EXHIBIT 99.2

             FIDELITY FEDERAL COMPLETES SALE OF AFFORDABLE HOUSING
                        SUBSIDIARIES AND RELATED ASSETS

On January 3, 2003, Fidelity Federal Bancorp (NASDAQ:FFED) ("Company")and its
wholly-owned subsidiary, United Fidelity Bank, announced that on December 27,
2002 it completed the sale to Pedcor Funding Corporation of the assets connected
to their affordable housing activities began in the mid-1990's. 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.

Related Parties
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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, 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.

Prior Marketing Efforts
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Over the past four years, the Company has approached several entities including
syndicators, investment banks, and individual companies regarding the
possibility of selling its affordable housing related assets. Efforts to sell
general partnership interests owned by Village Housing Corporation resulted in
indications that would require the Company to compensate the potential buyer(s)
to assume the liability of ownership. In one instance, disposal of nine of the
seventeen general partnership interests would have resulted in the payment of
over $3 million from the Company to the prospective buyer.

Included in the assets of Village Affordable Housing Corporation and Village
Housing Corporation was real estate adjacent to affordable housing developments.
During the four-year




period noted above, the Company had utilized various non-affiliated real estate
brokers to sell the real estate, generating little or no offer activity, due to
the limited uses of the property.

Over the past two years, the Company also attempted to sell subordinate notes
related to loans to the individual partnerships in a competitive bidding
auction. Invited to bid were syndicators, investment bankers, real estate
developers, and affiliates of Pedcor. Except for one incomplete bid, there were
no bidders on these assets other than affiliates of Pedcor.

Based on the low level of indicated interest received for purchasing these
assets, the Boards believed that entering into a competitive bidding arrangement
for the assets sold in this transaction may have resulted in a lower purchase
price. After analyzing a possible sale, management of the Company and its
independent directors decided to solicit an indication of interest in the
purchase of these assets from Messrs. Cordingley, Pedigo, and Stoffregen, who
control the management company for the affordable housing limited partnerships
involved.

The Transaction
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The Company solicited an offer from Messrs. Cordingley, Pedigo, and Stoffregen
for several reasons. First, under the terms of the limited partnership
agreements, any change in control of the general partner, which is Village
Housing Corporation, requires the consent of the limited partners, none of whom
are affiliated with either the Company or Pedcor. Because Messrs. Cordingley,
Pedigo, and Stoffregen already were considered to control the general partner
due to their ownership of more than 50% of the voting stock (including options
and warrants of the Company), no consent by the limited partners to a change in
control of the general partner to Pedcor was necessary. This was considered
important because in May 2000 the Company's shareholders approved a sale of 1.46
million shares of stock to an affiliated company of Pedcor. A provision of the
stock purchase agreement required entities controlled by Messrs. Cordingley,
Pedigo, and Stoffregen to provide an annual operating deficit guarantee until
May 2005 for the portfolio of limited partnerships projects of up to $300,000 in
the aggregate, and provide a management subsidy agreement until 2010. This
guarantee obligation and management subsidy agreement terminated if the
affordable housing project was sold to a third party, which would eliminate a
layer of financial support for the limited partners. The Company believed that
termination of the financial and management subsidies, would make it unlikely
that the limited partners would have consented to any purchaser other than
Pedcor. Also, many of the limited partnerships utilize FHA 223(f) financing,
which requires prior approval by FHA of a change in the general partner. This
FHA approval process, even if such approval is ultimately received, may have
delayed any transaction by 6-12 months. Selling to Pedcor avoided this delay
since it did not need FHA approval for the reasons discussed above.

Second, one of the assets owned by Village Housing Corporation was an income tax
receivable, which the Company could only use to offset future income. Under
applicable federal tax law, only an entity controlling more than 50% of Fidelity
Federal (including options and warrants) could acquire this asset and utilize
all of its tax benefits. As such, the only entity other than the Company which
could utilize a substantial part of this asset was an entity controlled by
Messrs. Cordingley, Pedigo, and Stoffregen. The Company determined that the
value received in cash




for the tax receivable as a part of the sale was significantly greater than the
anticipated value if it retained this asset or sold it to a third party.

Third, some of the assets of Village Affordable Housing Corporation consisted of
four parcels of land adjacent to affordable housing developments. The Company
had unsuccessfully attempted for the last several years to sell these
properties, notwithstanding having listed the parcels for during the period with
local real estate brokers.

Fourth, as a part of the sale of the assets, Pedcor has agreed to indemnify the
Company as to certain contingent liabilities, including a letter of credit, two
first mortgage loans and a contingent liability for an interest rate swap with a
notional value of $2.54 million. The Company would have considered refinancing
this letter of credit and these two first mortgage loans if it had not received
the additional credit support provided by the agreement of Pedcor for
indemnification. In this regard, Fidelity Federal had received a commitment and
indication of amounts that could have been refinanced, which would have resulted
in additional cash outlays of approximately $800,000. .

Because of Pedcor's familiarity with the assets being sold, the amount of time
spent by Fidelity Federal's management in connection with due diligence
requirements was minimized and Fidelity Federal was required to make only
limited representations with respect to the condition and history of the assets.
Management believes that an unrelated purchaser would have required a more
extensive due diligence process. Management also believes that an unrelated
purchaser would have required a significantly higher level of representations
and warranties from Fidelity Federal with respect to the condition of the assets
being sold, which could have created additional contingent liabilities for
Fidelity Federal.

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 written off for regulatory capital purposes,
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.

This release contains forward-looking statements that are based upon the
Company's current expectations, but are subject to certain risks and
uncertainties that may cause actual results to differ materially. Other risks
and uncertainties include economic conditions generally and in the market areas
of Fidelity Federal and United Fidelity Bank which could impact the Bank's
ability to generate additional business to support planned balance sheet growth.