UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended: December 31, 2004
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition period from ______ to __________.

Commission File No. 0-22880

Fidelity Federal Bancorp
(Exact name of registrant as specified in its charter)

          Indiana                                               35-1894432
(State of other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

18 North West Fourth Street, PO Box 1347, Evansville, Indiana 47706-1347
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (812) 424-0921

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of
the Act: Common Stock, $12 Stated Value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) 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 or any amendment to this form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes No X

The aggregate market value of voting stock held by non-affiliates of the Registrant (for purposes of such calculation, included are persons who are not directors, executive officers, or holders of more than 10% of the registrant's common stock) based on the average bid and asked prices of such stock at June 30, 2004 was approximately $4,764,327.

The number of shares outstanding of the registrant's common stock as of March 11, 2005 was 772,500 shares, with a $12 stated value.

DOCUMENTS INCORPORATED BY REFERENCE

       Documents                      Part of Form 10-K into which Incorporated
       ---------                      -----------------------------------------

Portions of the 2004 Annual
Report to Shareholders                                  Part II

Exhibit Index is on page 32


FIDELITY FEDERAL BANCORP

                                      Index

PART I
                                                                            Page
                                                                            ----

ITEM 1   -   Business                                                         4
ITEM 2   -   Properties                                                      14
ITEM 3   -   Legal Proceedings                                               14
ITEM 4   -   Submission of Matters to a Vote of Security Holders             15

PART II

ITEM 5   -   Market for Registrant's Common Equity, Related Shareholder
                 Matters and Issuer Purchases of Equity Securities           15
ITEM 6   -   Selected Financial Data                                         15
ITEM 7   -   Management's Discussion and Analysis of
                 Financial Condition and Results of Operation                15
ITEM 7A  -   Quantitative and Qualitative Disclosures About Market Risk      15
ITEM 8   -   Financial Statements and Supplementary Data                     15
ITEM 9   -   Changes in and Disagreements With Accountants
                 on Accounting and Financial Disclosure                      15
ITEM 9A  -   Controls and Procedures                                         15
ITEM 9B  -   Other Information                                               16

PART III

ITEM 10  -   Directors and Executive Officers of the Registrant              16
ITEM 11  -   Executive Compensation                                          18
ITEM 12  -   Security Ownership of Certain Beneficial
                 Owners and Management and Related Shareholder
                 Matters                                                     25
ITEM 13  -   Certain Relationships and Related Transactions                  27
ITEM 14  -   Principal Accountant Fees and Services                          28

PART IV

ITEM 15  -   Exhibits and Financial Statement Schedules                      29

SIGNATURES                                                                   31

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report contains certain forward-looking statements that are subject to risks and uncertainties and includes information about possible or assumed future results of operations. Many possible events or factors could affect our future financial results and performance. This could cause results or performance to differ materially from those expressed in our forward-looking statements. Words such as "expects", "anticipates", "may", "could", "intends", "projects", "believes", "estimates", and variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Investors and readers should not rely solely on or place undue reliance on the forward-looking statements and should consider all uncertainties and risks discussed throughout this report. These statements are representative only on the date hereof.

Possible events or factors that could affect our future financial results and performance include the following: the dependence of our loan growth and funding on economic conditions, as well as various discretionary factors, such as decisions to sell or purchase certain loans or loan portfolios; participations of loans; retention of residential mortgage loans; and the management of a borrower. The rate of charge-offs and loan and letter of credit loss provisions can be affected by local, regional and international economic and market conditions, concentrations of borrowers, industries, products and geographic locations, the mix of the loan portfolio and management's judgments regarding the collectibility of loans. Liquidity requirements may change as a result of fluctuations in assets and liabilities and off-balance sheet exposures, which will impact our capital and debt financing needs and the mix of funding sources. Decisions to purchase, hold or sell securities are also dependent on liquidity requirements and market volatility, as well as on and off-balance sheet positions. Factors that may impact interest rate risk include local, regional and international economic conditions, levels, mix, maturities, yields or rates of assets and liabilities, and the wholesale and retail funding sources of United Fidelity Bank ("United"). We are also exposed to the potential of losses arising from adverse changes in market rates and prices which can adversely impact the value of financial products, including securities, loans, deposits, debt and derivative financial instruments, such as futures, forwards, swaps, options, and other financial instruments with similar characteristics.

In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal Reserve Board, the Office of the Comptroller of the Currency, the FDIC, state regulators and the Office of Thrift Supervision, whose policies and regulations could affect our results. Other factors that may cause actual results to differ from the forward-looking statements include the following: competition with other local, regional and international banks, thrifts, credit unions and other nonbank financial institutions, such as investment banking firms, investment advisory firms, brokerage firms, investment companies and insurance companies, as well as other entities which offer financial services, located both within and outside the United States, and through alternative delivery channels such as the Internet; interest rate, market and monetary fluctuations; inflation; market volatility; general economic conditions and economic conditions in the geographic regions and industries in which we operate; introduction and acceptance of new banking-related products, services and enhancements; fee pricing strategies; mergers and acquisitions; and our ability to manage these and other risks.

3

PART I

ITEM 1. BUSINESS

Termination of Registration Requirements

On November 10, 2004, Fidelity announced a plan to terminate registration of its common stock. The Board of Directors unanimously approved a 1-for 30,000 reverse stock split in order to terminate the registration of its common stock with the Securities and Exchange Commission and result in the delisting of its shares on the NASDAQ. The reverse stock split was immediately followed by a 2,500-for-1 stock split. The effective dates for both the reverse and forward stock splits was February 28, 2005. On March 11, 2005, Fidelity filed Form 15 with the Securities and Exchange Commission notifying it of the completion of the reverse stock split and delisting of its shares on NASDAQ. Approximately $3.2 million will be paid out to fractional shareholders as a result of the reverse split in 2005 thus reducing shareholder's equity and cash. Additional details regarding this transaction may be found in the Schedule 13E-3 as filed with the Securities and Exchange Commission. All shares, options, warrants, and per share amounts throughout the Form 10-K and exhibits have been adjusted for the reverse and forward splits.

Overview

Fidelity Federal Bancorp ("Fidelity"), incorporated in 1993 under the laws of the State of Indiana, is a registered savings and loan holding company with its principal office in Evansville, Indiana. Fidelity's savings bank subsidiary, United, was organized in 1914 and is a federally-chartered stock savings bank located in Evansville, Indiana.

United is primarily engaged in the business of attracting savings deposits from the general public, Federal Home Loan Bank advances and other wholesale funding savings, and investing such funds in loans served by one-to-four family residential real estate located primarily in Vanderburgh and the surrounding counties in southern Indiana. United originates consumer loans on a direct basis in its offices. United previously originated consumer loans on a indirect basis through automobile dealers for the purchase of automobiles in southern Indiana, western Kentucky, southern Illinois and southeast Missouri. During the third quarter of 2004, United terminated the origination of indirect loans to allocate resources to more traditional community bank lending activities, and reduced full-time equivalent employees by approximately six. In addition, United originates commercial loans secured by real estate in addition to nonresidential real estate, other types of consumer loans, commercial and home equity. United also invests in interest-bearing deposits in other banks, mortgage-backed securities and other investments permitted by applicable law.

United conducts business from its main office in Evansville, Indiana and from four full-service branch offices. Three of United's branch offices are located in Evansville. The fourth branch office is located in Warrick County which is adjacent to Vanderburgh County. United's primary retail market area consists of the Indiana counties of Vanderburgh, Posey, Gibson and Warrick.

United's subsidiary, Village Capital Corporation, has earned fees in the past by providing real estate mortgage banking services, and currently records income on a rate cap/floor agreement on a credit extension to an unrelated borrower that was completed in 1995.

In 2001 United formed a new subsidiary, United Fidelity Finance, for purposes of acquiring, owning, purchasing, holding, selling, transferring, pledging and otherwise dealing with automobile loan receivables. United Fidelity Finance was utilized during 2002 to complete an automobile loan securitization transaction and held no assets as of December 31, 2004.

Fidelity had consolidated total assets of $200.6 million and total shareholders' equity of $16.3 million as of December 31, 2004.

4

Fidelity's subsidiaries at December 31, 2004 are listed below:

Subsidiary                                  Principal Office  Year Organized  Assets (in thousands)
----------                                  ----------------  --------------  ---------------------
United Fidelity Bank, fsb                   Evansville, IN        1914              $198,086

Subsidiaries of United Fidelity Bank, fsb:
    Village Capital Corporation             Evansville, IN        1994                  $362
    United Fidelity Finance                 Evansville, IN        2001                    $0

Fidelity's home office is located at 18 North West Fourth Street, Evansville, Indiana, 47708, and its telephone number is (812) 424-0921.

Personnel

As of December 31, 2004, Fidelity had 51.5 full-time equivalent employees. The employees are not represented by any collective bargaining unit. Fidelity believes its relations with its employees are good.

Fidelity maintains group life, hospital, surgical, dental, major medical, and long-term disability programs for full-time employees. Fidelity also participates in a defined benefit pension plan covering all eligible employees, as well as a defined contribution 401(k) plan. As of January 1, 2004, Fidelity`s defined benefit pension plan was amended to freeze the plan. As a result, the annual retirement benefit payable to a participant at age 65 will not increase after January 1, 2004.

LENDING ACTIVITIES

General

United's lending activities include the origination of permanent loans and construction loans secured by one-to-four family homes located in United's primary market area, commercial real estate loans secured primarily by one-to-four family homes, direct automobile loans and other types of consumer loans, which include loans secured by deposit accounts, home equity lines of credit and unsecured loans. United also originates commercial loans other than those secured by real estate. United's net loan portfolio was approximately $110.8 million at December 31, 2004, and represented 55.2% of total assets.

The following table presents certain information in respect of the composition of United's loan portfolio at the dates specified:

                                                                            At December 31,
                                   -------------------------------------------------------------------------------------------------
                                          2004                2003                2002                2001               2000
                                   -------------------------------------------------------------------------------------------------
                                              Percent             Percent             Percent             Percent            Percent
                                    Amount      of      Amount      of       Amount     of       Amount     of      Amount     of
                                               total               total               total               total              total
                                               loans               loans               loans               loans              loans
                                   -------------------------------------------------------------------------------------------------
Real estate mortgage loans
   First mortgage loans
     Conventional                  $38,226     34.28%  $41,754     41.27%   $36,157    48.91%  $43,929     41.22%  $47,809    43.56%
     Construction                    4,471      4.01     2,042      2.01      1,909     2.58       513      0.48     1,274     1.16
     Commercial                     16,251     14.57     9,144      9.04      5,645     7.64     6,114      5.74     6,873     6.26
     Multi-family loans                594      0.53       213      0.21      3,083     4.17     3,856      3.62     4,350     3.96
     Home equity loans               6,144      5.51     5,067      5.01      4,586     6.20     4,577      4.29     5,274     4.80
     First mortgage real estate
       loans purchased                 385      0.35      778       0.77        627     0.85       745      0.70     1,753     1.60
                                   ------------------------------------------------------------------------------------------------
                                    66,071     59.24    58,998     58.31     52,007    70.35    59,734     56.05    67,333    61.34
   Commercial loans, other than
     secured by real estate          4,136      3.71     3,138      3.10      2,210     2.99     1,848      1.73     2,305     2.10
   Consumer loans                   41,320     37.05    39,038     38.59     19,707    26.66    44,988     42.21    40,125    36.56
                                   ------------------------------------------------------------------------------------------------
         Total loans               111,527    100.00   101,174    100.00     73,924   100.00    106,570   100.00   109,763   100.00
   Allowance for loan losses          (756)               (737)                (837)             (2,138)            (1,921)
                                   -------             -------              -------             -------            -------

         Net loans                 110,771             100,437               73,087             104,432            107,842
                                   =======             =======              =======             =======            =======

         Total assets              200,558             175,390              132,290             159,659            166,466
                                   =======             =======              =======             =======            =======

         Total loans to total
           assets                     55.6                57.7%                55.9%               66.7%              65.9%
                                   =======             =======              =======             =======            =======

5

Residential Mortgage Loans

A substantial portion of United's lending activity involves the origination of loans secured by residential real estate consisting of single-family dwelling units. The residential mortgage loans included in United's portfolio are primarily conventional fixed-rate loans with a maturity of up to 30 years, which represent approximately a third of the portfolio.

United also offers adjustable-rate mortgage loans, which account for the remainder of the portfolio. Currently, these loans generally have interest rates that adjust (up or down) every year. Generally, these loans provide for a maximum adjustment of 6% over the life of the loans, with a maximum adjustment of 2% during any given year. Adjustments are based upon an index established at the time the commitments are issued by United. The index used for most loans is tied to the applicable United States Treasury security index. While adjustable-rate mortgage loans assist United in maintaining a positive spread during periods of high interest rates, it is not expected that adjustments in interest rates on adjustable-rate mortgages will precisely match changes in United's cost of funds. The majority of the adjustable rate mortgages originated by United have limitations on the amount (generally 6%) and frequency of interest rate changes.

During the year ended December 31, 2004, United originated $19.1 million of residential loans, of which $9.6 million were five-to-30-year fixed-rate mortgages and $9.5 million of which were adjustable-rate loans. The rates offered on United's adjustable rate residential mortgage loans are generally competitive with the rates offered by other thrift and financial institutions in United's market area and are based upon United's cost of funds and rate of return United can receive on comparable investments. Fixed-rate loans are originated only under terms and conditions, using documentation which permit their sale in the secondary market, and at rates which are generally competitive with rates offered by other financial institutions in United's market areas. During 2004, United sold most of its fixed rate mortgages in the secondary market.

Substantially all of United's residential mortgages include so called "due on sale" clauses, which are provisions giving United the right to declare a loan immediately due and payable in the event that, among other things, the borrower sells or otherwise disposes of the real property subject to the mortgage, and the loan is not repaid.

Generally, United will not lend more than 80% of the appraisal value of residential property which is owner occupied unless the borrower obtains private mortgage insurance reducing the uninsured portion of the loan to 75% or less of the appraised value. If private mortgage insurance is obtained, United's policy is to lend up to 103% of the value of the property securing the loan.

Construction Loans

United offers residential construction loans both to owner-occupants and to persons building residential property. Construction loans are usually offered with rates of interest that remain fixed during construction. Generally, construction loans have terms ranging from six to 12 months at fixed rates over the construction period. Construction loan documents generally provide for a transition to permanent loans at the end of the construction period. Construction loans represented 4% of total loans at December 31, 2004.

Commercial Real Estate Loans

United also originates commercial real estate loans. Commercial real estate loans increased from $9.1 million at December 31, 2003 to $16.3 million at December 31, 2004. United resumed commercial lending activities in February of 2002 and has continued to increase the portfolio in 2003 and 2004 with loans secured primarily with one-to-four family real estate and owner-occupied commercial property.

Generally, commercial real estate loans involve greater risk to United than do residential loans, but usually provide for a higher rate of interest and increased fee income than do residential loans. Commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by income producing properties is typically dependent on the successful operation of the related project and thus may be subject to a greater extent to adverse conditions in the real estate market or in the economy in general.

6

Multifamily Loans

Multifamily lending is generally considered to involve a higher degree of risk because the borrower typically depends upon income generated by the project to cover operating expenses and debt service. The profitability of a project can be affected by economic conditions, government policies and other factors beyond the control of the borrower. Multifamily loans have decreased from $3.1 million at December 31, 2002 to $594,000 at December 31, 2004.

Home Equity Loans

Home equity lines of credit are originated for terms of up to thirty years. Such loans are secured by a first or second mortgage on the borrower's principal residence. Home equity loans totaled $6.1 million or 5.5% of Fidelity's total loans outstanding at December 31, 2004.

Commercial Loans

Commercial loans totaled $4.1 million at December 31, 2004, compared to $3.1 million at December 31, 2003 and represents 3.7% of Fidelity's loan portfolio. Commercial lending entails significant risks when compared to mortgage lending. Such loans are subject to greater risk of default during periods of adverse economic conditions.

Because such loans are secured by non-real estate assets, such as rolling stock, equipment, inventory and accounts receivable, the collateral may not be sufficient to ensure full payment of the loan in the event of a default. Fidelity and United attempt to minimize such risks through prudent underwriting practices.

Consumer Loans

United offers and makes various types of consumer loans, including automobile loans, loans made to depositors on the security of their deposit accounts, and other secured and unsecured personal loans. Consumer loans are generally made at fixed rates of interest for terms of up to seven years. Automobile loans are originated by United directly and indirectly in conjunction with automobile dealers in Indiana, Illinois, Kentucky and Missouri. As previously discussed, United terminated the origination of indirect loans in the third quarter of 2004.

Consumer loans, particularly consumer loans which are unsecured or secured by rapidly depreciating assets such as automobiles, may entail greater risk than do residential mortgage loans. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance. The cost of collecting a remaining deficiency is often disproportionate to the amount of the deficiency. In addition, consumer loan collection is dependent on the borrowers continuing financial stability and is, therefore, more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. The risk of default on consumer loans increases during periods of recession, high unemployment and other adverse economic conditions. Despite the increased risks associated with consumer lending, consumer loans typically provide a higher rate of return than real estate loans and have shorter terms to maturity, thereby increasing profitability and assisting United in managing the interest-rate sensitivity of its assets and liabilities.

Competition

Fidelity and United face strong direct competition for deposits, loans and other financial-related services. United competes in Indiana, Kentucky and Illinois with other thrifts, commercial banks, credit unions, stockbrokers, finance companies and insurance companies. Some of these competitors are local, while others are statewide or national. United competes for deposits principally by offering depositors a variety of deposit programs, convenient office locations and hours, and other services, and for loan originations primarily through competitive interest rates and fees, efficiency and quality of service and the variety of loan products offered. Some of the non-bank financial institutions and financial services organizations with which United competes are not subject to the same degree of regulation as that imposed on federal savings banks, thrifts, or thrift-holding companies. As a result, such competitors may have advantages over United in providing certain services. As of February 28, 2005, approximately three locally based banks (and several others with branch or loan production offices), two thrifts, (including United) and eleven credit unions operated in the Evansville, Indiana metropolitan area. Many competitors are substantially larger or have significantly greater capital resources than United. Due to recently enacted

7

legislation to allow unlimited interstate branching, Fidelity and United may experience heightened competition from existing competitors and other major financial institutions seeking to expand their regional banking presence in Indiana.

SUPERVISION AND REGULATION

In addition to the general provisions discussed below, Fidelity and United were subject to the provisions of the Supervisory Agreement entered into with the OTS in February 1999, until terminated in October 2004. These provisions also impacted the operations of Fidelity and United until terminated. The footnote entitled "Other Restrictions" in the audited financial statements provides further details.

Regulation of the Company

Fidelity is a savings and loan holding company within the meaning of the Home Owners' Loan Act of 1933 ("HOLA"). Fidelity is registered with the Office of Thrift Supervision and is subject to OTS regulations, examinations, supervision and reporting requirements.

The Home Owners' Loan Act generally prohibits a savings and loan holding company, without prior approval of the OTS, from (i) acquiring control of any other savings association or savings and loan holding company; or (ii) acquiring more than 5% of the voting shares of a savings association or savings and loan holding company which is not a subsidiary. Except with the prior approval of the OTS, no director or officer of a savings and loan holding company or person owning or controlling more than 25% of such company's stock, may acquire control of any savings association, other than a subsidiary association, or any other savings and loan holding company.

Fidelity operates as a unitary savings and loan holding company. There are generally no restrictions on the activities of a unitary savings and loan holding company. However, if the OTS determines that there is reasonable cause to believe that an activity of a savings and loan holding company constitutes a serious risk to the financial safety, soundness, or stability of its subsidiary savings association, the OTS may impose restrictions it considers necessary to address such risk, which may include a limitation on the payment of dividends. If the savings association subsidiary of a unitary savings and loan holding company fails to meet the Qualified Thrift Lender Test ("QTL test"), as discussed below, then the holding company would be required to register as, and become subject to the activities restrictions applicable to, bank holding companies. If Fidelity were to acquire control of another savings association it would become a multiple savings and loan holding company. In general, the activities of Fidelity and any of its subsidiaries (other than United or other subsidiary savings associations) would be subject to further restrictions. The Home Owners' Loan Act generally provides that, among other things, no multiple savings and loan holding company or subsidiary which is not a savings association may engage in any business activity other than (i) furnishing or performing management services for a subsidiary savings association, (ii) conducting an insurance agency or escrow business, (iii) holding, managing or liquidating assets owned by or acquired from a subsidiary savings association,
(iv) holding or managing properties used or occupied by a subsidiary savings association, (v) acting as trustee under deeds of trust, (vi) those activities previously directly authorized by regulation as of March 5, 1987, to be engaged in by multiple savings and loan holding companies, or (vii) those activities authorized by regulation of the Board of Governors of the Federal Reserve System as permissible for bank holding companies, unless the OTS by regulation prohibits or limits such activities for savings and loan holding companies. Those activities described in (vii) above must also be approved by the OTS prior to being engaged in by a multiple savings and loan holding company.

No company may acquire control of an insured savings association after May 4, 1999, unless that company either (i) engages only in the financial activities permissible for a financial holding company or (ii) is a grandfathered, unitary savings and loan holding company. Generally, any company that was a unitary savings and loan holding company on May 4, 1999 is grandfathered. Such a company may continue to operate under present law as long as (i) the company continues to control only one savings institution or its successor (excluding supervisory acquisitions) that it controlled on May 4, 1999 and (ii) each controlled institution meets the qualified thrift lender test. Fidelity is a grandfathered unitary savings and loan holding company.

The OTS may also approve acquisitions resulting in the formation of a multiple savings and loan holding company which controls savings associations in more than one state. Generally, this may only occur if the state in which the association to be acquired is located specifically permits associations to be acquired by state-chartered associations or savings and loan holding companies located in the state where the acquiring entity is located or by a holding company that controls that state-chartered savings association.

8

Indiana law permits federal and state savings association holding companies with their home offices located outside of Indiana to acquire savings associations whose home offices are located in Indiana and savings and loan holding companies with their principal place of business in Indiana. Indiana savings and loan holding companies also may acquire savings associations with their home offices located outside of Indiana and savings association holding companies with their principal place of business located outside of Indiana.

Savings Bank Regulation

General. As a federally chartered, SAIF-insured savings association, United is subject to extensive regulation by the OTS and the FDIC. The OTS periodically examines the books and records of United and, in conjunction with the FDIC in certain situations, has examination and enforcement powers. This supervision and regulation are intended primarily for the protection of depositors and federal deposit insurance funds.

Qualified Thrift Lender Requirement. In order for United to exercise the powers granted to federally-chartered savings associations, it must be a "qualified thrift lender", or a "QTL". A savings association is a QTL if its qualified thrift investments equal or exceed 65% of the savings association's portfolio assets on a monthly basis in 9 out of every 12 months. Qualified thrift investments generally consist of (i) various housing related loans and investments (such as residential construction and mortgage loans, home improvement loans, manufactured housing loans, home equity loans and mortgage-backed securities), (ii) certain obligations of the FSLIC, the FDIC, the FSLIC Resolution Fund and the Resolution Trust Corporation (for limited periods), and (iii) shares of stock issued by any Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association. At December 31, 2004, the qualified thrift investment percentage test for United was 92.8%.

Loans-to-One-Borrower Limitations. The Home Owners' Loan Act generally requires savings associations to comply with the loans-to-one-borrower limitations applicable to national banks. In general, national banks may make loans to one borrower in amounts up to 15% of the bank's unimpaired capital and surplus, plus an additional 10% of capital and surplus for loans secured by readily marketable collateral. At December 31, 2004, United's loan-to-one-borrower limitation was approximately $3.3 million and no loans to a single borrower exceeded that amount, except as provided herein. Under certain conditions, a savings association may make loans to one borrower for residential housing developments in amounts up to 30% of the bank's unimpaired capital and surplus provided that all loans made in reliance upon the increased lending limit do not, in the aggregate, exceed 150% of the bank's unimpaired capital and surplus. At December 31, 2004, United had made $4.2 million such loans under this higher lending limit.

Commercial Real Property Loans. The Home Owners' Loan Act limits the aggregate amount of commercial real estate loans that a federal savings association may make to an amount not in excess of 400% of the savings association's capital.

Consumer Loans. The Home Owners' Loan Act limits the aggregate amount of consumer loans that a federal savings association may make to an amount not in excess of 35% of the savings association's total assets. At December 31, 2004, Consumer loans represented 20.9% of United's assets.

Limitation on Capital Distributions. Under OTS regulations, a savings association must file an application with the OTS for a capital distribution, including cash dividends, if (i) it is not eligible for expedited treatment of its application, (ii) the proposed capital distribution, plus all other capital distributions of the savings association during the calendar year, exceeds its net income for that year to date plus its retained net income for the preceding two years, (iii) it would not be at least adequately capitalized, as defined in the prompt corrective action regulations of the OTS, or (iv) the proposed distribution would be in violation of any applicable law, regulation, or agreement with the OTS. A savings association has no restrictions on capital distributions as long as, after the distribution, it is still classified as adequately capitalized. Although no application is required, a prior notice must be filed with the OTS if the savings association would not be well capitalized after the distribution, or if the savings association is a subsidiary of a savings and loan holding company.

Insurance of Deposits. The FDIC is an independent federal agency that insures the deposits, up to $100,000 per depositor subject to aggregation rules, of banks and thrifts and safeguards the safety and soundness of the banking and thrift industries. The FDIC administers two separate insurance funds, the Bank Insurance Fund (the "BIF") for commercial banks and state savings banks and the SAIF for savings associations such as United. The FDIC is required to maintain designated levels of reserves in each fund.

9

The FDIC is authorized to establish separate annual assessment rates for deposit insurance for members of the BIF and members of the SAIF. The FDIC has established a risk-based assessment system for both SAIF and BIF members. Under this system, assessments vary depending on the risk the institution poses to its deposit insurance fund. An institution's risk level is determined based on its capital level and the FDIC's level of supervisory concern about the institution.

Annual deposit insurance premiums range between $0.00 and $0.27 per $100 of deposits and are in effect, based on the assessment determined in accordance with the risk-assessment system discussed above.

The Financing Corporation ("FICO") assessment to service the interest on its bond obligations is separate from the SAIF assessment. As part of the deposit insurance assessments, institutions pay a FICO assessment for debt service requirements. The FICO assessment rate is subject to change on a quarterly basis, depending on the debt service requirements. In 2004, United paid $.004 per $100 of deposits to comply with this assessment. The total deposit insurance expense paid was $55,000, $51,000 and $57,000 for 2004, 2003 and 2002, respectively.

Commonly Controlled Banks and Savings Associations. Subject to certain exceptions, commonly controlled banks and savings associations must reimburse the FDIC for any losses suffered in connection with a failed bank or savings association affiliate. Institutions are commonly controlled if one is owned by another or if both are owned by the same holding company.

Community Reinvestment Act. Ratings of depository institutions under the Community Reinvestment Act of 1977 ("CRA") must be disclosed. The disclosure includes both a four-tier descriptive rating using terms such as "outstanding," "satisfactory," "needs to improve," or "substantial non-compliance" and a written evaluation of each institution's performance. United received a satisfactory rating from the OTS in its most recent CRA examination. Also, the Federal Housing Finance Board has adopted regulations establishing standards of community investment and service for members of the FHLB System to meet to be eligible for long-term advances. These regulations take into account a savings association's CRA record and the member's record of lending to first-time home buyers.

Brokered Deposits. Pursuant to the FDIC regulations, well-capitalized institutions are subject to no brokered deposits limitations, while adequately capitalized institutions are able to accept, renew or rollover brokered deposit only (i) with a waiver from the FDIC, and (ii) subject to certain restrictions on payment of rates. Undercapitalized institutions are not permitted to accept brokered deposits and may not solicit deposits by offering an effective yield that significantly exceeds the prevailing effective yields on insured deposits of comparable maturity in the institution's normal market area or in which such deposits are being solicited.

Enforcement. The OTS has primary enforcement responsibility over savings associations and has the authority to bring enforcement action against all "institution-affiliated parties," including stockholders, and any attorneys, appraisers and accountants who knowingly or recklessly participate in wrongful action likely to have an adverse effect on an insured institution. Civil penalties cover a wide range of violations and actions and range up to $25,000 per day unless a finding of reckless disregard is made, in which case penalties may be as high as $1 million per day. In addition, regulators are provided with flexibility to impose enforcement action on an institution that fails to comply with its regulatory requirements, particularly with respect to the capital requirements. Possible enforcement action ranges from the imposition of a capital directive to receivership, conservatorship or the termination of deposit insurance. The FDIC has the authority to recommend to the OTS that enforcement action to be taken with respect to a particular savings institution. If action is not taken by the OTS, the FDIC has authority to take such action under certain circumstances.

Standards for Safety and Soundness. The federal banking agencies have prescribed for all insured depository institutions safety and soundness standards in the form of guidelines, relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset quality and growth, earnings, and compensation, fees and benefits, and safekeeping customer information. If an insured depository institution fails to meet any of the standards described above, it will be required to submit to the appropriate federal banking agency a plan specifying the steps that will be taken to cure the deficiency. If an institution fails to submit an acceptable plan or fails to implement the plan, the appropriate federal banking agency will issue an order requiring the institution to take immediate steps to correct a safety and soundness deficiency.

Real Estate Lending Standards. OTS regulations require savings associations to establish and maintain written internal real estate lending policies. Each association's lending policies must be consistent with safe and sound banking practices and appropriate to the size of the association and the nature and scope of its operations. The policies must establish loan portfolio diversification standards; establish prudent underwriting standards, including loan-to-value limits that are clear and

10

measurable; establish loan administration procedures for the association's real estate portfolio; and establish documentation, approval, and reporting requirements to monitor compliance with the association's real estate lending policies. The association's written real estate lending policies must be reviewed and approved by the association's Board of Directors at least annually. Further, each association is expected to monitor conditions in its real estate market to ensure that its lending policies continue to be appropriate for current market conditions.

Prompt Corrective Regulatory Action. The Federal Deposit Insurance Act establishes a system of prompt corrective action to resolve the problems of undercapitalized institutions. Under this system, the banking regulators are required to take certain supervisory actions against undercapitalized institutions, the severity of which depends upon the institution's degree of capitalization.

Under the OTS prompt corrective action regulation, generally, a savings association that has a total risk-based capital of less than 8.0% or a tier 1 risk-based capital ratio or leverage ratio of less than 4.0% is considered to be undercapitalized. A savings association that has a total risk-based capital of less than 6.0%, a tier 1 risk-based capital ratio of less than 3%, or a leverage ratio that is less than 3.0% is considered to be "significantly undercapitalized" and a savings association that has a tangible capital to assets ratio equal to or less than 2% is deemed to be "critically undercapitalized." Generally, a capital restoration plan must be filed with the OTS within 45 days of the date an association receives notice that it is "undercapitalized," "significantly undercapitalized" or "critically undercapitalized". In addition, numerous mandatory supervisory actions become immediately applicable to the associations, including, but not limited to, restrictions on growth, investment activities, capital distributions, and affiliate transactions. The OTS could also take any one of a number of discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors.

Capital Requirements. The OTS has adopted capital standards under which savings associations must maintain (i) "core capital" in an amount not less than 3% of total adjusted assets for a savings association with a composite rating of 1, and not less than 4% for all other savings associations, (ii) "tangible capital" in an amount not less than 1.5% of total adjusted assets, and (iii) a level of risk-based capital equal to 8.0% of risk-weighted assets.

Under OTS regulations "core capital" includes common stockholders' equity, noncumulative perpetual preferred stock and related surplus, and minority interests in the equity accounts of consolidated subsidiaries, less nonqualifying intangible assets. In determining compliance with the capital standards, a savings association must deduct from capital its entire investment in and loans to any subsidiary engaged in activities not permissible for a national bank, other than subsidiaries (i) engaged in such non-permissible activities solely as agent for their customers; (ii) engaged in mortgage banking activities; or (iii) that are themselves savings associations or companies, the only investment of which is another savings association, acquired prior to May 1, 1989.

Capital requirements higher than the generally applicable minimum requirement may be established for a particular savings association if the OTS determines that the association's capital was or may become inadequate in view of its particular circumstances. Individual minimum capital requirements may be appropriate where the savings association is receiving special supervisory attention, has a high degree of exposure to interest rate risk, losses resulting in capital inadequacy, poor liquidity or cash flow, or poses other safety or soundness concerns.

In determining compliance with the risk-based capital requirements, a savings association must determine its interest rate risk and, if such risk exceeds a certain level, it must deduct an interest rate risk component in calculating its total capital for purposes of determining whether it meets its risk-based capital requirements. An association's interest rate risk (IRR) is measured by the decline in the net portfolio value resulting from a 200 basis point increase or decrease in market interest rates. If an association's measured IRR exposure exceeds 2%, it must then deduct an IRR component from total capital for determining its risk-based capital requirement.

Savings Bank's Subsidiaries. The OTS regulations permit federal savings associations to invest in the capital stock, obligations or specified types of securities of subsidiaries known as "service corporations" and as "operating subsidiaries". Operating subsidiaries may engage in any activity in which the savings association may engage. There is no limit as to the amount of the investment in an operating subsidiary. A service corporation may engage in certain specified activities. The savings association may make loans to a service corporation and joint ventures in which a service corporation is a participant in an aggregate amount not exceeding 3% of an association's assets, provided any investment over 2% is used for specified community or inner-city development purposes. The FDIC may, after consultation with the OTS, prohibit specific activities if it determines such activities pose a serious threat to SAIF.

11

Assessments. Savings associations are required by OTS regulation to pay assessments to the OTS to fund the operations of the OTS. The general assessment is computed upon the savings association's total assets, condition, and complexity of its operations, including consolidated subsidiaries, as reported in United's latest quarterly Thrift Financial Report. United's total assessment for the year ended December 31, 2004 was $74,000.

Acquisitions and Branching

The Bank Holding Company Act specifically authorizes a bank holding company, upon receipt of appropriate regulatory approvals, to acquire control of any savings association or holding company thereof wherever located. Similarly, a savings and loan holding company may acquire control of a bank. Moreover, federal savings associations may acquire or be acquired by any insured depository institution. Regulations promulgated by the Federal Reserve Board restrict the branching authority of savings associations acquired by bank holding companies.

The OTS has adopted regulations which permit nationwide branching to the extent permitted by federal statute. Federal statutes permit federal savings associations to branch outside of their home state if the association meets the domestic building and loan test in Section 7701(a)(19) of the Internal Revenue Code or the asset composition test of Section7701(c) of the Internal Revenue Code. Branching that would result in the formation of a multiple savings and loan holding company controlling savings associations in more than one state is permitted if the law of the state in which the savings association to be acquired is located specifically authorizes acquisitions of its state-chartered associations by state-chartered associations or their holding companies in the state where the acquiring association or holding company is located. Moreover, Indiana banks and savings associations are permitted to acquire other Indiana banks and savings associations and to establish branches throughout Indiana.

Transactions with Affiliates

Pursuant to the Home Owners' Loan Act, transactions engaged in by a savings association or one of its subsidiaries with affiliates of the savings association generally are subject to the affiliate transaction restrictions contained in Sections 23A and 23B of the Federal Reserve Act and Regulation W in the same manner and to the same extent as such restrictions now apply to transactions engaged in by a member bank or one of its subsidiaries with affiliates of the member bank. Section 23A of the Federal Reserve Act imposes both quantitative and qualitative restrictions on transactions engaged in by a member bank or one of its subsidiaries with an affiliate, while Section 23B of the Federal Reserve Act requires, among other things, that all transactions with affiliates be on terms substantially the same, and at least as favorable to the member bank or its subsidiary, as the terms that would apply to or would be offered in a comparable transaction with an unaffiliated party. Loans to executive officers, directors, and principal shareholders must comply with
Section 22(h) of the Federal Reserve Act, which requires these loans be made on terms substantially the same as offered in comparable transactions to other persons. United was in compliance with these rules at December 31, 2004.

Federal Home Loan Bank System

United is a member of the Federal Home Loan Bank of Indianapolis. The Federal Home Loan Bank System consists of 12 regional Federal Home Loan Banks ("FHLBs"), each subject to supervision and regulation by the Federal Housing Finance Board (the "FHFB"). The FHLBs provide a central credit facility for members. As a member of the FHLB of Indianapolis, United is required to own shares of capital stock in the FHLB in an amount at least equal to 1% of the aggregate principal amount of its unpaid residential mortgage loans, home purchase contracts, and similar obligations at the beginning of each year, or 1/20 of its advances (borrowings) from the FHLB, whichever is greater. As of December 31, 2004, United was in compliance with this requirement.

Check Clearing for the 21st Century Act.

Effective October 28, 2004, the Federal Reserve adopted final amendments to Regulation CC and its commentary to implement the Check Clearing for the 21st Century Act (the "Check 21 Act"). The Check 21 Act was enacted on October 28, 2003 and became effective on October 28, 2004.

To facilitate check truncation and electronic check exchange, the Check 21 Act authorizes a new negotiable instrument called a "substitute check" and provides that a properly prepared substitute check is the legal equivalent of the original check for all purposes. A substitute check is a paper reproduction of the original check that can be processed just like the

12

original check. The Check 21 Act does not require any bank to create substitute checks or to accept checks electronically. The Federal Reserve's amendments: (i) set forth the requirements of the Check 21 Act that apply to all banks, including those that choose not to create substitute checks; (ii) provide a model disclosure and model notices relating to substitute checks; and (ii) set forth bank endorsement and identification requirements for substitute checks. The amendments also clarify some existing provisions of the rule and commentary.

USA Patriot Act

The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA Patriot Act") is intended to strengthen the ability of U. S. Law Enforcement to combat terrorism on a variety of fronts. The potential impact of the USA Patriot Act on financial institutions is significant and wide-ranging. The USA Patriot Act contains sweeping anti-money laundering and financial transparency laws and requires financial institutions to implement additional policies and procedures with respect to, or additional measures designed to address, any or all of the following matters, among others: money laundering, suspicious activities and currency transaction reporting; and currency crimes.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") represents a comprehensive revision of laws affecting corporate governance, accounting obligations and corporate reporting. Among other requirements, the Sarbanes-Oxley Act established: (i) new requirements for audit committees of public companies, including independence, expertise, and responsibilities; (ii) additional responsibilities regarding financial statements for the chief executive officers and chief financial officers of reporting companies; (iii) new standards for auditors and regulation of audits; (iv) increased disclosure and reporting obligations for reporting companies regarding various matters relating to corporate governance, and (v) new and increased civil and criminal penalties for violation of the securities laws.

Other Laws and Regulations

Federal law extensively regulates other various aspects of the banking business such as reserve requirements. Current federal law also requires financial institutions, among other things, to make deposited funds available within specified time periods. In addition, with certain exceptions, a financial institution and a subsidiary may not extend credit, lease or sell property or furnish any services or fix or vary the consideration for the foregoing on the condition that (i) the customer must obtain or provide some additional credit, property or services from, or to, any of them, or (ii) the customer may not obtain some other credit, property or service from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of credit extended.

Interest and other charges collected or contracted for by United are subject to state usury laws and federal laws concerning interest rates. United's loan operations are also subject to federal laws applicable to credit transactions, such as the:

o Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
o Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;
o Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;
o Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;
o Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and
o rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.

The deposit operations of United also are subject to the:

o Customer Information Security Guidelines. The federal bank regulatory agencies have adopted final guidelines (the "Guidelines") for safeguarding confidential customer information. The Guidelines require each financial institution,

13

under the supervision and ongoing oversight of its Board of Directors, to create a comprehensive written information security program designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazards to the security or integrity of such information; and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.

o Electronic Funds Transfer Act, and Regulation E. The Electronic Funds Transfer Act, which is implemented by Regulation E, governs automatic deposits to and withdrawals from deposit accounts and customers' rights and liabilities arising from the use of automated teller machines and other electronic banking service.

Additional legislation and administrative actions affecting the banking industry is often considered by Congress, state legislatures and various regulatory agencies. It cannot be predicted with certainty whether such legislation or administrative action will be enacted or the extent to which the banking industry in general or Fidelity and United in particular would be affected.

Effect of Governmental Monetary Policies

Our earnings are affected by domestic economic conditions and the monetary and fiscal policies of the United States government and its agencies. The Federal Reserve Bank's monetary policies have had, and are likely to continue to have, an important impact on the operating results of commercial banks through its power to implement national monetary policy in order, among other things, to curb inflation or combat a recession. The monetary policies of the Federal Reserve Board have major effects upon the levels of bank loans, investments and deposits through its open market operations in United States government securities and through its regulation of the discount rate on borrowings of member banks and the reserve requirements against member bank deposits. It is not possible to predict the nature or impact of future changes in monetary and fiscal policies.

ITEM 2. PROPERTIES

Fidelity, through United, currently operates its business from its home office in Evansville and from four additional locations in Vanderburgh and Warrick Counties, Indiana. The following table sets forth the location of Fidelity's savings bank offices, which are all owned by United, as well as certain additional information relating to these offices as of December 31, 2004.


          Office Location    Year Facility Opened        Net Book Value
-------------------------------------------------------------------------
Home Office                          1974                $800,000
18 NW Fourth Street
Evansville, IN  47708
-------------------------------------------------------------------------
Eastside Branch                      1997               1,544,000
700 S. Green River Rd
Evansville, IN  47715
-------------------------------------------------------------------------
Northside Branch                     1976                  81,000
4441 First Avenue
Evansville, IN  47710
-------------------------------------------------------------------------
Westside Branch                      1979                  69,000
4801 W. Lloyd Expressway
Evansville, IN  47712
-------------------------------------------------------------------------
Bell Oaks Branch                     2001                 456,000
8533 Bell Oaks Drive
Newburgh, IN  47630
-------------------------------------------------------------------------

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordinary routine litigation incidental to the Registrant's business, to which the Registrant or its subsidiaries is a party or of which any of their property is the subject.

14

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Registrant's security holders during the fourth quarter of the year ended December 31, 2004.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The discussion concerning the market for the registrant's common equity and related shareholder matters and cash dividends by quarter for the current and previous year appears under the heading "Market Summary" and "Quarterly Results of Operations" included in Fidelity's 2004 Annual Report to Shareholders on page 3 and 31 respectively, and is incorporated herein by reference. As of February 28, 2005, Fidelity had 419 shareholders of record. Two shares of common stock were repurchased in 2004 as a result of fractional shares paid out to shareholders exiting Fidelity's dividend reinvestment plan.

ITEM 6. SELECTED FINANCIAL DATA

Selected Financial Data and other data included in Fidelity's 2004 Annual Report to Shareholders on page 4 are incorporated herein by reference.

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

Management's Discussion and Analysis of Financial Condition and Results of Operation included in Fidelity's 2004 Annual Report to Shareholders on pages 5 through 31 is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The discussion concerning quantitative and qualitative disclosures about market risk appears under the heading "Asset/Liability Management" included in Fidelity's 2004 Annual Report to Shareholders on pages 21 and 22 and is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements and Supplementary Data included in Fidelity's 2004 Annual Report to Shareholders on page 31 and is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. Fidelity's Principal Executive Officer and Principal Financial Officer have concluded that Fidelity's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), based on their evaluation of these controls and procedures as of the end of the period covered by this Form 10-K, are effective.

(b) Changes in Internal Controls. There have been no changes in Fidelity's internal controls over financial reporting or in other factors that occurred during Fidelity's fourth fiscal quarter of 2004 that has materially affected, or is reasonably likely to materially affect, Fidelity's internal control over financial reporting.

15

Limitations of the Effectiveness of Controls. Fidelity's management, including its Principal Executive Officer and Principal Financial Officer, does not expect that Fidelity's disclosure controls and procedures and other internal controls will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Fidelity have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

ITEM 9B. OTHER INFORMATION

Not Applicable

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT INFORMATION CONCERNING NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS

The following sets forth information as to each current Director and each nominees and each executive officer. Each Director serves for a term of one year and until his successor is duly elected and qualified. Each individual's service with Fidelity began at the formation of Fidelity in 1993, unless otherwise noted.

PAUL E. BECKER

Mr. Becker, 46 years of age, is a Director of Fidelity and a member of the Audit Committee. He is President of Gaither Technologies STC of Evansville, which designs, installs and maintains data systems and advanced telephone systems. Mr. Becker joined the Board in 2001.

BRUCE A. CORDINGLEY

Mr. Cordingley, 58 years of age, is a Director of Fidelity and served as Chairman of the Board of Directors from October 1994 until April 1998, and served as Chief Executive Officer of Fidelity from June 1995 to March 1996. He continues to serve as a Director of Fidelity and as Chairman of the Company's Executive Committee and in the other positions discussed below.

Except for the period from December 27, 1999 through May 18, 2000, Mr. Cordingley has been a Director of United since 1992. Mr. Cordingley is President of Pedcor Investments, a limited liability company, located in Indianapolis, Indiana, the principal business of which is real estate-oriented investment and development. In 1997 he became President of Pedcor Bancorp, the holding company of International City Bank, N.A., Long Beach, California. He is also a Director of International City Bank, N.A. Mr. Cordingley is an attorney and was a partner in the law firm of Ice, Miller, Donadio and Ryan in Indianapolis, Indiana from 1973 to February 1992.

JACK CUNNINGHAM

Mr. Cunningham, 74 years of age, is a Director of Fidelity and serves as Chairman of Fidelity and United since April 1998. Mr. Cunningham serves as Secretary of Fidelity and United. He served as President of Fidelity from May 1994 through October 1994 and as President of United from May 1994 through December 1994. Mr. Cunningham again served as

16

President and CEO of United from March 1997 until January 1998. Mr. Cunningham has been a Director of United since 1985 and an officer of United since 1974.

MICHAEL A. ELLIOTT

Mr. Elliott, 46 years of age, a CPA was named to the board of directors of Fidelity and United, effective January 21, 2004. Mr. Elliott also serves as Chairman of the Audit Committee. Mr. Elliott has served as Chief Financial Officer and Treasurer of Anchor Industries, Inc. since 1997. Prior to joining Anchor, Mr. Elliott was a manager with Geo. S. Olive and Co. LLC.

DONALD R. NEEL

Mr. Neel, 41 years of age, is a Director of Fidelity and also serves as its President and CEO. He previously served as Fidelity's Chief Financial Officer from 1993 to September 2002. Mr. Neel has served as President since October 2001 and CEO since October 2002. Mr. Neel also has served as President and Chief Executive Officer of United since July 2000.

GERALD K. PEDIGO

Mr. Pedigo, 67 years of age, is a Director of Fidelity and has served as a member of the Executive Committee since his election to the Board in May 2000. He has been Chairman of Pedcor Investments, a limited liability company, since 1987. In 1997 he became he became Chairman of Pedcor Bancorp, the holding company of International City Bank, Long Beach, California. He is also a Director of International City Bank, N.A.

BARRY A. SCHNAKENBURG

Mr. Schnakenburg, 57 years of age, is a Director of Fidelity and a member of the Audit Committee and has served as a Director of United since 1990. Mr. Schnakenburg has served as the President of U.S. Industries Group, Inc. for the past 11 years. U.S. Industries Group, Inc. is a building contractor located in Evansville, Indiana.

PHILLIP J. STOFFREGEN

Mr. Stoffregen, 46 years of age, is a Director of Fidelity and has served as a member of the Executive Committee since his election to the Board in May 2000. Mr. Stoffregen was an associate and then a partner with the law firm Ice, Miller, Donadio and Ryan in Indianapolis from 1984 to 1992. Since 1992, Mr. Stoffregen has served as Executive Vice President of Pedcor Investments where he is responsible for development and financing matters. He also was a director of Martin Luther King Community Development Corporation from 1991 to 1997 and from 1998 to present.

MARK A. ISAAC

Mr. Isaac, 40 years of age, is the Vice President and Chief Financial Officer of Fidelity. He assumed the responsibilities of Chief Financial Officer in September 2002. Prior to that time, he served as the Vice President and Controller of Fidelity. He has served as Senior Vice President and Chief Financial Officer of United since July 2000 to present.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires Fidelity's directors and executive officers, and persons who own more than 10% of a registered class of Fidelity's equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of Fidelity common stock and other equity securities of Fidelity. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish Fidelity with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to Fidelity, to the best knowledge of Fidelity during its most recent fiscal year all officers, directors and greater than 10% beneficial owners of Fidelity timely filed all reports required by Section 16(a) of the Securities Exchange Act.

The 2004 Annual Report to Shareholders, containing financial statements for the year ended December 31, 2004, and other information concerning the operations of Fidelity is enclosed herewith, but is not to be regarded as proxy soliciting material.

17

REPORT OF THE AUDIT COMMITTEE

The members of the Audit Committee for 2004 include Chairman Michael A. Elliott, Paul E. Becker and Barry A. Schnakenburg. All members of our Audit Committee are independent under the definition of independence set out in the NASD listing standards. The Board of Directors has determined that Chairman Michael A. Elliott is an "audit committee financial expert" as defined in Item 401(h) of SEC Regulation S-K. The Audit Committee held five meetings during 2004.

The Audit Committee, among other things, is directly responsible for the selection, oversight and compensation of our independent public accountants. It is also responsible for meeting with the independent auditors and the appropriate corporate officers to review matters relating to corporate financial reporting and accounting procedures and policies, the adequacy of financial, accounting and operating controls, and the scope of the audits of our independent auditors and our internal auditors. In addition, the Audit Committee is responsible for reviewing and reporting the results of each audit and making recommendations it may have to the board of directors with respect to financial reporting and accounting practices, policies, controls and safeguards. The Audit committee has adopted a written charter, a copy of which was included with the proxy statement for our 2003 annual meeting of shareholders.

Code of Ethics

Upon written request, Fidelity Federal Bancorp will provide without charge to each shareholder a copy of Fidelity's annual report on Form 10-K which is required to be filed with the Securities and Exchange Commission for the year ended December 31, 2004, and a copy of Fidelity's Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. All requests should be addressed to:

John Stewart, Shareholder Relations Fidelity Federal Bancorp 18 NW Fourth Street PO Box 1347 Evansville, Indiana 47706-1347

ITEM 11. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Five-Year Total Shareholder Return

The following indexed graph indicates Fidelity's total return to its shareholders on its common stock for the past five years, assuming dividend reinvestment, as compared to total return for the NASDAQ Market Index and the Peer Group Index (which is a line-of-business index prepared by an independent third party consisting of savings and loan holding companies or federally chartered savings institutions with the same SIC number as Fidelity and which have been publicly traded for at least six years). The comparison of total return on investment for each of the periods assumes that $100 was invested on January 1, 2000, in each of Fidelity, the NASDAQ Market Index, and the Peer Group Index.

18

[PREFORMANCE CHART APPEARS HERE]

                    1999    2000    2001    2002    2003    2004
------------------------------------------------------------------
Fidelity Federal   100.00  110.00  195.20  120.00  126.40  148.80
------------------------------------------------------------------
SIC Code Index     100.00  154.96  168.65  202.72  295.72  336.19
------------------------------------------------------------------
NASDAQ
Market Index       100.00   62.85   50.10   34.95   52.55   56.97
------------------------------------------------------------------

Compensation Committee Report

Decisions on compensation of Fidelity's executives are made by the Executive Committee of the Board of Directors of Fidelity, which also serves as the Compensation Committee. All decisions of the Executive Committee relating to the compensation of Fidelity's officers are reviewed by the full Board of Directors. Set forth below is a report submitted by Messrs. Cordingley, Schnakenburg, and Stoffregen, in their capacity as the Board's Executive Committee, addressing Fidelity's compensation policies for the year ended December 31, 2004 as they affected Fidelity's executive officers.

Compensation Policies Toward Executive Officers.

The Executive Committee's executive compensation policies are designed to provide competitive levels of compensation to the executive officers and to reward officers for satisfactory individual performance and for satisfactory

19

performance of Fidelity as a whole. There are no established goals or standards relating to performance of Fidelity which have been utilized in setting compensation of individual employees.

Base Salary.

Each executive officer is reviewed individually by the Executive Committee, which includes an analysis of the performance of Fidelity. In addition, the review includes, among other things, an analysis of the individual's performance during the past fiscal year, focusing primarily upon the following aspects of the individual's job or characteristics of the individual exhibited during the most recent fiscal year: quality and quantity of work; supervisory skills; dependability; initiative; attendance; overall skill level; and overall value to Fidelity.

Other Compensation Plans.

At various times in the past Fidelity has adopted certain broad based employee benefit plans in which the senior executives are permitted to participate on the same terms as non-executive employees who meet applicable eligibility criteria, subject to any legal limitations on the amount that may be contributed or the benefits that may be payable under the plans.

Benefits.

Fidelity provides medical, defined benefit, and defined contribution plans to the senior executives that are generally available to the other Fidelity employees. As of January 1, 2004 the defined benefit plan was frozen. The amount of perquisites, as determined in accordance with the rules of the SEC relating to executive compensation, did not exceed 10% of salary and bonus for year 2004.

Mr. Neel's 2004 Compensation.

Regulations of the Securities and Exchange Commission require that the Executive Committee disclose the Committee's basis for compensation reported for any individual who served as the Chief Executive Officer during the last fiscal year. Mr. Neel's salary was determined in the same manner as discussed above for other senior executives. Mr. Neel has served as CEO of Fidelity from October 2002 to present.

Current Members of the Executive Committee:

Bruce A. Cordingley (Chairman)
Barry A. Schnakenburg
Phillip J. Stoffregen

Compensation Committee Interlocks and Insider Participation

During the past fiscal year, no executive officer served on the Executive Committee, which serves as the Compensation Committee. No executive officer participated in any discussion or voting with respect to his respective salary as an executive officer and was not present in the room during the discussion by the Executive Committee of his respective compensation.

20

Summary Compensation Table

The following table sets forth, for the 12 months ended December 31, 2004, 2003, and 2002, the cash compensation paid by Fidelity or its subsidiaries, as well as certain other compensation paid or awarded during those years, to the Chief Executive Officer of Fidelity at any time during the year ended December 31, 2004 and any executive officers of Fidelity or United whose salary and bonus exceeded $100,000 during the year ended December 31, 2004.

--------------------------------------------------------------------------------------------------
                           Annual Compensation                         Long-Term Compensation
--------------------------------------------------------------------------------------------------
                                                                    Securities
Name and Principal                                Other Annual      Underlying       All Other
    Position          Year     Salary    Bonus   Compensation (1)  Options/SARs   Compensation (2)
--------------------------------------------------------------------------------------------------
Donald R. Neel,     12/31/04  $195,000  $18,500         0                833           1,792
President, CEO
and Director
--------------------------------------------------------------------------------------------------
                    12/31/03  $184,385     0            0                  0          $1,850
--------------------------------------------------------------------------------------------------
                    12/31/02  $180,318     0            0              2,083          $1,804
--------------------------------------------------------------------------------------------------

(1) While officers enjoy certain perquisites, such perquisites do not exceed the lesser of $50,000 or 10% of such officer's salary and bonus and are not required to be disclosed by applicable rules of the SEC.

(2) Consists of contributions by Fidelity under Fidelity's Retirement Savings
401(k) Plan.

1993 Directors' Stock Option Plan

The 1993 Directors' Stock Option Plan ("Directors' Plan") which provided for the grant of non-qualified stock options to individuals who are directors of Fidelity or any of its subsidiaries to acquire shares of common stock of Fidelity for a price of not less than $2 above the average of the high and low bid quotations as reported by NASDAQ for the common stock of Fidelity for the five trading days immediately preceding the date the option is granted. The plan has expired, however as of March 1, 2005 there were options for 9,895 shares outstanding.

1995 Key Employees' Stock Option Plan

The Key Employees' Plan provides for the grant of incentive stock options and non-qualified stock options to acquire shares of common stock of Fidelity for a price of not less than the fair market value of the share on the date which the option is granted. A total of 19,708 shares were reserved for issuance under the Key Employees Plan. The option price per share for each incentive stock option granted to an employee must not be less than the fair market value of the share of common stock on the date the option is granted. The option price per share for an incentive stock option granted to an employee owning 10% or more of the common stock of Fidelity must not be less than 110% of the fair market value of the share on the date that the option is granted. The option price per share for non-qualified stock options will be determined by the Administrative Committee of the Key Employees' Plan, but may not be less than 100% of the fair market value of a share of common stock on the date of the grant of the option.

The Key Employees' Plan expired on March 15, 2005, except outstanding options will remain in effect until they have been exercised, terminated, forfeited, or have expired. As such, options may be outstanding under the Key Employees' Plan through March 15, 2015. As of March 1, 2005 there were options for 14,244 shares outstanding.

Options Grants in Last Fiscal Year

The following table provides details regarding stock options granted to Mr. Neel in 2004. In addition, in accordance with the rules of the Securities and Exchange Commission, there are shown the hypothetical gains or "options spreads" that would exist for respective options. These gains are based on assumed rates of annual compound stock price appreciation of five percent (5%) and ten percent (10%) from the date the options were granted over the full option term. Gains are

21

reported net of the option exercise price, but before any effect of taxes. In assessing these values, it should be kept in mind that no matter what value is placed on a stock option on the date of grant, its ultimate value will be dependent on the market value of Fidelity's stock at a future date, and that value would depend on the efforts of such executive to foster the future success of Fidelity for the benefit of all shareholders. The amounts reflected in the table may not necessarily be achieved. The shares and exercise price have been adjusted for the reverse and forward stock splits at March 1, 2005.

---------------------------------------------------------------------------------------------------------------------
                                 Percent of
                                   total
                   Number of      options                       Market
                    Shares       granted to                    Price on                   Potential Realizable Value
                  Underlying     employees     Exercise or     Date of                     at Assumed Rates of Stock
                    Options      in Fiscal     Base Price       Grant       Expiration      Price Appreciation for
     Name           Granted       Year (%)      ($/Share)     ($/Share)        Date               Option Term
---------------------------------------------------------------------------------------------------------------------
                                                                                             5% ($)        10% ($)
---------------------------------------------------------------------------------------------------------------------
Donald R. Neel        833           44.4          18.90         18.90         1/21/14         9,905         25,101
---------------------------------------------------------------------------------------------------------------------

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values Table

The following table shows for the named executive officer the shares covered by both exercisable and non-exercisable stock options as of December 31, 2004. Mr. Neel did not exercise any options during 2004. The shares and exercise price have been adjusted for the reverse and forward stock splits at March 1, 2005.

--------------------------------------------------------------------------------------------------------------------
                              Number of Unexercised Stock Options       Value of Unexercised In-the-Money Options
                                            12/31/04                                   at 12/31/04
--------------------------------------------------------------------------------------------------------------------
          Name                Exercisable           Unexercisable           Exercisable           Unexersiable
--------------------------------------------------------------------------------------------------------------------
Donald R. Neel                    625                     0                   N/A (1)                  N/A
--------------------------------------------------------------------------------------------------------------------
                                  494                     0                   N/A (2)                  N/A
--------------------------------------------------------------------------------------------------------------------
                                 2,083                    0                   N/A (3)                  N/A
--------------------------------------------------------------------------------------------------------------------
                                 1,250                    0                   $4,950                    0
--------------------------------------------------------------------------------------------------------------------
                                 1,250                   833                  N/A (4)                  N/A
--------------------------------------------------------------------------------------------------------------------
                                  167                    666                   $570                  $2,280
--------------------------------------------------------------------------------------------------------------------

(1) The bid price of Fidelity's Common Stock at December 31, 2004 ($22.32 per share) was less than the exercise price ($129.72 per share).

(2) The bid price of Fidelity's Common Stock at December 31, 2004 ($22.32 per share) was less than the exercise price ($34.56 per share).

(3) The bid price of Fidelity's Common Stock at December 31, 2004 ($22.32 per share) was less than the exercise price ($48.00 per share).

(4) The bid price of Fidelity's Common Stock at December 31, 2004 ($22.32 per share) was less than the exercise price ($38.04 per share).

22

Other Employee Benefit Plans

Pension Plan

Fidelity participated in a defined benefit pension plan sponsored by the Financial Institutions Retirement Fund, a non-profit, tax qualified, tax-exempt pension plan and trust in which Federal Home Loan Banks, savings and loan associations and similar institutions participate ("Pension Plan"). Effective January 1, 2004 the annual benefit provided under the Pension Plan was amended to freeze the plan. As a result the annual retirement benefit payable to a participant at age 65 will not increase after January 1, 2004. In addition, no new employees shall become a participant in the plan after January 1, 2004. All employees of Fidelity or its subsidiaries who work a minimum of 1,000 hours per year were covered by the Pension Plan and become active participants upon completion of one year of service and attainment of age 21. Participants are not required or allowed to make contributions to the Pension Plan.

A participant in the Pension Plan is entitled to receive benefits based upon years of service for Fidelity or its subsidiaries and a percentage of the individual's career average annual salary, without deduction for Social Security benefits up to the date the Pension Plan was frozen. For purposes of computing benefits, "salary" includes an employee's regular base salary or wage inclusive of bonuses and overtime but is exclusive of special payments such as fees, deferred compensation, severance payments and contributions by Fidelity to the Pension Plan.

Participants become fully vested in their benefits after completion of five (5) years of service. Upon attaining age sixty-five (65), participants become one hundred percent (100%) vested in their benefits provided by Fidelity under the Pension Plan, regardless of years of service. Benefits are payable at normal retirement age (age 65). The Pension Plan also contains provisions for the payment of benefits on the early retirement, late retirement or death of a participant.

The regular benefit under the Pension Plan to be paid on a participant's retirement is a monthly pension for the life of a participant with minimum guaranteed benefit. The Pension Plan provides that married participants will receive the regular retirement benefit in the form of an actuarially equivalent joint and survivor annuity. Optional forms of payments are available to all participants; however, married participants must obtain written spousal consent to the distribution of benefits in a form other than a joint and survivor annuity.

No contributions were made to the Pension Plan by Fidelity in 2004 or 2003.

Annual Benefit at Normal Retirement

--------------------------------------------------------------------------------------------------------------------
Career Average                                               Years of Service
Salary
--------------------------------------------------------------------------------------------------------------------

                         10 years      15 years     20 years     25 years     30 years     35 years     40 years
--------------------------------------------------------------------------------------------------------------------
      $ 100,000            5,000         7,500       10,000       12,500       15,000       17,500       20,000
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
      $ 125,000            6,250         9,375       12,500       15,625       18,750       21,875       25,000
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
      $ 150,000            7,500        11,250       15,000       18,750       22,500       26,250       30,000
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
      $ 175,000            8,750        13,125       17,500       21,875       26,250       30,625       35,000
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
      $ 200,000           10,000        15,000       20,000       25,000       30,000       35,000       40,000
--------------------------------------------------------------------------------------------------------------------

The table set forth above shows estimated annual benefits payable at normal retirement to persons in specified remuneration classifications. The benefit amounts presented in the totals are annual pension amounts for the life of the participant, with a minimum guaranteed benefit of ten (10) years, for a participant at normal retirement (age 65) with the years of service set forth below with no deduction for Social Security or other offset amounts. The maximum compensation which may be taken into account for any purpose under the Pension Plan is limited by the Internal Revenue Code to $165,000 for 2004. As of December 31, 2004, Donald R. Neel had eleven years of service under the Pension Plan.

23

Retirement Savings Plan.

In 1994 Fidelity adopted a defined contribution plan under Internal Revenue Code Section 401(k) in which substantially all employees may participate. Under this plan, employees may contribute up to 15% of pay, and contributions up to 6% are supplemented by Fidelity contributions. Fidelity contributions are made at the rate of $0.25 for each dollar contributed by the participant. Participants may elect to have all or a portion of their contributions made on a tax-deferred basis pursuant to provisions in the plan meeting the requirements of Section 401(k) of the Internal Revenue Code. Fidelity's expense for the plan was $19,000 for the year ended December 31, 2004.

Compensation of Directors

The Directors of Fidelity and United were compensated for their services in each capacity in the amount of $200 for each company Board served per month in the amount of $400 or $4,800 per year. The five Directors of United for the twelve months ended December 31, 2004 were also Directors of Fidelity. Executive Committee members receive an additional $100 per month for their services. The maximum compensation received by any Director for his service on the Board was $8,200 for the year ended December 31, 2004. Directors who are also salaried employees receive no director fees.

Employment Contracts

Mr. Neel entered into an Employment Agreement with Fidelity in May 2000. The term of the Employment Agreement is 3 years, which may be extended annually for successive 1 year periods. Mr. Neel's Employment Agreement was extended another year to May 2005. Effective May 19, 2000 Mr. Neel shall earn an annual base salary of not less than $140,000. If during the one year period following a prospective change in control, as defined in the Employment Agreement, he is terminated for any reason other than cause, disability, retirement or death, or if he resigns due to a material breach of the Employment Agreement by Fidelity, he is entitled to an amount equal to 2.99 times his average annual base salary and bonus for the previous five (5) years. In addition, Fidelity must maintain for three years following termination all employee welfare plans and programs in which he was entitled to participate prior to termination, and reimburse him for the cost of obtaining such benefits for the first 24 months following termination. If Mr. Neel is terminated for any reason other than cause, disability, retirement or death, or if he resigns due to a material breach of the Employment Agreement by Fidelity, and such termination or resignation does not follow a change in control, he is entitled to an amount equal to his base salary during the remaining term of the Employment Agreement. In addition, Fidelity must maintain for the remainder of the term of the Employment Agreement all employee welfare plans and programs in which he was entitled to participate prior to termination, and reimburse him for the cost of obtaining such benefits. No payments may be made pursuant to the Employment Agreement if the payments would, among other things, be considered by a federal or state regulatory authority having jurisdiction over Fidelity an unsafe or unsound practice. The Employment Agreements also provide a 3-year covenant not to compete and covenants regarding confidentiality.

24

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

Beneficial Ownership
The following table sets forth information regarding the beneficial ownership of Fidelity's common stock as of March 1, 2005 by the only shareholders known by Fidelity to beneficially own 5% or more of the issued and outstanding shares of common stock of Fidelity. The share information and percent of class take into consideration the reverse and forward stock splits and fractional shares cashed out at March 1, 2005.

------------------------------------------------------------------------------
             Name and Address of     Amount and Nature of     Percent of Class
               Beneficial Owner    Beneficial Ownership (1)
------------------------------------------------------------------------------
Bruce A. Cordingley                      679,940 (2)               83.95%
Gerald K. Pedigo
Phillip J. Stoffregen
770 3rd Avenue Southwest
Carmel, IN  46032
------------------------------------------------------------------------------
M. Brian Davis                            61,660 (3)               7.86%
7731 Newburgh Road
Evansville, IN  47715
------------------------------------------------------------------------------

(1) This information is based on Schedule 13D and 13G Reports filed by the beneficial owner with the Securities and Exchange Commission (the "SEC") pursuant to applicable provisions of the Securities Exchange Act of 1934 ("Exchange Act"), as of March 1, 2005, and any other information provided to Fidelity by the beneficial owner. It does not reflect any changes in those shareholdings which may have occurred since that date. Beneficial ownership is direct except as otherwise indicated by footnote.

(2) This amount represents shares beneficially owned by Messrs. Cordingley, Pedigo and Stoffregen and Pedcor Holdings, LLC, and Pedcor Bancorp, which have filed a Schedule 13D with the Securities and Exchange Commission as a "group." Each of these individuals and entities have expressly disclaimed beneficial ownership with respect to shares of common stock covered by the Schedule 13D not owned by him or it of record. These shares consist of (i) 1,383 shares which Mr. Cordingley has the right to acquire upon exercise of stock options granted under Fidelity's 1993 Director's Stock Option Plan; 817 shares which Mr. Pedigo has the right to acquire upon exercise of stock options granted under Fidelity's 1993 Director's Stock Option Plan; and 967 shares which Mr. Stoffregen has the right to acquire pursuant to stock options granted from Fidelity's 1993 Director's Stock Option Plan. (i) 642,500 shares owned by Pedcor Financial, LLC, (of which Mr. Cordingley is the President and CEO and 32.2% owner, Mr. Pedigo is the Chairman and 32.2% owner and Mr. Stoffregen is a Executive Vice President and 32.2% owner);
(ii) 32,218 shares and 2,055 shares which Pedcor Financial, LLC (formerly Pedcor Holdings, LLC) and Pedcor Bancorp, respectively, have the right to acquire upon exercise of warrants.

(3) Includes 11,660 shares which Mr. Davis has the right to acquire pursuant to the exercise of stock options.

25

Security Ownership of Management

The following table sets forth certain information as of March 1, 2005, with respect to the common stock of Fidelity beneficially owned by each Director of Fidelity and by all executive officers and directors as a group. The share information and percent of class take into consideration the reverse and forward stock splits and fractional shares cashed out at March 1, 2005.

--------------------------------------------------------------------------------
                                         Number of Shares
Name                                    Beneficially Owned  Percent of Class (1)
--------------------------------------------------------------------------------
Bruce A. Cordingley (2)                       679,940               83.95%
Gerald K. Pedigo (2)
Phillip J. Stoffregen (2)
--------------------------------------------------------------------------------
Paul E. Becker (3)                                833                0.11%
--------------------------------------------------------------------------------
Jack Cunningham (4)                             5,306                0.68%
--------------------------------------------------------------------------------
Donald R. Neel (5)                             12,369                1.59%
--------------------------------------------------------------------------------
Barry A. Schnakenburg (6)                       5,008                0.65%
--------------------------------------------------------------------------------
All Executive Officers and Directors as
a Group (9) Persons) (7) (8)                  704,540               85.45%
--------------------------------------------------------------------------------

(1) The information contained in this column is based upon information furnished to Fidelity as of February 28, 2005, by the individuals named above. The nature of beneficial ownership for shares shown in this column represents sole voting and investment power unless otherwise noted. At March 1, 2005, Fidelity had 772,500 shares of common stock outstanding.

(2) This amount represents shares beneficially owned by Messrs. Cordingley, Pedigo and Stoffregen and Pedcor Holdings, LLC, and Pedcor Bancorp, which have filed a Schedule 13D with the Securities and Exchange Commission as a "group." Each of these individuals and entities have expressly disclaimed beneficial ownership with respect to shares of common stock covered by the Schedule 13D not owned by him or it of record. These shares consist of (i) 1,383 shares which Mr. Cordingley has the right to acquire upon exercise of stock options granted under Fidelity's 1993 Director's Stock Option Plan; 817 shares which Mr. Pedigo has the right to acquire upon exercise of stock options granted under Fidelity's 1993 Director's Stock Option Plan; and 967 shares which Mr. Stoffregen has the right to acquire pursuant to stock options granted from Fidelity's 1993 Director's Stock Option Plan. This amount also includes (i) 642,500 shares owned by Pedcor Financial LLC, (of which Mr. Cordingley is the President and CEO and 32.2% owner, Mr. Pedigo is the Chairman and 32.2% owner and Mr. Stoffregen is a Executive Vice President and 32.2% owner); (ii) 32,218 shares and 2,055 shares which Pedcor Financial, LLC and Pedcor Bancorp, respectively, have the right to acquire upon exercise of warrants.

(3) Includes 833 shares which Mr. Becker has the right to acquire pursuant to the exercise of stock options granted under Fidelity's 1993 Directors' Stock Option Plan.

(4) Includes 2,500 shares held jointly with his spouse, Barbara Cunningham, and 2,806 shares which Mr. Cunningham has the right to acquire pursuant to the exercise of stock options granted under Fidelity's 1993 Directors' Stock Option Plan.

(5) Includes 2,500 shares held in Mrs. Neel's IRA, and 2,500 shares held in Mr. Neel's IRA. Also includes 7,369 shares which Mr. Neel has the right to acquire pursuant to the exercise of the stock options granted under Fidelity's 1995 Key Employees' Stock Option Plan.

(6) Includes 2,508 shares which Mr. Schnakenburg has the right to acquire through the exercise of stock options granted under Fidelity's 1993 Directors' Stock Option Plan.

(7) Director Michael Elliott's shares were cashed out as a result of the reverse stock split.

(8) Includes 1,083 shares which Mr. Isaac has the right to acquire pursuant to the exercise of stock options granted under the 1995 Key Employees' Stock Option Plan.

26

Equity Compensation Plan Information

The following table provides information on all existing Stock Option Plans of Fidelity as of December 31, 2004. The shares and exercise price have been adjusted for the reverse and forward stock splits at March 1, 2005.

---------------------------------------------------------------------------------------------------------------------
                                  Number of securities to be      Weighted average exercise
                                    issued upon exercise of         price of outstanding         Number of securities
                                     outstanding options,             options, warrants           remaining available
         Plan category                warrants and rights                and rights               for future issuance
                                              (a)                            (b)                          (c)
---------------------------------------------------------------------------------------------------------------------
Equity compensation plans
approved by shareholders:
---------------------------------------------------------------------------------------------------------------------
Directors Plan                            9,895                             $75.96                          0
---------------------------------------------------------------------------------------------------------------------
1995 Key Employee Plan                   14,244                              41.28                      5,431
---------------------------------------------------------------------------------------------------------------------
Equity  compensation  plans not
approved by security holders:               N/A                                N/A                        N/A
---------------------------------------------------------------------------------------------------------------------

Total                                    24,139                             $55.44                      5,431
---------------------------------------------------------------------------------------------------------------------

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Transactions and Other Matters Between Management and Fidelity

Directors and executive officers of Fidelity and United and their associates are customers of, and have had transactions with, Fidelity and United in the ordinary course of business. Comparable transactions may be expected to take place in the future. Directors of Fidelity may not obtain extensions of credit from Fidelity or United. Loans made to non-director officers were made in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with other persons. These loans did not involve more than the normal risk of collectibility or present other unfavorable features.

During the fourth quarter of 2003, Fidelity entered into a $1.0 million unsecured term loan note with Pedcor Bancorp which matured on June 30, 2004. Fidelity paid off this note in March 2004. Messrs. Pedigo and Cordingley are directors of Pedcor Bancorp. In addition, Mr. Pedigo is the chairman of the board of directors of Pedcor Bancorp and owns 42.5% of its issued and outstanding stock, Mr. Cordingley is the president and chief executive officer of Pedcor Bancorp and owns 42.5% of its issued and outstanding stock, and Mr. Stoffregen is the executive vice president of Pedcor Bancorp and owns 14.0% of its issued and outstanding stock. This transaction was previously approved by the Conflicts Committee of Fidelity in 2003 (neither Mr. Pedigo, Mr. Cordingley, nor Mr. Stoffregen serve on this committee).

27

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

FEES TO INDEPENDENT AUDITOR FOR FISCAL YEARS 2004 AND 2003

The following table sets forth the aggregate fees billed by BDK, LLP for audit services rendered in connection with the consolidated financial statements and reports for fiscal year 2004 and fiscal year 2003 and for other services rendered during fiscal year 2004 and fiscal year 2003 on behalf of Fidelity and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services, which have been billed to the Company:

                                           Fiscal 2004       Fiscal 2003
Audit Fees                                   $57,583           $61,125
Audit Related Fees                            22,093             9,761
Tax Fees                                      14,472            25,708
All Other Fees                                 7,742             9,913
                                          -------------     ------------

         Total Fees                         $101,890          $106,507
                                          =============     ============

Audit fees consist of fees billed for professional services rendered for (i) the audit of Fidelity's consolidated financial statements, (ii) the review of interim condensed consolidated financial statements included in quarterly reports, (iii) the services that are normally provided by BKD in connection with the statutory and regulatory filings or engagements, and (iv) the attest services, except those not required by statute or regulation.

Audit related fees consist of fees for assurance and related services rendered by BKD that are reasonably related to the audit of Fidelity's consolidated financial statements but are not reported under the category "Audit Fees".

Tax fees consist of fees billed to Fidelity for professional services rendered for tax compliance, preparation and other tax services. Tax compliance and preparation fees consists of fees billed for professional services related to federal and state tax compliance, assistance with tax audits and appeals and assistance related to the impact of mergers, acquisitions and divestitures on tax return preparation. Other tax services consist of fees billed for other miscellaneous tax consulting and planning and for preparation of income tax returns.

All other fees consist of fees for all other services other than those reported above.

All of the fees and services described above under "audit fees", "audit-related fees" and "all other fees" were pre-approved by the Audit Committee. The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has adopted a policy for pre-approval of services provided by the independent auditors. Under the policy, pre-approval is detailed as to the particular service or category of services and is subject to a specific budget.

In addition, the Audit Committee may also pre-approve particular services on a case-by-case basis. For each proposed service, the independent auditor is required to provide detailed back-up documentation at the time of approval. The Audit Committee may delegate pre-approval authority to one or more of its members. Such a member must report any decisions to the Audit Committee at its next scheduled meeting.

The Audit Committee has considered whether, and determined that, the provision of the services covered for the fees billed under "All Other Fees" is compatible with maintaining the principal accountant's independence.

28

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1) The following consolidated financial statements are incorporated by reference in Item 8:

                                                                Page Numbers in
                                                                 Annual Report
                                                                 -------------
Independent Auditor's Report on
Consolidated Financial Statements                                      32

Consolidated Balance Sheet
December 31, 2004 and 2003                                             33

Consolidated Statement of Income-
For the years ended December 31, 2004, 2003 and 2002                34-36

Consolidated Statement of Changes in Shareholders' Equity -
For the years ended December 31, 2004, 2003 and 2002                   37

Consolidated Statement of Cash Flows -
For the years ended December 31, 2004, 2003 and 2002                38-39

Notes to consolidated Financial Statements                          40-69

(2) See response to Item 15(a)(1). All other financial statement schedules have been omitted because they are not applicable, or the required information is shown in the consolidated financial statements or notes thereto.

(3) List of Exhibits

Exhibit Number      Description
--------------      -----------

   3(i)(a)          Articles of Incorporation of Fidelity, filed as exhibit 3(a)
                    to Fidelity's 1995 Annual Report on Form 10-K, are
                    incorporated herein by reference.

   3(i)(b)          Articles of Amendment of the Articles of Incorporation of
                    Fidelity, filed as exhibit 4.1 with Fidelity's Registration
                    Statement on Form S-3 (file no. 333-53668), are incorporated
                    herein by reference.

   3(i)(c)          Articles of Amendment of the Articles of Incorporation of
                    Fidelity

   3(ii)            By-Laws of Fidelity, filed as exhibit 4.2 with Fidelity's
                    Registration Statement on Form S-3 (file no. 333-53668), are
                    incorporated herein by reference.

  10(a)             The 1993 Director's Stock Option Plan, filed as exhibit
                    10(d) to Fidelity's 1995 Annual Report on Form 10-K, is
                    incorporated herein by reference.

  10(b)             The 1995 Key Employee's Stock Option Plan, filed as exhibit
                    10(c) to Fidelity's 1996 Annual Report on Form 10-K, is
                    incorporated herein by reference.

  10(c)             Employment Agreement between Fidelity and Donald R. Neel,
                    filed as exhibit 10(d) to Fidelity's 2000 Annual Report on
                    Form 10-K, is incorporated herein by reference.

  13                2004 Annual Report to Shareholders (Except for the pages and
                    information expressly incorporated by reference in this Form
                    10-K, The Annual Report to Shareholders is provided

                                       29

                    solely for the information of the Securities and Exchange
                    Commission and is not deemed "filed" as part of this Form
                    10-K)

  21                Subsidiaries of Fidelity Federal Bancorp

  31(a)             Rule 13a-14(a) Certification for Annual Report on Form 10-K
                    by Principal Executive Officer

  31(b)             Rule 13a-14(a) Certification for Annual Report on Form 10-K
                    by Principal Financial Officer

  32(a)             Section 1350 Certification of Principal Executive Officer
                    (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

  32(b)             Section 1350 Certification of Principal Financial Officer
                    (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

(b) Exhibits

The response to this portion of Item 15 is submitted as a separate section of this report.

(c) Financial Statement Schedules

The response to this portion of Item 15 is submitted as a separate section of this report.

30

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, on the 29 day of March, 2005.

FIDELITY FEDERAL BANCORP
(Registrant)

By  /S/ DONALD R. NEEL
    ---------------------------------
    Donald R. Neel
    President and CEO
    (Principal Executive Officer)

By  /S/ MARK A. ISAAC
    ---------------------------------
    Mark A. Isaac, Vice President and
    Chief Financial Officer
    (Principal Financial Officer and
    Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 29, 2005, by the following persons on behalf of the registrant and in the capacities indicated.

By     /S/ JACK CUNNINGHAM
       ---------------------------------
       Jack Cunningham,
       Chairman

By     /S/ BRUCE A. CORDINGLEY
       ---------------------------------
       Bruce A. Cordingley, Director

By     /S/ PAUL E. BECKER
       ---------------------------------
       Paul E. Becker, Director

By     /S/ MICHAEL A. ELLIOTT
       ---------------------------------
       Michael A. Elliott, Director

By     /S/ DONALD R. NEEL
       ---------------------------------
       Donald R. Neel, Director

By     /S/ GERALD K. PEDIGO
       ---------------------------------
       Gerald K. Pedigo, Director

By     /S/ BARRY A. SCHNAKENBURG
       ---------------------------------
       Barry A. Schnakenburg, Director

By     /S/ PHILLIP J. STOFFREGEN
       ---------------------------------
       Phillip J. Stoffregen, Director

31

INDEX TO EXHIBITS

Page Exhibit Number Exhibit

3(i)(c) Articles of Amendment of the Articles of Incorporation of

          Fidelity

13        2004 Annual Report to Shareholders

21        Subsidiaries of Fidelity Federal Bancorp

31(a)     Rule 13a-14(a) Certification for Annual Report on Form 10-K by
          Principal Executive Officer

31(b)     Rule 13a-14(a) Certification for Annual Report on Form 10-K by
          Principal Financial Officer

32(a)     Section 1350 Certification of Principal Executive Officer
          (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

32(b)     Section Certification of Principal Financial Officer (pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002)

32

Exhibit 3(i)(c)

ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
FIDELITY FEDERAL BANCORP

Fidelity Federal Bancorp (hereinafter referred to as the "Corporation"), a corporation existing pursuant to the provisions of the Indiana Business Corporation Law, as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating the amendment of its Articles of Incorporation, hereby certifies, by its duly authorized officer, the following facts:

ARTICLE I
AMENDMENT

Section 1. The date of incorporation of the Corporation is July 30, 1993.

Section 2. The name of the Corporation following this amendment to the Corporation's Articles of Incorporation is Fidelity Federal Bancorp.

Section 3. The exact text of Section 1 of Article III of the Corporation's Articles of Incorporation is, as now amended, as follows:

Section 1. Number of Shares. The total number of shares of capital stock which the Corporation has authority to issue is 5,000,500 shares, all of which shall be divided into two classes of shares to be designated "Common Stock" and "Preferred Stock", respectively, as follows:

500 shares of Common Stock; and 5,000,000 shares of Preferred Stock.

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof issued and outstanding) by the affirmative vote of the holders of a majority of shares of Common Stock then issued and outstanding, without a vote of holders of the shares of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms and conditions establishing the series of Preferred Stock.

1

ARTICLE II
DATE OF ADOPTION OF AMENDMENTS

Section 1. The date of the adoption of the amendments set forth above in Article III, Section 1 is February 28, 2005.

Section 2. These Articles shall be effective as of 6:00 p.m. on February 28, 2005.

ARTICLE III
MANNER OF ADOPTION AND VOTE

Section 1. The Board of Directors of the Corporation duly adopted resolutions approving the foregoing amendments to the Corporation's Articles of Incorporation.

Section 2. Shareholder approval was not required for the foregoing amendment to the Articles of Incorporation pursuant to IC 23-1-38-2.

ARTICLE IV
COMPLIANCE WITH LEGAL REQUIREMENTS

The manner of adoption of the foregoing amendment to the Articles of Incorporation and the vote by which it was adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation and the By-Laws of the Corporation.

* * *

2

The undersigned officer of the Corporation verifies, subject to the penalties of perjury, that the statements contained herein are true this 25th day of February, 2005.

By: /s/ Donald R. Neel
    -----------------------------------
    Donald R. Neel, President and Chief
    Executive Officer

3

ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
FIDELITY FEDERAL BANCORP

Fidelity Federal Bancorp (hereinafter referred to as the "Corporation"), a corporation existing pursuant to the provisions of the Indiana Business Corporation Law, as amended (hereinafter referred to as the "Act"), desiring to give notice of corporate action effectuating the amendment of its Articles of Incorporation, hereby certifies, by its duly authorized officer, the following facts:

ARTICLE I
AMENDMENT

Section 1. The date of incorporation of the Corporation is July 30, 1993.

Section 2. The name of the Corporation following this amendment to the Corporation's Articles of Incorporation is Fidelity Federal Bancorp.

Section 3. The exact text of Section 1 of Article III of the Corporation's Articles of Incorporation is, as now amended, as follows:

Section 1. Number of Shares. The total number of shares of capital stock which the Corporation has authority to issue is 6,250,000 shares, all of which shall be divided into two classes of shares to be designated "Common Stock" and "Preferred Stock", respectively, as follows:

1,250,000 shares of Common Stock; and 5,000,000 shares of Preferred Stock.

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof issued and outstanding) by the affirmative vote of the holders of a majority of shares of Common Stock then issued and outstanding, without a vote of holders of the shares of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms and conditions establishing the series of Preferred Stock.

4

ARTICLE II
DATE OF ADOPTION OF AMENDMENTS

Section 1. The date of the adoption of the amendments set forth above in Article III, Section 1 is February 28, 2005.

Section 2. These Articles shall be effective as of 6:01 p.m. on February 28, 2005.

ARTICLE III
MANNER OF ADOPTION AND VOTE

Section 1. The Board of Directors of the Corporation duly adopted resolutions approving the foregoing amendments to the Corporation's Articles of Incorporation.

Section 2. Shareholder approval was not required for the foregoing amendment to the Articles of Incorporation pursuant to IC 23-1-38-2.

ARTICLE IV
COMPLIANCE WITH LEGAL REQUIREMENTS

The manner of adoption of the foregoing amendment to the Articles of Incorporation and the vote by which it was adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation and the By-Laws of the Corporation.

* * *

5

The undersigned officer of the Corporation verifies, subject to the penalties of perjury, that the statements contained herein are true this 25th day of February, 2005.

By: /s/ Donald R. Neel
    -----------------------------------
    Donald R. Neel, President and Chief
    Executive Officer

6

Exhibit 13 2004 Annual Report to Shareholders

[LOGO OF FIDELITY FEDERAL BANCORP]

2004 Annual Report
Contents

Page

Financial Highlights                                                 2

Market Summary                                                       3

Selected Statistical Information                                     4

Management's Discussion and Analysis                                 5

Independent Auditor's Report                                        32

Consolidated Balance Sheets                                         33

Consolidated Statements of Income                                   34

Consolidated Statements of Changes in Stockholders' Equity          37

Consolidated Statements of Cash Flows                               38

Notes to Consolidated Financial Statements                          40

1

[LOGO OF FIDELITY FEDERAL BANCORP]

Financial Highlights
(Dollars in Thousands, Except Share and Per Share Data)

                                                            December 31,  December 31,
                                                                2004          2003           Change
----------------------------------------------------------------------------------------------------
Per Share
   Basic net income                                           $   0.54     $   0.29           86.21%
   Diluted net income                                             0.54         0.29           86.21
   Book value at year end                                        17.74        16.68            6.35
   Market price (bid) at year end                                22.32        19.44           14.81

For the Year
   Net interest income                                        $  4,479     $  2,823           58.66%
   Provision for loan losses                                       448           13        3,346.15
   Non-interest income                                           2,495        3,878          (35.66)
   Non-interest expense                                          6,120        6,694           (8.57)
   Net income                                                      472          214          120.56

At Year End
   Total assets                                               $200,558     $175,390           14.35%
   Loans (net)                                                 110,771      100,437           10.29
   Total deposits                                              127,701      120,680            5.82
   Total stockholders' equity                                   16,261       13,367           21.65

Averages
   Total assets                                               $195,959     $149,577           31.01%
   Total earning assets                                        178,274      131,080           36.00
   Total loans                                                 109,050       82,553           32.10
   Total deposits                                              128,238      111,888           14.61
   Total stockholders' equity                                   15,274       12,668           20.57

Profitability Ratios
   Return on average assets                                       0.24%        0.14%
   Return on average stockholders' equity                         3.09         1.69
   Net interest margin                                            2.51         2.15

Loan Quality Ratios
   Net charge offs to average loans                               0.39%        0.14%
   Allowance for loan losses to loans at end of period            0.68         0.73
   Valuation allowance for letters of
      credit to total letters of credit                           1.02         1.05

Savings Bank Capital Ratios
   Tangible capital to adjusted total assets                      7.22%        6.87%
   Risk-based capital ratios
     Tier I capital                                              10.52         9.16
     Total risk-based capital                                    14.48        13.62

Other Data
   Average common and common equivalent shares outstanding     874,432      744,340
   Number of full-time equivalent employees at year end             52           62
   Number of banking offices                                         5            5

2

[LOGO OF FIDELITY FEDERAL BANCORP]

MARKET SUMMARY
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Until March 1, 2005 Fidelity's common stock was traded on the NASDAQ System under the symbol FFED. The stock is not currently traded on any stock exchange or on the NASDAQ system, and there is no established public trading market for the stock. The following table sets forth, for the periods indicated, the high and low bid prices per share as reported by NASDAQ. The bid prices represent prices between dealers, do not include retail mark-up, mark-down, or commissions and may not represent actual transactions. The stock prices have been adjusted for the reverse and forward stock split on March 1, 2005.

                                   2004                          2003
                         ------------------------------------------------------
                          Common Stock Bid Prices       Common Stock Bid Prices
                         ------------------------------------------------------
Year Ended December 31     High              Low         High              Low
-------------------------------------------------------------------------------

First quarter              $25.32          $18.60        $21.00          $14.52
Second quarter              24.60           16.44         18.36           13.44
Third quarter               21.24           16.92         21.00           15.00
Fourth quarter              24.96           17.16         22.56           18.00

We did not pay any cash dividends on our common stock in 2004 or 2003. Fidelity's dividend policy is to pay cash or distribute stock dividends when the Board of Directors deems it to be appropriate, taking into account Fidelity's financial condition and results of operations, economic and market conditions, industry standards, and other factors, including regulatory capital requirements of its savings bank subsidiary. We do not anticipate paying cash dividends in the foreseeable future. As of February 28, 2005, shares were held of record by approximately 419 shareholders.

3

[LOGO OF FIDELITY FEDERAL BANCORP]

Selected Statistical Information
(Dollars in Thousands, Except Share and Per Share Data)

                                               December 31,   December 31,   December 31,   December 31,   December 31,
Selected Financial Data as of                      2004           2003           2002           2001           2000
-----------------------------------------------------------------------------------------------------------------------
   Total assets                                 $ 200,558      $ 175,390      $ 132,290      $ 159,659      $ 166,466
   Interest-bearing deposits                        3,633          1,263          2,369         14,605         14,718
   Investment securities available for sale        65,192         52,208         34,912         18,074         21,001
   Loans, net                                     110,771        100,437         73,087        104,432        107,842
   Deposits                                       127,701        120,680        106,791        120,155        126,944
   Borrowings                                      10,460          8,077         10,586         12,317         13,939
   Federal Home Loan Bank advances                 44,090         31,550          3,000         12,333          9,903
   Stockholders' equity                            16,261         13,367          9,588         11,895          8,775

Selected Operations Data for Year Ended
   Interest income                              $   8,483      $   6,650      $   9,034      $  11,455      $  12,100
   Interest expense                                 4,004          3,827          6,022          8,501          8,457
                                                ---------------------------------------------------------------------
   Net interest income                              4,479          2,823          3,012          2,954          3,643
   Provision for loan losses                          448             13           (360)         1,349            670
                                                ---------------------------------------------------------------------
   Net interest income after provision for
     loan losses                                    4,031          2,810          3,372          1,605          2,973
   Non-interest income                              2,495          3,878          3,507          3,933          1,816
   Non-interest expense                             6,120          6,694          9,927          5,698          7,314
                                                ---------------------------------------------------------------------
   Income (loss) from continuing operations
     before tax                                       406             (6)        (3,048)          (160)        (2,525)
   Income tax benefit                                 (66)          (220)          (641)          (384)        (1,369)
                                                ---------------------------------------------------------------------
   Income (loss) from continuing operations           472            214         (2,407)           224         (1,156)
                                                ---------------------------------------------------------------------
   Loss from discontinued operations before
     tax                                               --             --         (1,537)
   Income tax expense                                  --             --            451
                                                ---------------------------------------------------------------------
   Loss from discontinued operations                   --             --         (1,988)
                                                ---------------------------------------------------------------------
   Net income (loss)                            $     472      $     214      $  (4,395)     $     224      $  (1,156)
                                                =====================================================================

Selected Financial Ratios
   Return on average assets                          0.24%          0.14%         (2.75)%         0.14%         (0.71)%
   Return on stockholders' equity                    3.09           1.69         (36.82)          2.18         (16.14)
   Net interest margin                               2.51           2.15           2.18           2.03           2.49
   Net interest spread                               2.42           2.11           2.23           2.12           2.33
   Tangible equity to assets at year end             7.22           6.87           8.52           8.48           8.42
   Allowance for loan losses to loans                0.68           0.73           1.13           2.01           1.75
   Allowance for loan losses to
     non-performing loans                           74.48          49.33          91.48          55.90         222.27
   Dividend payout ratio                              N/A            N/A            N/A            N/A            N/A

Per Share Data
   Diluted net income (loss) from continuing
     operations                                 $    0.54      $    0.29      $   (4.67)     $    0.52      $   (3.42)
   Diluted net income (loss) from
     discontinued operations                                                      (3.86)
   Diluted net income (loss)                         0.54           0.29          (8.53)          0.52          (3.42)
   Basic net income (loss) from continuing
     operations                                      0.54           0.29          (4.67)          0.52          (3.42)
   Basic net income (loss) from discontinued
     operations                                                                   (3.86)
   Basic net income (loss)                           0.54           0.29          (8.53)          0.52          (3.42)
   Cash dividends declared
   Book value at year end                           17.74          16.68          17.07          23.84          22.85
   Closing market price (bid) at year end           22.32          19.44          17.64          27.60          15.72
   Number of average common and common
     equivalent shares outstanding                874,432        744,340        515,272        428,894        338,097

4

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Termination of Registration Requirements

On November 10, 2004, Fidelity announced a plan to terminate registration of its common stock. The Board of Directors unanimously approved a 1-for 30,000 reverse stock split in order to terminate the registration of its common stock with the Securities and Exchange Commission and result in the delisting of its shares on the NASDAQ. The reverse stock split was immediately followed by a 2,500-for-1 stock split. The effective dates for both the reverse and forward stock splits was February 28, 2005. On March 11, 2005, Fidelity filed Form 15 with the Securities and Exchange Commission notifying it of the completion of the reverse stock split and delisting of its shares on NASDAQ. Approximately $3.2 million will be paid out to fractional shareholders as a result of the reverse stock split in 2005 thus reducing shareholder's equity and cash. Additional details regarding this transaction may be found in the Schedule 13E-3 as filed with the Securities and Exchange Commission.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Management's discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of Fidelity Federal. The information contained in this section should be read in conjunction with the consolidated financial statements and accompanying notes contained in this report.

Portions of this Management's Discussion and Analysis, as well as the notes to the consolidated financial statements and the Letter To Our Shareholders, contains or incorporates by reference certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about our financial condition, results of operations and business that are based on our current and future expectations. You can find many of these statements by looking for words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms and other comparable terminology. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties, including those discussed in the Management Discussion and Analysis, notes to the consolidated financial statements and the Letter to Shareholders, that could cause actual results to differ materially from those contemplated in such forward-looking statements. A few uncertainties which could affect our future performance include, without limitation, the effects of competition, technological changes and regulatory developments; changes in fiscal, monetary and tax policies; market, economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; and changes in the securities markets. Investors should consider these risks, uncertainties, and other factors in addition to those mentioned by us in other filings from time to time when considering any forward-looking statement.

We believe it is important to communicate our expectations to our investors. However, you are cautioned that no forward-looking statement is a guarantee of future performance and you should not place undue reliance on these forward-looking statements, which speak only as of the date of this annual report. There may be events in the future that we are not able to predict accurately or over which we have no control. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this annual report.

General

Fidelity Federal Bancorp ("Fidelity"), incorporated in 1993 under the laws of the State of Indiana, is a registered savings and loan holding company with its principal office in Evansville, Indiana. Fidelity's savings bank subsidiary, United Fidelity Bank, fsb ("United"), was organized in 1914, is a federally-chartered stock savings bank located in Evansville, Indiana, and is regulated by the Office of Thrift Supervision ("OTS"). Fidelity, through its savings bank subsidiary, is engaged in the business of obtaining funds in the form of savings deposits and other borrowings and investing such funds in consumer, commercial, and mortgage loans, and in investment securities.

5

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Operating Strategy

Fidelity's strategy is to continue to operate as an independent, community-oriented financial institution dedicated to meeting the financial needs of consumers and businesses in its market area. Fidelity prides itself in meeting or exceeding customer expectations. Fidelity's emphasizes on mortgage and commercial lending activities, as well as increasing its portfolio of consumer loans. The strategy also includes continued management of its portfolio of mortgage-backed securities, and to increase core deposit growth to support growth in loans and investments.

Performance Overview

The primary source of Fidelity's revenue is net interest income from loans and deposits, fees generated from loan sales and fees from financial services provided to customers. Economic factors, such as interest rates, business spending and consumer confidence, in addition to competition, influences loan and deposit volume that is generated by Fidelity.

Fidelity's earnings increased $258,000 over 2003. Net interest income increased $1.7 million and noninterest expense decreased $574,000 from the prior year. Offsetting a portion of these increases was a decrease of $1.4 million in noninterest income and a $435,000 increase in provision for loan losses.

Net income per share was $0.54 compared to $0.29 in 2003. Return on assets and return on equity for 2004 were 0.24% and 3.09%, respectively, compared to 0.14% and 1.69% for 2003, respectively.

Fidelity's balance sheet increased from $175.4 million at December 31, 2003 to $200.6 million at December 31, 2004. This increase was attributed to growth in the investment and loan portfolios. This growth was funded primarily by increases in certificate of deposits, and Federal Home Loan Bank advances. Fidelity also raised $2.5 million through a rights offering of equity in which 1.4 million shares were registered. A portion of these proceeds were used to increase regulatory capital during 2004 which supported balance sheet expansion.

Fidelity increased its commercial real estate and commercial loans by 66% in 2004. The primary collateral sources on these loans have been income-producing residential properties, and owner-occupied commercial real estate. Fidelity's investment portfolio also increased 24.9% in 2004 primarily through purchases of mortgage-backed securities.

Fidelity's classified assets have continued to decrease over the past several years. Total classified assets have declined from $6.0 million at December 31, 2002 to $1.5 million at December 31, 2004.

Comparison of Financial Condition at December 31, 2004 and December 31, 2003

Total assets at December 31, 2004 increased $25.2 million to $200.6 million from $175.4 million in December 2003, primarily due to the increases in mortgage-backed securities available for sale of $13.0 million and an increase in net loans of $10.3 million. Average assets for the year ended December 31, 2004 increased by $46.4 million from $149.6 million at December 31, 2003 to $196.0 million at December 31, 2004. The increase in total average assets is primarily due to an increase in the automobile loan category of $16.8 million. Average investment securities grew $20.2 million in 2004 when compared to 2003 and total average commercial and commercial real estate loans grew by $7.4 million when compared to the prior year.

Total assets at December 31, 2003 increased $43.1 million to $175.4 million from $132.3 million in December 2002, primarily due to the increases in mortgage-backed securities available for sale of $17.3 million and an increase in net loans of $27.4 million. Average assets for the year ended December 31, 2003 decreased by $10.0 million from $159.6 million at December 31, 2002 to $149.6 million at December 31, 2003. The decrease in total average assets is primarily due to decreases in the consumer loan category resulting from the $49.5 million loan securitization transaction completed in late 2002. As a result, average consumer loan outstandings for 2003 decreased $12.0 million from the prior year. In addition, loan workout activities reduced foreclosed assets held for sale from an average of $1.8 million in 2002 to $920,000 for December 31, 2003.

6

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition Loans

The following table shows the composition of Fidelity's loan portfolio:

                                               December       December       December       December       December
                                                 2004           2003           2002           2001           2000
-------------------------------------------------------------------------------------------------------------------
                                                              (In Thousands)
Real estate mortgage loans
First mortgage loans
Conventional                                  $  38,226      $  41,754      $  36,157      $  43,929      $  47,809
Construction                                      4,471          2,042          1,909            513          1,274
Commercial                                       16,251          9,144          5,645          6,114          6,873
Multi-family loans                                  594            213          3,083          3,856          4,350
Home equity loans                                 6,144          5,067          4,586          4,577          5,274
First mortgage real estate loans purchased          385            778            627            745          1,753
                                              ---------------------------------------------------------------------
                                                 66,071         58,998         52,007         59,734         67,333
Commercial and industrial                         4,136          3,138          2,210          1,848          2,305
Consumer loans                                   41,320         39,038         19,707         44,988         40,125
                                              ---------------------------------------------------------------------
Total loans                                     111,527        101,174         73,924        106,570        109,763
Allowance for loan losses                          (756)          (737)          (837)        (2,138)        (1,921)
                                              ---------------------------------------------------------------------

Net loans                                     $ 110,771      $ 100,437      $  73,087      $ 104,432      $ 107,842
                                              =====================================================================

Total assets                                  $ 200,558      $ 175,390      $ 132,290      $ 159,659      $ 166,466
                                              =====================================================================

Total loans to total assets                        55.6%          57.7%          55.9%          66.7%          65.9%

Total conventional real estate mortgages decreased by $3.5 million in 2004, due to an overall decline in originations in 2004 as compared to 2003.

Total commercial real estate loans outstanding have increased by approximately $7.1 million in 2004 and total commercial and industrial loans have increased by approximately $1.0 million as compared to 2003. Continued growth is expected in these two loan categories in 2005.

Consumer loans increased by $2.3 million to $41.3 million at December 31, 2004. The portfolio is primarily composed of prime automobile loans previously generated through a network of automobile dealers in Indiana, Kentucky, Illinois and Missouri. During the third quarter of 2004, United exited the indirect automobile market and focused its resources on more traditional community bank products. The portfolio is expected to decline in 2005.

Fidelity has no loans to foreign governments, foreign enterprises, foreign operations of domestic companies or highly leveraged transactions, nor any concentration to borrowers engaged in the same or similar industries that exceed ten percent of total loans.

Loan Maturities
The following table sets forth the remaining maturities for commercial loans as of December 31, 2004:

                              Within One    One to Five    After Five
                                 Year          Years          Years       Total
                             ---------------------------------------------------
                                                 (In Thousands)

Predetermined interest rates     $   52        $1,240        $  198       $1,490
Floating interest rates           1,055           202         1,389        2,646
                             ---------------------------------------------------

                                 $1,107        $1,442        $1,587       $4,136
                             ===================================================

7

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Non-Performing Loans

Fidelity discontinues the accrual of interest income on loans when, in the opinion of management, there is reasonable doubt as to the timely collectibility of interest or principal. When a loan reaches a ninety day or more past due status, the asset is generally repossessed or sold, if applicable, or the foreclosure process is initiated and the loan is re-classified to other real estate owned to be sold. A loan could be placed in a nonaccrual status sooner than ninety days if management knows the customer has abandoned the collateral and has no intention of repaying the loan.

Typically, when a loan reaches nonaccrual status, the accrued interest is reversed from income, unless strong evidence exists that the value of the collateral would support the collection of interest in a foreclosure situation. Nonaccrual loans are returned to an accrual status when, in the opinion of management, the financial position of the borrower indicates that there is no longer any reasonable doubt as to the timely payment of principal and interest. Income received on nonaccrual and restructured loans was $65,000 for the year ended December 31, 2004, $43,000 for the year ended December 31, 2003 and $23,000 for the year ended December 31, 2002. Additional interest income of approximately $53,000, $19,000 and $63,000 for the years ended December 31, 2004, 2003 and December 31, 2002, respectively, would have been recorded had income on nonaccruing and restructured loans been considered collectible and accounted for on an accrual basis.

The following table provides information on Fidelity's non-performing loans.

                                              December 31,    December 31,    December 31,    December 31,    December 31,
                                                 2004            2003            2002            2001            2000
                                             -----------------------------------------------------------------------------
                                                                        (Dollars In Thousands)
Non-accrual loans
   Real estate mortgage                         $  273          $  788          $  356          $  130
   Home equity                                     196             127
   Consumer                                        108             233             131             116
   Multi-family                                                                                                 $  148
   Commercial                                      178             267             388           3,291             472
                                                ----------------------------------------------------------------------
Total non-accrual loans                            755           1,415             875           3,537             620
Restructured
   Consumer                                                                         39             190             115
   Commercial                                                                                       53             119
                                                ----------------------------------------------------------------------
Total restructured loans                                                            39             243             234
90 days or more past due and accruing
   Consumer                                        133              54                              23              10
   Commercial                                      126             233                              22
   Mortgage                                                                          1
                                                ----------------------------------------------------------------------
Total 90 days or more past due and accruing        259             287               1              45              10

                                                ----------------------------------------------------------------------
       Total non-performing loans               $1,014          $1,702          $  915          $3,825          $  864
                                                ======================================================================

Ratio of non-performing loans to total loans      0.91%           1.68%           1.24%           3.59%           0.79%
                                                ======================================================================

The decrease in non-performing loans in 2004 is primarily due to one residential real estate loan totaling $451,000 on which accrual of interest income was ceased during the first quarter of 2003. The property was in the foreclosure process at the end of 2003 and sold during the first quarter of 2004. Proceeds were sufficient to repay principal, accrued interest, and other expenses. Approximately $170,000 of the $178,000 in commercial non-accrual loans is associated with one property that represents a small portion of a larger participated loan. Management believes that reserves for this loan are adequate.

8

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Analysis of Allowance for Loan Losses and Letter of Credit Valuation Allowance

Fidelity establishes its provision for loan losses and letter of credit valuation provision and evaluates the adequacy of the allowance for loan losses and its letter of credit valuation reserve based on management's evaluation of the performance of its loan and letter of credit portfolios. United's review of all loans and letters of credit for which full collectibility may not be reasonably assured, considers among other matters, the present value of expected cash flows, the estimated fair value of the underlying collateral, economic conditions, historical loss experience, the composition of the portfolios and other factors that warrant recognition in providing for an adequate loan loss allowance and letters of credit valuation allowance. This evaluation is performed on a quarterly basis and is designed to ensure that all relevant matters affecting collectibility will consistently be identified in a detailed review and that the outcome of the review will be considered in a disciplined manner by management in determining the necessary allowances and related provisions. The amounts actually reported in each period will vary with the outcome of this detailed review.

Classified Assets and Letters of Credit
(in thousands)

                                  December 31,    December 31,    December 31,
                                      2004            2003            2002
                                ----------------------------------------------

Classified assets                   $1,521          $1,757          $6,024
Classified letters of credit
                                ----------------------------------------------

     Total classified assets        $1,521          $1,757          $6,024
                                ==============================================

Classified assets and letters of credit of Fidelity totaled $1.5 million at December 31, 2004 compared to $1.8 million at December 31, 2003 and $6.0 million at December 31, 2002, a decrease of 74.8%. In addition to the classified assets and letters of credit, there are other assets and letters of credit totaling $6.1 million at December 31, 2004 for which management was closely monitoring the borrowers' abilities to comply with payment terms.

Impaired loans are those that management believes will not perform in accordance with the original loan terms. At December 31, 2004 and December 31, 2003, Fidelity had impaired loans totaling $679,000 and $775,000 respectively. The allowances for loan losses on such impaired loans totaled $130,000 and $169,000, which were included in Fidelity's allowance for loan losses at December 31, 2004 and December 31, 2003 respectively. Using similar guidelines for impaired loans, impaired letters of credit at December 31, 2004 and December 31, 2003 totaled $0. Impaired loans do not include large groups of homogeneous loans that are collectively evaluated for impairment, such as residential mortgage and consumer installment loans.

Foreclosed Assets

Foreclosed assets owned, consisting of one-to-four family dwellings, totaled $316,000 at December 31, 2004, compared to zero at December 31, 2003.

9

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Allowance for Loan Losses

The following table sets forth loan charge-offs and recoveries by the type of loan and an analysis of the allowance for loan losses for the years ended December 31, 2004, 2003, 2002 and 2001:

                                        December 31,     December 31,     December 31,     December 31,    December 31,
                                            2004             2003             2002             2001            2000
-----------------------------------------------------------------------------------------------------------------------
                                                                   (In Thousands)
Allowance for loan losses
   at beginning of period                $     737        $     837        $   2,138        $   1,921       $   2,021
                                         ----------------------------------------------------------------------------
Loan charge offs
   Real estate mortgage                                           2                                                80
   Multi-family                                                                  469              606             683
   Commercial                                   71                             1,158              354              12
   Consumer                                    499              234              327              441             391
                                         ----------------------------------------------------------------------------
     Total loan charge offs                    570              236            1,954            1,401           1,166
                                         ----------------------------------------------------------------------------
Loan recoveries
   Real estate mortgage                                                                             7
   Multi-family                                                  24              937              200             317
   Commercial                                                                                                      20
   Consumer                                    141               99               76               62              59
                                         ----------------------------------------------------------------------------
     Total loan recoveries                     141              123            1,013              269             396
                                         ----------------------------------------------------------------------------
Net charge offs                                429              113              941            1,132             770
Provision for loan losses
 transferred to held for sale                 (114)            (479)            (564)
Provision for loan losses                      562              492              204            1,349             670
                                         ----------------------------------------------------------------------------
Total net provision for loan losses            448               13             (360)           1,349             670
                                         ----------------------------------------------------------------------------
Allowance for loan losses
   at end of period                      $     756        $     737        $     837        $   2,138       $   1,921
                                         ============================================================================
Ratio of net charge offs to
   average loans outstanding
   during period                              0.39%            0.14%            0.99%            1.02%           0.72%
                                         ============================================================================
Ratio of provision for loan
   losses to average loans
   outstanding during period                  0.41%            0.02%           (0.38)%           1.21%           0.63%
                                         ============================================================================
Ratio of allowance for loan
   losses to total loans
   outstanding at year end                    0.68%            0.73%            1.13%            2.01%           1.75%
                                         ============================================================================
Average amount of loans
   outstanding for the period            $ 109,050        $  82,553        $  94,821        $ 111,572       $ 106,599
                                         ============================================================================
Amount of loans outstanding
   at end of period                      $ 111,527        $ 101,174        $  73,924        $ 106,570       $ 109,763
                                         ============================================================================

10

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

During the year ended December 31, 2004, 2003 and 2002 net charge-offs consisted primarily of consumer loans. Consumer loan charge-offs of $499,000 were recognized in 2004 compared to $234,000 in 2003 and $327,000 in 2002. Consumer loan recoveries of $141,000 were received in 2004 compared to $99,000 in 2003 and $76,000 in 2002. Charge-offs of $469,000 were recorded on multifamily loans in 2002 compared to zero in 2003 and 2004. During 2002 a subsidiary of United held general partnership interest in seventeen partnerships. Under the terms of the partnership agreement, the general partner was obligated to fund certain cash flow deficits of the particular partnership, or risk defaulting on loans. A default could have had a negative impact for the partners, including the company-owned general partner, such as causing recapture of tax credits. As such, funds would be loaned to the various partnerships to meet obligations. At the time the loans were made, they were fully reserved through additional provisions to the allowance for loan loss, due to the performance of the partnerships and the assessment of the quality of the credit. The loans were then charged-off.

Recoveries of $937,000 were received on multifamily loans in 2002, compared to $24,000 in 2003 and none in 2004. Due to the poor performance of certain multifamily loans in prior periods and management's assessment of allowances necessary to reflect the credit quality of these loans, specific reserves were created and certain charge-offs recorded. Several of these loans were refinanced through third parties during the past three years. The refinancing activities generally created additional cash flow because of reduced interest rates. As these loans were paid off, the reserves previously established for these loans were reversed or recorded recoveries to the extent that the payments received exceeded the charged down balances.

The provision for loan losses increased from $492,000 in 2003 to $562,000 in 2004 due to the $10.4 million increase in total loans outstanding. In 2002, operating deficit guarantees provided by Pedcor resulted in payments being made to Fidelity in the event that cash flows from properties were negative, based on a pre-determined computation. These guarantees and contingent liabilities were terminated upon the sale of the partnerships during the fourth quarter of 2002.

Fidelity's letter of credit valuation allowance was $232,000 at December 31, 2004 compared to $291,000 at December 31, 2003. The decrease is primarily due to the reduction in classified letters of credit, primarily due to efforts to refinance the credits on a non-recourse basis since 2001. Multi-family letters of credit, an off-balance sheet item, carry the same risk characteristics as conventional loans and totaled $22.7 million at December 31, 2004 compared to $27.8 million at December 31, 2003 and $29.7 million at December 31, 2002. The valuation allowance for letters of credit totaled 1.02% of outstanding letters of credit at December 31, 2004 compared to 1.0% at December 31, 2003. The allowance for loan losses and letters of credit to total loans and letters of credit at December 31, 2004 and 2003 was 0.74% and 0.80%, respectively. Management is not currently aware of any additional letters of credit that are expected to be called or funded. Management considers the allowance for loan losses and valuation allowance for letters of credit adequate to meet losses inherent in the loan and letter of credit portfolios at December 31, 2004.

The provision for consumer loans was credited in connection with consumer loans transferred to held for sale for $114,000 for 2004 compared to a credit of $479,000 in 2003. The credit during 2004 and 2003 is primarily attributable to the reduction in allocated reserves previously set aside for consumer loans as a result of completing consumer loan sales during each year. Fidelity will generally complete consumer loan sales during the month the loans are identified for sale, therefore no consumer loans were identified as held for sale at December 31, 2004.

Allocation of Allowance for Loan Losses

The allocation for loan losses and the percentage of loans within each category to total loans at December 31, 2004, 2003, 2002, and 2001 are as follows:

                                                        Allocation of Amount
                       ------------------------------------------------------------------------------------
                        December 31,      December 31,     December 31,      December 31,     December 31,
                            2004              2003             2002              2001             2000
-----------------------------------------------------------------------------------------------------------
                                                          (In Thousands)
Real estate mortgage        $    62          $    64           $    91          $    80          $     49
Home equity                      16               39                23               23                53
Multi-family                      6                2               150              258               514
Consumer                        414              363               247              505               628
Commercial                      258              269               326            1,272               677
                       ------------------------------------------------------------------------------------

     Total                   $  756           $  737            $  837           $2,138            $1,921
                       ====================================================================================

                                                     Percentage of Loans to Total Loans
                       ------------------------------------------------------------------------------------
                        December 31,      December 31,     December 31,      December 31,     December 31,
                            2004              2003             2002              2001             2000
-----------------------------------------------------------------------------------------------------------
Real estate mortgage          38.6%            43.0%             52.3%            42.4%             45.2%
Home equity                    5.5              5.0               6.2              4.3               4.8
Multi-family                   0.5              0.2               4.2              3.6               3.4
Consumer                      37.1             38.7              26.7             42.2              36.6
Commercial                    18.3             13.1              10.6              7.5              10.0
                       ------------------------------------------------------------------------------------
     Total                   100.0%           100.0%            100.0%           100.0%            100.0%
                       ====================================================================================

11

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Investment Securities

United's investment policy is reviewed annually by its Board of Directors. Any significant changes to the policy must be approved by the Board. The Board has an interest rate risk management committee, which is responsible for keeping the investment policy current.

At December 31, 2004, the investment portfolio represented 32.5% of Fidelity's assets, compared to 29.8% at December 31, 2003 and 26.4% at December 31, 2002, and is managed in a manner designed to meet the Board's investment policy objectives. The primary objectives, in order of priority, are to further the safety and soundness of Fidelity, to provide for the liquidity necessary to meet day to day, cyclical, and long-term changes in the mix of Fidelity's assets and liabilities and to provide for diversification of risk and management of interest rate and economic risk. At December 31, 2004, the entire investment portfolio was classified as available for sale. The net unrealized loss at December 31, 2004, which is included as a component of stockholders' equity, was $261,000 and was comprised of gross unrealized gains of $59,000 and gross unrealized losses of $480,000 and tax expense of $160,000. The change in the unrealized loss from December 31, 2003, was caused primarily by market interest rate changes during the period. Although the entire portfolio is classified as available for sale, management has not identified specific investments for sale in future periods. The following table sets forth the components of United's available-for-sale investment portfolio as of December 31, 2003, 2002, and 2001:

                                                                    December 31,    December 31,     December 31,
                                                                       2004            2003             2002
-----------------------------------------------------------------------------------------------------------------
                                                                                (dollars in thousands)
   Federal Home Loan Mortgage Corporation
      mortgage-backed securities                                      $11,075         $ 6,739          $17,148
   Federal National Mortgage Association mortgage-backed securities    32,812          25,203            3,382
   Government National Mortgage Association
      mortgage-backed securities                                       21,305          20,266           14,382

                                                                    ---------------------------------------------
       Total securities available for sale                            $65,192         $52,208          $34,912
                                                                    =============================================

The following table sets forth the contractual maturities of investment and mortgage-backed securities as of December 31, 2004, and the weighted average yields of such securities. The contractual maturities of mortgage-backed securities are not typically indicative of the actual holding period for such investments, as pre-payments on the underlying mortgage loans will reduce the average life of the investment, based on prevailing market interest rates.

                           -----------------------------------------------------------------------------------------
                                               After One But     After Five But
                            Within One Year  Within Five Years  Within Ten Years    Over Ten Years         Total
--------------------------------------------------------------------------------------------------------------------
                             Amount   Yield   Amount    Yield    Amount    Yield    Amount   Yield    Amount   Yield
--------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage
   Corporation                                                     1,218   3.75%   $ 9,857   3.96%   $11,075   4.12%
Federal National Mortgage
   Association                                                    $4,088   3.89%    28,724   4.15     32,812   3.94
Government National Mortgage
   Association                                                                      21,305   2.87     21,305   2.87
                             --------         --------           -------          ---------         ---------

     Total                     $ 0                $0              $5,306   3.86%   $59,886   3.66%   $65,192   3.68%
                             ========         ========           =======          =========         =========

     Percent of total         0.00%             0.00%              8.14%            91.86%           100.00%
                             ========         ========           =======          =========         =========

12

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Funding Sources

Deposits

Fidelity attracts both short-term and long-term deposits from the retail market by offering a wide assortment of accounts with different terms and different interest rates. These deposit alternatives include checking accounts, regular savings accounts, money market deposit accounts, fixed rate certificates with varying maturities, variable interest rate certificates, negotiable rate jumbo certificates ($99,000 or more), and variable rate IRA certificates.

Average deposits increased by $16.4 million for the year ended December 31, 2004. The primary categories affecting the decrease are as follows:

o Average retail certificate of deposits increased by $1.2 million, or 1.5% due to increased marketing efforts and rates offered during 2004.
o Average money market accounts increased $778,000, or 11.5%.
o Average demand deposits increased $1.8 million due to growth in commercial loan business accounts.
o Average savings increased $321,000 or 5.9%.
o Average agent-acquired certificates of deposit increased $13.0 million to assist Fidelity in funding balance sheet growth.

The following table sets forth the average balances of and the average rate paid on deposits by deposit category for the years ended December 31, 2004, 2003 and 2002.

                                 December 31,              December 31,                December 31,
                                     2004                      2003                        2002
                          ----------------------------------------------------------------------------------
Average Deposits              Amount       Rate        Amount         Rate        Amount          Rate
------------------------------------------------------------------------------------------------------------
                                                          (In Thousands)
Demand                         $  7,379                 $   5,564                 $   4,964
NOW accounts                     12,998      0.31%         13,793      0.49%         12,720       0.90%
Money market accounts             7,521      0.73           6,743      0.86           9,664       1.42
Savings accounts                  5,791      0.50           5,470      0.62           4,958       0.75
Certificates of deposit          81,364      2.59          80,121      3.39          86,531       4.71
Brokered deposits                13,185      2.34             197      3.55             248       6.05
                          ---------------           ---------------           ----------------

         Totals                $128,238      1.98%       $111,888      2.58%       $119,085       3.68%
                          ===============           ===============           ================

The current interest rate environment and local market conditions presented significant repricing opportunities during 2004 and 2003, resulting in an overall average yield of 1.98% on the deposit portfolio compared to 2.58% in 2003 and 3.68% in 2002.

Deposits at December 31, 2004 were $127.7 million compared to $120.7 million at December 31, 2003. This increase is primarily associated with the use of public and agent-acquired certificates of deposit to assist in balance sheet growth during 2004.

13

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

The following table summarizes certificates of deposit in amounts of $100,000 or more by maturity as of the following dates:

                           December 31,    December 31,    December 31,
                              2004            2003            2002
                           ------------    ------------    ------------
                                          (In Thousands)

Three months or less         $ 8,852         $18,168         $ 5,486
Three to six months            9,777           6,929           4,591
Six to twelve months           3,132           1,565           1,139
Over twelve months             3,491           2,727           3,955
                             -------         -------         -------
     Total                   $25,252         $29,389         $15,171
                             =======         =======         =======

Federal Home Loan Bank advances

Fidelity's investment and loan growth in 2004 was also facilitated by utilizing FHLB advances. FHLB advances outstanding increased from $31.6 million at December 31, 2003 to $44.1 million at December 31, 2004. To the extent that funding through deposits and other sources is not sufficient, United will continue to utilize FHLB advances to fund additional growth.

Borrowings

Fidelity's borrowings consisted primarily off FHLB advances, senior notes, junior notes and unsecured notes. Of the $54.6 million outstanding at December 31, 2004, $44.1 million were FHLB advances.

Fidelity's borrowings, other than FHLB advances, increased $2.4 million to $10.5 million at December 31, 2004.

o During the first half of 2004, Fidelity utilized funds received from its debt and equity offerings that were completed to repay a $1.0 million unsecured note to a related party and repay $1.8 million in 10% senior subordinated notes maturing in June 2005.
o These decreases were offset by a rights offering which raised $2.4 million in senior subordinated notes bearing interest at 9.00%. Fidelity also raised $3.1 million in trust preferred securities in 2004. The proceeds are anticipated to service debt and cash out fractional shareholders upon the completion of the reverse stock split in connection with Fidelity going private.

Capital Resources

Fidelity's stockholders' equity increased $2.9 million to $16.3 million at December 31, 2004, compared to $13.4 million at December 31, 2003. The change in stockholders' equity was accounted for by net income of $472,000, an increase in the net unrealized loss on securities available for sale of $52,000, and $2.5 million attributable to the issuance of stock in connection with the equity offering that was completed on May 18, 2004.

14

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Total capital, as defined for regulatory purposes, for United consists of Tier I capital plus the allowance for loan losses. Minimum capital levels are 4% for the leverage ratio, which is, defined as Tier I capital as a percentage of total assets less goodwill and other identifiable intangible assets; 4% for Tier I to risk-weighted assets; and 8% for total capital to risk-weighted assets.

                                  Tangible      Core       Tier 1    Risk-based
                                   Capital     Capital     Capital     Capital
                                -----------------------------------------------
Regulatory capital                 $14,077     $14,122     $13,129     $18,079
Minimum capital requirement          2,925       7,801       4,992       9,985
                                -----------------------------------------------
Excess capital                     $11,152      $6,321      $8,137      $8,094
                                ===============================================

Regulatory capital                    7.22%       7.25%      10.52%      14.49%
Required capital requirement          1.50        4.00        4.00        8.00
                                -----------------------------------------------
Excess over minimum                   5.72%       3.25%       6.52%       6.49%
                                ===============================================

The capital rating assigned to an entity can also be affected by qualitative judgments made by regulatory agencies about the risk inherent in the entity's activities that are not part of the calculated ratios. At December 31, 2004 and 2003, the Bank is categorized as well capitalized.

Liquidity

The primary sources of funds from operations are principal and interest payments on loans, deposits from customers, and sales and maturities of investment securities. Fidelity's entire investment portfolio is classified as "available for sale" and totaled $65.2 million at December 31, 2004 and is available assist in liquidity management. In addition, United is authorized to borrow money from the Federal Home Loan Bank or draw on $12.4 million secured lines of credit with other financial institutions. At December 31, 2004, United's gross borrowing capacity is $75.0 million with the Federal Home Loan Bank with approximately $6.9 million available to draw upon based on current assets pledged.

Fidelity has $500,000 available on a line of credit with another financial institution and can draw on this line until the expiration in November 2005. Fidelity's liquidity position may be further improved by the potential issuance of additional stock, additional trust preferred or debt financing, or dividends from United to Fidelity.

Subsequent to year end, United obtained a $10.0 million secured line of credit and an additional $9.8 million in unsecured lines of credit with other financial institutions. These additional lines plus the above liquidity alternatives will assist Fidelity in meeting the future liquidity needs and growth.

Contractual Obligations and Commitments

The company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to originate loans, standby letters of credit and unadvanced loans and lines of credit.

15

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheets. The contract amounts of these instruments reflect the extent of involvement the company has in the particular classes of financial instruments.

The following table summarizes the contractual obligations including interest and commitments at December 31, 2004.

                                                                 Payments Due by Period
                                                        Less than         2 - 3          4 - 5        After 5
($ in thousands)                          Total           1 Year          Years          Years         Years
------------------------------------   ------------    -------------    -----------     ---------    ----------
Contractual Cash Obligations:
   FHLB advances                         $45,689          $28,862         $11,558         $5,269
   Junior Subordinate notes               11,398              308             616          1,310      $9,164
   Senior Subordinate notes                3,271              213             426          2,632
   Other borrowings                        7,464              146             292            292       6,734
                                       ------------    -------------    -----------     ---------    ----------
     Total contractual obligations       $67,822          $29,529        $ 12,892         $9,503     $15,898
                                       ============    =============    ===========     =========    ==========


                                                                 Payments Due by Period
Other commitments:                                      Less than         2 - 3          4 - 5        After 5
                                          Total           1 Year          Years          Years         Years
                                       ------------    -------------    -----------     ---------    ----------
   Unadvanced loans and lines             $11,272          $4,309                                     $6,963
   Standby letters of credit               22,724          22,724                          -             -
   Commitments to originate loans           6,678           6,678           -              -             -
   Commitments to sell loans                  413             413           -              -             -
                                       ------------    -------------    -----------     ---------    ----------
     Total commitments                    $41,087         $34,124           $0             $0         $6,963
                                       ============    =============    ===========     =========    ==========

For additional information regarding Contractual Obligations and Commitments, see note, "Commitments and Contingent Liabilities", to the consolidated financial statements.

Effect of Inflation and Changing Prices.

Fidelity's Consolidated Financial Statements and related financial data presented have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars, without considering the change in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of Fidelity's operations and in increased loan amounts and in increased interest rates (which must include a real rate of return and an additional amount to reflect expected inflation over the term of the loan). Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates generally have a more significant impact on a financial institution's performance than do general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

16

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Off-Balance Sheet Arrangements

In the normal course of business, to meet the financing needs of its customers, Fidelity is a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. Fidelity's exposure to credit loss in the event of nonperformance by the other party to these financial instruments is represented by the contractual amount of the instruments. Fidelity uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Fidelity generally requires collateral or other security to support the financial instruments with credit risk. The amount of collateral or other security is determined based on management's credit evaluation of the counterparty. Fidelity evaluates each customer's creditworthiness on a case-by-case basis.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Letters of credit are conditional commitments issued by Fidelity to guarantee the performance of a customer to a third party. Letters of credit and other commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the letters of credit and commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. For further information about these arrangements, see Commitments and Contingent Liabilities of the Notes to Consolidated Financial Statements included elsewhere in this report.

Application of Critical Accounting Policies

Fidelity's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and reporting practices followed within the banking industry. The application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.

Reserve for Credit Losses: Fidelity maintains a range of reserve estimates to absorb probable loan losses inherent in the portfolio. The reserve for credit losses is maintained between a minimum and maximum level Fidelity considers to be adequate to absorb probable loan losses inherent in the portfolio and is based on ongoing quarterly assessments and evaluations of the collectibility and historical loss experience of loans. Credit losses are charged and recoveries are credited to the reserve. Provisions for credit losses are based on Fidelity's review of the historical credit loss experience and such factors that, in management's judgment, deserve consideration under existing economic conditions in estimating probable credit losses. In determining the appropriate range of reserves, Fidelity estimates losses using a range derived from "base" and "conservative" estimates. Fidelity's methodology for assessing the appropriate reserve range levels consists of several key elements, as discussed below. Fidelity's strategy for credit risk management includes a combination of conservative exposure limits significantly below legal lending limits, and conservative underwriting, documentation and collection standards. The strategy also emphasizes diversification on a geographic, industry and customer level, regular credit examinations and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, reserves are allocated to individual loans based on management's estimate of the borrower's ability to repay the loan given the availability of collateral, other sources of cask flow and legal options available to Fidelity. Included in the review of individual loans are those that are impaired as provided in SFAS No. 114, "Accounting by Creditors for Impairment of a Loan." Any reserves for impaired loans are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or fair value of the underlying collateral. Fidelity evaluates the collectibility of both principal and interest when assessing the need for a loss accrual. Historical loss rates are applied to other commercial loans not subject to specific reserve allocations.

17

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Homogenous loans, such as consumer installment, residential mortgage loans, and automobile leases are not individually risk graded. Rather, standard credit scoring systems and delinquency monitoring are used to assess credit risks. A minimum and maximum range of reserves are established for each pool of loans based on the expected net charge-offs for one year. Loss rates are based on the average net charge-off history by loan category.

Historical loss rates for commercial and consumer loans may be adjusted for significant factors that, in management's judgment, reflect the impact of any current conditions on loss recognition. Factors that management consider in the analysis include the effects of the national and local economies, trends in the nature and volume of loans (delinquencies, charge-offs and nonaccrual loans), changes in mix, credit score migration comparisons, asset quality trends, risk management and loan administration, changes in the internal lending policies and credit standards, collection practices and examination results from bank regulatory agencies and Fidelity's external credit examiners.

An unallocated reserve range of estimates is maintained to recognize the imprecision in estimating and measuring loss when evaluating reserves for individual loans or pools of loans. Reserves on individual loans and historical loss rates are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience.

Fidelity, has not substantively changed any aspect of its overall approach in the determination of the reserve for loan and lease losses. There have been no material changes in assumptions or estimation techniques as compared to prior periods that impacted the determination of the current year reserve for loan losses.

Based on the procedures discussed above, management is of the opinion that the reserve of $756,000 was adequate, but not excessive, to absorb estimated credit losses associated with the loan portfolio at December 31, 2004.

Valuation of Servicing Rights: When Fidelity sells loans through either securitizations or Freddie Mac, it may retain one or more subordinated tranches, servicing rights, interest-only strips, credit recourse, other residual interests, all of which are considered retained interests in the securitized or sold loans. Gain or loss on sale or securitization of the loans depends in part on the previous carrying amount of the financial assets sold or securitized, allocated between the assets sold and the retained interests based on their relative fair value at the date of sale or securitization. To obtain fair values, quoted market prices are used if available. If quotes are not available for retained interests, Fidelity calculates fair value based on the present value of future expected cash flows using both management's best estimates and third-party data sources for the key assumptions - credit losses, prepayment speeds, forward yield curves and discount rates commensurate with the risks involved. Gain or loss on sale or securitization of loans is reported as a component of other operating income in the Consolidated Statements of Income. Retained interests from securitized or sold loans, excluding servicing rights, are carried at fair value. Adjustments to fair value for retained interests are included in other operating income in the Consolidated Statements of Income if the fair value has declined below the carrying amount and such decline has been determined to be other-than-temporary. See "Automobile Loan Securitization" in the footnotes to the consolidated financial statements for projected adverse changes in assumptions and the impact on the fair value.

18

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Servicing rights resulting from loan sales are amortized in proportion to and over the period of estimated net servicing revenues. Servicing rights are assessed for impairment quarterly, based on fair value, with temporary impairment recognized through a valuation allowance and permanent impairment recognized through a write-off of the servicing asset and related valuation reserve. Key economic assumptions used in measuring any potential impairment of the servicing rights include the prepayment speed of the underlying loans, the weighted-average life of the loan, the discount rate and the weighted-average default rate, as applicable. The primary risk of material changes to the value of the servicing rights resides in the potential volatility in the economic assumptions used, particularly the prepayment speed. Fidelity monitors this risk and adjusts its valuation allowance as necessary to adequately reserve for any probable impairment in the portfolio. For purposes of measuring impairment, the mortgage servicing rights are stratified based on financial asset type and interest rates. Fees received for servicing loans owned by investors are based on a percentage of the outstanding monthly principal balance of such loans and are included in operating income as loan payment are included in operating income as loan payments are received. Costs of servicing loans are charged to expense as incurred. See "Loan Servicing" in the footnotes to the consolidated financial statements.

Income Taxes: Fidelity accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Such differences can relate to differences in accounting for credit losses, deprecation timing differences, unrealized gains and losses on investment securities, deferred compensation and leases, which are treated as operating leases for tax purposes and loans for financial statement purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The determination of current and deferred income taxes is based on complex analyses of many factors including interpretation of Federal and state income tax laws, the difference between tax and financial reporting basis of assets and liabilities (temporary differences), estimates of amounts due or owed, the timing of reversals of temporary differences and current financial accounting interpretations used in determining the current and deferred income tax liabilities.

Fidelity has a net deferred tax asset of $6.2 million at December 31, 2004. The realization of the recorded deferred tax assets ultimately resets upon Fidelity's ability to generate taxable income to utilize the net operating loss carryforwards and low income housing tax credits that make up the majority of the recorded deferred tax asset. To determine that it is more likely than not that these carryforwards and tax credits will be utilized prior to their expiration, management utilizes a model that projects the utilization of the carryforwards and credits based upon the estimated future taxable income of Fidelity. The most significant assumption used in the model is pre-tax income estimated by management.

Consideration of the need for a valuation allowance for the deferred tax asset was made at December 31, 2004 after projecting the reversal of the deferred items. These analyses were based on projected operating income in future years, action plans developed and partially implemented included in Fidelity's business plan and cost reductions. These analyses showed that not all carryforwards would be utilized within the carryforward periods (federal and state) and a valuation allowance would be necessary. The analyses assume that Fidelity will execute approximately 50% of the initiatives included within its current business plan and then achieve 10% growth in annual earnings thereafter. The conservative level of earnings contemplated by these analyses, if achieved, will constitute for the majority of the carryforward periods, earnings levels that are below other thrift holding companies included within Fidelity's peer group. Due to capital gains generated as a result of the sale of two Company subsidiaries, and a level of projected profitability for 2002 being less than originally anticipated, Fidelity established a valuation allowance of $600,000 until such time that Fidelity meets its future period profitability forecasts. Fidelity has set forth reasonable plans, and exceeded its 2004 and 2003 strategic plan indicating that future period profitability will increase and be more in line with its recently approved strategic plan, the ultimate outcome of this uncertainty on net income or earnings per share, if any, is unknown.

19

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Additional details on Fidelity's deferred tax asset and model assumption may be found under the heading "Income Tax" in the notes to the consolidated financial statements and under the heading "Income Tax Expense (Benefit)" in the Management Discussion and Analysis.

Additional accounting policies followed by Fidelity and United are presented in Note 1 to the financial statements. These policies, along with the disclosures presented in the other financial statement notes and in this financial review, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.

New Accounting Pronouncements

In December, 2004, the Financial Accounting Standards Board (FASB) issued an amendment to SFAS 123 Accounting for Stock-Based Compensation (SFAS 123R) which eliminates the ability to account for share-based compensation transactions using Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and generally requires that such transactions be accounted for using a fair value-based method. SFAS 123R will be effective for the Company beginning January 1, 2006. SFAS123R applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date as well as for the unvested portion of awards existing as of the effective date.

As of the required effective date, the Company will apply SFAS 123R using a modified version of prospective application. Under that transition method, compensation cost is recognized on or after the required effective date for the portion of outstanding awards for which the requisite service has not yet been rendered, based on the grant-date fair value of those awards calculated under SFAS 123 for pro forma disclosures. For periods before the required effective date, a company may elect to apply a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods by SFAS 123.

Based on the awards outstanding at December 31, 2004, management has estimated that approximately $12,000 of compensation expense related to those awards will be recognized during the year ended December 31, 2006.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities." This Interpretation clarifies the application of ARB No. 51, "Consolidated Financial Statements," for certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated support from other parties. This Interpretation requires variable interest entities (VIE's) to be consolidated by the primary beneficiary which represents the enterprise that will absorb the majority of the VIE's expected losses if they occur, receive a majority of the VIE's residual returns if they occur, or both. Qualifying Special Purpose Entities (QSPE) are exempt from the consolidation requirements of FIN 46. This Interpretation was effective for VIE's created after January 31, 2003 and for VIE's in which an enterprise obtains an interest after that date. In December 2003, the FASB issued Staff Interpretation No. 46R (FIN 46R), "Consolidation of Variable Interest Entities - an interpretation of ARB 51 (revised December 2003)," which replaces FIN 46. FIN 46R was primarily issued to clarify the required accounting for interests in VIE's. Additionally, this Interpretation exempts certain entities from its requirements and provides for special effective dates for enterprises that have fully or partially applied FIN 46 as of December 24, 2003. Application of FIN 46R is required in financial statements of public enterprises that have interests in structures that are commonly referred to as special-purpose entities, or SPE's, for periods ending after December 15, 2003. Application by public enterprises, other than small business issuers, for all other types of VIE's (i.e., non-SPE's) is required in financial statements for periods ending after March 15, 2004, with earIier adoption permitted. Adoption of this Interpretation did not have a material effect on Fidelity's Consolidated Financial Statements.

20

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Asset/Liability Management

Fidelity is subject to interest rate risk to the degree that its interest-bearing liabilities, primarily deposits with short and medium term maturities, mature or reprice at different rates than its interest-earning assets. Although having liabilities that mature or reprice less frequently than average assets will be beneficial in times of rising interest rates, such an asset/liability structure will result in lower net income during periods of declining interest rates such as those experienced in 2003 and 2002, unless offset by other factors. Balance sheet growth and rising rates attributed to higher net interest income in 2004.

The OTS utilizes a model, the "Office of Thrift Supervision Net Portfolio Value" ("NPV") model, which uses a net market value methodology to measure the interest rate risk exposure of savings associations. Under this model, an institution's "normal" level of interest rate risk in the event of an assumed change in interest rates is a decrease in the institution's NPV in an amount not exceeding 2% of the present value of its assets. Savings associations with over $300 million in assets or less than a 12% risk-based capital ratio are required to file OTS Schedule CMR. Data from Schedule CMR is used by the OTS to calculate changes in NPV (and the related "normal" level of interest rate risk) based upon certain interest rate changes (discussed below). Associations which do not meet either of the filing requirements are not required to file OTS Schedule CMR, but may do so voluntarily. United is not required to file a CMR since it exceeds the risk-based capital requirement and its assets are less than $300 million, but does so on a voluntary basis.

Presented below, at December 31, 2004 and December 31, 2003, is an analysis performed by the OTS of United's interest ate risk as measured by changes in NPV for instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, up 300 basis points and down 100 basis points. During the fourth quarter of 2004, the yield on the three month Treasury bill was below 2.00% and the information would not be meaningful. As a result, the NPV model did not produce results for the minus 200 or 300 basis points scenarios for the quarter ending December 31, 2004. The decrease in interest rate risk from December 31, 2003 to December 31, 2004 is due to interest rate changes and a change in United's balance sheet mix.

Interest Rate Risk as of December 31, 2004

                                                                        NPV as Percent of Present
                                  Net Portfolio Value                        Value of Assets
                   --------------------------------------------------------------------------------
       Change          Dollar           Dollar          Percentage
      in Rates         Amount           Change            Change      NPV Ratio             Change
---------------------------------------------------------------------------------------------------
        + 200 bp         18,172          (3,782)           (17)          9.30              - 157 bp
        - 100 bp         22,668             714              3          11.11                 24 bp

                        Interest Rate Risk as of December 31, 2003

                                                                        NPV as Percent of Present
                                  Net Portfolio Value                        Value of Assets
                   --------------------------------------------------------------------------------
       Change          Dollar           Dollar          Percentage
      in Rates         Amount           Change            Change      NPV Ratio             Change
---------------------------------------------------------------------------------------------------

        + 200 bp         12,006          (4,151)           (26)          7.10              - 214 bp
        - 100 bp         17,114             958              6           9.68                 44 bp

21

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analysis presented above. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate loans, have features, which restrict changes in interest rates on a short-term basis and over the life of the assets. Further, in the event of a change in interest rates, expected rates of prepayments on loans and early withdrawals from certificates could likely deviate significantly from those assumptions used in calculating the table.

Results of Operations

General

Fidelity recorded net income of $472,000 for the year ended December 31, 2004, an increase in net income of $258,000 over the previous year. Net interest income increased $1.7 million and the provision for loan losses increased $448,000. Noninterest income decreased $1.4 million while non-interest expense decreased $574,000.

Overview

Income

Fidelity generates two sources of pre-tax income. The first is net interest income. Net interest income is the difference between interest income - which is the income that Fidelity earns on its loans and investments - and interest expense - which is the interest that Fidelity pays on its deposits and borrowings.

Fidelity's second source of pre-tax income is noninterest income. This includes fee income - the compensation we receive from providing products and services - and gains on sales of loans. Most of Fidelity's fee income comes from loan sales, letter of credit fees, service charges and overdraft fees.

Fidelity may occasionally recognize a gain or loss as a result of the sale of investment securities or foreclosed real estate. These gains and losses are not a regular part of Fidelity's income.

Expenses

The expenses Fidelity incurs in operating its business consist of salaries and employee benefits, occupancy and equipment expenses, deposit insurance premiums, data processing fees and other miscellaneous expenses.

Salaries and employee benefits consist primarily of the salaries and wages paid to our employees, as well as expenses for retirement and other employee benefits.

Occupancy and equipment expenses, the fixed and variable costs of building and equipment, consist primarily of depreciation of property and equipment, real estate taxes, maintenance and insurance.

Deposit insurance premiums are calculated as a percentage of assessable deposits.

Data processing fees depend on the number of accounts and transaction volume.

Other expenses consist of professional fees, advertising and promotions, printing, supplies, postage and other miscellaneous operating expenses.

22

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

In addition to operating expenses noted above, Fidelity also occasionally recognizes expense that is not anticipated by management to be recurring. Such expenses that occurred in 2002 were changes in estimated useful lives of intangible assets, prepayment fees on FHLB advances, start up costs associated with United's first securitization transaction and other expenses incurred in connection with the sale of two of its subsidiaries.

Net Interest Income

Net interest income, Fidelity's largest component of income, represents the difference between interest and fees earned on loans, investments and other interest-earning assets, and interest paid on interest-bearing liabilities. It also measures how effectively management has balanced and allocated Fidelity's interest rate-sensitive assets and liabilities. In addition, certain external factors such as the overall condition of the economy, credit demand strength, Federal Reserve Board monetary policy, changes in tax laws, and the Supervisory Agreement that United currently operates under can also have significant effects on changes in net interest income from one period to another.

The net interest margin is determined by dividing net interest income by average interest earning assets. The net interest spread is the difference between the average yield earned on interest earning assets and the average rate paid on interest-bearing liabilities.

The following table details average balances, interest income/expense and average rates/yield for Fidelity's earning assets and interest bearing liabilities for the years ended December 31, 2004, 2003 and 2002.

23

[LOGO OF FIDELITY FEDERAL BANCORP]

                                         Average Balance Sheet and Net Interest Analysis
                                   (Dollars In Thousands on Fully Taxable Equivalent Basis)

                                    December 2004                   December 2003                   December 2002
                            ------------------------------------------------------------------------------------------------
                             Average              Average    Average              Average    Average             Average
Year Ended:                 Balances   Interest    Rates    Balances   Interest    Rates    Balances   Interest    Rates
----------------------------------------------------------------------------------------------------------------------------
Assets
   Federal funds sold and
     other short-term
     investments            $  1,031   $     14    1.36%    $  3,542   $     47    1.33%   $   6,371   $    114     1.79%
   Investment securities
     available for
     sale-taxable             61,871      2,089    3.38       41,658      1,421    3.41       32,191      1,427     4.43
   Loans held for sale         2,769        171    6.18          572         39    6.82        2,016        137     6.80
   Federal Home Loan Bank
     Stock                     3,553        155    4.36        2,755        141    5.12        2,634        160     6.07
   Loans (1) (2)
     Commercial loans          4,157        229    5.51        2,478        130    5.25        2,223        133     5.98
     Multi-family loans       14,802        929    6.28        9,097        592    6.51        8,733        799     9.15
     Home equity loans         5,490        259    4.72        4,795        224    4.67        4,563        245     5.37
     Real estate mortgages    41,192      2,170    5.27       39,553      2,266    5.73       40,700      2,852     7.01
     Consumer loans           43,409      2,467    5.68       26,630      1,790    6.72       38,602      3,167     8.20
                           ----------------------------------------------------------------------------------------------
       Total loans           109,050      6,054    5.55       82,553      5,002    6.06       94,821      7,196     7.59
                           ----------------------------------------------------------------------------------------------
       Total earning assets  178,274      8,483    4.76      131,080      6,650    5.07      138,033      9,034     6.54
                                       ----------------               -----------------               -------------------
   Allowance for loan losses    (751)                           (775)                         (1,135)
   Cash and due from banks     2,028                           2,191                           2,435
   Premises and equipment      4,565                           4,774                           5,810
   Other assets               11,839                          12,307                          14,482
                           -----------                     -----------                     -----------

       Total assets         $195,955                        $149,577                        $159,625
                           ===========                     ===========                     ===========

Liabilities
   Interest-bearing
     deposits
     Interest-bearing
       checking             $ 12,998    $    40    0.31     $ 13,792    $    67    0.49     $ 12,720    $   115     0.90
     Money market accounts     7,521         55    0.73        6,743         58    0.86        9,664        137     1.42
     Savings accounts          5,791         29    0.50        5,470         34    0.62        4,958         37     0.75
     Certificates of deposit  94,549      2,414    2.55       80,319      2,727    3.40       86,779      4,096     4.72
                           --------------------            --------------------            --------------------
       Total interest-bearing
          deposits           120,859      2,538    2.10      106,324      2,886    2.71      114,121      4,385     3.84
   Federal funds purchased     5,148         87    1.69                                          156          3     1.92
   Other borrowings            7,624        532    6.98        7,611        659    8.66       11,842      1,096     9.26
   Federal Home Loan Bank
       advances               37,650        847    2.25       15,172        282    1.86       13,561        538     3.97
                           --------------------            --------------------            --------------------
       Total
         interest-bearing
           liabilities       171,281      4,004    2.34      129,107      3,827    2.96      139,680      6,022     4.31
                                        -------                         -------                         -------
   Non-interest bearing
     demand deposits           7,379                           5,564                           4,964
   Advances by borrowers
     for taxes and
      insurance                  261                             285                             309
   Other liabilities           1,760                           1,953                           2,736
                           ----------                      ----------                      ----------
     Total liabilities       180,681                         136,909                         147,689

Stockholders' Equity          15,274                          12,668                          11,936
                           ----------                      ----------                      ----------

   Total liabilities and
      stockholders' equity  $195,955                        $149,577                        $159,625
                           ==========                      ==========                      ==========
   Recap: (3)
       Interest income                    8,483    4.76                   6,650    5.07                   9,034     6.54%
       Interest expense                   4,004    2.25                   3,827    2.92                   6,022     4.36
                                        -----------------               -----------------               ------------------
       Net interest
          Income/margin                  $4,479    2.51%                 $2,823    2.15%                 $3,012     2.18%
                                        =================               =================               ==================
Interest rate spread                               2.42%                           2.11%                            2.23%
Average interest-bearing
   assets to average
    interest-bearing
     liabilities                                 104.08%                         101.53%                           98.82%


(1) Nonaccrual loans have been included in the average balances.
(2) Loan income includes interest and fees on loans.
(3) Interest rate spread is calculated by subtracting combined weighted average interest rate cost from combined weighted average interest rate earned for the period indicated.

24

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Net interest income increased $1.7 million for the year ended December 31, 2004, compared to December 31, 2003. The net interest margin increased from 2.15% at December 31, 2003 to 2.51% at December 31, 2004. Lower interest rates and an increase in earning assets in 2004 impacted the margin positively by approximately $111,000 and $1.5 million, respectively, resulting in a net increase of $1.7 million.

o Consumer loan interest income increased $1.1 million in 2004 due to an increase in average loans but was partially offset by $451,000 decrease in rate. The yield on consumer loans decreased from 6.72% at December 31, 2003 to 5.68% due to lower rates.

o The yield on average mortgage loans decreased from 5.73% to 5.27% during 2004 due to refinancing activity in the portfolio and growth of the adjustable-rate mortgage (ARM) portfolio, which carried a lower yield in 2004. This resulted in a $96,000 decrease in mortgage loan interest income, of which $190,000 was due to lower rates in 2004, but partially offset by a $94,000 increase due to higher outstandings.

o Commercial and multifamily loans interest income increased $436,000 from the prior year primarily due the increase in average loans of $7.4 million.

o Average investment securities increased $20.2 million during 2004 which attributed to additional interest income of $689,000. However this interest income was slightly offset by a decrease in the yield on the investment portfolio resulting in a $21,000 decrease in interest income. A lower interest rate environment contributed to a lower reinvestment yield in 2003 and early 2004.

Interest expense increased $177,000 at December 31, 2004 when compared to December 31, 2003. Average interest-bearing liabilities increased $42.2 million from December 31, 2003 to $171.3 million at December 31, 2004. This increase accounted for $907,000 of increase in interest expense. The primary factors affecting the increase of interest expense were:

o Average certificates of deposit increased $14.2 million and the corresponding interest expense associated with the volume change increased $483,000.
o Average other borrowings and Federal Home Loan Bank advances increased $22.5 million during 2004 which accounted for $418,000 of the increase in other borrowings interest expense.

The yield on interest bearing liabilities decreased from 2.96% in 2003 to 2.34% in 2004. The change in rate accounted for $730,000 decrease in interest expense. Other factors in the decrease of interest due to the yield on interest-bearing liabilities were:

o The average rate on certificates of deposit decreased from 3.40% at December 31, 2003 to 2.55% at December 31, 2004. This decrease accounted for $796,000 of the decrease in interest expense.

o The average yield on FHLB advances increased from 1.86% to 2.25% in 2004 due to repricing in a higher interest rate environment. This increase in yield accounted for approximately $147,000 increase in interest expense.

Net interest income decreased $189,000 for the year ended December 31, 2003, compared to December 31, 2002. The net interest margin decreased slightly from 2.18% at December 31, 2002 to 2.15% at December 31, 2003. Lower interest rates in 2003 impacted the margin negatively by approximately $199,000, while the change in volume during 2003 impacted the margin favorably by approximately $10,000, resulting in a net decrease of $189,000.

25

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

United completed a $49.5 consumer loan securitization transaction at the end of the fourth quarter of 2002. The elimination of these higher earning assets and replacement with lower earning assets in 2003 negatively impacted interest income on a year-to-year comparison. Consumer loan interest income decreased $982,000 due to the decrease in average loans and an additional $395,000 due to a decrease in the overall yield on the consumer loan portfolio. The yield on consumer loans decreased from 8.20% at December 31, 2002 to 6.72% due to the completion of the securitization transaction and replacement of the sold loans with other loans at lower rates.

The yield on average mortgage loans decreased from 7.01% to 5.73% during 2003 due to refinancing activity in the portfolio and growth of the adjustable-rate mortgage (ARM) portfolio, which carried a lower yield in 2003. This resulted in a $586,000 decrease in mortgage loan interest income, of which $506,000 was due to lower rates in 2003.

During 2003, the Company sold $2.6 million in classified multifamily loans bearing an interest rate that was higher than market. These loans were effectively replaced with higher-quality, but lower yielding commercial real estate loans, resulting in a decrease in interest income of $207,000 from 2002.

Average investment securities increased $9.5 million during 2003 which attributed to additional interest income of $420,000. However this interest income was offset by a decrease in the yield on the investment portfolio resulting in a $426,000 decrease in interest income. Sales and increased prepayment speeds on United's mortgage-backed portfolio and a lower interest rate environment contributed to a lower reinvestment yield in 2003.

Interest expense decreased $2.2 million at December 31, 2003 when compared to December 31, 2002. Average interest-bearing liabilities decreased $10.6 million from December 31, 2002 to $129.1 million at December 31, 2003. This decrease accounted for $663,000 of the $2.2 million decrease in interest expense. Other factors in the decrease of interest expense were:

o Average certificates of deposit decreased $6.5 million and the corresponding interest expense associated with the volume change decreased $305,000.
o Average other borrowings decreased $4.2 million during 2003 which accounted for $392,000 of the $437,000 decrease in other borrowings interest expense.

The yield on interest bearing liabilities decreased from 4.31% in 2002 to 2.96% in 2003. The change in rate accounted for $1.5 million of the $2.2 million decrease in interest expense. Other factors in the decrease of interest due to the yield on interest-bearing liabilities were:

o The average rate on certificates of deposit decreased from 4.72% at December 31, 2002 to 3.40% at December 31, 2003. This decrease accounted for $1.1 million of the decrease in interest expense.

o The average yield on FHLB advances decreased from 3.97% to 1.86% in 2003 due to repricing opportunities in a lower interest rate environment and the prepayment of higher interest bearing advances in 2002. This decrease in yield accounted for approximately $320,000 reduction in interest expense.

26

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Rate/Volume Analysis

The following table sets forth an analysis of volume and rate changes in interest income and interest expense of Fidelity's average earning assets and average interest-bearing liabilities. The table distinguishes between the changes related to average outstanding balances of assets and liabilities (changes in volume holding the initial interest rate constant) and the changes related to average interest rates (changes in average rate holding the initial outstanding balance constant). The change in interest due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

                                                       December 31, 2004                      December 31, 2003
                                                 Compared to December 31, 2003          Compared to December 31, 2002
                                                  Increase (Decrease) Due To              Increase (Decrease) Due To
                                           ----------------------------------------------------------------------------

                                                Volume         Rate        Total       Volume       Rate        Total
-----------------------------------------------------------------------------------------------------------------------
                                                                       (Dollars In Thousands)
Interest income on average earning assets:
   Loans                                        $1,605        $(553)      $1,052         $(931)  $(1,263)     $(2,194)
   Investment securities                           689          (21)         668           420      (426)          (6)
   Loans held for sale                             150          (18)         132           (98)        -          (98)
   Federal Home Loan Bank stock                     41          (27)          14             7       (26)         (19)
   Federal funds sold and other  short-term
     investments                                   (33)           -          (33)          (51)      (16)         (67)
                                            ---------------------------------------------------------------------------
       Total interest income                     2,452         (619)       1,833          (653)   (1,731)      (2,384)
                                            ---------------------------------------------------------------------------

Interest expense on average interest-bearing
     liabilities:
   Now accounts                                     (4)         (23)         (27)           10       (58)         (48)
   Money market deposit accounts                     7          (10)          (3)          (41)      (38)         (79)
   Savings accounts                                  2           (7)          (5)            4        (7)          (3)
   Certificates of deposit                         483         (796)        (313)         (305)   (1,064)      (1,369)
   Federal funds purchased                           -           87           87            (3)        -           (3)
   Other borrowings                                  1         (128)        (127)         (392)      (45)        (437)
   Federal Home Loan Bank advances                 418          147          565            64      (320)        (256)
                                            ---------------------------------------------------------------------------
       Total interest expense                      907         (730)         177          (663)   (1,532)      (2,195)
                                            ---------------------------------------------------------------------------

Changes in net interest income                  $1,545        $ 111       $1,656         $  10   $  (199)     $  (189)
                                            ===========================================================================

Provision for Loan Losses and Letter of Credit Reserves

Fidelity makes provisions for loan losses in amounts estimated to be sufficient to maintain the allowance for loan losses at a level considered necessary by management to absorb losses in the loan portfolios. Specific reserves are assigned to certain credits. The reserves are determined by management's evaluation of those credits, which include evaluations of borrower's ability to repay outstanding debt, as well as the value of supporting collateral. The results of internal loan reviews, previous regulatory reviews, and past events assist Fidelity in making that evaluation. The independent support for the allowance for loan losses and letter of credit valuation reserve includes documentation that supports the amount of recorded reserves for these credits.

27

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

General reserves for loans and letters of credit not specifically reserved are also determined. Fidelity computes general reserves for the commercial, commercial mortgage, residential mortgage and consumer loan portfolios by utilizing historical information and information currently available about the loans within those portfolios that provides information as to the likelihood of loss. The potential effect of current economic conditions is also considered with respect to establishing general reserve amounts.

The provision for loan losses for the year ended December 31, 2003 was $448,000 compared to $13,000 for the year ended December 2003, an increase of $435,000. The increase was due to growth in United's loan portfolio.

During 2002, Fidelity completed a securitization of automobile loans in addition to a loan sale which resulted in a net reversal of the provision for loan losses of $360,000.

The ratio of allowance for loan losses to non-performing loans was 44.4% at December 31, 2004 compared to 49.3% at December 31, 2003. The primary reason for the increase in non-performing loans was due to one residential real estate loan totaling $451,000. This credit was paid off in full in the first quarter of 2004. The largest remaining non-accrual loan has a balance of $170,000 and is a purchased participation. Management believes that the reserves for the loan are adequate at December 31, 2004.

Non-Interest Income

Non-interest income for the year ended December 31, 2004 decreased by $1.4 million or 35.7% compared to December 31, 2003.

Net gains on the sale of loans decreased $415,000 from the prior year due primarily to a decrease in the amount of mortgage loans sold. Fidelity recorded a $353,000 in gains on sales of available for sale securities in 2003 compared to $47,000 in 2004. During 2002, Fidelity liquidated a $500,000 senior note for $360,000 and recorded a gain of $140,000. A gain of $359,000 was recognized on the sale of three foreclosed properties during 2003, or substantially all of the real estate owned portfolio compared to zero in 2004. An increase in early payoffs on automobile loans previously sold resulted in the repayment of dealer interest totaling $203,000 from auto dealers, compared to $299,000 in 2003. Income of $118,000 was recognized on the retained interests in securitized assets compared to $182,000 in 2003.

Non-interest income for the year ended December 31, 2003 increased by $371,000 or 10.6% compared to December 31, 2002.

Net gains on the sale of loans decreased $558,000 from the prior year due primarily to a decrease in volume of automobile loans sold. Fidelity recorded a $353,000 in gains on sales of available for sale securities in 2003 compared to $73,000 in 2002. Declining interest rates and increased prepayment speeds made it advantageous to sell certain securities in 2003. Servicing fees on loans sold increased $131,000 over the prior year due to the increased size of the mortgage and consumer loan servicing portfolios. Gain on sales of assets was $15,000 for 2003 compared to $574,000 in 2002. A non recurring gain of $574,000 was recognized in the fourth quarter of 2002 in connection with the sale of certain affordable housing assets to a related party. During 2002, Fidelity liquidated a $500,000 senior note for $360,000 and recorded a gain of $140,000. A gain of $359,000 was recognized on the sale of three foreclosed properties during 2003, or substantially all of the real estate owned portfolio. An increase in early payoffs on automobile loans previously sold resulted in the repayment of dealer interest totaling $299,000 from auto dealers, compared to $66,000 in 2002. Income of $182,000 was recognized on the retained interests in securitized assets compared to $90,000 in 2002.

28

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Non-Interest Expense

Non-interest expense decreased $574,000 or 8.6% for the year ended December 31, 2004, compared to December 31, 2003.

Salaries and employee benefits decreased $269,000 during 2004 when compared to 2003, due to a reduction in full-time equivalent employees. Data processing expense increased $76,000 over 2003 due to increased volume of mortgage and consumer loans serviced when compared to the same period in 2003, in addition to the introduction of internet banking in 2003. Advertising increased $48,000 over 2003 due to increased product promotions. Printing, postage and office supplies decreased $69,000 in 2004 due to cost control measures and the termination of indirect lending late in the third quarter of 2004. Dealer promotional expenses decreased $63,000 in 2004 due primarily to a decrease in automobile originations in the current year and the termination of indirect lending. Professional liability insurance expense decreased $89,000 from the prior year due to market rate decreases and improvement in bank earnings.

Non-interest expense decreased $3.2 million or 32.6% for the year ended December 31, 2003, compared to December 31, 2002.

Salaries and employee benefits decreased $289,000 during 2003 when compared to 2002, due to a reduction in full-time equivalent employees. Data processing expense increased $100,000 over 2002 due to increased volume of mortgage and consumer loans serviced when compared to the same period in 2002, in addition to the introduction of internet banking in 2003. Legal and professional fees decreased $48,000 from the prior year due to a decrease in loan workout activities. Dealer promotional expenses decreased $60,000 in 2003 due primarily to a decrease in automobile originations in the current year. Professional liability insurance expense increased $108,000 over the prior year due to market rate increases.

During 2003, the valuation allowance for letters of credit was reduced by $170,000 compared to none in 2002 and $1.5 million in 2001 to reflect a reduction in loss exposure achieved. The $170,000 in 2003 was effectively reclassified between the letter of credit valuation and allowance for loan losses offsetting the impact on net income.

Fidelity records its percentage share of losses for its limited partner investments in various affordable housing partnerships under the equity method of accounting. These losses were $40,000, $160,000, and $304,000 for 2003, 2002 and 2001, respectively. During the fourth quarter of 2002, Fidelity completed the sale of a subsidiary that held general partnership interests in seventeen affordable housing projects. See "Related Party" footnote for additional details.

Other real estate owned expenses of $247,000 were recognized in 2002 compared to only $34,000 in 2003 due to a foreclosure on one large commercial real estate loan in 2002.

Non-recurring expenses were incurred during 2002 for various reasons, the following non-recurring items are included in non-interest expense: Changes in the estimated useful lives of intangible assets created additional expense of $864,000 and are discussed in the "Related Party" footnote. Prepayment fees on FHLB advances of $504,000 were recognized in 2002 compared to none in 2003 or 2001. United repaid long-term FHLB advances that had substantially higher interest rates than the current market. The completion of the securitization transaction created liquidity which was used to payoff these higher interest bearing liabilities. These higher cost borrowings were replaced with deposits and borrowings at a much lower rate. This is expected to result in a much lower overall cost of funds for Fidelity in the future.

29

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Income Tax Expense (Benefit)

Fidelity reported a pretax income of $406,000 compared to the prior year pretax loss of $6,000. An income tax benefit of $66,000 was recorded on the pretax income which was primarily generated by the current year tax credits. In 2002, an income tax benefit of approximately $1.2 million was recorded on the $3.0 million pretax loss but was reduced by additional tax expense resulting from a capital gain, which reduced the benefit to $641,000. The additional tax expense was primarily the result of the capital gain for tax purposes on the sale of Fidelity's subsidiaries and the additional $600,000 tax valuation allowance established in connection with Fidelity's deferred tax asset. Included in the tax benefit are tax credits for 2004 and 2003 of $222,000. The 2004 and 2003 tax credits were received from Fidelity's remaining investment as a limited partner in affordable housing properties and are a component of the overall return on these investments.

The assumptions used to help consider the need for a valuation allowance for the deferred tax asset are subject to certain risks and uncertainties that could impact the final determination regarding the amount of the valuation allowance. These risks include the failure to implement the business plan targets for increased revenues, cost reductions, the potential loss of key employees, ability to maintain projected interest rate margins, and the potential disruption of activities in key income-producing areas.

Loss on Discontinued Operations

During the fourth quarter of 2002, Fidelity completed the sale of the assets connected to their affordable housing activities that began in the mid-1990's to Pedcor Funding Corporation ("Pedcor"). The assets consisted of the stock of Village Housing Corporation (a wholly-owned subsidiary of United Fidelity Bank), the stock of Village Affordable Housing Corporation (a wholly-owned subsidiary of Fidelity Federal), an interest rate swap, and notes from affordable housing limited partnerships in which Village Housing Corporation is the general partner.

The Company determined to pursue the sale of these assets in order to further focus on its community banking activities. It also determined that the elimination of the contingent liabilities associated with the ownership of the affordable housing general partnerships interests would improve its overall risk profile.

The purchaser, Pedcor Funding Corporation ("Pedcor"), is a company controlled by Bruce A. Cordingley, Gerald K. Pedigo, and Phillip J. Stoffregen, directors of Fidelity Federal and members of a group which beneficially owns, including stock options and warrants at the time of the transaction, approximately 69.9% of Fidelity Federal's issued and outstanding stock. Because of the relationship between Pedcor and Fidelity Federal, Messrs. Cordingley, Pedigo, and Stoffregen did not participate in either the discussion or the vote by the boards of directors of Fidelity Federal and United Fidelity Bank regarding the sale. The sale was unanimously approved by all other members of the respective Boards of Directors of Fidelity Federal and United Fidelity Bank and was completed following receipt of all necessary regulatory approvals and a fairness opinion. The fairness opinion was rendered by Crowe Chizek & Co., an independent, non-affiliated entity which has never performed services for Messrs. Cordingley, Pedigo, or Stoffregen or any entity they control (other than Fidelity Federal or United Fidelity Bank), and has not performed services within the last five years for Fidelity Federal or United Fidelity Bank.

The sale price for the all-cash transaction was approximately $1.7 million, thus the sale provided the Company with additional liquidity. Because a portion of the assets sold had been previously eliminated from regulatory capital, the sale resulted in an increase in the regulatory capital of United Fidelity Bank. Additional regulatory capital provides the Bank future capacity to increase earning assets, which could then increase net interest income.

30

[LOGO OF FIDELITY FEDERAL BANCORP]

Management's Discussion and Analysis

of Results of Operations and Financial Condition

Net loss on operations from these subsidiaries totaled $2.0 million of which $1.5 million was associated with the completion of the sale and $451,000 associated with the income tax expense impact. Net income or loss from prior years were immaterial and not included as a separate component. See the "Discontinued Operations" footnote for additional details.

Quarterly Results of Operations                                      (Dollars in  thousands)

                                          March 31          June 30       September 30      December 31         Total
----------------------------------------------------------------------------------------------------------------------
December 31, 2004
   Interest income                         $ 2,042          $ 2,050          $ 2,189          $ 2,202          $ 8,483
   Interest expense                            982              977              998            1,047            4,004
                                    ----------------------------------------------------------------------------------
     Net interest income                     1,060            1,073            1,191            1,155            4,479
   Provision for loan losses                   170               39              134              105              448
   Non-interest income                         701              659              579              556            2,495
   Non-interest expense                      1,586            1,602            1,523            1,409            6,120
                                    ----------------------------------------------------------------------------------
   Income before income tax                      5               91              113              197              406
   Income tax expense (benefit)                (60)             (19)              (8)              21              (66)
                                    ----------------------------------------------------------------------------------
   Net income                              $    65          $   110          $   121          $   176          $   472
                                    ==================================================================================

   Net income (loss) per share

     Diluted net income                    $  0.01          $  0.01          $  0.01          $  0.02          $  0.04
     Basic net income                         0.01             0.01             0.01             0.02             0.04
     Cash dividends*

December 31, 2003
   Interest income                         $ 1,602          $ 1,596          $ 1,616          $ 1,836          $ 6,650
   Interest expense                          1,158              980              833              856            3,827
                                    ----------------------------------------------------------------------------------
     Net interest income                       444              616              783              980            2,823
   Provision for loan losses                  (104)             (18)              99               36               13
   Non-interest income                       1,218            1,106              914              640            3,878
   Non-interest expense                      1,761            1,658            1,662            1,613            6,694
                                    ----------------------------------------------------------------------------------
   Income (loss) before income tax               5               82              (64)             (29)              (6)
   Income tax benefit                          (50)             (21)             (90)             (59)            (220)
                                    ----------------------------------------------------------------------------------
   Net income                              $    55          $   103          $    26          $    30          $   214
                                    ==================================================================================

     Net income (loss) per share

     Diluted net income                    $  0.10          $  0.13          $  0.03          $  0.04          $  0.29
     Basic net income                         0.10             0.13             0.03             0.04             0.29
     Cash Dividends*

*No cash dividends were paid for the years ended December 31, 2004 and 2003.

31

[LOGO OF BKD LLP]

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors
Fidelity Federal Bancorp
Evansville, Indiana

We have audited the accompanying consolidated balance sheets of Fidelity Federal Bancorp as of December 31, 2004 and 2003, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2004. 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 the standards of the Public Company Accounting Oversight Board (United States). 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 Federal Bancorp as of December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

/s/ BKD LLP

Evansville, Indiana
January 14, 2005

32

FIDELITY FEDERAL BANCORP

Consolidated Balance Sheets
(In Thousands, Except Share Data)

December 31                                                                        2004         2003
-------------------------------------------------------------------------------------------------------
Assets
   Cash and cash equivalents                                                    $     989     $   1,705
   Interest-bearing demand deposits                                                 3,633         1,263
                                                                             --------------------------
       Cash and cash equivalents                                                    4,622         2,968
   Investment securities available for sale                                        65,192        52,208
   Loans, net of allowance for loan losses of $756 and $737
     (also includes loans to related parties of $169 and $177                     110,771       100,437
   Premises and equipment                                                           4,646         4,620
   Federal Home Loan Bank of Indianapolis stock                                     3,627         3,466
   Deferred income tax                                                              6,192         6,093
   Foreclosed assets held for sale, net of allowance of $20 and $0                    316
   Interest receivable and other assets                                             5,192         5,598
                                                                             --------------------------

       Total assets                                                             $ 200,558     $ 175,390
                                                                             ==========================

Liabilities
   Deposits
     Non-interest bearing (includes related party deposits
       of $2,179 and $854)                                                      $   8,250     $   6,903
     Interest bearing (including related party time deposits of $364 and $0)      119,451       113,777
                                                                             --------------------------
       Total deposits                                                             127,701       120,680
   Federal Home Loan Bank advances                                                 44,090        31,550
   Borrowings (includes borrowings from a related party
     of $0 and $1,000)                                                             10,460         8,077
   Valuation allowance for letters of credit                                          232           291
   Other liabilities                                                                1,814         1,425
                                                                             --------------------------
       Total liabilities                                                          184,297       162,023
                                                                             --------------------------

Commitments and Contingent Liabilities

Stockholders' Equity
   Preferred stock, no par or stated value
     Authorized and unissued--5,000,000 shares
   Common stock, $12 stated value
     Authorized--1,250,000 shares
     Issued and outstanding--916,656 and 801,555 shares                            11,000         9,619
   Additional paid-in capital                                                      17,727        16,634
   Stock warrants                                                                     261           261
   Accumulated deficit                                                            (12,466)      (12,938)
   Accumulated other comprehensive loss                                              (261)         (209)
                                                                             --------------------------
       Total stockholders' equity                                                  16,261        13,367
                                                                             --------------------------

       Total liabilities and stockholders' equity                               $ 200,558     $ 175,390
                                                                             ==========================

See notes to consolidated financial statements.

33

FIDELITY FEDERAL BANCORP

Consolidated Statements of Income
(In Thousands, Except Share Data)

Year Ended December 31                                        2004       2003       2002
-----------------------------------------------------------------------------------------
Interest Income
   Loans receivable                                         $ 6,054    $ 5,002    $ 7,196
   Loans held for sale                                          171         39        137
   Investment securities--taxable                             2,089      1,421      1,427
   Deposits with financial institutions                          14         47        114
   Other dividend income                                        155        141        160
                                                          -------------------------------
         Total interest income                                8,483      6,650      9,034
                                                          -------------------------------

Interest Expense
   Deposits                                                   2,539      2,886      4,385
   Short-term borrowings                                         96         18         64
   Long-term debt                                             1,369        923      1,573
                                                          -------------------------------
         Total interest expense                               4,004      3,827      6,022
                                                          -------------------------------

Net Interest Income                                           4,479      2,823      3,012
   Provision for loan losses                                    448         13       (360)
                                                          -------------------------------

Net Interest Income After Provision for
   Loan Losses                                                4,031      2,810      3,372
                                                          -------------------------------

Other Income
   Service charges on deposit accounts                          457        436        439
   Net gains on loan sales (includes a $223 gain on sale
     to a related party in 2002)                                310        725      1,283
   Net gains on sales of securities available for sale           47        353         73
   Letter of credit fees                                        491        491        501
   Servicing fees on loans sold                                 351        292        161
   Gain on sale of assets                                                   15        574
   Gain on early extinguishment of debt                                               140
   Gain on sale of foreclosed assets                                       359
   Dealer interest recovery                                     203        299         66
   Income from I/O STRIP                                        118        182         90
   Other income (includes a $72 gain on sale of interest
     rate swap to a related party in 2002)                      518        726        180
                                                          -------------------------------
         Total non-interest income                            2,495      3,878      3,507
                                                          ===============================

34

FIDELITY FEDERAL BANCORP

Consolidated Statements of Income
(In Thousands, Except Share Data)

(Continued)

Year Ended December 31                                  2004      2003        2002
-------------------------------------------------------------------------------------
Other Expenses
   Salaries and employee benefits                     $ 3,058     $ 3,327     $ 3,616
   Net occupancy expenses                                 362         343         371
   Equipment expenses                                     360         393         350
   Data processing fees                                   513         437         337
   Deposit insurance expense                               55          51          57
   Legal and professional fees                            268         250         298
   Advertising                                            204         156         142
   Promotional expense                                     95         158         218
   Printing, postage, and office supplies expenses        136         205         229
   Professional liability insurance expense               195         284         176
   Fee on prepayment of FHLB advances                                             504
   Letter of credit valuation provision                   (77)       (170)
   Loss on investment in partnerships                      30          40         160
   Amortization of intangible assets                                              917
   Correspondent bank charges                             145         147         132
   Loss on securitization                                                         976
   Other real estate owned expenses                        26          34         247
   Bond issuance expense                                   36         110          63
   Other expense                                          714         929       1,134
                                                   ----------------------------------
         Total non-interest expense                     6,120       6,694       9,927
                                                   ----------------------------------

Income (Loss) From Continuing Operations
   Before Income Tax                                      406          (6)     (3,048)
   Income tax benefit                                     (66)       (220)       (641)
                                                   ----------------------------------

Income (Loss) From Continuing Operations                  472         214      (2,407)
                                                   ----------------------------------

Discontinued Operations
   Loss from operations of VHC and VAHC (including
     loss on sale of $1,517 to a related party)                                (1,537)
   Income tax expense                                                             451
                                                   ----------------------------------

         Loss on discontinued operations                                       (1,988)
                                                   ----------------------------------

Net Income (Loss)                                     $   472     $   214     $(4,395)
                                                   ==================================

35

FIDELITY FEDERAL BANCORP

Consolidated Statements of Income
(In Thousands, Except Share Data)

(Continued)

Year Ended December 31                                            2004        2003        2002
-----------------------------------------------------------------------------------------------
Basic Earnings (Loss) Per Share From Continuing Operations       $0.54       $0.29      $(4.67)

Basic Loss Per Share from Discontinued Operations                                       $(3.86)

Basic Earnings (Loss) Per Share                                  $0.54       $0.29      $(8.53)

Diluted Earnings (Loss) Per Share From Continuing Operations     $0.54       $0.29      $(4.67)

Diluted Loss Per Share from Discontinued Operations                                     $(3.86)

Diluted Earnings (Loss) Per Share                                $0.54       $0.29      $(8.53)

See notes to consolidated financial statements.

36

FIDELITY FEDERAL BANCORP

Consolidated Statements of Changes in Stockholders' Equity
(In Thousands, Except Share Data)

                                                                                                             Accumulated
                                               Common Stock                       Comprehensive                 Other
                                           -------------------- Paid-in    Stock     Income     Accumulated  Comprehensive
                                             Shares    Amount   Capital   Warrants   (Loss)       Deficit    Income (Loss)   Total
                                           ----------------------------------------------------------------------------------------
Balances, January 1, 2002                   498,917   $ 5,987   $14,692     $ 11                 $  (8,757)      $ (38)     $11,895

   Comprehensive loss
     Net loss                                                                        $(4,395)       (4,395)                  (4,395)
     Other comprehensive income, net of tax
       Unrealized gain on securities                                                     417                       417          417
                                                                                  -------------
   Comprehensive loss                                                                $(3,978)
                                                                                  =============
   Sale of stock                             62,823       754       667                                                       1,421
   Issuance of stock warrants                                                250                                                250
                                           ---------------------------------------             ------------------------------------

Balances, December 31, 2002                 561,740     6,741    15,359      261                   (13,152)        379        9,588

   Comprehensive income
     Net income                                                                        $ 214           214                      214
     Other comprehensive loss, net of tax
       Unrealized loss on securities                                                    (588)                     (588)        (588)
                                                                                  -------------
   Comprehensive loss                                                                  $(374)
                                                                                  =============
   Sale of stock                            239,815     2,878     1,275                                                       4,153
                                           ---------------------------------------             ------------------------------------

Balances, December 31, 2003                 801,555     9,619    16,634      261                   (12,938)       (209)      13,367

   Comprehensive income
     Net income                                                                         $472           472                      472
     Other comprehensive loss, net of tax
       Unrealized loss on securities                                                     (52)                      (52)         (52)
                                                                                  -------------
   Comprehensive income                                                                 $420
                                                                                  =============
   Sale of stock                            115,101     1,381     1,093                                                       2,474
                                           ---------------------------------------             ------------------------------------

Balances, December 31, 2004                 916,656    $11,000  $17,727     $261                  $(12,466)      $(261)     $16,261
                                           =======================================             ====================================

See notes to consolidated financial statements.

37

FIDELITY FEDERAL BANCORP

Consolidated Statements of Cash Flows
(In Thousands)

Year Ended December 31                                                  2004         2003         2002
---------------------------------------------------------------------------------------------------------
Operating Activities
   Net income (loss)                                                  $    472     $    214     $ (4,395)
   Adjustments to reconcile net income (loss) to net cash provided
     (used) by operating activities
     Provision for loan losses                                             448           13         (360)
     Provision for losses on foreclosed assets                              20
     Letter of credit valuation provision                                  (77)        (170)
     Gain on early extinguishment of debt                                                           (140)
     Net gain on sales of securities available for sale                    (47)        (353)         (73)
     Net gain on sale of loans                                            (310)        (725)
     Net gain on sale of foreclosed assets                                             (359)
     Loss on impairment of assets held for sale and changes in
       estimated useful lives of intangible assets                                                 1,769
     Depreciation and amortization                                         418          438        1,334
     Amortization of premiums and discounts, net                           484          399          348
     Valuation allowance--affordable housing investments                                              40
     Mortgage loans originated for sale                                 (9,557)     (25,827)     (22,954)
     Proceeds from sale of mortgage loans                                9,760       26,349       23,129
     Consumer loan originations transferred to held for sale           (19,621)     (36,829)      (5,145)
     Proceeds from consumer loan sales                                  19,728       37,032        5,145
     Deferred income tax                                                   (66)        (220)        (641)
     Changes in
       Interest payable and other liabilities                              406         (439)        (564)
       Interest receivable and other assets                                389         (465)        (617)
                                                                     -----------------------------------
         Net cash provided (used) by operating activities                2,447         (942)      (3,124)
                                                                     -----------------------------------

Investing Activities
   Purchases of securities available for sale                          (36,246)     (60,298)     (34,125)
   Proceeds from maturities of securities available for sale            20,185       19,455       12,607
   Proceeds from sales of securities available for sale                  2,555       22,530        5,053
   Purchases of FHLB stock                                                (161)        (792)         (54)
   Proceeds from sale of foreclosed assets                                            2,772
   Proceeds from sale of note receivable to a related party                                         (235)
   Net change in loans                                                 (11,126)     (30,145)      29,510
   Net change in loans to related parties                                    8        2,605          166
   Purchase of premises and equipment                                     (444)        (123)        (218)
   Proceeds from sales of premises and equipment                                                     783
   Funding on outstanding letters of credit                                 18                      (239)
                                                                     -----------------------------------
         Net cash provided (used) by investing activities              (25,211)     (43,996)      13,248
                                                                     -----------------------------------

38

FIDELITY FEDERAL BANCORP

Consolidated Statements of Cash Flows
(In Thousands)

(Continued)

Year Ended December 31                                          2004          2003          2002
---------------------------------------------------------------------------------------------------
Financing Activities
   Net change in
   Noninterest-bearing, interest-bearing
     demand and savings deposits (includes changes to
     related party of $1,325, $235 and $30)                  $   2,876     $   1,995     $  (3,753)
   Certificates of deposit (includes changes to related
     party of $364, $0 and $0)                                   4,145        11,894        (9,611)
   Proceeds from borrowings                                      5,558         4,275         4,858
   Repayment of borrowings                                      (2,175)       (7,784)       (6,449)
   Proceeds of borrowings from a related party                                 1,000
   Repayment of borrowings from a related party                 (1,000)
   Proceeds of FHLB advances                                   123,235        68,500        60,300
   Repayment of FHLB advances                                 (110,695)      (39,950)      (69,633)
   Sale of stock                                                 2,474         4,153         1,421
   Sale of stock warrants                                                                      250
                                                          ----------------------------------------
         Net cash provided (used) by financing activities       24,418        44,083       (22,617)
                                                          ----------------------------------------

Net Change in Cash and Cash Equivalents                          1,654          (855)      (12,493)

Cash and Cash Equivalents, Beginning of Period                   2,968         3,823        16,316
                                                          ----------------------------------------

Cash and Cash Equivalents, End of Period                     $   4,622     $   2,968     $   3,823
                                                          ========================================

Additional Cash Flows Information
   Interest paid                                             $   3,859     $   3,754     $   6,256
   Real estate acquired in settlement of loans                     752           192         2,123

See notes to consolidated financial statements.

39

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

>> Nature of Operations and Summary of Significant Accounting Policies

The accounting and reporting policies of Fidelity Federal Bancorp (Fidelity) and its wholly-owned subsidiaries conform to accounting principles generally accepted in the United States of America and reporting practices followed by the thrift industry. The more significant of the policies are described below.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fidelity is a registered thrift holding company whose principal activity is the ownership and management of United Fidelity Bank, fsb (United). United operates under a national thrift charter and provides full banking services. As a federally chartered thrift, United is subject to regulation by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation.

United generates mortgage, consumer and commercial loans and receives deposits from customers located primarily in Vanderburgh County, Indiana and surrounding counties. Fidelity's loans are generally secured by specific items of collateral including real property, consumer assets and business assets. Village Capital Corporation previously earned fees by providing real estate mortgage banking services to unaffiliated borrowers. Village Capital has not provided any new banking services for the past three years, but records fee income on transactions previously completed. Another United subsidiary, Village Insurance Corporation, is engaged in the business of selling credit life and accident health insurance in conjunction with United's lending activities. Village Insurance was merged into Village Capital Corporation during 2003. United formed a new subsidiary, United Fidelity Finance, LLC, during the fourth quarter of 2001, which was utilized to complete an auto loan securitization transaction during 2002.

Consolidation-- The consolidated financial statements include the accounts of Fidelity and its subsidiaries after elimination of all material intercompany transactions.

Use of estimates-- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowance for loan losses and the valuation of foreclosed assets held for sale, management obtains independent appraisals for significant properties.

40

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Cash equivalents-- Fidelity considers all liquid investments with original maturities of three months or less to be cash equivalents.

Securities available for sale are carried at fair value, with unrealized gains and losses reported separately in accumulated other comprehensive income, net of tax.

Amortization of premiums and accretion of discounts are recorded as interest income from securities. Realized gains and losses are recorded as net security gains (losses). Gains and losses of securities are recorded on the specific-identification method.

Loans held for sale are carried at the lower of aggregate cost or market value. Market is determined using the aggregate method. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income, based on the difference between estimated sales proceeds and aggregate cost.

Loans held for sale at any point in time normally consist of blocks of consumer loans designated for sale to unrelated financial institutions or individual 1-4 family mortgage loans originated for sale into the secondary market. The amounts of loans held for sale at December 31, 2004 and 2003, were not significant and have been included with total loans on the consolidated balance sheets.

Loans are carried at the principal amount outstanding. Interest income is accrued on the principal balances of loans. The accrual of interest on impaired loans is discontinued when, in management's opinion, the borrower may be unable to meet payments as they become due. When interest accrual is discontinued, all unpaid accrued interest is reversed when considered uncollectible. Interest income is subsequently recognized only to the extent cash payments are received. Certain loan fees and related direct costs are being deferred and amortized over the lives of the loans as an adjustment of yield on the loans.

Allowance for loan losses is maintained for credit losses to absorb losses inherent in the loan portfolio. The valuation allowance for letters of credit is maintained for losses related to letters of credit, which are off-balance sheet instruments. The allowances are based on ongoing quarterly assessments of the probable estimated losses inherent in the loan and letter of credit portfolios. The allowance for loan losses is increased by the provision for credit losses, which is charged against current period operating results and decreased by the amount of chargeoffs, net of recoveries. The valuation allowance for letters of credit is maintained in a separate liability account and changes in the valuation allowance are included in current year operations. Fidelity's methodology for assessing the appropriateness of the allowance for loan losses consists of several key elements, which include the formula allowance, specific allowances for identified problem loans and the unallocated allowance.

The formula allowance is calculated by applying loss factors to outstanding loans and certain unused commitments, in each case based on the internal risk grade of such loans, pools of loans or commitments. Changes in risk grades of both performing and nonperforming loans affect the amount of the formula allowance. Loss factors are based on historical loss experience and may be adjusted for significant factors that, in management's judgment, affect the collectibility of the portfolio as of the evaluation date.

Specific loan and letter of credit valuation reserves are established in cases where management has identified significant conditions or circumstances related to a loan or letter of credit that management believes indicate the probability that a loss has been incurred in excess of the amount determined by the application of, in the case of the allowance for loan losses, the formula allowance.

41

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The unallocated allowance for loan losses is based upon management's evaluation of various conditions, the effects of which are not directly measured in the determination of the formula and specific allowances. The evaluation of the inherent loss with respect to these conditions is subject to a higher degree of uncertainty because they are not identified with specific credits. The conditions evaluated in connection with the unallocated allowance for loan losses and the letter of credit valuation reserve may include existing general economic and business conditions affecting Fidelity's key lending areas, credit quality trends, collateral values, loan volumes and concentrations, seasoning of the loan and letter of credit portfolios, specific industry conditions within portfolio segments, recent loss experience in particular segments of the portfolios, duration of the current business cycle, regulatory examination results and findings of an independent third party conducting quarterly reviews of the loan and letter of credit portfolios.

The allowance for loan losses also incorporates the results of measuring impaired loans as provided in SFAS No. 114 and SFAS No. 118. A loan is considered impaired when management determines that it is probable that the bank will be unable to collect all amounts due according to the original contractual terms of the loan agreement. Impairment is measured by the difference between the recorded investment in the loan and the estimated present value of total expected future cash flows, discounted at the loan's effective rate, or the fair value of the collateral of the loan, if collateral dependent. Impairment is recognized by adjusting an allocation of the existing allowance for loan losses.

The determination of the adequacy of the allowance for loan losses and the letter of credit valuation allowance is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. Management believes that, as of December 31, 2004, the allowance for loan losses and the letter of credit valuation allowance were adequate based on information currently available. A worsening or protracted economic decline in the area within which Fidelity operates could affect the possibility of additional losses due to credit and market risks and could create the need for additional loss reserves.

Automobile Loan Securitizations--In 2002, United used the securitization of automobile loans as a source of funding and as a mechanism to reduce its volume of automobile loans. Automobile loans were transferred into a qualifying special purpose entity (SPE) then to a trust in a transaction which is effective under applicable banking rules and regulations to legally isolate the assets from United. Where the transferor is a depository institution such as United, legal isolation is accomplished through compliance with specific rules and regulations of the relevant regulatory authorities. SFAS 140 requires, for certain transactions completed after the initial adoption date, a "true sale" analysis of the treatment of the transfer under state law as if United were a debtor under the bankruptcy code. A "true sale" legal analysis includes several legally relevant factors, such as the nature and level of recourse to United and the nature of retained servicing rights. The analytical conclusion as to a true sale is never absolute and unconditional, but contains qualifications based on the inherent equitable powers of a bankruptcy court, as well as the unsettled state of the common law. Once the legal isolation test has been met under SFAS 140, other factors concerning the nature and extent of United's control over the transferred assets are taken into account in order to determine whether derecognition of assets is warranted, including whether the SPE has complied with rules concerning qualifying special purpose entities.

42

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

A legal opinion was obtained for the automobile loan securitization transaction in 2002, which was structured as a two-step securitization. While noting the transaction fell within the meaning of a "securitization" under the FDIC regulation, "Treatment by the Federal Deposit Insurance Corporation as Conservator or Receiver of Financial Assets Transferred by an Insured Depository Institution in Connection with a Securitization or Participation" (the "Securitization Rule"), in accordance with accounting guidance, an analysis was also rendered under state law as if United was a debtor under the bankruptcy code. The "true sale" opinion provides reasonable assurance the purchased assets would not be characterized as the property of United's receivership or conservatorship estate in the event of insolvency and also states United would not be required to substantively consolidate the assets and liabilities of the purchaser SPE with those of United upon such event.

In a securitization, the trust issues beneficial interests in the form of senior and subordinated asset-backed securities backed or collateralized by the assets sold to the trust. The senior classes of the asset-backed securities typically receive investment grade credit ratings at the time of issuance. These ratings are generally achieved through the acquisition of a financial guarantee policy, the creation of lower-rated subordinated classes of asset-backed securities, as well as subordinated interests retained by an affiliate of United. In all cases, United or its affiliate retains interests in the securitized assets, which may take the form of seller certificates, subordinated tranches, cash reserve balances, servicing assets and interest-only strips representing the cash flows generated by the assets in excess of the contractual cash flows required to be paid to the investors and for other obligations such as servicing fees.

In accordance with SFAS 140, securitized automobile loans are removed from the balance sheet and a net gain or loss is recognized in income at the time of initial sale and each subsequent sale when the combined net sales proceeds and, if applicable, retained interests differ from the loans' allocated carrying amount. Net gains or losses resulting from securitizations are recorded in noninterest income or expense.

Retained interests in the subordinated tranches and interest-only strips are recorded at their fair value and accounted for as available-for-sale securities with subsequent adjustments to fair value recorded through other comprehensive income within stockholders' equity or in other noninterest expense in the income statement if the fair value has declined below the carrying amount and such decline has been determined to be other than temporary. United uses assumptions and estimates in determining the fair value allocated to the retained interests at the time of sale and each subsequent sale in accordance with SFAS 140. These assumptions and estimates include projections concerning rates charged to customers, the expected life of the receivables, credit loss experience, loan repayment rates, the cost of funds and discount rates commensurate with the risks involved.

On a quarterly basis, management reviews the historical performance of the retained interest and the assumptions used to project future cash flows. If past performance and future expectations dictate, assumptions are revised and the present value of future cash flows is recalculated. Refer to the automobile loan securitization footnote for further analysis of the assumptions used in the determination of fair value.

The retained interest represents United's maximum loss exposure with respect to securitization vehicles. The investors in the debt securities issued by the SPEs have no further recourse against United if cash flows generated by the securitized automobile loans are inadequate to service the obligations of the SPEs.

Transaction costs associated with the automobile loan securitization were recognized as a component of the gain or loss at the time of sale.

43

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Premises and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based principally on the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized. Gains and losses on dispositions are included in current operations.

Federal Home Loan Bank (FHLB) stock is a required investment for institutions that are members of the FHLB system. The required investment in the common stock is based on a predetermined formula.

Foreclosed assets held for sale-- Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net income or expense from foreclosed assets.

Income tax in the consolidated statements of income includes deferred income tax provisions or benefits for all significant temporary differences in recognizing income and expenses for financial reporting and income tax purposes. Fidelity files consolidated income tax returns with its subsidiaries.

Servicing rights on originated loans that have been sold, including those transferred as part of securitizations, are capitalized by allocating the total cost of the mortgage or consumer loans between the servicing rights and the loans based on their relative fair values. Capitalized servicing rights are amortized in proportion to and over the period of estimated servicing revenues. Impairment of mortgage and consumer loan-servicing rights is assessed based on the fair value of those rights. Fair values are estimated using discounted cash flows based on a current market interest rate. For purposes of measuring impairment, the rights are stratified based on the predominant risk characteristics of the underlying loans. The predominant characteristic currently used for stratification is type of loan. The amount of impairment recognized is the amount by which the capitalized servicing rights for a stratum exceed their fair value.

Stock options and Fidelity's stock-based incentive compensation plans are discussed more fully in the Stock Option Plans footnote. The Company accounts for these plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price that was equal to or greater than the market value of the underlying common stock on the grant date. The following table illustrates the effect on net income and earnings per share if Fidelity had applied the fair value provisions of FASB statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

Year Ended December 31                                            2004       2003       2002
----------------------------------------------------------------------------------------------
                                                                  $472       $214     $(4,395)
Net income (loss), as reported
Less:  Total stock-based compensation cost determined
       under the fair value based method, net of income taxes       18         31          73
                                                                ------------------------------
                                                                  $454       $183     $(4,468)
Pro forma net income (loss)
                                                                ==============================
                                                                 $0.54      $0.29      $(8.54)
Basic earnings (loss) per share - as reported
Basic earnings (loss) per share - pro forma                      $0.52      $0.25      $(8.68)
Diluted earnings (loss) per share - as reported                  $0.54      $0.29      $(8.54)
Diluted earnings (loss) per share - pro forma                    $0.52      $0.25      $(8.68)

44

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Earnings per share have been computed based upon the weighted-average common shares outstanding during the year. The effect of outstanding options and warrants are included in diluted earnings per share if they are not anti-dilutive.

Reclassification of certain amounts in the 2003 and 2002 consolidated financial statements has been made to conform to the 2004 presentation.

>> Restriction on Cash and Due From Banks

United is required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. The reserve required at December 31, 2004 was $19.

United maintains cash in bank deposit accounts, which at times, may exceed federally insured limits. United has not experienced any losses in such accounts. Management does not believe United is exposed to any significant risk.

>>       Investment Securities Available for Sale

                                                 Gross        Gross
                                  Amortized    Unrealized   Unrealized   Fair
                                    Cost         Gains        Losses     Value
                                ------------------------------------------------

December 31, 2004
   Mortgage-backed securities      $65,613        $59         $(480)    $65,192
                                ================================================

December 31, 2003
   Mortgage-backed securities      $52,544        $50         $(386)    $52,208
                                ================================================

Securities with a carrying value of $65,191 and $52,207 were pledged at December 31, 2004 and 2003, respectively, to secure certain deposits, outstanding Federal Home Loan Bank advances, secured federal funds purchased line of credit , repurchased lines of credit, and for other purposes as permitted or required by law.

Gross gains of $47, $353 and $73 resulting from sales of available-for-sale securities were realized for 2004, 2003 and 2002, respectively. Taxes of $18, $134 and $28 were recorded on the gains, respectively.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at December 31, 2004 and 2003, was $55,161 and $34,400, respectively, which is approximately 85% and 66% of Fidelity's available-for-sale investment portfolio. These declines primarily resulted from recent increases in market interest rates.

Based on evaluation of available evidence, including recent changes in market interest rates and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary.

45

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following table shows our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

                                  Less than 12 Months           12 Months or More                  Total
                               -----------------------------------------------------------------------------------
   Description of Securities   Fair Value     Unrealized   Fair Value      Unrealized   Fair Value      Unrealized
                                                Losses                       Losses                       Losses
------------------------------------------------------------------------------------------------------------------
 December 31, 2004
    Mortgage-backed securities  $41,037         $(270)       $14,124         $(210)       $55,161         $(480)
                               ===================================================================================

 December 31, 2003
    Mortgage-backed securities  $34,281         $(384)       $   119         $  (2)       $34,400         $(386)
                               ===================================================================================

>> Loans and Allowance

December 31                                                                                2004             2003
------------------------------------------------------------------------------------------------------------------
Real estate mortgage loans
   First mortgage loans
     Conventional                                                                        $ 38,226         $ 41,754
     Construction                                                                           4,471            2,042
     Commercial                                                                            16,251            9,144
     Multi-family                                                                             594              213
     Home equity loans                                                                      6,144            5,067
     Purchased loans                                                                          385              778
Commercial loans--other than secured by real estate                                         4,136            3,138
Consumer loans                                                                             41,320           39,038
                                                                                        --------------------------
         Total loans                                                                      111,527          101,174

   Allowance for loan losses                                                                 (756)            (737)
                                                                                        --------------------------

         Total loans, net of the allowance for loan losses                               $110,771         $100,437
                                                                                        ==========================

46

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Year Ended December 31                     2004        2003        2002
------------------------------------------------------------------------

Allowance for Loan Losses
   Balances, beginning of period         $   737     $   837     $ 2,138
   Provision for losses                      562         492         204
   Loans transferred to held for sale       (114)       (479)       (564)
   Recoveries on loans                       141         123       1,013
   Loans charged off                        (570)       (236)     (1,954)
                                       ---------------------------------

         Balances, end of period         $   756     $   737     $   837
                                       =================================

Information on impaired loans is summarized below:

December 31                                  2004    2003
-----------------------------------------------------------

Impaired loans with an allowance             $671    $765

Impaired loans without an allowance             8      10
                                          ---------------
Total impaired loans                         $679    $775
                                          ===============
Allowance for impaired loans
  (included in allowance for loan losses)    $130    $169
                                          ===============


Year Ended December 31                           2004      2003      2002
--------------------------------------------------------------------------

Average balance of impaired loans               $  725    $  924    $3,656
Interest income recognized on impaired loans        26        13       312
Cash-basis interest included above                  26        16       333

At December 31, 2004 and 2003, accruing loans delinquent 90 days or more totaled $259 and $287, respectively. Non-accruing loans at December 31, 2004 and 2003, were $755 and $1,415, respectively.

>> Letter of Credit Valuation Allowance

Reserves related to letters of credit issued by Fidelity and United relate to the permanent financing for certain affordable housing projects. Multi-family housing letters of credit, an off-balance sheet item, carry the same risk characteristics as conventional loans and totaled $22,724 and $27,774 at December 31, 2004 and 2003, respectively.

47

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Year Ended December 31                          2004      2003      2002
-------------------------------------------------------------------------

Letter of credit valuation allowance
   Balances, beginning of year                 $ 291     $ 445     $ 665
   Provision                                     (77)     (170)
   Recoveries                                     18        16        19
   Funding of outstanding letters of credit                         (239)
                                              --------------------------

     Balances, end of year                     $ 232     $ 291     $ 445
                                              ==========================

>> Automobile Loan Securitization

United completed an automobile loan securitization transaction in 2002. The transaction resulted in the sale of $49 million of rated class A notes. Financial Security Assurance (FSA) provided a financial guaranty policy on the class A notes. The transaction also resulted in the sale of $500,000 in non-rated class B notes. The transaction was effected through a wholly-owned subsidiary, United Fidelity Finance, LLC.

A summary of the components of managed loans, which represents both owned and securitized loans, follow. The automobile loans presented represent the managed portfolio of indirect prime automobile loans.

                                                                     Loans Past
                                                      Principal       Due Over
As of December 31, 2004                                Balance        30 Days
-------------------------------------------------------------------------------

 Total managed automobile loans                        $ 86,240        $1,128
 Less: Automobile loans securitized                     (11,493)         (261)
 Automobile loans serviced for others                   (35,179)         (222)
                                                     --------------------------

 Total automobile loans held in portfolio              $ 39,568        $  645
                                                     ==========================

Certain cash flows received from the securitization trust follow:

Year Ended December 31                     2004        2003       2002
------------------------------------------------------------------------

 Proceeds from securitization                                    $48,939
 Servicing fees received                   $186        $329          138

United estimates the fair value of the retained interest at the date of the transfer and during the period of the transaction based on a discounted cash flow analysis. United receives annual servicing fees based on the loan balances outstanding, the rights to future cash flows arising after investors in the securitization trust have received their contractual return and after certain administrative costs of operating the trust. These cash flows are estimated over the life of the loans using prepayment, default and interest rate assumptions that market participants would use for financial instruments subject to similar levels of prepayment, credit and interest rate risk.

48

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

A summary of the fair values of the interest-only strips and servicing assets retained, key economic assumptions used to arrive at the fair values and the sensitivity of the December 31, 2004, fair values to immediate 10% and 20% adverse changes in those assumptions follows. Actual credit losses experienced through year end 2004 on the pool of automobile loans securitized have been consistent with initial projections. As such, the expected static pool loss assumption would perform consistently with that disclosed in the sensitivity analysis. The sensitivities are hypothetical. Changes in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained interests is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which might either magnify or counteract the sensitivities.

                                                      Weighted-     Monthly     Expected
                                                       Average    Prepayment   Cumulative     Annual     Weighted-
                                           Fair         Life         Speed       Credit      Discount     Average
                                          Value      (in months)    (% ABS)      Losses        Rate        Coupon
                                        -----------------------------------------------------------------------------
Interest-only strip
   As of the date of securitization        $2,707           39         1.50%        1.50%        15.0%        8.75%
   As of December 31, 2004                  1,114            7         0.67         1.50         15.0         8.41
   Decline in fair value of 10%
     adverse change                                                    $  2           $3         $  9
   Decline in fair value of 20%
     adverse change                                                      17            7           17

Servicing asset
   As of the date of securitization        $  362           39         1.50%        1.50%        15.0%
   As of December 31, 2004                      0            7         0.67         1.50         15.0

>> Foreclosed Assets Held for Sale

Activity in the allowance for losses on foreclosed assets was as follows:

Year Ended December 31                            2004              2003
-------------------------------------------------------------------------

 Balance, beginning of year                        $ 0             $ 100
 Provision charged to expense                       20
 Charge-offs, net of recoveries                                     (100)
                                                ------------------------

   Balance, end of year                            $20             $   0
                                                ========================

49

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

>>       Premises and Equipment

December 31                           2004         2003
                                   ---------------------

Land                                 $   935     $   935
Building and land improvements         5,892       5,590
Furniture, fixtures and equipment      2,357       2,214
                                   ---------------------
       Total cost                      9,184       8,739
Accumulated depreciation              (4,538)     (4,119)
                                   ---------------------

Net                                  $ 4,646     $ 4,620
                                   =====================

>> Other Assets and Investments in Limited Partnerships

Included in other assets at December 31, 2004 and 2003, are investments of $327 and $358, respectively, in limited partnerships which are organized to build, own and operate apartment complexes. The carrying amounts of these investments approximate Fidelity's equity in the net assets of the partnerships. The investments at December 31, 2004 and 2003, were as follows:

                                          Amount of                Number of
                                          Investment             Partnerships
Percentage and Type of               ------------------------------------------
 Partnership Interest                 2004          2003       2004        2003
-------------------------------------------------------------------------------

     31%--Limited                    $   0         $   0         1           1
     26%--Limited                       45            45         1           1
     10%--Limited                      187           217         1           1
     10%--Limited                       95            95         1           1

Fidelity records income on the equity method in the income and losses of the limited partnerships, which resulted in losses of $0, $22 and $38 during the years ended December 31, 2004, 2003 and 2002, respectively. In addition to recording its equity in the losses of these projects, Fidelity has recorded the benefit of low-income housing tax credits of $222, $222 and $185 for the years ended December 31, 2004, 2003 and 2002, respectively. In certain cases, Fidelity could reduce the carrying value of its investments in and related loans to these partnerships, should its share of net losses materially exceed the net investments in and loans to these partnerships. Combined condensed financial statements as of December 31, 2004 and 2003, have not been presented because the investments in limited partnerships were not considered material at that date.

Fidelity reduced the recorded value of its investment in limited partnerships, in addition to the losses recorded, by $30, $18 and $122 during the years ended December 31, 2004, 2003 and 2002, respectively, based on the performance of the underlying real estate operations.

50

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Included in other assets is interest receivable as follows:

December 31                                                2004     2003
------------------------------------------------------------------------

Interest receivable on loans                               $336     $333
Interest receivable on investment securities and other      306      231
                                                        ----------------

       Total interest receivable                           $642     $564
                                                        ================


>>       Deposits

December 31                                                2004        2003
-----------------------------------------------------------------------------

Non-interest bearing transaction accounts               $  8,250    $  6,903
Interest-bearing transaction accounts                     12,903      12,981
Money market deposit accounts                              8,219       6,798
Savings accounts                                           5,720       5,533
Certificates of $100 or more                              25,252      29,389
Other certificates and time deposits                      67,357      59,076
                                                        --------------------

       Total deposits                                   $127,701    $120,680
                                                        ====================

Certificates maturing in years ending December 31:

   2005                                                 $61,746
   2006                                                  21,640
   2007                                                   8,587
   2008                                                     476
   2009                                                     104
   Thereafter                                                56
                                                        -------

                                                        $92,609
                                                        =======

Time deposits at December 31, 2004 and 2003, included brokered deposits of approximately $14,438 and $2,873, respectively.

51

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

>> Federal Home Loan Bank Advances and Borrowings

December 31                                                                       2004          2003
-------------------------------------------------------------------------------------------------------
Subordinated Debenture- Trust Preferred Securities, 4.72%,
   interest paid quarterly, due December 2034, unsecured                         $ 3,093
Junior subordinated notes, 9.00%, interest paid semi-annually,
   due February 2009, unsecured                                                    1,002      $  1,002
Senior subordinated notes, 9.00%, interest paid semi-annually,
   due April 2009, unsecured                                                       2,365
Senior subordinated notes, 10.00%, interest paid semi-annually,
   due June 2005, unsecured                                                                      1,800
Federal Home Loan Bank advances, due at various dates through
   2008 (weighted-average rates of 2.37% and 2.08% at December 31,
   2004 and 2003, respectively)                                                   44,090        31,550
Note payable, 6.25%, interest paid monthly, due November 2005,
   secured by United guarantee                                                                     275
Junior subordinated notes, 5.41%, adjusted quarterly, interest paid
   quarterly, due September 2033, unsecured, with call option                      4,000         4,000
Note payable, 9.00%, interest paid quarterly, due June 2004, unsecured                           1,000
                                                                              -------------------------

       Total long-term debt                                                      $54,550       $39,627
                                                                              =========================

Fidelity and Fidelity Federal Bancorp Statuary Trust I-2004 (Trust) entered into an agreement to issue and sell 3,000 of Floating Rate TruPS(R) of the Trust, having a stated liquidation amount of $1,000 per capital security and bearing a per annum rate of interest, reset quarterly, equal to the three month LIBOR plus 2.25%. The Junior Subordinated Debentures due in 2034 were issued by Fidelity to the Trust. Fidelity has fully and unconditionally guaranteed all of the Issuer's obligations under trust preferred securities issued by the Trust. The Junior Subordinated Debentures qualify as Tier 1 Capital for regulatory capital purposes.

The terms of a security agreement with the FHLB require United to pledge as collateral qualifying first mortgage loans in an amount equal to at least 125% of these advances and all stock in the FHLB or eligible securities with a market value in an amount equal to at least 110% of these advances, in addition to first mortgage loans pledged of $30,964. Fidelity had $52,824 of investment securities pledged at December 31, 2004. Certain advances are subject to restrictions or penalties in the event of prepayment.

All long-term debt, except for Federal Home Loan Bank advances and the $4,000 note payable noted above, are the debt of the parent company and totaled $6,460 at December 31, 2004, as compared to $4,077 at December 31, 2003.

52

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The scheduled principal reduction of borrowings in years ended December 31 are:

   2005                                                       $28,090
   2006                                                         6,500
   2007                                                         4,500
   2008                                                         1,000
   2009                                                         7,367
   Thereafter                                                   7,093
                                                             --------

                                                              $54,550
                                                             ========


>>       Loan Servicing

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others totaled $54,658, $55,413 and $57,368 at December 31, 2004, 2003 and 2002, respectively.

The aggregate fair value of capitalized mortgage servicing rights at December 31, 2004 and 2003, approximated $628 and $639, respectively. Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates, were used to stratify the originated mortgage servicing rights.

Year Ended December 31                   2004       2003       2002
-------------------------------------------------------------------

Mortgage servicing rights
   Balances, beginning of period        $ 639      $ 514      $ 632
   Servicing rights capitalized            95        258        232
   Amortization of servicing rights      (106)      (285)      (198)
                                     ------------------------------
                                          628        487        666
   Change in valuation allowance                     152       (152)
                                     ------------------------------

     Balances, end of period            $ 628      $ 639      $ 514
                                     ==============================

The entire valuation allowance of $152 at December 31, 2002, was added in the fourth quarter of 2002. The valuation allowance was reduced by $152 during 2003 leaving a balance of $0 in the valuation allowance at December 31, 2003 and 2004.

Consumer loans are also serviced for others and are not included in the accompanying consolidated balance sheets. The unpaid principal balances of consumer loans serviced for others totaled $46,672 and $56,136 at December 31, 2004 and 2003, respectively.

53

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The aggregate fair value of capitalized consumer loan servicing rights at December 31, 2004 and 2003, approximated $45 and $223, respectively. As with mortgage servicing rights, comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value.

Year Ended December 31                   2004       2003
---------------------------------------------------------

Consumer loan servicing rights
   Balances, beginning of period        $ 223      $ 409
   Servicing rights capitalized            26         96
   Amortization of servicing rights      (204)      (282)
                                     -------------------

     Balances, end of period            $  45      $ 223
                                     ===================

>> Income Tax

Year Ended December 31                                          2004         2003         2002
------------------------------------------------------------------------------------------------
Income tax benefit
   Deferred
     Federal                                                  $   (99)     $  (228)     $(1,028)
     State                                                         33            8         (213)
     Change in valuation allowance                                                          600
                                                            -----------------------------------
       Total income tax benefit                               $   (66)     $  (220)     $  (641)
                                                            ===================================

Reconciliation of federal statutory to actual tax benefit
   Federal statutory income tax at 34%                        $   138      $    (2)     $(1,036)
   Effect of state income taxes                                    22            5          (53)
   Nondeductible expenses                                           8            8            8
   Changes in the deferred tax asset valuation allowance                                    600
   Affordable housing tax credits and other                      (222)        (211)        (222)
   Other                                                          (12)         (20)          62
                                                            -----------------------------------
       Actual tax benefit                                     $   (66)     $  (220)     $  (641)
                                                            ===================================

54

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The components of the deferred tax asset are as follows:

December 31                                                       2004         2003
-------------------------------------------------------------------------------------
Assets
   Allowance for loan losses                                     $   751      $   744
   Valuation for letters of credit                                    88          111
   Unrealized loss on available-for-sale securities                  159          128
   Alternative minimum tax credit                                     81           81
   Low income housing credit carryforward                          1,868        1,563
   State net operating loss carryforward                             972          974
   Federal net operating loss carryforward                         3,530        3,530
   State income tax                                                   20           14
   Differences in accounting for certain accrued liabilities           4
   Valuation for interest-only strip obligation                      173          173
   Other                                                              13            8
                                                               ----------------------
         Total assets                                              7,659        7,326
                                                               ----------------------

Liabilities
   Depreciation and amortization                                      (8)         (28)
   Differences in accounting for certain accrued liabilities                       (5)
   Differences in basis of FHLB stock                               (178)        (117)
   Basis differential on certain partnership interests              (245)        (155)
   Differences in accounting for loan servicing rights              (256)        (328)
                                                               ----------------------
         Total liabilities                                          (687)        (633)
                                                               ----------------------

         Net deferred tax asset before valuation allowance         6,972        6,693
                                                               ----------------------

Valuation Allowance
   Beginning balance                                                (600)        (600)
   Increase during the period                                       (180)
                                                               ----------------------

         Ending balance                                             (780)        (600)
                                                               ----------------------

         Net deferred tax asset                                  $ 6,192      $ 6,093
                                                               ======================

At December 31, 2004, Fidelity has federal net operating loss carryforwards for tax purposes totaling $10,382. These loss carryforwards expire in varying amounts through the year 2022. Fidelity has state net operating loss carryforwards for tax purposes of $11,435. These loss carryforwards expire in varying amounts through the year 2016. Fidelity has affordable housing credit carryforwards of $1,868. These carryforwards expire in varying amounts through the year 2022. In addition, Fidelity has an alternative minimum tax credit carryforward of $81.

55

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

>> Other Comprehensive Income (Loss)

Other comprehensive income components and related taxes were as follows:

Year Ended December 31                                          2004       2003       2002
------------------------------------------------------------------------------------------
Unrealized gains (losses) on securities available for sale     $ (38)     $(602)     $ 755
Reclassification for realized amount included in income          (47)      (353)       (73)
                                                             -----------------------------
  Other comprehensive income (loss), before tax effect           (85)      (955)       682
Tax expense (benefit)                                            (33)      (367)       265
                                                             -----------------------------

  Other comprehensive income (loss)                            $ (52)     $(588)     $ 417
                                                             =============================

>> Commitments and Contingent Liabilities

In the normal course of business, there are outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. Fidelity's exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. Fidelity uses the same credit policies in making such commitments as it does for instruments that are included on the consolidated balance sheets.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Fidelity evaluates each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by Fidelity upon extension of credit, is based on management's credit evaluation. Collateral held varies, but may include residential real estate, income-producing commercial properties or other assets of the borrower. At December 31, 2004 and 2003, commitments to extend credit, which represent financial instruments whose contract amount represents credit risk, were $6,678 and $12,099, respectively.

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments. At December 31, 2004 and 2003, Fidelity and United had granted unused lines of credit to borrowers aggregating approximately $11,272 and $12,839, respectively.

Fidelity has issued standby letters of credit on affordable housing developments in which the borrowers are not affiliated with Fidelity. The letters of credit secure tax-exempt bond issues and other permanent financing of limited partnerships. The amount outstanding on the letters of credit at December 31, 2004 and 2003, was $22,724 and $27,774, respectively.

56

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Fidelity, in its previous role as general partner on various affordable housing developments through its subsidiaries, was committed to advance certain amounts to limited partnerships. These previous commitments potentially included short-term loans to the limited partners or an increase in the general partner's equity investment. Upon the sale of Village Housing Corporation in the fourth quarter of 2002, these commitments were extinguished.

Fidelity has entered into change in control agreements with one of its employees which provide for the continuation of a multiple of the employee's existing salary and certain benefits for a two-year period of time under certain conditions following a change in control. The agreement becomes effective if there is a change in control that is accompanied by a significant change in job responsibilities and/or compensation.

Fidelity entered into an agreement with another institution in conjunction with a consumer loan sale that guaranteed to the purchaser that Fidelity would repurchase any consumer loans that exceeded a 60-day delinquency status. The original amount of the loans sold was $5.0 million and remaining amount outstanding totaled $745 at December 31, 2004. Over the past year, Fidelity has repurchased a total of $81 that exceeded the 60-day delinquency status.

Fidelity and its subsidiaries are also subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position of Fidelity.

>> Dividend and Capital Restrictions

Fidelity's dividend policy is to pay cash or distribute stock dividends when its board of directors deems it to be appropriate, taking into account Fidelity's financial condition and results of operations, economic and market conditions, industry standards and other factors, including regulatory capital requirements of its savings bank subsidiary. Fidelity is not subject to any regulatory restrictions on payments to its stockholders. Fidelity's primary source of income is dividends from United.

United was previously under a Supervisory Agreement (Agreement) with the OTS which restricted the payments of dividends from United to Fidelity without prior written OTS approval. The Agreement and restriction were terminated on October 29, 2004. Fidelity is uncertain when it will pay dividends in the future and the amount of such dividends, if any.

>> Regulatory Capital

United is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on United's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, United must meet specific capital guidelines that involve quantitative measures of United's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. United's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

57

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Quantitative measures established by regulation to ensure capital adequacy require United to maintain minimum amounts and ratios (set forth in the table below). Management believes, as of December 31, 2004 and 2003, that United meets all capital adequacy requirements to which it is subject.

As of December 31, 2004, the most recent notification from United's federal regulators categorized United as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, United must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed United's category.

United's actual and required capital amounts and ratios were as follows:

                                                                    Required for         To Be Well         Required per
                                                   Actual         Adequate Capital      Capitalized        Strategic Plan
                                            ---------------------------------------------------------------------------------
                                              Amount     Ratio     Amount    Ratio    Amount     Ratio    Amount    Ratio
                                            ---------------------------------------------------------------------------------
As of December 31, 2004
   Total risk-based capital (to risk-
     weighted assets)                         $18,079      14.5%     $9,985     8.0%   $12,481    10.0%    N/A         N/A
   Tier 1 capital (to risk-weighted assets)    13,129      10.5       4,992     4.0      7,489     6.0     N/A         N/A
   Core capital (to adjusted total assets)     14,122       7.2       7,801     4.0      9,752     5.0     N/A         N/A
   Core capital (to adjusted tangible
     assets)                                   14,122       7.2       3,901     2.0        N/A     N/A     N/A         N/A
   Tangible capital (to adjusted total
     assets)                                   14,077       7.2       2,925     1.5        N/A     N/A     N/A         N/A

As of December 31, 2003
   Total risk-based capital (to risk-
     weighted assets)                         $15,294      13.6%     $8,984     8.0%   $11,230    10.0%    $12,353    11.0%
   Tier 1 capital (to risk-weighted assets)    10,292       9.2       4,492     4.0      6,738     6.0       9,265     8.3
   Core capital (to adjusted total assets)     11,869       7.0       6,787     4.0      8,484     5.0      10,605     6.3
   Core capital (to adjusted tangible
     assets)                                   11,869       7.0       3,394     2.0        N/A     N/A     N/A         N/A
   Tangible capital (to adjusted total
     assets)                                   11,646       6.9       2,542     1.5        N/A     N/A     N/A         N/A

>> Stockholders' Equity and Capital Infusion

All information in this footnote agrees to information in registration statements previously filed by Fidelity. Therefore, share and per share data in this footnote has not been restated for the stock splits discussed in the footnote titled "Subsequent Events".

In March 2004, Fidelity filed a registration statement for a stockholder rights offering with the Securities and Exchange Commission. A total of 1.4 million shares were registered in this filing. For every 6.9 shares of Fidelity held on the record date, shareholders could subscribe to purchase one share of Fidelity at $1.81. The rights offering was completed on May 14, 2004. Fidelity raised $2.5 million net of costs associated with the offering. The shares purchased by shareholders with these funds were issued in May 2004.

58

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

In April 2003, Fidelity issued 2.8 million shares of common stock for $4.0 million in cash through the exercise of an option help by Pedcor Financial, LLC (Pedcor Financial) and affiliates. The exercise price per share was $1.44, and was determined under a formula included in the shareholder-approved stock purchase agreement effective May 19, 2000. The proceeds of the option exercise were utilized to reduce Fidelity's long-term debt outstanding. The remaining options expired on May 19, 2003. Pedcor Financial is a member of a group of companies which is controlled by Bruce A. Cordingley, Gerald K. Pedigo and Phillip J. Stoffregen directors of Fidelity. Following the option exercise in April 2003, Pedcor Financial and group beneficially owned approximately 67.75% of Fidelity's issued and outstanding stock.

In July 2002, Fidelity filed a registration statement for a stockholder rights offering with the Securities and Exchange Commission. A total of 750,000 shares were registered in this filing. For every 8.1 shares of Fidelity held on the record date, shareholders could subscribe to purchase one share of Fidelity at $2.00. The rights offering was completed in September 2002. Fidelity raised $770 net of costs associated with the offering. The shares purchased by shareholders with these funds were issued in September 2002.

During the third quarter of 2002, Pedcor Investments, LLC (Investments) exercised a portion of its option that was granted under the stock purchase agreement in May 2000, and purchased $259 in common stock resulting in 137,765 shares being issued.

In December 2001, Fidelity filed a registration statement for a debt and equity rights offering with the Securities and Exchange Commission. Subscription rights were distributed to persons who owned common stock as of the close of business on December 19, 2001, to purchase $1.5 million of 9.00% unsecured junior subordinated notes due February 28, 2009, and 500,000 warrants representing the right to purchase shares of common stock at $3.00 per share, less the purchase price of $0.50 per warrant. The offering was completed on February 28, 2002. Fidelity issued approximately $1.0 million in 9% notes and all of the 500,000 warrants, raising an additional $250.

In connection with Fidelity's debt and equity offering completed on January 31, 1995, Fidelity reserved 346,500 shares of its common stock for issuance upon exercise of 1,500 outstanding warrants. Each warrant represents the right to purchase 231 shares of common stock. The warrants were valued at $100 per warrant, carrying an exercise price of $8.93 per share and expire on January 31, 2005. At December 31, 2004, a total of 337,029 of the shares originally reserved had been issued and 9,471 remained reserved and unissued.

>> Discontinued Operations, Including Fourth Quarter Charges

On September 30, 2002, Fidelity signed a definitive agreement to sell the stock of its wholly owned affordable housing subsidiary, Village Affordable Housing Corporation and the stock of United's wholly owned affordable housing subsidiary, Village Housing Corporation and certain other related affordable housing assets to Pedcor Funding Corporation (Funding). Funding is a company controlled by three directors of Fidelity and are members of a group that beneficially owns approximately 60.7% of Fidelity's issued and outstanding stock at time of transaction.

59

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The sale price was approximately $1.7 million in cash and was consummated during the fourth quarter of 2002. The sale resulted in a consolidated pre-tax loss under generally accepted accounting principles of approximately $201, which consists of a gain from the sale of the affordable housing assets held by Fidelity and United of $574 offset by a loss from the sale of the subsidiaries of $775. The gain is recorded as gain on sale of assets in the other income section of the consolidated statements of income.

The subsidiaries were sold as part of Fidelity's plan to end its active involvement in the affordable housing business. Accordingly, the results of operations for the two subsidiaries, which include impairment charges recorded upon signing the definitive agreement of $742, has been classified as discontinued operations in Fidelity's consolidated statement of income for December 31, 2002. The $742 combined with the $775 loss noted in the paragraph above total the $1,517 listed in the income statement as the loss on sale of discontinued operations. The results of operations of the two subsidiaries for the years ended December 31, 2001 and 2000, were not material and have, therefore, not been segregated.

The sale was consummated in the fourth quarter of 2002. Certain charges were recorded in the third quarter because it was determined that some of the assets held for sale were impaired or their estimated useful lives had changed. Third quarter charges totaled approximately $1,000, net of tax, including approximately $860 in write-downs of intangible assets whose useful lives were reduced. In the fourth quarter, in addition to recording the amounts discussed in the second paragraph of this note, tax provisions of approximately $800 were recorded to account for the basis difference on the stock that was sold.

>> Benefit Plans

Fidelity is a participant in the Financial Institutions Retirement Fund (FIRF). This defined-benefit plan is a multi-employer plan; separate actuarial valuations are not made with respect to each participating employer. Effective January 1, 2004, the plan was frozen to reduce future cash outlay and expense. An estimated normal cost on an ongoing basis for a frozen plan is $14 per year. According to FIRF administrators, the market value of the fund's assets did not exceed the value of vested benefits in the aggregate as of June 30, 2004, the date of the latest actuarial valuation. Plan expense of $0 was recognized during 2004, and $0 in 2003 compared to $110 in 2002. The plan provides pension benefits for substantially all of Fidelity's employees.

Fidelity has a retirement savings 401(k) plan in which substantially all employees may participate. Fidelity matches employees' contributions at the rate of 25% up to 6% of the participant's salary. Fidelity's expense for the plan was $19, $20 and $21 for the years ended December 31, 2004, 2003 and 2002, respectively.

>> Related Party Transactions

Fidelity has entered into transactions with certain directors, executive officers, significant stockholders and their affiliates and associates. Such transactions were made in the ordinary course of business on substantially the same terms and conditions, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other customers, and did not, in the opinion of management, involve more than normal credit risk or present other unfavorable features.

60

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The aggregate amount of loans, as defined, to such related parties was as follows:

December 31                                              2004          2003
-----------------------------------------------------------------------------
Balances, beginning of year                              $177        $ 2,782
   Composition change                                                    (33)
   Loans charged off
   Recoveries
   New loans, including renewals
   Payments, etc., including renewals                      (8)        (2,572)
                                                     ------------------------
Balances, end of year                                    $169        $   177
                                                     ========================

Deposits from related parties held by Fidelity at December 31, 2004 and 2003, totaled $2.5 million and $854, respectively.

During the second quarter of 2003, Fidelity sold two classified notes totaling $2.6 million in connection with two first mortgages held by Fidelity on certain multifamily housing partnerships to a related party. The instruments were acquired by Pedcor Bancorp at par and assisted Fidelity in reducing its classified assets.

During the fourth quarter of 2003, Fidelity entered into a $1.0 million unsecured term loan note with Pedcor Bancorp which matures on June 30, 2004. These funds were contributed to United's capital prior to the end of the year. This note was paid off on March 11, 2004.

During the first quarter of 2002, Fidelity sold two notes held in conjunction with advances made by Fidelity to certain multifamily housing partnerships to a related party. The advances were made to facilitate refinancing activities and resulted in loans subordinated to the first mortgage loans. The advances had been previously charged off and had no value on Fidelity's books. The gain on the note sale totaled $223. Fidelity also sold a position in an interest rate swap for a $72 gain. These gains are included in gains on sales of loans in the consolidated statements of income. The instruments were acquired by Pedcor Funding Corporation and the purchase price consisted of a 20% down payment with the remainder financed by a 10 year note totaling $235 at a rate of 5.25% for five years and 6.50% for the last five years with principal paid annually and interest paid quarterly.

As noted in the discontinued operations footnote, Village Housing Corporation and Village Affordable Housing Corporation, along with certain affordable housing assets, were sold to Pedcor Funding Corporation in the fourth quarter of 2002.

Pedcor had also been providing management services to the partnerships in which Fidelity was a general partner at no cost since May 2000, in accordance with the provisions of the sale of stock to Pedcor in May 2000. Upon completion of the Village Housing Corporation sale noted in the discontinued operations note, these services were no longer necessary.

61

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

>> Stock Option Plans

Under Fidelity's stock option plans, Fidelity grants stock option awards which vest and become exercisable at various dates. During the years ended December 31, 2004 and 2002, Fidelity authorized the grant of options for up to 2,292 and 8,292 shares, respectively, of its common stock. No options were granted in 2003. The exercise price of each option, which has a 10-year life, was greater than the market price of Fidelity's stock on the date of grant; therefore, no compensation expense was recognized.

Although Fidelity has elected to follow APB No. 25, SFAS No. 123 requires pro forma disclosures of net income and earnings per share as if Fidelity had accounted for its employee stock options under that Statement. The fair value of each option grant was estimated on the grant date using an option-pricing model with the following assumptions:

Year Ended December 31                                            2004         2003         2002
---------------------------------------------------------------------------------------------------
Risk-free interest rates                                            4.3%         4.2%          5.1%
Dividend yields                                                     0.0%         0.0%          0.0%
Volatility factors of expected market price of common stock        39.1%        39.7%         40.3%

Weighted-average expected life of the options                   10 years     10 years     10 years

The following is a summary of the status of the Fidelity's stock option plans and changes in the plans as of and for the years ended December 31, 2004, 2003 and 2002.

Directors' Plan
Fidelity has a non-qualified stock option plan (Directors' Plan) which provides for the grant of non-qualified stock options to individuals who are directors of Fidelity, or any of its subsidiaries. The Directors' Plan provides for the grant of non-qualified stock options to acquire shares of common stock of Fidelity for the price of not less than $24 above the average of the high and low bid quotations, as reported by NASDAQ, for the common stock of Fidelity for the five trading days immediately preceding the date the option is granted. The plan has expired; however, as of December 31, 2004, there were options for 9,895 shares outstanding.

December 31                                          2004         2003           2002
--------------------------------------------------------------------------------------
Shares under option
   Outstanding at beginning of year                 16,548       16,548         11,964
   Granted                                                                       4,584
   Forfeited/expired                                (6,653)
                                 -----------------------------------------------------
                                                     9,895       16,548         16,548
   Outstanding at end of year
                                 =====================================================
                                                     9,895       16,548         16,548
   Exercisable at end of year
                                 =====================================================
Weighted option price per share
   Exercisable                                     $ 75.96      $ 75.48         $75.48
   Granted                                                                       53.04
Weighted-average fair value of options granted
   during the year                                                              $12.60

62

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The following table summarizes information about stock options under the Directors' Plan outstanding at December 31, 2004:

                                    Options Outstanding                        Options Exercisable
                        ----------------------------------------------------------------------------------
                                      Weighted-Average
  Range of Exercise       Number         Remaining       Weighted-Average     Number      Weighted-Average
      Prices            Outstanding   Contractual Life    Exercise Price    Exercisable    Exercise Price
----------------------------------------------------------------------------------------------------------
$ 51.72  to  $ 55.20       7,183         6.6 years            $ 53.04         7,183            $ 53.04
$116.88  to  $141.72       2,712         2.3 years            $136.44         2,712            $136.44

1995 Key Employees' Stock Option Plan
The 1995 Key Employees' Stock Option Plan (1995 Plan) provides for the granting of either incentive stock options (ISOs) pursuant to Section 422A of the Internal Revenue Code of 1986, as amended (Code), or stock options which do not qualify as ISOs, or any combination thereof. Options may be granted to key employees and officers of Fidelity and its subsidiaries.

The option price per share for ISOs will not be less than the fair market value of a share on the date the option is granted. The option price per share for ISOs granted to an employee owning 10 percent or more of the common stock of Fidelity will be not less than 110 percent of the fair market value of a share on the date the option is granted. The option price per share for ISOs will be determined by the compensation committee, but may not be less than 100 percent of the fair market value on the date of grant. A total of 19,708 shares have been reserved for issuance under the 1995 Plan.

At December 31, 2004, there were 5,431 options available for grant. A summary of the stock options activity for the 1995 Plan was as follows:

December 31                                           2004          2003          2002
---------------------------------------------------------------------------------------
Shares under option
   Outstanding at beginning of year                  12,785        15,285        15,554
   Granted                                            2,292                       3,708
   Forfeited/expired                                   (833)       (2,500)       (3,810)
   Exercised                                                                       (167)
                                                  -------------------------------------

   Outstanding at end of year                        14,244        12,785        15,285
                                                  =====================================

   Exercisable at end of year                        11,677        10,702       128,423
                                                  =====================================

Weighted option price per share
   Exercisable                                     $  44.52      $  46.08      $  46.20
   Granted                                            18.90                       38.04

Weighted-average fair value of options granted
   during the year                                 $  10.68                    $  16.44

63

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

The following table summarizes information about stock options under the 1995 Plan outstanding at December 31, 2004:

                                 Options Outstanding                       Options Exercisable
                     ---------------------------------------------------------------------------------
                                   Weighted-Average
 Range of Exercise     Number         Remaining       Weighted-Average     Number     Weighted-Average
      Prices         Outstanding   Contractual Life    Exercise Price    Exercisable   Exercise Price
------------------------------------------------------------------------------------------------------
$ 18.36 to $ 48.00     13,535        6.4 years            $ 38.76          10,968          $ 75.00
  $129.72                 709        2.8 years            $129.72             709          $129.72

>> Earnings Per Share

Earnings per share (EPS) were computed as follows:

Year Ended December 31                 2004                             2003                             2002
-----------------------------------------------------------------------------------------------------------------------------
                                     Weighted-    Per                Weighted-    Per                Weighted-    Per
                                      Average    Share                Average    Share                Average    Share
                            Income    Shares     Amount     Income    Shares     Amount     Income    Shares     Amount
                         ----------------------------------------------------------------------------------------------
Income from continuing
   operations                $472                             $214                          $(2,407)
                         ===========                      ===========                     ===========
Basic earnings per share

   Income available to
     common stockholders     $472     874,201    $0.54        $214    744,340    $0.29      $(2,407)   514,658   $(4.67)
                                                ======                           ======                          =======
   Effect of dilutive
     securities
     Stock options                        232
                         --------------------             -------------------             --------------------
Diluted earnings per
   share

   Income available to
     common stockholders
     and assumed
     conversions             $472     874,433    $0.54        $214    744,340    $0.29      $(2,407)   514,658   $(4.67)
                         ===============================================================================================

Options to purchase 21,572 shares of common stock at prices ranging from $21.48 to $141.72 per share, as well as stock warrants representing the right to purchase 42,456 shares of common stock at prices ranging from $36.00 to $107.16 per share were outstanding at December 31, 2004, but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares.

64

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Options to purchase 29,333 shares of common stock at prices ranging from $18.36 to $141.72 per share, as well as stock warrants representing the right to purchase 43,979 shares of common stock at prices ranging from $36.00 to $107.16 per share were outstanding at December 31, 2003, but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares.

Options to purchase 31,833 shares of common stock at prices ranging from $18.36 to $141.72 per share, as well as stock warrants representing the right to purchase 43,979 shares of common stock at prices ranging from $36.00 to $107.16 per share were outstanding at December 31 2002, but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares.

>> Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and Cash Equivalents--The fair value of cash and cash equivalents approximates carrying value.

Interest-Bearing Time Deposits--The fair value of interest-bearing time deposits approximates carrying value.

Investment Securities--Fair values are based on quoted market prices.

Loans--For both short-term loans and variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for certain mortgage loans, including one-to-four family residential, are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. The fair value for other loans is estimated using discounted cash flow analyses using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Interest Receivable/Payable--The fair values of interest receivable/payable approximate carrying values.

FHLB Stock--The fair value is estimated to be the carrying value, which is par. All transactions in the capital stock of the FHLB of Indianapolis are executed at par.

Deposits--The fair values of non-interest-bearing, interest-bearing demand and savings accounts are equal to the amount payable on demand at the balance sheet date. The carrying amounts for variable rate, fixed-term certificates of deposit approximate their fair values at the balance sheet date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on such time deposits.

Long-Term Debt--The fair value of these borrowings is estimated using a discounted cash flow calculation based on current rates for similar debt. Long-term debt consists of adjustable instruments tied to a variable market interest rate.

65

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Off-Balance-Sheet Commitments--Commitments include commitments to purchase and originate mortgage loans, commitments to sell mortgage loans and standby letters of credit and are generally of a short-term nature. The fair value of the loan commitments is based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The carrying amounts of the commitments to purchase and originate mortgage loans and to sell mortgage loans, which are immaterial, are reasonable estimates of the fair value of these financial instruments. The carrying amount of the standby letters of credit, which consist of a letter of credit valuation allowance of $232 and $291 at December 31, 2004 and 2003, respectively, is a reasonable estimate of the fair value of those off-balance sheet items.

The estimated fair values of Fidelity's financial instruments were as follows:

                                                           2004                           2003
                                                --------------------------------------------------------
                                                 Carrying        Fair           Carrying        Fair
December 31                                       Amount         Value           Amount         Value
--------------------------------------------------------------------------------------------------------
Assets
   Cash and cash equivalents                     $   4,622     $   4,622        $   2,968     $   2,968
   Investment securities available for sale         65,192        65,192           52,208        52,208
   Loans, net                                      110,771       112,275          100,437       102,462
   Interest receivable                                 642           642              564           564
   FHLB stock                                        3,627         3,627            3,466         3,466

Liabilities
   Deposits                                        127,701       127,457          120,680       121,782
   FHLB advances and borrowings                     54,550        53,991           39,627        39,723
   Interest payable                                    485           485              339           339
   Standby letters of credit                           232           232              291           291

>> New Accounting Pronouncements

In December, 2004, the Financial Accounting Standards Board (FASB) issued an amendment to SFAS 123 Accounting for Stock-Based Compensation, (SFAS 123R) which eliminates the ability to account for share-based compensation transactions using Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and generally requires that such transactions be accounted for using a fair value-based method. SFAS 123R will be effective for the Company beginning January 1, 2006. SFAS 123R applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date as well as for the unvested portion of awards existing as of the effective date.

As of the required effective date, the Company will apply SFAS 123R using a modified version of prospective application. Under that transition method, compensation cost is recognized on or after the required effective date for the portion of outstanding awards for which the requisite service has not yet been rendered, based on the grant-date fair value of those awards calculated under SFAS 123 for pro forma disclosures. For periods before the required effective date, a company may elect to apply a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods by SFAS 123.

Based on the awards outstanding at December 31, 2004, management has estimated that approximately $12 of compensation expense related to those awards will be recognized during the year ended December 31, 2006.

66

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

>> Condensed Financial Information (Parent Company Only)

Presented below is condensed financial information as to financial position, results of operations and cash flows of Fidelity:

                            Condensed Balance Sheets

December 31                                            2004         2003
-------------------------------------------------------------------------

Assets
   Cash and cash equivalents                          $ 3,265     $    39
   Investment in common stock of subsidiaries          16,681      14,889
   Loans, net                                             381         421
   Income tax receivable                                2,291       2,063
   Other assets                                           228          94
                                                  -----------------------

       Total assets                                   $22,846     $17,506
                                                  =======================

Liabilities
   Long-term debt                                     $ 6,460     $ 4,077
   Other liabilities                                      125          62
                                                  -----------------------
       Total liabilities                                6,585       4,139

Stockholders' Equity                                   16,261      13,367
                                                  -----------------------

       Total liabilities and stockholders' equity     $22,846     $17,506
                                                  =======================

67

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Condensed Statements of Income

Year Ended December 31                                                 2004         2003         2002
------------------------------------------------------------------------------------------------------
Income
   Interest income                                                   $    19      $   232      $   560
   Other income                                                           15          102          614
                                                                    ----------------------------------
       Total income                                                       34          334        1,174
                                                                    ----------------------------------

Expense
   Interest expense                                                      345          610        1,113
   Provision for loan losses                                              25          (73)        (400)
   Letter of credit valuation provision                                               (61)
   Other expenses                                                        264          350        1,526
                                                                    ----------------------------------
       Total expense                                                     634          826        2,239
                                                                    ----------------------------------

Loss Before Income Tax and Equity in
   Undistributed (Distributions in Excess of)
   Income of Subsidiaries                                               (600)        (492)      (1,065)

Income Taxes (Benefit)                                                  (228)        (187)         976
                                                                    ----------------------------------

Loss Before Equity in Undistributed (Distributions in Excess of)
   Income of Subsidiaries                                               (372)        (305)      (2,041)

Equity in Undistributed (Distributions in Excess of) Income of
   Subsidiaries                                                          844          519       (2,354)
                                                                   -----------------------------------

Net Income (Loss)                                                    $   472      $   214      $(4,395)
                                                                   ===================================

68

FIDELITY FEDERAL BANCORP

Notes to Consolidated Financial Statements
(Dollar Amounts in Thousands, Except Share Data)

Condensed Statements of Cash Flows

Year Ended December 31                                               2004         2003         2002
----------------------------------------------------------------------------------------------------
Operating Activities
   Net income (loss)                                               $   472      $   214      $(4,395)
   Adjustments to reconcile net income (loss) to net
     cash used by operating activities
     Depreciation and amortization                                       1            5            6
     Provision for loan losses                                          25          (73)        (400)
     Letter of credit valuation provision                                           (61)
     Funding on outstanding letters of credit                                                   (239)
     Gain on early extinguishment of debt                                                       (140)
     Loss on impairment of assets held for sale and changes in
       estimated useful lives of intangible assets                                             1,096
     Loss on sale of subsidiary                                                                   64
     Undistributed net income (loss) of subsidiaries                  (844)        (519)       2,374
     (Increase) decrease in other assets                              (363)         (87)         921
     (Increase) decrease in other liabilities                           64         (173)        (498)
                                                                 -----------------------------------
       Net cash used by operating activities                          (645)        (694)      (1,211)
                                                                 -----------------------------------

Investing Activities
   Capital contributions to subsidiaries                            (1,000)      (1,000)          (8)
   Proceeds from sale of subsidiary                                                              461
   Principal payments received on notes from subsidiaries                         1,500        1,375
   Net change in loans                                                  14        2,466          (97)
                                                                 -----------------------------------
       Net cash provided (used) by investing activities               (986)       2,966        1,731
                                                                 -----------------------------------

Financing Activities
   Repayment of long-term debt                                      (3,075)      (7,784)      (3,928)
   Proceeds from issuance of long-term debt                          5,458        1,275        1,858
   Sale of common stock                                              2,474        4,153        1,421
   Sale of stock warrants                                                                        250
                                                                 -----------------------------------
       Net cash provided (used) by financing activities              4,857       (2,356)        (399)
                                                                 -----------------------------------

Change in Cash and Cash Equivalents                                  3,226          (84)         121

Cash and Cash Equivalents, Beginning of Period                          39          123            2
                                                                 -----------------------------------

Cash and Cash Equivalents, End of Period                           $ 3,265      $    39      $   123
                                                                 ===================================

>> Subsequent Event

On February 28, 2005, the board of directors unanimously approved and Fidelity executed a 1-for-30,000 reverse stock split. The reverse stock split was immediately followed by a 2,500-for-1 forward stock split. Fidelity then terminated the registration of its common stock by filing Form 15E with the Securities and Exchange Commission. This resulted in the delisting of its shares on the NASDAQ. All share and per share data in the accompanying financial statements has been adjusted for the above stock splits.

69

Exhibit 21 Subsidiaries of Fidelity Federal Bancorp

Name Jurisdiction of Incorporation

United Fidelity Bank, fsb United States of America

Village Capital Corporation Indiana
(subsidiary of United Fidelity Bank, fsb)

United Fidelity Finance Delaware
(subsidiary of United Fidelity Bank, fsb)


Exhibit 31(a)

CERTIFICATION

I, Donald R. Neel, certify that:

1. I have reviewed this annual report on Form 10-K of Fidelity Federal Bancorp;

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

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

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

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

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 29, 2005                         /s/ Donald R. Neel
                                             ------------------------
                                             President and CEO
                                             ------------------------


Exhibit 31(b)

CERTIFICATION

I, Mark A. Isaac, certify that:

1. I have reviewed this annual report on Form 10-K of Fidelity Federal Bancorp;

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

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

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

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

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 29, 2005                             /s/ Mark A. Isaac
                                                 --------------------------
                                                 Vice President and CFO
                                                 --------------------------


Exhibit 32(a)

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Fidelity Federal Bancorp (the "Company") on Form 10-K for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Donald R. Neel, President and Chief Executive Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification is furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed for any other purpose.

/s/ Donald R. Neel
-------------------------------------
President and Chief Executive Officer
March 29, 2005


Exhibit 32(b)

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Fidelity Federal Bancorp (the "Company") on Form 10-K for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark A. Isaac, Vice President and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification is furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed for any other purpose.

/s/ Mark A. Isaac
----------------------
Vice President and CFO
March 29, 2005