<PAGE>   1
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark one)
[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
                    For the quarterly period ended March 31, 2001

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
                     For the transition period from __________ to______________


                         Commission File Number 0-25945
                                                -------

                          GRAND CENTRAL FINANCIAL CORP.
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)

DELAWARE                                                 34-1877137
--------                                                 ----------
 (State or other jurisdiction of                         (IRS Employer
  incorporation or organization)                          Identification No.)


                     601 Main Street, Wellsville, Ohio 43968
                     ---------------------------------------
                    (Address of principal executive offices)

                                 (330) 532-1517
                                 --------------
                           (Issuer's telephone number)



State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.


             Class:                               Outstanding at May 1, 2001
Common stock, $.01 par value                      1,938,871 common shares



Transitional Small Business Disclosure format (check one)     Yes [ ] No [X]


<PAGE>   2


                          GRAND CENTRAL FINANCIAL CORP.
                                   FORM 10-QSB
                          QUARTER ENDED MARCH 31, 2001
                                      INDEX






<TABLE>
<CAPTION>
PART I.  Financial Information
                                                                                                           PAGE
Item 1. - Financial Statements
<S>                                                                                                         <C>
      Consolidated Balance Sheets as of March 31, 2001 and
      December 31, 2000 ..............................................................................      3

      Consolidated Statements of Income for the three months ended
      March 31, 2001 and 2000.........................................................................      4

      Condensed Consolidated Statements of Changes in Shareholders' Equity
      for the three months ended March 31, 2001.......................................................      5

      Consolidated Statements of Comprehensive Income for the three months
      ended March 31, 2001 and 2000...................................................................      6

      Condensed Consolidated Statements of Cash Flows for the three months
      ended March 31, 2001 and 2000...................................................................      7

      Notes to Consolidated Financial Statements .....................................................      8


Item 2. - Management's Discussion and Analysis or Plan of Operation...................................     13


PART II.  Other Information

Item 1.  Legal Proceedings............................................................................     18
Item 2.  Changes in Securities........................................................................     18
Item 3.  Defaults Upon Senior Securities..............................................................     18
Item 4.  Submission of Matters to a Vote of Security Holders..........................................     18
Item 5.  Other Information............................................................................     18
Item 6.  Exhibits and Reports on Form 8-K.............................................................     18

Signatures ...........................................................................................     19
</TABLE>


<PAGE>   3


                  GRAND CENTRAL FINANCIAL CORP. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------

<S>                                                                               <C>               <C>
                                                                                   March 31,          December 31,
                                                                                     2001                 2000
                                                                                     ----                 ----
ASSETS
     Cash and amounts due from depository institutions                       $           3,784    $           2,928
     Interest-bearing deposits in other banks                                                2                    2
                                                                             -----------------    -----------------
         Total cash and cash equivalents                                                 3,786                2,930
     Time deposits with other banks                                                      7,476                7,000
     Securities available for sale                                                       2,871                3,090
     Securities held to maturity (estimated fair value
       of $33,351 in 2001 and $35,251 in 2000)                                          33,522               35,796
     Loans held for sale                                                                 1,089                    -
     Loans, net                                                                         84,586               86,265
     Federal Home Loan Bank stock, at cost                                               3,169                3,113
     Premises and equipment, net                                                         1,060                1,094
     Accrued interest receivable                                                           670                1,106
     Other assets                                                                          628                  539
                                                                             -----------------    -----------------

              Total assets                                                   $         138,857    $         140,933
                                                                             =================    =================

LIABILITIES AND SHAREHOLDERS' EQUITY
     Deposits
         Noninterest-bearing                                                 $             922    $             514
         Interest-bearing                                                               75,049               73,483
                                                                             -----------------    -----------------
              Total deposits                                                            75,971               73,997
     Federal Home Loan Bank advances                                                    36,678               40,536
     Loan payable                                                                        7,000                7,000
     Advance payments by borrowers for taxes and insurance                                 419                  656
     Accrued interest payable                                                              410                  632
     Other liabilities                                                                     434                  279
                                                                             -----------------    -----------------
         Total liabilities                                                             120,912              123,100
                                                                             -----------------    -----------------

     Preferred stock, authorized 1,000,000 shares, no shares
       issued and outstanding
     Common stock, $.01 par value, 6,000,000 shares
       authorized, 1,938,871 shares issued                                                  19                   19
     Additional paid-in capital                                                          8,326                8,322
     Retained earnings, substantially restricted                                        13,842               13,846
     Unearned stock based incentive plan shares                                           (339)                (365)
     Treasury stock, 189,040 shares, at cost                                            (2,151)              (2,151)
     Unearned employee stock ownership plan shares                                      (1,775)              (1,853)
     Accumulated other comprehensive income                                                 23                   15
                                                                             -----------------    -----------------
         Total shareholders' equity                                                     17,945               17,833
                                                                             -----------------    -----------------

              Total liabilities and shareholders' equity                     $         138,857    $         140,933
                                                                             =================    =================
</TABLE>

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

          See accompanying notes to consolidated financial statements.

                                                                              3.
<PAGE>   4


                  GRAND CENTRAL FINANCIAL CORP. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------

                                                                                         Three months ended
                                                                                              March 31,
                                                                                        2001             2000
                                                                                  ---------------------------------
<S>                                                                               <C>               <C>
INTEREST INCOME
     Loans, including fees                                                        $        1,724    $         1,479
     Interest on securities                                                                  748                824
     Interest-bearing deposits in banks                                                       78                147
                                                                                  --------------    ---------------
         Total interest income                                                             2,550              2,450

INTEREST EXPENSE
     Deposits                                                                                958                759
     FHLB borrowings                                                                         497                474
     Loan payable                                                                            126                 22
                                                                                  --------------    ---------------
         Total interest expense                                                            1,581              1,255

NET INTEREST INCOME                                                                          969              1,195

Provision for loan losses                                                                      -                  -
                                                                                  --------------    ---------------

NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES                                                                  969              1,195

NON-INTEREST INCOME
     Service charges                                                                          52                 56
     Gain on sale of loans                                                                     4                  -
     Gain on sale of securities                                                                -                  6
     Other income                                                                              8                 14
                                                                                  --------------    ---------------
         Total non-interest income                                                            64                 76

NON-INTEREST EXPENSE
     Salaries and employee benefits                                                          468                930
     Net occupancy expense                                                                    87                 98
     Data processing expense                                                                  35                 38
     Franchise taxes                                                                          75                 83
     Other expenses                                                                          189                245
                                                                                  --------------    ---------------
         Total non-interest expense                                                          854              1,394

Income (loss) before income taxes                                                            179               (123)
Income tax expense (benefit)                                                                  61                (42)
                                                                                  --------------    ---------------
Net income (loss)                                                                 $          118    $           (81)
                                                                                  ==============    ===============

Earnings (loss) per share
     Basic                                                                        $          .08    $          (.05)
     Diluted                                                                                 .07               (.05)
</TABLE>

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

          See accompanying notes to consolidated financial statements.

                                                                              4.
<PAGE>   5


                  GRAND CENTRAL FINANCIAL CORP. AND SUBSIDIARY
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------

                                                                     Unearned     Unearned
                                                                     Employee       Stock                 Accumulated
                                          Additional                   Stock        Based                    Other         Total
                                 Common     Paid in     Retained     Ownership    Incentive   Treasury   Comprehensive Shareholders
                                  Stock     Capital     Earnings    Plan Shares  Plan Shares    Stock       Income        Equity
                                  -----     -------     --------    -----------  -----------    -----       ------        ------

<S>                               <C>      <C>         <C>          <C>           <C>          <C>         <C>          <C>
Balances at January 1, 2001       $   19   $  8,322    $ 13,846     $ (1,853)     $   (365)    $(2,151)    $      15    $  17,833

Commitment to release ESOP shares                 4                       78                                                   82
Release of incentive shares                                                             26                                     26
Cash dividends                                             (122)                                                             (122)
Comprehensive income:
Net income                                                  118                                                               118
Change in unrealized gain (loss)
  securities available-for-sale,
  net of tax                                                                                                       8            8
                                                                                                                      -----------

     Total Comprehensive Income                                                                                               126
                                 ------- ---------- -----------  -----------   -----------  -----------   ----------  -----------

Balances at March 31, 2001        $   19   $  8,326    $ 13,842     $ (1,775)     $   (339)    $(2,151)    $      23   $   17,945
                                 ======= ========== ===========  ===========   ===========  ===========   ==========  ===========

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.


                                                                              5.
<PAGE>   6

                  GRAND CENTRAL FINANCIAL CORP. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------

                                                                                         Three Months Ended
                                                                                              March 31,
                                                                                              ---------
                                                                                       2001               2000
                                                                                       ----               ----
<S>                                                                               <C>               <C>
NET INCOME (LOSS)                                                                 $          118    $           (81)

Other comprehensive income, net of tax
     Unrealized gain (loss) on securities available
       for sale arising during the period                                                      8                  9

     Less: Reclassified adjustment for accumulated
             gains included in net income                                                      -                  4
                                                                                  --------------    ---------------
     Unrealized gains (losses) on securities                                                   8                  5
                                                                                  --------------    ---------------


COMPREHENSIVE INCOME (LOSS)                                                       $          126    $           (76)
                                                                                  ==============    ===============
</TABLE>

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


                                                                              6.
<PAGE>   7

                  GRAND CENTRAL FINANCIAL CORP. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------

                                                                                          Three Months Ended
                                                                                               March 31,
                                                                                               ---------
                                                                                         2001                2000
                                                                                         ----                ----
<S>                                                                             <C>                <C>
NET CASH FROM OPERATING ACTIVITIES                                              $        (1,572)   $            645

CASH FLOWS FROM INVESTING ACTIVITIES
     Securities available for sale
         Purchases                                                                            -                (118)
         Proceeds from sales                                                                  -                 124
         Proceeds from maturities and payments                                              223                 144
     Securities held to maturity
         Proceeds from maturities and payments                                            2,289              14,807
     Increase in time deposits with other banks                                             476              (7,000)
     Net change in loans                                                                  1,683              (2,896)
                                                                                ---------------    ----------------
         Net cash from investing activities                                               4,671               5,061

CASH FLOWS FROM FINANCING ACTIVITIES
     Net change in deposits                                                               1,974               2,754
     Net change in escrow accounts                                                         (237)               (126)
     Proceeds from loan payable                                                               -               7,000
     Return of capital                                                                        -             (11,051)
     Cash dividends                                                                        (122)               (111)
     Proceeds from long-term FHLB advances                                               15,310              14,400
     Repayment of long-term FHLB advances                                               (19,168)            (18,434)
                                                                                ---------------    ----------------
         Net cash from financing activities                                              (2,243)             (5,568)

NET CHANGE IN CASH AND CASH EQUIVALENTS                                                     856                 138

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                          2,930               4,928
                                                                                ---------------    ----------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $         3,786    $          5,066
                                                                                ===============    ================

SUPPLEMENTAL DISCLOSURES
     Cash paid during the period for:
         Interest                                                               $         1,803    $          1,097
         Income taxes                                                                         -                   -
</TABLE>

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

          See accompanying notes to consolidated financial statements.

                                                                              7.
<PAGE>   8

                          GRAND CENTRAL FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise indicated, amounts in thousand.

BASIS OF PRESENTATION: These interim consolidated financial statements reflect
all adjustments which, in the opinion of management, are necessary to present
fairly the financial position of Grand Central Financial Corp. ("Company") and
its sole subsidiary, Central Federal Savings and Loan Association of Wellsville
("Association"), at March 31, 2001, and its results of operations and cash flows
for the periods presented. All such adjustments are normal and recurring in
nature. The accompanying unaudited consolidated financial statements do not
purport to contain all the necessary financial disclosures required by generally
accepted accounting principles that might otherwise be necessary in the
circumstances. The results of operations for the three month period ended March
31, 2001 and 2000 are not necessarily indicative of the results that may be
expected or that have occurred for the entire year. The annual report for the
Company for the year ended December 31, 2000, contains consolidated financial
statements and related notes that should be read in conjunction with the
accompanying unaudited consolidated financial statements.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and the Association. All significant intercompany
balances and transactions have been eliminated in consolidation.

NATURE OF OPERATIONS:
The Company is engaged in the business of banking with operations and four
offices in Wellsville, Ohio and surrounding areas, which are primarily light
industrial areas. These communities are the source of substantially all of the
Company's deposits and loan activities. The Company's primary source of revenue
is single-family residential loans to middle income individuals.

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

Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for losses on loans and the value
of loans held for sale.

INVESTMENT AND MORTGAGE-BACKED SECURITIES:
Securities are classified as held to maturity and carried at amortized cost when
management has the positive intent and ability to hold them to maturity.
Securities are classified as available for sale when they might be sold before
maturity. Securities available for sale are carried at fair value, with
unrealized holding gains and losses reported in other comprehensive income.
Trading securities are carried at fair value, with changes in unrealized holding
gains and losses included in income. Other securities such as Federal Home Loan
bank stock are carried at cost.

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

                                  (Continued)

                                                                              8.
<PAGE>   9

                          GRAND CENTRAL FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

INVESTMENT AND MORTGAGE-BACKED SECURITIES: (continued)

Interest income includes amortization of purchase premium or discount. Gains and
losses on sales are based on the amortized cost of the security sold. Securities
are written down to fair value when a decline in fair value is not temporary.

LOANS:
Loans are stated at unpaid principal balances, less the allowance for loan
losses and net deferred loan fees. Interest income on loans is accrued over the
term of the loans based upon the principal outstanding. The allowance for loan
losses is increased by charges to income and decreased by charge-offs (net of
recoveries). Management's periodic evaluation of the adequacy of the allowance
is based on the Company's past loan loss experience, known and inherent risks in
the portfolio, adverse situations that may affect the collateral, and current
economic conditions.

Uncollectible interest on loans that are contractually past due is charged off,
or an allowance is established based on management's periodic evaluation. The
allowance is established by a charge to interest income equal to all interest
previously accrued and unpaid, and income is subsequently recognized only to the
extent that cash payments are received until, in management's judgment, the
borrower demonstrates the ability to make periodic interest payments in which
case the loan is returned to accrual status.

Loans considered to be impaired, as identified according to internal loan review
standards, are reduced to the present value of expected future cash flows or to
the fair value of collateral by allocating a portion of the allowance for loan
losses to such loans. If these allocations cause the allowance for loan losses
to require an increase, such an increase will be reported as a provision for
loan losses charged to operations.

Management analyzes loans on an individual basis and classifies a loan as
impaired when an analysis of the borrower's operating results and financial
condition indicates that underlying cash flows are not adequate to meet its debt
service requirements. Often this is associated with a delay or shortfall in
payments of 60 days or more. Smaller balance homogeneous loans are evaluated for
impairment in total. Such loans include residential first mortgage loans secured
by one to four family residences, residential construction loans, home equity,
and other consumer loans, with balances less than $200,000. Loans are generally
moved to non-accrual status when 90 days or more past due. These loans may also
be considered impaired.

Impaired loans, or portions thereof, are charged off when deemed uncollectible.
The nature of the disclosures for impaired loans is considered generally
comparable to prior nonaccrual loans and non-performing and past due asset
disclosures.

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

                                  (Continued)


                                                                              9.
<PAGE>   10

                          GRAND CENTRAL FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


INCOME TAXES:
Income tax expense is based on the effective tax rate expected to be applicable
for the entire year. The Company follows the liability method of accounting for
income taxes. The liability method provides that deferred tax assets and
liabilities are recorded at enacted tax rates based on the difference between
the tax basis of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as "temporary differences". A valuation
allowance, if needed, reduces deferred tax assets to the amount expected to be
realized.

EARNINGS PER SHARE:
Basic earnings per common share is net income divided by the weighted average
number of common shares outstanding during the period. ESOP shares are
considered outstanding for this calculation unless unearned. Stock based
incentive plan shares are considered outstanding as they become vested. Diluted
earnings per common share include the dilutive effect of stock based incentive
plan shares and the additional potential common shares issuable under stock
options. The basic weighted average shares were 1,530,264 and 1,805,871 and
diluted weighted average share were 1,584,102 and 1,819,400 for March 31, 2001
and 2000.

COMPREHENSIVE INCOME:
Comprehensive income consists of net income and other comprehensive income.
Other comprehensive income includes unrealized gains and losses on securities
available for sale, which is also recognized as a separate component of
shareholders' equity.


NOTE 2 - INVESTMENT AND MORTGAGE BACKED SECURITIES

The carrying values and estimated fair values of investment and mortgage-backed
securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                     March 31, 2001
                                                                 Gross              Gross
                                             Amortized        Unrealized         Unrealized             Fair
                                               Cost              Gains              Loss                Value
                                               ----              -----              ----                -----
                                                                     (In thousands)
<S>                                     <C>                 <C>               <C>                <C>
AVAILABLE FOR SALE:
Mortgage-backed securities:
     Freddie Mac                        $           201     $            -    $            (1)   $           200
     Fannie Mae                                   1,101                  8                  -              1,109
     Ginnie Mae                                   1,533                 29                  -              1,562
                                        ---------------     --------------    ---------------    ---------------
         Total                          $         2,835     $           37    $            (1)   $         2,871
                                        ===============     ==============    ===============    ===============
</TABLE>

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

                                  (Continued)


                                                                             10.
<PAGE>   11

                          GRAND CENTRAL FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2 - INVESTMENT AND MORTGAGE BACKED SECURITIES (continued)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                 Gross              Gross
                                             Amortized        Unrealized         Unrealized             Fair
                                               Cost              Gains              Loss                Value
                                               ----              -----              ----                -----
                                                                     (In thousands)

<S>                                     <C>                 <C>               <C>                <C>
HELD TO MATURITY:
U.S. government and federal
  agencies                              $         6,496     $           11    $            (6)   $         6,501
Mortgage-backed securities:
     Freddie Mac                                 15,088                 49               (171)            14,966
     Fannie Mae                                   6,100                 26                (42)             6,084
     CMO's                                        5,838                  6                (44)             5,800
                                        ---------------     --------------    ---------------    ---------------
         Total                          $        33,522     $           92    $          (263)   $        33,351
                                        ===============     ==============    ===============    ===============


                                                                    December 31, 2000
                                                                 Gross              Gross
                                             Amortized        Unrealized         Unrealized             Fair
                                               Cost              Gains              Loss                Value
                                               ----              -----              ----                -----
                                                                     (In thousands)
AVAILABLE FOR SALE:
Mortgage-backed securities:
     Freddie Mac                        $           217     $                 $            (2)   $           215
     Fannie Mae                                   1,223                 10                                 1,233
     Ginnie Mae                                   1,627                 15                                 1,642
                                        ---------------     --------------    ---------------    ---------------
         Total                          $         3,067     $           25    $            (2)   $         3,090
                                        ===============     ==============    ===============    ===============

HELD TO MATURITY:
U.S. government and federal
  agencies                              $         7,993     $            1    $          (128)   $         7,866
Mortgage-backed securities:
     Freddie Mac                                 15,442                 57               (258)            15,241
     Fannie Mae                                   6,454                 17                (85)             6,386
     CMO's                                        5,907                                  (149)             5,758
                                        ---------------     --------------    ---------------    ---------------
         Total                          $        35,796     $           75    $          (620)   $        35,251
                                        ===============     ==============    ===============    ===============

</TABLE>

--------------------------------------------------------------------------------
                                 (Continued)

                                                                             11.
<PAGE>   12

                          GRAND CENTRAL FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3 - LOANS RECEIVABLE

Loans are summarized as follows:

<TABLE>
<CAPTION>
                                                                                   March 31,         December 31,
                                                                                     2001                2000
                                                                                     ----                ----
                                                                                          (In thousands)
<S>                                                                             <C>                <C>
Loans secured by real estate:
     Construction loans on single family residences                             $         1,117    $            810
     Single family                                                                       62,832              63,963
     Multi-family and commercial                                                          1,330               1,185
Commercial loans                                                                            372                 331
Consumer loans                                                                           19,285              20,330
                                                                                ---------------    ----------------
                                                                                         84,936              86,619

Allowance for loan losses                                                                  (350)               (354)
                                                                                ---------------    -----------------

     Total                                                                      $        84,586    $         86,265
                                                                                ===============    ================

An analysis of the allowance for loan losses is as follows:

                                                                                        Three months ended
                                                                                             March 31,
                                                                                     2001                2000
                                                                                     ----                ----
                                                                                          (In thousands)

Balance, beginning of period                                                    $           354    $            369
Loans charged off                                                                            (4)                  -
Recoveries                                                                                    -                   2
Provision for losses                                                                          -                   -
                                                                                ---------------    ----------------

Balance, end of period                                                          $           350    $            371
                                                                                ===============    ================
</TABLE>


NOTE 4 - NOTE PAYABLE

The Company has a note payable with a local institution for $7,000 at a rate of
7.30%. The note is for 8 months with principal and interest paid on the maturity
date, August 5, 2001. The note is secured by stock.

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

                                                                             12.
<PAGE>   13


                          GRAND CENTRAL FINANCIAL CORP.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

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

The following discussion compares the financial condition of Grand Central
Financial Corp ("Company") and its wholly owned subsidiary, Central Federal
Savings and Loan Association of Wellsville (the "Association") at March 31, 2001
to December 31, 2000 and the results of operations for the three months ended
March 31, 2001 and 2000. This discussion should be read in conjunction with the
interim financial statements and footnotes included herein.


FORWARD-LOOKING STATEMENTS

          This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions which are
not subject to certain risks and uncertainties for forward-looking statements
contained in the Private Securities Reform Act of 1995, and is including this
statement for purposes of these safe harbor provisions. When used herein, the
terms "anticipates", "plans", "expects", "believes", and similar expressions as
they relate to the Company or its management are intended to identify such
forward-looking statements. The Company's actual results, performance or
achievements may materially differ from those expressed or implied in the
forward-looking statements. Risks and uncertainties that could cause or
contribute to such material differences include, but are not limited to, general
economic conditions, interest rate environment, competitive conditions in the
financial services industry, changes in law, governmental policies and
regulations, and rapidly changing technology affecting financial services.

         These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. Further information concerning the Company and its business,
including additional factors that could materially affect the Company's
financial results, is included in the Company's filings with the SEC.

         The Company does not undertake - and specifically disclaims any
obligation - to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

GENERAL

         The Company's results of operations are dependent primarily on net
interest income, which is the difference ("spread") between the interest income
earned on its loans, mortgage-backed securities, and securities portfolio and
its cost of funds, consisting of interest paid on its deposits and borrowed
funds. The interest rate spread is affected by regulatory, economic and
competitive factors that influence interest rates, loan demand and deposit
flows. The Company's net income is also affected by, among other things, loan
fee income, provisions for

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

                                                                             13.
<PAGE>   14

                          GRAND CENTRAL FINANCIAL CORP.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

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

loan losses, service charges, operating expenses and franchise and income taxes.
The Company's revenues are derived primarily from interest on mortgage loans,
consumer loans, mortgage-backed securities and securities, as well as income
from service charges and loan originations. The Company's operating expenses
principally consist of employee compensation and benefits, occupancy, federal
deposit-insurance premiums and other general and administrative expenses. The
Company's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government policies and actions of regulatory authorities. Future changes
in applicable law, regulations or government policies may materially impact the
Company.


MANAGEMENT STRATEGY

         The Company is a community oriented financial institution offering a
variety of financial services to meet the needs of the communities it serves.
The Company attracts deposits from the general public and uses such deposits,
together with borrowings and other funds, to originate one-to four-family
residential mortgage loans and short-term consumer loans. To a lesser extent,
the Company also originates residential construction loans in its market area
and a limited amount of commercial business loans and loans secured by
multi-family and non-residential real estate. Management's efforts in increasing
the Company's volume of shorter-term consumer loans have been intended to help
reduce interest rate risk, as well as to build on the Company's residential
mortgage business. The Company's deposits are insured up to the maximum
allowable amount by the Savings Association Insurance Fund (the "SAIF"), and
administered by the Federal Deposit Insurance Corporation (the "FDIC"). The
Company also invests in mortgage-backed securities, most of which are insured or
guaranteed by federal agencies, as well as securities issued by the U.S.
government or agencies thereof.

         The Company is not aware of any market or institutional trends, events
or uncertainties that are expected to have a material effect on liquidity,
capital resources or operations, except as discussed below. The Company is also
not aware of any current recommendations by its regulators which would have a
material effect if implemented, except as discussed below.


COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2001 AND DECEMBER 31, 2000

         Total assets of the Company were $138.9 million at March 31, 2001,
compared to $140.9 million at December 31, 2000, representing a decrease of $2.0
million, or 1.5%. The primary component in the decrease in total assets was a
$2.5 million decrease in total securities (including securities available for
sale and held to maturity) and a $1.7 million in loans, which was partially
offset by an increase in time deposits with other banks and loans held for sale.
The decrease in assets was primarily due to the securities maturing and loan
payments received during the first quarter. The increase in time deposits with
other banks is due to the interest earned on the deposit. Loans held for sale
also increased due to the Association's increased

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                                                                             14.
<PAGE>   15

                          GRAND CENTRAL FINANCIAL CORP.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

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volume and the drop in interest rates. Shareholders' equity increased $112,000
or .62% from December 31, 2000 to March 31, 2001.


COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001
AND MARCH 31, 2000

         General. Net income for the three months ended March 31, 2001 increased
by $199,000 or 245.7% from $(81,000) for the three months ended March 31, 2000
to net income of $118,000 for the three months ended March 31, 2001. The
increase was primarily due to the decrease in salaries and employee benefits
which doubled for the first three months of 2000 due to an acceleration of
expense for the stock-based incentive plan in conjunction with the return of
capital. The return of capital triggered additional expense for the stock-based
incentive plan when the return of capital for the shares in the plan was passed
through to the plans participants.

         Net Interest Income. Net interest income is the largest component of
the Company's net income, and consists of the difference between interest income
generated on interest-earning assets and interest expense incurred on
interest-bearing liabilities. Net interest income is primarily affected by the
volumes, interest rates and composition of interest-earning assets and
interest-bearing liabilities.

         Net interest income decreased approximately $226,000, or 18.9%, from
$1.2 million for the three months ended March 31, 2000 to $969,000 for the three
months ended March 31, 2001. The primary reason for this change was an increase
in interest expense of $326,000, or 26.0%. The increase in interest expense was
due to an increase in expense related to the loan payable and the association is
paying a higher rate for average earning liabilities. The growth in expense was
partially offset by the increase in interest income of approximately $100,000 or
4.1% from the three months ended March 31, 2001 primarily due to the increase in
interest and fees from loans.

         Provision for Loan Losses. The provision for loan losses is based on
management's regular review of the loan portfolio, which considers factors such
as past experience, prevailing general economic conditions and considerations
applicable to specific loans, such as the ability of the borrower to repay the
loan and the estimated value of the underlying collateral, as well as changes in
the size and growth of the loan portfolio.

         No provision for loan losses was recorded during the three months ended
March 31, 2001 or 2000. At March 31, 2001, the allowance for loan losses
represented .41% of total loans compared to .48% at December 31, 2000.
Management believes the allowance for loan losses is adequate to absorb probable
losses; however, future additions to the allowance may be necessary based on
changes in economic conditions.

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                                                                             15.
<PAGE>   16

                          GRAND CENTRAL FINANCIAL CORP.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

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

         Non-interest Income. The Company experienced a $12,000, or 15.8%,
decrease in non-interest income during the first three months of 2001 compared
to the same period in 2000. The decrease was primarily due to the decrease in
service charges. The Association experienced a decrease in deposits due to the
closing of three branches during late 1999, which also affected the amount of
service charges.

         Noninterest Expense. Noninterest expense decreased $540,000, or 38.7%,
primarily due to a decrease of $462,000 or 49.7% in salaries and benefits
expense. The majority of the decrease in salary and benefits expense was due to
an expense of $492,000 associated with the stock-based incentive plan in 2000
which was not repeated in 2001. Of the $492,000 decrease, $465,000 was due to an
acceleration of the stock-based incentive plan expense recorded in 2000 in
conjunction with the return of capital which was immediately passed through to
plan participants. Excluding the additional expense related to the stock-based
incentive plan in 2000, salary and benefit expense increased slightly in the
first quarter of 2001 compared to the same period in 2000. Occupancy and data
processing expense decreased in 2001 from the same period in 2000. The decrease
in occupancy and data processing is directly related to costs savings achieved
based on management's decision to close three in-store branches in the fourth
quarter of 2000.

         Income Taxes. The provision for income taxes totaled an expense of
$61,000 for the three months ended March 31, 2001 compared to a benefit of
$42,000 for the three months ended March 31, 2000, due to the increase in income
before income taxes.


LIQUIDITY AND CAPITAL RESOURCES

         The Association's primary sources of funds are deposits, principal and
interest payments on loans, mortgage-backed and investment securities and
borrowings from the Federal Home Loan Bank of Cincinnati (the "FHLB"). The
Association uses the funds generated to support its lending and investment
activities as well as any other demands for liquidity such as deposit outflows.
While maturities and scheduled amortization of loans are predictable sources of
funds, deposit flows, mortgage prepayments and the exercise of call features are
greatly influenced by general interest rates, economic conditions and
competition. The Association has continued to maintain the required levels of
liquid assets as defined by Office of Thrift Supervision (the "OTS")
regulations. Pursuant to recent legislation, the OTS has repealed the minimum
liquidity ratio requirement of 4.0%. OTS regulations now require the Association
to maintain sufficient liquidity to ensure its safe and sound operation. At
March 31, 2001, the Association's liquidity ratio was 18.45%.

         At March 31, 2001, the Association exceeded all of its regulatory
capital requirements with a tangible capital level of $22.2 million, or 16.04%,
of total adjusted assets, which is above the required level of $5.5 million, or
4.0%; core capital of $22.2 million, or 16.04%, of adjusted total assets, which
is above the required level of $5.5 million, or 4.0%; and risk-based capital of

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                                                                             16.
<PAGE>   17

                          GRAND CENTRAL FINANCIAL CORP.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

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

$22.6 million, or 33.19%, of risk-weighted assets, which is above the required
level of $5.4 million, or 8.0%.

         The Association's most liquid assets are cash and cash equivalents. The
levels of those assets are dependent on the Association's operating, financing,
lending and investing activities during any given period. At March 31, 2001,
cash and cash equivalents totaled $3.8 million, or 2.7% of total assets.

         The Association has other sources of liquidity if a need for additional
funds arises, including FHLB advances. At March 31, 2001, the Association had
unused borrowing capacity from the FHLB of $26.7 million. Depending on market
conditions, the pricing of deposit products and FHLB advances, the Association
may rely on FHLB borrowing to fund asset growth.

         The Association relies primarily on competitive rates, customer service
and long-standing relationships with customers to retain deposits. Based on the
Association's experience with deposit retention and current retention
strategies, management believes that, although it is not possible to predict
future terms and conditions upon renewal, a significant portion of such deposits
will remain with the Association.

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                                                                             17.
<PAGE>   18

                          GRAND CENTRAL FINANCIAL CORP.
                                   FORM 10-QSB
                          Quarter ended March 31, 2001
                           PART II - OTHER INFORMATION

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Item  1.-Legal Proceedings.
               None.

Item  2.-Changes in Securities and Use of Proceeds.
               None.

Item 3.-Defaults Upon Senior Securities.
               None.

Item 4.-Submission of Matters to a Vote of Security Holders.
               None.

Item 5.-Other Information.
               None.

Item 6.-Exhibits and Reports on Form 8-K.

(a)      Exhibits.

               Exhibit
               Number                       Exhibits
               -------                      --------

               3.1                          Articles of Incorporation*
               3.2                          Bylaws*
               4.0                          Form of Common Stock Certificate*

(b)      Reports on Form 8-K.

               On March 23, 2001 the Company filed a form 8-K, reporting the
               declaration of a cash dividend payable April 17, 2001 to
               shareholders of record on April 6, 2001.


*Incorporated by reference into this document from the Exhibits filed with the
Registration Statement on Form SB-2 and any amendments therto, Registration No.
333-64089.

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                                                                             18.
<PAGE>   19

                          GRAND CENTRAL FINANCIAL CORP.
                                  SIGNATURES

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In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                GRAND CENTRAL FINANCIAL COPR
                                ----------------------------



Dated:  May 11, 2001            By: /s/ William R. Williams
                                    -----------------------
                                    William R. Williams
                                    President and Chief Executive Officer
                                    (principal executive officer)


Dated:  May 11, 2001            By: /s/ John A. Rife
                                    ----------------
                                    John A. Rife
                                    Executive Vice President and Treasurer
                                    (principal accounting and financial officer)

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                                                                             19.