<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10 - Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001.
                               --------------

Commission file number             000-21553
                      ---------------------------------------------------------

                          METROPOLITAN FINANCIAL CORP.
-------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

             Ohio                                                34-1109469
-------------------------------                             ------------------
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                             Identification No.)

         22901 Mill Creek Blvd., Highland Hills, Ohio            44122
-------------------------------------------------------------------------------
           (Address of Principal Executive Offices)           (Zip Code)

                                 (216) 206-6000
-------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X      No ____
   ---

As of May 11, 2001, there were 8,110,327 common shares of the Registrant issued
and outstanding.





                                                                              1
<PAGE>   2




                          METROPOLITAN FINANCIAL CORP.

                                    FORM 10-Q
                          QUARTER ENDED MARCH 31, 2001

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>

                          PART I.    FINANCIAL INFORMATION                                                     PAGE
<S>                                      <C>                                                                  <C>
                          Item 1.  Financial Statements:

                            Consolidated Statements of Financial Condition
                            as of March  31, 2001 and December 31, 2000                                          3

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

                            Condensed Consolidated Statements of Cash Flows
                            for the three months ended March 31, 2001 and 2000                                   5

                            Consolidated Statement of Changes in Shareholders' Equity
                            for the three months ended March 31, 2001 and 2000                                   6

                            Notes to Consolidated Financial Statements                                         7-18

                          Item 2.  Management's Discussion and Analysis of
                          Financial Condition and Results of Operations                                        19-28

                          Item 3. Quantitative and Qualitative Disclosures About
                          Market Risk                                                                          29-32

                          PART II.   OTHER INFORMATION

                          Item 6. Exhibits and Reports on Form 8-K                                             32-33

                          SIGNATURE                                                                             34


</TABLE>



                                                                               2



<PAGE>   3



                          METROPOLITAN FINANCIAL CORP.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                   March 31, 2001        December 31, 2000
                                                                                   --------------        -----------------
<S>                                                                                      <C>                     <C>
         ASSETS
         Cash and due from banks                                                       $   14,246               $   17,010
         Interest-bearing deposits in other banks                                           6,631                    2,727
         Securities available for sale                                                     30,665                   39,306
         Securities held to maturity                                                       15,322                   15,480
         Mortgage-backed securities available for sale                                    202,197                  195,829
         Loans held for sale                                                              115,714                   51,382
         Loans receivable, net                                                          1,178,317                1,235,441
         Federal Home Loan Bank stock                                                      20,993                   20,624
         Premises and equipment, net                                                       68,881                   66,393
         Loan servicing rights, net                                                        20,986                   20,597
         Accrued income, prepaid expenses and other assets                                 25,096                   23,626
         Real estate owned, net                                                             3,927                    4,262
         Intangible assets                                                                  2,697                    2,602
                                                                                       ----------               ----------
              Total assets                                                             $1,705,672               $1,695,279
                                                                                       ==========               ==========

         LIABILITIES
         Noninterest-bearing deposits                                                  $   94,128               $   97,385
         Interest-bearing deposits                                                      1,065,482                1,048,882
                                                                                        ---------                ---------
            Total deposits                                                              1,159,610                1,146,267
         Borrowings                                                                       422,428                  426,079
         Other liabilities                                                                 31,821                   29,724
         Guaranteed Preferred Beneficial Interests in the
           Corporation's Junior Subordinated Debentures                                    43,750                   43,750
                                                                                       ----------               ----------
            Total liabilities                                                           1,657,609                1,645,820
                                                                                       ----------               ----------
         SHAREHOLDERS' EQUITY
         Preferred stock, 10,000,000 shares authorized,
           none issued                                                                         --                       --
         Common stock, no par value, 10,000,000
           shares authorized, 8,107,208 and 8,099,852
           shares issued and outstanding, respectively                                         --                       --
         Additional paid-in capital                                                        20,907                   20,882
         Retained earnings                                                                 29,245                   29,668
         Accumulated other comprehensive income (loss)                                     (2,089)                 (1,091)
                                                                                       ----------               ----------
            Total shareholders' equity                                                    48,063                    49,459
                                                                                       ----------               ----------
              Total liabilities and shareholders' equity                               $1,705,672               $1,695,279
                                                                                       ==========               ==========

</TABLE>

See notes to consolidated financial statements.

                                                                               3



<PAGE>   4




                          METROPOLITAN FINANCIAL CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                               Three Months Ended March 31,
                                                                                            ----------------------------------
                                                                                             2001                       2000
                                                                                            -------                    -------
<S>                                                                                         <C>                        <C>
INTEREST INCOME
  Interest and fees on loans                                                                $26,998                    $24,604
  Interest on mortgage-backed securities                                                      3,361                      4,184
  Interest and dividends on other securities                                                  1,276                      1,121
                                                                                            -------                    -------
    Total interest income                                                                    31,635                     29,909
                                                                                            -------                    -------
INTEREST EXPENSE
  Interest on deposits                                                                       15,130                     13,519
  Interest on borrowings                                                                      6,418                      5,749
  Interest on junior subordinated debentures                                                    998                        998
                                                                                            -------                    -------
    Total interest expense                                                                   22,546                     20,266
                                                                                            -------                    -------
NET INTEREST INCOME                                                                           9,089                      9,643
Provision for loan losses                                                                     1,055                      1,500
                                                                                            -------                    -------
Net interest income after provision for loan losses                                           8,034                      8,143
                                                                                            -------                    -------
NONINTEREST INCOME
  Net gain on sale of loans                                                                     669                        309
  Loan servicing income, net                                                                  (109)                        335
  Service charges on deposit accounts                                                           404                        320
  Net gain on sale of securities                                                                400                        333
  Other operating income                                                                      1,056                        818
                                                                                            -------                    -------
    Total noninterest income                                                                  2,420                      2,115
                                                                                            -------                    -------
NONINTEREST EXPENSE
  Salaries and related personnel costs                                                        5,770                      5,177
  Occupancy and equipment expense                                                             1,767                      1,340
  Federal deposit insurance premiums                                                            347                        359
  Data processing expense                                                                       417                        331
  Marketing expense                                                                             279                        222
  State franchise taxes                                                                         244                        262
  Amortization of intangibles                                                                    69                         66
  Other operating expenses                                                                    2,325                      1,602
                                                                                            -------                    -------
    Total noninterest expense                                                                11,218                      9,359
                                                                                            -------                    -------
INCOME (LOSS) BEFORE INCOME TAXES                                                             (764)                        899
Provision (benefit) for income taxes                                                          (341)                        292
                                                                                            -------                    -------
NET INCOME (LOSS)                                                                        $    (423)                   $    607
                                                                                          =========                    =======
Basic earnings (loss) per share                                                          $   (0.05)                  $    0.08
                                                                                          =========                   ========
Diluted earnings (loss) per share                                                        $   (0.05)                  $    0.08
                                                                                          =========                   ========

Weighted average shares outstanding for basic earnings per share                          8,103,437                  8,068,467
Effect of dilutive options                                                                      --                          --
                                                                                         ----------                  ---------
Weighted average shares outstanding for diluted earnings per share                        8,103,437                  8,068,467
                                                                                         ==========                  =========

</TABLE>

See notes to consolidated financial statements.


                                                                               4



<PAGE>   5



                          METROPOLITAN FINANCIAL CORP.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                              Three Months Ended March 31,
                                                                                         -------------------------------------
                                                                                            2001                       2000
                                                                                          ---------                 ----------
<S>                                                                                       <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES                                                      $ (5,020)                 $  (12,860)

CASH FLOWS FROM INVESTING ACTIVITIES
  Disbursement of loan proceeds                                                            (45,060)                    (80,743)
  Purchases of:
    Loans                                                                                  (51,352)                    (16,883)
    Mortgage-backed securities                                                             (10,299)                         --
    Securities available for sale                                                           (1,319)                        (12)
    Securities held to maturity                                                                 --                        (100)
    Mortgage servicing rights                                                                  423                          --
    Premises and equipment                                                                  (3,469)                     (5,102)
  Proceeds from maturities and repayments of:
    Loans                                                                                   89,073                      72,739
    Mortgage-backed securities                                                               4,194                      17,903
    Securities available for sale                                                           10,000
  Proceeds from sale of:
    Loans                                                                                       --                       4,276
    Mortgage-backed securities                                                                  --                      21,419
    Premises, equipment, and real estate owned                                                 348                       1,275
                                                                                          ---------                 -----------
      Net cash provided by (used in) investing activities                                   (7,461)                     14,772
                                                                                          ---------                 -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net change in deposit accounts                                                            13,343                     (31,256)
  Proceeds from borrowings                                                                  20,000                     141,150
  Repayment of borrowings                                                                   (3,651)                    (65,385)
  Net activity on lines of credit                                                          (20,000)                    (49,100)
  Proceeds from issuance of common stock                                                        25                          37
                                                                                          ---------                 -----------
    Net cash provided by (used in) financing activities                                      9,717                      (4,554)
                                                                                          ---------                 -----------

Net change in cash and cash equivalents                                                     (2,764)                     (2,642)
Cash and cash equivalents at beginning of period                                            17,010                      19,001
                                                                                          ---------                 -----------
Cash and cash equivalents at end of period                                                $ 14,246                  $   16,359
                                                                                          =========                 ==========

Supplemental disclosures of cash flow information:
Cash paid during the period for:
    Interest                                                                              $  22,675                 $   19,945
    Income taxes                                                                              1,174                         --
    Transfers from loans receivable to real estate owned                                        305                         --
    Transfers from loans receivable to loans held for sale                                   53,634                         --
    Loans securitized                                                                        27,753                      8,557

</TABLE>

See notes to consolidated financial statements.



                                                                               5




<PAGE>   6




                          METROPOLITAN FINANCIAL CORP.
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                            ACCUMULATED
                                                          ADDITIONAL                           OTHER             TOTAL
                                            COMMON         PAID-IN           RETAINED      COMPREHENSIVE     SHAREHOLDERS'
                                             STOCK         CAPITAL           EARNINGS      INCOME (LOSS)        EQUITY
                                            ------        ----------         --------      -------------     -------------
<S>                                        <C>               <C>               <C>            <C>                <C>

BALANCE DECEMBER 31, 1999                  $    --           $20,744           $28,171        $(4,047)           $44,868
Comprehensive income (loss):
   Net income                                                                      607                               607
   Change in unrealized loss on
     securities, net of tax and net of
     reclassification of gain of $216
     from net income                                                                           (1,580)            (1,580)
                                                                                                                   -----
     Total comprehensive income (loss)                                                                              (973)
Issuance of shares of Common stock
   Stock purchase plan-9,033 shares                               37                                                  37
                                                           ---------       -----------      ---------         ----------
BALANCE MARCH 31, 2000                    $     --           $20,781           $28,778        $(5,627)           $43,932
                                                           =========       ===========      =========         ==========


BALANCE DECEMBER 31, 2000                  $    --           $20,882           $29,668        $(1,091)           $49,459
Comprehensive income (loss):
   Net loss                                                                       (423)                             (423)
   Change in unrealized loss on
     securities and derivatives,  net of
     tax and net of reclassification
     of gain of $260 from net income                                                             (998)              (998)
                                                                                                              ----------
     Total comprehensive income (loss)                                                                            (1,421)
Issuance of shares of Common stock
   Stock purchase plan-7,356 shares                               25                                                  25
                                                           ---------       -----------      ---------         ----------
BALANCE MARCH 31, 2001                    $     --           $20,907           $29,245        $(2,089)           $48,063
                                                           =========       ===========      =========         ==========


</TABLE>




















See notes to consolidated financial statements.




                                                                               6



<PAGE>   7



                          METROPOLITAN FINANCIAL CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Metropolitan Financial Corp. ("Metropolitan" or the "Corporation") is a savings
and loan holding company and an Ohio corporation. Metropolitan's primary
operating subsidiary is Metropolitan Bank & Trust Company (the "Bank").
Metropolitan is engaged in the business of originating multifamily and
commercial real estate loans primarily in Ohio, Pennsylvania, Michigan, and
Kentucky and purchasing multifamily and commercial real estate loans throughout
the United States. Metropolitan offers full service banking services to
communities in Northeast Ohio where its additional lending activities include
originating one- to four-family residential real estate, construction, business
and consumer loans. The accounting policies of the Corporation conform to
generally accepted accounting principles and prevailing practices within the
financial services industry. All significant intercompany transactions have been
eliminated. In the opinion of management, the accompanying financial statements
include all adjustments, consisting only of normal recurring accruals, which the
Corporation considers necessary for a fair presentation of (a) the results of
operations for the three month periods ended March 31, 2001 and 2000; (b) the
financial condition at March 31, 2001 and December 31, 2000; (c) the statement
of cash flows for the three month periods ended March 31, 2001 and 2000; and (d)
the statement of changes in shareholders' equity for the three month periods
ended March 31, 2001 and 2000. The results of operations for the three month
period ended March 31, 2001 are not necessarily indicative of the results that
may be expected for any other period. The annual report for Metropolitan for the
year ended December 31, 2000, contains consolidated financial statements and
related notes which should be read in conjunction with the accompanying
consolidated financial statements. Unless otherwise indicated, dollar amounts
are in thousands, except per share data.

2. ACCOUNTING POLICIES

SECURITIES:  The Corporation  classifies debt and  mortgage-backed  securities
as held to maturity or available for sale. The Corporation classifies marketable
equity securities as available for sale.

Securities classified as held to maturity are those that management has the
positive intent and ability to hold to maturity. Securities held to maturity are
stated at cost, adjusted for amortization of premiums and accretion of
discounts.

Securities classified as available for sale are those that management could sell
for liquidity, investment management, or similar reasons, even if there is not a
present intention for such sale. Securities available for sale are carried at
fair value with unrealized gains and losses included as a separate component of
shareholders' equity, net of tax, and recognized as part of comprehensive
income. Gains or losses on dispositions are based on net proceeds and the
adjusted historic cost of securities sold, using the specific identification
method. Other securities, such as Federal Home Loan Bank stock, are carried at
cost.

LOANS: All loans are held for investment unless specifically designated as held
for sale. When the Bank originates or purchases loans, it makes a determination
whether or not to classify loans as held for sale. The Bank re-evaluates its
intention to hold or sell loans at each balance sheet date based on the current
environment and, if appropriate, reclassifies loans as held for sale. Sales of
loans are dependent upon various factors including interest rate movements,
deposit flows, the availability and attractiveness of other sources of funds,
loan demand by borrowers, and liquidity and capital needs.





                                                                               7




<PAGE>   8


Loans held for investment are stated at the principal amount outstanding
adjusted for amortization of premiums and deferred costs and accretion of
discounts and deferred fees using the interest method. At March 31, 2001 and
December 31, 2000, management had the intent and the Bank had the ability to
hold all loans being held for investment purposes for the foreseeable future.

Loans held for sale are recorded at the lower of cost or market. Gains and
losses on the sale of loans are determined by the identified loan method and are
reflected in operations at the time of the settlement of the sale.

Interest on loans is accrued over the term of the loans based upon the principal
outstanding. Management reviews loans that are delinquent 90 days or more to
determine if interest accrual should be discontinued based on the estimated fair
market value of the collateral. When a loan is placed on nonaccrual status,
accrued and unpaid interest is charged against income. Payments received on
nonaccrual loans are applied against principal until the recovery of the
remaining balance is reasonably assured.

ALLOWANCE FOR LOSSES ON LOANS: The allowance for loan losses is established by a
provision for loan losses charged against income. Estimating the risk of loss
and the amount of loss on any loan is necessarily subjective. Accordingly, the
allowance is maintained by management at a level considered adequate to cover
probable losses based on past loss experience, general economic conditions,
information about specific borrower situations including their financial
position, collateral values, and other factors and estimates which are subject
to change over time. While management may periodically allocate portions of the
allowance for specific problem loans, the whole allowance is available for any
loan charge-offs that occur. A loan is charged off against the allowance by
management as a loss when deemed uncollectible, although collection efforts
continue and future recoveries may occur.

Loans considered to be impaired 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 losses on loans to such loans. If these allocations require an
increase in the allowance for losses on loans, such increase is reported as a
provision for loan losses. The carrying values of impaired loans are
periodically adjusted to reflect cash payments, revised estimates of future cash
flows and increases in the present value of expected cash flows due to the
passage of time. Management excludes all consumer loans from its review for
impairment. However, these loans are considered in determining the appropriate
level of the allowance for loss on loans. All impaired loans are placed on
nonaccrual status.

DERIVATIVES: Effective January 1, 2001, a new accounting standard requires all
derivatives to be recorded at fair value. Net interest income (expense)
resulting from the difference between fixed and floating rate interest payments
is recorded on the accrual basis to interest income (expense). The change in
fair value of the derivative is recorded as an increase (decrease) to
accumulated other comprehensive income (loss).

EARNINGS PER SHARE: Basic and diluted earnings per share are computed based on
weighted average shares outstanding during the period. Basic earnings per share
has been computed by dividing net income (loss) by the weighted average shares
outstanding. Diluted earnings per share has been computed by dividing net income
(loss) by the diluted weighted average shares outstanding. Diluted weighted
average common shares were calculated



                                                                               8



<PAGE>   9



assuming the exercise of stock options less treasury shares assumed to be
purchased from the proceeds using the average market price of the Corporation's
stock.

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

3. SECURITIES

The amortized cost, gross unrealized gains and losses and fair values of
investment securities available for sale and held to maturity at March 31, 2001
and December 31, 2000 were as follows (in thousands):

<TABLE>
<CAPTION>

                                                                             March 31, 2001
                                          -------------------------------------------------------------------------------------
                                             Amortized         Gross Unrealized         Gross Unrealized                  Fair
                                               Cost                 Gains                    Losses                      Value
                                               ----                 -----                    ------                      -----
<S>                                               <C>                 <C>                   <C>                        <C>
AVAILABLE FOR SALE
Mutual funds                                     $    902                                                             $    902
FreddieMac preferred stock                          7,500                                  $  (900)                      6,600
FreddieMac note                                    10,000                                                               10,000
FannieMae notes                                     9,954                                      (54)                      9,900
Treasury notes and bills                            3,246            $ 17                                                3,263
Mortgage-backed securities                        202,188             522                     (513)                    202,197
                                                  -------            ----                  -------                    --------
                                                  233,790             539                   (1,467)                    232,862
HELD TO MATURITY
Tax-exempt municipal bond                          14,547                                   (2,910)                     11,637
Revenue bond                                          775                                                                  775
                                                  -------                                  -------                    --------
                                                   15,322                                   (2,910)                     12,412
                                                  -------                                  -------                    --------
   Total securities                              $249,112            $539                  $(4,377)                   $245,274
                                                 ========           =====                  =======                    ========

</TABLE>














                                                                               9




<PAGE>   10




<TABLE>
<CAPTION>

                                                                           December 31, 2000
                                          ------------------------------------------------------------------------------------
                                                 Amortized     Gross Unrealized         Gross Unrealized                Fair
                                                   Cost             Gains                    Losses                    Value
                                                 ---------     ----------------          ---------------              --------
<S>                                              <C>                 <C>                   <C>                        <C>
AVAILABLE FOR SALE
Mutual funds                                       $  889                                                             $    889
FreddieMac preferred stock                          7,500                                  $(1,350)                      6,150
FreddieMac note                                    10,000                                      (14)                      9,986
FannieMae notes                                    19,950            $ 10                      (40)                     19,920
Treasury notes and bills                            2,361                                                                2,361
Mortgage-backed securities                        196,052             534                     (757)                    195,829
                                                 --------            ----                  -------                    --------
                                                  236,752             544                   (2,161)                    235,135
HELD TO MATURITY
Tax-exempt municipal bond                          14,705                                     (145)                     14,560
Revenue bond                                          775               9                                                  784
                                                 --------            ----                  -------                    --------
                                                   15,480               9                     (145)                     15,344
                                                 --------            ----                  -------                    --------
   Total securities                              $252,232            $553                  $(2,306)                   $250,479
                                                 ========            ====                  =======                    ========

</TABLE>

4. LOANS RECEIVABLE

The composition of the loan portfolio at March 31, 2001 and December 31, 2000
was as follows (in thousands):

<TABLE>
<CAPTION>

                                                               March 31, 2001                             December 31, 2000
                                                               --------------                             -----------------
<S>                                                               <C>                                         <C>
Real estate loans
   Construction loans:
      One-to four-family                                           $137,189                                    $ 125,989
      Multifamily                                                     3,730                                        7,502
      Commercial                                                        250                                        5,873
      Land                                                           68,027                                       54,100
      Loans in process                                              (83,383)                                     (72,156)
                                                                 ----------                                    ---------
         Construction loans, net                                    125,813                                      121,308
   Permanent loans:
      One- to four-family                                           296,517                                      288,352
      Multifamily                                                   251,514                                      273,358
      Commercial                                                    218,959                                      254,824
                                                                 ----------                                    ---------
         Total real estate loans                                    892,803                                      937,842
Consumer loans                                                      159,364                                      163,019
Business and other loans                                            135,091                                      143,329
                                                                 ----------                                    ---------
         Total loans                                              1,187,258                                    1,244,190
Premiums on loans, net                                                7,750                                        7,393
Deferred loan fees, net                                              (2,204)                                      (2,191)
Allowance for losses on loans                                       (14,487)                                     (13,951)
                                                                 ----------                                    ---------
        Total loans receivable                                   $1,178,317                                    $1,235,441
                                                                 ==========                                    =========

</TABLE>





                                                                              10



<PAGE>   11

Activity in the allowance for losses on loans for the periods ended March 31,
2001 and 2000 was as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                                   Three Months Ended March 31,
                                                                                                   2001                    2000
                                                                                                  -------                 -------
<S>                                                                                               <C>                     <C>
Balance at the beginning of the period                                                            $13,951                 $11,025
Provision for loan losses                                                                           1,055                   1,500
Net charge-offs                                                                                      (519)                   (722)
                                                                                                  -------                 -------
Balance at end of period                                                                          $14,487                 $11,803
                                                                                                  =======                 =======

</TABLE>


             Nonperforming loans were as follows at (in thousands):
<TABLE>
<CAPTION>
                                                                                                  March 31,            December 31,
                                                                                                   2001                    2000
                                                                                                  ---------            ------------
<S>                                                                                                <C>                   <C>
Loans past due over 90 days still on accrual                                                       $ 4,074               $ 6,434
Nonaccrual loans                                                                                    20,316                14,739

</TABLE>

Nonperforming loans included all impaired loans and smaller balance homogeneous
loans, such as residential mortgage and consumer loans, that are collectively
evaluated for impairment.

Management analyzes loans on an individual basis and considers a loan to be
impaired when it is probable that all principal and interest amounts will not be
collected according to the loan contract based on current information and
events. Loans which are past due two payments or less and that management feels
are probable of being restored to current status within 90 days are not
considered to be impaired loans. All impaired loans are included in
nonperforming loans.

Information regarding impaired loans was as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                                 March 31,             December 31,
                                                                                                   2001                    2000
                                                                                                 ---------             ------------
<S>                                                                                               <C>                    <C>
Balance of impaired loans                                                                         $17,797                $ 4,869
Less portion for which no allowance
  for losses on loans is allocated                                                                  2,777                  4,649
                                                                                                  -------                -------
Balance of impaired loans for which
  an allowance for loan losses is allocated                                                       $15,020                $   220
                                                                                                  =======                =======
Portion of allowance for losses on loans
  allocated to the impaired loan balance                                                          $ 3,592                $   197
                                                                                                  =======                =======

</TABLE>












                                                                              11



<PAGE>   12


<TABLE>
<CAPTION>

                                                                                 March 31,                  March 31,
                                                                                   2001                       2000
                                                                                   -----                      ----
<S>                                                                                <C>                      <C>
Average investment in impaired loans
  during the period year to date                                                   $ 7,185                  $4,620
                                                                                   =======                  ======
Interest income recognized during
  impairment year to date                                                          $    55                  $   17
                                                                                   =======                  ======
Interest income recognized on a
  cash basis during the period year to date                                        $    55                  $   17
                                                                                   =======                  ======

</TABLE>

5. PREMISES AND EQUIPMENT

Premises and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>

                                                                                 March 31,               December 31,
                                                                                    2001                     2000
                                                                                    ----                     ----
<S>                                                                                <C>                       <C>
Land                                                                               $10,647                   $10,535
Office buildings                                                                    32,469                    11,718
Leasehold improvements                                                               3,249                     3,184
Furniture, fixtures, and equipment                                                  20,299                    17,948
Construction in progress                                                            10,232                    30,210
                                                                                    ------                   -------
   Total                                                                            76,896                    73,595
Accumulated depreciation                                                             8,015                     7,202
                                                                                    ------                   -------
   Total premises and equipment                                                    $68,881                   $66,393
                                                                                   =======                   =======

</TABLE>

In the second quarter, 1999, the Corporation started the construction of a new
corporate headquarters building. As a result, interest expenses have been
incurred to finance construction. These costs are capitalized as they are
incurred while the building is under construction and are included as a portion
of the historical cost to be depreciated over the useful life of the building.
Interest is also capitalized on the construction of retail sales offices.
Interest expense capitalized for the three-month periods ended March 31, 2001
and 2000 are $228 and $118, respectively.

















                                                                              12



<PAGE>   13




6. LOAN SERVICING

Mortgage loans serviced for others are not included in the accompanying
consolidated statements of financial condition. The unpaid principal balances of
these loans at March 31, 2001 and December 31, 2000 are summarized as follows
(in thousands):

<TABLE>
<CAPTION>

                                                                                  March 31,               December 31,
                                                                                    2001                     2000
                                                                                    ----                     ----
<S>                                                                                <C>                        <C>
Mortgage loan portfolios serviced for:
  FreddieMac                                                                       $ 951,061                  $ 882,715
  FannieMae                                                                          818,221                    849,472
  Others                                                                             208,592                    205,312
                                                                                  ----------                 ----------
    Total loans serviced for others                                               $1,977,874                 $1,937,499
                                                                                  ==========                 ==========

</TABLE>

Custodial balances maintained in noninterest-bearing checking accounts in
connection with the foregoing loan servicing were approximately $29,288 and
$25,484 at March 31, 2001 and December 31, 2000, respectively.

The following is an analysis of the changes in cost of loan servicing rights for
the three month period ended March 31, 2001 and 2000 (in thousands):

<TABLE>
<CAPTION>

                                                                                     Three Months Ended March 31,
                                                                                   2001                        2000
                                                                                  -------                    -------
<S>                                                                                 <C>                      <C>
Balance at the beginning of the period                                            $20,597                    $10,374
Acquired or originated                                                              1,877                        251
Amortization                                                                       (1,488)                      (610)
                                                                                  -------                    -------
Balance at the end of the period                                                  $20,986                    $10,015
                                                                                  =======                    =======

</TABLE>

7. DEPOSITS

Deposits consisted of the following (in thousands):

<TABLE>
<CAPTION>

                                                                                    March 31,            December 31,
                                                                                     2001                     2000
                                                                                     ----                     ----
<S>                                                                                  <C>                        <C>
Noninterest-bearing checking accounts                                                $ 94,128                 $ 97,385

Interest-bearing checking accounts                                                    144,924                  123,537
Passbook savings and statement savings                                                103,907                  106,258
Certificates of deposit                                                               816,651                  819,087
                                                                                    ---------               ----------
  Total interest-bearing deposits                                                   1,065,482                1,048,882
                                                                                    ---------               ----------
  Total deposits                                                                   $1,159,610               $1,146,267
                                                                                    =========                =========

</TABLE>



                                                                              13



<PAGE>   14



At March 31, 2001, scheduled maturities of certificates of deposit were as
follows (in thousands):

         Year                                    Weighted Average
        Ended                   Amount            Interest Rate
        -----                  --------          ----------------
         2001                  $524,922                6.44%
         2002                   176,683                6.14
         2003                    95,857                5.64
         2004                    11,443                5.85
         2005                     5,738                6.60
      Thereafter                  2,008                6.40
                               --------
                               $816,651                6.27%
                               ========


8. BORROWINGS

Borrowings consisted of the following at March 31, 2001 and December 31, 2000
(in thousands):

<TABLE>
<CAPTION>

                                                                                  March 31,                 December 31,
                                                                                    2001                       2000
                                                                                    ----                       ----

<S>                                                                                <C>                        <C>
Federal Home Loan Bank Advances (6.1% and 6.5% at
  March 31, 2001 and December 31, 2000, respectively)                              $361,443                   $365,094

Reverse repurchase agreements (5.9% at March 31, 2001
  and December 31, 2000)                                                             41,000                     41,000

Commercial bank line of credit (7.3% and 8.8% at March 31,
  2001 and December 31, 2000, respectively)                                           6,000                      6,000

Subordinated debt maturing January 1, 2005
  (9.625% fixed rate)                                                                13,985                     13,985
                                                                                   --------                   --------
                                                                                   $422,428                   $426,079
                                                                                   ========                   ========

</TABLE>







                                                                              14



<PAGE>   15




At March 31, 2001, scheduled payments on borrowings were as follows (in
thousands):

                                                       Weighted Average
             Year Ended                   Amount        Interest Rate
             ----------                  --------       -------------
                2001                     $130,104            6.03%
                2002                       58,598            6.20
                2003                       69,201            5.18
                2004                       48,495            6.24
                2005                       64,152            5.87
             Thereafter                    51,878            7.31
                                         --------
                Total                    $422,428            6.07%
                                         ========

At March 31, 2000, Federal Home Loan Bank advances were collateralized by all of
our FHLB stock, one-to-four family first mortgage loans, multifamily loans, and
securities with aggregate carrying values of approximately $21 million, $293
million, $163 million and $34 million, respectively.

The Corporation has a commercial line of credit agreement with a commercial
bank. The maximum borrowing under the line is $12,000,000. The balance
outstanding at March 31, 2001 was $6,000,000. The line matures annually on May
31, including this year. The interest rate on the line is tied to LIBOR or prime
at the Corporation's option. As collateral for the loan, the Corporation's
largest shareholder, Robert Kaye, has agreed to pledge a portion of his common
shares in an amount equal to at least 200% of any outstanding balance.

9. OFF-BALANCE-SHEET ACTIVITIES

The Bank can be a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial commitments include commitments to make loans. The Bank's
exposure to credit loss in the event of nonperformance by the other party to the
financial instrument for commitments to make loans is represented by the
contractual amount of these instruments. The Bank follows the same credit policy
to make such commitments as is followed for those loans recorded in the
financial statements.

As of March 31, 2001, the Bank had fixed and variable rate commitments to
originate and/or purchase loans (at market rates) of approximately $103,293,000
and $72,290,000, respectively. In addition, the Bank had firm commitments to
sell loans totaling $76,969,000 at March 31, 2001. Metropolitan's commitments to
originate and purchase loans are for loans with rates ranging from 6.25% to
18.00% and commitment periods up to one year.

The Bank maintains two standby letters of credit at the Federal Home Loan Bank
of Cincinnati for the benefit of Fannie Mae as secondary security for credit
risk on multifamily loans securitized in prior years. These standby letters of
credit, aggregating approximately $8.7 million, do not accrue interest and are
renewed on an annual basis.








                                                                              15




<PAGE>   16




The Bank has entered into two interest rate swap contracts to hedge variable
rate advances with each having a notional amount of $20,000. Both contracts
mature within five years and have the same counterparty. The Bank receives from
the respective contracts variable interest based on one-month or three-month
LIBOR. The Bank in turn pays to the counterparty interest at fixed rates of
6.450% and 6.275%, respectively. The counterparty has the option to terminate
the interest rate swap in the event LIBOR exceeds certain rates set on specific
dates per the terms of the contracts.

10. SEGMENT REPORTING

Metropolitan's operations include two major operating segments. A description of
those segments follows:

Retail and Commercial Banking--Retail and commercial banking is the segment of
the business that brings in deposits and lends those funds out to businesses and
consumers. The local market for deposits is the consumers and businesses in the
communities surrounding our 23 retail sales offices in Northeastern Ohio. The
market for lending and originations is Ohio and the surrounding states and
throughout the United States for purchases. The majority of loans are secured by
multifamily and commercial real estate. Loans are also made to businesses
secured by business assets and consumers secured by real or personal property.
Business and consumer loans are concentrated in Northeastern Ohio.

Mortgage banking--Mortgage banking is the segment of our business that
originates, sells and services permanent or construction loans secured by one-
to four-family residential properties. These loans are primarily originated
through commissioned loan officers located in Ohio and Western Pennsylvania. In
general, fixed rate loans are originated for sale and adjustable rate loans are
originated to be retained in the portfolio. Loans being serviced include loans
originated and still owned by Metropolitan, loans originated by Metropolitan but
sold to others with servicing rights retained by Metropolitan, and servicing
rights to loans originated by others but purchased by Metropolitan. The
servicing rights Metropolitan purchases may be located in a variety of states
and are typically being serviced for FannieMae or FreddieMac.

The category below labeled Parent and Other consists of the remaining segments
of Metropolitan's business. It includes corporate treasury, interest rate risk,
and financing operations which do not generate revenue from outside customers.











                                                                              16




<PAGE>   17






Operating results and other financial data for the current and preceding year
are as follows (in thousands):

         As of or for the three months ended March 31, 2001

<TABLE>
<CAPTION>

                                                      RETAIL AND
                                                      COMMERCIAL         MORTGAGE            PARENT
                                                       BANKING            BANKING           AND OTHER            TOTAL
                                                      ----------         --------           ---------          ---------
<S>                                                      <C>              <C>                 <C>               <C>
OPERATING RESULTS:
Net interest income                                  $    4,845         $   4,460           $   (216)         $    9,089
Provision for losses on loans                               949               106                ---               1,055
                                                        -------           -------             ------            --------
Net interest income after
  provision for loan losses                               3,896             4,354               (216)              8,034
Noninterest income                                        1,035               982                403               2,420
Direct noninterest expense                                4,755             1,924                430               7,109
Allocation of overhead                                    2,925             1,184                                  4,109
                                                        -------           -------             ------            --------
Net income (loss) before income taxes                $   (2,749)         $  2,228           $   (243)         $     (764)
                                                        =======           =======             ======            ========
FINANCIAL DATA:
Segment assets                                       $1,055,288          $487,764           $162,620          $1,705,672
Depreciation and amortization                               686             1,340                 91               2,117
Expenditures for additions
  to premises and equipment                               2,859               610                                  3,469

</TABLE>

         As of or for the three months ended March 31, 2000

<TABLE>
<CAPTION>

                                                   RETAIL AND
                                                   COMMERCIAL          MORTGAGE            PARENT
                                                     BANKING            BANKING           AND OTHER              TOTAL
                                                   ----------          --------           ---------            ---------
<S>                                                      <C>               <C>                <C>                 <C>
OPERATING RESULTS:
Net interest income                                     $ 6,472            $1,317             $1,854              $9,643
Provision for losses on loans                               959               164                377               1,500
                                                        -------          --------             ------              ------
Net interest income after
  provision for loan losses                               5,513             1,153              1,477               8,143
Noninterest income                                        1,358               715                 42               2,115
Direct noninterest expense                                4,634             1,640                 95               6,369
Allocation of overhead                                    2,209               781                                  2,990
                                                        -------          --------             ------              ------
Net income before income taxes                          $    28          $   (553)            $1,424              $  899
                                                        =======          ========             =====               ======
FINANCIAL DATA:
Segment assets                                       $1,061,369          $424,499           $116,520          $1,602,388
Depreciation and amortization                               571               537                123               1,231
Expenditures for additions
  to premises and equipment                               4,710               392                                  5,102


</TABLE>






                                                                              17




<PAGE>   18



The financial information provided for each major operating segment has been
derived from the internal profitability system used to monitor and manage
financial performance and allocate resources. The measurement of performance for
the operating segments is based on the organizational structure of Metropolitan
and is not necessarily comparable with similar information for any other
financial institution. The information presented is also not indicative of the
segments' financial condition and results of operations if they were independent
entities.

Metropolitan evaluates segment performance based on contribution to income
before income taxes. Certain indirect expenses have been allocated based on
various criteria considered by management to best reflect benefits derived. The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies. Indirect expense allocations and
accounting policies have been consistently applied for the periods presented.
There are no differences between segment profits and assets and the consolidated
profits and assets of Metropolitan. The interest rate risk that results from
investing in assets and liabilities with different terms to maturity or
repricing has been eliminated from the two major operating segments and is
assumed in the category labeled Parent and Other.

11. METROPOLITAN FINANCIAL CORP. STOCK PURCHASE PLAN

In July, 1999, the Board of Directors of Metropolitan Financial Corp. authorized
the adoption of a Stock Purchase Plan permitting directors, officers, and
employees of the Corporation and its subsidiaries and certain affiliated
companies to make purchases of the Corporation's common shares at 95% of the
fair market value. The plan authorized the issuance of an additional 160,000
common shares for purchases made under the plan. The purchases under the plan
commenced in the fourth quarter, 1999. Shares issued under this plan during the
three months ended March 31, 2001 totaled 7,356.








                                                                              18



<PAGE>   19

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

                                                                                    Three months ended March 31,
                                                                                     2001                 2000
                                                                                     ----                 ----
<S>                                                                                <C>                    <C>
Net income (loss) (in thousands)                                                   $(423)                 $607
Basic and diluted earnings per share                                               (0.05)                 0.08
Return on average assets                                                           (0.10)  %              0.15 %
Return on average equity                                                           (3.47)  %              5.47 %
Noninterest expense to average assets                                                2.68  %              2.35 %
Efficiency ratio                                                                   100.37  %             81.34 %
Net interest margin                                                                  2.33  %              2.54 %
Net charge-offs to average loans                                                     0.16  %              0.24 %

</TABLE>

<TABLE>
<CAPTION>

                                                                 March 31,              December 31,              March 31,
                                                                   2001                    2000                     2000
                                                                   ----                    ----                     ----
<S>                                                             <C>                      <C>                     <C>
Total assets (in thousands)                                     $1,705,672               $1,695,279              $1,602,388
Shareholders' equity (in thousands)                                 48,063                   49,459                  43,932
Shareholders' equity to total assets                                  2.82 %                   2.92 %                  2.74 %
Shares outstanding                                               8,107,208                8,099,852               8,072,777
Book value per share                                                 $5.93                    $6.11                   $5.44
Tangible book value per share                                         5.60                     5.79                    5.15
Market value of common stock                                          4.00                     2.38                    3.75
Nonperforming assets to total assets (2)                              1.66 %                   1.12 %                  0.90 %
Allowance for losses on loans to total loans (2)                      1.11 %                   1.07 %                  0.97 %

</TABLE>

(2) Ratios are based on period end balances.




















                                                                              19


<PAGE>   20



OVERVIEW

The reported results of Metropolitan primarily reflect the operations of the
Bank. Our results of operations are dependent on a variety of factors, including
the general interest rate environment, competitive conditions in the industry,
governmental policies and regulations and conditions in the markets for
financial assets. Like most financial institutions, the primary contributor to
our income is net interest income, the difference between the interest we earn
on interest-earning assets, such as loans and securities, and the interest we
pay on interest-bearing liabilities, such as deposits and borrowings. Our
operations are also affected by noninterest income, such as loan servicing fees,
service charges on deposit accounts, and gains or losses on the sales of loans
and securities. Our principal operating expenses, aside from interest expense,
consist of compensation and employee benefits, occupancy costs, and general and
administrative expenses.

RESULTS OF OPERATIONS

Net Income. Net income decreased $1.0 million to a net loss of $423,000 for the
three months ended March 31, 2001 as compared to net income of $607,000
for the first quarter, 2000. Net interest income and provision for loan losses
decreased $0.6 million and $0.4 million, respectively, for the three months
ended March 31, 2001 over the prior year period and noninterest income increased
$0.3 million from the same prior year period. Noninterest expense increased $1.9
million to $11.2 million for the quarter from $9.4 million from the prior year
quarter primarily as a result of increased personnel and professional services
costs.

Our net interest margin decreased twenty-one basis points to 2.33% for the three
month period ended March 31, 2001 as compared to 2.54% for the same period in
2000, primarily due to an increased cost of funds.

Interest Income. Total interest income increased 5.8% to $31.6 million in the
three month period ended March 31, 2001, as compared to $29.9 million in the
same period in 2000. This increase resulted primarily from an increased weighted
average yield, particularly loans receivable, in the three month period ended
March 31, 2001 as compared to the prior year along with a slight increase in
average interest-earning assets from the same period last year.

Interest Expense. Total interest expense increased 11.3% to $22.5 million for
the three month period ended March 31, 2001, as compared to $20.3 million for
the same period in 2000. Interest expense increased due to a 2.9% increase in
the average balance of interest-bearing liabilities outstanding and an increased
cost of funds for the three month period ending March 31, 2001 compared to the
same period in 2000. We increased our average balance of interest-bearing
liabilities in order to fund our growth of interest-earning assets. The average
balance of borrowings increased $51.3 million, or 13.8% for the three month
period ending March 31, 2001 as compared to the prior year period as our deposit
growth slowed and other sources of funds were utilized. As a result,
Metropolitan's cost of funds increased to 6.10% for the first quarter, 2001 as
compared to 5.62% for the same period in 2000.




                                                                              20



<PAGE>   21



Average Balances and Yields. The following table presents the total dollar
amount of interest income from average interest-earning assets and the resulting
yields, as well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates, and the net interest margin. Net interest
margin is influenced by the level and relative mix of interest-earning assets
and interest-bearing liabilities. All average balances are daily average
balances. Nonaccruing loans are included in average loan balances. The average
balances of mortgage-backed securities and securities are presented at
historical cost.

<TABLE>
<CAPTION>

                                                                        Three Months Ended March 31,
                                                                  2001                                      2000
                                               -------------------------------------      -----------------------------------------
                                                                           (Dollars in thousands)

                                               Average                                     Average
                                               Balance           Interest       Rate       Balance             Interest       Rate
                                               -------           --------       ----       -------             --------       ----
<S>                                           <C>                 <C>              <C>     <C>                  <C>            <C>
Interest-earning assets:
Loans receivable                              $1,282,003          $26,998        8.42%     $1,208,537           $24,604       8.14%
Mortgage-backed securities                       195,207            3,361        6.89         240,008             4,184       6.97
Other                                             80,416            1,276        6.51          67,875             1,121       6.81
                                             -----------          -------                 -----------           -------
  Total interest-earning assets                1,557,626           31,635        8.13       1,516,420            29,909       7.90
                                                                   ------                                        ------
Nonearning assets                                119,233                                       79,482
                                              ----------                                  -----------
  Total assets                                $1,676,859                                   $1,595,902
                                               =========                                    =========

Interest-bearing liabilities:
Deposits                                      $1,046,048           15,130        5.87      $1,054,443            13,519       5.20
Borrowings                                       423,391            6,646        6.37         372,085             5,867       6.39
Junior Subordinated Debentures                    43,750              998        9.12          43,750               998       9.12
                                             -----------         --------                ------------         ---------
  Total interest-bearing liabilities           1,513,189           22,774        6.10       1,470,278            20,384       5.62
                                                                   ------        ----                            ------       ----
Noninterest-bearing liabilities                  114,909                                       81,224
Shareholders' equity                              48,761                                       44,400
                                             -----------                                  -----------
  Total liabilities and
    shareholders' equity                      $1,676,859                                   $1,595,902
                                              ==========                                   ==========
Net interest income before capitalized
  interest and interest rate spread                                 8,861        2.03%                            9,525        2.28%
                                                                   ------        ====                           -------        ====
Net interest margin                                                              2.33%                                         2.54%
Interest expense capitalized                                          228                                           118
                                                                  -------                                       -------
Net interest income                                               $ 9,089                                       $ 9,643
                                                                  =======                                       =======
Average interest-earning
  assets to average interest-bearing
  liabilities                                     102.94%                                      103.14%


</TABLE>




                                                                              21




<PAGE>   22




Rate and Volume Variances. Net interest income is affected by changes in the
level of interest-earning assets and interest-bearing liabilities and changes in
yields earned on assets and rates paid on liabilities. The following table sets
forth, for the periods indicated, a summary of the changes in interest earned
and interest paid resulting from changes in average asset and liability balances
and changes in average rates. Changes attributable to the combined impact of
volume and rate have been allocated proportionately to change due to volume and
change due to rate.

<TABLE>
<CAPTION>

                                                         Three Months ended March 31,
                                                                2001 vs. 2000
                                                             Increase (Decrease)
                                             ---------------------------------------------------
                                                                     Change               Change
                                             Total                   Due to               Due to
                                             Change                  Volume                Rate
                                             ------                  -------              ------
                                                                 (In thousands)
<S>                                          <C>                     <C>                  <C>

INTEREST INCOME ON:
  Loans receivable                           $2,394                  $ 1,496             $  898
  Mortgage-backed securities                   (823)                    (781)               (42)
  Other                                         155                      218                (63)
                                             ------                  -------             -------
    Total interest income                     1,726                  $   933             $  793
                                             ------                  =======             ======
INTEREST EXPENSE ON:
  Deposits                                   $1,611                  $  (108)            $1,719
  Borrowings                                    779                      809                (30)
  Junior Subordinated Debentures                 --                       --                 --
                                             ------                  -------             ------
    Total interest expense                    2,390                  $   701             $1,689
                                                                     =======             ======
  Interest expense capitalized                  110
                                             ------
Increase in net interest income              $ (554)
                                             ======

</TABLE>

Provision for Loan Losses. The provision for loan losses decreased $0.4 million
for the first quarter, 2001, as compared to the first quarter, 2000. Management
decreased the provision for loan losses due to the ongoing analysis of the
appropriate allowance for loan losses as a percent of total loans. The allowance
for losses on loans at March 31, 2001 was $14.5 million or 1.11% of total loans,
as compared to $11.8 million, or 0.97% of total loans, at March 31, 2000.

Noninterest Income. Total noninterest income increased 14.4% to $2.4 million in
the three months ended March 31, 2001 as compared to $2.1 million in the same
period in 2000.

Gain on sale of loans was $669,000 in the three month period ended March 31,
2001, as compared to $309,000 during the same period in 2000. The primary reason
for the increase in the first quarter, 2001 was a decrease in interest rates
which has caused an increase in origination volumes and therefore an increase in
loans available to sell as compared to the same period in 2000. The proceeds of
residential loan sales in the first quarter, 2001 were $115 million as compared
to $23 million in the same period in 2000.






                                                                              22




<PAGE>   23



There was a loss of $109,000 from net loan servicing for the three month period
ended March 31, 2001 as compared to income of $335,000 for the period ended
March 31, 2000. The primary reason for the decreased income was the increased
amortization of servicing rights due to an increase in paid off loans compared
to the prior year. The portfolio of loans serviced for others increased slightly
to $1.97 billion at March 31, 2001 as compared to $1.94 billion at December 31,
2000. Origination of loan servicing, including the securitization of our loans,
was offset by payoffs and the amortization of existing loans serviced.

Service charges on deposit accounts increased $84,000 to $404,000 in the three
month period ended March 31, 2001 compared to the first quarter, 2000. The
primary reasons for the increase were the overall growth in the number of
checking accounts and increases in deposit fees as compared to prior periods.

Gains on sale of securities in the three months ended March 31, 2001, were
$400,000 as compared to $333,000 for the quarter ended March 31, 2000. The gain
in the first quarter was the result of the sale of loans securitized in the
first quarter, 2001. The gain in the first quarter, 2000 was the result of the
sale of $12.7 million of FNMA securities originated by Metropolitan in 1999 as
part of the multifamily securitization and $8.6 million of FHLMC securities
comprised of residential loans originated by Metropolitan.

Other noninterest income increased $238,000 to $1.1 million in the three month
period ended March 31, 2001, compared to the same period in the previous year.
This increase was primarily due to increased fee income generated from the
increased level of business and increased rental income from the new corporate
headquarters building in the first quarter, 2001.

Noninterest Expense. Total noninterest expense increased to $11.2 million in the
three month period ended March 31, 2001 as compared to $9.4 million for the same
period in 2000.

Personnel related expenses increased $0.6 million in the three month period
ended March 31, 2001 as compared to the same period in 2000. These increases
were primarily a result of increased staffing levels to support expanded
activities such as new retail sales offices and new mortgage origination
offices.

Occupancy costs increased $0.4 million in the three month period ended March 31,
2001, over the same period in 2000. This increase was generally the result of
additional retail sales and mortgage origination offices and increased building
depreciation expense.

Data processing expense increased 26.0% to $417,000 in the three month period
ended March 31, 2001 as compared to $331,000 for the first quarter, 2000. The
primary reason for the increase was greater costs incurred for data processing
following the systems conversion in 2000 in an effort to improve overall system
performance.

Marketing expense increased $57,000 in the three month period ending March 31,
2001 as compared to the same period in 2000. This increase was the result of
expenses incurred for advertising and promotions in the first quarter, 2001.




                                                                              23




<PAGE>   24



Other operating expenses, which include miscellaneous general and administrative
costs such as loan servicing, loan processing costs, business development, check
processing and ATM expenses, increased $723,000 for the three month period ended
March 31, 2001 as compared to the same period in 2000. This increase was
generally the result of increases in expenses pertaining to increased business
activities, real estate owned expenses, and increased costs for professional
services.

Provision for Income Taxes. The benefit for income taxes was $341,000 for the
three month period ended March 31, 2001 as compared to the provision of $292,000
for the same period in 2000. The primary reason for the decrease in the
provision was the loss recorded for the first quarter, 2001. The effective tax
rate was 44.6% for the three month period ended March 31, 2001 as compared to
32.5% for the same period in 2000.

ASSET QUALITY

Metropolitan's goal is to maintain high quality loans in the loan portfolio
through conservative lending policies and prudent underwriting. We undertake
detailed reviews of the loan portfolio regularly to identify potential problem
loans or trends early and to provide for adequate estimates of potential losses.
In performing these reviews, management considers, among other things, current
economic conditions, portfolio characteristics, delinquency trends, and
historical loss experiences. We normally consider loans to be nonperforming when
payments are 90 days or more past due or when the loan review analysis indicates
that repossession of the collateral may be necessary to satisfy the loan. In
addition, a loan is considered impaired when, in management's opinion, it is
probable that the borrower will be unable to meet the contractual terms of the
loan. When loans are classified as nonperforming, we assess the collectability
of the unpaid interest. Interest determined to be uncollectible is reversed from
interest income. Future interest income is recorded only if the loan principal
and interest due is considered collectible and is less than the estimated fair
value of the underlying collateral.



















                                                                              24




<PAGE>   25

The table below provides information concerning Metropolitan's nonperforming
assets and the allowance for losses on loans as of the dates indicated. All
loans classified by management as impaired were also classified as
nonperforming.


                                                March 31,           December 31,
                                                  2001                  2000
                                                  ----                  ----
                                                    (Dollars in thousands)

Nonaccrual loans                                 $20,316               $ 8,305
Loans past due greater than
  90 days or impaired, still accruing              4,074                 6,434
                                                 -------               -------
Total nonperforming loans                         24,390                14,739
Real estate owned                                  3,927                 4,262
                                                 -------               -------
Total nonperforming assets                       $28,317               $19,001
                                                 =======               =======
Allowance for losses on loans                    $14,487               $13,951
                                                 =======               =======

Nonperforming loans to total loans                  1.88%                 1.15%
Nonperforming assets to total assets                1.66%                 1.12%
Net charge-offs to average loans                    0.16%(1)              0.27%
Provision for loan losses to average loans          0.33%(1)              0.50%
Allowance for losses on loans to total
  nonperforming loans at end of period             59.40%                94.65%
Allowance for losses on loans to
  total loans at end of period                      1.11%                 1.07%

(1) Annualized for comparative purposes.

Nonperforming loans at March 31, 2001 increased $9.7 million to $24.4 million as
compared to $14.7 million at December 31, 2000. Real estate owned decreased $0.3
million over the same period. The reason for the increase in nonperforming loans
was the inclusion of $14.7 million of business loans to related borrowers which
became nonperforming in the first quarter, 2001. These loans were previously
included as "Special Mention" loans at December 31, 2000. Management has
estimated the impairment to be approximately $3.5 million.

The previously discussed $14.7 million of business loans that became
nonperforming in the first quarter, 2001 are the primary reason for the decline
of the asset quality ratios from year-end 2000. In spite of this decline, net
charge offs declined from the prior year period.

In addition to the nonperforming assets included in the table above, we identify
potential problem loans which are still performing but have a weakness which
causes us to classify those loans as substandard for regulatory purposes. There
was $3.8 million of loans in this category at March 31, 2001.


                                                                              25



<PAGE>   26



FINANCIAL CONDITION

Total assets amounted to $1.706 billion at March 31, 2001, as compared to $1.695
billion at December 31, 2000, an increase of $10.1 million. This modest increase
in assets was concentrated in mortgage-backed securities and total loans and was
funded by deposit growth. We expect limited asset growth to continue in the near
future until we improve our capital ratios to well capitalized levels.

Securities available for sale decreased $8.6 million to $30.7 million at March
31, 2001 from $39.3 million at December 31, 2000. This decrease was the result
of a call of a $10.0 million FNMA Note which was partially offset by the
purchase of $1.3 million of U.S. Treasury notes.

Mortgage backed securities increased $6.4 million to $202.2 million compared to
December 31, 2000. The increase was due to the purchase of $10.1 million of GNMA
securities offset by paydowns of other mortgage backed securities.

Loans receivable, net decreased $57.1 million during the three months ended
March 31, 2001. This decrease was primarily due to decreases in multifamily
loans and commercial loans of $21.8 million and $35.9 million, respectively.
There were modest fluctuations in other loan categories during the period. The
increase in loans held for sale was the result of the strategy to sell loans at
a gain as market interest rates have declined.

Real estate owned decreased $0.3 million to $3.9 million at March 31, 2001. The
sale of three properties occurred in the first quarter, 2001. Two of the three
properties were included in the year-end 2000 balance while the third property
was transferred into real estate owned during the first quarter.

Deposits totaled $1.160 billion at March 31, 2001, an increase of $13.3 million
from the balance at December 31, 2000. The increase resulted principally from an
increased balance of interest bearing checking accounts of $21.4 million offset
by minor decreases in other deposit categories.

Borrowings decreased $3.7 million from December 31, 2000 to March 31, 2001. The
decrease was the result of decreased use of Federal Home Loan Bank advances from
year end.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity. The term "liquidity" refers to our ability to generate adequate
amounts of cash for funding loan originations, loan purchases, deposit
withdrawals, maturities of borrowings, and operating expenses. Our primary
sources of internally generated funds are principal repayments and payoffs of
loans, cash flows from operations, and proceeds from sales of assets. External
sources of funds include increases in deposits and borrowings, and public or
private offerings by Metropolitan.

The Corporation's primary source of funds currently are dividends from the Bank,
which are subject to restrictions imposed by federal bank regulatory agencies
and debt and equity offerings. The Corporation's primary use of funds




                                                                              26



<PAGE>   27

is for interest payments on its existing debt. At March 31, 2001, the
Corporation, excluding the Bank, had cash and readily convertible investments of
$1.3 million. The Corporation has a $12 million line of credit with a commercial
bank. At March 31, 2001, the Corporation had a balance of $6 million
outstanding, leaving $6 million available to borrow. The line of credit matures
May 31, 2001 and we plan on renewing this line.

The Bank is required by regulation to maintain a liquidity ratio (average daily
balance of liquid assets to average daily balance of net withdrawable accounts
and short-term borrowings) of 4%. The Bank's liquidity ratio for the quarter
ending March 31, 2001 was 4.53%. Historically, Metropolitan has maintained its
liquidity close to the required minimum since the yield available on qualifying
investments is lower than alternative uses of funds and is generally not at an
attractive spread over incremental cost of funds.

While principal repayments and FHLB advances are fairly stable sources of funds,
deposit flows and loan prepayments are greatly influenced by prevailing interest
rates, economic conditions, and competition. Metropolitan regularly reviews cash
flow needed to fund its operations and believes that the existing resources are
adequate for its foreseeable requirements.

At March 31, 2001, $279.1 million, or 24.1%, of Metropolitan's deposits were in
the form of certificates of deposit of $100,000 and over. Another option
considered and utilized in the past has been the acceptance of out-of-state time
deposits from individuals and entities, predominantly credit unions. These
deposits typically have balances of $90,000 to $100,000 and have a term of one
year or more. At March 31, 2001, approximately $78.6 million, or 6.8% of our
deposits were held by these individuals and entities. Of these out-of-state time
deposits, $16.5 million were also included in the $100,000 and over time
deposits discussed above. During 2000, the Bank received regulatory approval and
began accepting brokered deposits. At March 31, 2001, brokered deposits totaled
$104.7 million. The total of all certificates of deposits from brokers,
out-of-state sources, and other certificates of deposit of $100,000 and over was
$338.4 million at March 31, 2001, or 29.2% of total deposits. We monitor
maturities to attempt to minimize any potential adverse effect on liquidity.

We have access to wholesale borrowings based on the availability of eligible
collateral. The FHLB makes funds available for housing finance based upon the
blanket or specific pledge of certain one- to four-family and multifamily loans
and various types of investment and mortgage-backed securities. The Bank had
borrowing capacity at the FHLB under its blanket pledge agreement of
approximately $375.2 million at March 31, 2001, of which $361.4 million was
utilized. The financial market makes funds available through repurchase
agreements by accepting various investment and mortgage-backed securities as
collateral. The Bank had borrowings through repurchase agreements of $41.0
million at March 31, 2001.

Capital. The Office of Thrift Supervision ("OTS") imposes capital requirements
on savings associations. Savings associations are required to meet three minimum
capital standards: (i) a leverage requirement, (ii) a tangible capital
requirement, and (iii) a risk-based capital requirement. Such standards must be
no less stringent than those applicable to national banks. In addition, the OTS
is authorized to impose capital requirements in excess of these standards on
individual associations on a case-by-case basis.




                                                                              27



<PAGE>   28



The Bank's regulatory capital ratios at March 31, 2001 were in excess of the
capital requirements specified by OTS regulations as shown by the following
table:

<TABLE>
<CAPTION>

                                      Tangible Capital                  Core Capital                   Risk-based Capital
                                      ----------------                -----------------               - -----------------
                                                                (Dollars in thousands)
<S>                                    <C>        <C>                 <C>          <C>                  <C>          <C>
Capital amount
Actual                                 $106,422   6.26%               $106,422     6.26%                $114,954     8.53%
Required                                 25,500   1.50                  68,001     4.00                  107,811     8.00
                                       --------   ----                --------     ----                 --------     ----
Excess                                 $ 80,922   4.76%               $ 38,421     2.26%                $  7,143     0.53%
                                       ========   ====                ========     ====                 ========     ====

</TABLE>

We anticipate that under the current regulations, the Bank will continue to meet
its minimum capital requirements in the foreseeable future.

RECENT ACCOUNTING DEVELOPMENTS

In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This statement supersedes SFAS No. 125 and revises the standards for accounting
for securitizations and other transfers of financial assets and collateral and
requires certain disclosures. It is effective for transactions occurring after
March 31, 2001. We expect no significant impact due to the adoption of SFAS No.
140.


FORWARD LOOKING STATEMENTS

Certain statements contained in this report that are not historical facts are
forward looking statements that are subject to certain risks and uncertainties.
When used herein, the terms "anticipates," "plans," "expects," "believes," and
similar expressions as they relate to Metropolitan or its management are
intended to identify such forward looking statements. Metropolitan'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.










                                                                              28



<PAGE>   29



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Metropolitan, like other financial institutions, is subject to market risk.
Market risk is the risk that a company can suffer economic loss due to changes
in the market values of various types of assets or liabilities. As a financial
institution, we make a profit by accepting and managing various types of risks.
The most significant of these risks are credit risk and interest rate risk. The
principal market risk for us is interest rate risk. Interest rate risk is the
risk that changes in market interest rates will cause significant changes in net
interest income because interest-bearing assets and interest-bearing liabilities
mature at different intervals and reprice at different times.

The Office of Thrift Supervision currently looks to the Thrift Bulletin 13a,
issued December 1, 1998, to evaluate interest rate risk at institutions they
supervise. They categorize interest rate risk as minimal, moderate, significant,
or high based on a combination of the projected Net Portfolio Value ("NPV")
level after a 200 basis point change in interest rates and the size of that
change in NPV due to a 200 basis point change in interest rates.

We manage interest rate risk in a number of ways. Some of the tools used to
monitor and quantify interest rate risk include:

    -     annual budgeting process;

    -     quarterly forecasting process;

    -     monthly review of listing of liability rates and maturities by month;

    -     monthly shock report of effect of sudden interest rate changes on net
          interest income;

    -     monthly shock report of effect of sudden interest rate changes on net
          value of portfolio equity;

    -     monthly analysis of rate and volume changes in historic net interest
          income;

    -     weekly review of certificate of deposit offering rates and maturities
          by day; and

    -     weekly forecast of balance sheet activity.

We have established an asset and liability committee to monitor interest rate
risk. This committee is made up of senior officers from finance, lending and
deposit operations. The committee meets at least quarterly, reviews our current
interest rate risk position, and determines strategies to pursue for the next
quarter. The activities of this committee are reported to the Board of Directors
of the Bank quarterly. Between meetings, the members of this committee are
involved in setting rates on deposits, setting rates on loans and serving on
loan committees where they work on implementing the established strategies.

During 2001, like many financial institutions, we had exposure to potential
declines in net interest income from rising interest rates. This is because
Metropolitan has had more short-term interest rate sensitive liabilities than



                                                                              29



<PAGE>   30



short-term interest rate sensitive assets. One of the ways we monitor interest
rate risk quantitatively is to measure the potential change in net interest
income based on various immediate changes in market interest rates. The
following table shows the change in net interest income for immediate sustained
parallel shifts of 1% and 2% in market interest rates for year-end 2000 and the
most recent quarter.

<TABLE>
<CAPTION>

                                                                  EXPECTED CHANGE IN NET INTEREST INCOME
                                                           ---------------------------------------------------
CHANGE IN INTEREST RATE                                    MARCH 31, 2001                    DECEMBER 31, 2000
-----------------------                                    --------------                    -----------------

<S>                                                            <C>                                <C>
          +2%                                                   -14%                               -27%
          +1%                                                    -7%                               -14%
          -1%                                                     0%                               +13%
          -2%                                                    -1%                               +27%

</TABLE>

The change in net interest income from a change in market rates is a short-term
measure of interest rate risk. The results above indicate that we have a
short-term exposure to rising rates but that the exposure declined significantly
during the quarter.

Another quantitative measure of interest rate risk is the change in the market
value of all financial assets and liabilities based on various immediate
sustained shifts in market interest rates. This concept is also known as net
portfolio value and is the methodology used by the Office of Thrift Supervision
in measuring interest rate risk.

The following table shows the change in net portfolio value for immediate
sustained parallel shifts of 1% and 2% in market interest rates for year-end
2000 and the most recent quarter.

<TABLE>
<CAPTION>

                                                                  EXPECTED CHANGE IN NET PORTFOLIO VALUE
                                                           ---------------------------------------------------
CHANGE IN INTEREST RATE                                    MARCH 31, 2001                    DECEMBER 31, 2000
-----------------------                                    --------------                    -----------------
<S>                                                             <C>                                <C>
            +2%                                                 -22%                               -26%
            +1%                                                  -7%                               -12%
            -1%                                                  -1%                               +12%
            -2%                                                  -3%                               +28%
</TABLE>

The change in net portfolio value is a long-term measure of interest rate risk.
It assumes that no significant changes in assets or liabilities held would take
place if there were a sudden change in interest rates. Because we monitor
interest rate risk regularly and actively manage that risk, these projections
serve as a worst case scenario assuming no reaction to changing rates. The
results above indicate that the post-shock NPV has improved during 2001. Under
TB 13a, Metropolitan falls in the moderate interest rate risk category as of
March 31, 2001, based upon current sensitivity to interest rate changes and the
current level of regulatory capital.

Our strategies to limit interest rate risk from rising interest rates are as
follows:

    -     originate one- to four-family loans primarily for sale;






                                                                              30




<PAGE>   31



    -     originate the majority of business loans to float with prime rates;

    -     increase core deposits which have low interest rate sensitivity;

    -     borrow funds with maturities greater than a year;

    -     borrow funds with maturities matched to new long-term assets acquired;

    -     increase the volume of loans serviced since the value of that asset
          rises as rates rise; and

    -     consider the use of derivatives to reduce interest rate risk when
          economically practical.

We also follow strategies that increase interest rate risk in limited ways
including:

    -     originating  and purchasing  fixed rate  multifamily  and commercial
          real estate loans limited to five year maturities; and

    -     originating and purchasing fixed rate consumer loans with terms from
          two to fifteen years.

The result of these strategies taken together is that Metropolitan has made
progress in reducing interest rate risk by lengthening liability maturities. In
the first quarter of 2001, we have strived to fund all significant additions of
fixed rate assets with borrowings with similar repayment terms. We plan to
continue this funding pattern throughout the remainder of 2001.

The Bank's level of interest rate risk as of March 31, 2001, is outside the
limits set by the Bank's Board of Directors. Therefore, management has
implemented a strategy to decrease interest rate risk during the remainder of
2001 by focusing on:

    -     limiting  new five year  fixed rate  commercial  real  estate  loans
          to those that can be readily sold;

    -     limiting the purchase of fixed rate consumer loans to those with high
          enough yields to be profitable when matched with similar borrowing
          maturities;

    -     continuing to extend liability maturities when long term rates are
          favorable; and


    -     considering the sale of assets with long-term fixed rates.

We are also aware that any method of measuring interest rate risk including the
two used above has certain shortcomings. For example, certain assets and
liabilities may have similar maturities or repricing dates but their repricing
rates may not follow the general trend in market interest rates. Also, as a
result of competition, the interest rates on certain assets and liabilities may
fluctuate in advance of changes in market interest rates while rates on other
assets and liabilities may lag market rates. In addition, any projection of a
change in market rates




                                                                              31



<PAGE>   32




requires that prepayment rates on loans and early withdrawal of certificates of
deposits be projected and those projections may be inaccurate. We focus on the
change in net interest income and the change in net portfolio value as a result
of immediate and sustained parallel shifts in interest rates as a balanced
approach to monitoring interest rate risk when used with budgeting and the other
tools noted above.

At the present time we do not hold any trading positions, foreign currency
positions, or commodity positions. Equity investments are approximately 1.6% of
assets and 76.1% of that amount is held in Federal Home Loan Bank stock which
can be sold to the Federal Home Loan Bank of Cincinnati at par. Therefore, we do
not consider any of these areas to be a source of significant market risk.

  PART II.    OTHER INFORMATION

  Items 1-5 are not applicable.

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a. Exhibits
          Exhibit
          Number            Description
          -------           -----------
             3.1        Amended and Restated Articles of Incorporation of
                        Metropolitan (filed as Exhibit 2 to the Corporation's
                        Form 8-A, filed October 15, 1996 and incorporated herein
                        by reference).

             3.2        Amended and Restated Code of Regulations of Metropolitan
                        (filed as Exhibit 3.2 on Form 10-K, filed April 2,
                        2001 and incorporated herein by reference).

             4.1        Indenture, dated as of April 30, 1998, of the
                        Corporation relating to the 8.60% Junior Subordinated
                        Debentures due June 30, 2028 (filed as Exhibit 4.1 to
                        the Corporation's Form 10-Q, filed May 15, 1998 and
                        incorporated herein by reference).

             4.2        Amended and Restated Trust Agreement, dated as of April
                        30, 1998, of Metropolitan Capital Trust I (filed as
                        Exhibit 4.2 to the Corporation's Form 10-Q, filed May
                        15, 1998 and incorporated herein by reference).

             4.3        Guarantee of the Corporation relating to the Trust
                        Preferred Securities dated April 30, 1998 (filed as
                        Exhibit 4.3 to the Corporation's Form 10-Q, filed May
                        15, 1998 and incorporated herein by reference).

             4.4        Agreement as to Expenses and Liabilities, dated as of
                        April 30, 1998 (filed as Exhibit 4.4 to Metropolitan's
                        Form 10-Q, filed May 15, 1998 and incorporated herein by
                        reference).





                                                                              32




<PAGE>   33



             4.5        Indenture, dated as of May 14, 1999, of the Corporation
                        relating to the 9.50% Junior Subordinated Debentures due
                        June 30, 2029 (filed as Exhibit 4.1 to the Corporation's
                        Form S-1, filed May 11, 1999 and incorporated herein by
                        reference).

             4.6        Amended and Restated Trust Agreement, dated as of May
                        14, 1999, of Metropolitan Capital Trust II (filed as
                        Exhibit 4.4 to the Corporation's Form S-1, filed May 11,
                        1999 and incorporated herein by reference).

             4.7        Guarantee of the Corporation relating to the Trust
                        Preferred Securities dated May 14, 1999 (filed as
                        Exhibit 4.6 to the Corporation's Form S-1, filed May 11,
                        1999 and incorporated herein by reference).

             4.8        Agreement as to Expenses and Liabilities, dated as of
                        May 14, 1999 (filed as Exhibit D to Exhibit 4.4 to the
                        Corporation's Form S-1, filed May 11, 1999 and
                        incorporated herein by reference).

            10.1        Fifth Amendment to Restated Loan Agreement by and
                        between the Huntington National Bank and the Corporation
                        dated as of July 28, 2000 (incorporated herein by
                        reference to Exhibit 10.1 to the Corporation's Form 10-Q
                        filed on November 14, 2000).

            10.2        Employment contract of Kenneth T. Koehler

       b.               Reports on Form 8-K - Not applicable.



                                                                              33




<PAGE>   34




                          METROPOLITAN FINANCIAL CORP.

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                     METROPOLITAN FINANCIAL CORP.



                                     By: /s/ Donald F. Smith
                                         -------------------
                                         Donald F. Smith,
                                         Chief Financial Officer,
                                         (Principal Financial and Accounting
                                         Officer)



                                         Date:  May 15, 2001







                                                                             34