<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-Q

(Mark One)

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

                 For the quarterly period ended March 31, 2001

                                      OR

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

             For the transition period from _________ to _________


                         Commission file number 0-20082

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


          Delaware                                               36-3811768
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

One Grant Square, Hinsdale, Illinois                               60521
(Address of principal executive offices)                         (Zip Code)


                                 (630) 323-1776
              (Registrant's telephone number, including area code)

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

YES   X  NO____
     ---

   Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.

   Common Stock, $0.01 par value -9,299,055 shares outstanding as of May 4,
2001.

================================================================================
<PAGE>

                       Alliance Bancorp and Subsidiaries
                                   Form 10-Q

                                     Index
                                     -----
<TABLE>
<CAPTION>
Part I.        Financial Information                                             Page
-------        ---------------------                                             ----
<S>            <C>                                                               <C>

Item 1.        Financial Statements (unaudited)

               Consolidated Statements of Financial Condition
               as of March 31, 2001 and December 31, 2000                           1

               Consolidated Statements of Income for the Three
               Months Ended March 31, 2001 and 2000                                 2

               Consolidated Statements of Changes in Stockholders' Equity
               for the Three Months Ended March 31, 2001 and 2000                   3

               Consolidated Statements of Cash Flows for the
               Three Months Ended March 31, 2001 and 2000                           4

               Notes to Consolidated Financial Statements                           5

Item 2.        Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                            9

Item 3.        Quantitative and Qualitative Disclosures About Market Risk
               See "Management's Discussion and Analysis of Financial Condition
               and Results of Operations," "Asset/Liability Management"            15

Part II.       Other Information
--------       -----------------

Item 1.        Legal Proceedings                                                   19

Item 2.        Changes in Securities                                               19

Item 3.        Defaults upon Senior Securities                                     19

Item 4.        Submission of Matters to a Vote of Security Holders                 19

Item 5.        Other Information                                                   19

Item 6.        Exhibits and Reports on Form 8-K                                    20

               Signature Page                                                      21
</TABLE>
<PAGE>

Alliance Bancorp and Subsidiaries
Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                                         March 31,       December 31,
(In thousands, except share data)                                                          2001              2000
---------------------------------------------------------------------------------------------------------------------
                                                                                                 (unaudited)
<S>                                                                                    <C>               <C>
Assets
Cash and due from banks                                                                $     20,108           21,918
Interest-bearing deposits                                                                    64,688           30,235
Investment securities available for sale, at fair value                                      48,483           51,848
Investment securities held to maturity (fair value of $20,412 and $20,309)                   19,407           19,405
Mortgage-backed securities available for sale, at fair value                                220,750          223,423
Mortgage-backed securities held to maturity (fair value of $12,994 and                       11,878           12,165
 $13,134)
Loans, net of allowance for losses of $7,307 at March 31, 2001
 and $7,276 at December 31, 2000                                                          1,492,465        1,526,296
Accrued interest receivable                                                                  10,946           13,143
Real estate                                                                                  18,555           19,675
Premises and equipment, net                                                                  11,436           12,110
Stock in Federal Home Loan Bank of Chicago, at cost                                          29,995           29,486
Bank owned life insurance                                                                    48,222           47,519
Other assets                                                                                 14,929           15,447
---------------------------------------------------------------------------------------------------------------------
                                                                                       $  2,011,862        2,022,670
=====================================================================================================================

Liabilities and Stockholders' Equity
Liabilities:
 Deposits                                                                              $  1,304,661        1,275,338
 Borrowed funds                                                                             500,138          550,116
 Advances by borrowers for taxes and insurance                                                9,358           10,666
 Accrued expenses and other liabilities                                                      27,155           22,494
---------------------------------------------------------------------------------------------------------------------
   Total liabilities                                                                      1,841,312        1,858,614
---------------------------------------------------------------------------------------------------------------------

Stockholders' Equity:
 Preferred stock, $.01 par value; authorized 1,500,000 shares;
  none issued and outstanding                                                                     -                -
 Common stock, $.01 par value; authorized 21,000,000 shares;
  11,754,153 shares issued and 9,295,331 outstanding at March 31, 2001
  11,702,397 shares issued and 9,243,575 outstanding at December 31, 2000                       117              117
 Additional paid-in capital                                                                 108,972          108,123
 Retained earnings, substantially restricted                                                110,059          106,722
 Treasury stock, at cost;
  2,458,822 shares at March 31, 2001 and December 31, 2000                                  (46,440)         (46,440)
 Accumulated other comprehensive loss                                                        (2,158)          (4,466)
---------------------------------------------------------------------------------------------------------------------
   Total stockholders' equity                                                               170,550          164,056
---------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
---------------------------------------------------------------------------------------------------------------------
                                                                                       $  2,011,862        2,022,670
=====================================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       1
<PAGE>

Alliance Bancorp and Subsidiaries
Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                    March 31,
(In thousands, except per share amounts)                                                       2001          2000
---------------------------------------------------------------------------------------------------------------------
                                                                                                   (unaudited)
<S>                                                                                         <C>             <C>
Interest Income:
 Loans                                                                                      $  30,484        26,561
 Mortgage-backed securities                                                                     4,013         5,371
 Investment securities                                                                          1,840         1,623
 Interest-bearing deposits                                                                        703           100
---------------------------------------------------------------------------------------------------------------------
  Total interest income                                                                        37,040        33,655
---------------------------------------------------------------------------------------------------------------------
Interest Expense:
 Deposits                                                                                      15,370        13,307
 Borrowed funds                                                                                 8,165         6,499
---------------------------------------------------------------------------------------------------------------------
  Total interest expense                                                                       23,535        19,806
---------------------------------------------------------------------------------------------------------------------
  Net interest income                                                                          13,505        13,849
  Provision for loan losses                                                                       200           200
---------------------------------------------------------------------------------------------------------------------
  Net interest income after provision for loan losses                                          13,305        13,649
---------------------------------------------------------------------------------------------------------------------
Noninterest Income:
 Gain on sales of loans held for sale                                                               -            14
 Loss on sales of mortgage-backed securities available for sale                                     -        (6,059)
 Loss on sales of investment securities available for sale                                          -          (491)
 Income from real estate operations                                                               485           974
 Servicing fee income                                                                              58            53
 ATM fee income                                                                                   197           421
 Other fees and commissions                                                                     1,679         1,275
 Other, net                                                                                       521           (89)
---------------------------------------------------------------------------------------------------------------------
  Total noninterest income                                                                      2,940        (3,902)
---------------------------------------------------------------------------------------------------------------------
Noninterest Expense:
 Compensation and benefits                                                                      4,965         5,423
 Occupancy expense                                                                              2,084         2,004
 Federal deposit insurance premiums                                                                70            69
 Advertising expense                                                                              169           197
 ATM expense                                                                                       93           269
 Computer services                                                                                348           354
 Other                                                                                          2,167         2,519
---------------------------------------------------------------------------------------------------------------------
  Total noninterest expense                                                                     9,896        10,835
---------------------------------------------------------------------------------------------------------------------
  Income (loss) before income taxes and extraordinary item                                      6,349        (1,088)
 Income tax expense (benefit)                                                                   1,711          (540)
---------------------------------------------------------------------------------------------------------------------
  Income (loss) before extraordinary item                                                       4,638          (548)
 Extraordinary item-gain on early extinguishment of debt,
  net of tax expense of $3,069                                                                      -         5,700
---------------------------------------------------------------------------------------------------------------------
  Net income                                                                                $   4,638         5,152
---------------------------------------------------------------------------------------------------------------------
Basic earnings per share
  Income (loss) before extraordinary item                                                   $    0.50         (0.05)
  Extraordinary item, net of tax                                                                    -          0.57
---------------------------------------------------------------------------------------------------------------------
  Net income                                                                                     0.50          0.52
---------------------------------------------------------------------------------------------------------------------
Diluted earnings per share
  Income (loss) before extraordinary item                                                        0.47         (0.05)
  Extraordinary item, net of tax                                                                    -          0.57
---------------------------------------------------------------------------------------------------------------------
  Net income                                                                                $    0.47          0.52
=====================================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       2
<PAGE>

Alliance Bancorp and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity

<TABLE>
<CAPTION>
                                                                                                              Accumulated
                                                                              Additional                           Other
                                                          Comprehensive  Common  Paid-in Retained  Treasury Comprehensive
(In thousands, except per share amounts)                         Income   Stock  Capital Earnings     Stock Income (Loss)      Total
====================================================================================================================================
                                                                                     (unaudited)
<S>                                                      <C>             <C>    <C>      <C>       <C>      <C>             <C>
Three Months Ended March 31, 2000
Balance at December 31, 1999                             $                  117  108,093   92,337  (29,857)      (17,019)   153,671
Net income                                                        5,152       -        -    5,152        -             -      5,152
Other comprehensive income, net of tax
 Change in minimum pension liability                                 23       -        -        -        -            23         23
 Change in unrealized gain (loss) on securities
  available for sale, net of reclassification adjustment          6,631       -        -        -        -         6,631      6,631
                                                         --------------
Total comprehensive income                                       11,806
Cash dividends declared, $0.14 per share                                      -        -   (1,362)       -             -     (1,362)
Purchase of treasury stock                                                    -        -        -   (8,318)            -     (8,318)
Proceeds from exercise of stock options                                       -        5        -        -             -          5

Tax benefit from stock related compensation                                   -        5        -        -             -          5
------------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2000                                $                  117  108,103   96,127  (38,175)      (10,365)   155,807
====================================================================================================================================

Three Months Ended March 31, 2001
Balance at December 31, 2000                             $                  117  108,123  106,722  (46,440)       (4,466)   164,056
Net income                                                        4,638       -        -    4,638        -             -      4,638
Other comprehensive income, net of tax
 Change in minimum pension liability                                (10)      -        -        -        -           (10)       (10)
 Change in unrealized gain (loss) on securities
  available for sale, net of reclassification adjustment          2,318       -        -        -        -         2,318      2,318
                                                         --------------
Total comprehensive income                                        6,946
Cash dividends declared, $0.14 per share                                      -        -   (1,301)       -             -     (1,301)
Proceeds from exercise of stock options                                       -      658        -        -             -        658
Tax benefit from stock related compensation                                   -      191        -        -             -        191
------------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2001                                $                  117  108,972  110,059  (46,440)       (2,158)   170,550
====================================================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       3
<PAGE>

Alliance Bancorp and Subsidiaries
Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                    March 31,
(In thousands)                                                                                 2001          2000
--------------------------------------------------------------------------------------------------------------------
                                                                                                   (unaudited)
<S>                                                                                         <C>             <C>
Cash Flows From Operating Activities:
Net income                                                                                  $   4,638         5,152
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization                                                                     763           750
Provision for loan losses                                                                         200           200
Federal Home Loan Bank of Chicago stock dividend                                                 (509)         (476)
Amortization of premiums, discounts, and deferred loan fees                                       465           322
Originations of loans held for sale                                                           (46,044)      (15,637)
Sale of loans originated for resale                                                            50,447         9,791
Gain on sales of loans                                                                              -           (14)
Loss on sales of mortgage-backed securities available for sale                                      -         6,059
Loss on sales of investment securities available for sale                                           -           491
Extraordinary item-gain on early extiguishment of debt, net of tax                                  -        (5,700)
Decrease in accrued interest receivable                                                         2,197         1,089
Increase in other assets                                                                       (1,716)       (1,745)
Increase in accrued expenses and other liabilities                                              4,829             1
--------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                      15,270           283
--------------------------------------------------------------------------------------------------------------------

Cash Flows From Investing Activities:
Loans originated or purchased for investment                                                  (71,611)     (102,503)
Purchases of premises and equipment                                                               (89)         (556)
Proceeds from sale of:
 Mortgage-backed securities available for sale                                                      -       115,180
 Investment securities available for sale                                                           -        12,505
 Loans held for investment                                                                      4,554         2,374
Proceeds from maturities of investment securities available for sale                            4,071             -
Net (increase) decrease in real estate ventures                                                   924        (1,815)
Principal collected on loans                                                                   96,373        57,870
Principal collected on mortgage-backed securities available for sale                            5,772        10,512
--------------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities                                                      39,994        93,567
--------------------------------------------------------------------------------------------------------------------

Cash Flows From Financing Activities:
Net increase in deposits                                                                       29,323        13,744
Proceeds from borrowed funds                                                                        -       115,000
Repayment of borrowed funds                                                                   (50,000)     (246,231)
Net decrease in advance payments by borrowers for taxes and insurance                          (1,308)       (1,051)
Purchase of treasury stock                                                                          -        (8,318)
Cash dividends paid                                                                            (1,294)       (1,425)
Proceeds from exercise of stock options                                                           658             5
--------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities                                                         (22,621)     (128,276)
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                                           32,643       (34,426)
Cash and cash equivalents at beginning of period                                               52,153        60,520
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                                  $  84,796        26,094
====================================================================================================================

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest                                                                                    $  23,785        20,164
Income taxes                                                                                        -             -

Supplemental Disclosures of Noncash Activities:
Loans exchanged for mortgage-backed securities                                              $     320             -
Additions to real estate acquired in settlement of loans                                    $      67           496
--------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       4
<PAGE>

Alliance Bancorp and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)

Three Months Ended March 31, 2001 and 2000

(1)  Basis of Presentation

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they
do not include all of the information and footnotes required by GAAP for
complete financial statements.  In the opinion of management, all adjustments
(consisting of only normal recurring accruals) necessary for a fair presentation
have been included.

     The unaudited consolidated financial statements include the accounts of
Alliance Bancorp (the "Company") and its wholly-owned subsidiaries.  All
material intercompany balances and transactions have been eliminated.

(2)  Comprehensive Income

     The following table sets forth the required disclosures of other
comprehensive income and the reclassification amounts as presented in the
consolidated statements of changes in stockholders' equity and the related tax
effects allocated to each component of other comprehensive income for the
periods indicated:

<TABLE>
<CAPTION>
                                                                            Before           Tax             Net
                                                                             Tax          (Expense)         of Tax
(In thousands)                                                              Amount        or Benefit        Amount
---------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>               <C>
Three Months Ended March 31, 2000
Disclosure of reclassification amount:
Unrealized holding gain (loss) on securities available for sale
   arising during the period                                               $  3,650         (1,276)          2,374
Less: reclassification adjustment for gain (loss) included in
   net income                                                                (6,550)         2,293          (4,257)
---------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on securities                                   $ 10,200         (3,569)          6,631
Change in minimum pension liability                                              38            (15)             23
---------------------------------------------------------------------------------------------------------------------
Other comprehensive income                                                 $ 10,238         (3,584)          6,654
---------------------------------------------------------------------------------------------------------------------

Three Months Ended March 31, 2001
Disclosure of reclassification amount:
Unrealized holding gain (loss) on securities available for sale
   arising during the period                                               $  3,566         (1,248)          2,318
Less: reclassification adjustment for gain (loss) included in
   net income                                                                     -              -               -
---------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on securities                                   $  3,566         (1,248)          2,318
Change in minimum pension liability                                             (16)             6             (10)
---------------------------------------------------------------------------------------------------------------------
Other comprehensive income                                                 $  3,550         (1,242)          2,308
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>

Alliance Bancorp and Subsidiaries
Notes to Consolidated Financial Statements - (Continued)
(unaudited)

Three Months Ended March 31, 2001 and 2000

(3)  Earnings per Share

     The following table sets forth the computation of basic and diluted
earnings per share for the periods indicated:

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                         March 31,
                                                                             --------------------------------
(In thousands, except share data)                                                2001              2000
-------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                 <C>
Numerator:
  Income (loss) before extraordinary item                                    $      4,638              (548)
  Extraordinary item, net of tax                                                        -             5,700
                                                                             --------------------------------
  Net income                                                                 $      4,638             5,152
                                                                             --------------------------------
Denominator:
  Basic earnings per share-weighted average shares                              9,263,895         9,961,869
  Effect of dilutive securities-stock options                                     591,943                 -
                                                                             --------------------------------
  Diluted earnings per share-adjusted weighted average shares                   9,855,838         9,961,869
                                                                             --------------------------------
Basic earnings per share
  Income (loss) before extraordinary item                                    $       0.50             (0.05)
  Extraordinary item, net of tax                                                        -              0.57
                                                                             --------------------------------
  Net income                                                                 $       0.50              0.52
                                                                             --------------------------------
Diluted earnings per share
  Income (loss) before extraordinary item                                    $       0.47             (0.05)
  Extraordinary item, net of tax                                                        -              0.57
                                                                             --------------------------------
  Net income                                                                 $       0.47              0.52
                                                                             --------------------------------
</TABLE>

(4)  Commitments and Contingencies

     At March 31, 2001, the Company had outstanding commitments to originate or
purchase loans of $23.4 million and undisbursed balances of construction loans
of $164.4 million.  Unused equity lines of credit available to customers were
$111.7 million at March 31, 2001.

                                       6
<PAGE>

Alliance Bancorp and Subsidiaries
Notes to Consolidated Financial Statements - (Continued)
(unaudited)

Three Months Ended March 31, 2001 and 2000

(5)  Operating Segments

     The Company's operations include three primary segments: banking, mortgage
brokerage and joint venture real estate developments.  Through its banking
subsidiary's network of 19 retail banking facilities in Chicago; north, west and
southwestern Cook County; and DuPage County in Illinois, the Company provides
traditional community banking services such as accepting deposits and making
loans.  Mortgage brokerage activities conducted through the Bank's subsidiary,
Liberty Home Mortgage include the origination of primarily residential mortgage
loans for sale to various investors as well as to the Bank.  Joint venture real
estate activities are primarily conducted through the Company's real estate
subsidiaries.  The real estate subsidiaries provide equity financing in various
developments with reputable real estate developers, primarily for the
construction of single family homes.  The Company's three reportable segments
are strategic business units that are separately managed as they offer different
products and services and have different marketing strategies.  Smaller
operating segments are combined and are shown as "Other" below and consist of
financial advice and brokerage services and holding company investments.  Assets
and results of operations are based on accounting principles generally accepted
in the United States of America, with profit and losses of equity method
investees excluded.  Inter-segment revenues and expenses are eliminated in
reporting consolidated results of operations.

     Operating segment information is as follows:

<TABLE>
<CAPTION>
                                                                    Mortgage      Real Estate         Inter-segment   Consolidated
(In thousands)                                            Banking  Brokerage   Joint Ventures   Other  Eliminations          Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>          <C>         <C>              <C>   <C>             <C>
Three Months Ended March 31, 2001
Interest income                                       $    36,904        202               31     297          (394)        37,040
Interest expense                                           23,511        178              164      76          (394)        23,535
----------------------------------------------------------------------------------------------------------------------------------
Net interest income (loss)                                 13,393         24             (133)    221             -         13,505
Provision for loan losses                                     200          -                -       -             -            200
----------------------------------------------------------------------------------------------------------------------------------
Net interest income (loss) after provision
 for loan losses                                           13,193         24             (133)    221             -         13,305
Other fees and commissions                                  1,100        439                -     415           (20)         1,934
Other noninterest income, net                                 547          -              434      78           (53)         1,006
Noninterest expense                                         8,613        756               34     566           (73)         9,896
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                           6,227       (293)             267     148             -          6,349
Income tax expense (benefit)                                1,662       (116)             106      59             -          1,711
----------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                     $     4,565       (177)             161      89             -          4,638
----------------------------------------------------------------------------------------------------------------------------------
Assets                                                $ 1,986,740     10,823           18,131  19,457       (23,289)     2,011,862
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       7
<PAGE>

Alliance Bancorp and Subsidiaries
Notes to Consolidated Financial Statements - (Continued)
(unaudited)

Three Months Ended March 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                   Mortgage      Real Estate            Inter-segment  Consolidated
(In thousands)                                          Banking   Brokerage   Joint Ventures    Other    Eliminations         Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>            <C>         <C>               <C>     <C>            <C>
Three Months Ended March 31, 2000
Interest income                                    $     33,636         127               46      166           (320)        33,655
Interest expense                                         19,885          87              154        -           (320)        19,806
------------------------------------------------------------------------------------------------------------------------------------
Net interest income (loss)                               13,751          40             (108)     166              -         13,849
Provision for loan losses                                   200           -                -        -              -            200
------------------------------------------------------------------------------------------------------------------------------------
Net interest income (loss) after provision
 for loan losses                                         13,551          40             (108)     166              -         13,649
Other fees and commissions                                1,152         357                -      517           (277)         1,749
Other noninterest income, net                            (6,372)          -              888     (114)           (53)        (5,651)
Noninterest expense                                       8,975       1,572               22      596           (330)        10,835
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes and
 extraordinary item                                        (644)     (1,175)             758      (27)             -         (1,088)
Income tax expense (benefit)                               (371)       (458)             297       (8)             -           (540)
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary item                    (273)       (717)             461      (19)             -           (548)
------------------------------------------------------------------------------------------------------------------------------------
Extraordinary item-gain on early extinguishment
 of debt, net of tax expense                              5,700           -                -        -              -          5,700
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                  $      5,427        (717)             461      (19)             -          5,152
------------------------------------------------------------------------------------------------------------------------------------
Assets                                             $  1,812,085      12,626           24,921   14,920        (27,520)     1,837,032
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(6)  Reclassifications

     Certain reclassifications of prior year amounts have been made to conform
     with the current year presentation.

                                       8
<PAGE>

Alliance Bancorp and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of
Operations

General

  Alliance Bancorp ( the "Company") is a registered savings and loan holding
company incorporated under the laws of the state of Delaware and is engaged in
the business of providing financial service products to the public through its
wholly-owned subsidiary, Liberty Federal Bank (the "Bank").

  The Bank, a Federal savings bank chartered under the authority of the Office
of Thrift Supervision ("OTS"), originally was organized in 1934, and changed its
charter from a federal savings and loan association to a federal savings bank in
1991.  The Bank is a member of the Federal Home Loan Bank ("FHLB") System and
its deposit accounts are insured to the maximum allowable amount by the Federal
Deposit Insurance Corporation ("FDIC").  The Bank is regulated by the OTS and
the FDIC and is further regulated by the Board of Governors of the Federal
Reserve System as to reserves required to be maintained against deposits and
certain other matters.

  The Bank is a community-oriented company providing financial services through
nineteen full service retail banking facilities in Chicago; north, west and
southwestern Cook County; and DuPage County in Illinois.  The Bank offers a
variety of deposit products in an attempt to attract funds from the general
public in highly competitive market areas surrounding its offices.  In addition
to deposit products, the Bank also offers its customers financial advice and
security brokerage services through INVEST Financial Corporation ("INVEST").
The Bank invests its retail deposits primarily in mortgage and consumer loans,
investment securities and mortgage-backed securities, secured primarily by one-
to four-family residential loans.

  The earnings of the Bank are primarily dependent on its net interest income,
which is the difference between the interest income earned on its loans,
mortgage-backed and investment securities portfolios, and its cost of funds,
consisting of the interest paid on its deposits and borrowings.

  The Bank's earnings are also affected by noninterest income, including income
related to loan origination fees contributed by Liberty Home Mortgage and the
noncredit consumer related financial services offered by the Bank, such as net
commissions received by the Bank from securities brokerage services, loan
servicing income, fee income on transaction accounts, and interchange fees from
its shared ATMs.  In the current quarter, the Bank terminated its participation
in a shared ATM network primarily due to increased costs.  Currently the Bank
operates eighteen ATM's located at its branch offices.  The Bank's noninterest
income has also been affected by gains from the sale of various assets,
including loans, mortgage-backed securities, investment securities and real
estate.  Noninterest expense consists principally of employee compensation and
benefits, occupancy expense, federal deposit insurance premiums, and other
general and administrative expenses of the Bank and Liberty Home Mortgage.

  The Bank's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government policies and actions of regulatory authorities.

  On January 22, 2001, the Company entered into a definitive agreement with
Charter One Financial, Inc. under which Alliance Bancorp would be merged into
Charter One.  Charter One is one of the 30 largest bank holding companies in the
country with over $33 billion in assets and approximately 420 branch office
locations in Ohio, Michigan, New York, Illinois, Massachusetts and Vermont.
Terms of the agreement call for each share of Alliance common stock to be
exchanged for $5.25 in cash and .72 shares of Charter One stock.  The
transaction has been approved by the boards of directors of both companies and
is subject to approval by the Office of Thrift Supervision, the Federal Reserve
Board, and Alliances' shareholders.  The transaction will be accounted for as a
purchase and is expected to be completed early in the third quarter of 2001.

                                       9
<PAGE>

Forward-Looking Statements

  This Quarterly Report on Form 10-Q, contains forward-looking statements within
the meaning of the federal securities laws.  The Company intends such forward-
looking statements to be covered by the safe harbor provisions for forward-
looking statements contained in the Private Securities Reform Act of 1995, and
is including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Company, are generally
identified by use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project," or similar expressions.  The Company's ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain.  Factors which could have a material adverse effect on the operations
of the Company and the subsidiaries include, but are not limited to, changes in:
interest rates, general economic conditions, legislative/regulatory changes,
monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board, the quality or composition of the
loan or investment portfolios, demand for loan products, deposit flow,
competition, demand for financial services in the Company's market area and
accounting principles and guidelines.  These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements.

  Accordingly, results actually achieved may differ materially from expected
results in these statements.  The Company does not undertake, and specifically
disclaims, any obligation to update any forward-looking statements to reflect
events or circumstances occurring after the date of such statements.

Liquidity/Capital Resources

  The Company's primary sources of funds are deposits, borrowings, principal and
interest payments on loans and mortgage-backed securities and the sale of loans,
mortgage-backed and investment securities.  While maturities and scheduled
amortization of loans and mortgage-backed securities are a predictable source of
funds, deposit flows and mortgage prepayments are greatly influenced by interest
rate cycles and economic conditions.

  The Company's most liquid assets are cash and cash equivalents, which include
investments in highly liquid, short-term investments and interest-bearing
deposits. The levels of these assets are dependent on the Company's operating,
financing, lending and investing activities during any given period.  At March
31, 2001, cash and cash equivalents totaled $84.8 million.

  Liquidity management for the Company is both a daily and long-term function of
the Company's management strategy.  Excess funds are generally invested in
short-term investments and interest-bearing deposits.  In the event that the
Company should require funds beyond its ability to generate them internally,
additional sources of funds are available through the use of FHLB advances.

  The Company's cash flows are comprised of three classifications: cash flows
from operating activities, cash flows from investing activities, and cash flows
from financing activities.  Net cash related to operating activities, consisting
primarily of interest and dividends received less interest paid on deposits and
the origination and sale of loans, provided $15.3 million for the three months
ended March 31, 2001.  Net cash related to investing activities, consisting
primarily of disbursements for loans originated or purchased for investment,
offset by principal collections on loans and mortgage-backed securities,
provided $40.0 million for the three months ended March 31, 2001.  Net cash
utilized by financing activities, consisting primarily of net activity in
deposit and escrow accounts, net activity from borrowed funds and the payment of
dividends, totaled $22.6 million for the three months ended March 31, 2001.

  The Bank's tangible capital ratio at March 31, 2001 was 7.21%.  This exceeded
the tangible capital requirement of 1.5% of adjusted assets by $113.5 million.
The Bank's core capital ratio at March 31, 2001 was 7.21%.  This exceeded the
core capital requirement of 4.0% of adjusted assets by $63.8 million.  The
Bank's risk-based capital ratio was 10.83% at March 31, 2001.  The Bank
currently exceeds the risk-based capital requirement of 8.0% of risk-weighted
assets by $39.1 million.

                                       10
<PAGE>

Changes in Financial Condition

  The Company had total assets of $2.0 billion at March 31, 2001, a decrease of
$10.8 million, or 0.5%, from December 31, 2000.

  Loans totaled $1.5 billion at March 31, 2001, a decrease of $33.8 million.
Loan originations were $117.7 million for the three months ended March 31, 2001,
offset by loan sales of $55.0 million and principal repayments of $96.4 million.

  Deposits totaled $1.3 billion at March 31, 2001, an increase of $29.3 million.
The deposit base and the interest paid on deposits continues to be affected by
alternative investment products and competition within the Company's market
areas.  The weighted average deposit cost at March 31, 2001 was 5.15% compared
to 5.21% at December 31, 2000.

  Stockholders' equity totaled $170.6 million at March 31, 2001, an increase of
$6.5 million.  At March 31, 2001, the number of common shares outstanding was
9,295,331 and the book value per common share outstanding was $18.35 per share.
On March 16, 2001, the Company declared a $0.14 per share cash dividend payable
April 13, 2001 to shareholders of record on March 31, 2001.

                                       11
<PAGE>

Asset Quality
Non-performing Assets

  The following table sets forth information as to non-accrual loans and real
estate owned at the dates indicated.  The Company discontinues the accrual of
interest on loans ninety days or more past due, at which time all accrued but
uncollected interest is reversed.  There were no loans at March 31, 2001 nor
during the quarter ended March 31, 2001, which met the definition of an impaired
loan.  A loan is considered impaired when it is probable that a creditor will be
unable to collect contractual principal and interest due according to the
contractual terms of the loan agreement.  Loans considered for impairment do not
include residential mortgage and consumer installment loans.

<TABLE>
<CAPTION>
                                                                   Quarter Ended
                                         -----------------------------------------------------------------------
                                          March 31,      December 31,    September 30,    June 30,    March 31,
(Dollars in thousands)                       2001            2000             2000          2000         2000
----------------------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>             <C>              <C>         <C>
Non-accrual mortgage loans
 90 days or more past due                $     2,478         2,703            4,598         3,393        3,143
Non-accrual commercial real estate
 loans 90 days or more past due                  680           657              645           643          643
Non-accrual consumer loans
 90 days or more past due                        946           972              728           720          685
                                         ---------------------------------------------------------------------
Total non-performing loans                     4,104         4,332            5,971         4,756        4,471
Total foreclosed real estate                     182           378              147           629          693
                                         ---------------------------------------------------------------------
Total non-performing assets              $     4,286         4,710            6,118         5,385        5,164
                                         ---------------------------------------------------------------------

Total non-performing loans
 to total loans                                 0.27%         0.28             0.40          0.32         0.32
Total non-performing assets
 to total assets                                0.21%         0.23             0.31          0.28         0.28
</TABLE>

  The following table sets forth certain information regarding the Company's
allowance for loan losses at the dates indicated.

<TABLE>
<CAPTION>
                                                                   Quarter Ended
                                        ------------------------------------------------------------------------
                                          March 31,     December 31,    September 30,     June 30,     March 31,
(Dollars in thousands)                      2001            2000             2000           2000          2000
----------------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>             <C>               <C>          <C>
Balance at beginning of period          $      7,276        7,244            6,176          6,135         6,031
Provision for loan losses                        200          200            1,200            200           200
Charge-offs                                      190          190              147            171           115
Recoveries                                        21           22               15             12            19
                                        -----------------------------------------------------------------------
Balance at end of period                $      7,307        7,276            7,244          6,176         6,135
                                        -----------------------------------------------------------------------
Ratio of net charge-offs during the
 period to average loans outstanding            0.01%        0.01             0.01           0.01          0.01

Ratio of allowance for loan losses
 to net loans receivable at
 end of period                                  0.49%        0.48             0.48           0.42          0.43
Ratio of allowance for loan losses
 to non-performing loans at
 end of period                                178.05%      167.96           121.32         129.87        137.22
</TABLE>

Classification of Assets

  The Company regularly reviews the assets in its portfolio to determine whether
any assets require classification in accordance with applicable regulations.

  As of March 31, 2001 the Company had total classified assets of $3.9 million,
of which $3.2 million were classified "substandard" and $658,000 were classified
as "doubtful."  The assets so classified consisted of auto loans, single family
residential loans including equity lines of credit and foreclosed single family
residential loans (real estate owned).



                                       12
<PAGE>

Loan Portfolio Composition

The following table sets forth the composition of the Company's loan portfolio
in dollar amounts and in percentages at the dates indicated.

<TABLE>
<CAPTION>
                                      March 31,         December 31,        September 30,          June 30,            March 31,
                                         2001               2000                2000                 2000                2000
                              -----------------------------------------------------------------------------------------------------
                                           Percent              Percent             Percent             Percent             Percent
                                                of                   of                  of                  Of                  of
                                  Amount     Total       Amount   Total     Amount    Total     Amount    Total     Amount    Total
                              ---------------------  ------------------  ---------- -------  ---------- -------  ---------  -------
                                                                       (Dollars in thousands)
<S>                           <C>          <C>       <C>        <C>      <C>        <C>      <C>        <C>      <C>        <C>
Mortgage loans:
 One-to four-family           $  622,592     37.40%     656,413   38.76    692,707    42.08    713,377    44.42    724,859    48.02
 Multi-family                    224,028     13.46      227,601   13.44    210,214    12.77    205,793    12.81    176,778    11.71
 Commercial real estate          161,547      9.70      163,492    9.65    149,802     9.10    142,373     8.87    142,794     9.46
 Land                              6,239      0.37        6,858    0.40      6,551     0.40      7,914     0.49      5,680     0.38
 Construction
  One-to four-family              25,517      1.53       28,398    1.68     27,837     1.69     26,827     1.67     21,817     1.45
  Multi-family                   209,412     12.58      192,964   11.39    159,107     9.66    124,200     7.74     95,637     6.33
  Commercial real estate          94,934      5.70       99,350    5.87     94,802     5.76     95,784     5.96     73,662     4.88
                              ---------------------  ------------------  ----------  ------  ---------- -------  ---------  -------
  Total mortgage loans         1,344,269     80.74    1,375,076   81.19  1,341,020    81.46  1,316,268    81.96  1,241,227    82.23
Other loans:
 Commercial leases                50,762      3.05       46,407    2.74     36,577     2.22     30,263     1.89     25,371     1.68
Home equity lines of credit      112,634      6.77      113,311    6.69    110,714     6.72    107,245     6.68    102,920     6.82
 Automobile loans                136,459      8.20      138,664    8.19    138,616     8.42    134,245     8.36    123,354     8.17
 Commercial business loans         4,447      0.27        4,571    0.27      4,518     0.27      4,080     0.25      4,012     0.27
 Consumer loans                   16,147      0.97       15,638    0.92     14,915     0.91     13,830     0.86     12,510     0.83
                              ---------------------  ------------------  ----------  ------  ---------- -------  ---------  -------
  Total loans receivable       1,664,718    100.00%   1,693,667  100.00  1,646,360   100.00  1,605,931   100.00  1,509,394   100.00
                                           --------              ------              ------             -------             -------
Add (deduct):
 Loans in process
  One-to four-family              (7,840)                (9,647)           (12,441)            (11,666)             (8,630)
  Multi-family                  (132,815)              (125,534)          (102,648)            (91,343)            (59,545)
  Commercial real estate         (23,814)               (24,261)           (27,595)            (32,863)            (24,792)
Premiums and deferred loan
  costs (fees), net                 (477)                  (653)               132                 131                 397
 Allowance for loan losses        (7,307)                (7,276)            (7,244)             (6,176)             (6,135)
                              -----------            -----------         ----------          ----------          ----------
 Loans receivable, net        $1,492,465              1,526,296          1,496,564           1,464,014           1,410,689
                              -----------            -----------         ----------          ----------          ----------
</TABLE>

                                       13
<PAGE>

Asset/Liability Management

  The Company's asset and liability management strategy attempts to minimize the
risk of a significant decrease in net interest income caused by changes in the
interest rate environment without penalizing current income.  Net interest
income, the primary source of the Company's earnings, is affected by interest
rate movements.  To mitigate the impact of changes in interest rates, a balance
sheet must be structured so that repricing opportunities exist for both assets
and liabilities in approximately equivalent amounts at basically the same time
intervals.  Imbalances in repricing opportunities at any point in time
constitute an interest sensitivity gap, which is the difference between interest
sensitive assets and interest sensitive liabilities.  These static measurements
do not reflect the results of any potential activity and are best used as early
indicators of potential interest rate exposures.  The following table sets forth
the amounts of interest-bearing assets and interest-bearing liabilities
outstanding at March 31, 2001, which are anticipated by the Company to reprice
or mature in each of the future time periods shown.  The amounts of assets and
liabilities shown which reprice or mature during a particular period were based
upon the contractual terms of the asset or liability or certain assumptions
concerning the amortization and prepayment of such assets and liabilities.
Savings accounts, Now accounts and money market accounts were assumed to be
withdrawn at annual percentage rates of 17%, 37% and 79%, respectively.
Management believes that these assumptions approximate actual experience and
considers them reasonable, although the actual amortization and repayment of
assets and liabilities may vary substantially.

Interest Rate Sensitivity Gap Analysis

<TABLE>
<CAPTION>
                                                                               At March 31, 2001
                                                  -------------------------------------------------------------------
                                                                   More Than     More Than
                                                       1 Year         1 Year       3 Years     More Than
(Dollars in thousands)                                Or Less     To 3 Years    To 5 Years       5 Years        Total
---------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>           <C>            <C>          <C>
Interest-Earning Assets:
Mortgage loans (1)                                $   415,809        177,962       194,620       385,555    1,173,946
Equity lines of credit (1)                            112,921              -             -             -      112,921
Automobile loans (1)                                      962         39,721        91,130         6,022      137,835
Consumer loans and leases (1)                           8,266         40,793        11,150        10,757       70,966
Mortgage-backed securities (2)                         87,593         44,685        31,984        71,458      235,720
Interest-bearing deposits                              64,688              -             -             -       64,688
Investment securities (2)                              36,543              -        28,675        32,672       97,890
---------------------------------------------------------------------------------------------------------------------
Total interest-earning assets                         726,782        303,161       357,559       506,464    1,893,966

Interest-Bearing Liabilities:
Savings accounts                                       37,573         57,069        37,204        89,169      221,015
NOW interest-bearing accounts                          23,322         21,348         5,713        12,649       63,032
Money market accounts                                  55,388          7,714         3,672         3,338       70,112
Certificate accounts                                  546,211        324,448        18,949             -      889,608
Borrowed funds                                        122,638        287,500        90,000             -      500,138
---------------------------------------------------------------------------------------------------------------------
 Total interest-bearing liabilities                   785,132        698,079       155,538       105,156    1,743,905
---------------------------------------------------------------------------------------------------------------------
Interest sensitivity gap                          $   (58,350)      (394,918)      202,021       401,308      150,061
=====================================================================================================================
Cumulative interest sensitivity gap               $   (58,350)      (453,268)     (251,247)      150,061
=====================================================================================================================
Cumulative interest sensitivity gap as a
 percentage of total assets                             (2.90)%       (22.50)       (12.47)         7.45
Cumulative net interest-earning assets as a
 percentage of interest-bearing liabilities             92.57 %        69.44         84.67        108.60
---------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   For purposes of the gap analysis, loans and leases are not reduced by the
      allowance for loan losses and are reduced for non-performing loans.

(2)   Mortgage-backed and investment securities are not increased (decreased) by
      unrealized gains (losses) resulting from the accounting  for available for
      sale securities under FASB No. 115.

      Certain shortcomings are inherent in the method of analysis presented in
the foregoing table. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react in different
degrees to changes in market interest rates. Also, the interest rates on certain
types of assets and liabilities may

                                       14
<PAGE>

fluctuate in advance of changes in market interest rates, while interest rates
on other types may lag behind changes in market rates. Additionally, certain
assets, such as ARM loans, have features which restrict changes in interest
rates on a short-term basis and over the life of the asset. Further, in the
event of a change in interest rates, prepayment and early withdrawal levels
would likely deviate significantly from those assumed in calculating the table.
Finally, the ability of many borrowers to service their debt may decrease in the
event of an interest rate increase.

  The Company seeks to reduce the volatility of its net interest income by
managing the relationship of interest rate sensitive assets to interest rate
sensitive liabilities.  To accomplish this, the Company has attempted to
increase the percentage of assets, whose interest rates adjust more frequently,
and to reduce the average maturity of such assets.  The Company currently
originates shorter maturity fixed-rate commercial real estate loans, home equity
lines of credit and consumer loans, which generally mature or reprice more
quickly than fixed-rate residential real estate loans.

  Adjustable-rate loans are nearly as likely to refinance in low interest rate
environments as fixed-rate loans.  Often, interest rate cycles allow for these
refinancings before the adjustable-rate loans can adjust to fully indexed market
rates.  In such declining interest rate environments, that result in high levels
of loan refinancings, the Company may decide to acquire longer fixed-rate
mortgage loans or mortgage-backed securities.  To provide an acceptable level of
interest rate risk, the Company will implement a funding strategy using long-
term FHLB borrowings.

  As part of its asset/liability strategy, the Company has implemented a policy
to maintain its cumulative one-year interest sensitivity gap ratio within a
range of (15%) to 15% of total assets, which reflects the current interest rate
environment and allows the Company to maintain an acceptable net interest rate
spread.  The gap ratio will fluctuate as a result of market conditions and
management's expectation of future interest rate trends.

Quantitative and Qualitative Disclosures About Market Risk

  As its primary interest rate risk planning tool, the Bank utilizes a market
value model.  The model measures the Bank's interest rate risk by approximating
the Bank's net portfolio value ("NPV"), which is the net present value of
expected cash flows from assets, liabilities and any off-balance sheet
contracts, under a range of interest rate scenarios, which range from a 300
basis point increase to a 300 basis point decrease in market interest rates
(measured in 100 basis point increments).  The Bank's asset and liability
structure results in a decrease in NPV in a rising interest rate scenario and an
increase in NPV in a declining interest rate scenario.  During periods of rising
interest rates, the value of monetary assets declines more rapidly than the
value of monetary liabilities rises.  Conversely, during periods of falling
interest rates, the value of monetary assets rises more rapidly than the value
of monetary liabilities declines.  However, the amount of change in value of
specific assets and liabilities due to changes in interest rates is not the same
in a rising rate environment as in a falling interest rate environment (i.e.,
the amount of value increase under a specific rate decline may not equal the
amount of value decrease under an identical upward interest rate movement).

  There have been no material changes in market risk since December 31,
2000 as reported in the Company's Form 10-K for the year ended December 31,
2000.

Analysis of Net Interest Income

  Net interest income represents the difference between income on interest-
earning assets and expense on interest-bearing liabilities.  Net interest income
depends upon the volume of interest-earning assets and interest-bearing
liabilities and the interest rate earned or paid on them.

                                       15
<PAGE>

Average Balance Sheets

  The following table sets forth certain information relating to the Company's
Consolidated Statements of Financial Condition and reflects the average yield on
assets and the average cost of liabilities for the periods indicated.  Such
yields and costs are derived by dividing income or expense by the average
balance of assets or liabilities, respectively, for the periods shown.  Average
balances are derived from average daily balances and include non-performing
loans.  The yields and costs include fees, which are considered adjustments to
yields.

<TABLE>
<CAPTION>
                                                              Three Months Ended March 31,                        At March 31,
                                         -----------------------------------------------------------------
                                                       2001                             2000                           2001
                                         -----------------------------------------------------------------------------------------
                                                                 Average                          Average
                                              Average             Yield/        Average            Yield/                  Yield/
(Dollars in thousands)                        Balance   Interest    Cost        Balance  Interest    Cost        Balance     Cost
----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>        <C>      <C>           <C>       <C>       <C>            <C>
Assets:
Interest-earning assets:
Mortgage loans, net                      $  1,190,888 $   23,784    7.99%  $  1,121,652 $  21,420    7.64%  $  1,169,793     7.75%
Equity lines of credit                        121,161      2,567    8.59        103,931     2,114    8.16        113,064     7.69
Automobile loans                              139,042      2,789    8.13        120,560     2,337    7.78        138,590     8.88
Consumer loans and leases                      64,319      1,344    8.36         34,177       690    8.08         71,018     8.40
Mortgage-backed securities                    239,254      4,013    6.71        331,257     5,371    6.49        232,628     6.67
Interest-bearing deposits                      51,334        703    5.55          7,189       100    5.58         64,688     5.22
Investment securities                          98,783      1,840    7.48         94,472     1,623    6.88         97,885     7.46
----------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets               1,904,781     37,040    7.80      1,813,238    33,655    7.43      1,887,666     7.66
Noninterest-earning assets                    115,547                            91,268                          124,196
----------------------------------------------------------------------------------------------------------------------------------
Total assets                             $  2,020,328                      $  1,904,506                      $ 2,011,862
==================================================================================================================================

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Deposits:
Savings accounts                         $  1,095,441 $   14,684    5.44%  $  1,042,422 $  12,483    4.80%  $  1,110,623     5.51%
NOW interest-bearing accounts                  64,620        145    0.91         65,564       154    0.94         63,032     0.91
Money market accounts                          69,725        541    3.15         83,460       670    3.22         70,112     3.20
----------------------------------------------------------------------------------------------------------------------------------
Total deposits                              1,229,786     15,370    5.07      1,191,446    13,307    4.48      1,243,767     5.15
Borrowed funds                                525,125      8,165    6.31        471,968     6,499    5.52        500,138     6.16
----------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities          1,754,911     23,535    5.44      1,663,414    19,806    4.78      1,743,905     5.44
NOW noninterest-bearing deposits               60,932                            56,086                           60,894
Other liabilities                              38,033                            31,234                           36,513
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities                           1,853,876                         1,750,734                        1,841,312
Stockholders' equity                          166,452                           153,772                          170,550
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
   stockholders' equity                  $  2,020,328                      $  1,904,506                     $  2,011,862
-----------------------------------------------------------------------------------------------------------------------------------
Net interest income/
   interest rate spread                               $   13,505    2.36%               $  13,849    2.65%                   2.22%
----------------------------------------------------------------------------------------------------------                 --------
Net interest-earning assets/
   net interest margin                   $    149,870               2.84%  $    149,824              3.06%
----------------------------------------------------------------------------------------------------------
Interest-earning assets to
   interest-bearing liabilities                  1.09 X                            1.09 X
----------------------------------------------------------------------------------------------------------
</TABLE>

                                       16
<PAGE>

Rate/Volume Analysis

  The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and interest expense
during the periods indicated.  Information is provided in each category with
respect to (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate), (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume), and (iii) the net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31, 2001
                                                                                     Compared To
                                                                          Three Months Ended March 31, 2000
                                                                    --------------------------------------------
                                                                                  Increase (Decrease)
                                                                                In Net Interest Income
                                                                                        Due To
                                                                    --------------------------------------------
(In thousands)                                                       Volume              Rate             Net
----------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                 <C>              <C>
Interest-Earning Assets:
Mortgage loans, net                                                 $   1,357            1,007            2,364
Equity lines of credit                                                    343              110              453
Automobile loans                                                          629               25              654
Consumer loans and leases                                                 350              102              452
Mortgage-backed securities                                             (1,535)             177           (1,358)
Interest-bearing deposits                                                 604               (1)             603
Investment securities                                                      74              143              217
----------------------------------------------------------------------------------------------------------------
 Total                                                                  1,822            1,563            3,385
----------------------------------------------------------------------------------------------------------------

Interest-Bearing Liabilities:
Deposits                                                                  405            1,658            2,063
Borrowed funds                                                            734              932            1,666
----------------------------------------------------------------------------------------------------------------
 Total                                                                  1,139            2,590            3,729
----------------------------------------------------------------------------------------------------------------
Net change in net interest income                                   $     683           (1,027)            (344)
----------------------------------------------------------------------------------------------------------------
</TABLE>

Comparison of Operating Results for the Three Months Ended
March 31, 2001 and March 31, 2000

General

  Net income totaled $4.6 million, or $0.47 per diluted share for the three
months ended March 31, 2001, as compared to $5.2 million, or $0.52 per diluted
share reported for the quarter ended March 31, 2000.  During the quarter ended
March 31, 2000, the Company had auctioned $125 million of FHLB of Chicago
advances to other member banks of the FHLB of Chicago and recorded a pre-tax
gain of $8.8 million on the sale of these advances.  This gain was recorded as
an "Extraordinary item-gain on early extinguishment of debt," net of tax of $5.7
million, or $0.57 per diluted share.  Concurrently, the Company sold $122
million of investment and mortgage-backed securities, available for sale,
recognizing losses of $6.3 million.  The gain on these combined de-leveraging
transactions, net of fees and tax was $1.4 million.  Net interest income for the
three months ended March 31, 2001 was $13.5 million, a decrease of $344,000, or
2.5%, from the March 31, 2000 quarter of $13.8 million.

Interest Income

  Interest income for the quarter ended March 31, 2001 totaled $37.0 million, an
increase of $3.4 million, or 10.1%, from the prior year's quarter. Interest
income on mortgage loans, the largest component of interest-earning assets,
increased $2.4 million, or 11.0%, to $23.8 million from the March 2000 quarter.
The average balance of the mortgage loan portfolio increased $69.2 million. The
annualized average yield on the mortgage loan portfolio

                                      17
<PAGE>

increased to 7.99% for the three months ended March 31, 2001 from 7.64% for the
2000 period. The increase in yields is due to the general increase in interest
rates and the continued change in the mix of the loan portfolio from a one-to
four-family lender to a multi-family and commercial real estate lender. Interest
income on equity lines of credit increased $453,000, or 21.4%, to $2.6 million
from the prior year's quarter. The average balance of equity lines of credit
increased $17.3 million, to $121.2 million from $103.9 million for the March
2000 quarter. Interest income on auto loans increased $452,000 to $2.8 million
for the three months ended March 31, 2001. The average balance of the auto loan
portfolio increased $18.5 million, while the annualized average yield on the
portfolio increased to 8.13% as compared to 7.78% for the comparable quarter a
year ago. The average balance of the mortgage-backed securities portfolio
decreased $92.0 million to $239.3 million from the March 2000 quarter. As
previously mentioned, this was primarily as a result of the de-leveraging
security sales in the first quarter of 2000. However, the annualized yield on
this portfolio increased from 6.49% to 6.71% when comparing the quarters.

Interest Expense

  Interest expense on deposit accounts increased $2.1 million, or 15.5%, to
$15.4 million, for the quarter ended March 31, 2001 compared to the prior year's
quarter.  The increase is related to both an increase in the average deposit
base and the annualized average cost of deposits.  The average deposit base
increased $38.3 million to $1.2 billion when comparing the quarters.  The
annualized average cost of deposits for the three months ended March 31, 2001
was 5.07%, an increase from the annualized average cost of 4.48% for the March
2000 period.  Since March 31, 2000 and through the year ended December 31, 2000,
rates on deposit accounts have generally increased, reflecting the Federal
Reserve Bank's influence in increasing rates.  In an effort to compete with
other banks to retain deposits and improve its interest rate sensitivity
position, the Bank has had to offer longer term, higher yielding certificate of
deposit accounts which have increased the cost of funds.  For the quarter ended
March 31, 2001, the Company recorded interest expense on borrowed funds of $8.2
million on an average balance of $525 million at an annualized cost of 6.31%
primarily related to FHLB borrowings.  During the current quarter, the Company
repaid $50 million of FHLB advances that matured.

Net Interest Income

  Net interest income for the three months ended March 31, 2001 decreased
$344,000 or 2.5%, to $13.5 million from the 2000 period.  The annualized average
yield on interest-earning assets increased from 7.43% to 7.80% when comparing
the 2000 and 2001 quarters.  The annualized average cost of interest-bearing
liabilities increased from 4.78% to 5.44%.  This resulted in an annualized
average net interest rate spread of 2.36% for the three-month period ended March
31, 2001 compared to 2.65% for the prior year's period.  During the current
quarter, interest-bearing liabilities repriced faster than interest-bearing
assets resulting in a decrease in the net interest rate spread.  Both the
average balance of interest-earning assets and interest-bearing liabilities
increased during the quarter ended March 31, 2001 compared to the 2000 quarter.

Provision for Loan Losses

  Based on management's evaluation of the loan portfolio, a provision of
$200,000 for loan losses was recorded during the quarter ended March 31, 2001.
The allowance for loan losses represents 0.49% of total loans receivable at
March 31, 2001.  The amount of non-performing loans at March 31, 2001, was $4.1
million, or 0.27% of total loans, compared to $4.5 million or 0.32% of total
loans at March 31, 2000.

Noninterest Income

  Total noninterest income for the three months ended March 31, 2001 was $2.9
million compared to an expense of $3.9 million in the 2000 quarter.  The quarter
ended March 31, 2000 included losses on sales of mortgage-backed and investment
securities available for sale of $6.6 million.  As previously mentioned, the
Company sold these securities concurrently with the auction of FHLB advances as
part of a de-leveraging strategy.  The gain on the sale of the FHLB advances is
shown as an extraordinary item-gain on early extinguishment of debt of $5.7
million, net of tax.  Other fees and commissions increased $404,000, primarily
due to an increase in loan origination fees contributed by Liberty Home
Mortgage.  Liberty Home Mortgage sold mortgages totaling $10 million in the
first quarter of 2000 compared to $50 million sold in the current quarter.
Other income for the quarter ended March 31, 2000, included a write-down in
value of an equity investment of $112,000, reflecting a decrease in the
respective

                                       18
<PAGE>

market value. The current quarter includes income of $413,000 from the
investment in Bank Owned Life Insurance which was purchased in the third quarter
of 2000. The current quarter's real estate income was $485,000, a decrease of
$489,000 from the prior year's quarter. This decrease was primarily due to fewer
sales in the March 2001 quarter. In the current quarter, the Bank terminated its
participation in a shared ATM network primarily due to increased costs. ATM fee
income, net of ATM expenses for the current quarter was $104,000, compared to
$152,000 in the prior year's quarter.

Noninterest Expense

  Noninterest expense for the quarter ended March 31, 2001 totaled $9.9 million,
a decrease of $939,000, or 8.7% from the prior year's quarter.  Compensation and
benefits, the largest component of noninterest expense, decreased $458,000,
primarily due to staff reductions at the mortgage broker subsidiary.

Income Tax Provision

  The provision for income taxes for the three months ended March 31, 2001 was
$1.7 million.  The effective tax rate for the quarter was 26.9% compared to
32.9% for the 2000 quarter.  The lower effective tax rate for the March 2001
quarter was due to a reduction in the provision of $225,000 as a result of the
completion of a review of the Company's tax liability.

Part II - Other Information

Item 1.  Legal Proceedings

               Not Applicable.

Item 2.  Changes in Securities

               Not Applicable.

Item 3.  Defaults Upon Senior Securities

               Not Applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

               Not Applicable.

Item 5.  Other Information

               Not Applicable.

                                       19
<PAGE>

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

          (a)  Exhibit No. 11  Statement re: Computation of Per Share Earnings

<TABLE>
<CAPTION>
                                                                       Three Months Ended March 31,
                                                                        2001                  2000
                                                                   ----------------------------------
<S>                                                                <C>                      <C>
Net income                                                         $   4,638,000            5,152,000
                                                                   ----------------------------------

Basic earnings per share-weighted average shares                       9,263,895            9,961,869

Effect of dilutive securities-stock options                              591,943                    -
                                                                   ----------------------------------

Diluted earnings per share-adjusted weighted average shares            9,855,838            9,961,869
                                                                   ----------------------------------

Basic earnings per share                                           $        0.50                 0.52
                                                                   ----------------------------------

Diluted earnings per share                                         $        0.47                 0.52
                                                                   ----------------------------------
</TABLE>

          (b)  Reports on Form 8-K.

               A report on Form 8-K was filed by the Company on February 1, 2001
               for the purpose of reporting, pursuant to Items 5 and 7 of the
               Form 8-K, that the Company entered into an Agreement and Plan of
               Merger with Charter One Financial, Inc. and Charter Michigan
               Bancorp, Inc. as of January 22, 2001.

                                       20
<PAGE>

SIGNATURES

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.



                               Alliance Bancorp




Dated: May 4, 2001                            /s/  Kenne P. Bristol
       -------------------                         -----------------------------

                                                   Kenne P. Bristol
                                                   President and
                                                   Chief Executive Officer




Dated: May 4, 2001                            /s/  Richard A. Hojnicki
       -------------------                         -----------------------------

                                                   Richard A. Hojnicki
                                                   Executive Vice President and
                                                   Chief Financial Officer

                                       21