EXHIBIT 13

2 0 0 0 A N N U A L R E P O R T

[LOGO]
FIRST BELL
BANCORP,
INC.

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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Table of Contents
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Selected Financial and Other Data of the Company 1
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Letter to Our Shareholders 3
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Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
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Management's Report on Internal Control and
Compliance with Laws and Regulations 22
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Independent Auditors' Report 23
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Consolidated Financial Statements 24
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Notes to Consolidated Financial Statements 29
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Executive Management and Directors 46
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Shareholder Information 48
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Office Locations Inside Back Cover
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Selected Financial and Other Data of the Company
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The following table sets forth certain summary historical financial informa-
tion concerning the financial position of the Company for the period and at the
dates indicated. The financial data is derived in part from, and should be read
in conjunction with, the consolidated financial statements and related notes
contained elsewhere herein.

At December 31,
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2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
(In thousands)

Financial Condition Data:
Total assets...................... $832,680 $821,171 $767,606 $675,684 $656,183
Investments carried at cost....... -- 4,989 9,980 9,973 14,964
Investments carried at fair value. 213,234 202,382 136,677 15,902 --
Cash and cash equivalents......... 40,509 20,468 21,543 24,523 26,406
Total loans receivable, net....... 526,842 532,292 545,535 579,394 530,815
Mortgage-backed securities, at
fair value....................... 21,523 -- -- 31,855 --
Deposits.......................... 536,685 511,931 495,128 495,055 483,941
Borrowings........................ 219,250 238,000 180,000 90,000 70,000
Stockholders' equity.............. 61,620 54,518 73,902 72,983 86,433

Year Ended December 31,
--------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
(In thousands except per share amounts)

Selected Operating Data:
Interest income................... $ 52,705 $ 52,090 $ 49,649 $ 49,226 $ 41,007
Interest expense.................. 40,677 37,061 32,843 32,329 22,050
-------- -------- -------- -------- --------
Net interest income.............. 12,028 15,029 16,806 16,897 18,957
Provision for loan losses........ -- 120 90 45 90
-------- -------- -------- -------- --------
Net interest income after
provision for loan losses....... 12,028 14,909 16,716 16,852 18,867
Total other income................ 858 598 643 829 1,198
Total other expenses.............. 5,598 6,116 5,643 5,060 8,177
-------- -------- -------- -------- --------
Income before provision for income
taxes............................ 7,288 9,391 11,716 12,621 11,888
Provision for income taxes........ 586 1,349 3,878 5,046 4,485
-------- -------- -------- -------- --------
Net income (4).................... $ 6,702 $ 8,042 $ 7,838 $ 7,575 $ 7,403
======== ======== ======== ======== ========
Earnings per share
Basic (4)........................ $1.61 $1.68 $1.41 $1.29 $1.05
======== ======== ======== ======== ========
Diluted (4)...................... $1.57 $1.61 $1.35 $1.23 $1.02
======== ======== ======== ======== ========
Dividends declared per common
shares........................... $0.48 $0.40 $0.40 $0.40 $0.37
======== ======== ======== ======== ========

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FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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At or For the Year Ended December 31,
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2000 1999 1998 1997 1996
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Selected Financial Ratios and Other
Data:
Book value per share................. $ 12.95 $ 10.51 $ 12.11 $ 11.21 $ 11.14
Stockholders' equity to assets at
period end.......................... 7.40% 6.64% 9.63% 10.80% 13.17%
Return on average assets (net income
divided by average total assets) (4). 0.82 0.99 1.09 1.08 1.30
Return on average equity (net income
divided by average equity) (4)...... 12.28 12.50 10.36 10.25 6.75
Stockholders' equity to assets ratio
(average stockholders'
equity divided by average total
assets)............................. 6.68 7.96 10.50 10.55 19.26
Dividend payout ratio................ 29.38 23.04 28.48 31.04 36.43
Average interest rate spread (1)(5).. 1.62 1.91 1.99 1.90 2.45
Net interest margin (2)(5)........... 1.94 2.36 2.53 2.45 3.38
Other income to average assets....... 0.10 0.07 0.09 0.11 0.21
Other expenses to average assets (4). 0.69 0.76 0.78 0.72 1.44
Non-performing assets to total
assets.............................. 0.07 0.08 0.08 0.09 0.10
Non-performing loans to total loans.. 0.11 0.05 0.09 0.11 0.08
Allowance for loan losses to total
loans............................... 0.18 0.17 0.15 0.12 0.13
Allowance for loan losses to non-
performing assets................... 1.56x 1.40x 1.39x 1.13x 1.06x
Efficiency ratio (3)................. 34.27 31.50 30.34 28.95 29.07
Net interest income to other expenses
(5)................................. 2.76x 3.08x 3.18x 3.34x 2.32x
Net interest income after provision
for loan losses to total
other expenses (5).................. 2.76x 3.06x 3.17x 3.33x 2.31x
Average interest-earning assets to
average interest-bearing
liabilities......................... 1.06x 1.09x 1.12x 1.12x 1.24x
Number of:
Depositor accounts.................. 56,581 54,257 53,579 53,628 53,188
Full-service customer service
facilities......................... 7 7 7 7 7

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(1) The interest rate spread represents the difference between the weighted-
average yield on interest-earning assets and the weighted-average cost of
interest-bearing liabilities.
(2) The net interest margin represents net interest income as a percentage of
average interest-earning assets.
(3) The efficiency ratio represents the ratio of recurring other expenses to
recurring other income and net interest income.
(4) Without giving effect to the one-time special Savings Association Insurance
Fund ("SAIF") assessment of $2.5 million, or $1.5 million after tax, to
recapitalize the SAIF recorded in September, 1996 and the return of capital
of $20.7 million paid on December 31, 1996, net income would have been $8.9
million, the basic and diluted earnings per share would have been $1.27 and
$1.23, respectively, other expenses to average assets would have been
1.00%, return on average assets would have been 1.57% and return on average
equity would have been 8.01%.
(5) Ratios are based on net interest income determined with tax equivalent
rates of return for non-taxable investment securities.
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Letter To Our Shareholders
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For the savings and loan industry, the defining
event of the year 2000 was the Federal Reserve
Board's continued policy of raising interest
rates. Indeed, over the period from June 1999
through May 2000, the Fed increased rates by a
total of 175 basis points--that is, 1.75 percent.
For an interest-rate sensitive institution such as
ours, the impact was severe, both on our fixed-
rate mortgage portfolio and on the rates we were
compelled to offer on our certificates of deposit,
which went from 5.59 percent to 6.4 percent--a
jump of 15 percent in our costs.

Even so, we were able to minimize the effect upon
our total financial performance. Diluted earnings
per share at First Bell Bancorp, the parent
corporation of Bell Federal Savings and Loan
Association of Bellevue, declined $.04 per share,
to $1.57 from $1.61; net income was down to $6.7
million from $8.0 million earned in the previous
year. Total consolidated assets were up to $832.7
million, compared to $821.2 million at the end of
1999. Stockholders' equity was $61.6 million or
$12.95 per share.

We were able though, to increase our income from
some of our sources such as fees, sales of loans
and investments, and other sources. Our non-
interest income increased to $858,000 last year
from $598,000 in 1999. As usual, we also paid
strict attention to expenses, reducing our general
and administrative expenses to $5.6 million from
$6.1 million the preceding year. Our strong credit
culture meant that non-performing assets were down
to $594,000; for 1999, this figure was $659,000.
Our efficiency ratio, for years one of the best in
the industry, stood at 34.27 percent.

Ironically, we also suffered from some of the
stronger features of the economy in 2000: the
tight labor market and rising levels of
compensation meant that we experienced higher
turnover than customary among both our entry-level
and professional employees. As a service business,
our people are a vital asset, and our
responsibility to our shareholders means that the
effort to replace human resource losses at a
comparable level of quality is our highest
priority.

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FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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We discuss in detail the measures taken to
enhance our performance in the following pages.
Let me address myself here to some of the broader
issues. Naturally, the most encouraging
development has been the Federal Reserve's
decision early in the current year to lower
interest rates--at this writing, by some 150 basis
points. Depending upon the state of the economy,
it is possible that there may be further steps in
this direction.

But as much as the decisions of others may influ-
ence our efforts, we can scarcely wait for them to
act. In the constantly changing environment of our
industry and our economy, rapid and effective
adjustment and adaptation are the key to success.

The adjustments we are making at First Bell
Bancorp fall into three general areas:

. continuing the diversification of our product
line and delivery system;

. restructuring our portfolio; and

. redirecting our strategic vision toward
becoming more of a community bank.

We are confident these efforts will be fruitful
and hopeful about the prospects for developments
favorable to our industry and the economy in gen-
eral. Our commitment to producing value for our
shareholders, and for our loyal customers as well
has never been higher.

Sincerely,

/s/ Albert H. Eckert, II

Albert H. Eckert, II
President and Chief Executive
Officer
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Responding to an Industry in Flux
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For several years in this space, we have
addressed our efforts to adapt to--and where pos-
sible, to anticipate--fundamental change in our
business landscape. It is entirely likely that we
will be continuing that discussion in the years
ahead. This assumption stems not (we believe) from
a lack of imagination on our part; it is rather
that change has become to all intents and purposes
identical with the nature of our industry.

Products and Delivery

The pressure of rising interest rates on yields
naturally hurt our portfolio of fixed-rate mort-
gages. In response, we continued the shift in our
product line toward adjustable rate mortgages and
home equity loans. During the course of the year,
we originated; 112 adjustable rate mortgages at a
total value of $18.2 million, 99 fixed rate mort-
gages totaling $10.1 million, 293 home equity
loans at a total value of $7.9 million and 55 con-
struction mortgages valued at $14.3 million.

Our marketing efforts and competitive rates were
successful in increasing the growth of our various
savings accounts. The total number of accounts--
money market and checking; passbook, club, and
other; and certificates of deposit--went to 56,581
from 54,257. At year's end, the dollar amount of
these accounts stood at $536.7 million, up almost
5 percent from 1999.

In tune with the times, we have added an internet
banking option to our bank-by-phone service (which
now fields an average of 280 calls per day). By
either conduit, customers may review account
balances, checks cleared, and electronic or
automatic deposits or withdrawals; they may also
transfer money between accounts and make loan
payments. In addition, internet customers may sign
up for an online bill-paying service.

Portfolio Restructuring

Savings and loans have traditionally extended
long-term credit for home mortgages, a practice we
began to curtail two years ago. Rapidly evolving
economic conditions and the opportunity for more
attractive returns have led us to a thorough
ongoing reexamination of the makeup of our loan
and investment portfolio, with noteworthy results.

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FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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As interest rates fell in early 2001, the oppor-
tunity developed to allow the Company to reduce
its exposure to future interest rate increases.
Continued pressure on our net interest margin has
led us to reduce our exposure by selling, in Janu-
ary 2001, approximately $20 million in fixed rate
mortgages. Also, the Company sold mortgage backed
securities of approximately $21.3 million because
of the exposure to rapid prepayment speeds. Addi-
tionally, we have sold a similar amount of fixed-
rate municipal securities in which we had invested
in recent years.

The proceeds from these sales will be invested in
two new areas. We have purchased approximately
$56.7 million in adjustable rate, securitized
loans from the Small Business Administration.
Also, the Association is contemplating a purchase
of bank-owned life insurance. The earnings from
this purchase will be used to defray the cost of
employee benefits.

Community Banking

As change blurs the former boundaries in the
financial services industry, First Bell Bancorp
expects to evolve increasingly from a savings and
loan institution into the broader base of a commu-
nity bank. This change could involve additions to
the product line such as the sale of annuities and
even equities. Our analysis of market conditions
and demand will determine any such steps.

But the first concrete step will be our entrance
into the commercial lending arena. The Pittsburgh
area is experiencing healthy growth in both resi-
dential and commercial real estate. Developers are
optimistic about expansion and a number of small
retail clusters are springing up. At the same
time, downtown Pittsburgh has seen reasonably vig-
orous growth of both high tech and financial serv-
ice enterprises. In short, the commercial real
estate lending future looks promising. As our
plans mature, we will keep our shareholders and
customers, present and prospective, fully apprised
of our direction in this regard.

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Management's Discussion and Analysis of
Financial Condition and Results of Operations
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Overview

First Bell Bancorp, Inc. (the "Company") is a Delaware corporation organized
by the Board of Directors in 1995 to serve as the holding company of Bell
Federal Savings and Loan Association of Bellevue (the "Association"). All
material business of the Company is transacted through the subsidiary thrift
institution. Since 1891, the Association has operated a traditional savings and
loan institution serving the greater Pittsburgh, Pennsylvania area with the
mission to achieve superior profitability while maintaining a strong capital
and liquidity position. As a community oriented savings and loan, the Company's
primary investment is in one- to four-family residential mortgage loans and
investment securities. The primary sources of funds are from retail deposit
accounts and borrowings. The Company's successful longevity has come from
conservative underwriting, control of overhead expenses and the ability to
adapt to changing economic and environmental conditions.

The Company's long-term policy of originating loans secured by one- to four-
family, owner-occupied, primary residences, has resulted in the maintenance of
high quality assets. While the balance of non-performing loans may fluctuate
based on circumstances which effect our borrowers, with active management
of the loan portfolio, the Company, again in 2000, did not have a loan charge-
off. The Company has not had a loan charge-off since 1994. Furthermore, the
Company reduced its non-performing assets to $594,000 as of December 31, 2000
from $659,000 as of the prior year end date. The allowance for loan losses is
$925,000 or 156% of total non-performing assets at December 31, 2000.

Continued prudent management of non-interest expenses has contributed to the
production of consistent returns for the Company's shareholders. The Company
consistently ranks as one of the most efficient savings and loan associations
in the country. The ratio of other expenses to average assets was 0.69%, 0.76%
and 0.78% for the years ended December 31, 2000, 1999, and 1998, respectively.
Low operating costs are maintained by managing and monitoring overhead costs,
primarily through controlling the growth in personnel. At December 31, 2000,
the Company's seven offices and $832.7 million in assets were operated by a
total of fifty-one full-time equivalent employees, resulting in an average of
$16.3 million in assets per employee.

First Bell has utilized technology to expand its product distribution. With
the introduction of telephone banking in 1999 and the addition of Internet
banking in 2000, depositors have the ability to access their accounts, transfer
money between accounts, or make loan payments from their home or office 24-
hours per day. Optionally, depositors may sign up for electronic bill paying to
further the management of their finances.

Deposit growth has been the integral source of funds and the means of growth
for the Company. In this regard, management has emphasized providing an
increased level of service to its customers in its local market areas in order
to retain and develop deposit relationships with such customers. In 2000 and
1999, First Bell placed considerable emphasis on core deposit relationships,
consisting of money market, NOW, passbook, club and statement savings accounts.
These accounts tend to be stable and lower cost than other types of deposits.
Certificates of deposit are offered with terms ranging from three months to ten
years and are priced at competitive rates.

The Company utilizes borrowings from the Federal Home Loan Bank of Pittsburgh
("FHLB") to augment its retail deposits and to manage its interest rate risk
position, fund the investment portfolio and to help manage the Company's equity
position. As of December 31, 2000, the Company had borrowings from the FHLB of
$208.0 million and a bank line of credit of $11.3 million.

The Board of Directors and management of the Company believe in the generation
of stockholder value and utilizes its ability to generate solid, consistent
earnings and to manage First Bell's capital position. In the first quarter of
2000, the Company increased its regular quarterly dividend 20% to $0.12 per
share. In addition, the Board of Directors believes the Company's stock is a
prudent long-term investment. The Company has repurchased 431,000, 911,000 and
424,000 shares of its common stock in the three years ended December 31, 2000,
1999, and 1998, respectively.

Private Securities Litigation Reform Act of 1995 Safe Harbor Statement

In addition to historical information, this Annual Report includes certain
forward looking statements based on current management expectations. Examples
of this forward looking information can be found in, but are not limited to,
the: "Letter to Our Shareholders," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Asset Quality," "Interest Rate
Sensitivity/Net Portfolio Value Analysis,"
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FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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and in the "Notes to Consolidated Financial Statements for the Years Ended
December 31, 2000, 1999, and 1998," "Note 5--Investment Securities Available
for Sale," "Note 17--Commitments and Contingencies" and "Note 18--Fair Values
of Financial Instruments". The Company's actual results could differ
materially from those management expectations. Factors that could cause future
results to vary from current management expectations include, but are not
limited to, general economic conditions, legislative and regulatory changes,
monetary and fiscal policies of the federal government, changes in tax
policies, rates and regulations of federal, state and local tax authorities,
changes in interest rate, deposit flows, the cost of funds, demand for loan
products, demand for financial services, competition, changes in the quality
or composition of the Company's loan and investment portfolios, changes in
accounting principles, policies or guidelines, and other economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices. Further description of the
risks and uncertainties to the business are included in detail in Item 1,
"Business" of the Company's 2000 10-K.

Financial Condition

The following table sets forth information concerning the composition of the
Company's assets at December 31, 2000 and 1999. Dollar amounts are in thou-
sands.

December 31, December 31,
2000 1999
---------------- ----------------
Percent Percent
of of
Amount Total Amount Total
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ASSETS
Cash and cash equivalent.................... $ 40,509 4.86% $ 20,468 2.49%
Federal funds sold.......................... 6,425 0.77 33,000 4.02
Investment securities....................... 234,757 28.19 207,371 25.25
Conventional loans, net..................... 526,842 63.27 532,292 64.82
Other loans................................. 969 .12 967 .12
FHLB stock.................................. 11,400 1.37 11,400 1.39
Deferred tax asset.......................... 1,232 .15 5,049 .61
Other assets................................ 10,546 1.27 10,624 1.30
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TOTAL ASSETS............................... $832,680 100.00% $821,171 100.00%
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Total Assets

Total assets increased by $11.5 million or 1.4% to $832.7 million at December
31, 2000 from $821.2 million at December 31, 1999. The increase in total
assets was the result of increases in investment securities and cash and cash
equivalents. Offsetting these increases were decreases in conventional mort-
gages, net, federal funds sold and deferred tax assets.

Conventional Mortgage Loans

The Company emphasizes the origination of conventional one- to four-family
residential mortgage loans for its portfolio in its primary market, the
greater Pittsburgh Metropolitan area. The Company originates primarily 15 and
30 year, fixed-rate and adjustable rate mortgage loans. The Company also orig-
inates residential construction loans and home equity installment and line of
credit loans on one- to four-family properties. Conventional mortgage loans
decreased by $5.5 million or 1.0% to $526.8 million at December 31, 2000 from
$532.3 million at December 31, 1999. The decrease was primarily the result of
principal repayments of $60.5 million offset by the funding of conventional
mortgage loans of $50.6 million. Conventional mortgage loans are comprised of
residential mortgages, residential construction loans, home equity installment
and line of credit loans and multifamily loans. At December 31, 2000, residen-
tial mortgage loans totaled $507.6 million or 94.9% of the total loan portfo-
lio. At December 31, 2000, $468.6 million or 92.3% of the loan portfolio con-
sisted of fixed-rate mortgage loans down from $494.0 million or 95.6% as of
the prior year end date. This reflects the Company's emphasis on the origina-
tion of adjustable rate mortgages to reduce the susceptibility to interest
rate risk. Residential construction mortgage loans totaled $12.1 million
or 2.3% of total loans and home equity loans totaled $15.1 million or 2.8% of
total loans at December 31, 2000.
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8

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Investment Securities and Other Interest Earning Investments

In recent years, the Company has placed more emphasis on its investment port-
folio to support the Company's continued growth. The investment portfolio is
comprised of Bank Qualified Municipal Securities, Collateralized Mortgage Obli-
gations ("CMO's"), Treasury Securities and in 1999, a Federal Home Loan Bank
("FHLB") Bond. Investment securities increased by $27.4 million or 13.2% to
$234.8 million at December 31, 2000 from $207.4 million at December 31, 1999.
The increase was the result of the purchase of $23.3 million of mortgage-backed
securities and an increase in the value of the investment portfolio. The net
unrealized loss on securities available for sale decreased from $14.7 million
at December 31, 1999 to $1.8 million at December 31, 2000. The balance invested
in FHLB stock remained unchanged at $11.4 million. The investment required by
the FHLB is based on the balance of borrowings from the FHLB and the balance of
the Company's investment in mortgages and securities collateralized by mort-
gages. Federal funds sold decreased by $26.6 million or 80.5% to $6.4 million
at December 31, 2000 from $33.0 million at December 31, 1999. This decrease was
the result of the funds being invested in interest bearing accounts at the FHLB
at rates equivalent to the Federal funds rate.

Deferred Tax Asset

The deferred tax asset decreased by $3.8 million to $1.2 million at December
31, 2000 from $5.0 million at December 31, 1999. The decrease was largely the
result of the net unrealized gain/loss on investment securities--available for
sale changing from a net loss of $14.7 million to a net loss of $1.8 million.

Asset Quality

In management's opinion, the Company has maintained high asset quality during
2000. For the sixth consecutive year the Company has not experienced a loan
charge-off. Prudent underwriting, conservative lending policies, a healthy
economy and active management of the mortgage loan portfolio have enabled the
Company to minimize losses inherent in the operation of a savings and loan. At
December 31, 2000 total non-performing assets totaled $594,000 or 0.07% of
total assets in comparison to $659,000 or 0.08% of total assets as of December
31, 1999. The non-performing assets consisted of thirteen first mortgage loans
and one property held in real estate owned pending sale. The Company has estab-
lished a reserve for possible loan losses of $925,000, which is equal to 156%
of non-performing assets as of December 31, 2000.

While every effort is made to originate quality assets, management cannot
guarantee that problem loans will not occur. The allowance is based on manage-
ment's assessment of prospective national and local economic conditions, the
regulatory environment and inherent risks in the portfolio, not to specific
problem loans existing in the portfolio. Management believes that the current
level of reserves is adequate. However, the balance of reserves necessary can
be greatly influenced by regulatory changes and economic conditions. Therefore,
the level of future reserves and the related effect on net income cannot be
assured.

Liquidity and Capital Resources

During 2000, the Company was required to maintain an average daily balance of
specified liquid assets equal to a monthly average of not less than a specified
percentage of its net withdrawable deposit accounts plus short-term borrowings.
This liquidity requirement was 4% for fiscal 2000, but recent regulation has
eliminated this statutory liquidity requirement. The Company's liquidity ratio
for 2000 was 9.22%, which exceeded the applicable requirements.

The Company's sources of funds are deposits, borrowings and principal and
interest payments on loans and investment securities. While maturities and
scheduled amortization of loans are predictable sources of funds, deposit flows
and mortgage prepayments are strongly influenced by changes in general interest
rates, economic conditions and competition.

At December 31, 2000, loan commitments were $8.8 million. The Association
anticipates that it will have sufficient funds available to meet its current
and future loan origination commitments, as well as sufficient funds available
for the Company to meet its cash obligations. Certificates of deposit, which
are scheduled to mature in one year or less from December 31, 2000, totaled
$268.0 million. Management believes that a significant portion of such deposits
will remain with the Association. As a member of the FHLB, the Association has
the ability to borrow from the FHLB, if necessary. As of December 31, 2000, the
Association had $208.0 million in outstanding borrowings. The December 31, 2000
FHLB report had the Association's additional borrowing capacity from the FHLB
at $227.3 million.
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FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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Impact of Inflation and Changing Prices

The Financial Statements and Notes thereto presented herein have been pre-
pared in accordance with Generally Accepted Accounting Principles ("GAAP"),
which require the measurement of financial position and operating results
without considering the changes in the relative purchasing power of money over
time due to inflation. The impact of inflation is reflected in the increased
cost of the Company's operations. Unlike industrial companies, nearly all of
the assets and liabilities of the Company are monetary in nature. As a result,
interest rates have a greater impact on the Company's performance than do the
effects of general levels of inflation. Interest rates do not necessarily move
in the same direction or to the same extent as the price of goods and servic-
es.

Interest Rate Sensitivity/Net Portfolio Value Analysis

The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are interest rate sensitive. The
Company's interest rate sensitivity is monitored by management through
selected interest rate risk measures produced internally and by the OTS. The
Company's interest rate risk is measured by modeling the change in net portfo-
lio value ("NPV") and net interest income over a variety of interest rate sce-
narios and, to a lesser extent, through GAP analysis.

The OTS calculates interest rate risk through modeling. All calculations have
limitations because of inherent assumptions which must be made with respect to
market values, discount rates, prepayments, the interest rate sensitivity of
the assets and liabilities to changes in base interest rates, the value of
options imbedded in the asset or liability, the likelihood that the option
will be exercised and the extent to which customers elect to make deposits or
withdrawals from savings accounts. Management bases their assumptions on his-
torical data accumulated over a variety of interest rate scenarios.

As of December 31, 2000, the Association's NPV, as measured by the OTS, was
$75.8 million or 8.98% of the market value of assets. Following a 200 basis
point increase in interest rates, the Association's "post-shock" NPV, which
provides a larger decline than a 200 basis point decrease, was $36.9 million,
or 4.70% of the market value of assets. The change in the NPV ratio or the
Association's Sensitivity Measure was minus 428 basis points. As of December
31, 1999, the Association's NPV, as measured by the OTS, was $69.8 million.
The Association's "post-shock" NPV following a 200 basis point shock was $26.5
million, resulting in a sensitivity measure of a minus 503 basis points. The
fluctuations from year to year were the results of changes in national inter-
est rates, the maintenance of larger capital balances at the Association and
changes in the composition of the Association's assets and liabilities.

Under OTS capital requirements which have not been fully implemented, the
decline in the NPV ratio at December 31, 2000 would reflect an above average
interest rate risk. If the regulations are implemented as proposed, the Com-
pany would remain in compliance with the fully phased in capital requirements.
Management reviews the quarterly OTS measurements and compares them to evalua-
tions produced through internally generated simulation models. These measures
are used in conjunction with NPV measures to identify excessive interest rate
risk.
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The following analysis sets forth the Association's NPV as of December 31,
2000 and 1999 as calculated by the Office of Thrift Supervision, which are
consistent with internal calculations, for instantaneous and sustained changes
in interest rates relative to the NPV in an unchanging interest rate environ-
ment.

2000
- ----

Change in
Interest Rates Net Portfolio Value Net Change Projected Percentage
(in basis points) ($ in thousands) ($ in thousands) Change to Base
- ----------------- ------------------- ---------------- --------------------

+200 36,907 -38,921 -51%
+100 57,958 -17,870 -24%
-- 75,828 -- --
-100 80,165 4,337 +6%
-200 73,993 -1,835 -2%

1999
- ----

+200 26,466 -43,341 -62%
+100 48,419 -21,388 -31%
-- 69,807 -- --
-100 88,766 18,959 +27%
-200 97,915 28,108 +40%

Interest Rate Sensitivity/GAP Analysis

Another method to calculate interest rate sensitivity is through "GAP" analy-
sis. In a GAP analysis, assets and liabilities are analyzed by examining the
extent to which such assets and liabilities are "interest rate sensitive" and
by monitoring an institution's interest rate sensitivity "GAP." In a rising
interest rate environment, an institution with a positive gap would be in a
better position to invest in higher yielding assets, which would result in the
yield on its assets increasing at a pace closer to the cost of its interest-
bearing liabilities, than would be the case if it has a negative gap. During a
period of falling interest rates, an institution with a positive gap would
tend to have its assets repricing at a faster rate than one with a negative
gap, which would tend to restrain the growth or decrease net interest income.

The following tables sets forth the amount of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 2000 and 1999 which
are anticipated to reprice or mature in each of the future time periods shown.
The amounts of assets and liabilities shown which reprice or mature during a
particular period were determined in accordance with the earlier of term to
(i) repricing or (ii) the contractual terms of the asset or liability adjusted
for prepayment rates. The prepayment rates for fixed-rate mortgage loans on
one- to four-family residences are assumed to prepay at a rate of 9% per year
and are net of deferred loan origination fees and the allowance for loan loss-
es. Decay rates of 14% for passbook accounts, 17% for NOW accounts and 31% for
money market deposit accounts are assumed. In addition, it is assumed that
fixed maturity deposits are not withdrawn prior to maturity. Although manage-
ment believes the assumptions are reasonable, they should not be regarded as
necessarily indicative of the actual decay rates that may be experienced in
the future. While a conventional gap measure may be useful, it is limited in
its ability to predict trends in future earnings. It makes no presumptions
about changes in prepayment tendencies, deposit or loan maturity preferences
or repricing time lags that may occur in response to a change in the interest
rate environment.

Certain shortcomings are inherent in this method of analysis. 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 inter-
est 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.
- -------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

At December 31, 2000
------------------------------------------------------------------------------------------
More More More
Than Than Than More
Three Six One Than More
Three Months Months Year to Three Than Five More
Months to Six to Twelve Three Years to Years to Than
or Less Months Months Years Five Years Ten Years Ten Years Total
-------- -------- --------- --------- ---------- --------- --------- --------
(Dollars in thousands)

INTEREST EARNING ASSETS:
Real Estate Loans:
ARM loans............. $ 3,251 $ 1,845 $ 4,687 $ 10,634 $ 19,399 $ 4,796 $ -- $ 44,612
Fixed rate loans...... 10,389 10,336 20,722 41,346 70,620 106,699 199,942 460,054
Residential
construction loans... -- 17 -- 1,043 2,762 -- 2,882 6,704
Multi-family.......... 28 -- 7 7 23 152 182 399
Second mortgage
loans................ 2,114 103 -- 1,408 9,015 2,433 -- 15,073
Consumer loans......... 969 -- -- -- -- -- -- 969
Mortgage-backed
securities............ -- 21,523 -- -- -- -- -- 21,523
Investment securities
(1)................... 48,833 11.182 1,508 91,812 84,268 16,383 3,081 257,067
FHLB stock............. -- -- -- -- -- -- 11,400 11,400
-------- -------- --------- --------- --------- --------- -------- --------
Total interest earning
assets................. 65,584 45,006 26,924 146,250 186,087 130,463 217,487 817,801

INTEREST BEARING
LIABILITIES:
Passbook, club and
other accounts........ 2,436 2,436 4,873 15,588 11,529 17,342 15,403 69,607
Money market and
NOW accounts......... 3,369 3,369 6,738 18,123 10,835 12,419 6,755 61,609
Certificate accounts... 54,040 88,842 125,075 109,616 17,884 10,012 -- 405,469
Borrowings............. 11,250 -- -- 110,000 28,000 70,000 -- 219,250
Advances by borrowers
for taxes and
insurance............. 10,993 -- -- -- -- -- -- 10,993
-------- -------- --------- --------- --------- --------- -------- --------
Total interest bearing
liabilities............ 82,088 94,647 136,686 253,327 68,248 109,773 22,158 766,927
-------- -------- --------- --------- --------- --------- -------- --------
Interest sensitivity
gap.................... $(16,504) $(49,641) $(109,762) $(107,077) $ 117,839 $ 20,690 $195,329 $ 50,874
======== ======== ========= ========= ========= ========= ======== ========
Cumulative interest
sensitivity gap........ $(16,504) $(66,145) $(175,907) $(282,984) $(165,145) $(144,455) $ 50,874 $ 50,874
======== ======== ========= ========= ========= ========= ======== ========
Cumulative interest
sensitivity gap as a
percentage of total
assets................. (1.99%) (7.96%) (21.16%) (34.04%) (19.87%) (17.38%) 6.12% 6.12%
Cumulative net interest
earning assets
as a percentage of
cumulative interest
bearing liabilities.... 79.89% 62.57% 43.88% 50.07% 73.99% 80.60% 106.63% 106.63%

- -------
(1) Includes interest bearing deposits in other financial institutions and
federal funds sold.
- --------------------------------------------------------------------------------

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

At December 31, 1999
-------------------------------------------------------------------------------------------
More More More
Than Than Than More More
Three Six One Than Than
Three Months Months Year to Three Five More
Months to Six to Twelve Three Years to Years to Than
or Less Months Months Years Five Years Ten Years Ten Years Total
-------- --------- --------- --------- ---------- --------- --------- --------
(Dollars in thousands)

INTEREST EARNING ASSETS:
Real Estate Loans:
ARM loans.............. $ 2,892 $ 1,105 $ 4,199 $ 10,316 $ 2,423 $ 1,577 $ -- $ 22,512
Fixed rate loans....... 11,080 11,042 22,092 81,018 68,089 183,238 114,132 490,691
Residential
construction loans.... -- -- -- -- -- -- 7,577 7,577
Multi-family........... -- -- -- 27 127 168 178 500
Second mortgage
loans................. 1,824 -- -- 81 7,980 1,101 26 11,012
Consumer loans......... 967 -- -- -- -- -- -- 967
Investment securities.. 49,775 375 768 8,247 2,980 41,430 153,203 256,778
FHLB stock............. -- -- -- -- -- -- 11,400 11,400
-------- --------- --------- --------- --------- --------- -------- --------
Total interest earning
assets................. 66,538 12,522 27,059 99,689 81,599 227,514 286,516 801,437

INTEREST BEARING
LIABILITIES:
Passbook, club and
other accounts........ 2,546 2,546 5,091 16,318 12,101 18,275 16,432 73,309
Money market and
NOW accounts.......... 2,719 2,719 5,437 14,936 9,189 10,946 6,313 52,259
Certificate accounts... 70,824 65,000 129,164 85,895 23,202 12,279 -- 386,364
Borrowings............. 30,000 -- -- -- 70,000 138,000 -- 238,000
Advances by borrowers
for taxes
and insurance......... 11,223 -- -- -- -- -- -- 11,223
-------- --------- --------- --------- --------- --------- -------- --------
Total interest bearing
liabilities............ 117,312 70,265 139,692 117,149 114,492 179,500 22,745 761,155
-------- --------- --------- --------- --------- --------- -------- --------
Interest sensitivity
gap.................... $(50,774) $ (57,743) $(112,633) $ (17,460) $ (32,893) $ 48,014 $263,771 $ 40,282
======== ========= ========= ========= ========= ========= ======== ========
Cumulative interest
sensitivity gap........ $(50,774) $(108,517) $(221,150) $(238,610) $(271,503) $(223,489) $ 40,282 $ 40,282
======== ========= ========= ========= ========= ========= ======== ========
Cumulative interest
sensitivity gap as a
percentage of total
assets................. (6.22%) (13.30%) (27.10%) (29.24%) (33.27%) (27.38%) 5.03% 5.03%
Cumulative net interest
earning assets
as a percentage of
cumulative interest
bearing liabilities.... 56.72% 42.15% 32.43% 46.31% 51.42% 69.73% 105.29% 105.29%

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

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

Average Balances, Interest and Average Yields

The following table sets forth certain information relating to the Company's
balance sheet at December 31, 2000, and average balance sheets and statements
of income for the years ended December 31, 2000, 1999 and 1998, and reflect the
tax equivalent average yield on assets and average cost of liabilities for the
periods indicated. Such yields and costs are derived by dividing income or
expense by the average monthly balance of assets or liabilities, respectively,
for the years presented. Average balances are based on average daily balances.
The yields and costs include fees which are considered adjustments to yields.
Interest income for 2000, 1999 and 1998 shown in the chart below is the tax
equivalent interest income. Tax equivalent interest income is being used
because interest on investment securities include tax-exempt securities. Tax-
exempt securities carry pre-tax yields lower than comparable taxable assets.
Therefore, it is more meaningful to analyze interest income on a tax-equivalent
basis. Tax equivalent adjustments of $3.4 million, $3.8 million and $1.1 mil-
lion were made to interest income on investment securities in 2000, 1999 and
1998, respectively.

At December 31,
2000 Year Ended December 31, 2000
------------------- ----------------------------
Average Average
Balance Yield/Cost Balance Interest Yield/Cost
-------- ---------- -------- -------- ----------
(Dollars in thousands)

Interest-earning Assets:
Investment securities (1)...... $262,042 6.86% $238,737 $15,932 6.67%
Conventional loans (2)(6)...... 526,842 7.11 533,002 38,376 7.20
Other loans.................... 969 7.04 980 69 7.04
Mortgage-backed securities..... 21,523 6.76 13,567 977 7.20
Federal funds sold............. 6,425 5.70 13,200 800 6.06
-------- -------- -------
Total interest-earning
assets...................... 817,801 7.01 799,486 56,154 7.02
-------
Non-interest earning assets.. 14,879 17,201
-------- --------
TOTAL ASSETS............... $832,680 $816,687
======== ========
Interest-bearing Liabilities:
Passbook, club and other
accounts (5).................. $ 69,607 3.33% $ 59,000 $ 2,737 4.64%
Money market and NOW accounts.. 61,609 3.10 83,044 1,637 1.97
Certificate accounts........... 405,469 5.60 389,054 23,256 5.98
Borrowings..................... 219,250 5.86 221,960 13,047 5.88
-------- -------- -------
Total interest-bearing
liabilities................. 755,935 5.23 753,058 40,677 5.40
-------
Non-interest-bearing
liabilities................. 15,125 9,071
-------- --------
TOTAL LIABILITIES.......... 771,060 762,129
Stockholders' equity........... 61,620 54,558
-------- --------
Total liabilities and
stockholders' equity.......... $832,680 $816,687
======== ========
Net tax equivalent interest
income/net
interest rate spread (3)........ $15,477 1.62%
=======
Net tax equivalent yield on
average
interest-earning assets (4)..... 1.77% 1.94%
Ratio of average interest-earning
assets
to average interest-bearing
liabilities..................... 1.06 1.05

- -------
(1) Includes interest-bearing deposits in other financial institutions and
FHLB stock.
(2) Includes non-accrual loans, deferred net loan origination fees,
undisbursed portion of loans in process, and allowance for loan losses.
(3) Net interest rate spread represents the difference between the average
yield on interest-earning assets, and the average cost of interest- bear-
ing liabilities.
(4) Net interest margin represents net interest income as a percentage of
average interest-earning assets.
(5) Includes advances by borrowers for taxes and insurance.
(6) Interest on conventional loans includes loan fees of $326, $723, and $613
for the years ended December 31, 2000, 1999 and 1998, respectively.
- --------------------------------------------------------------------------------

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

December 31, 1999 December 31, 1998
---------------------------- ----------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
-------- -------- ---------- -------- -------- ----------
(Dollars in thousands)

Interest-earning Assets:
Investment securities
(1).................. $241,728 $15,765 6.52% $115,109 $ 7,395 6.42%
Conventional loans
(2)(6)............... 535,222 38,974 7.28 566,367 41,848 7.39
Other loans........... 937 66 7.04 831 58 6.98
Mortgage-backed
securities........... -- -- -- 4,979 284 5.70
Federal funds sold.... 18,518 1,073 5.79 22,413 1,212 5.41
-------- ------- -------- -------
Total interest-
earning assets..... 796,405 55,878 7.02 709,699 50,797 7.16
------- -------

Non-interest earning
assets............. 12,190 10,762
-------- --------
TOTAL ASSETS...... $808,595 $720,461
======== ========
Interest-bearing
Liabilities:
Passbook, club and
other accounts (5)... $ 85,151 $ 3,021 3.55% $ 82,136 $ 2,480 3.02%
Money market and NOW
accounts............. 53,508 1,404 2.62 47,945 1,147 2.39
Certificate accounts.. 356,439 19,751 5.54 362,720 21,186 5.84
Borrowings............ 230,335 12,886 5.59 142,481 8,030 5.64
-------- ------- -------- -------
Total interest-
bearing
liabilities........ 725,433 37,062 5.11 635,282 32,843 5.17
------- -------
Non-interest-bearing
liabilities........ 18,836 9,524
-------- --------
TOTAL LIABILITIES. 744,269 644,806
Stockholders' equity.. 64,326 75,655
-------- --------
Total liabilities and
stockholders' equity. $808,595 $720,461
======== ========
Net tax equivalent
interest income/net
interest rate spread
(3).................... $18,816 1.91% $17,954 1.99%
======= =======
Net tax equivalent yield
on average
interest-earning assets
(4).................... 2.36% 2.53%
Ratio of average
interest-earning assets
to average interest-
bearing liabilities.... 1.10 1.12

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

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

Rate/Volume Analysis

The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing liabili-
ties have affected the Company's interest income and interest expense during
the years indicated. Information is provided in each category with respect to
(i) changes attributable to changes in volume (changes in volume multiplied by
prior rate), (ii) changes attributable to changes in rate (changes in rate mul-
tiplied by current volume) and (iii) the changes attributable to the combined
impact of volume and rate. The change in interest due to both rate and volume
in the rate/volume analysis table have been allocated to changes due to rate
and volume in proportion to the absolute amounts of the changes in each. The
average rates for investment securities used to calculate the variances in the
following table, for 2000, 1999 and 1998, are tax equivalent rates.

Year Ended December 31, Year Ended December 31,
2000 vs. 1999 1999 vs. 1998
Increase (Decrease) in Increase (Decrease) in
Net Interest Income Due to Net Interest Income Due to
--------------------------------- ----------------------------
Total Total
Increase Increase
Volume Rate (Decrease) Volume Rate (Decrease)
-------- --------- ------------ ------- ------- ----------
(In thousands)

Interest-earning assets:
Investment securities. $ (195) $ 362 $ 167 $ 8,129 $ 241 $ 8,370
Conventional loans.... (162) (436) (598) (2,302) (572) (2,874)
Other loans........... 3 -- 3 7 1 8
Mortgage-backed
securities........... 977 -- 977 (284) -- (284)
Federal funds sold.... (308) 35 (273) (211) 72 (139)
-------- --------- --------- ------- ------- -------
Total interest-
earning assets..... 315 (39) 276 5,339 (258) 5,081
-------- --------- --------- ------- ------- -------
Interest-bearing
liabilities:
Passbook, club and
other accounts....... (928) 644 (284) 91 450 541
Money Market and NOW
accounts............. 774 (541) 233 133 124 257
Certificate accounts.. 1,807 1,698 3,505 (367) (1,068) (1,435)
Borrowings............ (468) 629 161 4,955 (99) 4,856
-------- --------- --------- ------- ------- -------
Total interest-
bearing
liabilities........ 1,185 2,430 3,615 4,812 (593) 4,219
-------- --------- --------- ------- ------- -------
Net change in net
interest income........ $ (870) $(2,469) $(3,339) $ 527 $ 335 $ 862
======== ========= ========= ======= ======= =======

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

Sources of Funding

Deposit growth and borrowings have been the integral source of funds and the
means of growth for the Company. In this regard, management has emphasized pro-
viding an increased level of service to its customers in its local market areas
in order to retain and develop deposit relationships with such customers. In
2000 and 1999, First Bell placed considerable emphasis on core deposit rela-
tionships, consisting of money market, NOW, passbook, club and statement sav-
ings accounts. These accounts tend to be stable and lower cost than other types
of deposits. Certificates of deposit are offered with terms ranging from three
months to ten years and are priced at competitive rates.

As of December 31, 2000, the Company had outstanding borrowings from the FHLB
in the amount of $208.0 million and a bank line of credit of $11.3 million.
These borrowings were used to fund the investment portfolio and to help manage
the Company's equity and the interest rate risk position.

The following table sets forth information concerning the Company's liabili-
ties and stockholders' equity at December 31, 2000 and 1999. Dollar amounts are
in thousands.

December 31, 2000 December 31, 1999
------------------- -------------------
Percent Percent
of of
Amount Total Amount Total
--------- --------- --------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits................................. $ 536,685 64.45% $ 511,931 62.34%
Borrowings............................... 219,250 26.33 238,000 28.98
Other liabilities........................ 15,125 1.82 16,722 2.04
Stockholders' equity..................... 61,620 7.40 54,518 6.64
--------- ------- --------- -------
TOTAL LIABILITIES STOCKHOLDERS' EQUITY.. $ 832,680 100.00% $ 821,171 100.00%
========= ======= ========= =======

Liabilities

Total liabilities increased to $771.1 million at December 31, 2000 from $766.7
million at December 31, 1999. The $4.4 million or 0.6% increase was the result
of an increase in deposits, offset by a decrease in borrowings. Borrowings
decreased by $18.8 million or 7.9% to $219.3 million at December 31, 2000 from
$238.0 million at December 31, 1999. Total deposits increased by $24.8 million
or 4.8% to $536.7 million at December 31, 2000 from $511.9 million at December
31, 1999. The increase was the result of certificate accounts increasing by
$19.1 million and a net increase in core savings accounts of $5.6 million or
4.5%.

Capital

Total stockholders' equity increased by $7.1 million or 13.0% to $61.6 million
at December 31, 2000 from $54.5 million at December 31, 1999. The primarily
factors contributing to the increase in total stockholders' equity were net
income of $6.7 million and the increase in the value of investment securities
held as available for sale, net of taxes of $7.9 million. These increases were
offset by the purchase of $6.5 million in treasury stock and dividends declared
of $2.0 million.
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

December 31, 2000 Operating Results

The following table presents selected components of net income for the years
ended December 31, 2000, 1999 and 1998. Dollar amounts are in thousands.

For the Years Ended
December 31,
-----------------------
2000 1999 1998
------- ------- -------

Tax equivalent interest income......................... $56,154 $55,878 $50,798
Interest expense....................................... 40,677 37,061 32,844
------- ------- -------
Tax equivalent net interest income..................... 15,477 18,817 17,954
Provision for loan loss................................ -- 120 90
Other income........................................... 858 598 643
Other expenses......................................... 5,598 6,116 5,643
Income taxes........................................... 4,035 5,137 5,026
------- ------- -------
Net Income............................................. $ 6,702 $ 8,042 $ 7,838
======= ======= =======

Net income for the year ended December 31, 2000 decreased by $1.3 million or
16.7% to $6.7 million from $8.0 million for the year ended December 31, 1999.
The decrease was the primarily the result of a decrease in net interest income
offset by a decrease in other expenses and income taxes.

Interest Income

Interest income discussed in this section is tax equivalent income. Tax
equivalent interest income is being used because interest on investment secu-
rities includes tax-exempt securities. Tax-exempt securities carry pre-tax
yields lower than comparable taxable assets. Therefore, it is more meaningful
to analyze interest income on a tax-equivalent basis. Tax equivalent adjust-
ments of $3.4 million, $3.8 million and $1.1 million were made for the years
ended December 31, 2000, 1999 and 1998, respectively. Interest income
increased by $276,000 or 0.5% to $56.2 million for the year ended December 31,
2000 from $55.9 million for the year ended December 31, 1999. The increase was
primarily due to an increase in interest earned on investment securities and
mortgage-backed securities offset by a decrease in interest earned on conven-
tional mortgage loans. Interest on investment securities and mortgage-backed
securities increased by $167,000 and $977,000, respectively for the year ended
December 31, 2000 and 1999. The increase was the result of the average rate
earned on the investment portfolio increasing to 6.67% for the year ended
December 31, 2000 from 6.52% for the year ended December 31, 1999. There were
no mortgage-backed securities held in the Association's portfolio as of
December 31, 1999. Interest on conventional mortgage loans decreased by
$598,000 or 1.5% to $38.4 million for the year ended December 31, 2000 from
$39.0 million for the year ended December 31, 1999. The decrease was the
result of the average balance for conventional mortgage loans decreasing by
$2.2 million to $533.0 million for the year ended December 31, 2000 from
$535.2 million for the comparable 1999 period. Also contributing to the
decrease was an eight basis points decline in the average rate earned on con-
ventional mortgage loans. The average rate earned on conventional mortgage
loans for 2000 was 7.20% compared to 7.28% for 1999.

Interest Expense

Interest expense increased to $40.7 million for the year ended December 31,
2000 from $37.1 million for the year ended December 31, 1999. The $3.6 million
or 9.8% increase was the result of a rising interest rate environment. Over an
eighteen month period, beginning in June, 1999 the Federal Reserve Bank
increased interest rates 175 basis points or 1.75%. As a result, in fiscal
year 2000, the average rate for certificates of deposit and the Company's
borrowings increased from 5.54% to 5.98% and from 5.59% to 5.88%, respective-
ly. Also, average balance of certificates of deposit increased $32.6 million
or 9.15% from $356.4 million to $389.1 million. The average balance on
borrowings decreased to $222.0 million for the year ended December 31, 2000
from $230.3 million for the year ended December 31, 1999. An increase in
interest expense on money market and NOW deposits of $233,000 was offset by a
decrease in interest
- -------------------------------------------------------------------------------

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

expense for passbook, club and other accounts of $284,000.

Net Interest Income

Tax equivalent net interest income decreased by $3.3 million or 17.7% to $15.5
million for the year ended December 31, 2000 from $18.8 million for the year
ended December 31, 1999. The increase was the result of interest income rising
by $276,000 offset by an increase in interest expense of $3.6 million.

Provision for Loan Loss

No additional provision for loan loss was recorded during the year ended
December 31, 2000. In determining the provision for loan losses, management
assesses the risk inherent in its loan portfolio including, but not limited to,
an evaluation of the concentration of loans secured by properties located in
the Pittsburgh area, the trends in national and local economies, trends in the
real estate market and in the Company's loan portfolio and the level of non-
performing loans and assets. The Company's history of loan losses has been min-
imal, which management believes is a reflection of the Company's underwriting
standards. There were no charge-offs for the years ended December 31, 2000 and
1999. Management believes the current level of loan loss reserve is adequate to
cover losses inherent in the portfolio as of such date. However, there can be
no assurance that the Company will not sustain losses in future periods.

Other Income

Other income increased by $260,000 or 43.5% to $858,000 for the year ended
December 31, 2000 from $598,000 for the year ended December 31, 1999. The
increase was the result of gains on sales of investment securities increasing
to $138,000 for the year ended December 31, 2000 compared to $45,000 for the
year ended December 31, 1999. In addition, service fees and charges and miscel-
laneous income increased $81,000 and $86,000. respectively.

Other Expenses

Other expenses decreased by $518,000 or 8.5% to $5.6 million for the year
ended December 31, 2000 from $6.1 million for the year ended December 31, 1999.
The decrease was the primarily the result of a decrease in compensation, pay-
roll taxes and fringe benefits, federal insurance premiums and office occupancy
expense offset by increases in computer services and miscellaneous expenses.
During fiscal year 2000, compensation, payroll taxes and fringe benefits
decreased $416,000 or 13.0% due to reduced staffing and reductions in benefit
costs linked to the Company's stock price. Federal insurance premiums decreased
$192,000 or 64.0% and office occupancy expense decreased $50,000, while com-
puter services and miscellaneous expenses increased $137,000.

Income Taxes

Income taxes decreased to $586,000 from $1.3 million as a larger percentage of
the Company's income was derived from the tax exempt securities in the year
ended December 31, 2000 in comparison to the year ended December 31, 1999. Tax
equivalent adjustments of $3.4 million and $3.8 million were made for the
years ended December 31, 2000 and 1999, respectively. The annualized effective
tax rate after the tax equivalent increase was 37.6% for 2000 compared to 39.0%
for 1999.

December 31, 1999 Operating Results

Net income for the year ended December 31, 1999 increased by $204,000 or 2.6%
to $8.0 million from $7.8 million for the year ended December 31, 1998. The
increase was the primarily the result of an increase in net interest income
offset by an increase in other expenses.

Interest Income

Interest income discussed in this section is tax equivalent income. Tax equiv-
alent interest income is being used because interest on investment securities
includes tax-exempt securities. Tax-exempt securities carry pre-tax yields
lower than comparable taxable assets. Therefore, it is more meaningful to ana-
lyze interest income on a tax-equivalent basis. Tax equivalent adjustments of
$3.8 million and $1.1 million were made for the years ended December 31, 1999
and 1998, respectively. Interest income increased by $5.1 million or 10.0% to
$55.9 million for the year ended December 31, 1999 from $50.8 million for the
year ended December 31, 1998. The increase was primarily due to an increase in
interest earned on investment securities offset by a decrease in interest
earned on conventional mortgage loans. Interest on investment securities
increased by $8.4 million or 113.2% to $15.8 million for the year ended Decem-
ber 31, 1999 from $7.4 million for the
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT
- --------------------------------------------------------------------------------

comparable 1998 period. The increase was the result of the average balance
increasing to $241.7 million for the year ended December 31, 1999 from $115.1
million for the year ended December 31, 1998. Interest on conventional mortgage
loans decreased by $2.9 million or 6.9% to $39.0 million for the year ended
December 31, 1999 from $41.8 million for the year ended December 31, 1998. The
decrease was the result of the average balance for conventional mortgage loans
decreasing by $31.1 million or 5.5% to $535.2 million for the year ended Decem-
ber 31, 1999 from $566.4 million for the comparable 1998 period. Also contrib-
uting to the decrease was an eleven basis points decline in the average rate
earned on conventional mortgage loans. The average rate earned on conventional
mortgage loans for 1999 was 7.28% compared to 7.39% for 1998.

Interest Expense

Interest expense increased to $37.0 million for the year ended December 31,
1999 from $32.8 million for the year ended December 31, 1998. The $4.2 million
or 12.8% increase was the result of an increase in interest expense on
borrowings offset by a decrease in interest expense on deposits. Interest
expense on borrowings increased by $4.9 million or 60.5% to $12.9 million for
the year ended December 31, 1999 from $8.0 million for the year ended December
31, 1998. The increase was the result of the average balance on borrowings
which increased to $230.3 million for the year ended December 31, 1999 from
$142.5 million for the year ended December 31, 1998. Interest expense on depos-
its decreased by $638,000 or 2.6% to $24.2 million for the year ended December
31, 1999 from $24.8 million for the comparable 1998 period. The decrease was
the primarily the result of a decline in the average cost on certificate
accounts. The average cost for 1999 was 5.54% compared to 5.84% for 1998.

Net Interest Income

Tax equivalent net interest income increased by $862,000 or 4.8% to $18.8 mil-
lion for the year ended December 31, 1999 from $18.0 million for the year ended
December 31, 1998. The increase was the result of interest income rising by
$5.1 million offset by an increase in interest expense of $4.2 million.

Provision for Loan Loss

The provision for loan loss for 1999 was $120,000. The addition to the provi-
sion is the result of an increase in the origination of jumbo, home equity and
Community Reinvestment Act ("CRA") mortgages. In determining the provision for
loan losses, management assesses the risk inherent in its loan portfolio
including, but not limited to, an evaluation of the concentration of loans
secured by properties located in the Pittsburgh area, the trends in national
and local economies, trends in the real estate market and in the Company's loan
portfolio and the level of non-performing loans and assets. The Company's his-
tory of loan losses has been minimal, which management believes is a reflection
of the Company's underwriting standards.

There were no charge-offs for the years ended December 31, 1999 and 1998.
Management believes the current level of loan loss reserve is adequate to cover
losses inherent in the portfolio as of such date. However, there can be no
assurance that the Company will not sustain losses in future periods.

Other Income

Other income decreased by $45,000 or 7.0% to $598,000 for the year ended
December 31, 1999 from $643,000 for the year ended December 31, 1998. The
decrease was the result of gains on sales of investment securities and mort-
gage-backed securities declining to $45,000 for the year ended December 31,
1999 compared to $97,000 for the year ended December 31, 1998. In addition, a
decline in miscellaneous income of $19,000 was primarily the result of losses
on real estate owned included in miscellaneous income. Offsetting these
decreases was a rise in loan fees and service charges of $26,000 or 5.0%.

Other Expenses

Other expenses increased by $473,000 or 8.4% to $6.1 million for the year
ended December 31, 1999 from $5.6 million for the year ended December 31, 1998.
The increase was the primarily the result of an increase in miscellaneous
expenses. Miscellaneous expenses increased to $1.5 million for the year ended
December 31, 1999 from $1.1 million for the comparable 1998 period. The
$456,000 or 41.7% increase was due to expenses associated with the annual
meeting and one-time non-recurring expenses related to the operation of the
Association.

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

Income Taxes

Income taxes remained relatively flat for the years ended December 31, 1999
and 1998. Tax equivalent adjustments of $3.8 million and $1.1 million were made
for the years ended December 31, 1999 and 1998, respectively. The annualized
effective tax rate after the tax equivalent increase was 39.0% for 1999 and
39.1% for 1998.

New Accounting Pronouncements

For a discussion of new accounting pronouncements and their effect on the Com-
pany, see note number 2 to the Consolidated Financial Statements.
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

Management's Report on Internal Control
and Compliance with Laws and Regulations
- --------------------------------------------------------------------------------

March 23, 2001

To the Stockholders of First Bell Bancorp, Inc.:

Financial Statements

The management of First Bell Bancorp, Inc. ("the Company") is responsible for
the preparation, integrity, and fair presentation of its published financial
statements and all other information presented in this annual report. The
financial statements have been prepared in accordance with accounting princi-
ples generally accepted in the United States of America ("generally accepted
accounting principles") and, as such, include amounts based on informed
judgements and estimates made by management.

Internal Control

Management is responsible for establishing and maintaining effective internal
control over financial reporting, including safeguarding of assets, for finan-
cial presentations in conformity with both generally accepted accounting prin-
ciples and the Office of Thrift Supervision ("OTS") instructions for Thrift
Financial Reports ("TFR"). The internal control contains monitoring mechanisms,
and actions are taken to correct deficiencies identified.

There are inherent limitations in the effectiveness of any internal control,
including the possibility of human error and the circumvention or overriding of
controls. Accordingly, even effective internal control can provide only reason-
able assurance with respect to financial statement preparation. Further,
because of changes in conditions, the effectiveness of internal control may
vary over time.

Management assessed the institution's internal control over financial
reporting, including safeguarding of assets, for financial presentations in
conformity with both generally accepted accounting principles and TFR
instructions as of December 31, 2000. This assessment was based on criteria for
effective internal control over financial reporting, including safeguarding of
assets, described in Internal Control--Integrated Framework issued by the
committee of Sponsoring Organizations of the Treadway Commission. Based on this
assessment, management believes that the Company maintained effective internal
control over financial reporting, including safeguarding of assets, presented
in confor-mity with both generally accepted accounting principles and TFR
instructions as of December 31, 2000.

The Audit Committee of the Board of Directors is comprised entirely of outside
directors who are independent of the Company's management. The Audit Committee
is responsible for recommending to the Board of Directors, the selection of
independent auditors. It meets periodically with management, the independent
auditors, and the internal auditor to ensure that they are carrying out their
responsibilities. The Committee is also responsible for performing an oversight
rule by reviewing and monitoring the financial, accounting and auditing proce-
dures of the Company in addition to reviewing the Company's financial reports.
The independent auditors and the internal auditors have full and free access to
the Audit Committee, with or without the presence of management, to discuss the
adequacy of internal control over financial reporting and any other matters
which they believe should be brought to the attention of the Committee.

Compliance with Laws and Regulations

Management is also responsible for ensuring compliance with the federal laws
and regulations concerning loans to insiders and the federal and state laws and
regulations concerning dividend restrictions, both of which are designated by
the Federal Deposit Insurance Corporation as safety and soundness laws and reg-
ulations.

Management assessed its compliance with the designated safety and soundness
laws and regulations and has maintained records of its determinations and
assessments as required by the OTS. Based on this assessment, Management
believes that the Company has complied, in all material respects, with the des-
ignated safety and soundness laws and regulations for the year ended December
31, 2000.

/s/ Albert H. Eckert, II

Albert H. Eckert, II
Chief Executive Officer

/s/ Jeffrey M. Hinds

Jeffrey M. Hinds
Chief Financial Officer

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

Independent Auditors' Report
- -------------------------------------------------------------------------------

To the Board of Directors and Stockholders of
First Bell Bancorp, Inc.:

We have audited the accompanying consolidated balance sheets of First Bell
Bancorp, Inc. and subsidiary, as of December 31, 2000 and 1999, and the
related consolidated statements of income, comprehensive income (loss),
changes in stockholders' equity and cash flows for each of the three years in
the period ended December 31, 2000. These financial statements are the respon-
sibility of First Bell Bancorp Inc.'s management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements are free of material misstatement. An audit includes examin-
ing, 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 eval-
uating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of First Bell Bancorp, Inc. and sub-
sidiary as of December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States of America.

/s/ Deloitte & Touche LLP

Pittsburgh, Pennsylvania
March 23, 2001
- -------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

Consolidated Balance Sheets
(In thousands, except shares and per share data)
- --------------------------------------------------------------------------------

December 31,
------------------
2000 1999
ASSETS -------- --------

CASH AND CASH EQUIVALENTS:
Cash on hand................................................ $ 988 $ 1,857
Noninterest-bearing deposits................................ 2,113 2,204
Interest-bearing deposits................................... 37,408 16,407
-------- --------
Total cash and cash equivalents........................... 40,509 20,468
FEDERAL FUNDS SOLD............................................ 6,425 33,000
INVESTMENT SECURITIES HELD-TO-MATURITY--At cost
(fair value of $5,242 at December 31, 1999).................. -- 4,989
INVESTMENT SECURITIES AVAILABLE-FOR-SALE--At fair value
(cost of $215,237 and $217,043 at December 31, 2000 and
1999, respectively).......................................... 213,234 202,382
MORTGAGE BACKED SECURITIES AVAILABLE-FOR-SALE--At fair value
(cost of $21,271 at December 31, 2000)....................... 21,523 --
CONVENTIONAL LOANS--Net of allowance for loan losses of $925
at December 31, 2000 and 1999................................ 526,842 532,292
OTHER LOANS--Net.............................................. 969 967
REAL ESTATE OWNED............................................. 29 390
PREMISES AND EQUIPMENT--Net................................... 3,682 3,924
FEDERAL HOME LOAN BANK STOCK--At cost......................... 11,400 11,400
ACCRUED INTEREST RECEIVABLE................................... 5,383 4,947
DEFERRED TAX ASSET............................................ 1,232 5,049
PREPAID INCOME TAXES.......................................... 152 --
OTHER ASSETS.................................................. 1,300 1,363
-------- --------
Total assets.............................................. $832,680 $821,171
======== ========

2000 1999
LIABILITIES AND STOCKHOLDERS' EQUITY -------- --------

DEPOSITS:
Passbook, club and other accounts........................... $ 69,607 $ 73,308
Money market and NOW accounts............................... 61,609 52,259
Certificate accounts........................................ 405,469 386,364
-------- --------
Total deposits............................................ 536,685 511,931
BORROWINGS.................................................... 219,250 238,000
ADVANCES BY BORROWERS FOR TAXES AND INSURANCE................. 10,993 11,223
ACCRUED INTEREST ON DEPOSITS.................................. 869 703
ACCRUED INTEREST ON BORROWINGS................................ 1,183 864
ACCRUED INCOME TAXES.......................................... -- 777
DIVIDENDS PAYABLE ON COMMON STOCK............................. 490 453
OTHER LIABILITIES............................................. 1,590 2,702
-------- --------
Total liabilities......................................... 771,060 766,653
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock ($.01 par value; 2,000,000 shares
authorized; no shares issued or outstanding)............... -- --
Common stock ($.01 par value; 20,000,000 shares authorized;
8,596,250 shares issued and 4,758,360 and
5,189,063 outstanding
at December 31, 2000 and 1999, respectively,
one stock right per share)................................. 86 86
Additional paid-in capital.................................. 62,556 62,217
Unearned ESOP shares (495,807 and 528,739 shares at December
31, 2000 and 1999, respectively)........................... (3,507) (3,740)
Unearned MRP shares (210,727 and 242,384 shares at December
31, 2000 and 1999, respectively)........................... (2,937) (3,378)
Treasury stock, at cost (3,837,890 and 3,407,187 shares at
December 31, 2000, and 1999, respectively)................. (62,030) (55,523)
Accumulated other comprehensive loss, net of taxes.......... (1,067) (8,931)
Retained earnings--substantially restricted................. 68,519 63,787
-------- --------
Total stockholders' equity................................ 61,620 54,518
-------- --------
Total liabilities and stockholders' equity................ $832,680 $821,171
======== ========

See notes to consolidated financial statements.

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

Consolidated Statements of Income
(In thousands, except per share amounts)
- --------------------------------------------------------------------------------

Years Ended December 31,
----------------------------
2000 1999 1998
-------- -------- --------

INTEREST AND DIVIDEND INCOME:
Conventional loans.............................. $ 38,376 $ 38,974 $ 41,848
Interest-bearing deposits....................... 1,218 1,027 1,152
Mortgage-backed securities...................... 977 -- 284
Federal funds sold.............................. 800 1,073 1,212
Investment securities, taxable.................. 1,438 3,212 2,509
Investment securities, non-taxable.............. 9,021 6,981 2,104
Other loans..................................... 69 66 58
Federal Home Loan Bank stock.................... 806 757 482
-------- -------- --------
Total interest and dividend income............ 52,705 52,090 49,649
-------- -------- --------
INTEREST EXPENSE:
Deposits........................................ 27,630 24,175 24,813
Borrowings...................................... 13,047 12,886 8,030
-------- -------- --------
Total interest expense........................ 40,677 37,061 32,843
-------- -------- --------
NET INTEREST INCOME............................... 12,028 15,029 16,806
PROVISION FOR LOAN LOSSES......................... -- 120 90
-------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES........................................... 12,028 14,909 16,716
-------- -------- --------
OTHER INCOME:
Service fees and charges........................ 623 542 516
Gain (loss) on sales of mortgage-backed
securities available-for-sale.................. -- -- 97
Gain on sale of investments..................... 138 45 --
Miscellaneous income............................ 97 11 30
-------- -------- --------
Total other income............................ 858 598 643
-------- -------- --------
OTHER EXPENSES:
Compensation, payroll taxes and fringe benefits. 2,777 3,193 3,227
Federal insurance premiums...................... 108 300 305
Office occupancy expense, excluding
depreciation................................... 472 522 498
Depreciation.................................... 294 291 296
Computer services............................... 298 261 224
Miscellaneous expenses.......................... 1,649 1,549 1,093
-------- -------- --------
Total other expenses.......................... 5,598 6,116 5,643
-------- -------- --------
INCOME BEFORE PROVISION FOR INCOME TAXES.......... 7,288 9,391 11,716
-------- -------- --------
PROVISION FOR INCOME TAXES:
Current:
Federal........................................ 1,149 1,609 3,048
State.......................................... 666 728 809
Deferred (benefit) expense...................... (1,229) (988) 21
-------- -------- --------
Total provision for income taxes.............. 586 1,349 3,878
-------- -------- --------
NET INCOME........................................ $ 6,702 $ 8,042 $ 7,838
======== ======== ========
BASIC EARNINGS PER SHARE.......................... $ 1.61 $ 1.68 $ 1.41
======== ======== ========
DILUTED EARNINGS PER SHARE........................ $ 1.57 $ 1.61 $ 1.35
======== ======== ========

See notes to consolidated financial statements.
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
- --------------------------------------------------------------------------------

Years Ended December 31,
-----------------------------
2000 1999 1998
-------- --------- --------

Net income....................................... $ 6,702 $ 8,042 $ 7,838
Unrealized gains (losses) arising during the
period.......................................... 12,911 (16,551) 1,993
Less: reclassification adjustment for (gains)
losses realized in net income................... -- (45) (97)
-------- --------- -------
Comprehensive income, before tax adjustment...... 19,613 (8,554) 9,734
Tax benefit (expense)............................ (5,047) 6,486 (834)
-------- --------- -------
Comprehensive (loss) income, net of taxes........ $ 14,566 $ (2,068) $ 8,900
======== ========= =======

See notes to consolidated financial statements.
- --------------------------------------------------------------------------------

Consolidated Statements of Changes in Stockholders' Equity
(In thousands)
- --------------------------------------------------------------------------------

Preferred Stock Common Stock Additional Unearned
----------------- ----------------- Paid-in ESOP
Shares Par Value Shares Par Value Capital Shares
------- --------- ------ --------- ---------- --------

BALANCE, DECEMBER 31, 1997............... -- $-- 6,511 $86 $61,371 $(4,217)
Purchase of treasury stock............. -- -- (424) -- -- --
Allocation of MRP shares............... -- -- -- -- 67 --
Allocation of ESOP shares.............. -- -- -- -- 373 245
Exercise of options.................... -- -- 13 -- (43) --
Change in unrealized gain in securities
available-for-sale, net of taxes...... -- -- -- -- -- --
Dividends ($.40 per share)............. -- -- -- -- -- --
Net income............................. -- -- -- -- -- --
--- --- ----- --- ------- -------
BALANCE, DECEMBER 31, 1998............... -- -- 6,100 86 61,768 (3,972)
Purchase of treasury stock............. -- -- (911) -- -- --
Allocation of MRP shares............... -- -- -- -- 129 --
Allocation of ESOP shares.............. -- -- -- -- 320 232
Change in unrealized gain (loss) in
securities
available-for-sale, net of taxes...... -- -- -- -- -- --
Dividends ($.40 per share)............. -- -- -- -- -- --
Net income............................. -- -- -- -- -- --
--- --- ----- --- ------- -------
BALANCE, DECEMBER 31, 1999............... -- -- 5,189 86 62,217 (3,740)
Purchase of treasury stock............. -- -- (431) -- -- --
Allocation of MRP shares............... -- -- -- -- 91 --
Allocation of ESOP shares.............. -- -- -- -- 248 233
Change in unrealized gain in securities
available-for-sale, net of taxes...... -- -- -- -- -- --
Dividends ($.48 per share)............. -- -- -- -- -- --
Net income............................. -- -- -- -- -- --
--- --- ----- --- ------- -------
BALANCE, DECEMBER 31, 2000............... -- $-- 4,758 $86 $62,556 $(3,507)
=== === ===== === ======= =======

Accumulated
Other
Unearned Comprehensive
MRP Treasury Income, Retained
Shares Stock Net of Taxes Earnings Total
-------- -------- ------------- -------- --------

BALANCE, DECEMBER 31, 1997............... $(4,290) $(32,077) $ 117 $51,993 $ 72,983
Purchase of treasury stock............. -- (7,069) -- -- (7,069)
Allocation of MRP shares............... 451 -- -- -- 518
Allocation of ESOP shares.............. -- -- -- -- 618
Exercise of options.................... -- 228 -- -- 185
Change in unrealized gain in securities
available-for-sale, net of taxes...... -- -- 1,062 -- 1,062
Dividends ($.40 per share)............. -- -- -- (2,233) (2,233)
Net income............................. -- -- -- 7,838 7,838
------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1998............... (3,839) (38,918) 1,179 57,598 73,902
Purchase of treasury stock............. -- (16,604) -- -- (16,604)
Allocation of MRP shares............... 461 -- -- -- 590
Allocation of ESOP shares.............. -- -- -- -- 552
Change in unrealized gain (loss) in
securities
available-for-sale, net of taxes...... -- -- (10,110) -- (10,110)
Dividends ($.40 per share)............. -- -- -- (1,854) (1,854)
Net income............................. -- -- -- 8,042 8,042
------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1999............... (3,378) (55,522) (8,931) 63,786 54,518
Purchase of treasury stock............. -- (6,508) -- -- (6,508)
Allocation of MRP shares............... 441 -- -- -- 532
Allocation of ESOP shares.............. -- -- -- -- 481
Change in unrealized gain in securities
available-for-sale, net of taxes...... -- -- 7,864 -- 7,864
Dividends ($.48 per share)............. -- -- -- (1,969) (1,969)
Net income............................. -- -- -- 6,702 6,702
------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 2000............... $(2,937) $(62,030) $ (1,067) $68,519 $ 61,620
======= ======== ======== ======= ========

See notes to consolidated financial statements.
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

Consolidated Statements of Cash Flows
(In thousands)
- --------------------------------------------------------------------------------

Years Ended December 31,
-----------------------------
2000 1999 1998
-------- -------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...................................... $ 6,702 $ 8,042 $ 7,838
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation................................... 294 291 296
Deferred income taxes.......................... (1,229) (988) 21
Amortization of premiums and accretion of
discounts..................................... (82) (93) (19)
Provision for loan loss........................ -- 120 90
Compensation expense--allocations of ESOP and
MRP shares.................................... 1,013 1,055 1,175
(Gain) loss on sale of real estate owned....... (84) 11 (13)
Gain on sale of mortgage-backed securities
available-for-sale............................ -- -- (97)
Gain on sale of investments, held-to-maturity.. (138) -- --
Gain on sale of investments available-for-
sale.......................................... -- (45) --
Increase or decrease in assets and liabilities:
Accrued interest receivable................... (436) (676) (1,069)
Accrued interest on deposits.................. 166 103 65
Accrued interest on borrowings................ 319 1 531
Prepaid/Accrued income taxes.................. (929) 658 (109)
Other assets.................................. 63 (426) (322)
Other liabilities............................. (1,112) 195 296
Dividends payable............................. 37 (83) (39)
-------- -------- ---------
Net cash provided by operating activities....... 4,584 8,165 8,644
-------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities available-for-
sale........................................... -- (90,188) (132,770)
Purchase of mortgage-backed securities
available-for-sale............................. (23,073) -- --
Net decrease (increase) in Federal Funds........ 26,575 3,175 (34,625)
Maturity of investment securities held-to-
maturity....................................... -- 5,000 --
Maturity of investment securities available-for-
sale........................................... -- -- 10,000
Principal paydowns on mortgage-backed securities
available-for-sale............................. 1,768 -- 1,402
Net proceeds from sale of investment securities
held to maturity............................... 5,125 -- --
Net proceeds from sale of mortgage-backed
securities available-for-sale.................. -- -- 30,352
Net proceeds from sale of investment securities
available-for-sale............................. -- 3,317 --
Principal paydowns on investment securities
available-for-sale............................. 1,869 4,700 3,974
Net decrease in conventional loans.............. 5,421 11,765 33,958
Net (increase) decrease in other loans.......... (2) (68) 8
Purchase of Federal Home Loan Bank stock........ -- (2,400) (3,852)
Net proceeds from sale of real estate owned..... 493 140 128
Purchase of premises and equipment.............. (53) (810) (209)
-------- -------- ---------
Net cash provided by (used in) investing
activities..................................... 18,123 (65,369) (91,634)
-------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW
accounts and savings accounts.................. 5,649 (174) 10,891
Net increase (decrease) in certificate
accounts....................................... 19,105 16,977 (10,818)
Advances by borrowers for taxes and insurance... (230) (132) (872)
Net (decrease) increase in borrowings........... (18,750) 58,000 90,000
Dividends paid.................................. (1,932) (1,938) (2,271)
Proceeds from stock options exercised........... -- -- 149
Purchase of treasury stock...................... (6,508) (16,604) (7,069)
-------- -------- ---------
Net cash (used in) provided by financing
activities..................................... (2,666) 56,129 80,010
-------- -------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS...................................... 20,041 (1,075) (2,980)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR...... 20,468 21,543 24,523
-------- -------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR............ $ 40,509 $ 20,468 $ 21,543
======== ======== =========
SUPPLEMENTAL DISCLOSURES:
Cash paid for:
Interest on deposits and advances by borrowers
for taxes and insurance....................... $ 27,464 $ 24,073 $ 24,747
Interest on borrowings......................... 12,728 12,886 7,500
Income taxes................................... 2,752 1,731 3,936
Noncash transactions:
Transfers from conventional loans to real
estate acquired through foreclosure........... 29 459 201
Increase in additional paid-in capital--ESOP
and MRP allocations........................... 339 449 397
Unrealized gain (loss) on securities available-
for-sale...................................... 12,911 (16,596) 1,896

See notes to consolidated financial statements.
- --------------------------------------------------------------------------------

Notes to Consolidated Financial Statements
Years Ended December 31, 2000, 1999 and 1998
- --------------------------------------------------------------------------------

1. BASIS OF PRESENTATION

The principal business of the Company is to operate a traditional customer
oriented savings and loan association. The Association's business is pri-
marily conducted through six branch offices located throughout the suburban
Pittsburgh, Pennsylvania area and its principal office in the borough of
Bellevue. The Company's principal executive office is located in Wilming-
ton, Delaware.

The consolidated financial statements include the accounts of First Bell
Bancorp, Inc. ("First Bell") and its wholly-owned subsidiary, Bell Federal
Savings and Loan Association of Bellevue (the "Association" or "Bell
Federal", collectively the "Company"). All significant intercompany
transactions have been eliminated in consolidation. The investment in Bell
Federal on First Bell's parent company financial statements is carried at
the parent company's equity in the underlying net assets.

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and with general practices within
the banking industry. In preparing such consolidated financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Federal Home Loan Bank System--The Association is a member of the Fed-
eral Home Loan Bank ("FHLB") system. As a member, the Association is
required to maintain a minimum investment in capital stock of the FHLB
of not less than 1% of the Association's outstanding conventional mort-
gage loans or 0.3% of its total assets. Deficiencies, if any, in the
required investment at the end of any reporting period are purchased in
the subsequent reporting period. The Association receives dividends on
its FHLB stock.

b. Cash and Cash Equivalents--For the purpose of presenting the
consolidated statements of cash flows, cash on hand and interest and
noninterest-bearing deposits with original maturities of less than 90
days are considered cash equivalents.

The Association services mortgage loans for the Federal National Mort-
gage Association ("FNMA"). The Association is required to restrict cash
balances equal to the corresponding escrow funds. As of December 31,
2000 and 1999, restricted cash of approximately $362,000 and $427,000,
respectively, has been segregated on the books of the Association.

The Association's reserve requirements imposed by the Federal Reserve
Bank averaged approximately $1,061,000 and $1,132,000 for the years
ended December 31, 2000 and 1999, respectively.

c. Investment and Mortgage-Backed Securities--The Company follows
Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Debt and Equity Securities," for investment and
mortgage-backed securities. Investment and mortgage-backed securities
that may be sold as part of the Company's asset/liability or liquidity
management or in response to or in anticipation of changes in interest
rates and prepayment risk or other factors are classified as available-
for-sale and are carried at fair market value. Unrealized gains and
losses on such securities are reported net of related taxes as other
comprehensive income and as a separate component of stockholders'
equity. Securities that the Company has the intent and ability to hold
to maturity are classified as held-to-maturity and are carried at
amortized cost. Realized gains and losses on sales of all securities
are reported in earnings and are computed using the specific
identification cost basis.

Premiums are amortized and discounts are accreted to maturity using the
level yield method. The Company does not maintain atrading account.

d. Conventional Loans--Interest on loans is credited to income as earned.
Interest earned that has not been collected is accrued. Interest
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

- --------------------------------------------------------------------------------
accrued on loans delinquent more than 90 days is offset by a reserve for
uncollected interest and is, therefore, not recognized as income. Origi-
nation fees and costs related to activities performed for a loan origi-
nation are deferred and recognized over the contractual life using
the level yield method in accordance with SFAS No. 91 "Accounting for
Nonrefundable Fees and Costs Associated with Originating or Acquiring
Loans and Initial Direct Costs of Leases."

e. Servicing of Loans--The total amount of loans serviced for others was
$16,539,000, $19,088,000 and $24,388,000, at December 31, 2000, 1999
and 1998, respectively.

f. Allowance for Loan Losses--The allowance for loan losses is determined
by management, taking into consideration the past loan loss experience,
known and inherent risks in the portfolio, adverse situations which may
affect the borrowers' ability to repay and estimated values of
underlying collateral and current economic conditions in the
Association's lending area. While management uses the best information
available to estimate losses on loans, future additions to the
allowance may be necessary for changes in economic conditions beyond
the Association's control.

g. Real Estate Owned--Real estate owned is initially recorded at the lower
of carrying value or fair value less estimated costs to sell.
Subsequently, such real estate is carried at the lower of fair value
less estimated costs to sell or its initial recorded value. Reductions
in the carrying value of real estate subsequent to acquisition are
recorded through a valuation allowance. Costs related to the
development and improvement of the real estate are capitalized, whereas
those costs relating to holding the real estate are charged to expense.

Recovery of the carrying value of real estate acquired in settlement of
loans is dependent to a great extent on economic, operating and other
conditions that may be beyond the Company's control.

h. Premises and Equipment--Premises, equipment and leasehold improvements
are stated at cost less accumulated depreciation and amortization.
Depreciation and amortization are computed on a straight-line basis
over the estimated useful lives (3-50 years) or leasehold period, if
shorter, of the related assets.

i. Deposits--Interest on deposits is accrued and charged to operating
expense monthly and is paid in accordance with the terms of the respec-
tive accounts.

j. Income Taxes--The Company follows the provisions of SFAS No. 109,
"Accounting for Income Taxes." SFAS No. 109 requires the asset and
liability method of accounting for income taxes, under which deferred
income taxes are recognized for the tax consequences of "temporary
differences" by applying enacted statutory tax rates to differences
between the financial statement carrying amounts and the tax bases of
existing assets and liabilities. Under SFAS No. 109, the effect on
deferred taxes of a change in tax rates is recognized in income in the
period that includes the enactment date. Management considers whether a
valuation allowance is required for existing deferred tax assets.

k. Other Comprehensive Income--The Financial Accounting Standards Board
("FASB") issued SFAS No. 130, "Reporting Comprehensive Income," which
became effective for financial statements for fiscal years beginning
after December 15, 1997. SFAS No. 130 established standards for
reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general-purpose
financial statements.

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

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

The following table sets forth the related tax effects allocated to each
element of other comprehensive income for the years ended December 31,
2000, 1999 and 1998:

2000 1999 1998
------------------------ ---------------------------- -----------------------
Tax Tax Tax
(Expense) Net- (Expense) Net-of- Pre- (Expense) Net-
Pre-tax or of-tax Pre-tax or tax tax or of-tax
Amount Benefit Amount Amount Benefit Amount Amount Benefit Amount
------- --------- ------ -------- --------- -------- ------ --------- ------

Unrealized gains
(losses) on securities:
Unrealized holding
gains (losses) arising
during period......... $12,911 $(5,047) $7,864 $(16,551) $6,468 $(10,083) $1,993 $(872) $1,121
Less: reclassification
adjustment for gains
(losses) realized in
net income............ -- -- -- 45 (18) 27 97 (38) 59
------- ------- ------ -------- ------ -------- ------ ----- ------
Net unrealized gains
(losses).............. 12,911 (5,047) 7,864 (16,596) 6,486 (10,110) 1,896 (834) 1,062
------- ------- ------ -------- ------ -------- ------ ----- ------
Other comprehensive
income................. $12,911 $(5,047) $7,864 $(16,596) $6,486 $(10,110) $1,896 $(834) $1,062
======= ======= ====== ======== ====== ======== ====== ===== ======

The following table sets forth the components of accumulated other compre-
hensive income for the years ended December 31, 2000, 1999 and 1998:

2000 1999 1998
------- -------- ------

Beginning balance................................... $(8,931) $ 1,179 $ 117
Net unrealized gains on securities, net of taxes.... 7,864 (10,110) 1,062
------- -------- ------
Ending balance...................................... $(1,067) $ (8,931) $1,179
======= ======== ======

l. Segment Information--In June 1997, the FASB issued Statement No. 131,
"Disclosures About Segments of an Enterprise and Related Information,"
which was effective for financial statements for periods beginning after
December 15, 1997. The Company has determined that it only has one oper-
ating segment which is the operation of a bank, therefore, will not be
presenting any further segment information.

m. Earnings Per Share--Basic EPS is computed by dividing net income avail-
able to common stockholders by the weighted average number of common
shares outstanding for the period. Diluted EPS is computed by dividing
net income available to common stockholders, adjusted for dilutive secu-
rities, by the weighted average number of common shares outstanding,
adjusted for dilutive securities.

n. Treasury Stock--Treasury stock is recorded at cost.

o. Interest Rate Risk--A significant portion of the Company's assets con-
sist of long-term fixed-rate residential mortgage loans, while a signif-
icant portion of the Company's liabilities consist of deposits with con-
siderably shorter terms. As a result of these differences in the
maturities of assets and liabilities, any significant increase in inter-
est rates will have an adverse effect on the Company's results of opera-
tions.

p. New Accounting Pronouncements Not Yet Adopted--In June 1998, the FASB
issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This statement, as amended, establishes accounting and
reporting standards for derivative instruments, including certain deriv-
ative instruments embedded in other contracts, and for hedging activi-
ties. The provisions of this statement are effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. The Company
will adopt SFAS No. 133 effective January 1, 2001. Management does not
expect that the adoption of SFAS No. 133 will have a significant impact
on the financial position, results of operations, or cash flows of the
Company.

q. Reclassifications--Certain balances have been reclassified to conform to
the 2000 presentation.

3. STOCKHOLDER RIGHTS PLAN

The Company adopted a Stockholder Rights Plan on November 18, 1998 in which
preferred stock purchase rights were distributed as a dividend at the rate
of one right for each share of common stock held as of the close of busi-
ness on November 30,
- -------------------------------------------------------------------------------
31

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

- --------------------------------------------------------------------------------
1998 and for each share of Company Common Stock issued (including shares
distributed from Treasury) by the Company thereafter and prior to the Dis-
tribution Date.

Each Right will entitle stockholders to buy one one-thousandth of a share
of Series A Preferred Stock of the Company at an exercise price of $50.00.
The Rights will be exercisable only if a person or group acquires benefi-
cial ownership of 10% or more of the Company's outstanding Common Stock or
commences a tender or exchange offer upon consummation of which a person or
group would beneficially own 10% or more of the Company's outstanding Com-
mon Stock.

If any person becomes the beneficial owner of 10% or more of Company's Com-
mon Stock or a holder of 10% or more of the Company's Common Stock engages
in certain self-dealing transactions or a merger transaction in which the
Company is the surviving corporation and its Common Stock remains outstand-
ing, then each Right not owned by such person or certain related parties
will entitle its holder to purchase, at the Right's then-current exercise
price, units of the Company's Series A Preferred Stock having a market
value equal to twice the then-current exercise price. In addition, if First
Bell is involved in a merger or other business combination transactions
with another person after which its Common Stock does not remain outstand-
ing, or sells 50% or more of its assets or earning power to another person,
each Right will entitle its holder to purchase, at the Right's then-current
exercise price, shares of common stock of the ultimate parent of such other
person having a market value equal to twice the then-current exercise
price.

First Bell will generally be entitled to redeem the Rights at $0.01 per
right at any time until the 10th business day following public announcement
that a person or group has acquired 10% or more of the Company's Common
Stock.

4. INVESTMENT SECURITIES HELD-TO-MATURITY

There were no investment securities held-to- maturity at December 31, 2000.
The $5.0 million reduction from December 31, 1999 was the result of the
Company selling a U.S. Treasury Note that resulted in a gain of $138,000.
The sale of the security was done to improve the Company's interest rate
risk position. The proceeds from the sale were used to help fund the
purchase of the adjustable rate mortgage-backed securities.

The following is a summary of investment securities held-to-maturity at
December 31, 1999 (in thousands):

1999
-----------------------------
Gross Gross
Amor- Unreal- Unreal-
tized ized ized Fair
Cost Gain Loss Value
------ ------- ------- ------

Treasury bills.................................. $4,985 $182 -- $5,167
Other investments............................... 4 71 -- 75
------ ---- --- ------
$4,989 $253 -- $5,242
====== ==== === ======

There were no sales of investment securities held-to-maturity during the
years ended December 31, 1999 or 1998.

5. INVESTMENT SECURITIES AVAILABLE-FOR-SALE

These investments consist of municipal securities and collateralized mort-
gage obligations ("CMO's"). The following is a summary of investment secu-
rities available-for-sale at December 31, 2000 and 1999 (in thousands):

2000
-----------------------------------
Gross Gross
Amor- Unreal- Unreal-
tized ized ized Fair
Cost Gain Loss Value
-------- ------- -------- --------

Municipal
Securities............................... $199,196 $608 $ (2,618) $197,186
CMO's..................................... 11,037 12 (5) 11,044
FHLB Bond................................. 5,000 -- -- 5,000
Other Investments......................... 4 -- -- 4
-------- ---- -------- --------
$215,237 $620 $ (2,623) $213,234
======== ==== ======== ========

1999
-----------------------------------

Municipal
Securities............................... $199,141 $ -- $(14,373) $184,768
CMO's..................................... 12,902 12 (153) 12,761
FHLB Bond................................. 5,000 -- (147) 4,853
-------- ---- -------- --------
$217,043 $ 12 $(14,673) $202,382
======== ==== ======== ========

There were no sales of investment securities available-for-sale during the
years ended December 31, 2000 and 1998. In 1999, proceeds from the sale of
municipal securities available for sale were $3,317,000 resulting in gross
and net gains of $45,000.
- --------------------------------------------------------------------------------

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

The carrying value and fair value of investment securities available-for-
sale by contractual maturity as of December 31, 2000, are shown below
(in thousands):

Amortized Fair
Cost Value
--------- --------

Due after one through five years.......................... $ 519 $ 525
Due after five years through ten years.................... 64,282 64,524
Due after ten years....................................... 150,436 148,185
-------- --------
$215,237 $213,234
======== ========

The expected maturity may differ from the contractual maturity for the
municipal securities because most of these securities have a call feature
that is earlier than the contractual maturity date. For the CMO's, the
expected maturity may differ from the contractual maturity because borrow-
ers may have the right to prepay obligations with or without prepayment
penalties.

6. MORTGAGE-BACKED SECURITIES
AVAILABLE-FOR-SALE

The following is a summary of mortgage-backed securities available-for-sale
held at December 31, 2000 (in thousands):

Gross Gross
Amor- Unreal- Unreal-
tized ized ized Fair
Cost Gains Loss Value
------- ------- ------- -------

Federal National Mortgage Association......... $ 9,229 $146 -- $ 9,375
Government National Mortgage Association...... 12,042 106 -- 12,148
------- ---- --- -------
$21,271 $252 -- $21,523
======= ==== === =======

There were no mortgage-backed securities available-for-sale held at Decem-
ber 31, 1999.

There were no sales of mortgage-backed securities available-for-sale during
the year ended December 31, 2000. Proceeds from sales of mortgage-backed
securities available-for-sale were $30,352,000 for the year ended December
31, 1998 resulting in gross gains of $200,000 and gross losses of $103,000.

The contractual maturity of these securities is in excess of 25 years. The
expected maturity will differ from the contractual maturity because
borrowers may have the right to prepay obligations with or without call or
prepayment penalties.

7. CONVENTIONAL LOANS

The following is a summary of conventional loans as of December 31, 2000
and 1999 (in thousands):

2000 1999
-------- --------

Conventional mortgages...................................... $507,601 $516,514
Residential construction loans.............................. 12,087 16,229
Multi-family loans.......................................... 399 500
Second mortgage loans....................................... 15,073 11,012
-------- --------
535,160 544,255
Less:
Deferred net loan origination fees.......................... 2,020 2,386
Undisbursed portion of construction loans in process........ 5,373 8,652
Allowance for loan losses................................... 925 925
-------- --------
$526,842 $532,292
======== ========

Conventional mortgages consist of one- to four-family fixed and adjustable
rate loans. The Company grants loans throughout the greater Pittsburgh,
Pennsylvania metropolitan area. The Company's borrowers ability to repay
the loans Company's outstanding is, therefore, dependent on the economy of
that area.

Nonaccrual loans totaled $565,000 and $269,000 at December 31, 2000 and
1999, respectively. The Association does not accrue interest on loans past
due 90 days or more. Uncollected interest on total nonaccrual loans
amounted to $32,000, $6,000 and $32,000 for the years ended December 31,
2000, 1999 and 1998, respectively.

In February, 2001 the Company sold approximately $20,400,000 fixed rate
mortgage loans for a gain of approximately $62,000. The sale was completed
to improve the Company's interest rate risk position. The proceeds from the
sale were reinvested into securitized loans from the Small Business Admin-
istration.
- -------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

- --------------------------------------------------------------------------------
8. ALLOWANCE FOR LOAN LOSSES

The following is an analysis of the changes in the allowance for loan
losses for the years ended December 31 (in thousands):

2000 1999 1998
---- ---- ----

Balance, beginning of year.................................... $925 $805 $715
Provision for loan losses..................................... -- 120 90
Recovery of previous loan chargeoffs.......................... -- -- --
---- ---- ----
Balance, end of year.......................................... $925 $925 $805
==== ==== ====

9. PREMISES AND EQUIPMENT

The following is a summary of premises and equipment as of December 31 (in
thousands):

2000 1999
------ ------

Land and land improvements..................................... $ 529 $ 529
Office buildings and leasehold improvements.................... 4,402 4,435
Furniture, fixtures and equipment.............................. 1,927 1,874
------ ------
6,858 6,838
Less accumulated depreciation and amortization................. 3,176 2,914
------ ------
$3,682 $3,924
====== ======

The Company leases certain of its branch offices under various operating
leases. Some of these leases contain renewal and extension clauses. The
following is a summary of the future minimum lease payments under these
operating leases (in thousands):

Year Ending Minimum Lease
December 31, Payments
------------ -------------

2001............................................................ $138
2002............................................................ 82
2003............................................................ 69
2004............................................................ 63
2005............................................................ 63
2006 and thereafter............................................. 43

Rental expense under these leases was approximately $139,000, $157,000 and
$163,000 for the years ended December 31, 2000, 1999 and 1998, respective-
ly.

10. DEPOSITS

The following is a summary of deposits and stated interest rates as of
December 31 (in thousands):

Stated Rate 2000 1999
------------- -------- --------

Balance by interest rate:
Passbook, club and other accounts........... 3.00%--4.45% $ 69,607 $ 73,308
-------- --------
Money market and NOW accounts............... 0.00%--3.21% 61,609 52,259
-------- --------
Certificate accounts........................ 3.00%--5.50% 30,631 217,751
5.51%--6.00% 73,556 119,707
6.01%--6.50% 110,565 29,773
6.51%--7.50% 188,371 14,350
7.51%--8.50% 2,344 2,750
8.51%--9.50% -- 2,032
9.51%--10.00% 2 1
-------- --------
405,469 386,364
-------- --------
$536,685 $511,931
======== ========

Noninterest-bearing demand deposits were approximately $3,306,000 and
$3,791,000 at December 31, 2000 and 1999, respectively.

The following is a summary of certificate accounts by contractual maturity
at December 31, 2000 (in thousands):

Contractual
Maturity
-----------

2001................................................................. $267,957
2002................................................................. 77,695
2003................................................................. 31,921
2004................................................................. 5,464
2005................................................................. 12,420
2006 and thereafter.................................................. 10,012
--------
$405,469
========

The Association maintains insurance on deposits through the Savings Associ-
ation Insurance Fund ("SAIF"), which is under the supervision of the Fed-
eral Deposit Insurance Corporation ("FDIC").

Deposits in excess of $100,000 are not insured by the SAIF. The aggregate
amount of certificates of deposit with a minimum denomination of $100,000
was $45,662,000 and $43,732,000 at December 31, 2000 and 1999, respective-
ly.
- --------------------------------------------------------------------------------

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

11. BORROWINGS

The following is a summary of borrowings as of December 31, (in thousands):

Amount Rate Type Maturity Date
------- ----- ---------- ---------------
2000

$11,250 8.26% Adjustable January 2003(5)
40,000 5.79%(1) Fixed April 2008
25,000 5.66%(1) Fixed May 2008
45,000 5.60%(1) Fixed June 2008
28,000 4.99%(2) Fixed January 2009
25,000 6.01%(3) Fixed June 2010
25,000 6.12%(3) Fixed June 2010
20,000 6.14%(3) Fixed June 2010

Amount Rate Type Maturity Date
------- ----- ---------- ---------------
1999

$20,000 5.83%(4) Fixed January 2000
8,000 6.96% Adjustable January 2000
2,000 6.84% Adjustable January 2000
70,000 5.61%(1) Fixed December 2004
40,000 5.79%(1) Fixed April 2008
25,000 5.66%(1) Fixed May 2008
45,000 5.60%(1) Fixed June 2008
28,000 4.99%(2) Fixed January 2009

The above borrowings are secured by the assets of the Company.
-------
(1) The FHLB has the option to convert this interest rate to an adjustable
rate based on the three month LIBOR at the five-year anniversary date
of the borrowings origination, which will occur in the second quarter
of 2003.
(2) The FHLB has the option to convert this interest rate to an adjustable
rate based on the three month LIBOR at the five-year anniversary date
of the borrowings origination, which will occur in the first quarter
of 2004.
(3) Every six months the Federal Home Loan Bank ("FHLB") has the option to
convert this interest rate to an adjustable rate based on the three-
month London Interbank Offered Rate ("LIBOR").
(4) Every six months the FHLB has the option to convert this interest rate
to an adjustable rate based on the three-month LIBOR. This borrowing
was paid off in 2000.
(5) Quarterly payments of $1,250,000 are due on this term loan through the
maturity date.

12. REGULATORY CAPITAL REQUIREMENTS AND RESTRICTIONS

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

Quantitative measures established by regulation to ensure capital adequacy
require the Association to maintain minimum amounts and ratios (set forth
in the table below) of Total and Tier I Capital to risk-weighted assets and
of Tangible and Tier I Capital to total assets. Effective in April 1999,
the minimum Tier I Capital to total assets ratio changed to 4.00% and the
increase in the Tier I Capital to total assets ratio will not materially
impact the Association. As of December 31, 2000, the Association met all
capital adequacy requirements to which it is subject.

The most recent notification from the Office of Thrift Supervision catego-
rized the Association as well capitalized under the regulatory framework
for prompt corrective action. To be categorized as well capitalized the
Association must maintain minimum Total Capital to risk-weighted assets,
Tier I Capital to risk-weighted assets and Tier I Capital to total assets
ratios as set forth in the following table.
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

- --------------------------------------------------------------------------------
There are no conditions or events since that notification that management
believes have changed the institution's category.

The Association had the following amounts of capital and capital ratios at
December 31, 2000 and 1999 (in thousands):

To Be Well
Capitalized
Under
Prompt
For Capital Corrective
Adequacy Action
Actual Purposes Provisions
------------- ------------- -------------
Amount Ratio Amount Ratio Amount Ratio
------- ----- ------- ----- ------- -----

As of December 31, 2000:
Total Capital (to risk-
weighted assets)............. $80,327 23.11% $27,804 8.00% $34,756 10.00%
Tier I Capital (to risk-
weighted assets)............. 79,402 22.85% N/A 4.00% 20,853 6.00%
Tier I Capital (to total
assets)...................... 79,402 9.41% 33,727 4.00% 42,172 5.00%
Tangible Capital.............. 79,402 9.41% 12,651 1.50% N/A N/A

As of December 31, 1999:
Total Capital (to risk-
weighted assets)............. $75,763 21.51% $28,176 8.00% $35,220 10.00%
Tier I Capital (to risk-
weighted assets)............. 74,838 21.25% N/A 4.00% 21,132 6.00%
Tier I Capital (to total
assets)...................... 74,838 8.90% 33,638 4.00% 42,048 5.00%
Tangible Capital.............. 74,838 8.90% 12,614 1.50% N/A N/A

Tangible Capital and Tier I Capital (to total assets) capital ratios are
computed as a percentage of total assets. Total Capital and Tier I Capital
(to risk-weighted assets) ratios are computed as a percentage of risk-
weighted assets. Risk-weighted assets were $347,556,000 and $352,195,000 at
December 31, 2000 and 1999, respectively.

At the date of the conversion from a mutual to a stock organization, the
Association established a liquidation account in an amount equal to its
retained income as of June 30, 1995. The liquidation account is maintained
for the benefit of eligible account holders and supplemental eligible
account holders who continue to maintain their accounts at the Association
after the conversion. The liquidation account is reduced annually to the
extent that eligible account holders and supplemental eligible account
holders have reduced their qualifying deposits as of each anniversary date.
Subsequent increases in such balances will not restore an eligible account
holder's or supplemental eligible account holder's interest in the liquida-
tion account. In the event of a complete liquidation of the Association,
each eligible account holder and supplemental eligible account holder will
be entitled to receive a distribution from the liquidation account in an
amount proportionate to the current adjusted qualifying balances for
accounts then held.

The Association may not declare or pay cash dividends on or repurchase any
of its shares of common stock if the effect thereof would cause equity to
be reduced below applicable regulatory capital maintenance requirements or
if such declaration and payment would otherwise violate regulatory require-
ments. At December 31, 2000, the maximum dividend the Association may
declare and pay to First Bell is approximately $31.5 million.

13. EARNINGS PER SHARE

Both basic and diluted earnings per share are calculated as of December 31
as follows (in thousands, except per share amounts):

Weighted
Average Per
Income Shares Share
2000 ------ -------- -----

Income available to common stockholders................ $6,702 4,879
Unearned ESOP shares................................... -- (515)
Unearned MRP shares.................................... -- (211)
------ -----
Basic earnings per share............................... 6,702 4,153 $1.61
=====
Effect of dilutive securities:
MRP shares............................................ -- 30
Stock options......................................... -- 101
------ -----
Diluted earnings per share............................. $6,702 4,284 $1.57
====== ===== =====

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

Weighted
Average Per
Income Shares Share
1999 ------ -------- -----

Income available to common stockholders............... $8,042 5,590
Unearned ESOP shares.................................. -- (547)
Unearned MRP shares................................... -- (242)
------ -----
Basic earnings per share.............................. 8,042 4,801 $1.68
=====
Effect of dilutive securities:
MRP shares........................................... -- 65
Stock options........................................ -- 138
------ -----
Diluted earnings per share............................ $8,042 5,004 $1.61
====== ===== =====

Weighted
Average Per
Income Shares Share
1998 ------ -------- -----

Income available to common stockholders............... $7,838 6,411
Unearned ESOP shares.................................. -- (581)
Unearned MRP shares................................... -- (275)
------ -----
Basic earnings per share.............................. 7,838 5,555 $1.41
=====
Effect of dilutive securities:
MRP shares........................................... -- 99
Stock options........................................ -- 156
------ -----
Diluted earnings per share............................ $7,838 5,810 $1.35
====== ===== =====

14. INTEREST EXPENSE

The following is a summary of interest expense on deposits for the years
ended December 31 (in thousands):

2000 1999 1998
------- ------- -------

Passbook, club and other accounts................... $ 2,737 $ 3,021 $ 2,480
Money market and NOW accounts....................... 1,637 1,404 1,147
Certificate accounts................................ 23,256 19,750 21,186
------- ------- -------
$27,630 $24,175 $24,813
======= ======= =======

15. INCOME TAXES

Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the bases used for income tax purposes. The tax
effects of significant items comprising the net deferred tax asset
(liability) at December 31 are as follows (in thousands):

2000 1999
------- -------

Deferred Tax Assets:
Unrealized loss on investment securities, available for
sale.................................................... $ 684 $ 5,731
Alternative minimum tax credit carryforward.............. 1,678 684
Other.................................................... 221 199
------- -------
Total deferred tax assets............................... 2,583 6,614
------- -------
Deferred Tax Liabilities:
Deferred loan origination fees........................... (734) (751)
Allowance for loan losses................................ (258) (449)
Depreciation on premises and equipment................... (359) (365)
------- -------
Total deferred tax liabilities.......................... (1,351) (1,565)
------- -------
Net deferred tax asset.................................. $ 1,232 $ 5,049
======= =======

The Company generated an alternative minimum tax credit carryforwards in
2000 and 1999 of $994 and $684, respectively. These tax credits can be
carried over indefinitely.

The provision for income taxes consists of the following components for the
year ended December 31 (in thousands):

2000 1999 1998
------- ------ ------

Current:
Federal............................................. $ 1,149 $1,609 $3,048
State............................................... 666 728 809
Deferred (benefit) expense........................... (1,229) (988) 21
------- ------ ------
Total provision for income taxes................... $ 586 $1,349 $3,878
======= ====== ======

The reconciliation between the federal statutory tax rate and the Company's
effective income tax rate for the year ended December 31 is as follows:

2000 1999 1998
----- ----- ----

Statutory tax rate...................................... 34.0% 34.0% 34.0%
State income taxes...................................... 6.0 5.1 4.6
Tax exempt interest income.............................. (33.0) (25.3) (5.8)
Other--net.............................................. 1.0 0.6 0.3
----- ----- ----
Effective tax rate..................................... 8.0% 14.4% 33.1%
===== ===== ====

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

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

In accordance with SFAS No. 109, the Company has provided for deferred
income taxes for the differences between the bad debt deduction for tax and
financial statement purposes incurred after December 31, 1987. Deferred
taxes have not been recognized with respect to pre-1988 tax basis bad debt
reserves. In the event that the Company were to recapture these reserves
into income, it would recognize tax expense of approximately $1.7 million.
As a result of legislation enacted in 1996, however, this liability will
not be recaptured if the Company were to change its depository institution
charter.

16. EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plan--The Company had a defined benefit pension
plan for substantially all employees. During 1999, the Company terminated
the Defined Benefit Pension Plan. The termination is considered a settle-
ment as defined in SFAS No. 88, "Employers' Accounting for Settlements and
Curtailments of Defined benefit Pension Plans and for Termination Bene-
fits." At the option of the employee, all plan assets were distributed
either through the purchase of a non-participating annuity contract or lump
sum distribution. The Company was relieved of primary responsibility for
any pension benefit obligation. The termination eliminated significant
risks related to the obligation and the assets used to effect the settle-
ment. On May 10, 1999, the final contribution was made which resulted in an
expense of $100,000. The benefits of the defined benefit plan were gener-
ally based on the years of service and the employee's compensation during
the last five years of employment.

The Defined Benefit Pension Plan was amended in the prior year to freeze
benefit accruals effective March 31, 1998 and to fully vest all active
Participants on April 1, 1998. Such amendment constituted a curtailment as
defined by SFAS No. 88, "Employers' Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination
Benefits." The effects of such curtailment are reflected in the following
table.

Net periodic pension cost for the defined benefit plan includes the follow-
ing components for the year ended December 31, 1998 (in thousands):

1998
-----

Components of Net Periodic
Pension Cost
Service cost--benefits earned during the period..................... $ 18
Interest cost on projected benefit obligation....................... 77
Expected return on assets........................................... (74)
Amortization of initial unrecognized net obligation or (net asset)
as of January 1, 1987.............................................. (5)
Amortization of prior service cost.................................. (2)
Recognized net actuarial (gain) or loss............................. --
-----
FAS 87 net periodic pension cost.................................... 14
Curtailment recognized during the year.............................. (117)
-----
Total net periodic pension (income) cost............................. $(103)
=====

The following rate assumptions were used in the plan accounting as of
December 31, 1998:

1998
----

Discount rate.......................................................... 6.70%
Rate of compensation increases......................................... 5.00%
Expected long-term rate of return on plan assets....................... 6.75%

Deferred Supplemental Compensation Plan--During 1992, the Board of Direc-
tors approved a supplemental deferred compensation plan for the President
of the Association. The plan provides that the President will receive
deferred compensation in an amount up to $60,000 per year based upon the
return on assets of the Company for the prior year. The compensation will
be paid to the President upon his retirement. For the year ended December
31, 2000, deferred compensation expense under this plan was $45,000. For
the years ended December 31, 1999 and 1998, deferred compensation expenses
under this plan were $60,000 each year.

401(k) Plan--The Association maintains a defined contribution 401(k) plan
to provide benefits for substantially all employees. The plan provides for,
but does not require, employees to make tax deferred payroll savings con-
tributions. The Association is required to make a matching contribution
based on the level of employee contribution. The total expense recorded
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
under this plan for the years ended December 31, 2000, 1999 and 1998, was
approximately $9,200, $9,900 and $9,800, respectively.

Employee Stock Ownership Plan--The Association has established the Bell
Federal Savings and Loan Association of Bellevue Employee Stock Ownership
Plan ("ESOP") which covers substantially all employees. The shares for the
plan were purchased with the proceeds of a loan from the Company which will
be repaid through the operations of the Association. Shares are allocated
to employees, as principal and interest payments are made to the Company.

Compensation expense related to the ESOP for 2000, 1999 and 1998, totaled
$480,000, $511,000 and $586,000, respectively, based on the average fair
value of shares committed to be released. The loan and related interest
expense on the loan are eliminated in these consolidated financial state-
ments. The fair value of unallocated ESOP shares at December 31, 2000 was
approximately $6,786,358. Shares held by the ESOP were as follows as of
December 31:

2000 1999 1998
------- ------- -------

Unallocated shares, beginning of year............. 528,739 561,562 596,089
Shares released for allocation.................... (32,932) (32,823) (34,527)
------- ------- -------
Unallocated shares, end of year................... 495,807 528,739 561,562
======= ======= =======

Stock Option Plan--The Company has a fixed option plan that was approved by
Shareholders on April 29, 1996. Options under this plan have been granted
to certain officers and directors of the Company. The plan also permits
options to be granted to employees at the Company's discretion. Under the
plan, the total number of shares of common stock that may be granted is
859,625. The Company has adopted the disclosure-only provision of SFAS No.
123, "Accounting for Stock-Based Compensation," and accordingly, no compen-
sation cost has been recognized for the stock option plan. Had compensation
cost for the Company's stock option plan been determined based on the fair
value at the grant date for awards in 1997 and 1996 consistent with the
provisions of SFAS No. 123, the Company's net earnings and earnings per
share would have been reduced to the pro forma amounts indicated below for
the years ended December 31 (in thousands, except per share amounts):

Basic Diluted
Earnings Earnings
Net Per Per
Income Share Share
2000 ------ -------- --------

As reported......................................... $6,702 $1.61 $1.57
Pro forma........................................... $6,616 $1.59 $1.54

Basic Diluted
Earnings Earnings
Net Per Per
Income Share Share
1999 ------ -------- --------

As reported......................................... $8,042 $1.68 $1.61
Pro forma........................................... $7,867 $1.64 $1.57

Basic Diluted
Earnings Earnings
Net Per Per
Income Share Share
1998 ------ -------- --------

As reported......................................... $7,838 $1.41 $1.35
Pro forma........................................... $7,615 $1.37 $1.31

The following summarizes the activity in the Stock Option Plan for the year
ended December 31:

2000 1999 1998
-------- -------- --------

Options outstanding, beginning of year.......... 380,486 380,486 437,288
Options exercised............................... -- -- (13,931)
Options forfeited............................... -- -- (42,871)
-------- -------- --------
Options outstanding, end of year................ 380,486 380,486 380,486
======== ======== ========
Weighted average exercise price, end of year.... $10.70 $10.70 $10.70
======== ======== ========
Options exercisable, end of year................ 304,382 228,285 152,188
======== ======== ========
Options available for grant, end of year........ 465,208 465,208 465,208
======== ======== ========
Weighted-average fair value of options granted
during the year................................ $ -- $ -- $ --
======== ======== ========
Remaining contractual life of outstanding
options........................................ 6 Years 7 Years 8 Years

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

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

The exercise price of all options was reduced from $13.375 to $10.70 during
1997 as a result of the return of capital distribution made on December 16,
1996. As a result, the Company was required to issue additional options to
the existing participants in an amount equal to the difference between the
value of the options in each participant's account before the reduction in
the exercise price, and the value of the options in each participant's
account after the reduction in the exercise price. All options granted in
1997 are as a result of this equitable right adjustment. Approximately one-
fifth of the stock option shares may be exercised after the end of each
year, and no option will be exercisable after ten years from the date of
grant. Terminated employees forfeit any non-vested options.

Master Stock Compensation Plan--The Association has a Master Stock Compen-
sation Plan ("MRP") that was approved by Shareholders on April 29, 1996.
Awards under this plan have been granted to certain officers, directors and
management personnel of the Association. Under the MRP, a committee of the
Board of Directors of the Association grants shares of common stock to
employees and directors.

The following summarizes activity in the MRP for the year ended December
31:

2000 1999 1998
------- ------- -------

Awards outstanding, beginning of year............. 64,714 99,171 129,428
Awards granted.................................... -- -- 2,100
Awards forfeited.................................. (3,175) (1,400) --
Awards vested..................................... (31,657) (33,057) (32,357)
------- ------- -------
Awards outstanding, end of year................... 29,882 64,714 99,171
======= ======= =======
Total remaining MRP shares, end of year........... 210,727 242,384 275,441
======= ======= =======

Shares vest under the current awards at 20% per year, commencing one year
from the date of grant subject to the attainment of certain performance
goals. The cost of unearned shares related to these awards, included as a
separate component of stockholders' equity, aggregated $2,937,000 and
$3,378,000 at December 31, 2000 and 1999, respectively. Compensation cost
is recorded over the five-year period as shares are earned based on the
average fair market value of stock during the fiscal year. The expense for
the years ended December 31, 2000, 1999 and 1998 was $533,000, $545,000 and
$590,000 respectively. Terminated employees forfeit any non-vested awards.

17. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Association originates loan commit-
ments. Loan commitments generally have fixed expiration dates or other ter-
mination clauses and may require payment of a fee. The Association evalu-
ates each customer's credit worthiness on a case-by-case basis. The amount
of collateral deemed necessary by the Association is based on management's
credit evaluation and the Association's underwriting guidelines for the
particular loan. The total commitments outstanding at December 31 are sum-
marized as follows (in thousands):

2000 1999
----------------- -----------------
Notional Notional Notional Notional
Amount Rate Amount Rate
-------- -------- -------- --------

Adjustable rate mortgages................ $ 30 7.00% $ 578 6.84%
15 year fixed rate mortgages............. -- -- 777 7.50%
30 year fixed rate mortgages............. 87 7.54% 3,185 7.51%
Construction mortgages................... 5,373 7.09% 1,489 7.56%
Home equity loans........................ 483 7.09% 270 6.74%
Available line of credit................. 2,849 8.92% 58 6.40%
------ ------
$8,822 $6,357
====== ======

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

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

Additionally, the Company is also subject to certain asserted and unas-
serted potential claims encountered in the normal course of business. In
the opinion of management, neither the resolution of these claims nor the
funding of credit commitments will have a material effect on the Associa-
tion's financial position or results of operations.

Credit related financial instruments have off-balance sheet credit risk
because only origination fees (if any) are recognized in the balance sheet
(as "other liabilities") for these instruments until the commitments are
fulfilled or expire. The credit risk amounts are equal to the notional
amounts of the contracts, assuming that all counterparties fail completely
to meet their obligations and the collateral or other security is of no
value.

18. FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of the Company's financial instruments as of December 31
are as follows (in thousands):

2000 1999
----------------- -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------

Assets:
Cash and noninterest-bearing deposits. $ 3,101 $ 3,101 $ 4,061 $ 4,061
Interest-bearing deposits............. 37,408 37,408 16,407 16,407
Federal Funds sold.................... 6,425 6,425 33,000 33,000
Investment securities held-to-
maturity............................. -- -- 4,989 5,242
Investment securities available-for-
sale................................. 234,757 234,757 202,382 202,382
Conventional loans.................... 526,842 532,545 532,292 521,535
Federal Home Loan Bank stock.......... 11,400 11,400 11,400 11,400
Liabilities:
Passbook, club, money market, NOW and
other accounts....................... $131,216 $131,216 $125,567 $125,567
Certificate accounts.................. 405,469 407,272 386,364 383,041
Borrowings............................ 219,250 206,392 238,000 226,064

a. Cash and Noninterest-bearing Deposits, Interest-bearing Deposits and
Federal Funds Sold--For cash and noninterest-bearing deposits, interest-
bearing deposits and Federal funds sold, the fair value is estimated as
the carrying amount.

b. Investment Securities Held-to-Maturity, Investment Securities Available-
for-Sale and Mortgage-backed Securities Available-for-Sale--Fair values
for these securities are based on quoted market prices or dealer quotes.
If a quoted market price is not available, fair value is estimated using
quoted market prices for similar securities.

c. Conventional Loans--For conventional mortgages, fair value is estimated by
discounting estimated future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit ratings and
for the same remaining maturities.

d. Passbook, Club, Money Market, NOW and Other Accounts--The fair value of
these accounts is the amount payable on demand, or the carrying amount at
the reporting date.

e. Certificate Accounts--The fair value of fixed-maturity certificates of
deposit is estimated by discounting future cash flows using the rates cur-
rently offered for deposits of similar remaining maturities.

f. Borrowings--The fair value of borrowings is estimated as the present value
of the remaining payments of the borrowings using the year end FHLB inter-
est rate for like borrowings.

g. Off-balance Sheet Commitments to Extend Credit--The fair value of off-bal-
ance sheet commitments to extend credit is estimated to equal the out-
standing commitment amount. Management does not believe it is meaningful
to provide an estimate of fair value that differs from the outstanding
commitment amount as a result of the uncertainties involved in attempting
to assess the likelihood and timing of the commitment being drawn upon,
coupled with the lack of an established market and a wide diversity of fee
structures.
- -------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

19. PARENT COMPANY

The following are condensed financial statements for First Bell as of
December 31, 2000 and 1999 and for the years ended December 31, 2000, 1999
and 1998 (in thousands):

BALANCE SHEETS

2000 1999
ASSETS -------- --------

CASH AND INTEREST-BEARING DEPOSITS..................... $ 546 $ 8
FEDERAL FUNDS SOLD..................................... 750 600
INVESTMENT IN AND ADVANCES TO BELL FEDERAL............. 79,401 74,838
LOAN RECEIVABLE--ESOP.................................. 4,207 4,304
OTHER ASSETS........................................... 558 1,109
-------- --------
Total assets......................................... $ 85,462 $ 80,859
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
BORROWINGS............................................. $ 11,250 $ 10,000
LOAN PAYABLE TO BELL FEDERAL........................... 10,851 6,691
ACCRUED INTEREST....................................... 594 126
ACCRUED INCOME TAXES................................... (448) (215)
OTHER LIABILITIES...................................... 528 808
-------- --------
Total liabilities.................................... 22,775 17,410
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock ($.01 par value; 2,000,000 shares
authorized; no shares issued)........................ -- --
Common stock ($.01 par value; 20,000,000 shares
authorized; 8,596,250 shares issued and 4,758,360 and
5,189,063 outstanding: one stock right per share).... 86 86
Additional paid-in capital............................ 62,556 62,217
Unearned ESOP shares.................................. (3,507) (3,740)
Unearned MRP shares................................... (2,937) (3,378)
Treasury stock, at cost............................... (62,030) (55,523)
Retained earnings..................................... 68,519 63,787
-------- --------
Total stockholders' equity........................... 62,687 63,449
-------- --------
Total liabilities and stockholders' equity........... $ 85,462 $ 80,859
======== ========

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

STATEMENTS OF INCOME

Year Ended December
31,
-----------------------
2000 1999 1998
------- ------ ------

INTEREST INCOME:
Interest bearing deposits......................... $ 31 $ 7 $ 36
Federal funds sold................................ 30 32 59
Interest on ESOP loan receivable.................. 414 357 382
------- ------ ------
Total interest income........................... 475 396 477
------- ------ ------
INTEREST EXPENSE................................... 1,806 942 412
------- ------ ------
NET INTEREST (EXPENSE) INCOME...................... (1,331) (546) 65
GENERAL AND ADMINISTRATIVE EXPENSES................ 192 195 132
------- ------ ------
LOSS BEFORE PROVISION FOR INCOME TAXES............. (1,523) (741) (67)
------- ------ ------
(BENEFIT) PROVISION FOR INCOME TAXES--
Current:
Federal.......................................... (520) (265) (44)
State............................................ 42 39 28
------- ------ ------
Total (benefit) provision for income taxes...... (478) (226) (16)
------- ------ ------
LOSS BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF
SUBSIDIARY........................................ (1,045) (515) (51)
Equity in undistributed earnings of Bell Federal. 7,747 8,557 7,889
------- ------ ------
NET INCOME......................................... $ 6,702 $8,042 $7,838
======= ====== ======

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

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

STATEMENTS OF CASH FLOWS

Year Ended December 31,
--------------------------
2000 1999 1998
------- -------- -------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................... $ 6,702 $ 8,042 $ 7,838
Adjustments to reconcile net income to net
cash used in operating activities:
Equity in undistributed earnings of Bell
Federal.................................... (7,747) (8,557) (7,889)
Increase or decrease in assets and
liabilities:
Accrued income taxes....................... (233) (236) (59)
Accrued interest........................... 468 126 (14)
Other assets............................... 551 95 (1,011)
Other liabilities.......................... (161) 164 (7)
Dividends payable.......................... (119) (83) (39)
------- -------- -------
Net cash used in operating activities..... (539) (449) (1,181)
------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in Federal Funds...... (150) (600) 1,550
Principal paydowns on ESOP loan receivable.... 97 105 84
Dividend from Bell Federal.................... 4,000 8,000 7,000
Net investment in and advances to Bell
Federal...................................... 160 405 598
------- -------- -------
Net cash provided by investing activities. 4,107 7,910 9,232
------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in borrowings.................... 1,250 10,000 --
Dividends paid................................ (1,932) (1,938) (2,271)
Purchase of treasury stock.................... (6,508) (16,604) (7,069)
Loan payable to Bell Federal.................. 12,889 14,377 1,365
Principal payment on loan payable............. (8,729) (13,290) (84)
------- -------- -------
Net cash used in financing activities..... (3,030) (7,455) (8,059)
------- -------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................... 538 6 (8)
CASH, BEGINNING OF YEAR........................ 8 2 10
------- -------- -------
CASH, END OF YEAR.............................. $ 546 $ 8 $ 2
======= ======== =======
SUPPLEMENTAL DISCLOSURES:
Cash paid for:
Income taxes................................. $ 42 $ 42 $ 37
Interest..................................... 972 816 426
Non-cash transactions:
Increase in additional paid-in capital--ESOP
and MRP share allocations................... 339 449 397

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

20. QUARTERLY EARNINGS SUMMARY (Unaudited)

Quarterly earnings for the years ended December 31, 2000 and 1999 are as
follows (in thousands, except per share amounts):

2000
-----------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------

INTEREST AND DIVIDEND INCOME....... $12,995 $13,220 $13,218 $13,272
INTEREST EXPENSE................... 9,672 9,981 10,366 10,658
------- ------- ------- -------
NET INTEREST INCOME............... 3,323 3,239 2,852 2,614
PROVISION FOR LOAN LOSSES.......... -- -- -- --
------- ------- ------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES........ 3,323 3,239 2,852 2,614
OTHER INCOME....................... 246 291 164 157
OTHER EXPENSES..................... 1,338 1,347 1,446 1,467
------- ------- ------- -------
INCOME BEFORE PROVISION FOR INCOME
TAXES............................. 2,231 2,183 1,570 1,304
PROVISION FOR INCOME TAXES......... 262 266 79 (21)
------- ------- ------- -------
NET INCOME......................... 1,969 1,917 1,491 1,325
------- ------- ------- -------
OTHER COMPREHENSIVE INCOME, NET OF
TAX--
Unrealized gain (loss) on
investments...................... 1,239 1,580 1,383 3,663
------- ------- ------- -------
COMPREHENSIVE INCOME............... $ 3,208 $ 3,497 $ 2,874 $ 4,988
======= ======= ======= =======
BASIC EARNINGS PER SHARE (1)....... $ 0.46 $ 0.46 $ 0.37 $ 0.33
======= ======= ======= =======
DILUTED EARNINGS PER SHARE (1)..... $ 0.44 $ 0.45 $ 0.35 $ 0.32
======= ======= ======= =======

1999
-------------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------

INTEREST AND DIVIDEND INCOME...... $12,966 $12,959 $12,854 $13,311
INTEREST EXPENSE.................. 8,898 9,215 9,379 9,569
------- ------- ------- -------
NET INTEREST INCOME.............. 4,068 3,744 3,475 3,742
PROVISION FOR LOAN LOSSES......... 30 30 30 30
------- ------- ------- -------
NET INTEREST INCOME AFTER
PROVISION FOR
LOAN LOSSES..................... 4,038 3,714 3,445 3,712
OTHER INCOME...................... 123 139 180 156
OTHER EXPENSES.................... 1,632 1,655 1,420 1,409
------- ------- ------- -------
INCOME BEFORE PROVISION FOR INCOME
TAXES............................ 2,529 2,198 2,205 2,459
PROVISION FOR INCOME TAXES........ 494 265 230 360
------- ------- ------- -------
NET INCOME........................ 2,035 1,933 1,975 2,099
------- ------- ------- -------
OTHER COMPREHENSIVE INCOME, NET OF
TAX--
Unrealized gain (loss) on
investments..................... (961) (5,224) (1,764) (2,161)
------- ------- ------- -------
COMPREHENSIVE INCOME.............. $ 1,074 $(3,291) $ 211 $ (62)
======= ======= ======= =======
BASIC EARNINGS PER SHARE (1)...... $ 0.39 $ 0.40 $ 0.43 $ 0.47
======= ======= ======= =======
DILUTED EARNINGS PER SHARE (1).... $ 0.37 $ 0.38 $ 0.41 $ 0.45
======= ======= ======= =======

-------
(1) Quarterly per share amounts do not add to the total for the years
ended December 31, 2000 and 1999, due to rounding.

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

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

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

First Bell Bancorp, Inc.
Executive Management

Albert H. Eckert, II Robert C. Baierl
President and Chief Executive Officer Secretary

Jeffrey M. Hinds William S. McMinn
Executive Vice President and Treasurer
Chief Financial Officer

David F. Figgins
Vice President

Directors

Albert H. Eckert, II Jeffrey M. Hinds
President and Chief Executive Officer Executive Vice President and
First Bell Bancorp, Inc. and Chief Financial Officer
Bell Federal Savings and Loan First Bell Bancorp, Inc. and
Association of Bellevue Bell Federal Savings and Loan
Association of Bellevue

David F. Figgins

Retired Vice President and Theodore R. Dixon
General Manager President
Marshall Contractors, Inc. Dixon Agency

Thomas J. Jackson, Jr. Jack W. Schweiger
Retired Attorney-at-Law President
Houston Harbaugh Schweiger Homes

Robert C. Baierl Peter E. Reinert
President Shareholder
Wright Contract Interiors Akerman, Senterfitt & Eidson, P.A.

William S. McMinn
Senior Executive Vice President
Aon Risk Services, Inc. of Pennsylvania
- --------------------------------------------------------------------------------

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

Bell Federal Savings and Loan Association of Bellevue
Executive Management

Albert H. Eckert, II Thomas J. Jackson, Jr.
President and Chief Executive Officer Secretary

Jeffrey M. Hinds Margaret L. Gerber
Executive Vice President and Assistant Vice President
Chief Financial Officer

Ronald S. Boltey
William S. McMinn Assistant Vice President
Treasurer

Directors

David F. Figgins

Retired Vice President and Theodore R. Dixon
General Manager President
Marshall Contractors, Inc. Dixon Agency

Thomas J. Jackson, Jr. Jack W. Schweiger
Retired Attorney-at-Law President
Houston Harbaugh Schweiger Homes

Robert C. Baierl Peter E. Reinert
President Shareholder
Wright Contract Interiors Akerman, Senterfitt & Eidson, P.A.

William S. McMinn
Senior Executive Vice President
Aon Risk Services, Inc. of Pennsylvania
- --------------------------------------------------------------------------------

FIRST BELL BANCORP, INC. 2000 ANNUAL REPORT

Shareholder Information
- -------------------------------------------------------------------------------

Market Summary of Stock

First Bell Bancorp, Inc.'s common stock trades on The NASDAQ National Market.
The following summary sets forth the range of prices for common stock over the
periods noted. These prices reflect the high and low prices as quoted by the
NASDAQ National Market. These prices may include interdealer prices, without
regard to retail mark-up, markdown, or commissions paid and may not reflect
actual transactions. The common stock of the Company began trading on June 29,
1995. As of March 5, 2001, there were approximately 3,800 stockholders of rec-
ord and 4,786,360 common shares outstanding.

2000
-------------------------
High Low Dividends
------- ------- ---------

1st Quarter........................................... 16.50 10.25 $0.12
2nd Quarter........................................... 16.625 13.875 $0.12
3rd Quarter........................................... 16.375 14.125 $0.12
4th Quarter........................................... 15.1875 11.9375 $0.12

1999
-------------------------
High Low Dividends
------- ------- ---------

1st Quarter........................................... 17.50 14.75 $0.10
2nd Quarter........................................... 20.3125 16.50 $0.10
3rd Quarter........................................... 18.00 15.75 $0.10
4th Quarter........................................... 16.75 14.625 $0.10

Dividend Policy

The management and Board of Directors of the Company continually review the
Company's dividend policy. The Company intends to continue its policy of pay-
ing quarterly dividends; however, the payment will depend upon a number of
factors, including capital requirements, regulatory limitations, the Company's
financial condition, results of operations and the Association's ability to
pay dividends to the Company. At present, the Company has no significant
source of income other than dividends from the Association and to a lesser
extent interest on short-term investments. Consequently, the Company depends
upon dividends from the Association to accumulate earnings for payment of cash
dividends to its shareholders. See Note 13 to the Consolidated Financial
Statements for a discussion of restrictions on the Association's ability to
pay dividends.

Nasdaq Listing

Quotes on the common stock can be found on The Nasdaq stock market under the
symbol "FBBC".

Dividend Reinvestment

First Bell Bancorp, Inc.'s registered shareholders may reinvest their divi-
dends in additional shares of the Company's common stock and, if desired, pur-
chase additional shares through a voluntary cash investment of $50 to $3,000
per quarter. Participants in the plan pay no broker fees. Purchases for the
plan are generally made on the third Friday of January, April, July and Octo-
ber. For more information on this service, call the Dividend Reinvestment
Department of Registrar and Transfer Company at 1-800-368-5948.

Annual Meeting

The 2001 Annual Meeting of the Stockholders of First Bell Bancorp, Inc. will
be held at 3:00 P.M. on Monday, April 30, 2001 at 629 Lincoln Avenue,
Bellevue, Pennsylvania 15202.

Annual Report on Form 10-K and Exhibits

A copy of the Annual Report on Form 10-K (excluding exhibits) of the Company
for the year-ended December 31, 2000, as filed with the Securities and
Exchange Commission, will be furnished free of charge, upon written request to
stockholders who have not previously received a copy from the Company.

Written requests may be directed to:

Shareholder Relations
First Bell Bancorp, Inc.
c/o Bell Federal Savings and Loan Association of Bellevue
532 Lincoln Avenue
Pittsburgh, Pennsylvania 15202

The Company will furnish any exhibit to its Annual Report on Form 10-K upon
payment of a reasonable fee.

Transfer Agent and Registrar
Registrar and Transfer Company
10 Commerce Drive
Cranford, NJ 07016

Executive Offices
First Bell Bancorp, Inc.
300 Delaware Avenue, Suite 1704
Wilmington, DE 19801
(302) 427-7883

Independent Auditors
Deloitte & Touche LLP
2500 One PPG Place
Pittsburgh, Pennsylvania 15222

Special Counsel
Muldoon Murphy and Faucette LLP
5101 Wisconsin Avenue N.W.
Washington, DC 20016
- -------------------------------------------------------------------------------

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

Bell Federal Savings and Loan Association of Bellevue
Office Locations

Bellevue Office Wood Street Office*
532 Lincoln Avenue Sixth & Wood Street
Bellevue, Pennsylvania 15202 Suite 100
(412) 734-2700 Pittsburgh, Pennsylvania 15222

Wexford Office* Mt. Lebanon Office*
10533 Perry Highway 300 Cochran Road
Wexford, Pennsylvania 15090 Pittsburgh, Pennsylvania 15228

McKnight Road Office* Craig Street Office*
7709 McKnight Road 201 North Craig Street
Pittsburgh, Pennsylvania 15237 Pittsburgh, Pennsylvania 15213

Sewickley Office
414 Beaver Street
Sewickley, Pennsylvania 15143

- -------
*Bell Federal Savings maintains an Automated Teller Machine (ATM) at these
locations.

World Wide Web Address

www.bellfederalsavings.com

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[LOGO]
FIRST BELL
BANCORP,
INC.