available under the
employee plan, which includes additions to the available shares of 14,520,
representing cancelled shares.























<PAGE> 65

The number of shares of common stock authorized under the directors' plan is
76,374.  The exercise price must be at least 100% of the fair market value of
the common stock on the date of grant, and the option term cannot exceed 10
years.  Options issued to outside directors of the Company are immediately
exercisable.   A summary of the stock option activity and related information
in the director plan follows:

<TABLE>
<CAPTION>
                                        2001                   2000                1999
                                          Weighted               Weighted            Weighted
                                          Average                Average             Average
                                          Exercise               Exercise            Exercise
                                  Shares    Price        Shares    Price     Shares    Price
                                 -------- ---------     -------- ---------  -------- --------
<S>                             <C>       <C>          <C>       <C>        <C>      <C>
Outstanding at beginning of year 27,828    $ 10.00      34,466    $ 10.00    37,966   $ 10.00
Granted                              --         --       9 964      17.56        --        --
Exercised                            --         --     (16,602)     10.00    (3,500)    10.00
Cancelled                            --         --          --         --        --        --
                                 -------    ------      -------    ------    -------    -----
End of period                    27,828    $ 12.71      27,828    $ 12.71    34,466   $ 10.00
                                 =======    ======      =======    ======    =======   ======
Options exercisable              27,828                 27,828               34,466
                                 =======                =======              =======
Fair value of options granted
 during period                             $  N/A                $   2.17            $  N/A
                                            ======                 ======              ======
</TABLE>

At September 30, 2001, there were no options available under the directors
plan.

The following table summarizes information about the stock options outstanding
at September 30, 2001:

<TABLE>
<CAPTION>
                                     Outstanding             Exercisable
                                  -----------------      -----------------
                                          Weighted               Weighted
                                           Average                Average
                                          Remaining              Remaining
                                         Contractual            Contractual
                                  Number     Life        Number     Life
                                 --------  ---------    --------  ---------
<S>                             <C>          <C>        <C>         <C>
Range of Exercise Prices
$10.00 to $13.00                 157,420      2.21       157,420     2.21
$13.01 to $17.56                  12,314      7.81        12,014     7.81
$18.19 to $25.03                  12,000      9.64            --       --
                                --------     -----      --------    -----
                                 181,734      3.58       169,434     2.57
                                ========     =====      ========    =====
</TABLE>






<PAGE> 66

Had compensation cost for stock options been measured using FASB Statement No.
123, net income and earnings per share would have been the pro forma amounts
indicated below.  The pro forma effect may increase in the future in more
options granted.

<TABLE>
<CAPTION>

                                                   2001      2000     1999
<S>                                             <C>        <C>      <C>
Net Income:
   As reported                                   $ 4,872    4,242    4,130
   Pro forma                                       4,865    4,222    4,110

Earnings per share:
 Basic:
   As reported                                      2.42     2.04     1.85
   Pro forma                                        2.41     2.03     1.84

 Diluted:
   As reported                                      2.31     1.96     1.76
   Pro forma                                        2.30     1.95     1.75

</TABLE>

The pro forma effects are computed using the option pricing models, using the
following weighted-average assumptions as of the grant date.

<TABLE>
<CAPTION>
                                                   2001      2000      1999
<S>                                              <C>       <C>       <C>
Dividend yield                                     2.31%     2.71%     1.96%
Risk-free interest rate                            5.28%     5.90%     5.75%
Weighted average expected life                     4.8 yrs   4.8 yrs   4.8 yrs
Expected volatility                               28.16%    11.28%    23.38%

</TABLE>


(14)   OTHER COMPREHENSIVE INCOME

Other comprehensive income components and related taxes were as follows:
<TABLE>
<CAPTION>
                                                  Year ended September 30,
                                                  2001    2000      1999
<S>                                           <C>         <C>    <C>
Unrealized holding gains and losses on
   available for sale investment securities    $ 4,696      316   (2,898)
Less reclassification adjustment for gains
   later recognized in income                     (231)      -        -
Net unrealized gains and losses                  4,465      316   (2,898)
Tax effect                                      (1,697)    (102)  (1,078)
                                                 -----     ----   -------
Other comprehensive income (loss)              $ 2,768      214   (1,820)
                                                 =====     ====   =======
</TABLE>

<PAGE> 67

(15) COMMITMENTS AND CONTINGENCIES

The Bank is a party to financial instruments with off-balance sheet risk in the
normal course of its business.  These instruments include commitments to
originate loans and letters of credit.  The instruments involve credit and
interest rate risk in excess of the amount recognized in the consolidated
statements of financial condition.  The Bank evaluates each customer's
creditworthiness on a case-by-case basis.

Commitments to originate mortgage loans at September 30, 2001 of $8.8 million
represent amounts which the Bank plans to fund within the normal commitment
period of 60 to 90 days of which $1.2 million were fixed rate,  with rates
ranging from 7.125% to 8.125%, and $7.6 million were adjustable rate.

The estimated fair value of these commitments approximates the commitment
amount.  Because the creditworthiness of each customer is reviewed prior to the
extension of the commitment, the Bank adequately controls the credit risk on
these commitments, as it does for loans recorded on the consolidated statements
of financial condition.  The Bank conducts substantially all of its lending
activities in the Chicagoland area in which it serves.  Management believes the
Bank has a diversified loan portfolio and the concentration of lending
activities in these local communities does not result in an acute dependence
upon the economic conditions of the lending region.

The Company is involved in various litigation arising in the normal course of
business.  In the opinion of management, based on the advice of legal counsel,
liabilities arising from such claims, if any, would not have a material effect
on the Company's financial statements.

The Company is involved in various litigation arising in the normal course of
business.  In the opinion of management, based on the advice of legal counsel,
liabilities arising from such claims, if any, would not have a material effect
on the Company's financial statements.


(16)  FAIR VALUE DISCLOSURES

Fair value disclosures are required under Statement of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments."
Such fair value disclosures are made at a specific point in time, based upon
relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result from
offering for sale at one time the Company's entire holdings of a particular
financial instrument.  Because no market exists for a portion of the Company's
financial instruments, fair value estimates are based on judgments regarding
future expected loss experience, current economic conditions, risk
characteristics of various financial instruments, and other factors.  These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect these estimates.

Fair value estimates are based on existing on- and off-balance sheet financial
instruments without attempting to estimate the value of anticipated future
business and the value of assets and liabilities that are not considered
financial instruments.  The tax ramifications related to the realization of the
unrealized gains and losses have a significant effect on the fair value
estimates and have not been considered in any estimates.

<PAGE>  68

Reasonable comparability of fair values among financial institutions is not
practical due to the variety of assumptions and valuation methods used in
calculating the estimates.

CASH AND CASH EQUIVALENTS  The carrying value of cash and cash equivalents
approximates fair value due to the relatively short period between the
origination of the instruments and their expected realization.

INVESTMENT AND MORTGAGE-BACKED SECURITIES  The fair value of these financial
securities, which includes investment securities, mortgage-backed securities,
and FHLB of Chicago stock, is the quoted market price, if available, or the
quoted market price for similar securities.  The fair value of FHLB of Chicago
stock is recorded at redemption value, which is equal to cost.

LOANS RECEIVABLE  The fair value of loans receivable held for investment is
estimated for portfolios of loans with similar financial characteristics.
Loans are segregated by type, such as one-to four-family, multi-family,
commercial, and consumer.  For variable rate loans that reprice frequently and
for which there has been no significant change in credit risk, fair values
equal carrying values.  The fair values for fixed-rate loans were based on
estimates using discounted cash flow analyses and current interest rates being
offered for loans with similar terms to borrowers of similar credit quality.

LOANS HELD FOR SALE  These loans are carried at the lower of cost, adjusted for
applicable deferred loan fees or expenses, or estimated market value in the
aggregate.  The fair value for loans held for sale  is the quoted market price,
if available, or the quoted market price for similar loan products.

ACCRUED INTEREST RECEIVABLE AND PAYABLE  The carrying value of accrued interest
receivable and payable approximates fair value due to the relatively short
period of time between accrual and expected realization.

DEPOSITS  The fair values for demand deposits with no stated maturity are equal
to the amount payable on demand as of September 30, 2001 and 2000,
respectively.  The fair value for fixed-rate certificate accounts is based on
the discounted value of contractual cash flows using the interest rates
currently being offered for certificates of similar maturities as of September
30, 2001 and 2000, respectively.

BORROWED FUNDS  Rates currently available to the Company for debt with similar
terms and remaining maturities are used to estimate fair value of existing
debt.

















<PAGE> 69

The estimated fair value of the Company's financial instruments at September
30, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                2001                             2000
                                      Carrying     Estimated         Carrying     Estimated
                                       amount       fair value         amount       fair value
                                                         (in thousands)
<S>                                  <C>               <C>             <C>           <C>
FINANCIAL ASSETS:
  Cash and due from banks             $   7,107           7,107           4,690          4,690
  Interest-earning deposits               1,397           1,397           1,405          1,405
  Federal funds sold                        100             100             100            100
  Mortgage-backed securities            127,685         127,685           2,901          2,924
  Securities                             60,061          60,061          84,431         84,431
  Loans receivable                      422,980         447,456         534,227        532,680
  Loans held for sale                    41,219          41,910              --             --
  Accrued interest receivable             3,650           3,650           4,161          4,161
                                        -------         -------         -------        -------
Total financial assets                $ 664,199         689,366         631,965        630,391
                                        =======         =======         =======        =======
FINANCIAL LIABILITIES:
  Noninterest-bearing deposits           13,746         13,746            9,287          9,287
  NOW, money market and management,
    and passbook accounts               163,431        163,431          153,572        153,572
  Certificate accounts                  222,442        223,763          218,574        218,111
  Borrowed funds                        187,345        191,784          205,150        204,561
  Accrued interest payable                1,081          1,081            1,277          1,277
                                        -------        -------          -------        -------
Total financial liabilities           $ 588,045        593,805          587,860        586,808
                                        =======        =======          =======        =======
</TABLE>



(17)  Shareholders' Rights Plan

On February 18, 1997, the Company's Board of Directors adopted a shareholders'
rights plan (the Rights Plan).  Under the terms of the Rights Plan, the Board
of Directors declared a dividend of one preferred share purchase right for each
outstanding share of common stock.  Upon becoming exercisable, each right
entitles the registered holder thereof, under certain limited circumstances, to
purchase one-thousandth of a share of Series A Junior Participating Preferred
Stock at an exercise price of $60.00.  Rights do not become exercisable until
eleven business days after any person or group has acquired, commenced, or
announced its intention to commence a tender or exchange offer to acquire 15%
or more of the Company's common stock, or in the event a person or group owning
10% or more of the Company's common stock is deemed to be "adverse" to the
Company.  If the rights become exercisable, holders of each right, other than
the acquiror, upon payment of the exercise price, will have the right to
purchase the Company's common stock (in lieu of preferred shares) having a
value equal to two times the exercise price.  If the Company is acquired in a
merger, share exchange or other business combination or 50% or more of its
consolidated assets or earning power are sold, rights holders, other than the
acquiring or adverse person or group, will be entitled to purchase the
acquiror's shares at a similar discount.  If the rights become exercisable, the
Company may also exchange rights, other than those held by the  acquiring or
adverse person or group, in whole or in part, at an exchange ratio of one share
of the Company's common stock per right held.  Rights are redeemable by the
Company at any time until they are exercisable at the exchange rate of $.01 per
right.  Issuance of the rights has no immediate Dilutive effect, does not

<PAGE> 70
currently affect reported earnings per share, is not taxable to the Company or
its shareholders, and will not change the way in which the Company's shares are
traded.  The rights expire in February 2007.


(18) CONDENSED PARENT COMPANY ONLY FINANCIAL INFORMATION

The following condensed statements of financial condition as of September 30,
2001 and 2000 and condensed statements of earnings and cash flows for each of
the three years in the period ended September 30, 2001 for Fidelity Bancorp,
Inc. should be read in conjunction with the consolidated financial statements
and the notes thereto.

<TABLE>
<CAPTION>
                     STATEMENT OF FINANCIAL CONDITION
                                                            September 30,
                                                         2001          2000
                                                            (in thousands)
<S>                                                 <C>              <C>
ASSETS
Cash and cash equivalents                            $    983          1,642
Securities available for sale,                          4,080          8,763
Equity investment in the Bank                          51,980         43,989
Accrued interest                                           81            162
Other assets                                            1,908            586
                                                      -------         ------
                                                     $ 59,032         55,142
                                                      =======         ======

LIABILITIES AND STOCKHOLDERS' EQUITY:
Borrowed funds from Bank                                4,000          8,000
Other borrowed funds                                    4,245          3,850
Accrued taxes and other liabilities                     1,403            489
                                                      -------         ------
Total liabilities                                       9,648         12,339

Stockholders' equity                                   49,384         42,803
                                                      -------         ------
                                                     $ 59,032         55,142
                                                      =======         ======
</TABLE>


















<PAGE> 71
<TABLE>
<CAPTION>
                            STATEMENTS OF EARNINGS
                                           Year ended September 30,
                                     2001          2000            1999
                                                  (in thousands)

<S>                               <C>            <C>             <C>
Equity in earnings of the Bank     $ 4,842        4,463           4,358
Interest income                        493          103              58
Interest expense                      (647)        (165)             --
Gain on sale of security               125           --              --
Non-interest expense                  (377)        (307)           (359)
                                    ------        -----           -----
Income before income taxes           4,436        4,094           4,057
Income tax benefit                    (436)        (148)            (73)
                                    ------        -----           -----
Net income                         $ 4,872        4,242           4,130
                                    ======        =====           =====
</TABLE>







































<PAGE>  72
<TABLE>
<CAPTION>
                              STATEMENTS OF CASH FLOWS
                                                 Year ended September 30,
                                             2001          2000           1999
                                                        (in thousands)
<S>                                         <C>          <C>          <C>
OPERATING ACTIVITIES:
  Net income                                 $ 4,872       4,242         4,130
  Equity in earnings of the Bank              (4,842)     (4,463)       (4,358)
  Dividends received from the Bank               300       1,695         9,864
  Net amortization and accretion of
    premiums and discounts                       (27)         --            -
  Gain on sale of security                      (125)         --            -
  Decrease (increase) in accrued
    interest receivable                           81        (162)           -
  Decrease (increase) in other assets           (269)        145          (118)
  Increase (decrease) in accrued taxes and
    other liabilities                           (304)       (240)           62
                                              ------       -----         -----
Net cash provided by (used in)
  operating activities                          (314)      1,217         9,580

INVESTING ACTIVITIES:
  Purchase of securities available
    for sale                                  (4,000)     (7,972)           -
  Proceeds from sale of securities             8,125          --            -
  Principal repayments received
    on ESOP loan                                 460         443           460
                                              ------       -----         -----
Net cash provided by (used in)
    investing activities                       4,585      (7,529)          460

FINANCING ACTIVITIES:
  Proceeds from intercompany loans                --       8,000            -
  Proceeds from (repayment of)
    borrowed funds                            (3,605)      3,850            -
  Purchase of treasury stock                    (562)     (3,377)       (9,312)
  Payment of common stock dividends             (968)       (991)       (1,005)
  Proceeds from exercise of stock options        205           4           209
                                              ------       -----         -----
Net cash provided by (used in)
    financing activities                      (4,930)     (7,486)      (10,108)
                                             -------       -----         -----
Net increase (decrease) in cash
    and cash equivalents                        (659)     (1,174)          (68)
Cash and cash equivalents at beginning
  of year                                      1,642         468           536
                                             -------       -----         -----
Cash and cash equivalents at end of year     $   983       1,642           468
                                             =======       =====         =====
</TABLE>








<PAGE>  73
(19)  QUARTERLY RESULTS OF OPERATIONS (unaudited)

The following table sets forth certain unaudited income and expense and per
share data on a quarterly basis for the three-month period indicated:
<TABLE>
<CAPTION>
                                     Year ended September 30, 2001      Year ended September 30, 2000
                                  1st Qtr  2nd Qtr  3rd Qtr  4th Qtr   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr
                                              (in thousands, except per share data)
<S>                            <C>        <C>      <C>      <C>       <C>      <C>      <C>      <C>
Interest income                 $ 11,933   11,656   11,185   11,680    10,689   10,815   11,020   11,327
Interest expense                   8,553    8,083    7,568    7,257     6,678    6,921    7,432    8,081
                                   -----    -----    -----    -----     -----    -----    -----    -----
Net interest income
  before provision
  for loan losses                  3,380    3,573    3,617    4,423     4,011    3,894    3,588    3,246
Provision for loan
  losses                              70       40       70      115        40       15       55       70
                                   -----    -----    -----    -----     -----    -----    -----    -----
Net interest income
  after provision for
  loan losses                      3,310    3,533    3,547    4,308     3,971    3,879    3,533    3,176

Non-interest income                  385      512      444      966       338      399      415      416
Non-interest expense               2,439    2,354    2,257    2,650     2,477    2,467    2,356    2,020
                                   -----    -----    -----    -----     -----    -----    -----    -----
Income before income tax
  expense                          1,256    1,691    1,734    2,624     1,832    1,811    1,592    1,572
Income tax expense                   393      642      647      751       699      683      586      597
                                   -----    -----    -----    -----     -----    -----    -----    -----
Net income                      $    863    1,049    1,087    1,873     1,133    1,128    1,006      975
                                   =====    =====    =====    =====     =====    =====    =====    =====

Earnings per share              $   0.41     0.50     0.52     0.89      0.51     0.52     0.48     0.47
                                    ====     ====     ====     ====     =====    =====    =====    =====
Cash dividends declared
  per share                     $   0.12     0.12     0.12     0.12      0.11     0.12     0.12     0.12
                                    ====     ====     ====     ====     =====    =====    =====    =====
</TABLE>

Net income for the three months ended September 30, 2001 is higher than the
previous calendar quarters due primarily to the $618,000 gain on sale of loans
recorded during that quarter.


(20) CONTINGENCY

The Company has been active in its efforts to realize some recovery of the $3.0
million of Reliance Acceptance Group, Inc. (RAG) subordinated notes, which were
written-off during the fourth quarter of fiscal 1997, through participation on
the Official Committee of the Unsecured Creditors of RAG and formulation of a
plan for RAG's bankruptcy litigation.  The Estate Representatives for RAG
arrived at a preliminary settlement with certain parties that would allow RAG
to settle or satisfy the claims of certain of its creditors including the
Company.  The proposed settlement is subject to certain significant conditions
and no assurances can be provided that the settlement will be completed or that
the Company will receive any of the settlement proceeds.  Since the amount of
the settlement, if any, cannot be quantified until various legal processes are
complete, no estimated recovery has been recorded in the Company's financial
statements as of September 30, 2001.









<PAGE>  74


                           Independent Auditors' Report


The Board of Directors
Fidelity Bancorp, Inc.
Chicago, Illinois


We have audited the accompanying consolidated statement of financial condition
of Fidelity Bancorp, Inc. (the Company) as of September 30, 2001 and 2000, and
the related consolidated statements of earnings, changes in stockholders'
equity, and cash flows for the years then ended.  These financial statements
are the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Fidelity Bancorp,
Inc. as of September 30, 2001 and 2000, and the results of its operations and
its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.




                                                Crowe, Chizek and Company LLP


Oak Brook, Illinois
October 31, 2001


















<PAGE>  75

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure

          None.


PART III


Item 10.  Directors and Executive Officers of the Registrant

          The information relating to directors and executive officers appears
          in the Company's proxy statement for the annual meeting of
          stockholders to be held on January 23, 2002 and is incorporated
          herein by reference.

          Section 16(a) of the Exchange Act requires that our executive
          officers, directors and persons who own more than 10% of our common
          stock file reports of ownership and changes in ownership and changes
          in ownership with the Securities and Exchange Commission.  They are
          also required to furnish us with copies of all Section 16(a) forms
          they file.  Based solely on our review of the copies of such forms,
          and, if appropriate, representations made to us by any reporting
          person concerning whether a Form 5 was required to be filed for 2001,
          we are not aware that any of our directors, executive officers or 10%
          stockholders failed to comply with the filing requirements of Section
          16(a) during the fiscal year ended September 30, 2001.

Item 11.  EXECUTIVE COMPENSATION

          The information relating to executive compensation (excluding the
          sections marked "Compensation Committee Report of Executive
          Compensation" and "Stock Performance Graph") appears in the Company's
          proxy statement for the annual meeting of stockholders to be held on
          January 23, 2002 and is incorporated herein by reference.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The information relating to security ownership of certain beneficial
          owners and management appears in the Company's proxy statement for
          the annual meeting of stockholders to be held on January 23, 2002 and
          is incorporated herein by reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The information relating to certain relationships and related
          transactions appears on pages 16 and 17 of the Company's proxy
          statement for the annual meeting of stockholders to be held on
          January 23, 2002 and is incorporated herein by reference.








<PAGE> 76

PART IV


Item 14.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K


          The following documents are filed as part of this report:

          (a)   Exhibits

          Exhibit No.

             3.1   Restated Certificate of Incorporation of Fidelity Bancorp,
                   Inc.*
             3.2   Bylaws of Fidelity Bancorp, Inc.*
             4.0   Stock Certificate of Fidelity Bancorp, Inc.*
             4.1   Rights Agreement between the Company and Harris Trust and
                   Savings Bank, as trustee (including the related certificate
                   of designations) ****
            10.1   Employment Agreements between the Bank and Executive and
                   Employee Agreement between the Company and Executive *
            10.2   Special Termination Agreement between the Bank and Executive
                   and Special Termination Agreement between the Company and
                   Executive *
            10.6  Employee Stock Ownership Plan and Trust ***
            10.8  Recognition and Retention Plan and Trust *
            10.9  Incentive Stock Option Plan **
            10.10 Stock Option Plan for Outside Directors **
            10.11 Rights Agreement ****
            21.0  Subsidiary information is incorporated herein by reference to
                  "Part II - Subsidiaries"
            23.1  Consent from KPMG LLP
            99.1  Proxy Statement and form of proxy for the 2002 Annual Meeting
                  of Stockholders (except such portions incorporated by
                  reference into this Form 10-K, the proxy materials shall not
                  be deemed to be "filed" with the Commission).



          (b)   Reports on Form 8-K

                None

-----------------
   *  Incorporated herein by reference into this document from the exhibits to
Form S-1, Registration Statement as amended, originally filed on October 28,
1993, Registration No. 33-68670.

  **  Incorporated herein by reference into this document from the exhibits to
Form S-8, Registration Statement, filed on April 20, 1994, Registration No. 33-
78000.

 ***  Incorporated herein by reference into this document from the exhibits to
Form 10-K, filed on December 9, 1994.

****  Incorporated herein by reference into this document from the exhibits to
Form 8-A, filed on February 19, 1997.

<PAGE> 77

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


                                          By:/s/ Raymond S. Stolarczyk
                                             --------------------------
                                             Raymond S. Stolarczyk
Date:  December 24, 2001                     Chairman of the Board and Chief
                                             Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated:


Name                                 Title                   Date

/s/ Raymond S. Stolarczyk   Chairman and Chief Executive    December 24, 2001
-------------------------   Officer
Raymond S. Stolarczyk

/s/ Thomas E. Bentel        President and Chief             December 24, 2001
-------------------------   Operating Officer
Thomas E. Bentel

/s/ Elizabeth A. Doolan     Vice President and              December 24, 2001
-------------------------   Chief Financial Officer
Elizabeth A. Doolan

/s/ Judith K. Leaf          Corporate Secretary             December 24, 2001
-------------------------
Judith K. Leaf

/s/ Paul J. Bielat          Director                        December 24, 2001
-------------------------
Paul J. Bielat

/s/ Edward J. Burda         Director                        December 24, 2001
-------------------------
Edward J. Burda

/s/ Patrick J. Flynn        Director                        December 24, 2001
-------------------------
Patrick J. Flynn

/s/ Richard J. Kasten       Director                        December 24, 2001
-------------------------
Richard J. Kasten